10-K 1 lry1231201110k.htm FORM 10-K LRY 12.31.2011 10K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
 
 
 
þ
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011
OR
 
 
 
o
 
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                      to                     
 
 
 
 
 
 
Commission file numbers:
 
1-13130 (Liberty Property Trust)
 
 
1-13132 (Liberty Property Limited Partnership)
 
LIBERTY PROPERTY TRUST
 
LIBERTY PROPERTY LIMITED PARTNERSHIP
(Exact Names of Registrants as Specified in Their Governing Documents)
 
 
 
 
 
 
MARYLAND (Liberty Property Trust)
 
23-7768996
PENNSYLVANIA (Liberty Property Limited Partnership)
 
23-2766549
 
 
 
(State or Other Jurisdiction
 
(I.R.S. Employer
of Incorporation or Organization)
 
Identification Number)
 
 
 
500 Chesterfield Parkway
 
 
Malvern, Pennsylvania
 
19355
 
 
 
(Address of Principal Executive Offices)
 
(Zip Code)
Registrants' Telephone Number, including Area Code (610) 648-1700
Securities registered pursuant to Section 12(b) of the Act:
 
 
 
 
 
 
 
 
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS
 
ON WHICH REGISTERED
 
 
 
Common Shares of Beneficial Interest,
 
 
$0.001 par value
 
 
(Liberty Property Trust)
 
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
YES þ NO o
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.
YES o NO þ
Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past ninety (90) days.
YES þ NO o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that registrant was required to submit and post such files.)
YES þ NO o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of the Registrants' knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. (See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act). (Check one):
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Large Accelerated Filer þ
 
Accelerated Filer o
 
Non-Accelerated Filer o
 
Smaller Reporting Company o
 
 
 
 
(Do not check if a smaller reporting company)
 
 
Indicate by check mark if the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
YES o NO þ
The aggregate market value of the Common Shares of Beneficial Interest, $0.001 par value (the "Common Shares"), of Liberty Property Trust held by non-affiliates of Liberty Property Trust was $3.7 billion, based upon the closing price of $32.58 on the New York Stock Exchange composite tape on June 30, 2011. Non-affiliate ownership is calculated by excluding all Common Shares that may be deemed to be beneficially owned by executive officers and trustees, without conceding that any such person is an "affiliate" for purposes of the federal securities laws.
Number of Common Shares outstanding as of February 21, 2012: 116,558,234
Documents Incorporated by Reference
Portions of the proxy statement for the annual meeting of shareholders of Liberty Property Trust to be held in May 2012 are incorporated by reference into Part III of this Form 10-K.




EXPLANATORY NOTE

This report combines the annual reports on Form 10-K for the period ended December 31, 2011 of Liberty Property Trust and Liberty Property Limited Partnership. Unless stated otherwise or the context otherwise requires, references to the "Trust”, mean Liberty Property Trust and its consolidated subsidiaries; and references to the “Operating Partnership” mean Liberty Property Limited Partnership and its consolidated subsidiaries. The terms the "Company”, “we”, “our” or “us” means the Trust and the Operating Partnership, collectively.

The Trust is a self-administered and self-managed Maryland real estate investment trust (a "REIT"). Substantially all of the Trust's assets are owned directly or indirectly, and substantially all of the Trust's operations are conducted directly or indirectly, by its subsidiary, the Operating Partnership, a Pennsylvania limited partnership.

The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 96.8% of the common equity of the Operating Partnership at December 31, 2011. The common units of limited partnership interest in the Operating Partnership (the "Common Units"), other than those owned by the Trust, are exchangeable on a one-for-one basis (subject to anti-dilution protections) for the Trust's Common Shares of Beneficial Interest, $0.001 par value per share (the "Common Shares"). The Company has issued several series of Cumulative Redeemable Preferred Units of the Operating Partnership (the "Preferred Units"). The outstanding Preferred Units of each series are exchangeable on a one-for-one basis after stated dates into a corresponding series of Cumulative Redeemable Preferred Shares of the Trust except for the Series I-2 Preferred Units, which are not convertible or exchangeable into any other securities. The ownership of the holders of Common and Preferred Units is reflected on the Trust's financial statements as "noncontrolling interest - operating partnership" in mezzanine equity and as a component of total equity as "noncontrolling interest - operating partnership."

The financial results of the Operating Partnership are consolidated into the financial statements of the Trust. The Trust has no significant assets other than its investment in the Operating Partnership. The Trust and the Operating Partnership are managed and operated as one entity. The Trust and the Operating Partnership have the same managers.

The Trust's sole business purpose is to act as the general partner of the Operating Partnership. Net proceeds from equity issuances by the Trust are contributed to the Operating Partnership in exchange for partnership units. The Trust itself does not issue any indebtedness, but guarantees certain of the unsecured debt of the Operating Partnership.

We believe combining the annual reports on Form 10-K of the Trust and the Operating Partnership into this single report results in the following benefits:
enhances investors' understanding of the Trust and the Operating Partnership by enabling investors to view the business as a whole in the same manner as management views and operates the business;
eliminates duplicative disclosure and provides a more streamlined and readable presentation since a substantial portion of the Company's disclosure applies to both the Trust and the Operating Partnership; and
creates time and cost efficiencies through the preparation of one combined report instead of two separate reports.

To help investors understand the significant differences between the Trust and the Operating Partnership, this report presents the following separate sections for each of the Trust and the Operating Partnership:
consolidated financial statements;
the following notes to the consolidated financial statements;
Income per Common Share of the Trust and Income per Common Unit of the Operating Partnership;
Other Comprehensive Income of the Trust and Other Comprehensive Income of the Operating Partnership; and
Shareholders' Equity of the Trust and Owners' Equity of the Operating Partnership

This report also includes separate Item 9A. Controls and Procedures sections and separate Exhibit 31 and 32 certifications for each of the Trust and the Operating Partnership in order to establish that the Chief Executive Officer and the Chief Financial Officer of each entity have made the requisite certifications and that both the Trust and Operating Partnership are compliant with Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended.

There are separate sections in this report for the Trust and the Operating Partnership where it is necessary to highlight the differences of the Trust and Operating Partnership. These sections specifically refer to the Trust or the Operating Partnership. In the sections that combine disclosure of the Trust and the Operating Partnership, this report refers to actions or holdings as being actions or holdings of the Company.



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INDEX
 
Index
 
Page
 
 
 
PART I.
 
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 1B.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
PART II
 
 
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
Item 7.
 
 
 
Item 7A.
 
 
 
Item 8.
 
 
 
Item 9.
 
 
 
Item 9A.
 
 
 
Item 9B.
 
 
 
PART III
 
 
 
 
 
Item 10.
 
 
 
Item 11.
 
 
 
Item 12.
 
 
 
Item 13.
 
 
 
Item 14.
 
 
 
PART IV
 
 
 
 
 
Item 15.
 
 
 
 
 
 
 
 
 
 
 
 


3



----------
The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this Annual Report on Form 10-K and other materials filed or to be filed by the Company (as defined herein) with the Securities and Exchange Commission (“SEC”) (as well as information included in oral statements or other written statements made or to be made by the Company) contain statements that are or will be forward-looking, such as statements relating to rental operations, business and property development activities, joint venture relationships, acquisitions and dispositions (including related pro forma financial information), future capital expenditures, financing sources and availability, litigation and the effects of regulation (including environmental regulation) and competition. These forward-looking statements generally are accompanied by words such as “believes,” “anticipates,” “expects,” “estimates,” “should,” “seeks,” “intends,” “planned,” “outlook” and “goal” or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve important risks, uncertainties and other factors that could cause actual results to differ materially from the expected results and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of the Company. The Company assumes no obligation to update or supplement forward looking statements that become untrue because of subsequent events. These risks, uncertainties and other factors include, without limitation, uncertainties affecting real estate businesses generally (such as entry into new leases, renewals of leases and dependence on tenants' business operations), risks relating to our ability to maintain and increase property occupancy and rental rates, risks relating to the recent credit crisis and economic disruption, risks relating to construction and development activities, risks relating to acquisition and disposition activities, risks relating to the integration of the operations of entities that we have acquired or may acquire, risks relating to joint venture relationships and any possible need to perform under certain guarantees that we have issued or may issue in connection with such relationships, possible environmental liabilities, risks relating to leverage and debt service (including availability of financing terms acceptable to the Company and sensitivity of the Company's operations and financing arrangements to fluctuations in interest rates), dependence on the primary markets in which the Company's properties are located, the existence of complex regulations relating to status as a real estate investment trust (“REIT”) and the adverse consequences of the failure to qualify as a REIT, risks relating to litigation and the potential adverse impact of market interest rates on the market price for the Company's securities. See “Management's Discussion and Analysis of Financial Condition and Results of Operations - Forward-Looking Statements.”



4


PART I
ITEM 1. BUSINESS
The Company
Liberty Property Trust (the "Trust") is a self-administered and self-managed Maryland real estate investment trust (a "REIT"). Substantially all of the Trust's assets are owned directly or indirectly, and substantially all of the Trust's operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the "Operating Partnership" and, together with the Trust and their consolidated subsidiaries, the "Company").
The Company completed its initial public offering in 1994 to continue and expand the commercial real estate business of Rouse & Associates, a Pennsylvania general partnership, and certain affiliated entities (collectively, the "Predecessor"), which was founded in 1972. As of December 31, 2011, the Company owned and operated 332 industrial and 265 office properties (the "Wholly Owned Properties in Operation") totaling 65.2 million square feet. In addition, as of December 31, 2011, the Company owned 10 properties under development, which when completed are expected to comprise 3.1 million square feet (the "Wholly Owned Properties under Development") and 1,456 acres of developable land, substantially all of which is zoned for commercial use. Additionally, as of December 31, 2011, the Company had an ownership interest, through unconsolidated joint ventures, in 47 industrial and 49 office properties totaling 14.2 million square feet (the "JV Properties in Operation" and, together with the Wholly Owned Properties in Operation, the "Properties in Operation") and 615 acres of developable land, substantially all of which is zoned for commercial use. We refer to the Wholly Owned Properties under Development and the Properties in Operation collectively as the "Properties."
The Company provides leasing, property management, development and other tenant-related services for the Properties. The industrial Properties consist of a variety of warehouse, distribution, service, assembly, light manufacturing and research and development facilities. They include both single-tenant and multi-tenant facilities, with most designed flexibly to accommodate various types of tenants, space requirements and industrial uses. The Company's office Properties are multi-story and single-story office buildings located principally in suburban mixed-use developments or office parks. Substantially all of the Properties are located in prime business locations within established business communities. In addition, the Company, directly or through joint ventures, owns urban office properties in Philadelphia and Washington, D.C. The Company's strategy with respect to product and market selection is expected generally to favor industrial and metro-office properties and markets with strong demographic and economic fundamentals. To the extent deemed consistent with the Company's strategy and under appropriate circumstances, the Company intends to reduce its ownership of suburban office properties, as it has done recently.
The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 96.8% of the common equity of the Operating Partnership at December 31, 2011. The common units of limited partnership interest in the Operating Partnership (the "Common Units"), other than those owned by the Trust, are exchangeable on a one-for-one basis (subject to anti-dilution protections) for the Trust's common shares of beneficial interest, $0.001 par value per share (the "Common Shares"). As of December 31, 2011, the Common Units held by the limited partners were exchangeable for 3.8 million Common Shares. The Company has issued several series of Cumulative Redeemable Preferred Units of the Operating Partnership (the "Preferred Units"). The outstanding Preferred Units of each series are exchangeable on a one-for-one basis after stated dates into a corresponding series of Cumulative Redeemable Preferred Shares of the Trust except for the Series I-2 Preferred Units, which are not convertible or exchangeable into any other securities. The ownership of the holders of Common and Preferred Units is reflected on the Trust's financial statements as "noncontrolling interest - operating partnership" in mezzanine equity and as a component of total equity as "noncontrolling interest - operating partnership."
In addition to this Annual Report on Form 10-K, the Company files with or furnishes to the SEC periodic and current reports, proxy statements and other information. The Company makes these documents available on its website, www.libertyproperty.com, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. Any document the Company files with or furnishes to the SEC is available to read and copy at the SEC's Public Reference Room at 100 F Street, NE, Room 1580, Washington, D.C. 20549. Further information about the public reference facilities is available by calling the SEC at (800) SEC-0330. These documents also may be accessed on the SEC's website, http://www.sec.gov.
Also posted on the Company's website is the Company's Code of Conduct, which applies to all of its employees and also serves as a code of ethics for its chief executive officer, chief financial officer and persons performing similar functions. The Company will send the Code of Conduct, free of charge, to anyone who requests a copy in writing from its Investor Relations Department at the address set forth on the cover of this filing. The Company intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendments to or waivers of the Code of Conduct by posting the required information in the Corporate Governance section of its website.
Management and Employees
The Company's 443 employees (as of February 21, 2012) operate under the direction of 19 senior executives, who have been

5


affiliated with the Company and the Predecessor for an average of 19.9 years. The Company and the Predecessor have developed and managed commercial real estate for the past 39 years. The Company maintains an in-house leasing and property management staff which the Company believes enables it to better understand the characteristics of the local markets in which it operates, to respond quickly and directly to tenant needs and to better identify local real estate opportunities.
Segments and Markets
At December 31, 2011, the Company's reportable segments were based on the Company's method of internal reporting and are as follows:
 
 
REGIONS
MARKETS
 
 
Northeast
Southeastern PA; Lehigh/Central PA; New Jersey; Maryland
Central
Minnesota; Chicago/Milwaukee; Houston; Arizona
South
Richmond; Virginia Beach; Carolinas; Jacksonville; Orlando; South Florida; Tampa
Metro
Philadelphia; Metro Washington, D.C.
United Kingdom
County of Kent; West Midlands
Business Objective and Strategies for Growth
The Company's business objective is to maximize long-term profitability for its shareholders by being a leader in commercial real estate through the ownership, management, development and acquisition of superior industrial and office properties. The Company intends to achieve this objective through offering industrial and/or office properties in multiple markets and operating as a leading landlord in the industry. The Company believes that this objective will provide the benefits of enhanced investment opportunities, economies of scale, risk diversification both in terms of geographic market and real estate product type, access to capital and the ability to attract and retain personnel. The Company also strives to be a leading provider of customer service, providing an exceptional and positive tenant experience. The Company seeks to be an industry leader in sustainable development and to operate an energy-efficient portfolio. In pursuing its business objective, the Company seeks to achieve a combination of internal and external growth, maintain a conservative balance sheet and pursue a strategy of financial flexibility.
Products
The Company strives to be a high quality provider of five products (industrial properties, including big box warehouse, multi-tenant industrial, and industrial-flex; and office properties, including single-story office and multi-story office). The Company's strategy with respect to product and market selection is expected generally to favor industrial and metro-office properties and markets with strong demographic and economic fundamentals. However, consistent with the Company's strategy and market opportunities, the Company may pursue industrial and office products other than those noted above.
Markets
The Company operates primarily in the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States. Additionally, the Company owns certain assets in the United Kingdom. The Company's goal is to operate in each of its markets with an appropriate product mix of industrial and office properties. In some markets it may offer only one of its product types. Generally, the Company seeks to have a presence in each market sufficient for the Company to compete effectively in that market. The Company's efforts emphasize efficiencies of scale through asset aggregation and controlled environments. The Company gathers information from internal sources and independent third parties and analyzes this information to support its evaluation of current and new markets and market conditions.
Organizational Plan
The Company seeks to maintain a management organization that facilitates efficient execution of the Company's strategy. As part of this effort, the Company pursues a human resources plan designed to create and maintain a highly effective real estate company through recruiting, training and retaining capable people. The structure is designed to support a local office entrepreneurial platform operating within a value-added corporate structure. The Company seeks to provide management and all employees with technology tools to enhance competitive advantage and more effectively execute on strategic and operational goals.
Internal Growth Strategies
The Company seeks to maximize the profitability of its Properties by endeavoring to maintain high occupancy levels while obtaining competitive rental rates, controlling costs and focusing on customer service efforts.

6



Maintain High Occupancies
The Company believes that the quality and diversity of its tenant base and its strategy of operating in multiple markets is integral to achieving its goal of attaining high occupancy levels for its portfolio. The Company targets financially stable tenants in an effort to minimize uncertainty relating to the ability of the tenants to meet their lease obligations.
Cost Controls
The Company seeks to identify best practices to apply throughout the Company in order to enhance cost savings and other efficiencies. The Company also employs an annual capital improvement and preventative maintenance program designed to reduce the operating costs of the Properties in Operation and maintain the long-term value of the Properties in Operation.
Customer Service
The Company seeks to achieve high tenant retention through a comprehensive customer service program, which is designed to provide an exceptional and positive tenant experience. The customer service program establishes best practices and provides an appropriate customer feedback process. The Company believes that the program has been helpful in increasing tenant satisfaction.
Energy Efficiency Initiatives
The Company is committed to improving the energy efficiency of the existing buildings in its portfolio. The Company is pursuing a strategic initiative focused on improving the energy efficiency of the Properties in Operation. In connection with this initiative the Company has: (1) conducted level one energy audits on over 200 buildings; (2) benchmarked over 100 buildings with the Energy Star Portfolio Manager; (3) achieved Energy Star Certification for over 70 Properties in Operation; and (4) installed energy monitoring systems in over 100 buildings. These steps are estimated to have saved substantial energy costs during 2011.
Additionally, the Company has been an active participant in the U.S. Green Building Council's Leadership in Energy and Environmental Design ("LEED") program. The LEED program, which was created to recognize environmental leadership in the building industry, establishes a national standard for developing high-performance, sustainable buildings. The Company has over 10 million square feet of LEED projects completed or under construction. The Company believes that green building techniques can result in positive environmental results and significant economic returns to tenants in terms of savings in operating costs and improved employee performance.
The Company's efforts in this area are ongoing. The Company intends to continue to explore methods of enhancing the performance of the buildings in its existing portfolio.
External Growth Strategies
The Company seeks to enhance its long-term profitability through the development, acquisition and disposition of properties either directly or through joint ventures. The Company also considers acquisitions of real estate operating companies.
Wholly Owned Properties
Development
The Company pursues attractive development opportunities, focusing primarily on high-quality industrial and office properties within its existing markets. When the Company's marketing efforts identify opportunities, the Company will consider pursuing opportunities outside of the Company's established markets. The Company and its Predecessor have developed over 63 million square feet of commercial real estate during the past 39 years. The Company's development activities generally fall into two categories: build-to-suit projects and projects built for inventory (projects that are less than 75% leased prior to commencement of construction). The Company develops build-to-suit projects for existing and new tenants. The Company also builds properties for inventory where the Company has identified sufficient demand at market rental rates to justify such construction.
During the year ended December 31, 2011, the Company did not complete any development projects.




7


As of December 31, 2011, the Company had 10 Wholly Owned Properties under Development, which are expected to comprise, upon completion, 3.1 million square feet and are expected to represent a Total Investment of $288.7 million, of which $88.8 million has been completed as of December 31, 2011. These Wholly Owned Properties under Development were 20.2% pre-leased as of December 31, 2011. The scheduled deliveries of the 3.1 million square feet of Wholly Owned Properties under Development are as follows (in thousands, except percentages):
 
 
SQUARE FEET
 
PERCENT LEASED
 
TOTAL
SCHEDULED IN-SERVICE DATE
 
IND-DIST.
 
IND-FLEX
 
OFFICE
 
TOTAL
 
DECEMBER 31, 2011
 
INVESTMENT
 3rd Quarter, 2012
 
156

 

 

 
156

 
100.0
%
 
$
8,412

 4th Quarter, 2012
 

 
103

 
56

 
159

 
58.2
%
 
30,415

 1st Quarter, 2013
 
128

 
84

 
205

 
417

 
51.9
%
 
96,730

 3rd Quarter, 2013
 
2,172

 

 
153

 
2,325

 
6.6
%
 
153,121

TOTAL
 
2,456

 
187

 
414

 
3,057

 
20.2
%
 
$
288,678

 
 
 
 
 
 
 
 
 
 
 
 
 
The "Total Investment" for a Property is defined as the Property's purchase price plus closing costs (in the case of acquisitions - if vacant) and management's estimate, as determined at the time of acquisition, of the cost of necessary building improvements in the case of acquisitions, or land costs and land and building improvement costs in the case of development projects, and, where appropriate, other development costs and carrying costs.
The Company believes that, because it is a fully integrated real estate firm, its base of commercially zoned land in existing industrial and office business parks provides a competitive advantage for future development activities. As of December 31, 2011, the Company owned 1,456 acres of land held for development, substantially all of which is zoned for commercial use. Substantially all of the land is located adjacent to or within existing industrial or business parks with site improvements, such as public sewers, water and utilities, available for service. The Company estimates that its land holdings would support, as and when developed, approximately 14.6 million square feet of property. The Company's investment in land held for development as of December 31, 2011 was $219.4 million.
Through a development agreement with Philadelphia Industrial Development Corporation, the Company has development rights for 35 acres of land located at the Navy Yard in Philadelphia. The Company estimates that these 35 acres would support, as and when developed, approximately 775,000 square feet of property.
Through a development agreement with Kent County Council, the Company develops commercial buildings at Kings Hill, a 650-acre mixed use development site in the County of Kent, England. The Company also is the project manager for the installation of infrastructure on the site and receives a portion of the proceeds from the sale of land parcels to home builders. The site has planning consent for 2.0 million square feet of commercial space and 2,885 homes, of which approximately 825,000 square feet of commercial space and 2,472 homes have been completed as of December 31, 2011.
Acquisitions/Dispositions
The Company seeks to acquire properties consistent with its business objectives and strategies. The Company executes its acquisition strategy by purchasing properties that the Company believes will create shareholder value over the long-term.
During the year ended December 31, 2011, the Company acquired 21 properties comprising 4.2 million square feet for an aggregate purchase price of $249.5 million.
The Company disposes of properties and land held for development that no longer fit within the Company's strategic plan, or with respect to which the Company believes it can optimize cash proceeds. During the year ended December 31, 2011, the Company sold 62 operating properties containing an aggregate of 4.2 million square feet, and 61 acres of land, for aggregate proceeds of $371.6 million.
Joint Venture Properties
The Company, from time to time, considers joint venture opportunities with institutional investors or other real estate companies. Joint venture partnerships provide the Company with additional sources of capital to share investment risk and fund capital requirements. In some instances, joint venture partnerships provide the Company with additional local market or product type expertise.
As of December 31, 2011, the Company had investments in and advances to unconsolidated joint ventures totaling $174.7 million (see Note 8 to the Company's Consolidated Financial Statements).

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Development
During the year ended December 31, 2011, none of the unconsolidated joint ventures in which the Company held an interest completed any development projects.
As of December 31, 2011, the Company had no joint venture properties under development.
As of December 31, 2011, unconsolidated joint ventures in which the Company held an interest owned 615 acres of land held for development and had a leasehold interest in an additional 71 acres of land. Substantially all of the land held for development and the land related to the leasehold interest is zoned for commercial use. Substantially all of the land held for development and the land related to the leasehold interest is located adjacent to or within existing industrial or business parks with site improvements, such as public sewers, water and utilities, available for service. The Company estimates that its joint venture land holdings and leasehold interest would support, as and when developed, approximately 7.4 million square feet of property.
Acquisitions/Dispositions
During the year ended December 31, 2011, none of the unconsolidated joint ventures in which the Company held an interest acquired any properties.
During the year ended December 31, 2011, a joint venture in which the Company holds a 25% interest sold one property, which contained 231,000 square feet of leaseable space, for proceeds of $8.4 million. In addition, a joint venture in which the Company holds a 20% interest sold one building, which contained 22,000 square feet of leaseable space, for proceeds of $7.5 million. Also, a joint venture in which the Company holds a 50% interest sold five acres of land for proceeds of $9.6 million.

ITEM 1A. RISK FACTORS
The Company's results of operations and the ability to make distributions to our shareholders and service our indebtedness may be affected by the risk factors set forth below. (The Company refers to itself as "we," "us" or "our" in the following risk factors.) This section contains some forward looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations.
Risks Related to Our Business
Weakness in the general economy continues to adversely affect our business and financial condition.
The Company's business is subject to the risks in this section. Current economic conditions have increased the probability the Company will experience these risks. Continuing weakness in the general economy has negatively impacted the Company's business practices by reducing demand for our properties. This lack of demand has reduced our ability to achieve increases in rents as the spaces are leased. Although some signs of economic recovery have been noted, the economy as it impacts our business has not returned to pre-recession levels.
The ongoing weakness in the general economy has affected some of our existing tenants, and could have an adverse impact on our ability to collect rent or renew leases with these tenants, resulting in a negative effect on our cash flow from operations.
The ongoing weakness in the general economy has had an adverse effect on many companies in numerous industries. We have tenants in these and other industries which may be experiencing these adverse effects. Should any of our tenants experience a downturn in its business that weakens its financial condition, delays lease commencement or causes it to fail to make rental payments when due, become insolvent or declare bankruptcy, the result could be a termination of the tenant's lease and material losses to us. Our cash flow from operations and our ability to make expected distributions to our shareholders and service our indebtedness could, in such a case, be adversely affected.
Unfavorable events affecting our existing tenants, or negative market conditions that may affect our existing tenants, could have an adverse impact on our ability to attract new tenants, relet space, collect rent or renew leases, and thus could have a negative effect on our cash flow from operations.
Our cash flow from operations depends on our ability to lease space to tenants on economically favorable terms. Therefore, we could be adversely affected by various facts and events over which we have limited control, such as:
lack of demand for space in the areas where our Properties are located
inability to retain existing tenants and attract new tenants
oversupply of or reduced demand for space and changes in market rental rates

9


defaults by our tenants or their failure to pay rent on a timely basis
the need to periodically renovate and repair our space
physical damage to our Properties
economic or physical decline of the areas where our Properties are located
potential risk of functional obsolescence of our Properties over time
If a tenant is unable to pay rent due to us, we may be forced to evict such tenants, or engage in other remedies, which may be expensive and time consuming and may adversely affect our net income, shareholders' equity and cash distributions to shareholders.
At any time, any of our tenants may experience a downturn in its business that may weaken its financial condition. As a result, a tenant may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy. Any tenant bankruptcy or insolvency, leasing delay or failure to make rental payments when due could result in the termination of the tenant's lease and material losses to our Company.
If our tenants do not renew their leases as they expire, we may not be able to rent the space. Furthermore, leases that are renewed, and some new leases for space that is relet, may have terms that are less economically favorable to us than current lease terms, or may require us to incur significant costs, such as for renovations, tenant improvements or lease transaction costs.
Any of these events could adversely affect our cash flow from operations and our ability to make expected distributions to our shareholders and service our indebtedness.
A significant portion of our costs, such as real estate taxes, insurance costs, and debt service payments, generally are not reduced when circumstances cause a decrease in cash flow from our Properties.
We may not be able to compete successfully with other entities that operate in our industry.
We experience a great deal of competition in attracting tenants for our Properties and in locating land to develop and properties to acquire.
In our effort to lease our Properties, we compete for tenants with a broad spectrum of other landlords in each of our markets. These competitors include, among others, publicly-held REITs, privately-held entities, individual property owners and tenants who wish to sublease their space. Some of these competitors may be able to offer prospective tenants more attractive financial or other terms than we are able to offer.
We may experience increased operating costs, which could adversely affect our operations.
Our Properties are subject to increases in operating expenses such as insurance, cleaning, electricity, heating, ventilation and air conditioning, general and administrative costs and other costs associated with security, landscaping, repairs and maintenance. While our current tenants generally are obligated to pay a significant portion of these costs, there is no assurance that these tenants will make such payments or agree to pay these costs upon renewal or that new tenants will agree to pay these costs. If operating expenses increase in our markets, we may not be able to increase rents or reimbursements in all of these markets so as to meet increased expenses without simultaneously decreasing occupancy rates. If this occurs, our ability to make distributions to shareholders and service our indebtedness could be adversely affected.
Our ability to achieve growth in operating income depends in part on our ability to develop properties, which may suffer under certain circumstances.
We intend to continue to develop properties when warranted by market conditions. Current market conditions for development, although showing signs of recovery, have not normalized and consequently we expect growth in operating income from development to be below pre-recession levels.
Additionally, our general construction and development activities include the risks that:
construction and leasing of a property may not be completed on schedule, which could result in increased expenses and construction costs, and would result in reduced profitability
construction costs may exceed our original estimates due to increases in interest rates and increased materials, labor or other costs, possibly making the property unprofitable because we may not be able to increase rents to compensate for the increase in construction costs
some developments may fail to achieve expectations, possibly making them unprofitable
we may be unable to obtain, or may face delays in obtaining, required zoning, land-use, building, occupancy, and other governmental permits and authorizations, which could result in increased costs and could require us to abandon our

10


activities entirely with respect to a project
we may abandon development opportunities after we begin to explore them and as a result, we may fail to recover costs already incurred. If we alter or discontinue our development efforts, past and future costs of the investment may need to be expensed rather than capitalized and we may determine the investment is impaired, resulting in a loss
we may expend funds on and devote management's time to projects that we do not complete
occupancy rates and rents at newly completed properties may fluctuate depending on a number of factors, including market and economic conditions, and may result in lower than projected rental rates with the result that our investment is not profitable
We face risks associated with property acquisitions.
We acquire individual properties and portfolios of properties, in some cases through the acquisition of operating entities, and intend to continue to do so when circumstances warrant.
Our acquisition activities and their success are subject to the following risks:
when we are able to locate a desirable property, competition from other real estate investors may significantly increase the purchase price
acquired properties may fail to perform as expected
the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates
acquired properties may be located in new markets where we face risks associated with an incomplete knowledge or understanding of the local market, a limited number of established business relationships in the area and a relative unfamiliarity with local governmental and permitting procedures
we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties and operating entities, into our existing operations, and as a result, our results of operations and financial condition could be adversely affected
We may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow.
Many of our Properties are concentrated in our primary markets, and we therefore may suffer economic harm as a result of adverse conditions in those markets.
Our Properties are located principally in specific geographic areas. Due to the concentration of our Properties in these areas, performance is dependent on economic conditions in these areas. These areas have experienced periods of economic decline.
We may not be able to access financial markets to obtain capital on a timely basis, or on acceptable terms.
In addition to the capital market constraints previously noted, our ability to access the public debt and equity markets depends on a variety of factors, including:
general economic conditions affecting these markets
our own financial structure and performance
the market's opinion of REITs in general
the market's opinion of REITs that own properties similar to ours
We may suffer adverse effects as a result of the terms of and covenants relating to our indebtedness.
Required payments on our indebtedness generally are not reduced if the economic performance of our portfolio of Properties declines. If the economic performance of our Properties declines, net income, cash flow from operations and cash available for distribution to shareholders will be reduced. If payments on debt cannot be made, we could sustain a loss, or in the case of mortgages, suffer foreclosures by mortgagees or suffer judgments. Further, some obligations, including our $500 million credit facility and $1.8 billion in unsecured notes issued in past public offerings, contain cross-default and/or cross-acceleration provisions, as does $7.1 million in outstanding mortgage indebtedness at December 31, 2011, which means that a default on one obligation may constitute a default on other obligations.
Our credit facility and unsecured debt securities contain customary restrictions, requirements and other limitations on our ability to incur indebtedness, including total debt to asset ratios, secured debt to total asset ratios, debt service coverage ratios and minimum ratios of unencumbered assets to unsecured debt which we must maintain. Our continued ability to borrow under our $500 million credit facility is subject to compliance with our financial and other covenants. In addition, our failure to comply with such covenants

11


could cause a default under this credit facility, and we may then be required to repay such debt with capital from other sources. Under those circumstances, other sources of capital may not be available to us, or be available only on unattractive terms.
Our degree of leverage could limit our ability to obtain additional financing.
Our degree of leverage could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. Our senior unsecured debt is currently rated investment grade by the three major rating agencies. However, there can be no assurance we will be able to maintain this rating, and in the event our senior debt is downgraded from its current rating, we would likely incur higher borrowing costs. Our degree of leverage could also make us more vulnerable to a downturn in business or the economy generally.
Further issuances of equity securities may be dilutive to our existing shareholders.
The interests of our existing shareholders could be diluted if we issue additional equity securities to finance future developments, acquisitions, or repay indebtedness. Our Board of Trustees can authorize the issuance of additional securities without shareholder approval. Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including issuances of common and preferred equity.
An increase in interest rates would increase our interest costs on variable rate debt and could adversely impact our ability to refinance existing debt.
We currently have, and may incur more, indebtedness that bears interest at variable rates. Accordingly, if interest rates increase, so will our interest costs, which would adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our shareholders. Further, rising interest rates could limit our ability to refinance existing debt when it matures.
Property ownership through joint ventures will limit our ability to act exclusively in our interests and may require us to depend on the financial performance of our co-venturers.
From time to time we invest in joint ventures in which we do not hold a controlling interest. These investments involve risks that do not exist with properties in which we own a controlling interest, including the possibility that our partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives. In instances where we lack a controlling interest, our partners may be in a position to require action that is contrary to our objectives. While we seek to negotiate the terms of these joint ventures in a way that secures our ability to act in our best interests, there can be no assurance that those terms will be sufficient to fully protect us against actions contrary to our interests. If the objectives of our co-ventures are inconsistent with ours, we may not in every case be able to act exclusively in our interests.
Additionally, our joint venture partners may experience financial difficulties or change their investment philosophies. This may impair their ability to meet their obligations to the joint venture, such as with respect to providing additional capital, if required. If such a circumstance presented itself we may be required to perform on their behalf, if possible, or suffer a loss of all or a portion of our investment in the joint venture.
Risks Related to the Real Estate Industry
Real estate investments are illiquid, and we may not be able to sell our Properties if and when we determine it is appropriate to do so.
Real estate generally cannot be sold quickly. We may not be able to dispose of our Properties promptly in response to economic or other conditions. In addition, provisions of the Internal Revenue Code of 1986, as amended (the "Code"), limit a REIT's ability to sell properties in some situations when it may be economically advantageous to do so, thereby adversely affecting returns to shareholders and adversely impacting our ability to meet our obligations to the holders of other securities.
We may experience economic harm if any damage to our Properties is not covered by insurance.
We believe all of our Properties are adequately insured with carriers that are adequately capitalized. However, we cannot guarantee that the limits of our current policies will be sufficient in the event of a catastrophe to our Properties or that carriers will be able to honor their obligations. Our existing property and liability policies expire during 2012. We cannot guarantee that we will be able to renew or duplicate our current coverages in adequate amounts or at reasonable prices.
We may suffer losses that are not covered under our comprehensive liability, fire, extended coverage and rental loss insurance

12


policies. For example, we may not be insured for losses resulting from acts of war, certain acts of terrorism, or from environmental liabilities. If an uninsured loss or a loss in excess of insured limits should occur, we would nevertheless remain liable for the loss which could adversely affect cash flow from operations.
Potential liability for environmental contamination could result in substantial costs.
Under federal, state and local environmental laws, ordinances and regulations, we may be required to investigate and clean up the effects of releases of hazardous or toxic substances or petroleum products at our Properties simply because of our current or past ownership or operation of the real estate. If unidentified environmental problems arise, we may have to make substantial payments which could adversely affect our cash flow and our ability to make distributions to our shareholders because:
as owner or operator, we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination
the law typically imposes clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination
even if more than one person may be responsible for the contamination, each person who shares legal liability under the environmental laws may be held responsible for all of the clean-up costs
governmental entities and third parties may sue the owner or operator of a contaminated site for damages and costs
These costs could be substantial. The presence of hazardous or toxic substances or petroleum products or the failure to properly remediate contamination may materially and adversely affect our ability to borrow against, sell or rent an affected property. In addition, applicable environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination. Changes in laws increasing the potential liability for environmental conditions existing at our Properties may result in significant unanticipated expenditures.
It is our policy to retain independent environmental consultants to conduct Phase I environmental site assessments and asbestos surveys with respect to our acquisition of properties. These assessments generally include a visual inspection of the properties and the surrounding areas, an examination of current and historical uses of the properties and the surrounding areas and a review of relevant state, federal and historical documents, but do not involve invasive techniques such as soil and ground water sampling. Where appropriate, on a property-by-property basis, our practice is to have these consultants conduct additional testing, including sampling for asbestos, for lead in drinking water, for soil contamination where underground storage tanks are or were located or where other past site usages create a potential environmental problem, and for contamination in groundwater. Even though these environmental assessments are conducted, there is still the risk that:
the environmental assessments and updates will not identify all potential environmental liabilities
a prior owner created a material environmental condition that is not known to us or the independent consultants preparing the assessments
new environmental liabilities have developed since the environmental assessments were conducted
future uses or conditions such as changes in applicable environmental laws and regulations could result in environmental liability for us
While we test indoor air quality on a regular basis and have an ongoing maintenance program in place to address this aspect of property operations, inquiries about indoor air quality may necessitate special investigation and, depending on the results, remediation. Indoor air quality issues can stem from inadequate ventilation, chemical contaminants from indoor or outdoor sources, pollen, viruses and bacteria. Indoor exposure to chemical or biological contaminants above certain levels can be alleged to be connected to allergic reactions or other health effects and symptoms in susceptible individuals. If these conditions were to occur at one of our Properties, we may need to undertake a targeted remediation program, including without limitation, steps to increase indoor ventilation rates and eliminate sources of contaminants. Such remediation programs could be costly, necessitate the temporary relocation of some or all of the Property's tenants or require rehabilitation of the affected Property.
Our Properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.
When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold at any of our Properties could require us to undertake a costly remediation program to contain or remove the mold from the affected Property. In addition, the presence of significant mold could expose us to liability from our tenants, employees of our tenants and others if property damage or health concerns arise.

13


Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make expenditures that adversely impact our operating results.
All of our Properties are required to comply with the Americans with Disabilities Act ("ADA"). The ADA generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in imposition of fines by the United States government or an award of damages to private litigants, or both. Expenditures related to complying with the provisions of the ADA could adversely affect our results of operations and financial condition and our ability to make distributions to shareholders. In addition, we are required to operate our Properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our Properties. We may be required to make substantial capital expenditures to comply with those requirements and these expenditures could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to shareholders.
Terrorist attacks and other acts of violence or war may adversely impact our operating results and may affect markets on which our securities are traded.
Terrorist attacks against our Properties, or against the United States or United States interests generally, may negatively affect our operations and investments in our securities. Attacks or armed conflicts could have a direct adverse impact on our Properties or operations through damage, destruction, loss or increased security costs. Any terrorism insurance that we obtain may be insufficient to cover the loss for damages to our Properties as a result of terrorist attacks.
Furthermore, any terrorist attacks or armed conflicts could result in increased volatility in or damage to the United States and worldwide financial markets and economy. Adverse economic conditions could affect the ability of our tenants to pay rent, which could have an adverse impact on our operating results.
Risks Related to Our Organization and Structure
We have elected REIT status under the federal tax laws and could suffer adverse consequences if we fail to qualify as a REIT.
We have elected REIT status under federal tax laws and have taken the steps known to us to perfect that status, but we cannot be certain that we qualify or that we will remain qualified. Qualification as a REIT involves the application of highly technical and complex provisions of the Code, as to which there are only limited judicial or administrative interpretations. The complexity of these provisions and of the related income tax regulations is greater in the case of a REIT that holds its assets in partnership form, as we do. Moreover, no assurance can be given that new tax laws will not significantly affect our qualification as a REIT or the federal income tax consequences of such qualification. New laws could be applied retroactively, which means that past operations could be found to be in violation, which would have a negative effect on the business.
If we fail to qualify as a REIT in any taxable year, the distributions to shareholders would not be deductible when computing taxable income. If this happened, we would be subject to federal income tax on our taxable income at regular corporate rates. Also, we could be prevented from qualifying as a REIT for the four years following the year in which we were disqualified. Further, if we requalified as a REIT after failing to qualify, we might have to pay the full corporate-level tax on any unrealized gain in our assets during the period we were not qualified as a REIT. We would then have to distribute to our shareholders the earnings we accumulated while we were not qualified as a REIT. These additional taxes would reduce our funds available for distribution to our shareholders. In addition, while we were disqualified as a REIT, we would not be required by the Code to make distributions to our shareholders. A failure by the Company to qualify as a REIT and the resulting requirement to pay taxes and interest (and perhaps penalties) would cause us to default under various agreements to which we are a party, including under our credit facility, and would have a material adverse effect on our business, prospects, results of operations, earnings, financial condition and our ability to make distributions to shareholders.
Future economic, market, legal, tax or other considerations may lead our Board of Trustees to authorize the revocation of our election to qualify as a REIT. A revocation of our REIT status would require the consent of the holders of a majority of the voting interests of all of our outstanding Common Shares.
Risks associated with potential borrowings necessary to make distributions to qualify as a REIT; distributions can be made in Common Shares.
We intend to make distributions to shareholders to comply with the distribution provisions of the Code necessary to maintain qualification as a REIT and to avoid income taxes and the non-deductible excise tax. Under certain circumstances, we may be required to borrow funds to meet the distribution requirements necessary to achieve the tax benefits associated with qualifying as a REIT. In such circumstances, we might need to borrow funds to avoid adverse tax consequences, even if our management believes

14


that the prevailing market conditions are not generally favorable for such borrowings or that such borrowings would not be advisable in the absence of such tax considerations.
Certain officers of the Trust may not have the same interests as shareholders as to certain tax laws.
Certain officers of the Trust own Common Units. These units may be exchanged for our Common Shares. The officers who own those units and have not yet exchanged them for our Common Shares may suffer different and more adverse tax consequences than holders of our Common Shares suffer in certain situations:
when certain of our Properties are sold
when debt on those Properties is refinanced
if we are involved in a tender offer or merger
Because these officers own units and face different consequences than shareholders do, the Trust and those officers may have different objectives as to these transactions than shareholders do.
Certain aspects of our organization could have the effect of restricting or preventing a change of control of our Company, which could have an adverse effect on the price of our shares.
Our charter contains an ownership limit on shares. To qualify as a REIT, five or fewer individuals cannot own, directly or indirectly, more than 50% in value of the outstanding shares of beneficial interest. To this end, our Declaration of Trust, among other things, generally prohibits any holder of the Trust's shares from owning more than 5% of the Trust's outstanding shares of beneficial interest, unless that holder gets the consent from our Board of Trustees. This limitation could prevent the acquisition of control of the Company by a third party without the consent from our Board of Trustees.
We can issue preferred shares. Our Declaration of Trust authorizes our Board of Trustees to establish the preferences and rights of any shares issued. The issuance of preferred shares could have the effect of delaying, making more difficult or preventing a change of control of the Company, even if a change in control were in the shareholder's interest.
There are limitations on acquisition of and changes in control pursuant to, and fiduciary protections of The Board under Maryland law. The Maryland General Corporation Law ("MGCL") contains provisions which are applicable to the Trust as if the Trust were a corporation. Among these provisions is a section, referred to as the "control share acquisition statute," which eliminates the voting rights of shares acquired in quantities so as to constitute "control shares," as defined under the MGCL. The MGCL also contains provisions applicable to us that are referred to as the "business combination statute," which would generally limit business combinations between the Company and any 10% owners of the Trust's shares or any affiliate thereof. Further, Maryland law provides broad discretion to the Board with respect to its fiduciary duties in considering a change in control of our Company, including that the Board is subject to no greater level of scrutiny in considering a change in control transaction than with respect to any other act by the Board. Finally, the "unsolicited takeovers" provisions of the MGCL permit the Board, without shareholder approval and regardless of what is currently provided in our Declaration of Trust or By-Laws, to implement takeover defenses that our Company does not yet have, including permitting only the Board to fix the size of the Board and permitting only the Board to fill a vacancy on the Board. All of these provisions may have the effect of inhibiting a third party from making an acquisition proposal for our Company or of delaying, deferring or preventing a change in control of the Company under circumstances that otherwise could provide the holders of Common Shares with the opportunity to realize a premium over the then current market price.
Various factors out of our control could hurt the market value of our publicly traded securities.
The value of our publicly traded securities depends on various market conditions, which may change from time to time. In addition to general economic and market conditions and our particular financial condition and performance, the value of our publicly traded securities could be affected by, among other things, the extent of institutional investor interest in us and the market's opinion of REITs in general and, in particular, REITs that own and operate properties similar to ours.
The market value of the equity securities of a REIT may be based primarily upon the market's perception of the REIT's growth potential and its current and future cash distributions, and may be secondarily based upon factors such as the real estate market value of the underlying assets. The failure to meet the market's expectations with regard to future earnings and cash distributions likely would adversely affect the market price of publicly traded securities. Our payment of future dividends will be at the discretion of our Board of Trustees and will depend on numerous factors including our cash flow, financial condition and capital requirements, annual distribution requirements under the REIT provisions of the Code, the general economic environment and such other factors as our Board of Trustees deems relevant, and we cannot assure you that our annual dividend rate will be maintained at its current level. We are currently distributing more in dividends than we receive in net cash provided by operating activities less customary

15


tenant improvement and leasing transaction costs. Over time, increases in occupancy and rental rates could offset this shortfall. Should market opportunities allow us to accelerate our strategy relating to dispositions (i.e. sale of suburban office) without corresponding opportunities to reinvest those proceeds in the near term, this shortfall would increase. We will continually evaluate these circumstances opposite our distribution policies.
Rising market interest rates could make an investment in publicly traded securities less attractive. If market interest rates increase, purchasers of publicly traded securities may demand a higher annual yield on the price they pay for their securities. This could adversely affect the market price of publicly traded securities.
We no longer have a shareholder rights plan but are not precluded from adopting one.
Our shareholder rights plan expired in accordance with its terms on December 31, 2007. While we did not extend or renew the plan, we are not prohibited from adopting, without shareholder approval, a shareholder rights plan that may discourage any potential acquirer from acquiring more than a specific percentage of our outstanding Common Shares since, upon this type of acquisition without approval of our Board of Trustees, all other common shareholders would have the right to purchase a specified amount of Common Shares at a substantial discount from market price.
Transactions by the Trust or the Operating Partnership could adversely affect debt holders.
Except with respect to several covenants limiting the incurrence of indebtedness and a covenant requiring the Operating Partnership to maintain a certain unencumbered total asset value, our indentures do not contain any additional provisions that would protect holders of the Operating Partnership's debt securities in the event of (i) a highly leveraged transaction involving the Operating Partnership, (ii) a change of control or (iii) certain reorganizations, restructurings, mergers or similar transactions involving the Operating Partnership or the Trust.

ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
The Wholly Owned Properties in Operation, as of December 31, 2011, consisted of 332 industrial and 265 office properties. Single tenants occupy 178 Wholly Owned Properties in Operation. These tenants generally require a reduced level of service in connection with the operation or maintenance of these properties. The remaining 419 Wholly Owned Properties in Operation are multi-tenant properties for which the Company renders a range of building, operating and maintenance services.
As of December 31, 2011, the industrial Wholly Owned Properties in Operation were 92.8% leased. The average building size for the industrial Wholly Owned Properties in Operation was approximately 135,000 square feet. As of December 31, 2011, the office Wholly Owned Properties in Operation were 89.8% leased. The average building size for the office Wholly Owned Properties in Operation was approximately 77,000 square feet.
The JV Properties in Operation, as of December 31, 2011, consisted of 47 industrial and 49 office properties. Single tenants occupy 38 JV Properties in Operation. These tenants generally require a reduced level of service in connection with the operation or maintenance of these properties. The remaining 58 JV Properties in Operation are multi-tenant properties for which the Company renders a range of building, operating and maintenance services.
As of December 31, 2011, the industrial JV Properties in Operation were 88.2% leased. The average building size for the industrial JV Properties in Operation was approximately 201,000 square feet. As of December 31, 2011, the office JV Properties in Operation were 89.7% leased. The average building size for the office JV Properties in Operation was approximately 96,000 square feet.
As of December 31, 2011, the industrial Properties in Operation were 92.0% leased. The average building size for the industrial Properties in Operation was approximately 143,000 square feet. As of December 31, 2011, the office Properties in Operation were 89.8% leased. The average building size for the office Properties in Operation was approximately 80,000 square feet.
A complete listing of the Wholly Owned Properties in Operation appears as Schedule III to the financial statements of the Company included in this Annual Report on Form 10-K. The table below sets forth certain information on the Company's Properties in Operation as of December 31, 2011 (in thousands, except percentages).

16


 
 
Type
 
Net Rent(1)
 
Square Feet
 
% Leased
 Northeast - Southeastern PA
 
Industrial
-
Distribution
 
$
4,237

 
597

 
88.0
%
 
 
 
-
Flex
 
15,714

 
1,662

 
88.0
%
 
 
Office
 
 
 
93,757

 
6,997

 
87.9
%
 
 
Total
 
 
 
113,708

 
9,256

 
87.9
%
Northeast - Lehigh
 
Industrial
-
Distribution
 
68,383

 
15,621

 
98.4
%
 
 
 
-
Flex
 
3,792

 
483

 
98.0
%
 
 
Office
 
 
 
1,224

 
121

 
96.3
%
 
 
Total
 
 
 
73,399

 
16,225

 
98.4
%
Northeast - Other
 
Industrial
-
Distribution
 
3,686

 
1,040

 
69.6
%
 
 
 
-
Flex
 
9,273

 
1,075

 
87.3
%
 
 
Office
 
 
 
30,803

 
2,420

 
88.9
%
 
 
Total
 
 
 
43,762

 
4,535

 
84.1
%
Central
 
Industrial
-
Distribution
 
23,752

 
6,103

 
92.7
%
 
 
 
-
Flex
 
20,350

 
2,714

 
87.1
%
 
 
Office
 
 
 
41,202

 
3,439

 
88.4
%
 
 
Total
 
 
 
85,304

 
12,256

 
90.3
%
South
 
Industrial
-
Distribution
 
40,547

 
11,172

 
90.3
%
 
 
 
-
Flex
 
29,444

 
3,941

 
90.9
%
 
 
Office
 
 
 
79,127

 
6,262

 
91.7
%
 
 
Total
 
 
 
149,118

 
21,375

 
90.8
%
Metro
 
Industrial
-
Distribution
 
3,569

 
346

 
100.0
%
 
 
 
-
Flex
 
1,852

 
101

 
100.0
%
 
 
Office
 
 
 
18,073

 
974

 
97.5
%
 
 
Total
 
 
 
23,494

 
1,421

 
98.3
%
United Kingdom
 
Industrial
-
Distribution
 

 

 

 
 
 
-
Flex
 
1,223

 
44

 
100.0
%
 
 
Office
 
 
 
2,692

 
90

 
96.7
%
 
 
Total
 
 
 
3,915

 
134

 
97.7
%
TOTAL
 
Industrial
-
Distribution
 
144,174

 
34,879

 
93.8
%
 
 
 
-
Flex
 
81,648

 
10,020

 
89.5
%
 
 
Office
 
 
 
266,878

 
20,303

 
89.8
%
 
 
Total
 
 
 
$
492,700

 
65,202

 
91.9
%
 
 
 
 
 
 
 
 
 
 
 
Joint Ventures (2)
 
Industrial
-
Distribution
 
$
30,653

 
9,269

 
88.3
%
 
 
 
-
Flex
 
3,792

 
171

 
82.0
%
 
 
Office
 
 
 
101,666

 
4,724

 
89.7
%
 
 
Total
 
 
 
$
136,111

 
14,164

 
88.7
%

(1)
Net rent represents the contractual rent per square foot multiplied by the tenant's square feet leased at December 31, 2011 for tenants in occupancy. Average annual rent per square foot for the Wholly Owned Properties in Operation is $8.22 and for the Joint Venture Properties in Operation it is $10.83. Net rent does not include the tenant's obligation to pay property operating expenses and real estate taxes.
(2)
Joint Ventures represent the 96 properties owned by unconsolidated joint ventures in which the Company has an interest.

17


The expiring number of tenants, square feet and annual rent by year for the Properties in Operation as of December 31, 2011 are as follows (in thousands except number of tenants and % of annual rent):
 
 
Industrial-Distribution
 
Industrial-Flex
 
Office
 
Total
 
 
Number of Tenants
 
Square Feet
 
Annual (1) Rent
 
% of Annual Rent
 
Number of Tenants
 
Square Feet
 
Annual Rent
 
% of Annual Rent
 
Number of Tenants
 
Square Feet
 
Annual Rent
 
% of Annual Rent
 
Number of Tenants
 
Square Feet
 
Annual Rent
 
% of Annual Rent
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Wholly Owned Properties in Operation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
62

  
3,948

  
$
15,574

 
9.4
%
 
124

 
1,459

 
$
13,065

 
14.6
%
 
258

  
2,035

 
$
27,550

 
9.2
%
 
444

 
7,442

 
$
56,189

 
10.2
%
2013
 
55

  
4,352

  
19,027

 
11.7
%
 
113

 
1,792

 
16,531

 
18.4
%
 
231

  
2,197

 
35,610

 
11.9
%
 
399

 
8,341

 
71,168

 
12.9
%
2014
 
57

  
4,428

  
20,265

 
12.4
%
 
95

 
1,111

 
10,478

 
11.7
%
 
189

  
2,914

 
44,661

 
14.9
%
 
341

 
8,453

 
75,404

 
13.6
%
2015
 
43

  
5,283

  
23,169

 
14.2
%
 
75

 
1,096

 
10,856

 
12.1
%
 
162

  
2,513

 
35,496

 
11.8
%
 
280

 
8,892

 
69,521

 
12.6
%
2016
 
44

  
3,732

  
16,992

 
10.4
%
 
62

 
1,068

 
10,746

 
12.0
%
 
121

  
2,014

 
34,494

 
11.5
%
 
227

 
6,814

 
62,232

 
11.3
%
2017
 
32

  
2,721

  
14,123

 
8.7
%
 
40

 
943

 
9,650

 
10.8
%
 
76

  
1,466

 
25,116

 
8.4
%
 
148

 
5,130

 
48,889

 
8.8
%
2018
 
23

  
2,202

  
13,188

 
8.1
%
 
20

 
567

 
5,231

 
5.8
%
 
41

  
1,273

 
22,647

 
7.5
%
 
84

 
4,042

 
41,066

 
7.4
%
2019
 
13

  
1,557

  
8,915

 
5.5
%
 
6

 
277

 
3,458

 
3.8
%
 
40

  
1,866

 
36,052

 
12.0
%
 
59

 
3,700

 
48,425

 
8.8
%
2020
 
14

  
2,743

  
16,926

 
10.4
%
 
9

 
338

 
4,623

 
5.2
%
 
29

  
979

 
18,982

 
6.3
%
 
52

 
4,060

 
40,531

 
7.3
%
2021
 
3

  
89

  
448

 
0.3
%
 
5

 
120

 
1,474

 
1.6
%
 
15

  
294

 
4,917

 
1.6
%
 
23

 
503

 
6,839

 
1.2
%
Thereafter
 
10

  
1,654

  
14,505

 
8.9
%
 
8

 
194

 
3,634

 
4.0
%
 
20

  
685

 
14,566

 
4.9
%
 
38

 
2,533

 
32,705

 
5.9
%
Total
 
356

  
32,709

  
$
163,132

 
100.0
%
 
557

  
8,965

 
$
89,746

 
100.0
%
 
1,182

  
18,236

 
$
300,091

 
100.0
%
 
2,095

 
59,910

 
$
552,969

 
100.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Joint Venture Properties in Operation:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
8

  
354

  
$
1,317

 
3.6
%
 
4

  
53

 
$
1,391

 
36.7
%
 
41

  
316

  
$
8,525

 
6.8
%
 
53

 
723

 
$
11,233

 
6.8
%
2013
 
10

  
1,258

  
4,558

 
12.3
%
 

  

 

 
%
 
24

  
282

  
6,164

 
4.9
%
 
34

 
1,540

 
10,722

 
6.5
%
2014
 
9

  
1,234

  
5,679

 
15.3
%
 
2

  
25

 
701

 
18.5
%
 
31

  
468

  
11,843

 
9.5
%
 
42

 
1,727

 
18,223

 
11.0
%
2015
 
7

  
633

  
2,988

 
8.1
%
 

  

 

 
%
 
22

  
218

  
4,787

 
3.8
%
 
29

 
851

 
7,775

 
4.7
%
2016
 
10

  
1,085

  
5,191

 
14.0
%
 
1

  
36

 
991

 
26.1
%
 
28

  
559

  
14,232

 
11.4
%
 
39

 
1,680

 
20,414

 
12.3
%
2017
 
9

  
1,197

  
5,227

 
14.1
%
 
2

  
25

 
708

 
18.7
%
 
12

  
247

  
5,874

 
4.7
%
 
23

 
1,469

 
11,809

 
7.1
%
2018
 
5

  
726

  
3,964

 
10.7
%
 

  

 

 
%
 
13

  
60

  
1,936

 
1.5
%
 
18

 
786

 
5,900

 
3.5
%
2019
 
2

  
681

  
3,725

 
10.1
%
 

  

 

 
%
 
21

  
255

  
7,375

 
5.9
%
 
23

 
936

 
11,100

 
6.7
%
2020
 
1

  
77

  
276

 
0.7
%
 

  

 

 
%
 
7

  
132

  
2,869

 
2.3
%
 
8

 
209

 
3,145

 
1.9
%
2021
 
2

  
522

  
2,280

 
6.1
%
 

  

 

 
%
 
12

  
248

  
6,869

 
5.5
%
 
14

 
770

 
9,149

 
5.5
%
Thereafter
 
3

  
419

  
1,857

 
5.0
%
 

  

 

 
%
 
17

  
1,455

  
54,715

 
43.7
%
 
20

 
1,874

 
56,572

 
34.1
%
Total
 
66

  
8,186

  
$
37,062

 
100.0
%
 
9

  
139

 
$
3,791

 
100.0
%
 
228

  
4,240

  
$
125,189

 
100.0
%
 
303

 
12,565

 
$
166,042

 
100.0
%

(1) Annual rent represents the contractual rent per square foot multiplied by the tenants' square feet leased on the date of lease expiration for the tenants in occupancy on December 31, 2011.

18


The table below highlights, for the Properties in Operation, the Company's top ten industrial tenants and top ten office tenants as of December 31, 2011. The table reflects, for the tenants in the JV Properties in Operation, the Company's ownership percentage of the respective joint venture.
 
 
Percentage of
Top 10 Industrial Tenants
 
Annual Rent
Kellogg USA, Inc.
 
1.5
%
Amazon.com
 
1.2
%
Home Depot U.S.A., Inc.
 
1.1
%
Wakefern Food Corp.
 
1.0
%
Flowers Foods, Inc.
 
0.9
%
Ozburn Hessey Logistics, L.L.C.
 
0.8
%
Uline, Inc.
 
0.7
%
Federal Express Corporation
 
0.6
%
The Dial Corporation
 
0.6
%
DSC Logistics, Inc.
 
0.6
%
 
 
9.0
%
 
 
 
 
 
Percentage of
Top 10 Office Tenants
 
Annual Rent
The Vanguard Group, Inc.
 
3.9
%
United Healthcare Services, Inc.
 
1.7
%
GlaxoSmithKline
 
1.6
%
Comcast Corporation
 
1.5
%
GMAC Mortgage Corporation
 
1.4
%
United States of America
 
1.4
%
Fidelity National Information Services
 
1.4
%
PNC Bank, National Association
 
1.2
%
WellCare Health Plans, Inc.
 
1.0
%
Sanofi-Aventis U.S., Inc.
 
0.9
%
 
 
16.0
%
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material litigation as of December 31, 2011.

ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.

19


PART II
ITEM 5. MARKET FOR THE REGISTRANTS' COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND RELATED ISSUER PURCHASES OF EQUITY SECURITIES
The Common Shares are traded on the New York Stock Exchange under the symbol "LRY." There is no established public trading market for the Common Units. The following table sets forth, for the calendar quarters indicated, the high and low closing prices of the Common Shares on the New York Stock Exchange, and the dividends declared per Common Share for such calendar quarter.
 
 
High
 
Low
 
Dividends Declared Per Common Share
2011
 
 
 
 
 
 
Fourth Quarter
 
$32.73
 
$27.49
 
$0.475
Third Quarter
 
35.42

 
26.16

 
0.475

Second Quarter
 
36.06

 
31.66

 
0.475

First Quarter
 
35.25

 
31.77

 
0.475

2010
 
 
 
 
 
 
Fourth Quarter
 
$34.82
 
$29.84
 
$0.475
Third Quarter
 
33.16

 
27.41

 
0.475

Second Quarter
 
35.05

 
28.85

 
0.475

First Quarter
 
34.96

 
28.75

 
0.475

As of February 21, 2012, the Common Shares were held by 1,033 holders of record. Since its initial public offering in 1994, the Company has paid regular and uninterrupted quarterly dividends.
Although the Company currently anticipates that dividends at $0.475 per Common Share per quarter or a comparable rate will continue to be paid in the future, the payment of future dividends by the Company will be at the discretion of the Board of Trustees and will depend on numerous factors including the Company's cash flow, its financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Code, the general economic environment and such other factors as the Board of Trustees deems relevant.
The following line graph compares the cumulative total shareholder return on Common Shares for the period beginning December 31, 2006 and ended December 31, 2011 with the cumulative total return on the Standard and Poor's 500 Stock Index ("S&P 500") and the NAREIT Equity REIT Total Return Index ("NAREIT Index") over the same period. Total return values for the S&P 500, the NAREIT Index and the Company's Common Shares were calculated based on cumulative total return assuming the investment of $100 in the NAREIT Index, the S&P 500 and the Company's Common Shares on December 31, 2006, and assuming reinvestment of dividends in all cases.



20


ITEM 6. SELECTED FINANCIAL DATA
The following tables set forth Selected Financial Data for the Trust and the Operating Partnership as of and for the years ended December 31, 2011, 2010, 2009, 2008 and 2007. The information set forth below should be read in conjunction with "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the financial statements and notes thereto appearing elsewhere in this report. Certain amounts from prior years have been reclassified to conform to current-year presentation.
Operating Data
 
YEAR ENDED DECEMBER 31,
(In thousands, except per share data)
 
2011
 
2010
 
2009
 
2008
 
2007
Total operating revenue
 
$667,594
 
$657,001
 
$644,696
 
$628,849
 
$573,465
Income from continuing operations
 
$139,871
 
$130,002
 
$30,526
 
$123,947
 
$113,819
Net income
 
$210,710
 
$153,375
 
$78,992
 
$180,106
 
$190,310
Basic:
 
 
 
 
 
 
 
 
 
 
  Income from continuing operations
 
$1.00
 
$0.93
 
$0.09
 
$1.05
 
$1.01
  Income from discontinued operations
 
$0.60
 
$0.20
 
$0.43
 
$0.57
 
$0.80
  Income per common share/unit
 
$1.60
 
$1.13
 
$0.52
 
$1.62
 
$1.81
Diluted:
 
 
 
 
 
 
 
 
 
 
  Income from continuing operations
 
$1.00
 
$0.92
 
$0.09
 
$1.05
 
$1.00
  Income from discontinued operations
 
$0.59
 
$0.20
 
$0.43
 
$0.57
 
$0.80
  Income per common share/unit
 
$1.59
 
$1.12
 
$0.52
 
$1.62
 
$1.80
Dividends paid per common share
 
$1.900
 
$1.900
 
$1.900
 
$2.500
 
$2.485
Trust - weighted average number of shares outstanding - basic (1)
 
114,755

 
112,924

 
107,550

 
93,615

 
91,197

Trust - weighted average number of shares outstanding - diluted (2)
 
115,503

 
113,606

 
108,002

 
93,804

 
91,803

Operating Partnership - weighted average number of units outstanding - basic (1)
 
118,624

 
116,871

 
111,568

 
97,805

 
95,387

Operating Partnership - weighted average number of units outstanding - diluted (2)
 
119,372

 
117,553

 
112,020

 
97,994

 
95,993

 
 
 
 
 
 
 
 
 
 
 
Balance Sheet Data
 
DECEMBER 31,
(In thousands)
 
2011
 
2010
 
2009
 
2008
 
2007
Net real estate
 
$
4,219,955

 
$
3,969,929

 
$
4,001,253

 
$
4,023,311

 
$
4,382,901

Total assets
 
$
4,989,673

 
$
5,064,799

 
$
5,228,943

 
$
5,217,035

 
$
5,643,937

Total indebtedness
 
$
2,222,862

 
$
2,359,822

 
$
2,456,875

 
$
2,590,167

 
$
3,021,129

Liberty Property Trust shareholders' equity
 
$
2,103,594

 
$
2,082,186

 
$
2,122,295

 
$
1,958,779

 
$
1,837,025

Owners' Equity (Liberty Property Limited Partnership)
 
$
2,459,756

 
$
2,438,552

 
$
2,483,169

 
$
1,945,516

 
$
1,800,969

 
 
 
 
 
 
 
 
 
 
 
Other Data
 
YEAR ENDED DECEMBER 31,
(Dollars in thousands)
 
2011
 
2010
 
2009
 
2008
 
2007
Net cash provided by operating activities
 
$
317,724

 
$
292,264

 
$
307,201

 
$
272,709

 
$
346,752

Net cash (used in) provided by investing activities
 
$
(56,223
)
 
$
(103,461
)
 
$
(14,332
)
 
$
45,793

 
$
(758,924
)
Net cash (used in) provided by financing activities
 
$
(351,513
)
 
$
(315,842
)
 
$
(74,033
)
 
$
(331,314
)
 
$
396,322

Funds from operations available to common shareholders (3)
 
$
311,841

 
$
312,138

 
$
310,439

 
$
316,986

 
$
305,386

Total leaseable square footage of Wholly Owned Properties in Operation at end of period (in thousands)
 
65,202

 
65,241

 
64,384

 
63,799

 
62,079

Total leaseable square footage of JV Properties in Operation at end of period (in thousands)
 
14,164

 
14,422

 
13,786

 
13,069

 
11,462

Wholly Owned Properties in Operation at end of period
 
597

 
637

 
639

 
654

 
649

JV Properties in Operation at end of period
 
96

 
98

 
96

 
95

 
91

Wholly Owned Properties in Operation percentage leased at end of period
 
92
%
 
90
%
 
89
%
 
91
%
 
93
%
JV Properties in Operation percentage leased at end of period
 
89
%
 
83
%
 
88
%
 
92
%
 
94
%

(1)
Basic weighted average number of shares includes vested Common Shares (Liberty Property Trust)/Common Units (Liberty Property Limited Partnership) outstanding during the year.

21


(2)
Diluted weighted average number of shares outstanding includes the vested and unvested Common Shares (Liberty Property Trust)/Common Units (Liberty Property Limited Partnership) outstanding during the year as well as the dilutive effect of outstanding options.
(3)
The National Association of Real Estate Investment Trusts ("NAREIT") has issued a standard definition for Funds from operations (as defined below). The Securities and Exchange Commission has agreed to the disclosure of this non-GAAP financial measure on a per share basis in its Release No. 34-47226, Conditions for Use of Non-GAAP Financial Measures. The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company's operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company's financial performance when compared to other REITs since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles ("GAAP")), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company's operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP. Historically the Company included impairment charges in this computation. However, excluding impairment charges from the computation of Funds from operations is consistent with NAREIT's reaffirmation in November of 2011 of its July, 2000 guidance on NAREIT-defined Funds from Operations, which indicated that impairment write-downs of depreciable real estate should be excluded in the computation of Funds from operations. Accordingly, Funds from operations have been restated for prior periods. A reconciliation of Funds from operations to net income may be found in Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations.

22



Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (“REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, collectively with the Trust and their consolidated subsidiaries, the “Company”).
The Company operates primarily in the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States. Additionally, the Company owns certain assets in the United Kingdom.
As of December 31, 2011, the Company owned and operated 332 industrial and 265 office properties (the “Wholly Owned Properties in Operation”) totaling 65.2 million square feet. In addition, as of December 31, 2011, the Company owned 10 properties under development, which when completed are expected to comprise 3.1 million square feet (the “Wholly Owned Properties under Development”) and 1,456 acres of developable land, substantially all of which is zoned for commercial use. Additionally, as of December 31, 2011, the Company had an ownership interest, through unconsolidated joint ventures, in 47 industrial and 49 office properties totaling 14.2 million square feet (the “JV Properties in Operation” and, together with the Wholly Owned Properties in Operation, the “Properties in Operation”). The Company also has an ownership interest through unconsolidated joint ventures in 615 acres of developable land, substantially all of which is zoned for commercial use. The Company refers to the Wholly Owned Properties under Development and the Properties in Operation collectively as the "Properties."
The Company focuses on creating value for shareholders through increasing profitability and cash flow. With respect to its Properties in Operation, the Company endeavors to maintain high occupancy levels while maximizing rental rates and controlling costs. The Company pursues development opportunities that it believes will create value and yield acceptable returns. The Company also acquires properties that it believes will create long-term value, and disposes of properties that no longer fit within the Company’s strategic objectives or in situations where it can optimize cash proceeds. The Company’s strategy with respect to product and market selection is expected generally to favor industrial and metro-office properties and markets with strong demographic and economic fundamentals.
The Company’s operating results depend primarily upon income from rental operations and are substantially influenced by rental demand for the Properties in Operation. The economic disruption that commenced in 2008 continues to adversely impact the Company’s business. Although we have seen some improvement in the general economy, the economy as it impacts our business has not returned to pre-recession levels. Rental demand for the Properties in Operation remained relatively flat for the year ended December 31, 2011 as compared to the year ended December 31, 2010. During the year ended December 31, 2011, the Company successfully leased 15.8 million square feet and attained occupancy of 91.9% for the Wholly Owned Properties in Operation and 88.7% for the JV Properties in Operation for a combined occupancy of 91.3% for the Properties in Operation as of that date. During the year ended December 31, 2011, straight line rents on renewal and replacement leases were on average 7.2% lower than rents on expiring leases. At December 31, 2010, occupancy for the Wholly Owned Properties in Operation was 89.9% and for the JV Properties in Operation was 83.0% for a combined occupancy for the Properties in Operation of 88.7%. The Company believes that average occupancy for its Properties in Operation will be flat or increase by up to 2% for 2012 compared to 2011. Furthermore, the Company believes that straight line rents on renewal and replacement leases for 2012 will on average be flat to 4% lower than rents on expiring leases.
Consistent with our strategy, during 2011 the Company was an active seller of suburban office properties and acquired or commenced development of industrial and metro-office properties. The foregoing activity is anticipated to result in a decline in net cash provided by operating activities until the acquisition properties are stabilized and the development properties are completed and leased. As a result, the Company anticipates that for 2012 the net cash provided by operating activities, less customary capital expenditures and leasing transaction costs, will be less than dividend distributions. The Company will continue to evaluate these circumstances in light of its dividend distribution policy.
WHOLLY OWNED CAPITAL ACTIVITY
Acquisitions
During the year ended December 31, 2011, the Company acquired 21 properties for an aggregate purchase price of $249.5 million. These properties, which contain 4.2 million square feet of leaseable space, were 83.0% leased as of December 31, 2011. The Company also acquired six parcels of land totaling 382 acres for $43.1 million. For 2012, the Company anticipates that wholly owned property acquisitions will range from $100 million to $300 million and believes that certain of the acquired properties will be either vacant or underleased.


23



Dispositions
Disposition activity allows the Company to, among other things, (1) reduce its holdings in certain markets and product types within a market consistent with the Company's strategy; (2) lower the average age of the portfolio; (3) optimize the cash proceeds from the sale of certain assets; and (4) obtain funds for investment activities. During the year ended December 31, 2011, the Company realized proceeds of $371.6 million from the sale of 62 operating properties representing 4.2 million square feet and 61 acres of land. For 2012, the Company anticipates that wholly owned property dispositions will range from $250 million to $350 million.
Development
During the year ended December 31, 2011, the Company did not bring any development projects into service but initiated 10 Wholly Owned Properties under Development with a projected Total Investment of $288.7 million, of which $88.8 million has been incurred as of December 31, 2011. For 2012, the Company anticipates that wholly owned development deliveries will total between $30 million and $70 million and that during 2012 it will commence development on properties with an expected aggregate Total Investment in a range from $200 million to $300 million.
“Total Investment” for a property is defined as the property’s purchase price plus closing costs (in the case of acquisitions if vacant) and management’s estimate, as determined at the time of acquisition, of the cost of necessary building improvements in the case of acquisitions, or land costs and land and building improvement costs in the case of development projects, and, where appropriate, other development costs and carrying costs.
UNCONSOLIDATED JOINT VENTURE CAPITAL ACTIVITY
The Company periodically enters into unconsolidated joint venture relationships in connection with the execution of its real estate operating strategy.
Acquisitions
During the year ended December 31, 2011, none of the unconsolidated joint ventures in which the Company held an interest acquired any properties. The Company does not anticipate that any unconsolidated joint ventures in which the Company holds an interest will acquire any properties in 2012.
Dispositions
During the year ended December 31, 2011, an unconsolidated joint venture in which the Company holds a 25% interest realized proceeds of $8.4 million from the sale of one property which contained 231,000 square feet of leaseable space. In addition, an unconsolidated joint venture in which the Company holds a 20% interest realized proceeds of $7.5 million from the sale of one property which contained 22,000 square feet of leaseable space. Also, an unconsolidated joint venture in which the Company holds a 50% interest realized proceeds of $9.6 million from the sale of five acres of land. The Company does not anticipate that any unconsolidated joint ventures in which the Company holds an interest will dispose of any properties in 2012.
Development
During the year ended December 31, 2011, none of the unconsolidated joint ventures in which the Company held an interest brought any properties into service or began any development activities. As of December 31, 2011, none of the unconsolidated joint ventures in which the Company held an interest had any properties under development. The Company does not anticipate that any unconsolidated joint ventures in which the Company holds an interest will bring any development properties into service or begin any development activities in 2012.
Forward-Looking Statements
When used throughout this report, the words "believes," "anticipates," "estimates" and "expects" and similar expressions are intended to identify forward-looking statements. Such statements indicate that assumptions have been used that are subject to a number of risks and uncertainties that could cause actual financial results or management plans and objectives to differ materially from those projected or expressed herein, including: the effect of national and regional economic conditions; rental demand; the Company's ability to identify, and enter into agreements with suitable joint venture partners in situations where it believes such arrangements are advantageous; the Company's ability to identify and secure additional properties and sites, both for itself and the joint ventures to which it is a party, that meet its criteria for acquisition or development; the current credit crisis and its impact on the availability and cost of capital; the effect of prevailing market interest rates; risks related to the integration of the operations of entities that we have acquired or may acquire; risks related to litigation; and other risks described from time to time in the Company's filings with the SEC. Given these uncertainties, readers are cautioned not to place undue reliance on such statements.

24


Critical Accounting Policies and Estimates
The Company's discussion and analysis of its financial condition and results of operations are based upon the Company's consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles ("US GAAP"). The preparation of these financial statements requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases these estimates, judgments and assumptions on historical experience and on other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.
The following critical accounting policies discussion reflects what the Company believes are the more significant estimates, assumptions and judgments used in the preparation of its Consolidated Financial Statements. This discussion of critical accounting policies is intended to supplement the description of the accounting policies in the footnotes to the Company's Consolidated Financial Statements and to provide additional insight into the information used by management when evaluating significant estimates, assumptions and judgments. For further discussion of our significant accounting policies, see Note 2 to the Consolidated Financial Statements included in this report.
Capitalized Costs
Expenditures directly related to the acquisition or improvement of real estate, including interest and other costs capitalized on development projects and land being readied for development, are included in net real estate and are stated at cost. The Company considers a development property substantially complete upon the completion of tenant build-out, but no later than one year after the completion of major construction activity. The capitalized costs include pre-construction costs essential to the development of the property, construction costs, interest costs, real estate taxes, development related salaries and other costs incurred during the period of development. The determination to capitalize rather than expense costs requires the Company to evaluate the status of the development activity. Capitalized interest for the years ended December 31, 2011, 2010 and 2009 was $3.0 million, $929,000 and $7.6 million, respectively. Acquisition costs related to the purchase of operating properties with existing tenants are expensed as incurred. Acquisition-related expenses for the years ended December 31, 2011 and 2010 were $2.6 million and $295,000, respectively. There were no acquisition-related expenses during the year ended December 31, 2009.
Revenue Recognition
Rental revenue is recognized on a straight line basis over the terms of the respective leases. Deferred rent receivable represents the amount by which straight line rental revenue exceeds rents currently billed in accordance with the lease agreements. Above-market and below-market lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management's estimate of fair market lease rates for each corresponding in-place lease. The capitalized above or below-market lease values are amortized as a component of rental revenue over the remaining term of the respective leases and any bargain renewal option periods, where appropriate.
Allowance for Doubtful Accounts
The Company continually monitors the liquidity and creditworthiness of its tenants. Based on these reviews, provisions are established, and an allowance for doubtful accounts for estimated losses resulting from the inability of its tenants to make required rental payments is maintained. As of December 31, 2011 and 2010, the Company's allowance for doubtful accounts totaled $7.5 million and $11.3 million, respectively. The Company had a net recovery of bad debts of $1.9 million for the year ended December 31, 2011 and bad debt expense of $3.9 million and $4.3 million for the years ended December 31, 2010 and 2009, respectively.
Impairment of Real Estate
The Company evaluates its real estate investments upon the occurrence of significant adverse changes in operations to assess whether any impairment indicators are present that could affect the recovery of the recorded value. Indicators the Company uses to determine whether an impairment evaluation is necessary include the low occupancy level of the property, holding period for the property, strategic decisions regarding future development plans for a property under development and land held for development and other market factors. If impairment indicators are present, the Company performs an undiscounted cash flow analysis and compares the net carrying amount of the property to the property's estimated undiscounted future cash flow over the anticipated holding period. The Company assesses the expected undiscounted cash flows based upon a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, current market rental rates, changes in market rental rates, operating costs, capitalization rates, holding periods and discount rates. For these assumptions,

25


the Company considers its experience and historical performance in the various markets and data provided by market research organizations. If any real estate investment is considered impaired, the carrying value of the property is written down to its estimated fair value. Fair value is estimated based on the discounting of future expected cash flows at a risk adjusted interest rate. During the years ended December 31, 2011, 2010 and 2009, the Company recognized impairment losses of $7.8 million, $1.0 million and $9.5 million, respectively. The determination of whether an impairment exists requires the Company to make estimates, judgments and assumptions about the future cash flows. The Company has evaluated each of its Properties and land held for development and has determined that there are no additional impairment charges that need to be recorded at December 31, 2011.
Intangibles
In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, "Business Combinations," the Company allocates the purchase price of real estate acquired to land, building and improvements and intangibles based on the relative fair value of each component. The value ascribed to in-place leases is based on the rental rates for the existing leases compared to the Company's estimate of the fair market lease rates for leases of similar terms and present valuing the difference based on an interest rate which reflects the risks associated with the leases acquired. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships. Origination cost estimates include the costs to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal and other related expenses. Additionally, the Company estimates carrying costs during the expected lease-up periods including real estate taxes, other operating expenses and lost rentals at contractual rates. The Company depreciates the amounts allocated to building and improvements over 40 years. The amounts allocated to the intangible relating to in-place leases, which are included in deferred financing and leasing costs or in other liabilities in the accompanying consolidated balance sheets, are amortized on a straight line basis over the remaining term of the related leases. In the event that a tenant terminates its lease, the unamortized portion of the intangible is written off.
Investments in Unconsolidated Joint Ventures
The Company analyzes its investments in joint ventures under ASC 810, "Consolidation," to determine if the joint venture is considered a variable interest entity and would require consolidation. The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence over, but does not control, these entities. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for equity in earnings and cash contributions and distributions.
On a periodic basis, management assesses whether there are any indicators that the value of the Company's investments in unconsolidated joint ventures may be impaired. An investment is impaired only if management's estimate of the value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other than temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over the estimated fair value of the investment.
Management estimated the fair value of its ownership interest in the joint ventures considering the estimated fair value of the real estate assets owned by the joint ventures and the related indebtedness as well as the working capital assets and liabilities of the joint ventures and the terms of the related joint venture agreements. The Company's estimates of fair value of the real estate assets are based on a discounted cash flow analysis incorporating a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, current market rental rates, changes in market rental rates, operating costs, capitalization rates, holding periods and discount rates. For these assumptions, the Company considered its experience and historical performance in the various markets and data provided by market research organizations. In assessing whether an impairment is other-than-temporary, the Company considers several factors. The longevity and severity of the impairment are considered as well as the expected time for recovery of value to occur, if ever.








26


The Company determined that four investments in joint ventures had other-than-temporary impairments as of December 31, 2009. The investment in unconsolidated joint ventures as of December 31, 2009 before and after the impairment charge are as follows (in thousands):
 
 
December 31, 2009
 
 
Before
 
 
 
After
 
 
Impairment
 
Impairment
 
Impairment
Liberty Venture I, LP
 
$
11,238

 
$

 
$
11,238

Kings Hill Unit Trust
 
3,198

 

 
3,198

Liberty Illinois, LP
 
26,531

 
6,964

 
19,567

Liberty AIPO LP
 
13,302

 

 
13,302

Silversword Properties, Ltd.
 
10,618

 
2,170

 
8,448

Cambridge Medipark Ltd.
 
6,618

 

 
6,618

Blythe Valley JV Sarl
 
8,991

 
5,608

 
3,383

Liberty Washington, LP
 
137,429

 
64,060

 
73,369

Liberty/Commerz 1701 JFK Boulevard, LP
 
36,461

 

 
36,461

Total
 
$
254,386

 
$
78,802

 
$
175,584

 
 
 
 
 
 
 
Determining values in the current market is inherently difficult and is based on the Company's assessment of a number of factors which are difficult to predict. The market may decline further and future impairment charges may be needed.
No impairment losses on the Company's investments in unconsolidated joint ventures were recognized during the years ended December 31, 2011 or 2010.
Results of Operations
The following discussion is based on the consolidated financial statements of the Company. It compares the results of operations of the Company for the year ended December 31, 2011 with the results of operations of the Company for the year ended December 31, 2010, and the results of operations of the Company for the year ended December 31, 2010 with the results of operations of the Company for the year ended December 31, 2009. As a result of the varying levels of development, acquisition and disposition activities by the Company in 2011, 2010 and 2009, the overall operating results of the Company during such periods are not directly comparable. However, certain data, including the Same Store (as defined below) comparison, do lend themselves to direct comparison.

This information should be read in conjunction with the accompanying consolidated financial statements and notes included elsewhere in this report.
Comparison of Year Ended December 31, 2011 to Year Ended December 31, 2010
Overview
The Company’s average gross investment in operating real estate owned for the year ended December 31, 2011 increased to $4,986.9 million from $4,780.1 million for the year ended December 31, 2010. This increase in operating real estate resulted in increases in rental revenue, operating expense reimbursement, real estate taxes and depreciation and amortization expense. Despite the increase in operating real estate, rental property operating expenses decreased due to one-time reductions in certain operating expenses.
Total operating revenue increased to $667.6 million for the year ended December 31, 2011 from $657.0 million for the year ended December 31, 2010. This $10.6 million increase was primarily due to an increase in average gross investment in operating real estate. This increase was partially offset by a decrease in rental rates and termination fees, which totaled $3.0 million for the year ended December 31, 2011 as compared to $5.2 million for the year ended December 31, 2010. Termination Fees are fees that the Company agrees to accept in consideration for permitting certain tenants to terminate their leases prior to the contractual expiration date. Termination Fees are included in rental revenue and if a property is sold or held for sale, related termination fees are included in discontinued operations. See “Other” below.
Segments
The Company evaluates the performance of the Wholly Owned Properties in Operation in terms of net operating income by reportable segment (see Note 18 to the Company’s financial statements for a reconciliation of this measure to net income). Net operating income includes operating revenue from external customers, real estate taxes, amortization of lease transaction costs and other operating expenses which relate directly to the management and operation of the assets within each reportable segment.The

27


following table identifies changes in reportable segments (dollars in thousands):
Reportable Segment Net Operating Income:
 
 
Year Ended December 31,
 
PERCENTAGE
INCREASE
(DECREASE)
 
2011
 
2010
 
Northeast
 
 
 
 
 
– Southeastern PA
$
101,982

 
$
108,593

 
(6.1
%)
– Lehigh/Central PA
64,786

 
66,632

 
(2.8
%)
– Other
35,017

 
37,234

 
(6.0
%)
Central
68,114

 
70,386

 
(3.2
%)
South
132,703

 
136,135

 
(2.5
%)
Metro
19,370

 
20,713

 
(6.5
%)
United Kingdom
(178
)
 
243

 
(173.3
%)
Total reportable segment net operating income
$
421,794

 
$
439,936

 
(4.1
%)

Same Store
Property level operating income, exclusive of Termination Fees, for the Same Store properties increased to $464.4 million for the year ended December 31, 2011 from $459.6 million for the year ended December 31, 2010, on a straight line basis (which recognizes rental revenue evenly over the life of the lease), and increased to $460.1 million for the year ended December 31, 2011 from $446.7 million for the year ended December 31, 2010 on a cash basis. This increase of 1.0% on a straight line basis was primarily due to reductions in certain operating expense items and due to an increase in average occupancy. The increase of 3.0% on a cash basis was primarily due to the above factors as well as contractual rental rate increases on existing leases.
Management generally considers the performance of the Same Store properties to be a useful financial performance measure because the results are directly comparable from period to period. Management further believes that the performance comparison should exclude Termination Fees since they are more event-specific and are not representative of ordinary performance results. In addition, Same Store property level operating income and Same Store cash basis property level operating income exclusive of Termination Fees is considered by management to be a more reliable indicator of the portfolio’s baseline performance. The Same Store properties consist of the 568 properties totaling approximately 59.5 million square feet owned on January 1, 2010, excluding properties sold through December 31, 2011.

Set forth below is a schedule comparing the property level operating income, on a straight line basis and on a cash basis, for the Same Store properties for the years ended December 31, 2011 and 2010. Same Store property level operating income and cash basis property level operating income are non-US GAAP measures and do not represent income before property dispositions, income taxes, equity in earnings of unconsolidated joint ventures and impairment charges because they do not reflect the consolidated operations of the Company. Investors should review Same Store results, along with Funds from operations (see “Liquidity and Capital Resources” below), US GAAP net income and cash flow from operating activities, investing activities and financing activities when considering the Company’s operating performance. Also set forth below is a reconciliation of Same Store property level operating income and cash basis property level operating income to net income (in thousands).


28


 
Year Ended
 
December 31, 2011
 
December 31, 2010
Same Store:
 
 
 
Rental revenue
$
470,426

 
$
473,380

Operating expenses:
 
 
 
Rental property expense
137,323

 
142,701

Real estate taxes
77,242

 
77,372

Operating expense recovery
(208,575
)
 
(206,312
)
Unrecovered operating expenses
5,990

 
13,761

Property level operating income
464,436

 
459,619

Less straight line rent
4,346

 
12,953

Cash basis property level operating income
$
460,090

 
$
446,666

Reconciliation of non-GAAP financial measure – Same Store:
 
 
 
Cash basis property level operating income
$
460,090

 
$
446,666

Straight line rent
4,346

 
12,953

Property level operating income
464,436

 
459,619

Property level operating income - properties purchased or developed subsequent to January 1, 2010
13,589

 
8,686

Less: Property level operating income – properties held for sale at December 31, 2011
(18,350
)
 
(20,124
)
Termination fees
3,035

 
5,151

General and administrative expense
(59,370
)
 
(52,747
)
Depreciation and amortization expense
(157,349
)
 
(150,692
)
Other income (expense)
(113,621
)
 
(124,689
)
Gain on property dispositions
5,025

 
4,616

Income taxes
(1,020
)
 
(1,736
)
Equity in earnings of unconsolidated joint ventures
3,496

 
2,296

Impairment charges - investment in unconsolidated joint ventures and other

 
(378
)
Discontinued operations (1)
70,839

 
23,373

Net income
$
210,710

 
$
153,375

 
(1)
Includes Termination Fees of $600,000 and $1.4 million for the years ended December 31, 2011 and 2010, respectively.
General and Administrative
General and administrative expenses increased to $59.4 million for the year ended December 31, 2011 compared to $52.7 million for the year ended December 31, 2010. This increase was primarily due to increases in performance-related personnel costs and increases in acquisition-related expenses. Personnel costs increased to $40.2 million for the year ended December 31, 2011 compared to $37.2 million for the year ended December 31, 2010. Acquisition-related expenses increased to $2.6 million for the year ended December 31, 2011 compared to $295,000 for the year ended December 31, 2010.
Depreciation and Amortization
Depreciation and amortization increased to $157.3 million for the year ended December 31, 2011 from $150.7 million for the year ended December 31, 2010. This increase was primarily due to the increased investment in operating real estate.

Interest Expense
Interest expense decreased to $122.0 million for the year ended December 31, 2011 from $132.6 million for the year ended December 31, 2010. This decrease was primarily due to the decrease in the average debt outstanding to $2,214.9 million for the year ended December 31, 2011 from $2,354.7 million for the year ended December 31, 2010 as well as a decrease in the weighted

29


average interest rate to 5.8% for the year ended December 31, 2011 from 6.2% for the year ended December 31, 2010. The decrease was also partially due to an increase in interest capitalized during the year ended December 31, 2011 due to an increase in development activity.
Interest expense allocated to discontinued operations for the year ended December 31, 2011 and 2010 was $9.0 million and $15.3 million, respectively. This decrease was due to the level of dispositions in 2011 compared to 2010.
Other
Gain on property dispositions, net of impairment charges, increased to $5.0 million for the year ended December 31, 2011 from $4.6 million for the year ended December 31, 2010.
Income from discontinued operations increased to $70.8 million for the year ended December 31, 2011 from $23.4 million for the year ended December 31, 2010. This increase was due to an increase in gains recognized on sales which were $60.6 million for the year ended December 31, 2011 and $6.9 million for the year ended December 31, 2010.
As a result of the foregoing, the Company’s net income increased to $210.7 million for the year ended December 31, 2011 from $153.4 million for the year ended December 31, 2010.
Comparison of Year Ended December 31, 2010 to Year Ended December 31, 2009
Overview
The Company's average gross investment in operating real estate owned for the year ended December 31, 2010 increased to $4,780.1 million from $4,604.3 million for the year ended December 31, 2009. This increase in operating real estate resulted in increases in rental revenue, operating expense reimbursement, rental property operating expenses and depreciation and amortization expense.
Total operating revenue increased to $657.0 million for the year ended December 31, 2010 from $644.7 million for the year ended December 31, 2009. This $12.3 million increase was primarily due to the increase in investment in operating real estate and the increase in operating revenue from the "Prior Year Same Store" (as defined below) group of properties as well as an increase in Termination Fees, which totaled $5.2 million for the year ended December 31, 2010 as compared to $4.3 million for the year ended December 31, 2009. Termination Fees are included in rental revenue and if a property is sold or held for sale related termination fees are included in discontinued operations.
Segments
The Company evaluates the performance of the Wholly Owned Properties in Operation in terms of net operating income by reportable segment (see Note 18 to the Company’s financial statements for a reconciliation of this measure to net income). The following table identifies changes in reportable segments (dollars in thousands):
Reportable Segment Net Operating Income:
 
Year Ended December 31,
 
PERCENTAGE
INCREASE
(DECREASE)
 
 
2010
 
2009
 
 
Northeast
 
 
 
 
 
 
– Southeastern PA
$
108,593

 
$
112,148

 
(3.2
%)
 
– Lehigh/Central PA
66,632

 
65,827

 
1.2
%
 
– Other
37,234

 
43,953

 
(15.3
%)
(1
)
Central
70,386

 
73,249

 
(3.9
%)
 
South
136,135

 
140,361

 
(3.0
%)
 
Metro
20,713

 
15,525

 
33.4
%
(2
)
United Kingdom
243

 
1,293

 
(81.2
%)
 
Total reportable segment net operating income
$
439,936

 
$
452,356

 
(2.7
%)
 
(1) The change was primarily due to a decrease in Termination Fees.
(2) The change was primarily due to an increase in average gross investment in operating real estate.

30


Same Store
Property level operating income, exclusive of Termination Fees, for the Prior Year Same Store properties decreased to $475.0 million for the year ended December 31, 2010 from $490.9 million for the year ended December 31, 2009, on a straight line basis, and decreased to $467.1 million for the year ended December 31, 2010 from $476.9 million for the year ended December 31, 2009 on a cash basis. These decreases of 3.2% and 2.0%, respectively, were primarily due to a decrease in occupancy for industrial-flex and office properties.

Management generally considers the performance of the Prior Year Same Store properties to be a useful financial performance measure because the results are directly comparable from period to period. Management further believes that the performance comparison should exclude Termination Fees since they are more event specific and are not representative of ordinary performance results. In addition, Prior Year Same Store property level operating income and Prior Year Same Store cash basis property level operating income exclusive of Termination Fees are considered by management to be more reliable indicators of the portfolio's baseline performance. The Prior Year Same Store properties consist of the 615 properties totaling approximately 60.8 million square feet owned on January 1, 2009 and excluding properties sold through December 31, 2010.

Set forth below is a schedule comparing the property level operating income, on a straight line basis and on a cash basis, for the Prior Year Same Store properties for the years ended December 31, 2010 and 2009. Prior Year Same Store property level operating income and Prior Year Same Store cash basis property level operating income are non-GAAP measures and do not represent income before property dispositions, income taxes, equity in earnings of unconsolidated joint ventures and impairment charges because they do not reflect the consolidated operations of the Company. Investors should review Prior Year Same Store results, along with Funds from operations (see "Liquidity and Capital Resources" section), GAAP net income and net cash flow from operating activities, investing activities and financing activities when considering the Company's operating performance. Also, set forth below is a reconciliation of Prior Year Same Store property level operating income to net income (in thousands).

31


 
Year Ended
 
December 31, 2010
 
December 31, 2009
Prior Year Same Store:
 
 
 
Rental revenue
$
488,755

 
$
501,457

Operating expenses:
 
 
 
Rental property expense
150,349

 
148,353

Real estate taxes
80,128

 
81,820

Operating expense recovery
(216,688
)
 
(219,573
)
Unrecovered operating expenses
13,789

 
10,600

Property level operating income
474,966

 
490,857

Less straight line rent
7,845

 
13,999

Cash basis property level operating income
$
467,121

 
$
476,858

Reconciliation of non-GAAP financial measure – Prior Year Same Store:
 
 
 
Cash basis property level operating income
$
467,121

 
$
476,858

Straight line rent
7,845

 
13,999

Property level operating income
474,966

 
490,857

Property level operating income - properties purchased or developed subsequent to January 1, 2009
25,320

 
9,703

Less: Property level operating income – 2011 discontinued operations
(52,105
)
 
(58,749
)
Termination fees
5,151

 
4,269

General and administrative expense
(52,747
)
 
(51,229
)
Depreciation and amortization expense
(150,692
)
 
(148,046
)
Other income (expense)
(124,689
)
 
(121,381
)
Gain on property dispositions
4,616

 
1,687

Income taxes
(1,736
)
 
(494
)
Equity in earnings of unconsolidated joint ventures
2,296

 
2,161

Impairment charges - investment in unconsolidated joint ventures and other
(378
)
 
(82,552
)
                                  - goodwill

 
(15,700
)
Discontinued operations at December 31, 2010 (1)
7,713

 
25,809

 2011 discontinued operations (1)
15,660

 
22,657

Net income
$
153,375

 
$
78,992


(1)
Discontinued operations includes Termination Fees of $1.4 million and $5.0 million for the years ended December 31, 2010 and 2009, respectively.
General and Administrative
General and administrative expenses increased to $52.7 million for the year ended December 31, 2010 from $51.2 million for the year ended December 31, 2009. This increase was primarily due to a decrease in expenses capitalized due to the decrease in development activity.
Depreciation and Amortization
Depreciation and amortization increased to $150.7 million for the year ended December 31, 2010 from $148.0 million for the year ended December 31, 2009. The increase was primarily due to the increase in average gross investment in operating real estate during the respective periods and particularly the increased investment in tenant improvement costs, which are depreciated over a shorter period than buildings.


32


Interest Expense

Interest expense increased to $134.4 million for the year ended December 31, 2010 from $134.0 million for the year ended December 31, 2009. This increase was primarily due to a decrease of $6.7 million in interest that was capitalized due to the decrease in development activity and because of $2.1 million in expense in 2010 relating to the prepayment of $119.3 million of secured loans. The effect of these items was partially offset by a decrease in interest expense because of the decrease in the average debt outstanding, which was $2,354.7 million for the year ended December 31, 2010, compared to $2,503.8 million for the year ended December 31, 2009. The weighted average interest rate was unchanged at 6.2% for the years ended December 31, 2010 and 2009.
Interest expense allocated to discontinued operations for the years ended December 31, 2010 and 2009 was $15.3 million and $17.8 million, respectively. This decrease was due to the increase in the level of dispositions in 2010 compared to 2009.
Other
Gain on property dispositions increased to $4.6 million for the year ended December 31, 2010 from $1.7 million for the year ended December 31, 2009.
During the year ended December 31, 2009, the Company recognized in continuing operations $98.3 million in impairment charges. These impairment charges primarily result from $78.8 million of impairment charges relating to the other-than-temporary decline in fair value below the carrying values of certain of the Company's investments in unconsolidated joint ventures. During 2009, the Company also wrote off the $15.7 million of goodwill and other intangibles relating to its October 2007 acquisition of Republic Property Trust. Impairment charges in continuing operations in 2010 were $378,000.

During the year ended December 31, 2009, the Company purchased $11.4 million of its 7.75% senior notes due April 2009, $6.9 million of its 8.50% senior notes due August 2010, $3.5 million of its 7.25% senior notes due March 2011, $4.9 million of its 6.375% senior notes due August 2012 and $3.5 million of its 6.625% senior notes due October 2017. These notes were purchased at an aggregate $1.5 million discount. This discount is included in net income for the year ended December 31, 2009 as debt extinguishment gain. There were no such transactions in 2010.
Income from discontinued operations decreased to $23.4 million from $48.5 million for the year ended December 31, 2010 compared to the year ended December 31, 2009. The decrease is due to lower operating income and a decrease in gains recognized on sales (net of impairment charges) which were $6.9 million for the year ended December 31, 2010 compared to $17.9 million for the year ended December 31, 2009. These decreases were partially offset by termination fees in discontinued operations which equaled $1.4 million in 2010 and $5.0 million in 2009.
As a result of the foregoing, the Company's net income increased to $153.4 million for the year ended December 31, 2010 from $79.0 million for the year ended December 31, 2009.
Liquidity and Capital Resources
Overview
The Company seeks to maintain a conservative balance sheet and pursue a strategy of financial flexibility. The Company expects to expend $250 million to $350 million to fund its investment in development properties in 2012. The Company’s 2012 debt maturities total approximately $265.1 million. The Company anticipates that it will invest $100 million to $300 million in acquisitions in 2012. The Company expects to realize approximately $250 million to $350 million in proceeds from asset sales in 2012. The Company believes that proceeds from asset sales, its available cash, borrowing capacity from its Credit Facility (as defined below) and its other sources of capital including the public debt and equity markets will provide it with sufficient funds to satisfy these obligations.
Activity
As of December 31, 2011, the Company had cash and cash equivalents of $81.9 million, including $63.7 million in restricted cash.
Net cash provided by operating activities increased to $317.7 million for the year ended December 31, 2011 from $292.3 million for the year ended December 31, 2010. This $25.5 million increase was primarily due to fluctuations in assets and liabilities. Net cash flow provided by operating activities is the primary source of liquidity to fund dividends to shareholders and for recurring capital expenditures and leasing transaction costs for the Company’s Wholly Owned Properties in Operation.

Net cash used in investing activities was $56.2 million for the year ended December 31, 2011 compared to $103.5 million for the

33


year ended December 31, 2010. This $47.2 million decrease primarily resulted from an increase in proceeds from dispositions partially offset by an increase in cash used for acquisitions, land and development properties.
Net cash used in financing activities was $351.5 million for the year ended December 31, 2011 compared to $315.8 million for the year ended December 31, 2010. This $35.7 million increase was primarily due to the net changes in the Company’s debt during the respective periods which is reflective of the disposition and acquisition activity described above. Net cash used in financing activities includes proceeds from the issuance of equity and debt, net of debt repayments, equity repurchases and shareholder distributions.
The Company funds its development activities and acquisitions with long-term capital sources and proceeds from the disposition of properties. For the year ended December 31, 2011, a portion of these activities were funded through an unsecured $500 million credit facility. The Company has maintained an unsecured credit facility throughout 2009, 2010 and 2011. During that period the company has replaced, restated and amended its credit facility to address due dates and changes in borrowing costs. As replaced, restated and amended these credit facilities are referred to below as the "Credit Facility." The interest rate on borrowings under the Credit Facility fluctuates based upon ratings from Moody’s Investors Service, Inc., Standard and Poor’s Ratings Group and Fitch, Inc. It matures in November 2015 and has a one year extension option. Based upon the Company's current credit ratings, borrowings under the facility currently bear interest at LIBOR plus 107.5 basis points.
The Company uses debt financing to lower its overall cost of capital in an attempt to increase the return to shareholders. The Company staggers its debt maturities and maintains debt levels it considers to be prudent. In determining its debt levels, the Company considers various financial measures including the debt to gross assets ratio and the fixed charge coverage ratio. As of December 31, 2011, the Company’s debt to gross assets ratio was 36.3% and for the year ended December 31, 2011, the fixed charge coverage ratio was 3.1x. Debt to gross assets equals total long-term debt and borrowings under the Credit Facility divided by total assets plus accumulated depreciation. The fixed charge coverage ratio equals income from continuing operations before property dispositions, including operating activity from discontinued operations, plus interest expense and depreciation and amortization, divided by interest expense, including capitalized interest, plus distributions on preferred units.
As of December 31, 2011, $290.8 million in mortgage loans and $1,792.6 million in unsecured notes were outstanding with a weighted average interest rate of 5.9%. The interest rates on $2,067.5 million of mortgage loans and unsecured notes are fixed and range from 4.5% to 8.8%. The weighted average remaining term for the mortgage loans and unsecured notes is 4.8 years.

 The Company's contractual obligations, as of December 31, 2011, are as follows (in thousands):

 
 
PAYMENTS DUE BY PERIOD
 
 
 
 
LESS THAN 1
 
 
 
 
 
MORE THAN
Contractual Obligations (1)
 
TOTAL
 
YEAR
 
1-3 YEARS
 
3-5 YEARS
 
5 YEARS
 
 
 
 
 
 
 
 
 
 
 
Long-term debt (2)
 
$
2,688,682

 
$
364,020

 
$
406,722

 
$
1,114,332

 
$
803,608

Land purchase obligations
 
5,941

 
356

 
713

 
3,037

 
1,835

Operating lease obligations
 
8,083

 
912

 
968

 
690

 
5,513

Share of debt of unconsolidated joint ventures (2)
 
364,760

 
85,695

 
30,430

 
101,212

 
147,423

Joint venture capital commitments
 
1,399

 
1,399

 

 

 

Tenant contractual obligations
 
38,105

 
35,940

 
909

 
576

 
680

Share of tenant contractual obligations of unconsolidated joint ventures
 
2,505

 
2,476

 
29

 

 

Letter of credit
 
6,289

 
6,289

 

 

 

Share of letter of credit of unconsolidated joint ventures
 
1,250

 
1,250

 

 

 

Total
 
$
3,117,014

 
$
498,337

 
$
439,771

 
$
1,219,847

 
$
959,059


(1)
Contractual obligations exclude annual ground rent obligations due on the previous purchase of certain land by the Company.  These payments are due in perpetuity.  The 2011 obligation was $18,000.
(2)
Includes principal and interest payments. Interest payments assume Credit Facility borrowings and interest rates remain at the December 31, 2011 level until maturity.
General
The Company believes that its existing sources of capital will provide sufficient funds to finance its continued development and acquisition activities. The Company's existing sources of capital include the public debt and equity markets, proceeds from secured financing of properties, proceeds from property dispositions, equity capital from joint venture partners and net cash provided by operating activities. Additionally, the Company expects to incur variable rate debt, including borrowings under the Credit Facility,

34


from time to time.

During the period from January 1, 2009 through December 31, 2009, the Company closed on mortgages totaling $330.3 million bearing interest at a weighted average interest rate of 7.1%. The net proceeds of the offering were used to pay outstanding borrowings under its Credit Facility and for general corporate purposes.

In January 2009, the Company satisfied a $20 million 8.125% medium term unsecured note due January 2009.

During the period from January 1, 2009 through December 31, 2009 the Company purchased $11.4 million of its 7.75% senior notes due April 2009, $6.9 million of its 8.50% senior notes due August 2010, $3.5 million of its 7.25% senior notes due March 2011, $4.9 million of its 6.375% senior notes due August 2012 and $3.5 million of its 6.625% senior notes due October 2017. These purchases resulted in an aggregate $1.5 million debt extinguishment gain.

During the year ended December 31, 2009, the Company sold 12,821,000 common shares pursuant to a continuous offering program for net proceeds of $283.2 million. All common shares authorized under this program have been sold.

In April 2009, the Company repaid $238.6 million of 7.75% senior notes due April 2009.

In April 2010, the Company repaid $119.3 million of mortgage loans. The weighted average interest rate of these loans as of March 31, 2010 was 7.3%.

In August 2010, the Company repaid $169.7 million of 8.50% senior notes due August 2010.

In August 2010, the Company replaced its existing $600 million Credit Facility with a $500 million Credit Facility. Based upon the Company's then-current credit ratings, borrowings under the Credit Facility bore interest at LIBOR plus 230 basis points.

In September 2010, the Company issued $350 million of ten-year, 4.75% senior notes. The net proceeds from this issuance were used to repay borrowings under the Credit Facility and for general corporate purposes.

In March 2011, the Company used proceeds from the Credit Facility together with available cash on hand to repay $246.5 million principal value of 7.25% senior notes.

In October 2011, the Company replaced its existing $500 million Credit Facility which was due November 2013 with a new Credit Facility. The new facility is for $500 million. It matures in November 2015 and has a one year extension option. Based upon the Company's current credit ratings, borrowings under the new facility currently bear interest at LIBOR plus 107.5 basis points.

The Company's annual Common Share dividend paid was $1.90 per share in 2011, 2010 and 2009.

The Company has an effective S-3 shelf registration statement on file with the SEC pursuant to which the Trust and the Operating Partnership may issue an unlimited amount of equity securities and debt securities.
Off-Balance Sheet Arrangements
As of December 31, 2011, the Company had investments in and advances to unconsolidated joint ventures totaling $174.7 million.
Calculation of Funds from Operations
The National Association of Real Estate Investment Trusts (“NAREIT”) has issued a standard definition for Funds from operations (as defined below). The SEC has agreed to the disclosure of this non-GAAP financial measure on a per share basis in its Release No. 34-47226, Conditions for Use of Non-GAAP Financial Measures. The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company’s operating performance that excludes depreciation and amortization and gains and losses from operating property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company’s financial performance when compared to other REITs since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and

35


joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company’s operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP. Historically the Company included impairment charges in this computation. However, excluding impairment charges from the computation of Funds from operations is consistent with NAREIT's reaffirmation in November of 2011 of its July, 2000 guidance on NAREIT-defined Funds from Operations, which indicated that impairment write-downs of depreciable real estate should be excluded in the computation of Funds from operations. Accordingly, Funds from operations have been restated for prior periods.

Funds from operations (“FFO”) available to common shareholders for the year ended December 31, 2011, 2010, and 2009 are as follows (in thousands, except per share amounts):
 
Year Ended December 31,
 
2011
 
2010
 
2009
Reconciliation of net income to FFO - basic:
 
 
 
 
 
Net income available to common shareholders
$
184,001

 
$
127,762

 
$
56,376

Basic - income available to common shareholders
184,001

 
127,762

 
56,376

Basic - income available to common shareholders per weighted average share
$
1.60

 
$
1.13

 
$
0.52

Adjustments:
 
 
 
 
 
Depreciation and amortization of unconsolidated joint ventures
14,452

 
14,927

 
16,180

Depreciation and amortization
168,435

 
171,682

 
170,633

Gain on property dispositions
(61,198
)
 
(6,669
)
 
65,136

Noncontrolling interest share in addback for depreciation and amortization and gain on property dispositions
(3,925
)
 
(6,009
)
 
(8,845
)
Funds from operations available to common shareholders – basic
$
301,765

 
$
301,693

 
$
299,480

Basic Funds from operations available to common shareholders per weighted average share
$
2.63

 
$
2.67

 
$
2.78

Reconciliation of net income to FFO - diluted:
 
 
 
 
 
Net income available to common shareholders
$
184,001

 
$
127,762

 
$
56,376

Diluted - income available to common shareholders
184,001

 
127,762

 
56,376

Diluted - income available to common shareholders per weighted average share
$
1.59

 
$
1.12

 
$
0.52

Adjustments:
 
 
 
 
 
Depreciation and amortization of unconsolidated joint ventures
14,452

 
14,927

 
16,180

Depreciation and amortization
168,435

 
171,682

 
170,633

Gain on property dispositions
(61,198
)
 
(6,669
)
 
65,136

Noncontrolling interest less preferred share distributions
6,151

 
4,436

 
2,114

Funds from operations available to common shareholders - diluted
$
311,841

 
$
312,138

 
$
310,439

Diluted Funds from operations available to common shareholders per weighted average share
$
2.61

 
$
2.66

 
$
2.77

Reconciliation of weighted average shares:
 
 
 
 
 
Weighted average common shares - all basic calculations
114,755

 
112,924

 
107,550

Dilutive shares for long term compensation plans
748

 
682

 
452

Diluted shares for net income calculations
115,503

 
113,606

 
108,002

Weighted average common units
3,869

 
3,947

 
4,018

Diluted shares for Funds from operations calculations
119,372

 
117,553

 
112,020


Inflation
Inflation has remained relatively low in recent years, and as a result, it has not had a significant impact on the Company during

36


this period. To the extent an increase in inflation would result in increased operating costs, such as insurance, real estate taxes and utilities, substantially all of the tenants’ leases require the tenants to absorb these costs as part of their rental obligations. In addition, inflation also may have the effect of increasing market rental rates.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The following discussion about the Company's risk management includes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from the results discussed in the forward-looking statements.
The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued interest, dividends and distributions payable and other liabilities are reasonable estimates of fair value because of the short-term nature of these instruments. The fair value of the Company's long-term debt, which is based on estimates by management and on rates quoted on December 31, 2011 for comparable loans, is greater than the aggregate carrying value by approximately $131.8 million at December 31, 2011.
The Company's primary market risk exposure is to changes in interest rates. The Company is exposed to market risk related to its Credit Facility and certain other indebtedness as discussed in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources."
The Company also uses long-term and medium-term debt as a source of capital. These debt instruments are typically issued at fixed interest rates. When these debt instruments mature, the Company typically refinances such debt at then-existing market interest rates which may be more or less than the interest rates on the maturing debt. In addition, the Company may attempt to reduce interest rate risk associated with a forecasted issuance of new debt. In order to reduce interest rate risk associated with these transactions, the Company occasionally enters into interest rate protection agreements.
If the interest rates for variable rate debt were 100 basis points higher or lower during 2011, the Company's interest expense would have increased or decreased by $1.0 million. If the interest rate for the fixed rate debt maturing in 2012 was 100 basis points higher or lower than its current rate of 6.48%, the Company's interest expense would have increased or decreased by $1.5 million.
The sensitivity analysis above assumes no changes in the Company's financial structure. It also does not consider future fluctuations in interest rates or the specific actions that might be taken by management to mitigate the impact of such fluctuations.
The Company is also exposed to currency risk on its net investment in the United Kingdom. The Company does not believe that this currency risk exposure is material to its financial statements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements and supplementary financial data of Liberty Property Trust and Liberty Property Operating Partnership, L.P. and the reports thereon of Ernst & Young LLP, an independent registered public accounting firm, with respect thereto are filed as part of this Annual Report on Form 10-K.




37


Management's Annual Report on Internal Control Over Financial Reporting
The Trust's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a - 15 (f) and 15d - 15(f). The Trust's internal control system was designed to provide reasonable assurance to the Trust's management and Board of Trustees regarding the preparation and fair presentation of published financial statements.
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of the Trust's internal control over financial reporting as of December 31, 2011. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. Based on our assessment we believe that, as of December 31, 2011, the Trust's internal control over financial reporting is effective based on those criteria.
The Trust's independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the Trust's internal controls over financial reporting, which is included in this Annual Report on Form 10-K.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

38


Report of Independent Registered Public Accounting Firm
The Board of Trustees and Shareholders of Liberty Property Trust
We have audited Liberty Property Trust's (the "Trust") internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Trust's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Trust's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Liberty Property Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2011 and 2010, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended December 31, 2011 of Liberty Property Trust and our report dated February 24, 2012 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
 
February 24, 2012

39


Report of Independent Registered Public Accounting Firm
The Board of Trustees and Shareholders of Liberty Property Trust
We have audited the accompanying consolidated balance sheets of Liberty Property Trust (the "Trust") as of December 31, 2011 and 2010, and the related consolidated statements of operations, equity, and cash flows for each of the three years in the period ended December 31, 2011. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Trust's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Liberty Property Trust at December 31, 2011 and 2010, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Liberty Property Trust's internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2012 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
 
February 24, 2012


40


Management's Annual Report on Internal Control Over Financial Reporting
The Operating Partnership's management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15 (f) and 15d-15(f). The Operating Partnership's internal control system was designed to provide reasonable assurance to the Operating Partnership's management regarding the preparation and fair presentation of published financial statements.
Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of the Operating Partnership's internal control over financial reporting as of December 31, 2011. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. Based on our assessment we believe that, as of December 31, 2011, the Operating Partnership's internal control over financial reporting is effective based on those criteria.
The Operating Partnership's independent registered public accounting firm, Ernst & Young LLP, has issued an attestation report on the Operating Partnership's internal controls over financial reporting, which is included in this Annual Report on Form 10-K.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

41


Report of Independent Registered Public Accounting Firm
The Partners of Liberty Property Limited Partnership
We have audited Liberty Property Limited Partnership's (the "Operating Partnership") internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Operating Partnership's management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Operating Partnership's internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
In our opinion, Liberty Property Limited Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2011, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets as of December 31, 2011 and 2010, and the related consolidated statements of operations, owners' equity, and cash flows for each of the three years in the period ended December 31, 2011 of Liberty Property Limited Partnership and our report dated February 24, 2012 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
 
February 24, 2012

42


Report of Independent Registered Public Accounting Firm
The Partners of Liberty Property Limited Partnership
We have audited the accompanying consolidated balance sheets of Liberty Property Limited Partnership (the "Operating Partnership") as of December 31, 2011 and 2010, and the related consolidated statements of operations, owners' equity, and cash flows for each of the three years in the period ended December 31, 2011. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Operating Partnership's management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Liberty Property Limited Partnership at December 31, 2011 and 2010, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2011, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), Liberty Property Limited Partnership's internal control over financial reporting as of December 31, 2011, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 24, 2012 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
 
February 24, 2012


43


CONSOLIDATED BALANCE SHEETS OF LIBERTY PROPERTY TRUST
(In thousands, except share and unit amounts)
 
 
December 31,
 
2011
 
2010
ASSETS
 
 
 
Real estate:
 
 
 
Land and land improvements
$
856,783

 
$
801,271

Building and improvements
4,117,179

 
3,902,891

Less accumulated depreciation
(1,062,230
)
 
(938,044
)
Operating real estate
3,911,732

 
3,766,118

Development in progress
88,848

 

Land held for development
219,375

 
203,811

Net real estate
4,219,955

 
3,969,929

Cash and cash equivalents
18,204

 
108,409

Restricted cash
63,659

 
49,526

Accounts receivable
8,192

 
6,898

Deferred rent receivable
103,008

 
99,779

Deferred financing and leasing costs, net
130,210

 
128,536

Investments in and advances to unconsolidated joint ventures
174,687

 
171,916

Assets held for sale
195,572

 
456,181

Prepaid expenses and other assets
76,186

 
73,625

Total assets
$
4,989,673

 
$
5,064,799

LIABILITIES
 
 
 
Mortgage loans
$
290,819

 
$
320,679

Unsecured notes
1,792,643

 
2,039,143

Credit facility
139,400

 

Accounts payable
23,418

 
23,652

Accrued interest
24,147

 
29,821

Dividend and distributions payable
56,958

 
56,149

Other liabilities
194,995

 
156,803

Total liabilities
2,522,380

 
2,626,247

Noncontrolling interest - operating partnership - 301,483 preferred units outstanding as of December 31, 2011
7,537

 

EQUITY
 
 
 
Liberty Property Trust shareholders’ equity
 
 
 
Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized; 117,352,353 (includes 1,249,909 in treasury) and 115,530,608 (includes 1,249,909 in treasury) shares issued and outstanding as of December 31, 2011 and 2010, respectively
117

 
116

Additional paid-in capital
2,617,355

 
2,560,193

Accumulated other comprehensive loss
(429
)
 
(155
)
Distributions in excess of net income
(461,498
)
 
(426,017
)
Common shares in treasury, at cost, 1,249,909 shares as of December 31, 2011 and 2010
(51,951
)
 
(51,951
)
Total Liberty Property Trust shareholders’ equity
2,103,594

 
2,082,186

Noncontrolling interest – operating partnership
 
 
 
3,808,746 and 3,928,733 common units outstanding as of December 31, 2011 and 2010, respectively
64,428

 
67,621

9,740,000 preferred units outstanding as of December 31, 2011 and 2010
287,959

 
287,959

Noncontrolling interest – consolidated joint ventures
3,775

 
786

Total equity
2,459,756

 
2,438,552

Total liabilities, noncontrolling interest - operating partnership and equity
$
4,989,673

 
$
5,064,799


See accompanying notes.

44


CONSOLIDATED STATEMENTS OF OPERATIONS OF LIBERTY PROPERTY TRUST
(In thousands, except per share amounts)
 
Year Ended December 31,
 
2011
 
2010
 
2009
OPERATING REVENUE
 
 
 
 
 
Rental
$
466,984

 
$
463,240

 
$
453,970

Operating expense reimbursement
200,610

 
193,761

 
190,726

Total operating revenue
667,594

 
657,001

 
644,696

OPERATING EXPENSE
 
 
 
 
 
Rental property
127,266

 
128,180

 
122,635

Real estate taxes
77,618

 
75,489

 
75,981

General and administrative
59,370

 
52,747

 
51,229

Depreciation and amortization
157,349

 
150,692

 
148,046

Total operating expenses
421,603

 
407,108

 
397,891

Operating income
245,991

 
249,893

 
246,805

OTHER INCOME (EXPENSE)
 
 
 
 
 
Interest and other income
8,397

 
9,695

 
11,069

Debt extinguishment gain

 

 
1,547

Interest expense
(122,018
)
 
(134,384
)
 
(133,997
)
Total other income (expense)
(113,621
)
 
(124,689
)
 
(121,381
)
Income before gain on property dispositions, income taxes, equity in earnings of unconsolidated joint ventures and impairment charges
132,370

 
125,204

 
125,424

Gain on property dispositions
5,025

 
4,616

 
1,687

Income taxes
(1,020
)
 
(1,736
)
 
(494
)
Equity in earnings of unconsolidated joint ventures
3,496

 
2,296

 
2,161

Impairment charges - investment in unconsolidated joint ventures and other

 
(378
)
 
(82,552
)
                                  - goodwill

 

 
(15,700
)
Income from continuing operations
139,871

 
130,002

 
30,526

Discontinued operations (including net gain on property dispositions of $60,582, $6,857 and $17,859 for the years ended December 31, 2011, 2010 and 2009, respectively)
70,839

 
23,373

 
48,466

Net income
210,710

 
153,375

 
78,992

Noncontrolling interest – operating partnership
(27,222
)
 
(25,448
)
 
(23,125
)
Noncontrolling interest – consolidated joint ventures
511

 
(165
)
 
509

Net income available to common shareholders
$
183,999

 
$
127,762

 
$
56,376

Earnings per common share
 
 
 
 
 
Basic:
 
 
 
 
 
Income from continuing operations
$
1.00

 
$
0.93

 
$
0.09

Income from discontinued operations
0.60

 
0.20

 
0.43

Income per common share – basic
$
1.60

 
$
1.13

 
$
0.52

Diluted:
 
 
 
 
 
Income from continuing operations
$
1.00

 
$
0.92

 
$
0.09

Income from discontinued operations
0.59

 
0.20

 
0.43

Income per common share – diluted
$
1.59

 
$
1.12

 
$
0.52

Dividends per common share
$
1.90

 
$
1.90

 
$
1.90

Weighted average number of common shares outstanding
 
 
 
 
 
Basic
114,755

 
112,924

 
107,550

Diluted
115,503

 
113,606

 
108,002

Amounts attributable to common shareholders
 
 
 
 
 
Income from continuing operations
$
115,469

 
$
105,172

 
$
9,623

Discontinued operations
68,530

 
22,590

 
46,753

Net income available to common shareholders
$
183,999

 
$
127,762

 
$
56,376


See accompanying notes.

45


CONSOLIDATED STATEMENT OF EQUITY OF LIBERTY PROPERTY TRUST
(In thousands, except share amounts)
 
 
 
NUMBER OF COMMON SHARES
 
COMMON
SHARES OF
BENEFICIAL
INTEREST
 
ADDITIONAL
PAID-IN
CAPITAL
 
ACCUMULATED
OTHER
COMPREHENSIVE
(LOSS) INCOME
 
DISTRIBUTIONS
IN EXCESS OF
NET INCOME
 
COMMON
SHARES
HELD
IN
TREASURY
 
TOTAL
LIBERTY
PROPERTY
TRUST
SHAREHOLDERS’
EQUITY
 
NONCONTROLL-
ING INTEREST -
OPERATING
PARTNERSHIP-
COMMON
 
NONCONTROLL-
ING INTEREST -
OPERATING
PARTNERSHIP –
PREFERRED
 
NONCONTROLL-
ING INTEREST -
CONSOLIDATED
JOINT
VENTURES
 
TOTAL
EQUITY
Balance at January 1, 2009
 
100,034,404

 
$
101

 
$
2,201,728

 
$
(5,378
)
 
$
(185,721
)
 
$
(51,951
)
 
$
1,958,779

 
$
78,638

 
$
287,959

 
$
1,130

 
$
2,326,506

Net proceeds from the issuance of common shares
 
13,777,194

 
13

 
293,845

 

 

 

 
293,858

 

 

 

 
293,858

Net income
 

 

 

 

 
56,376

 

 
56,376

 
2,113

 
21,012

 
(509
)
 
78,992

Distributions
 

 

 

 

 
(208,566
)
 

 
(208,566
)
 
(7,513
)
 
(21,012
)
 

 
(237,091
)
Noncash compensation
 

 

 
12,905

 

 

 

 
12,905

 

 

 

 
12,905

Foreign currency translation adjustment
 

 

 

 
7,717

 

 

 
7,717

 
282

 

 

 
7,999

Redemption of noncontrolling interests – common units
 
63,613

 

 
1,226

 

 

 

 
1,226

 
(1,226
)
 

 

 

Balance at December 31, 2009
 
113,875,211

 
114

 
2,509,704

 
2,339

 
(337,911
)
 
(51,951
)
 
2,122,295

 
72,294

 
287,959

 
621

 
2,483,169

Net proceeds from the issuance of common shares
 
1,572,776

 
2

 
37,414

 

 

 

 
37,416

 

 

 

 
37,416

Net income
 

 

 

 

 
127,762

 

 
127,762

 
4,436

 
21,012

 
165

 
153,375

Distributions
 

 

 

 

 
(215,868
)
 

 
(215,868
)
 
(7,541
)
 
(21,012
)
 

 
(244,421
)
Noncash compensation
 

 

 
11,595

 

 

 

 
11,595

 

 

 

 
11,595

Foreign currency translation adjustment
 

 

 

 
(2,494
)
 

 

 
(2,494
)
 
(88
)
 

 

 
(2,582
)
Redemption of noncontrolling interests – common units
 
82,621

 

 
1,480

 

 

 

 
1,480

 
(1,480
)
 

 

 

Balance at December 31, 2010
 
115,530,608

 
116

 
2,560,193

 
(155
)
 
(426,017
)
 
(51,951
)
 
2,082,186

 
67,621

 
287,959

 
786

 
2,438,552

Net proceeds from the issuance of common shares
 
1,701,758

 
1

 
44,547

 

 

 

 
44,548

 

 

 

 
44,548

Net income
 

 

 

 

 
183,999

 

 
183,999

 
6,153

 
21,069

 
(511
)
 
210,710

Contributions
 

 

 

 

 

 

 

 

 

 
3,500

 
3,500

Distributions
 

 

 

 

 
(219,480
)
 

 
(219,480
)
 
(7,280
)
 
(21,069
)
 

 
(247,829
)
Noncash compensation
 

 

 
10,555

 

 

 

 
10,555

 

 

 

 
10,555

Foreign currency translation adjustment
 

 

 

 
(274
)
 

 

 
(274
)
 
(6
)
 

 

 
(280
)
Redemption of noncontrolling interests – common units
 
119,987

 

 
2,060

 

 

 

 
2,060

 
(2,060
)
 

 

 

Balance at December 31, 2011
 
117,352,353

 
$
117

 
$
2,617,355

 
$
(429
)
 
$
(461,498
)
 
$
(51,951
)
 
$
2,103,594

 
$
64,428

 
$
287,959

 
$
3,775

 
$
2,459,756


See accompanying notes.

46


CONSOLIDATED STATEMENTS OF CASH FLOWS OF LIBERTY PROPERTY TRUST
(In thousands)
 
 
Year Ended December 31,
 
2011
 
2010
 
2009
OPERATING ACTIVITIES
 
 
 
 
 
Net income
$
210,710

 
$
153,375

 
$
78,992

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
171,714

 
174,013

 
172,575

Amortization of deferred financing costs
5,190

 
6,339

 
5,101

Impairment charges - investment in unconsolidated joint ventures and other

 
378

 
98,252

Debt extinguishment gain

 

 
(1,547
)
Equity in earnings of unconsolidated joint ventures
(3,496
)
 
(2,296
)
 
(2,161
)
Distributions from unconsolidated joint ventures
551

 
657

 
663

Gain on property dispositions
(65,607
)
 
(11,473
)
 
(19,546
)
Noncash compensation
10,555

 
11,595

 
12,905

Changes in operating assets and liabilities:
 
 
 
 
 
Restricted cash
(14,114
)
 
(7,294
)
 
(1,189
)
Accounts receivable
(1,320
)
 
(850
)
 
4,191

Deferred rent receivable
(6,566
)
 
(13,581
)
 
(13,414
)
Prepaid expenses and other assets
6,027

 
(7,597
)
 
3,699

Accounts payable
(229
)
 
(7,399
)
 
(1,099
)
Accrued interest
(5,674
)
 
(1,430
)
 
(5,223
)
Other liabilities
9,983

 
(2,173
)
 
(24,998
)
Net cash provided by operating activities
317,724

 
292,264

 
307,201

INVESTING ACTIVITIES
 
 
 
 
 
Investment in properties – acquisitions
(233,568
)
 
(43,505
)
 

Investment in properties – other
(75,834
)
 
(75,857
)
 
(58,871
)
Investments in and advances to unconsolidated joint ventures
(11,195
)
 
(1,870
)
 
(5,132
)
Distributions from unconsolidated joint ventures
11,364

 
6,776

 
20,721

Net proceeds from disposition of properties/land
390,754

 
35,934

 
190,534

Net (advances on) proceeds from public reimbursement receivable/escrow
(10,237
)
 
18,917

 
(23,238
)
Investment in development in progress
(48,628
)
 
(7,481
)
 
(79,586
)
Investment in land held for development
(52,868
)
 
(6,086
)
 
(29,391
)
Investment in deferred leasing costs
(26,011
)
 
(30,289
)
 
(29,369
)
Net cash used in investing activities
(56,223
)
 
(103,461
)
 
(14,332
)
FINANCING ACTIVITIES
 
 
 
 
 
Net proceeds from issuance of common shares
44,552

 
37,434

 
293,814

Redemption of preferred units
(9,060
)
 

 

Proceeds from unsecured notes

 
366,000

 

Repayments of unsecured notes
(246,500
)
 
(169,739
)
 
(287,179
)
Proceeds from mortgage loans

 
743

 
330,250

Repayments of mortgage loans
(29,860
)
 
(156,890
)
 
(54,864
)
Proceeds from credit facility
650,500

 
338,500

 
199,150

Repayments on credit facility
(511,100
)
 
(478,500
)
 
(319,150
)
Increase in deferred financing costs
(3,023
)
 
(9,697
)
 
(5,550
)
Distribution paid on common shares
(218,613
)
 
(215,083
)
 
(201,984
)
Distribution paid on units
(28,409
)
 
(28,610
)
 
(28,520
)
Net cash used in financing activities
(351,513
)
 
(315,842
)
 
(74,033
)
Net (decrease) increase in cash and cash equivalents
(90,012
)
 
(127,039
)
 
218,836

(Decrease) increase in cash and cash equivalents related to foreign currency translation
(193
)
 
(1,998
)
 
2,816

Cash and cash equivalents at beginning of year
108,409

 
237,446

 
15,794

Cash and cash equivalents at end of year
$
18,204

 
$
108,409

 
$
237,446


See accompanying notes.

47


CONSOLIDATED BALANCE SHEETS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(In thousands, except unit amounts)
 
 
December 31,
 
2011
 
2010
ASSETS
 
 
 
Real estate:
 
 
 
Land and land improvements
$
856,783

 
$
801,271

Building and improvements
4,117,179

 
3,902,891

Less accumulated depreciation
(1,062,230
)
 
(938,044
)
Operating real estate
3,911,732

 
3,766,118

Development in progress
88,848

 

Land held for development
219,375

 
203,811

Net real estate
4,219,955

 
3,969,929

Cash and cash equivalents
18,204

 
108,409

Restricted cash
63,659

 
49,526

Accounts receivable
8,192

 
6,898

Deferred rent receivable
103,008

 
99,779

Deferred financing and leasing costs, net
130,210

 
128,536

Investments in and advances to unconsolidated joint ventures
174,687

 
171,916

Assets held for sale
195,572

 
456,181

Prepaid expenses and other assets
76,186

 
73,625

Total assets
$
4,989,673

 
$
5,064,799

LIABILITIES
 
 
 
Mortgage loans
$
290,819

 
$
320,679

Unsecured notes
1,792,643

 
2,039,143

Credit facility
139,400

 

Accounts payable
23,418

 
23,652

Accrued interest
24,147

 
29,821

Distributions payable
56,958

 
56,149

Other liabilities
194,995

 
156,803

Total liabilities
2,522,380

 
2,626,247

Limited partners' equity - 301,483 preferred units outstanding as of December 31, 2011
7,537

 

OWNERS’ EQUITY
 
 
 
General partner’s equity - 116,102,444 (net of 1,249,909 treasury units) and 114,280,699 (net of 1,249,909 treasury units) common units outstanding as of December 31, 2011 and 2010, respectively
2,103,594

 
2,082,186

Limited partners’ equity – 3,808,746 and 3,928,733 common units outstanding as of December 31, 2011 and 2010, respectively
64,428

 
67,621

Limited partners’ equity – 9,740,000 preferred units outstanding as of December 31, 2011 and 2010
287,959

 
287,959

Noncontrolling interest – consolidated joint ventures
3,775

 
786

Total owners’ equity
2,459,756

 
2,438,552

Total liabilities, limited partners' equity and owners’ equity
$
4,989,673

 
$
5,064,799

 
 
 
 

See accompanying notes.

48


CONSOLIDATED STATEMENTS OF OPERATIONS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(In thousands, except per unit amounts)
 
Year Ended December 31,
 
2011
 
2010
 
2009
OPERATING REVENUE
 
 
 
 
 
Rental
$
466,984

 
$
463,240

 
$
453,970

Operating expense reimbursement
200,610

 
193,761

 
190,726

Total operating revenue
667,594

 
657,001

 
644,696

OPERATING EXPENSE
 
 
 
 
 
Rental property
127,266

 
128,180

 
122,635

Real estate taxes
77,618

 
75,489

 
75,981

General and administrative
59,370

 
52,747

 
51,229

Depreciation and amortization
157,349

 
150,692

 
148,046

Total operating expenses
421,603

 
407,108

 
397,891

Operating income
245,991

 
249,893

 
246,805

OTHER INCOME (EXPENSE)
 
 
 
 
 
Interest and other income
8,397

 
9,695

 
11,069

Debt extinguishment gain

 

 
1,547

Interest expense
(122,018
)
 
(134,384
)
 
(133,997
)
Total other income (expense)
(113,621
)
 
(124,689
)
 
(121,381
)
Income before gain on property dispositions, income taxes, equity in earnings of unconsolidated joint ventures and impairment charges
132,370

 
125,204

 
125,424

Gain on property dispositions
5,025

 
4,616

 
1,687

Income taxes
(1,020
)
 
(1,736
)
 
(494
)
Equity in earnings of unconsolidated joint ventures
3,496

 
2,296

 
2,161

Impairment charges - investment in unconsolidated joint ventures and other

 
(378
)
 
(82,552
)
                                  - goodwill

 

 
(15,700
)
Income from continuing operations
139,871

 
130,002

 
30,526

Discontinued operations (including net gain on property dispositions of $60,582, $6,857 and $17,859 for the years ended December 31, 2011, 2010 and 2009, respectively)
70,839

 
23,373

 
48,466

Net income
210,710

 
153,375

 
78,992

Noncontrolling interest – consolidated joint ventures
511

 
(165
)
 
509

Preferred unit distributions
(21,069
)
 
(21,012
)
 
(21,012
)
Income available to common unitholders
$
190,152

 
$
132,198

 
$
58,489

Earnings per common unit
 
 
 
 
 
Basic:
 
 
 
 
 
Income from continuing operations
$
1.00

 
$
0.93

 
$
0.09

Income from discontinued operations
0.60

 
0.20

 
0.43

Income per common unit - basic
$
1.60

 
$
1.13

 
$
0.52

Diluted:
 
 
 
 
 
Income from continuing operations
$
1.00

 
$
0.92

 
$
0.09

Income from discontinued operations
0.59

 
0.20

 
0.43

Income per common unit - diluted
$
1.59

 
$
1.12

 
$
0.52

Distributions per common unit
$
1.90

 
$
1.90

 
$
1.90

Weighted average number of common units outstanding
 
 
 
 
 
Basic
118,624

 
116,871

 
111,568

Diluted
119,372

 
117,553

 
112,020

 
 
 
 
 
 
Net income allocated to general partners
$
183,999

 
$
127,762

 
$
56,376

Net income allocated to limited partners
27,222

 
25,448

 
23,125

See accompanying notes.

49


CONSOLIDATED STATEMENT OF OWNERS’ EQUITY OF LIBERTY PROPERTY LIMITED PARTNERSHIP
(In thousands, except unit amounts)
 
 
NUMBER OF COMMON UNITS
 
GENERAL
PARTNER’S
EQUITY
 
LIMITED
PARTNERS’
EQUITY  –
COMMON
UNITS
 
LIMITED
PARTNERS’
EQUITY  –
PREFERRED
UNITS
 
NONCONTROLLING
INTEREST –
CONSOLIDATED
JOINT VENTURES
 
TOTAL
OWNERS’
EQUITY
Balance at January 1, 2009
4,074,967

 
$
1,944,386

 
$

 
$

 
$
1,130

 
$
1,945,516

Transfer of noncontrolling interests to permanent equity

 

 
93,031

 
287,959

 

 
380,990

Contributions from partners

 
306,763

 

 

 

 
306,763

Distributions to partners

 
(208,566
)
 
(7,513
)
 
(21,012
)
 

 
(237,091
)
Foreign currency translation adjustment

 
7,717

 
282

 

 

 
7,999

Net income

 
56,376

 
2,113

 
21,012

 
(509
)
 
78,992

Redemption of limited partners common units for common shares
(63,613
)
 
15,619

 
(15,619
)
 

 

 

Balance at December 31, 2009
4,011,354

 
2,122,295

 
72,294

 
287,959

 
621

 
2,483,169

Contributions from partners

 
49,011

 

 

 

 
49,011

Distributions to partners

 
(215,868
)
 
(7,541
)
 
(21,012
)
 

 
(244,421
)
Foreign currency translation adjustment

 
(2,494
)
 
(88
)
 

 

 
(2,582
)
Net income

 
127,762

 
4,436

 
21,012

 
165

 
153,375

Redemption of limited partners common units for common shares
(82,621
)
 
1,480

 
(1,480
)
 

 

 

Balance at December 31, 2010
3,928,733

 
2,082,186


67,621


287,959


786


2,438,552

Contributions from partners

 
55,103






3,500


58,603

Distributions to partners

 
(219,480
)

(7,280
)

(21,069
)



(247,829
)
Foreign currency translation adjustment

 
(274
)

(6
)





(280
)
Net income

 
183,999


6,153


21,069


(511
)

210,710

Redemption of limited partners common units for common shares
(119,987
)
 
2,060


(2,060
)






Balance at December 31, 2011
3,808,746

 
$
2,103,594

 
$
64,428

 
$
287,959

 
$
3,775

 
$
2,459,756


See accompanying notes.

50


CONSOLIDATED STATEMENTS OF CASH FLOWS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(In thousands)
 
 
Year Ended December 31,
 
2011
 
2010
 
2009
OPERATING ACTIVITIES
 
 
 
 
 
Net income
$
210,710

 
$
153,375

 
$
78,992

Adjustments to reconcile net income to net cash provided by operating activities:
 
 
 
 
 
Depreciation and amortization
171,714

 
174,013

 
172,575

Amortization of deferred financing costs
5,190

 
6,339

 
5,101

Impairment charges - investment in unconsolidated joint ventures and other

 
378

 
98,252

Debt extinguishment gain

 

 
(1,547
)
Equity in earnings of unconsolidated joint ventures
(3,496
)
 
(2,296
)
 
(2,161
)
Distributions from unconsolidated joint ventures
551

 
657

 
663

Gain on property dispositions
(65,607
)
 
(11,473
)
 
(19,546
)
Noncash compensation
10,555

 
11,595

 
12,905

Changes in operating assets and liabilities:
 
 
 
 
 
Restricted cash
(14,114
)
 
(7,294
)
 
(1,189
)
Accounts receivable
(1,320
)
 
(850
)
 
4,191

Deferred rent receivable
(6,566
)
 
(13,581
)
 
(13,414
)
Prepaid expenses and other assets
6,027

 
(7,597
)
 
3,699

Accounts payable
(229
)
 
(7,399
)
 
(1,099
)
Accrued interest
(5,674
)
 
(1,430
)
 
(5,223
)
Other liabilities
9,983

 
(2,173
)
 
(24,998
)
Net cash provided by operating activities
317,724

 
292,264

 
307,201

INVESTING ACTIVITIES
 
 
 
 
 
Investment in properties – acquisitions
(233,568
)
 
(43,505
)
 

Investment in properties – other
(75,834
)
 
(75,857
)
 
(58,871
)
Investments in and advances to unconsolidated joint ventures
(11,195
)
 
(1,870
)
 
(5,132
)
Distributions from unconsolidated joint ventures
11,364

 
6,776

 
20,721

Net proceeds from disposition of properties/land
390,754

 
35,934

 
190,534

Net (advances on) proceeds from public reimbursement receivable/escrow
(10,237
)
 
18,917

 
(23,238
)
Investment in development in progress
(48,628
)
 
(7,481
)
 
(79,586
)
Investment in land held for development
(52,868
)
 
(6,086
)
 
(29,391
)
Investment in deferred leasing costs
(26,011
)
 
(30,289
)
 
(29,369
)
Net cash used in investing activities
(56,223
)
 
(103,461
)
 
(14,332
)
FINANCING ACTIVITIES
 
 
 
 
 
Redemption of preferred units
(9,060
)
 

 

Proceeds from unsecured notes

 
366,000

 

Repayments of unsecured notes
(246,500
)
 
(169,739
)
 
(287,179
)
Proceeds from mortgage loans

 
743

 
330,250

Repayments of mortgage loans
(29,860
)
 
(156,890
)
 
(54,864
)
Proceeds from credit facility
650,500

 
338,500

 
199,150

Repayments on credit facility
(511,100
)
 
(478,500
)
 
(319,150
)
Increase in deferred financing costs
(3,023
)
 
(9,697
)
 
(5,550
)
Capital contributions
44,552

 
37,434

 
293,814

Distributions to partners
(247,022
)
 
(243,693
)
 
(230,504
)
Net cash used in financing activities
(351,513
)
 
(315,842
)
 
(74,033
)
Net (decrease) increase in cash and cash equivalents
(90,012
)
 
(127,039
)
 
218,836

(Decrease) increase in cash and cash equivalents related to foreign currency translation
(193
)
 
(1,998
)
 
2,816

Cash and cash equivalents at beginning of year
108,409

 
237,446

 
15,794

Cash and cash equivalents at end of year
$
18,204

 
$
108,409

 
$
237,446


See accompanying notes.

51


Liberty Property Trust and Liberty Property Limited Partnership
Notes to Consolidated Financial Statements
December 31, 2011
1.     ORGANIZATION
Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, together with the Trust and their consolidated subsidiaries, the “Company”). The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 96.8% of the common equity of the Operating Partnership at December 31, 2011. The Company provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties which are located principally within the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States and the United Kingdom. Unless otherwise indicated, the notes to the Consolidated Financial Statements apply to both the Trust and the Operating Partnership. The terms the "Company,” “we,” “our” or “us” means the Trust and Operating Partnership collectively.
All square footage amounts are unaudited.
2.     SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with U.S. generally accepted accounting principles ("US GAAP") requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.
Principles of Consolidation
The consolidated financial statements of the Company include the Trust, the Operating Partnership, wholly owned subsidiaries and those subsidiaries in which the Company owns a majority voting interest with the ability to control operations of the subsidiaries and where no approval, veto or other important rights have been granted to the noncontrolling shareholders. All significant intercompany transactions and accounts have been eliminated.
Reclassifications
Certain amounts from prior years have been reclassified to conform to current-year presentation including reclassifying the accompanying consolidated statements of operations for discontinued operations.
Real Estate and Depreciation
The properties are recorded at cost and are depreciated using the straight line method over their estimated useful lives. The estimated useful lives are as follows:
Building and improvements
 
40 years (blended)
Capital improvements
 
15 - 20 years
Equipment
 
5 - 10 years
Tenant improvements
 
Term of the related lease
Expenditures directly related to the acquisition or improvement of real estate, including interest and other costs capitalized during development, are included in net real estate and are stated at cost. The capitalized costs include pre-construction costs essential to the development of the property, development and construction costs, interest costs, real estate taxes, development-related salaries and other costs incurred during the period of development. In accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, "Business Combinations" ("ASC 805"), effective January 1, 2009, certain acquisition-related costs are expensed as incurred. Expenditures for maintenance and repairs are charged to operations as incurred.
In accordance with ASC 805, the Company allocates the purchase price of real estate acquired to land, building and improvements and intangibles based on the relative fair value of each component. Lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management's estimate of fair market lease rates for each corresponding in-place lease. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to

52


customer relationships.
The Company considers any renewal options in determining the lease term in accordance with the definition included in ASC 840, "Leases." To the extent a lease includes a tenant option to renew or extend the duration of the lease at a fixed or determinable rental rate, the Company evaluates whether or not that option represents a bargain renewal option by analyzing if there is reasonable assurance at the acquisition date that the tenant will exercise the option because the rental rate is sufficiently lower than the expected rental rate for equivalent property under similar terms and conditions at the exercise date.
The Company depreciates the amounts allocated to building and improvements over 40 years and the amounts allocated to intangibles relating to in-place leases, which are included in deferred financing and leasing costs and other liabilities in the accompanying consolidated balance sheets, over the remaining term of the related leases. This calculation includes both the remaining noncancelable period and any bargain renewal option periods.
Once a property is designated as held for sale, no further depreciation expense is recorded. Operations for properties identified as held for sale and/or sold where no continuing involvement exists are presented in discontinued operations for all periods presented.
The Company evaluates its real estate investments upon occurrence of a significant adverse change in its operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If indicators of impairment are identified, the Company estimates the future undiscounted cash flows from the use and eventual disposition of the property and compares this amount to the carrying value of the property. If any real estate investment is considered impaired, a loss is recognized to reduce the carrying value of the property to its estimated fair value.
Investments in Unconsolidated Joint Ventures
The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. Under the equity method of accounting, the net equity investment of the Company is reflected in the accompanying consolidated balance sheets and the Company's share of net income from the joint ventures is included in the accompanying consolidated statements of operations.
On a periodic basis, management assesses whether there are any indicators that the value of the Company's investments in unconsolidated joint ventures may be impaired. An investment is impaired only if management's estimate of the value of the investment is less than the carrying value of the investment, and such decline in value is deemed to be other-than-temporary. To the extent impairment has occurred, the loss is measured as the excess of the carrying amount of the investment over the estimated fair value of the investment. The estimated fair value of the investments is determined using a discounted cash flow model which is a Level III valuation under ASC 820, "Fair Value Measurement." The Company considers a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, operating costs, capitalization rates, holding periods and discount rates. As these factors are difficult to predict and are subject to future events that may alter management's assumptions, the values estimated by management in its impairment analyses may not be realized.
During the year ended December 31, 2009, the Company recognized impairment charges related to the decline in the fair values below the carrying values of certain of the Company's investments in unconsolidated joint ventures. The Company considered the decline in fair value below the carrying value of $78.8 million to be other-than-temporary. The investment in unconsolidated joint ventures was impaired for the following reportable segments as of December 31, 2009 (in thousands):
Reportable Segment
 
Impairment
Amount
Central
 
$
6,963

Metro
 
64,060

United Kingdom
 
7,779

Total
 
$
78,802

No impairment losses on unconsolidated joint ventures were recognized during the years ended December 31, 2011 or 2010.
Cash and Cash Equivalents
Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents.
Restricted Cash
Restricted cash includes tenant security deposits and escrow funds that the Company maintains pursuant to certain mortgage loans.

53


Restricted cash also includes the undistributed proceeds from the sale of residential land in Kent County, United Kingdom.
Accounts Receivable/Deferred Rent Receivable
The Company's accounts receivable are comprised of rents and charges for property operating costs due from tenants. The Company's deferred rent receivable represents the cumulative difference between rent revenue recognized on a straight line basis and contractual payments due under the terms of tenant leases. The Company periodically performs a detailed review of amounts due from tenants to determine if accounts receivable and deferred rent receivable balances are collectible. Based on this review, accounts receivable and deferred rent receivable are reduced by an allowance for doubtful accounts. The Company considers tenant credit quality and payment history and general economic conditions in determining the allowance for doubtful accounts. If the accounts receivable balance or the deferred rent receivable balance is subsequently deemed uncollectible, the receivable and allowance for doubtful account balance are written off.
The allowance for doubtful accounts at December 31, 2011 and 2010 was $7.5 million and $11.3 million, respectively. The Company had a net recovery of bad debts of $1.9 million for the year ended December 31, 2011 and bad debt expense of $3.9 million and $4.3 million for the years ended December 31, 2010 and 2009, respectively.
Goodwill
Goodwill represented the amounts paid in excess of the fair value of the net assets acquired in connection with the acquisition of Republic Property Trust in October 2007. Pursuant to ASC 350, "Intangible - Goodwill and Other" ("ASC 350"), goodwill is not amortized to expense but rather is analyzed for impairment. In conjunction with the purchase of Republic Property Trust, goodwill and other intangibles of $15.7 million were recorded. The goodwill was assigned to the Metro Washington, D.C. operation ("reporting unit") which is part of the Metro reportable segment. The Company assessed goodwill for impairment annually in November and in interim periods if certain events occurred indicating the carrying value may be impaired. The Company performed its analysis for potential impairment of goodwill in accordance with ASC 350 in November 2009, which requires that a two-step impairment test be performed on goodwill. In the first step, the fair value of the reporting unit is compared to its carrying value. The estimated fair value of the reporting unit is determined using a discounted cash flow model which considers a number of assumptions that are subject to economic and market uncertainties including, among others, demand for space, competition for tenants, changes in market rental rates, and operating costs. If the fair value exceeds its carrying value, goodwill is not impaired, and no further testing is required. If the carrying value of the reporting unit exceeds its fair value, then a second step must be performed in order to determine the implied fair value of the goodwill and compare it to the carrying value of the goodwill. If the carrying value of goodwill exceeds its implied fair value then an impairment loss is recorded equal to the difference. An impairment loss of $15.7 million was recognized during the year ended December 31, 2009 and there is no longer any goodwill in the Company's consolidated balance sheets.
Revenues
The Company earns rental income under operating leases with tenants. Rental income is recognized on a straight line basis over the applicable lease term. Operating expense reimbursements consisting of amounts due from tenants for real estate taxes, utilities and other recoverable costs are recognized as revenue in the period in which the corresponding expenses are incurred.
Termination fees (included in rental revenue) are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration date. The Company recognizes termination fees in accordance with Securities and Exchange Commission Staff Accounting Bulletin 104, "Revenue Recognition," when the following conditions are met:
a.
the termination agreement is executed,
b.
the termination fee is determinable,
c.
all landlord services pursuant to the terminated lease have been rendered, and
d.
collectability of the termination fee is assured.
Deferred Financing and Leasing Costs
Costs incurred in connection with financing or leasing are capitalized and amortized on a straight line basis over the term of the related loan or lease. Deferred financing cost amortization is reported as interest expense. Intangible assets related to acquired in-place leases are amortized over the terms of the related leases.
Fair Value of Financial Instruments
The carrying value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued interest, dividend and distributions payable and other liabilities are reasonable estimates of fair values because of the short-term nature of these

54


instruments. The fair value of the Company's long-term debt, which is based on estimates by management and on rates quoted on December 31, 2011 for comparable loans, is greater than the aggregate carrying value by approximately $131.8 million at December 31, 2011.
Income Taxes
The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"). As a result, the Company generally is not subject to federal income taxation at the corporate level to the extent it distributes annually at least 100% of its REIT taxable income, as defined in the Code, to its shareholders and satisfies certain other organizational and operational requirements. The Company has met these requirements and, accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four subsequent taxable years. Even as a REIT, the Company may be subject to certain state and local income and property taxes, and to federal income and excise taxes on undistributed taxable income.
Several of the Company's subsidiaries are taxable REIT subsidiaries (each a "TRS") and are subject to federal income taxes. In general, a TRS may perform additional services for tenants and generally may engage in real estate or non-real estate businesses that are not permitted REIT activities. The Company is also taxed in certain states, the United Kingdom, and Luxembourg. Accordingly, the Company has recognized federal, state and foreign income taxes in accordance with US GAAP, as applicable.
There are no uncertain tax positions or possibly significant unrecognized tax benefits that are reasonably expected to occur within the next 12 months. The Company's policy is to recognize interest accrued related to unrecognized benefits in interest expense and penalties in other expense. There were no interest or penalties deducted in any of the years ended December 31, 2011, 2010 and 2009 and no interest and penalties accrued at December 31, 2011 or December 31, 2010.
Certain of the Company's taxable REIT subsidiaries had net operating loss carryforwards available of approximately $19.3 million as of December 31, 2011. These carryforwards begin to expire in 2018. The Company has considered estimated future taxable income and has determined that a valuation allowance for the full carrying value of net operating loss carryforwards is appropriate.
The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction, certain state and local jurisdictions, the United Kingdom and Luxembourg. With few exceptions, the Company is no longer subject to U.S. federal, state, and local, or United Kingdom and Luxembourg examinations by tax authorities for years before 2007.
The Federal tax cost basis of the real estate was $5.8 billion and $5.6 billion at December 31, 2011 and 2010, respectively.
Share Based Compensation
Share based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employees' requisite service period.
Recently Issued Accounting Standards
ASU 2011-04
In May 2011, the FASB issued Accounting Standards Update (“ASU”) 2011-04, “Fair Value Measurement (Topic 820), Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in US GAAP and IFRS” (“ASU 2011-04”), which amends ASC 820 to converge US GAAP and International Financial Reporting Standards (“IFRS”) requirements for measuring financial assets at fair value, including the disclosures regarding these measurements. 
ASU 2011-04 is effective for the Company beginning January 1, 2012. The Company does not anticipate that the adoption of ASU 2011-04 will have a material impact on its financial position or results of operations.
ASU 2011-05
In June 2011, the FASB issued ASU 2011-05, “Comprehensive Income (Topic 220), Presentation of Comprehensive Income” (“ASU 2011-05”), which is intended to lead to converging guidance under US GAAP and IFRS related to presentation of comprehensive income. ASU 2011-05 is effective for the Company beginning January 1, 2012 and the provisions of ASU 2011-05 will be adopted retrospectively. In adopting ASU 2011-05, the Company will be required to disclose the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. The Company does not anticipate that the adoption of ASU 2011-05 will have a material impact on its financial position or results of operations.

55


3.     INCOME PER COMMON SHARE OF THE TRUST

The following table sets forth the computation of basic and diluted income per common share of the Trust (in thousands except per share amounts):
 
2011
 
2010
 
Income
(Numerator)
 
Weighted
Average
Shares
(Denominator)
 
Per Share
 
Income
(Numerator)
 
Weighted
Average
Shares
(Denominator)
 
Per Share
Basic income from continuing operations
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations net of noncontrolling interest
$
115,469

 
114,755

 
$
1.00

 
$
105,172

 
112,924

 
$
0.93

Dilutive shares for long-term compensation plans

 
748

 
 
 

 
682

 
 
Diluted income from continuing operations
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations net of noncontrolling interest
115,469

 
115,503

 
$
1.00

 
105,172

 
113,606

 
$
0.92

Basic income from discontinued operations
 
 
 
 
 
 
 
 
 
 
 
Discontinued operations net of noncontrolling interest
68,530

 
114,755

 
$
0.60

 
22,590

 
112,924

 
$
0.20

Dilutive shares for long-term compensation plans

 
748

 
 
 

 
682

 
 
Diluted income from discontinued operations
 
 
 
 
 
 
 
 
 
 
 
Discontinued operations net of noncontrolling interest
68,530

 
115,503

 
$
0.59

 
22,590

 
113,606

 
$
0.20

Basic income per common share
 
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
183,999

 
114,755

 
$
1.60

 
127,762

 
112,924

 
$
1.13

Dilutive shares for long-term compensation plans

 
748

 
 
 

 
682

 
 
Diluted income per common share
 
 
 
 
 
 
 
 
 
 
 
Net income available to common shareholders
$
183,999

 
115,503

 
$
1.59

 
$
127,762

 
113,606

 
$
1.12


56


 
2009
 
Income
(Numerator)
 
Weighted
Average
Shares
(Denominator)
 
Per Share
Basic income from continuing operations
 
 
 
 
 
Income from continuing operations net of noncontrolling interest
$
9,623

 
107,550

 
$
0.09

Dilutive shares for long-term compensation plans

 
452

 
 
Diluted income from continuing operations
 
 
 
 
 
Income from continuing operations net of noncontrolling interest
9,623

 
108,002

 
$
0.09

Basic income from discontinued operations
 
 
 
 
 
Discontinued operations net of noncontrolling interest
46,753

 
107,550

 
$
0.43

Dilutive shares for long-term compensation plans

 
452

 
 
Diluted income from discontinued operations
 
 
 
 
 
Discontinued operations net of noncontrolling interest
46,753

 
108,002

 
$
0.43

Basic income per common share
 
 
 
 
 
Net income available to common shareholders
56,376

 
107,550

 
$
0.52

Dilutive shares for long-term compensation plans

 
452

 
 
Diluted income per common share
 
 
 
 
 
Net income available to common shareholders
$
56,376

 
108,002

 
$
0.52


Dilutive shares for long-term compensation plans represent the unvested common shares outstanding during the year as well as the dilutive effect of outstanding options. The amounts of anti-dilutive options that were excluded from the computation of diluted income per common share as the exercise price was higher than the average share price of the Company in 2011, 2010 and 2009 were 1,685,000, 1,433,000 and 2,661,000, respectively.
During the years ended December 31, 2011, 2010 and 2009, 256,000, 315,000 and 187,000 common shares, respectively, were issued upon the exercise of options.
During the years ended December 31, 2011, 2010 and 2009, individuals acquired 119,987, 82,621 and 63,613 common shares, respectively, in exchange for the same number of common units. These individuals acquired these common units in connection with their contributions to the Operating Partnership of certain assets in prior years. The exchange of common shares for the common units is exempt from the registration requirement of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereunder.



57


4.    INCOME PER COMMON UNIT OF THE OPERATING PARTNERSHIP

The following table sets forth the computation of basic and diluted income per common unit of the Operating Partnership (in thousands, except per unit amounts):
 
 
2011
 
2010
 
Income
(Numerator)
 
Weighted
Average Units
(Denominator)
 
Per Unit
 
Income
(Numerator)
 
Weighted
Average Units
(Denominator)
 
Per Unit
Income from continuing operations net of noncontrolling interest
$
140,382

 
 
 
 
 
$
129,837

 
 
 
 
Less: Preferred unit distributions
(21,069
)
 
 
 
 
 
(21,012
)
 
 
 
 
Basic income from continuing operations
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations available to common unitholders
119,313

 
118,624

 
$
1.00

 
108,825

 
116,871

 
$
0.93

Dilutive units for long-term compensation plans

 
748

 
 
 

 
682

 
 
Diluted income from continuing operations
 
 
 
 
 
 
 
 
 
 
 
Income from continuing operations available to common unitholders
119,313

 
119,372

 
$
1.00

 
108,825

 
117,553

 
$
0.92

Basic income from discontinued operations
 
 
 
 
 
 
 
 
 
 
 
Discontinued operations
70,839

 
118,624

 
$
0.60

 
23,373

 
116,871

 
$
0.20

Dilutive units for long-term compensation plans

 
748

 
 
 

 
682

 
 
Diluted income from discontinued operations
 
 
 
 
 
 
 
 
 
 
 
Discontinued operations
70,839

 
119,372

 
$
0.59

 
23,373

 
117,553

 
$
0.20

Basic income per common unit
 
 
 
 
 
 
 
 
 
 
 
Income available to common unitholders
190,152

 
118,624

 
$
1.60

 
132,198

 
116,871

 
$
1.13

Dilutive units for long-term compensation plans

 
748

 
 
 

 
682

 
 
Diluted income per common unit
 
 
 
 
 
 
 
 
 
 
 
Income available to common unitholders
$
190,152

 
119,372

 
$
1.59

 
$
132,198

 
117,553

 
$
1.12



58


 
2009
 
Income
(Numerator)
 
Weighted
Average Units
(Denominator)
 
Per Unit
Income from continuing operations net of noncontrolling interest
$
31,035

 
 
 
 
Less: Preferred unit distributions
(21,012
)
 
 
 
 
Basic income from continuing operations
 
 
 
 
 
Income from continuing operations available to common unitholders
10,023

 
111,568

 
$
0.09

Dilutive units for long-term compensation plans

 
452

 
 
Diluted income from continuing operations
 
 
 
 
 
Income from continuing operations available to common unitholders
10,023

 
112,020

 
$
0.09

Basic income from discontinued operations
 
 
 
 
 
Discontinued operations
48,466

 
111,568

 
$
0.43

Dilutive units for long-term compensation plans

 
452

 
 
Diluted income from discontinued operations
 
 
 
 
 
Discontinued operations
48,466

 
112,020

 
$
0.43

Basic income per common unit
 
 
 
 
 
Income available to common unitholders
58,489

 
111,568

 
$
0.52

Dilutive units for long-term compensation plans

 
452

 
 
Diluted income per common unit
 
 
 
 
 
Income available to common unitholders
$
58,489

 
112,020

 
$
0.52


Dilutive units for long-term compensation plans represent the unvested common units outstanding during the year as well as the dilutive effect of outstanding options. The amounts of anti-dilutive options that were excluded from the computation of diluted income per common unit as the exercise price was higher than the average unit price of the Company in 2011, 2010 and 2009 were 1,685,000, 1,433,000 and 2,661,000, respectively.
During the year ended December 31, 2011, 2010 and 2009, 256,000, 315,000 and 187,000 common units, respectively, were issued upon the exercise of options.
During the year ended December 31, 2011, 2010 and 2009, individuals acquired 119,987, 82,621 and 63,613 common shares of the Trust in exchange for the same number of common units of the Operating Partnership. These individuals acquired these common units in connection with their contributions to the Operating Partnership of certain assets in prior years. The exchange of common shares for the common units is exempt from the registration requirement of the Securities Act of 1933, as amended, pursuant to Section 4(2) thereunder.

5.     OTHER COMPREHENSIVE INCOME OF THE TRUST

The functional currency of the Trust's United Kingdom operations is pounds sterling. The Trust translates the financial statements for the United Kingdom operations into US dollars. Gains and losses resulting from this translation do not impact the results of operations and are included in accumulated other comprehensive loss as a separate component of shareholders' equity and non-controlling interest - common units. A proportionate amount of gain or loss is allocated to noncontrolling interest-common units. Accumulated other comprehensive loss consists solely of the foreign currency translation adjustments described above. Other comprehensive loss was $0.3 million and $2.6 million for the years ended December 31, 2011 and 2010, respectively, compared to income of $8.0 million for the year ended December 31, 2009. Upon sale or upon complete or substantially complete liquidation

59


of the Trust's foreign investment, the gain or loss on the sale will include the cumulative translation adjustments that have been previously recorded in accumulated other comprehensive loss and noncontrolling interest-common units.

Total comprehensive income for the years ended December 31, 2011, 2010 and 2009 was $210.4 million, $150.8 million and $87.0 million, respectively.

6.    OTHER COMPREHENSIVE INCOME OF THE OPERATING PARTNERSHIP

The functional currency of the Operating Partnership’s United Kingdom operations is pounds sterling. The Operating Partnership translates the financial statements for the United Kingdom operations into US dollars. Gains and losses resulting from this translation do not impact the results of operations and are included in general partner’s equity – common units and limited partners’ equity-common units. Other comprehensive loss was $0.3 million and $2.6 million for the years ended December 31, 2011 and 2010, respectively, compared to income of $8.0 million for the year ended December 31, 2009. Upon sale or upon complete or substantially complete liquidation of the Operating Partnership's foreign investment, the gain or loss on the sale will include the cumulative translation adjustments that have been previously recorded in general partner’s equity - common units and limited partners’ equity – common units.

Total comprehensive income for the years ended December 31, 2011, 2010 and 2009 was $210.4 million, $150.8 million and $87.0 million, respectively.
7.     REAL ESTATE
The Company owns and operates industrial and office properties. The carrying value of these properties by type as of December 31, 2011 and 2010 is as follows (in thousands):
 
 
Land
 
Building
 
 
 
 
 
 
And Land
 
And
 
 
 
Accumulated
 
 
Improvements
 
Improvements
 
Total
 
Depreciation
2011
 
 
 
 
 
 
 
 
Industrial properties
 
$404,788
 
$1,897,253
 
$2,302,041
 
$465,695
Office properties
 
451,995

 
2,219,926

 
2,671,921

 
596,535

 
 
 
 
 
 
 
 
 
2011 Total
 
$856,783
 
$4,117,179
 
$4,973,962
 
$1,062,230
 
 
 
 
 
 
 
 
 
2010
 
 
 
 
 
 
 
 
Industrial properties
 
$367,543
 
$1,731,557
 
$2,099,100
 
$409,863
Office properties
 
433,728

 
2,171,334

 
2,605,062

 
528,181

 
 
 
 
 
 
 
 
 
2010 Total
 
$801,271
 
$3,902,891
 
$4,704,162
 
$938,044
Depreciation expense was $144.3 million in 2011, $147.3 million in 2010 and $144.5 million in 2009.
Information on the operating properties the Company sold during the years ended December 31, 2011 and 2010 is as follows:









60


2011 Sales
 
 
Number of
 
Leaseable
 
 
Reportable Segment
 
Buildings
 
Square Feet
 
Gross Proceeds
 
 
 
 
 
 
(in thousands)
Northeast
 
 
 
 
 
 
   Southeastern PA
 
1

 
35,212

 
$
3,882

   Lehigh/Central PA
 
32

 
1,422,501

 
124,000

   Northeast - Other
 
2

 
91,698

 
11,351

Central
 
6

 
919,480

 
71,301

South
 
21

 
1,750,489

 
154,656

Total
 
62

 
4,219,380

 
$
365,190

2010 Sales
 
 
Number of
 
Leaseable
 
 
Reportable Segment
 
Buildings
 
Square Feet
 
Gross Proceeds
 
 
 
 
 
 
(in thousands)
Northeast
 
 
 
 
 
 
   Southeastern PA
 
2

 
63,925

 
$
5,987

   Lehigh/Central PA
 
2

 
146,800

 
7,216

   Northeast - Other
 
1

 
39,151

 
5,100

Central
 
1

 
26,660

 
523

South
 
4

 
401,791

 
10,190

Total
 
10

 
678,327

 
$
29,016


8.     INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES
Listed below are the unconsolidated joint ventures in which the Company has a noncontrolling interest. The Company receives fees from these joint ventures for services it provides. These services include property management, leasing, development and administration. These fees are included in interest and other income in the accompanying consolidated statements of operations. The Company may also receive a promoted interest if certain return thresholds are met.
Liberty Venture I, LP
The Company has a 25% interest in Liberty Venture I, LP, an entity engaged in the ownership of industrial properties in New Jersey. This joint venture is part of the Company's Northeast-Other reportable segment.
As of December 31, 2011, the joint venture owned 23 industrial properties totaling 3.1 million square feet and 43 acres of developable land.
The Company recognized $614,000, $611,000 and $682,000 in fees for services during the years ended December 31, 2011, 2010 and 2009, respectively.
Kings Hill Unit Trust
The Company has a 20% interest in Kings Hill Unit Trust, an entity engaged in the ownership of office and industrial properties in the County of Kent, United Kingdom. This joint venture is part of the Company's United Kingdom reportable segment.
As of December 31, 2011, the joint venture owned five industrial properties and 10 office properties totaling 535,000 square feet.
The Company had notes receivable from Kings Hill Unit Trust for an aggregate of $10.8 million and $4.3 million as of December 31, 2011 and 2010, respectively. The notes receivable bear interest at rates of 2% to 10% and are due in January 2017. These related party receivables are reflected in investments in and advances to unconsolidated joint ventures in the Company's consolidated balance sheets.

61


The Company had a receivable from Kings Hill Unit Trust for $137,000 and $147,000 as of December 31, 2011 and 2010, respectively. This related party receivable is reflected in accounts receivable in the Company's consolidated balance sheets.
Income from fees and interest was $427,000, $465,000 and $492,000 during the years ended December 31, 2011, 2010 and 2009, respectively.
Liberty Illinois, LP
The Company has a 25% interest in Liberty Illinois, LP, an entity primarily engaged in the ownership of industrial properties in Illinois. This joint venture is part of the Company's Central reportable segment.
As of December 31, 2011, the joint venture owned 15 industrial properties totaling 5.1 million square feet and 335 acres of developable land.
The Company recognized $635,000, $596,000 and $890,000 in fees for services during the years ended December 31, 2011, 2010 and 2009, respectively.
Blythe Valley JV Sarl
The Company has a 20% interest in Blythe Valley JV Sarl, an entity engaged in the ownership of office properties in the West Midlands, United Kingdom. This joint venture is part of the Company's United Kingdom reportable segment.
As of December 31, 2011, the joint venture owned 12 office properties totaling 457,000 square feet and 98 acres of developable land.
The Company had notes receivable from Blythe Valley JV Sarl for an aggregate of $12.4 million and $8.5 million as of December 31, 2011 and 2010, respectively. The notes receivable bear interest at rates of 2% to 10% and are due in December 2017. These related party receivables are reflected in investments in and advances to unconsolidated joint ventures in the Company's consolidated balance sheets.
The Company had a receivable from Blythe Valley JV Sarl for $151,000 and $101,000 as of December 31, 2011 and 2010, respectively. This related party receivable is reflected in accounts receivable in the Company's consolidated balance sheets.
The Company recognized $335,000, $316,000 and $376,000 in fees for services during the years ended December 31, 2011, 2010 and 2009, respectively.
Liberty Washington, LP
The Company has a 25% interest in Liberty Washington, LP, an entity engaged in the ownership of office properties in Northern Virginia and Washington, D.C. This joint venture is part of the Company's Metro reportable segment.
As of December 31, 2011, the joint venture owned 25 office properties totaling 2.6 million square feet and six acres of developable land.
The Company had a payable to Liberty Washington, LP for $223,000 and $236,000 as of December 31, 2011 and 2010, respectively. This related party payable is reflected in investments in and advances to unconsolidated joint ventures in the Company's consolidated balance sheets.
The Company had a receivable from Liberty Washington, LP for $1.2 million and $2.0 million as of December 31, 2011 and 2010, respectively. This related party receivable is reflected as prepaid expenses and other assets in the Company's consolidated balance sheets.
The Company recognized $4.0 million, $4.0 million and $4.1 million in interest and fees for services during the years ended December 31, 2011, 2010 and 2009, respectively.
Liberty/Commerz 1701 JFK Boulevard, LP
The Company has a 20% interest in Liberty/Commerz 1701 JFK Boulevard, LP ("Liberty/Commerz"), an entity engaged in the ownership of a 1.25 million square foot office tower in Philadelphia, Pennsylvania. This joint venture is part of the Company's Metro reportable segment.
The Company had a receivable from this joint venture for $2.2 million and $2.6 million as of December 31, 2011 and 2010,

62


respectively. This related party receivable is due to the funding of joint venture development costs and is reflected in investments in and advances to unconsolidated joint ventures in the Company's consolidated balance sheets.
The Company had a receivable from this joint venture for $272,000 and $420,000 as of December 31, 2011 and 2010, respectively. This related party receivable is reflected in accounts receivable in the Company's consolidated balance sheets.
The Company recognized $2.1 million, $2.0 million and $1.9 million in fees for services during the years ended December 31, 2011, 2010, and 2009 respectively.
Other Joint Ventures
As of December 31, 2011, the Company had a 50% ownership interest in three additional unconsolidated joint ventures. One of these joint ventures has four operating properties and an investment in land held for development and is part of the Company's South reportable segment. One of these joint ventures has one operating property and an investment in land held for development and is part of the Company's United Kingdom reportable segment. The other joint venture has a leasehold interest and does not operate or own operating properties and is part of the Company's United Kingdom reportable segment. As of December 31, 2011 and 2010, the Company had a $3.1 million note payable due to this joint venture. The note payable is interest free and is due upon written notice from the joint venture.
The Company's share of each of the joint venture's earnings is included in equity in earnings of unconsolidated joint ventures in the accompanying consolidated statements of operations.
Summary Financial Data
The condensed balance sheets as of December 31, 2011 and 2010 and condensed statements of operations for Liberty Venture I, LP, Kings Hill Unit Trust, Liberty Illinois, LP, Blythe Valley JV Sarl, Liberty Washington, LP, Liberty/Commerz and other unconsolidated joint ventures for the years ended December 31, 2011, 2010 and 2009 are as follows (in thousands):
Condensed Balance Sheets:
 
December 31, 2011
 
Liberty
 
Kings Hill
 
Liberty
 
Blythe Valley
 
Liberty
 
Liberty/
 
 
 
 
 
Venture I, LP
 
Unit Trust
 
Illinois, LP
 
JV Sarl
 
Washington, LP
 
Commerz
 
Other
 
Total
Real estate assets
$
126,996

 
$
183,097

 
$
256,441

 
$
192,847

 
$
917,879

 
$
493,737

 
$
68,363

 
$
2,239,360

Accumulated depreciation
(25,466
)
 
(18,510
)
 
(30,633
)
 
(18,781
)
 
(93,569
)
 
(55,588
)
 
(5,242
)
 
(247,789
)
   Real estate assets, net
101,530

 
164,587

 
225,808

 
174,066

 
824,310

 
438,149

 
63,121

 
1,991,571

Land held for development
2,760

 

 
42,670

 
36,868

 
2,000

 

 
14,929

 
99,227

Other assets
10,386

 
11,528

 
12,667

 
10,640

 
58,125

 
51,043

 
24,852

 
179,241

   Total assets
$
114,676

 
$
176,115

 
$
281,145

 
$
221,574

 
$
884,435

 
$
489,192

 
$
102,902

 
$
2,270,039

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt
$
74,651

 
$
112,835

 
$
140,400

 
$
184,436

 
$
349,234

 
$
324,000

 
$
44,691

 
$
1,230,247

Other liabilities
3,291

 
71,539

 
6,683

 
73,737

 
23,995

 
11,069

 
8,204

 
198,518

Equity
36,734

 
(8,259
)
 
134,062

 
(36,599
)
 
511,206

 
154,123

 
50,007

 
841,274

   Total liabilities and equity
$
114,676

 
$
176,115

 
$
281,145

 
$
221,574

 
$
884,435

 
$
489,192

 
$
102,902

 
$
2,270,039

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company's net investment in
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
unconsolidated joint ventures (1)
$
8,428

 
$
9,634

 
$
21,348

 
$
3,663

 
$
74,893

 
$
31,615

 
$
25,106

 
$
174,687



63


 
December 31, 2010
 
Liberty
 
Kings Hill
 
Liberty
 
Blythe Valley
 
Liberty
 
Liberty/
 
 
 
 
 
Venture I, LP
 
Unit Trust
 
Illinois, LP
 
JV Sarl
 
Washington, LP
 
Commerz
 
Other
 
Total
Real estate assets
$
133,443

 
$
183,763

 
$
252,140

 
$
202,544

 
$
909,485

 
$
493,196

 
$
68,614

 
$
2,243,185

Accumulated depreciation
(23,764
)
 
(15,861
)
 
(24,436
)
 
(14,887
)
 
(71,513
)
 
(41,733
)
 
(3,786
)
 
(195,980
)
   Real estate assets, net
109,679

 
167,902

 
227,704

 
187,657

 
837,972

 
451,463

 
64,828

 
2,047,205

Land held for development
2,741

 

 
42,698

 
36,897

 
2,000

 

 
21,848

 
106,184

Other assets
11,475

 
6,480

 
13,514

 
12,221

 
55,138

 
49,457

 
28,959

 
177,244

   Total assets
$
123,895

 
$
174,382

 
$
283,916

 
$
236,775

 
$
895,110

 
$
500,920

 
$
115,635

 
$
2,330,633

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Debt
$
75,801

 
$
140,859

 
$
140,400

 
$
192,132

 
$
347,990

 
$
324,000

 
$
53,996

 
$
1,275,178

Other liabilities
2,686

 
41,058

 
5,897

 
67,060

 
34,161

 
10,775

 
10,927

 
172,564

Equity
45,408

 
(7,535
)
 
137,619

 
(22,417
)
 
512,959

 
166,145

 
50,712

 
882,891

   Total liabilities and equity
$
123,895

 
$
174,382

 
$
283,916

 
$
236,775

 
$
895,110

 
$
500,920

 
$
115,635

 
$
2,330,633

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company's net investment in
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
unconsolidated joint ventures (1)
$
10,600

 
$
3,286

 
$
21,959

 
$
2,298

 
$
74,345

 
$
34,355

 
$
25,073

 
$
171,916


(1)
Differences between the Company's net investment in unconsolidated joint ventures and its underlying equity in the net assets of the venture is primarily a result of impairments related to the Company's investment in unconsolidated joint ventures, the deferral of gains associated with the sales of properties to joint ventures in which the Company retains an ownership interest and loans made to the joint ventures by the Company. These adjustments have resulted in an aggregate difference reducing the Company's investments in unconsolidated joint ventures by $42.7 million as of December 31, 2011. Differences between historical cost basis and the basis reflected at the joint venture level (other than loans) are typically depreciated over the life of the related asset.

Condensed Statements of Operations:
 
Year Ended December 31, 2011
 
Liberty
 
Kings Hill
 
Liberty
 
Blythe Valley
 
Liberty
 
Liberty/
 
 
 
 
 
Venture I, LP
 
Unit Trust
 
Illinois, LP
 
JV Sarl
 
Washington, LP
 
Commerz
 
Other
 
Total
Total revenue
$
17,008

 
$
16,389

 
$
20,245

 
$
13,950

 
$
76,811

 
$
62,225

 
$
7,212

 
$
213,840

Operating expense
5,912

 
3,372

 
8,055

 
3,942

 
27,074

 
20,575

 
1,869

 
70,799

 
11,096

 
13,017

 
12,190

 
10,008

 
49,737

 
41,650

 
5,343

 
143,041

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest
(5,472
)
 
(5,979
)
 
(8,348
)
 
(14,991
)
 
(22,998
)
 
(20,445
)
 
(3,169
)
 
(81,402
)
Depreciation and amortization
(4,088
)
 
(4,219
)
 
(7,342
)
 
(4,951
)
 
(28,618
)
 
(15,494
)
 
(1,793
)
 
(66,505
)
Other income/(expense)
985

 
(511
)
 
(56
)
 
(191
)
 
125

 
(2,046
)
 
(509
)
 
(2,203
)
Gain (loss) on sale
1,515

 

 

 
(1,605
)
 

 

 
1,253

 
1,163

Net income (loss)
$
4,036

 
$
2,308

 
$
(3,556
)
 
$
(11,730
)
 
$
(1,754
)
 
$
3,665

 
$
1,125

 
$
(5,906
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company's equity in earnings (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 of unconsolidated joint ventures
$
1,212

 
$
637

 
$
(394
)
 
$
(1,898
)
 
$
1,889

 
$
1,314

 
$
736

 
$
3,496

 
 
Year Ended December 31, 2010
 
Liberty
 
Kings Hill
 
Liberty
 
Blythe Valley
 
Liberty
 
Liberty/
 
 
 
 
 
Venture I, LP
 
Unit Trust
 
Illinois, LP
 
JV Sarl
 
Washington, LP
 
Commerz
 
Other
 
Total
Total revenue
$
17,089

 
$
15,980

 
$
20,160

 
$
13,270

 
$
72,824

 
$
61,444

 
$
7,276

 
$
208,043

Operating expense
7,352

 
2,471

 
7,782

 
3,401

 
25,614

 
21,417

 
1,271

 
69,308

 
9,737

 
13,509

 
12,378

 
9,869

 
47,210

 
40,027

 
6,005

 
138,735

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest
(5,879
)
 
(3,078
)
 
(7,966
)
 
(14,783
)
 
(20,486
)
 
(20,445
)
 
(3,485
)
 
(76,122
)
Depreciation and amortization
(5,099
)
 
(4,197
)
 
(7,051
)
 
(5,315
)
 
(29,132
)
 
(15,479
)
 
(1,979
)
 
(68,252
)
Other income/(expense)
11

 
(564
)
 
(48
)
 
(289
)
 
165

 
(781
)
 
20

 
(1,486
)
Net (loss) income
$
(1,230
)
 
$
5,670

 
$
(2,687
)
 
$
(10,518
)
 
$
(2,243
)
 
$
3,322

 
$
561

 
$
(7,125
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company's equity in (loss) earnings of
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 unconsolidated joint ventures
$
(107
)
 
$
1,317

 
$
(174
)
 
$
(1,980
)
 
$
1,624

 
$
1,157

 
$
459

 
$
2,296


64



 
Year Ended December 31, 2009
 
Liberty
 
Kings Hill
 
Liberty
 
Blythe Valley
 
Liberty
 
Liberty/
 
 
 
 
 
Venture I, LP
 
Unit Trust
 
Illinois, LP
 
JV Sarl
 
Washington, LP
 
Commerz
 
Other
 
Total
Total revenue
$
18,407

 
$
16,197

 
$
22,191

 
$
13,325

 
$
74,850

 
$
61,094

 
$
4,928

 
$
210,992

Operating expense
6,559

 
2,649

 
8,350

 
6,120

 
26,159

 
21,170

 
2,435

 
73,442

 
11,848

 
13,548

 
13,841

 
7,205

 
48,691

 
39,924

 
2,493

 
137,550

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest
(4,992
)
 
(7,674
)
 
(7,469
)
 
(13,084
)
 
(17,086
)
 
(20,455
)
 
(2,915
)
 
(73,675
)
Depreciation and amortization
(4,255
)
 
(4,559
)
 
(7,117
)
 
(5,576
)
 
(30,727
)
 
(15,498
)
 
(1,594
)
 
(69,326
)
Other income/(expense)
131

 
(602
)
 
(50
)
 
(175
)
 
280

 
(378
)
 
156

 
(638
)
Impairment charges

 

 

 

 
(39,380
)
 

 

 
(39,380
)
Net income (loss)
$
2,732

 
$
713

 
$
(795
)
 
$
(11,630
)
 
$
(38,222
)
 
$
3,593

 
$
(1,860
)
 
$
(45,469
)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company's equity in earnings (loss)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
of unconsolidated joint ventures
$
905

 
$
334

 
$
181

 
$
(1,318
)
 
$
1,649

 
$
1,241

 
$
(831
)
 
$
2,161

9.     DEFERRED FINANCING AND LEASING COSTS
Deferred financing and leasing costs at December 31, 2011 and 2010 are as follows (in thousands):
 
 
December 31,
 
 
2011
 
2010
 
 
 
 
 
Deferred leasing costs
 
$
187,042

 
$
167,712

Deferred financing costs
 
40,885

 
42,190

In-place lease value and related intangible asset
 
26,334

 
26,778

 
 
254,261

 
236,680

Accumulated amortization
 
(124,051
)
 
(108,144
)
Total
 
$
130,210

 
$
128,536


10.     INDEBTEDNESS
Overview
Indebtedness consists of mortgage loans, unsecured notes, and borrowings under a credit facility. The weighted average interest rates for the years ended December 31, 2011, 2010 and 2009 were 5.8%, 6.2% and 6.2%, respectively. Interest costs during the years ended December 31, 2011, 2010 and 2009 in the amount of $3.0 million, $929,000 and $7.6 million, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2011, 2010 and 2009 was $134.3 million, $145.8 million and $159.7 million, respectively.
The Company is subject to financial covenants contained in some of its debt agreements, the most restrictive of which are detailed below under the heading "Credit Facility." As of December 31, 2011, the Company was in compliance with all financial covenants.
The scheduled principal amortization and maturities of the Company's mortgage loans, unsecured notes outstanding and the Credit Facility (as defined below) and the related weighted average interest rates at December 31, 2011 are as follows (in thousands, except percentages):

65


 
 
 
 
 
 
 
 
 
 
 
 
Weighted
 
 
Mortgages
 
 
 
 
 
 
 
Average
 
 
Principal
 
Principal
 
Unsecured
 
Credit
 
 
 
Interest
 
 
Amortization
 
Maturities
 
Notes
 
Facility
 
Total
 
Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
2012
 
$
4,931

 
$
30,114

 
$
230,100

 
$

 
$
265,145

 
6.47
%
2013
 
4,582

 
4,510

 

 

 
9,092

 
5.73
%
2014
 
4,965

 
2,684

 
200,000

 

 
207,649

 
5.66
%
2015
 
4,511

 
44,469

 
316,000

 
139,400

 
504,380

 
4.15
%
2016
 
3,068

 
182,318

 
300,000

 

 
485,386

 
6.10
%
2017
 
2,318

 
2,349

 
296,543

 

 
301,210

 
6.61
%
2018
 

 

 
100,000

 

 
100,000

 
7.50
%
2019
 

 

 

 

 

 

2020
 

 

 
350,000

 

 
350,000

 
4.75
%
 
 
$
24,375

 
$
266,444

 
$
1,792,643

 
$
139,400

 
$
2,222,862

 
5.58
%
Mortgage Loans, Unsecured Notes
Mortgage loans with maturities ranging from 2012 to 2017 are collateralized by and in some instances cross-collateralized by properties with a net book value of $510.7 million as of December 31, 2011.
The interest rates on $2,067.5 million of mortgage loans and unsecured notes are fixed and range from 4.5% to 8.8%. The weighted average remaining term for the mortgage loans and unsecured notes is 4.8 years.
Credit Facility

The Company has maintained an unsecured credit facility throughout 2009, 2010 and 2011. During that period the Company has replaced, restated and amended its credit facility. This activity has resulted in changes to due dates, borrowing costs and covenant calculations. As replaced, restated and amended these credit facilities are referred to below as the "Credit Facility." The interest rate on borrowings under the Credit Facility fluctuates based upon ratings from Moody’s Investors Service, Inc., Standard and Poor’s Ratings Group and Fitch, Inc. Based on the Company's present ratings, borrowings under the Credit Facility are priced at LIBOR plus 107.5 basis points. The Credit Facility expires in November 2015 and the Company has a one-year extension option. The Credit Facility contains a competitive bid option, whereby participating lenders bid on the interest rate to be charged. This feature is available for up to 50% of the amount of the facility. The interest rate on the $139.4 million of borrowings outstanding as of December 31, 2011 was 1.48%. There is also a 20 basis point annual facility fee on the current borrowing capacity. The Credit Facility contains financial covenants, certain of which are set forth below:
total debt to total assets may not exceed 0.60:1;
earnings before interest, taxes, depreciation and amortization to fixed charges may not be less than 1.50:1;
unsecured debt to unencumbered asset value must equal or be less than 60% and
unencumbered net operating income to unsecured interest expense must equal or exceed 200%.
Activity

In March 2011, the Company used proceeds from its Credit Facility together with available cash on hand to repay $246.5 million principal value of 7.25% senior notes.

In October 2011, the Company replaced its existing $500 million Credit Facility which was due November 2013 with a new Credit Facility. The new facility is for $500 million. It matures in November 2015 and has a one-year extension option. Based upon the Company's current credit ratings, borrowings under the new facility currently bear interest at LIBOR plus 107.5 basis points.
During the year ended December 31, 2010, the Company used available cash and proceeds from its Credit Facility to repay $119.3 million principal value of mortgage loans. The weighted average interest rate of these loans as of March 31, 2010 was 7.3%. The Company incurred a $1.2 million prepayment penalty and wrote off $936,000 in deferred financing costs in conjunction with the prepayment of these loans. These costs are included as interest expense in the accompanying consolidated statements of operations.
During the year ended December 31, 2010, the Company used proceeds from its Credit Facility to repay $169.7 million principal value of 8.50% senior notes due August 2010.
During the year ended December 31, 2010, the Company replaced its existing $600 million Credit Facility with a $500 million

66


Credit Facility. Based upon the Company's then-current credit ratings, borrowings under the new facility bore interest at LIBOR plus 230 basis points.
During the year ended December 31, 2010, the Company issued $350 million of 10-year, 4.75% senior notes. The net proceeds from this issuance were used to repay borrowings under the Company's Credit Facility and for general corporate purposes.
During the year ended December 31, 2009, the Company satisfied a 7.75% senior note due April 2009 in full by paying $238.6 million in outstanding principal amount and satisfied an 8.125% medium term unsecured note due January 2009 in full by paying $20.0 million in outstanding principal amount.
During the year ended December 31, 2009, the Company purchased $11.4 million of its 7.75% senior notes due April 2009, $6.9 million of its 8.50% senior notes due August 2010, $3.5 million of its 7.25% senior notes due March 2011, $4.9 million of its 6.375% senior notes due August 2012 and $3.5 million of its 6.625% senior notes due October 2017. These notes were purchased at a $1.5 million aggregate discount. The discount is included in net income as debt extinguishment gain.
During the year ended December 31, 2009, the Company closed on mortgages totaling $330.3 million bearing interest at an average rate of 7.1%. The net proceeds of these mortgages were used to pay down outstanding borrowings under the Credit Facility and for general corporate purposes.
11.     LEASING ACTIVITY
Future minimum rental payments due from tenants under noncancelable operating leases as of December 31, 2011 are as follows (in thousands):
2012
 
$
471,541

2013
 
418,995

2014
 
352,486

2015
 
288,527

2016
 
230,557

Thereafter
 
677,843

 
 
 
TOTAL
 
$
2,439,949

In addition to minimum rental payments, most leases require the tenants to pay for their pro rata share of specified operating expenses. These payments are included as operating expense reimbursement in the accompanying consolidated statements of operations.
12.     NONCONTROLLING INTEREST - OPERATING PARTNERSHIP / LIMITED PARTNERS' EQUITY - PREFERRED UNITS
As of December 31, 2011, the Company had outstanding the following cumulative preferred units of the Operating Partnership:
ISSUE
 
AMOUNT
 
UNITS
 
LIQUIDATION
PREFERENCE
 
DIVIDEND
RATE
 
 
(in 000’s)
 
 
 
 
Series I-2
 
$
7,537

 
301

 
$25
 
6.25
%
The preferred units are callable at the holder's option at any time and are callable at the Operating Partnership's option after a stated period of time for cash.
In addition to the units listed above, during the year ended December 31, 2011, the Company issued 362,369 Series I-1 preferred units for $9.1 million. These units were redeemed by the holder prior to December 31, 2011.
Preferred distributions related to these units were $57,000 for the year ended December 31, 2011.

13.     SHAREHOLDERS' EQUITY - TRUST
Common Shares
The Company paid to holders of its common shares and holders of its common units distributions of $226.0 million, $222.6 million and $209.6 million during the years ended December 31, 2011, 2010 and 2009, respectively. On a per share basis, the Company

67


paid common share and common unit distributions of $1.90 during each of the years ended December 31, 2011, 2010 and 2009.
The following unaudited table summarizes the taxability of common share distributions (taxability for 2011 is estimated):
 
 
2011
 
2010
 
2009
 
 
 
 
 
 
 
Ordinary dividend
 
$
1.4300

 
$
1.4812

 
$
1.6772

Qualified dividend
 

 

 

Capital gain - 15%
 
0.1708

 

 
0.0976

IRC Sec 1250 unrecapture gain - 25%
 
0.2992

 
0.0128

 
0.1252

Return of capital
 

 
0.4060

 

 
 
 
 
 
 
 
Total
 
$
1.9000

 
$
1.9000

 
$
1.9000

The Company's tax return for the year ended December 31, 2011 has not been filed. The taxability information presented for the 2011 distributions is based upon the best available data. The Company's prior federal income tax returns are subject to examination by taxing authorities. Because the application of tax laws and regulations is susceptible to varying interpretations, the taxability of distributions could be changed at a later date upon final determination by taxing authorities.
Common Shares Held in Treasury
The Company has a share repurchase plan under which the Company may purchase up to $100 million of the Company's common shares and preferred shares (as defined below).
The Company purchased no common shares under the share repurchase plan during 2011, 2010 or 2009.
Common units
The common units of the Operating Partnership not held by the Trust outstanding as of December 31, 2011 have the same economic characteristics as common shares of the Trust. The 3,808,746 outstanding common units of the Operating Partnership not held by the Trust share proportionately in the net income or loss and in any distributions of the Operating Partnership. The common units of the Operating Partnership not held by the Trust are redeemable at any time at the option of the holder. The Trust, as the sole general partner of the Operating Partnership, may at its option elect to settle the redemption in cash or through the exchange on a one-for-one basis with unregistered common shares of the Trust. The market value of the 3,808,746 outstanding common units based on the closing price of the common shares of the Company at December 31, 2011 was $117.6 million.
No common units were issued in connection with acquisitions during 2011, 2010 or 2009.
Preferred units
In addition to the preferred units identified above (see Note 12), the Trust has outstanding the following cumulative redeemable preferred units of the Operating Partnership (the “Equity Preferred Units”):
 
ISSUE
 
AMOUNT
 
UNITS
 
LIQUIDATION
PREFERENCE
 
DIVIDEND
RATE
 
REDEEMABLE
AS OF
 
EXCHANGEABLE AFTER
 
 
(in 000’s)
 
 
 
 
 
 
 
 
Series B
 
$
95,000

 
3,800

 

$25

 
7.45
%
 
8/31/2009
 
8/31/13 into Series B Cumulative Redeemable Preferred Shares of the Trust
Series E
 
$
20,000

 
400

 

$50

 
7.00
%
 
6/16/2010
 
6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust
Series F
 
$
50,000

 
1,000

 

$50

 
6.65
%
 
6/30/2010
 
12/12/15 into Series F Cumulative Redeemable Preferred Shares of the Trust
Series G
 
$
27,000

 
540

 

$50

 
6.70
%
 
12/15/2011
 
12/15/16 into Series G Cumulative Redeemable Preferred Shares of the Trust
Series H
 
$
100,000

 
4,000

 

$25

 
7.40
%
 
8/21/2012
 
8/21/17 into Series H Cumulative Redeemable Preferred Shares of the Trust

The Equity Preferred Units are callable at the Operating Partnership’s option after a stated period of time. The Trust as the sole general partner of the Operating Partnership may at its option elect to settle the redemption for cash or through the exchange on a one-for-one basis with unregistered preferred shares of the Trust.

68


The Company paid the following Equity Preferred Unit distributions for the years ended December 31:
 
 
2011
 
2010
 
2009
Distributions (in millions)
 
$21.0
 
$21.0
 
$21.0
Distribution per unit:
 
 
 
 
 
 
Series B
 
$1.86
 
$1.86
 
$1.86
Series E
 
$3.50
 
$3.50
 
$3.50
Series F
 
$3.33
 
$3.33
 
$3.33
Series G
 
$3.35
 
$3.35
 
$3.35
Series H
 
$1.85
 
$1.85
 
$1.85
As of December 31, 2011, the Company had 6,273,000 authorized but unissued preferred shares.
Dividend Reinvestment and Share Purchase Plan
The Company has a Dividend Reinvestment and Share Purchase Plan under which holders of common shares may elect to automatically reinvest their distributions in additional common shares and may make optional cash payments for additional common shares. The Company may issue additional common shares or repurchase common shares in the open market for purposes of satisfying its obligations under the Dividend Reinvestment and Share Purchase Plan. During the years ended December 31, 2011, 2010, and 2009, 1,181,776, 915,363, and 304,587 common shares, respectively, were issued through the Dividend Reinvestment and Share Purchase Plan. The Company used the proceeds to pay down outstanding borrowings under the Company's Credit Facility and for general corporate purposes.
Continuous Equity Offering
During the year ended December 31, 2009, the Company sold 12.8 million common shares pursuant to a continuous offering program. The net proceeds from the offering of $283.2 million were used for general corporate purposes, including the funding of maturing senior note obligations. The Company did not sell any common shares pursuant to a continuous offering program during 2011 or 2010.
Noncontrolling Interest - Consolidated Joint Ventures
Noncontrolling interest - consolidated joint ventures includes third-party ownership interests in consolidated joint venture investments.

14.     OWNERS' EQUITY - OPERATING PARTNERSHIP

Common units
General and limited partners' equity - common units relates to limited partnership interests of the Operating Partnership issued in connection with the formation of the Operating Partnership and certain subsequent acquisitions. The common units outstanding as of December 31, 2011 have the same economic characteristics as common shares of the Trust. The 3,808,746 outstanding common units are the limited partners' equity - common units held by persons and entities other than the Trust, the general partner of the Operating Partnership, which holds a number of common units equal to the number of outstanding common shares of beneficial interest. Both the common units held by the Trust and the common units held by persons and entities other than the Trust are counted in the weighted average number of common units outstanding during any given period. The 3,808,746 outstanding common units share proportionately in the net income or loss and in any distributions of the Operating Partnership and are exchangeable into the same number of common shares of the Trust. The market value of the 3,808,746 outstanding common units at December 31, 2011 based on the closing price of the common shares of the Company at December 31, 2011 was $117.6 million.

Preferred units
The following are the Equity Preferred Units of the Operating Partnership:


69


ISSUE
 
AMOUNT
 
UNITS
 
LIQUIDATION PREFERENCE
 
DIVIDEND RATE
 
REDEEMABLE AS OF
 
EXCHANGEABLE AFTER
 
 
(in 000's)
 
 
 
 
 
 
 
 
Series B
 
$
95,000

 
3,800

 

$25

 
7.45
%
 
8/31/2009
 
8/31/13 into Series B Cumulative Redeemable Preferred Shares of the Trust
Series E
 
$
20,000

 
400

 

$50

 
7.00
%
 
6/16/2010
 
6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust
Series F
 
$
50,000

 
1,000

 

$50

 
6.65
%
 
6/30/2010
 
12/12/15 into Series F Cumulative Redeemable Preferred Shares of the Trust
Series G
 
$
27,000

 
540

 

$50

 
6.70
%
 
12/15/2011
 
12/15/16 into Series G Cumulative Redeemable Preferred Shares of the Trust
Series H
 
$
100,000

 
4,000

 

$25

 
7.40
%
 
8/21/2012
 
8/21/17 into Series H Cumulative Redeemable Preferred Shares of the Trust

The Equity Preferred Units are callable at the Operating Partnership's option after a stated period of time. The Trust as the sole general partner of the Operating Partnership may at its option elect to settle the redemption for cash or through the exchange on a one-for-one basis with unregistered preferred shares of the Trust.
The Operating Partnership paid the following Equity Preferred Unit distributions for the years ended December 31:
 
 
2011
 
2010
 
2009
Distributions (in millions)
 
$21.0
 
$21.0
 
$21.0
Distribution per unit:
 
 
 
 
 
 
Series B
 
$1.86
 
$1.86
 
$1.86
Series E
 
$3.50
 
$3.50
 
$3.50
Series F
 
$3.33
 
$3.33
 
$3.33
Series G
 
$3.35
 
$3.35
 
$3.35
Series H
 
$1.85
 
$1.85
 
$1.85
Continuous Equity Offering
During the year ended December 31, 2009, the Operating Partnership sold 12.8 million common units pursuant to a continuous offering program. The net proceeds from the offering of $283.2 million were used for general corporate purposes, including the funding of maturing senior note obligations. The Operating Partnership did not sell any common units pursuant to a continuous offering program during 2011 or 2010.
Noncontrolling Interest - Consolidated Joint Ventures
Noncontrolling interest - consolidated joint ventures includes third-party ownership interests in consolidated joint venture investments.
15.     EMPLOYEE BENEFIT PLANS
The Company maintains a 401(k) plan for the benefit of its full-time employees. The Company matches the employees' contributions up to 3% of the employees' salary and may also make annual discretionary contributions. Total 401(k) expense recognized by the Company was $768,000, $788,000 and $802,000 for the years ended December 31, 2011, 2010 and 2009, respectively.
16.     SHARE BASED COMPENSATION
Compensation Plans
The Company has a share-based compensation plan (the "Plan") which is utilized to compensate key employees, non-employee trustees and consultants. In addition, the Company has a 2008 Long-Term Incentive Plan (the "2008 Plan") which is applicable to the Company's executive officers. Pursuant to both the Plan and the 2008 Plan, grants of stock options and restricted stock units have been made.
Options
The Company has authorized the grant of options under the Plan and the 2008 Plan of up to 21.1 million common shares of the Company. All options granted have 10-year terms and most options vest and are expensed over a three-year period, with options

70


to purchase up to 20% of the shares exercisable after the first anniversary, up to 50% after the second anniversary and 100% after the third anniversary of the date of grant.
Share based compensation cost related to options for the years ended December 31, 2011, 2010 and 2009 was $1.7 million, $2.0 and $1.5 million, respectively.
The fair value of share option awards is estimated on the date of the grant using the Black-Scholes option valuation model. The following weighted-average assumptions were utilized in calculating the fair value of options granted during the periods indicated:
 
Year Ended December 31,
 
2011
 
2010
 
2009
Risk-free interest rate
2.1%
 
2.3%
 
1.6%
Dividend yield
6.1%
 
7.6%
 
8.5%
Historical volatility factor
0.366
 
0.357
 
0.325
Weighted-average expected life
5 years
 
5 years
 
5 years
A summary of the Company's share option activity, and related information for the year ended December 31, 2011 follows:
 
 
Options (000s)
 
Weighted Average Exercise Price
Outstanding January 1, 2011
 
3,323

 
$33.06
Granted
 
253

 
33.51
Exercised
 
(256
)
 
29.63
Forfeited
 
(9
)
 
28.28
Outstanding December 31, 2011
 
3,311

 
$33.37
Exercisable at December 31, 2011
 
2,435

 
$34.85
The weighted average fair value of options granted during the years ended December 31, 2011, 2010 and 2009 was $6.17, $5.00 and $2.30, respectively. Exercise prices for options outstanding as of December 31, 2011 ranged from $20.32 to $49.74. The weighted average remaining contractual life of the options outstanding and exercisable at December 31, 2011 was 5.4 years and 4.4 years, respectively.
During the years ended December 31, 2011, 2010 and 2009, the total intrinsic value of share options exercised (the difference between the market price at exercise and the price paid by the individual to exercise the option) was $900,000, $1.4 million and $1.7 million, respectively. As of December 31, 2011, 1.9 million of the options outstanding and exercisable had an exercise price higher than the closing price of the Company's common shares and are considered to have no intrinsic value at that date. As of December 31, 2011, 560,000 options outstanding and exercisable had an exercise price lower than the closing price of the Company's common shares. The aggregate intrinsic value of these options was $2.8 million at that date. The total cash received from the exercise of options for the years ended December 31, 2011, 2010 and 2009 was $7.6 million, $8.5 million and $4.3 million, respectively. The Company has historically issued new shares to satisfy share option exercises.
As of December 31, 2011, there was $1.0 million of unrecognized compensation costs related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted average period of 0.7 years.
Long Term Incentive Shares ("LTI")
Restricted LTI share grants made under the Plan are valued at the grant date fair value, which is the market price of the underlying common shares, and vest ratably over a 5-year period beginning with the first anniversary of the grant.
During 2011, 2010 and 2009, the Company granted Restricted Stock Units to the executive officers pursuant to the 2008 Plan. A portion of the Restricted Stock Unit will vest from 50% to 200% at the end of a three year period based on whether our total return exceeds the average total returns of a selected group of peer companies ("First Portion"). The grant date fair value of the First Portion was calculated based on a Monte Carlo simulation model and was determined to be 146%, 141% and 175% as of December 2011, 2010 and 2009, respectively, of the market value of a common share as of the grant date and is amortized over the respective three year period subject to certain accelerated vesting due to the age and years of service of certain executive officers. Another portion of the Restricted Stock Unit will vest from 50% to 200% at the end of a three year period based on the amount of the Company's Funds from operations ("Second Portion"). Targets are established for each of the three years in the relevant award period. Depending on how each year's performance compares to the projected performance for that year, the Restricted Stock Units are deemed earned and will be payable to the executive officer at the end of the award period. The fair

71


value of the Second Portion is based on the market value of a common share as of the grant date and is being amortized to expense during the period from grant date to the vesting dates, adjusting for the expected level of vesting that is anticipated to occur at those dates also subject to certain accelerated vesting provisions as described above.
Share-based compensation cost related to restricted LTI share grants for the years ended December 31, 2011, 2010 and 2009 were $8.2 million, $6.6 million and $8.1 million, respectively.
The Company's restricted LTI share activity for the year ended December 31, 2011 is as follows:
 
 
Shares (000s)
 
Weighted Avg. Grant Date Fair value
Nonvested at January 1, 2011
 
729

 
$29.03
Granted
 
217

 
33.62

Vested
 
(199
)
 
30.95

Forfeited
 
(2
)
 
28.82

Nonvested at December 31, 2011
 
745

 
$29.86
The weighted average fair value of restricted shares granted during the years ended December 31, 2011, 2010 and 2009 was $33.62 per share, $32.65 per share and $20.52 per share, respectively. As of December 31, 2011, there was $9.8 million of total unrecognized compensation cost related to nonvested shares granted under the Plan. That cost is expected to be recognized over a weighted average period of 1.3 years. The total fair value of restricted shares vested during the years ended December 31, 2011, 2010 and 2009 was $6.2 million, $3.9 million and $4.4 million, respectively.
Bonus Shares
The Plan provides that employees of the Company may elect to receive bonuses or commissions in the form of common shares in lieu of cash ("Bonus Shares"). By making such election, the employee receives shares equal to 120% of the cash value of the bonus or commission, less applicable withholding tax. Bonus Shares issued for the years ended December 31, 2011, 2010 and 2009 were 85,471, 60,238 and 80,187, respectively. Share-based compensation cost related to Bonus Shares for the years ended December 31, 2011, 2010 and 2009 was $2.8 million, $2.0 million and $1.7 million, respectively.
Profit Sharing Plan
The Plan provides that employees of the Company, below the officer level, may receive up to 5% of base pay in the form of cash contributions to an investment account depending on Company performance. Prior to 2011, these contributions were made in Company shares. Shares issued in conjunction with the profit sharing plan for the years ended December 31, 2010 and 2009 were 17,769 and 23,849 shares, respectively. Compensation cost related to the profit sharing plan for the years ended December 31, 2011, 2010 and 2009 was $868,000, $387,000 and $582,000 respectively.
An additional 7,899,926, 8,365,493 and 9,142,276 common shares were reserved for issuance for future grants under the Plan at December 31, 2011, 2010 and 2009, respectively.
Employee Share Purchase Plan
The Company registered 750,000 common shares under the Securities Act of 1933, as amended, in connection with an employee share purchase plan ("ESPP"). The ESPP enables eligible employees to purchase shares of the Company, in amounts up to 10% of the employee's salary, at a 15% discount to fair market value. There were 18,818, 19,043 and 19,137 shares issued, in accordance with the ESPP, during the years ended December 31, 2011, 2010 and 2009, respectively. Share-based compensation cost related to the ESPP for the years ended December 31, 2011, 2010 and 2009 was $67,000, $78,000 and $131,000, respectively.
17.     COMMITMENTS AND CONTINGENCIES
Environmental Matters
Substantially all of the Properties and land were subject to Phase I Environmental Assessments and when appropriate Phase II Environmental Assessments (together, the “Environmental Assessments”) obtained in contemplation of their acquisition by the Company. The Environmental Assessments did not reveal, nor is the Company aware of, any non-compliance with environmental laws, environmental liability or other environmental claim that the Company believes would likely have a material adverse effect on the Company.

72


Operating Ground Lease Agreements
Future minimum rental payments under the terms of all non-cancelable operating ground leases under which the Company is the lessee, as of December 31, 2011, were as follows (in thousands):
 
Year
Amount
2012
$
160

2013
163

2014
158

2015
153

2016
153

2017 though 2071
5,237

Total
$
6,024


Operating ground lease expense incurred by the Company during the years December 31, 2011, 2010 and 2009 totaled $322,000, $434,000 and $460,000, respectively.
Legal Matters
From time to time, the Company is a party to a variety of legal proceedings, claims and assessments arising in the normal course of business. The Company believes that as of December 31, 2011 there were no legal proceedings, claims or assessments expected to have a material adverse effect on the Company’s business or financial statements.
Other
As of December 31, 2011, the Company was obligated to make additional capital contributions to unconsolidated joint ventures of $1.4 million. As of December 31, 2011, the Company had other miscellaneous guarantees related to its unconsolidated joint ventures for up to a maximum of $452,000.
As of December 31, 2011, the Company had letter of credit obligations of $6.3 million related to development requirements. The Company believes that it is remote that there will be a draw upon these letter of credit obligations.
As of December 31, 2011, the Company had initiated the development of 10 buildings. These buildings are expected to contain a total of 3.1 million square feet of leaseable space and represent an anticipated aggregate investment of $288.7 million. At December 31, 2011, Development in Progress totaled $88.8 million.
As of December 31, 2011, the Company was obligated to pay tenants for allowances for tenant improvements not yet completed for a maximum of $38.1 million.
The Company maintains cash and cash equivalents at financial institutions. The combined account balances at each institution typically exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes the risk is not significant.
18.     QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

A summary of quarterly results of operations for the years ended December 31, 2011 and 2010 follows. Certain amounts have been reclassified to conform to the current presentation of discontinued operations (in thousands, except per share amounts).

73


 
 
QUARTER ENDED
 
 
DEC. 31,
 
SEPT. 30,
 
JUNE 30,
 
MAR. 31,
 
DEC. 31,
 
SEPT. 30,
 
JUNE 30,
 
MAR. 31,
 
 
2011
 
2011
 
2011
 
2011
 
2010
 
2010
 
2010
 
2010
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Operating revenue
 
$169,801
 
$166,247
 
$165,027
 
$166,519
 
$164,530
 
$166,316
 
$161,789
 
$164,366
Income from continuing operations
 
34,316

 
35,857

 
38,934

 
30,764

 
32,062

 
35,900

 
33,576

 
28,464

Discontinued operations
 
6,929

 
5,824

 
53,907

 
4,179

 
4,471

 
5,106

 
6,438

 
7,358

Net income
 
41,245

 
41,681

 
92,841

 
34,943

 
36,533

 
41,006

 
40,014

 
35,822

Income per common share - basic (1)
 
0.30

 
0.31

 
0.74

 
0.25

 
0.27

 
0.31

 
0.30

 
0.26

Income per common share - diluted (1)
 
0.30

 
0.31

 
0.74

 
0.25

 
0.26

 
0.30

 
0.29

 
0.26


(1)
The sum of quarterly financial data may vary from the annual data due to rounding.



74


19.     SEGMENT INFORMATION
The Company operates its portfolio of industrial and office properties primarily throughout the Mid-Atlantic, Southeastern, Midwestern and Southwestern United States and the United Kingdom. The Company reviews the performance of the portfolio on a geographical basis. During the year ended December 31, 2011, the Company realigned the reportable segments due to changes in internal reporting responsibilities. As such, the following are considered the Company’s reportable segments:
 
REGIONS
MARKETS
 
 
Northeast
Southeastern PA; Lehigh/Central PA; New Jersey; Maryland
Central
Minnesota; Chicago/Milwaukee; Houston; Arizona
South
Richmond; Virginia Beach; Carolinas; Jacksonville; Orlando; South Florida; Tampa
Metro
Philadelphia; Metro Washington, D.C.
United Kingdom
County of Kent; West Midlands

The following lists the Company’s reportable segments as characterized in the Company’s Annual Report on Form 10-K for the year ended December 31, 2010:
 
REGIONS
(BEFORE 2011 CHANGES)
MARKETS (BEFORE 2011 CHANGES)
 
 
Northeast
Southeastern PA; Lehigh/Central PA; New Jersey
Midwest
Minnesota; Milwaukee; Chicago
Mid-Atlantic
Maryland; Carolinas; Richmond; Virginia Beach
South
Jacksonville; Orlando; South Florida; Tampa; Texas; Arizona
Philadelphia/D.C.
Philadelphia; Metro Washington, D.C.
United Kingdom
County of Kent; West Midlands
The Company evaluates the performance of its reportable segments based on net operating income. Net operating income includes operating revenue from external customers, real estate taxes, amortization of lease transaction costs and other operating expenses which relate directly to the management and operation of the assets within each reportable segment. The Company's performance measure disclosed in its 2010 annual report on Form 10-K was property level operating income. The primary difference between property level operating income and net operating income is the deduction of amortization of lease transaction costs. Comparative prior periods have been restated to reflect current segment disclosures.
The Company's accounting policies for the segments are the same as those used in the Company's Consolidated Financial Statements. There are no material inter-segment transactions.


75


The operating information by reportable segment is as follows (in thousands):
 
 
 
 Year ended
 
 
 
 December 31,
 
 
 
2011
 
2010
 
2009
Operating revenue
 
 
 
 
 
 
 
 Northeast - Southeastern PA
 
$
174,063

 
$
181,412

 
$
185,158

 
 Northeast - Lehigh / Central PA
 
99,311

 
103,802

 
101,473

 
 Northeast - Other
 
70,582

 
74,660

 
82,221

 
 Central
 
126,268

 
125,501

 
129,340

 
 South
 
222,004

 
232,071

 
235,021

 
 Metro
 
28,578

 
28,617

 
22,057

 
 United Kingdom
 
4,408

 
4,211

 
4,403

Segment-level operating revenue
 
725,214

 
750,274

 
759,673

 
 
 
 
 
 
 
 
 Reconciliation to total operating revenues
 
 
 
 
 
 
 
 Discontinued operations
 
(57,828
)
 
(93,097
)
 
(115,021
)
 
 Other
 
208

 
(176
)
 
44

 Total operating revenue
 
$
667,594

 
$
657,001

 
$
644,696

 
 
 
 
 
 
 
 
 Net operating income
 
 
 
 
 
 
 
 
 Northeast - Southeastern PA
 
$
101,982

 
$
108,593

 
$
112,148

 
 Northeast - Lehigh / Central PA
 
64,786

 
66,632

 
65,827

 
 Northeast - Other
 
35,017

 
37,234

 
43,953

 
 Central
 
68,114

 
70,386

 
73,249

 
 South
 
132,703

 
136,135

 
140,361

 
 Metro
 
19,370

 
20,713

 
15,525

 
 United Kingdom
 
(178
)
 
243

 
1,293

Segment-level net operating income
 
421,794

 
439,936

 
452,356

 
 
 
 
 
 
 
 
 Reconciliation to income from continuing operations before income taxes
 
 
 
 
 
 
 
 Interest expense (1)
 
(131,046
)
 
(149,704
)
 
(151,764
)
 
 Depreciation/amortization expense (2)
 
(106,487
)
 
(109,265
)
 
(109,474
)
 
 Gain on property dispositions
 
5,025

 
4,616

 
1,687

 
 Equity in earnings of unconsolidated joint ventures
 
3,496

 
2,296

 
2,161

 
 General and administrative expense (2)
 
(36,140
)
 
(32,805
)
 
(31,056
)
 
 Discontinued operations excluding gain on property dispositions
 
(10,257
)
 
(16,516
)
 
(30,607
)
 
 Impairment charges - investment in unconsolidated joint ventures and other
 

 
(378
)
 
(82,552
)
 
                                   - goodwill
 

 

 
(15,700
)
 
Other
 
(5,494
)
 
(6,442
)
 
(4,031
)
 Total income from continuing operations before income taxes
 
$
140,891

 
$
131,738

 
$
31,020

(1)
Includes interest on discontinued operations.
(2)
Excludes costs which are included in determining segment-level net operating income.

76



The Company's operating revenue by product type and by reportable segment for the years ended December 31, 2011, 2010 and 2009 is as follows (in thousands):

 
Year Ended
 
December 31, 2011
 
December 31, 2010
 
December 31, 2009
 
Industrial
 
Office
 
Total
 
Industrial
 
Office
 
Total
 
Industrial
 
Office
 
Total
 Northeast - Southeastern PA
$
29,290

 
$
144,773

 
$
174,063

 
$
30,515

 
$
150,897

 
$
181,412

 
$
33,382

 
$
151,776

 
$
185,158

 Northeast - Lehigh / Central PA
93,193

 
6,118

 
99,311

 
91,826

 
11,976

 
103,802

 
88,398

 
13,075

 
101,473

 Northeast - Other
18,369

 
52,213

 
70,582

 
20,862

 
53,798

 
74,660

 
21,294

 
60,927

 
82,221

 Central
61,370

 
64,898

 
126,268

 
57,438

 
68,063

 
125,501

 
63,472

 
65,868

 
129,340

 South
91,439

 
130,565

 
222,004

 
95,123

 
136,948

 
232,071

 
96,172

 
138,849

 
235,021

 Metro
7,817

 
20,761

 
28,578

 
7,591

 
21,026

 
28,617

 
3,470

 
18,587

 
22,057

 United Kingdom
1,288

 
3,120

 
4,408

 
1,263

 
2,948

 
4,211

 
1,294

 
3,109

 
4,403

 
$
302,766

 
$
422,448

 
725,214

 
$
304,618

 
$
445,656

 
750,274

 
$
307,482

 
$
452,191

 
759,673

Reconciliation to total operating revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Discontinued operations
 
 
 
 
(57,828
)
 
 
 
 
 
(93,097
)
 
 
 
 
 
(115,021
)
   Other
 
 
 
 
208

 
 
 
 
 
(176
)
 
 
 
 
 
44

Total operating revenue
 
 
 
 
$
667,594

 
 
 
 
 
$
657,001

 
 
 
 
 
$
644,696


The Company's total assets by reportable segment as of December 31, 2011 and 2010 is as follows (in thousands):

 
 
As of December 31,
 
 
2011
 
2010
Total assets
 
 
 
 
 
 Northeast - Southeastern PA
$
842,779

 
$
857,762

 
 Northeast - Lehigh / Central PA
716,772

 
749,137

 
 Northeast - Other
424,005

 
438,613

 
 Central
991,776

 
967,170

 
 South
1,448,849

 
1,506,972

 
 Metro
383,725

 
281,258

 
 United Kingdom
144,558

 
126,597

 
 Other
37,209

 
137,290

Total assets
$
4,989,673

 
$
5,064,799


The Company's real estate assets by reportable segment as of December 31, 2011 and 2010 is as follows (in thousands):
 
 
As of December 31,
 
 
2011
 
2010
Real estate assets
 
 
 
 
 
 Northeast - Southeastern PA
$
780,228

 
$
797,071

 
 Northeast - Lehigh / Central PA
677,519

 
632,399

 
 Northeast - Other
360,043

 
369,172

 
 Central
843,844

 
756,553

 
 South
1,288,907

 
1,232,983

 
 Metro
227,931

 
138,220

 
 United Kingdom
41,483

 
43,531

Total real estate assets
$
4,219,955

 
$
3,969,929









77



The Company incurred the following costs related to its long-lived assets for the years ended December 31, 2011, 2010 and 2009 (in thousands):

 
 
Year Ended December 31,
 
 
2011
 
2010
 
2009
Costs incurred on long-lived assets
 
 
 
 
 
 
 Northeast - Southeastern PA
$
14,851

 
$
9,567

 
$
16,850

 
 Northeast - Lehigh / Central PA
66,472

 
26,139

 
24,507

 
 Northeast - Other
9,232

 
11,974

 
9,370

 
 Central
119,654

 
28,042

 
40,747

 
 South
123,833

 
53,192

 
46,340

 
 Metro
98,193

 
428

 
17,982

 
 United Kingdom
4,838

 
4,805

 
7,465

Total costs incurred on long-lived assets
$
437,073

 
$
134,147

 
$
163,261


20.     ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS
The operating results and gain on disposition of real estate for properties sold and held for sale are reflected in the consolidated statements of operations as discontinued operations. Prior period financial statements have been adjusted for discontinued operations. The proceeds from dispositions of operating properties with no continuing involvement were $365.2 million, $29.0 million and $165.6 million for the years ended December 31, 2011, 2010 and 2009, respectively.
A summary of the results of operations for the properties held for sale and disposed of through the respective disposition dates is as follows (in thousands):
 
 
For the Year Ended
 
December 31, 2011
 
December 31, 2010
 
December 31, 2009
Revenues
$
58,145

 
$
93,456

 
$
115,486

Operating expenses
(25,694
)
 
(38,313
)
 
(41,882
)
Interest expense
(9,028
)
 
(15,320
)
 
(17,767
)
Depreciation and amortization
(13,166
)
 
(23,307
)
 
(25,230
)
Income before property dispositions
10,257

 
16,516

 
30,607

Gain on property dispositions
60,582

 
6,857

 
17,859

Net income
$
70,839

 
$
23,373

 
$
48,466


As of December 31, 2011, seven properties totaling 544,000 square feet in the Company's Northeast-Other reportable segment, 18 properties totaling 1.0 million square feet in the Company's Central reportable segment and 17 properties totaling 1.0 million square feet in the Company's South reportable segment were considered to be held for sale.
Interest expense is allocated to discontinued operations. The allocation of interest expense to discontinued operations was based on the ratio of net assets sold and held for sale to the sum of total net assets plus consolidated debt.
Asset Impairment
During the years ended December 31, 2011, 2010 and 2009, the Company recognized impairment losses of $7.8 million, $1.0 million and $9.5 million, respectively. The 2009 amount excludes $94.5 million in impairment charges recognized in 2009 related to investments in unconsolidated joint ventures and goodwill. See Note 2. The impairment losses are for operating properties or land parcels and were in the reportable segments and for the amounts as indicated below (amounts in thousands):

78


 
 
Year Ended December 31,
Reportable Segment
 
2011
 
 
2010
 
 
2009
 
Southeastern PA
 
$

 
 
$
(52
)
(1) 
 
$

 
Lehigh/Central PA
 

 
 

 
 
113

 
Northeast - Other
 
538

 
 

 
 
1,138

 
Central
 
5,990

 
 
511

 
 
837

 
South
 
1,331

 
 
121

 
 
4,284

 
Metro
 
(30
)
(1) 
 
377

 
 
3,137

 
Total
 
$
7,829

 
 
$
957

 
 
$
9,509

 
(1) Represents recovery of estimated sales costs on properties sold.
Impairment losses of $3.2 million were recognized in the fourth quarter of 2011.
For the year ended December 31, 2011, $7.9 million in impairments related to properties sold were included in the caption discontinued operations in the Company's consolidated statement of operations. For the year ended December 31, 2010, $579,000 in impairments related to properties sold were included in the caption discontinued operations in the Company's consolidated statements of operations and $378,000 in impairment was included in the caption impairment charges - investment in unconsolidated joint ventures and other in the Company's consolidated statements of operations. For the year ended December 31, 2009, $5.8 million in impairment related to properties sold was included in the caption discontinued operations in the Company's statement of operations and $3.7 million in impairment was included in the caption impairment charges - investment in unconsolidated joint ventures and other in the Company's consolidated statements of operations. The Company determined these impairments through a comparison of the aggregate future cash flows (including quoted offer prices) to be generated by the properties to the carrying value of the properties. The Company has evaluated each of the properties and land held for development and has determined that there are no additional valuation adjustments necessary at December 31, 2011.
21.     SUPPLEMENTAL DISCLOSURE TO STATEMENT OF CASH FLOWS
The following are supplemental disclosures to the statements of cash flows for the years ended December 31, 2011, 2010 and 2009 (amounts in thousands):
 
 
2011
 
2010
 
2009
 Write-off of fully depreciated/amortized property and deferred costs
$
127,005

 
$
48,373

 
$
76,714

Assumption of mortgage loans

 
2,833

 

Equity contribution from consolidated joint venture partner

3,500

 

 

Issuance of preferred units
16,597

 

 


22.     SUBSEQUENT EVENTS
In February 2012, the Company redeemed $32.5 million of outstanding 6.65% Series F Cumulative Redeemable Preferred Units for $26.0 million.




79


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1501 Perryman Road
Aberdeen, MD
 
$


$
5,813,324

 
$
18,874,059

 
$
4,458,440

 
$
5,816,839

 
 
$
23,328,984

 
$
29,145,823

 
 
$
3,120,023

 
2005
 
40

200 Boulder Drive
Allentown, PA
 


4,722,683

 
18,922,645

 
451,444

 
4,722,683

 
 
19,374,089

 
24,096,772

 
 
3,585,402

 
2004
 
40

250 Boulder Drive
Allentown, PA
 


3,599,936

 
12,099,145

 
2,176,159

 
3,717,733

 
 
14,157,508

 
17,875,241

 
 
2,861,088

 
2004
 
40

400 Nestle Way
Allentown, PA
 
17,866,621


8,065,500

 

 
27,420,765

 
8,184,096

 
 
27,302,169

 
35,486,265

 
 
11,449,353

 
1997
 
40

650 Boulder Drive
Allentown, PA
 

*
5,208,248

 

 
31,373,290

 
9,961,788

 
 
26,619,750

 
36,581,539

 
 
6,100,156

 
2002
 
40

651 Boulder Drive
Allentown, PA
 


4,308,646

 

 
17,823,342

 
4,308,646

 
 
17,823,342

 
22,131,987

 
 
5,394,063

 
2000
 
40

700 Nestle Way
Allentown, PA
 

*
3,473,120

 

 
20,069,956

 
4,174,970

 
 
19,368,105

 
23,543,076

 
 
7,609,194

 
1998
 
40

705 Boulder Drive
Allentown, PA
 

*
10,594,027

 

 
27,998,382

 
10,596,767

 
 
27,995,642

 
38,592,409

 
 
5,954,725

 
2001
 
40

7165 Ambassador Drive
Allentown, PA
 

*
792,999

 

 
4,533,868

 
804,848

 
 
4,522,019

 
5,326,867

 
 
1,303,428

 
2002
 
40

7248 Industrial Boulevard
Allentown, PA
 


2,670,849

 
13,307,408

 
4,455,487

 
2,670,673

 
 
17,763,070

 
20,433,744

 
 
6,100,304

 
1988
 
40

7339 Industrial Boulevard
Allentown, PA
 


1,187,776

 

 
6,722,946

 
1,197,447

 
 
6,713,275

 
7,910,723

 
 
2,773,766

 
1996
 
40

7437 Industrial Boulevard
Allentown, PA
 


717,488

 
5,022,413

 
3,042,952

 
726,651

 
 
8,056,202

 
8,782,852

 
 
3,853,855

 
1976
 
40

794 Roble Road
Allentown, PA
 


1,147,541

 
6,088,041

 
1,183,790

 
1,147,541

 
 
7,271,832

 
8,419,373

 
 
3,013,590

 
1985
 
40

8014 Industrial Boulevard
Allentown, PA
 

*
4,019,258

 

 
9,764,666

 
3,645,117

 
 
10,138,806

 
13,783,924

 
 
3,864,903

 
1999
 
40

8150 Industrial Boulevard
Allentown, PA
 


2,564,167

 

 
8,388,663

 
2,571,466

 
 
8,381,365

 
10,952,830

 
 
2,124,888

 
2002
 
40

8250 Industrial Boulevard
Allentown, PA
 

*
1,025,667

 

 
5,339,264

 
1,035,854

 
 
5,329,076

 
6,364,931

 
 
1,419,826

 
2002
 
40

8400 Industrial Boulevard
Allentown, PA
 


6,725,948

 

 
27,128,012

 
7,521,211

 
 
26,332,749

 
33,853,961

 
 
3,821,606

 
2005
 
40

6330 Hedgewood Drive
Allentown, PA
 


531,268

 

 
4,967,420

 
532,047

 
 
4,966,642

 
5,498,688

 
 
2,854,456

 
1988
 
40

6350 Hedgewood Drive
Allentown, PA
 

*
360,027

 

 
4,028,297

 
560,691

 
 
3,827,633

 
4,388,324

 
 
1,874,910

 
1989
 
40

6370 Hedgewood Drive
Allentown, PA
 


540,795

 

 
3,217,414

 
541,459

 
 
3,216,750

 
3,758,209

 
 
1,648,666

 
1990
 
40

6390 Hedgewood Drive
Allentown, PA
 


707,203

 

 
2,934,130

 
707,867

 
 
2,933,466

 
3,641,333

 
 
1,458,999

 
1990
 
40

6520 Stonegate Drive
Allentown, PA
 


453,315

 

 
1,689,706

 
484,361

 
 
1,658,661

 
2,143,021

 
 
779,854

 
1996
 
40

6540 Stonegate Drive
Allentown, PA
 


422,042

 

 
3,925,217

 
422,730

 
 
3,924,530

 
4,347,259

 
 
2,338,921

 
1988
 
40

6560 Stonegate Drive
Allentown, PA
 


458,281

 

 
2,805,110

 
458,945

 
 
2,804,447

 
3,263,391

 
 
1,660,545

 
1989
 
40

6580 Snowdrift Road
Allentown, PA
 


388,328

 

 
3,503,320

 
389,081

 
 
3,502,567

 
3,891,648

 
 
2,007,984

 
1988
 
40

7620 Cetronia Road
Allentown, PA
 


1,091,806

 
3,851,456

 
258,140

 
1,093,724

 
 
4,107,678

 
5,201,402

 
 
1,681,318

 
1990
 
40

180,190 Cochrane Drive
Annapolis, MD
 


3,670,256

 

 
23,125,713

 
3,752,293

 
 
23,043,676

 
26,795,969

 
 
12,250,406

 
1988
 
40

4606 Richlynn Drive
Belcamp, MD
 


299,600

 
1,818,861

 
712,787

 
299,600

 
 
2,531,649

 
2,831,249

 
 
787,520

 
1985
 
40


80


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
74 West Broad Street
Bethlehem, PA
 


1,096,127

 

 
14,230,904

 
1,099,079

 
 
14,227,953

 
15,327,032

 
 
4,885,891

 
2002
 
40

10801 Nesbitt Avenue South
Bloomington, MN
 


784,577

 

 
3,603,519

 
786,382

 
 
3,601,714

 
4,388,096

 
 
1,022,562

 
2001
 
40

5705 Old Shakopee Road
Bloomington, MN
 


2,113,223

 

 
5,520,730

 
2,148,571

 
 
5,485,383

 
7,633,953

 
 
1,089,350

 
2001
 
40

5715 Old Shakopee Road West
Bloomington, MN
 


1,263,226

 
2,360,782

 
2,012,357

 
1,264,758

 
 
4,371,607

 
5,636,365

 
 
1,113,304

 
2002
 
40

5735 Old Shakopee Road West
Bloomington, MN
 


1,263,226

 
2,360,782

 
1,024,178

 
1,264,758

 
 
3,383,428

 
4,648,186

 
 
905,911

 
2002
 
40

5775 West Old Shakopee Road
Bloomington, MN
 


2,052,018

 
3,849,649

 
1,611,411

 
2,060,644

 
 
5,452,433

 
7,513,078

 
 
1,630,370

 
2002
 
40

6161 Green Valley Drive
Bloomington, MN
 


740,378

 
3,311,602

 
2,114,197

 
709,961

 
 
5,456,216

 
6,166,177

 
 
1,412,320

 
1992
 
40

6601-6625 W. 78th Street
Bloomington, MN
 


2,263,060

 

 
39,321,294

 
2,310,246

 
 
39,274,108

 
41,584,354

 
 
13,053,858

 
1998
 
40

750 Park of Commerce Boulevard
Boca Raton, FL
 


2,430,000

 

 
22,128,524

 
2,473,406

 
 
22,085,118

 
24,558,524

 
 
1,439,006

 
2007
 
40

777 Yamato Road
Boca Raton, FL
 


4,101,247

 
16,077,347

 
5,921,455

 
4,501,247

 
 
21,598,803

 
26,100,049

 
 
7,460,852

 
1987
 
40

951 Broken Sound Parkway
Boca Raton, FL
 


1,426,251

 
6,098,952

 
1,805,060

 
1,426,251

 
 
7,904,012

 
9,330,263

 
 
3,017,037

 
1986
 
40

400 Boulder Drive
Breinigsville, PA
 



 

 
13,408,721

 
2,865,575

 
 
10,543,146

 
13,408,721

 
 
1,950,266

 
2003
 
40

8201 Industrial Boulevard
Breinigsville, PA
 

*
2,089,719

 

 
8,328,910

 
2,222,168

 
 
8,196,461

 
10,418,629

 
 
1,199,549

 
2006
 
40

8500 Industrial Boulevard
Breinigsville, PA
 


8,752,708

 

 
39,797,921

 
11,511,499

 
 
37,039,130

 
48,550,629

 
 
3,719,708

 
2007
 
40

860 Nestle Way
Breinigsville, PA
 


8,118,881

 
18,885,486

 
7,099,680

 
8,118,881

 
 
25,985,166

 
34,104,047

 
 
4,685,394

 
2004
 
40

602 Heron Drive
Bridgeport, NJ
 


524,728

 
2,240,478

 
7,650

 
524,728

 
 
2,248,128

 
2,772,856

 
 
772,071

 
1996
 
40

1485 W. Commerce Avenue
Carlisle, PA
 


4,249,868

 
13,886,039

 
2,241,825

 
4,095,262

 
 
16,282,471

 
20,377,733

 
 
3,402,664

 
2004
 
40

95 Kriner Road
Chambersburg, PA
 


8,695,501

 

 
34,494,348

 
9,407,871

 
 
33,781,978

 
43,189,849

 
 
2,329,297

 
2006
 
40

9000 109th Street
Champlin, MN
 


1,251,043

 
11,662,995

 

 
1,251,043

 
 
11,662,995

 
12,914,038

 
 
119,723

 
2011
 
40

12810 Virkler Drive
Charlotte, NC
 


475,368

 
2,367,586

 
679,827

 
476,262

 
 
3,046,518

 
3,522,780

 
 
35,229

 
2010
 
40

2700 Hutchinson McDonald Road
Charlotte, NC
 


912,500

 
4,721,259

 
1,854

 
912,500

 
 
4,723,113

 
5,635,613

 
 
29,930

 
2011
 
40

2701 Hutchinson McDonald Road
Charlotte, NC
 


1,275,000

 
4,649,750

 
1,998

 
1,275,000

 
 
4,651,748

 
5,926,748

 
 
33,806

 
2011
 
40

2730 Hutchinson McDonald Road
Charlotte, NC
 


1,878,750

 
10,129,499

 
3,057

 
1,878,750

 
 
10,132,556

 
12,011,306

 
 
59,461

 
2011
 
40

2801 Hutchinson McDonald Road
Charlotte, NC
 


1,065,000

 
6,975,250

 
2,064

 
1,065,000

 
 
6,977,315

 
8,042,315

 
 
42,560

 
2011
 
40

3000 Crosspoint Center Lane
Charlotte, NC
 


1,831,250

 
10,779,412

 
49,915

 
1,831,250

 
 
10,829,326

 
12,660,576

 
 
68,123

 
2011
 
40

3005 Crosspoint Center Lane
Charlotte, NC
 


1,990,000

 
6,561,540

 
50,440

 
1,990,000

 
 
6,611,980

 
8,601,980

 
 
46,392

 
2011
 
40

4045 Perimeter West Drive
Charlotte, NC
 


1,418,928

 
7,511,050

 

 
1,418,928

 
 
7,511,050

 
8,929,978

 
 
129,136

 
2011
 
40

4525 Statesville Road
Charlotte, NC
 


841,250

 
5,279,315

 
1,217

 
841,250

 
 
5,280,532

 
6,121,782

 
 
31,795

 
2011
 
40

8910 Pioneer Avenue
Charlotte, NC
 


527,873

 
4,959,206

 

 
527,873

 
 
4,959,206

 
5,487,079

 
 

 
2011
 
40


81


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8916 Pioneer Avenue
Charlotte, NC
 


557,730

 
5,785,333

 

 
557,730

 
 
5,785,333

 
6,343,063

 
 

 
2011
 
40

1309 Executive Boulevard
Chesapeake, VA
 


926,125

 

 
5,098,066

 
955,374

 
 
5,068,817

 
6,024,191

 
 
1,374,379

 
2001
 
40

1301 Executive Boulevard
Chesapeake, VA
 



 

 
6,160,743

 
970,151

 
 
5,190,592

 
6,160,743

 
 
864,245

 
2005
 
40

1305 Executive Boulevard
Chesapeake, VA
 


861,020

 

 
4,739,120

 
1,129,850

 
 
4,470,290

 
5,600,140

 
 
1,101,570

 
2002
 
40

1313 Executive Boulevard
Chesapeake, VA
 


1,180,036

 

 
4,629,615

 
1,708,050

 
 
4,101,602

 
5,809,652

 
 
1,109,869

 
2002
 
40

500 Independence Parkway
Chesapeake, VA
 


864,150

 
4,427,285

 
497,821

 
866,609

 
 
4,922,648

 
5,789,257

 
 
974,573

 
2004
 
40

501 Independence Parkway
Chesapeake, VA
 


1,202,556

 
5,975,538

 
1,528,763

 
1,292,273

 
 
7,414,584

 
8,706,857

 
 
1,330,395

 
2005
 
40

505 Independence Parkway
Chesapeake, VA
 


1,292,062

 
6,456,515

 
1,289,521

 
1,292,254

 
 
7,745,843

 
9,038,098

 
 
1,493,630

 
2005
 
40

510 Independence Parkway
Chesapeake, VA
 


2,012,149

 
7,546,882

 
872,187

 
2,014,689

 
 
8,416,530

 
10,431,219

 
 
1,582,457

 
2005
 
40

676 Independence Parkway
Chesapeake, VA
 


1,527,303

 

 
11,291,284

 
1,562,903

 
 
11,255,684

 
12,818,587

 
 
685,070

 
2006
 
40

700 Independence Parkway
Chesapeake, VA
 
5,961,747


1,950,375

 
7,236,994

 
647,606

 
1,951,135

 
 
7,883,840

 
9,834,975

 
 
1,930,522

 
2004
 
40

6230 Old Dobbin Lane
Colombia, MD
 


3,004,075

 

 
7,861,617

 
2,746,455

 
 
8,119,237

 
10,865,692

 
 
1,647,141

 
2004
 
40

6200 Old Dobbin Lane
Columbia, MD
 


958,105

 

 
3,770,704

 
1,295,000

 
 
3,433,809

 
4,728,809

 
 
954,540

 
2002
 
40

6210 Old Dobbin Lane
Columbia, MD
 


958,105

 

 
3,948,851

 
1,307,300

 
 
3,599,656

 
4,906,956

 
 
1,159,574

 
2002
 
40

6220 Old Dobbin Lane
Columbia, MD
 


3,865,848

 

 
7,741,067

 
3,166,951

 
 
8,439,964

 
11,606,915

 
 
1,181,084

 
2006
 
40

6240 Old Dobbin Lane
Columbia, MD
 


958,105

 

 
3,990,310

 
1,599,259

 
 
3,349,156

 
4,948,415

 
 
738,247

 
2000
 
40

6250 Old Dobbin Lane
Columbia, MD
 


958,105

 

 
3,618,313

 
1,295,000

 
 
3,281,418

 
4,576,418

 
 
946,952

 
2002
 
40

7178-80 Columbia Gateway
Columbia, MD
 


1,569,237

 
4,786,887

 
1,942,434

 
1,571,105

 
 
6,727,452

 
8,298,558

 
 
3,277,887

 
1987
 
40

9755 Patuxent Woods Drive
Columbia, MD
 


3,917,094

 
14,959,075

 
1,592,908

 
3,922,382

 
 
16,546,694

 
20,469,076

 
 
2,110,013

 
2006
 
40

9770 Patuxent Woods Drive
Columbia, MD
 


341,663

 
3,033,309

 
1,876,157

 
341,663

 
 
4,909,466

 
5,251,129

 
 
1,928,403

 
1986
 
40

9780 Patuxent Woods Drive
Columbia, MD
 


218,542

 
1,940,636

 
669,179

 
218,542

 
 
2,609,815

 
2,828,356

 
 
970,654

 
1986
 
40

9790 Patuxent Woods Drive
Columbia, MD
 


243,791

 
2,164,094

 
640,811

 
243,791

 
 
2,804,905

 
3,048,695

 
 
956,301

 
1986
 
40

9800 Patuxent Woods Drive
Columbia, MD
 


299,099

 
2,654,069

 
658,514

 
299,099

 
 
3,312,583

 
3,611,682

 
 
1,210,388

 
1988
 
40

9810 Patuxent Woods Drive
Columbia, MD
 


266,684

 
2,366,901

 
832,049

 
266,684

 
 
3,198,950

 
3,465,634

 
 
1,062,186

 
1986
 
40

9820 Patuxent Woods Drive
Columbia, MD
 


237,779

 
2,110,835

 
940,798

 
237,779

 
 
3,051,633

 
3,289,412

 
 
1,151,870

 
1988
 
40

9830 Patuxent Woods Drive
Columbia, MD
 


296,262

 
2,628,933

 
582,878

 
296,262

 
 
3,211,811

 
3,508,073

 
 
1,189,447

 
1986
 
40

1250 Hall Court
Deer Park, TX
 
2,835,796


829,570

 
4,778,327

 
47,398

 
831,611

 
 
4,823,685

 
5,655,296

 
 
670,275

 
2006
 
40

170 Parkway West
Duncan, SC
 


598,348

 
3,643,756

 
133,029

 
598,918

 
 
3,776,215

 
4,375,133

 
 
652,306

 
2006
 
40

190 Parkway West
Duncan, SC
 


551,663

 
3,310,993

 
209,022

 
552,211

 
 
3,519,466

 
4,071,678

 
 
624,478

 
2006
 
40


82


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
265 Parkway East
Duncan, SC
 


901,444

 
5,751,389

 
18,391

 
902,374

 
 
5,768,850

 
6,671,224

 
 
1,109,277

 
2006
 
40

285 Parkway East
Duncan, SC
 


975,433

 
5,851,990

 
318,001

 
976,393

 
 
6,169,031

 
7,145,424

 
 
882,096

 
2006
 
40

3255 Neil Armstrong Boulevard
Eagan, MN
 


1,131,017

 

 
3,366,266

 
1,103,860

 
 
3,393,423

 
4,497,283

 
 
1,104,644

 
1998
 
40

3711 Kennebec Drive
Eagan, MN
 


999,702

 
4,042,589

 
4,748

 
999,702

 
 
4,047,338

 
5,047,040

 
 
51,924

 
2011
 
40

10301-10305 West 70th Street
Eden Prairie, MN
 


120,622

 
1,085,226

 
399,773

 
118,300

 
 
1,487,321

 
1,605,621

 
 
565,142

 
1984
 
40

10321 West 70th Street
Eden Prairie, MN
 


145,198

 
1,305,700

 
460,783

 
142,399

 
 
1,769,282

 
1,911,681

 
 
527,279

 
1984
 
40

10333 West 70th Street
Eden Prairie, MN
 


110,746

 
995,868

 
292,038

 
108,610

 
 
1,290,042

 
1,398,652

 
 
500,671

 
1984
 
40

10349-10357 West 70th Street
Eden Prairie, MN
 


275,903

 
2,481,666

 
523,647

 
270,584

 
 
3,010,632

 
3,281,215

 
 
1,183,599

 
1985
 
40

10365-10375 West 70th Street
Eden Prairie, MN
 


291,077

 
2,618,194

 
417,055

 
285,464

 
 
3,040,862

 
3,326,326

 
 
1,204,622

 
1985
 
40

10393-10394 West 70th Street
Eden Prairie, MN
 


269,618

 
2,423,318

 
861,035

 
264,419

 
 
3,289,552

 
3,553,971

 
 
1,252,741

 
1985
 
40

10400 Viking Drive
Eden Prairie, MN
 


2,912,391

 

 
22,507,711

 
2,938,372

 
 
22,481,730

 
25,420,102

 
 
8,061,772

 
1999
 
40

6321-6325 Bury Drive
Eden Prairie, MN
 


462,876

 
4,151,790

 
1,084,902

 
462,876

 
 
5,236,692

 
5,699,568

 
 
1,808,107

 
1988
 
40

7075 Flying Cloud Drive
Eden Prairie, MN
 


10,232,831

 
10,855,851

 
53,337

 
10,243,977

 
 
10,898,042

 
21,142,019

 
 
1,317,734

 
2007
 
40

7078 Shady Oak Road
Eden Prairie, MN
 


343,093

 
3,085,795

 
1,486,581

 
336,481

 
 
4,578,988

 
4,915,469

 
 
1,443,276

 
1985
 
40

7400 Flying Cloud Drive
Eden Prairie, MN
 


195,982

 
1,762,027

 
1,456,974

 
773,243

 
 
2,641,740

 
3,414,983

 
 
780,581

 
1987
 
40

7615 Smetana Lane
Eden Prairie, MN
 


1,011,517

 

 
8,510,179

 
3,000,555

 
 
6,521,141

 
9,521,696

 
 
2,056,639

 
2001
 
40

7625 Smetana Lane
Eden Prairie, MN
 


4,500,641

 

 
2,987,320

 
1,916,609

 
 
5,571,353

 
7,487,962

 
 
872,417

 
2006
 
40

7660-7716 Golden Triangle Drive
Eden Prairie, MN
 


568,706

 
5,115,177

 
2,274,443

 
1,289,215

 
 
6,669,111

 
7,958,326

 
 
2,545,665

 
1988
 
40

7695-7699 Anagram Drive
Eden Prairie, MN
 


760,525

 
3,254,758

 
623,355

 
760,525

 
 
3,878,113

 
4,638,638

 
 
1,650,469

 
1997
 
40

7777 Golden Triangle Drive
Eden Prairie, MN
 


993,101

 
2,136,862

 
1,151,598

 
993,101

 
 
3,288,460

 
4,281,561

 
 
1,110,177

 
2000
 
40

7800 Equitable Drive
Eden Prairie, MN
 


2,188,525

 
3,788,762

 
128,371

 
2,188,525

 
 
3,917,133

 
6,105,657

 
 
1,350,117

 
1993
 
40

7905 Fuller Road
Eden Prairie, MN
 


1,229,862

 
4,075,167

 
1,980,136

 
1,230,965

 
 
6,054,200

 
7,285,165

 
 
2,278,049

 
1994
 
40

8855 Columbine Road
Eden Prairie, MN
 


1,400,925

 

 
5,226,016

 
1,599,757

 
 
5,027,185

 
6,626,941

 
 
965,066

 
2000
 
40

8911 Columbine Road (B2)
Eden Prairie, MN
 


916,687

 

 
3,766,331

 
1,718,407

 
 
2,964,611

 
4,683,018

 
 
865,194

 
2000
 
40

8937 Columbine Road
Eden Prairie, MN
 


1,325,829

 

 
4,191,274

 
1,739,966

 
 
3,777,137

 
5,517,103

 
 
1,072,175

 
2001
 
40

8967 Columbine Road
Eden Prairie, MN
 


1,450,000

 

 
3,575,107

 
1,450,000

 
 
3,575,107

 
5,025,107

 
 
1,222,998

 
2000
 
40

8995 Columbine Road
Eden Prairie, MN
 


1,087,594

 

 
3,664,053

 
2,055,296

 
 
2,696,352

 
4,751,648

 
 
844,069

 
2001
 
40

9023 Columbine Road
Eden Prairie, MN
 


1,956,273

 

 
4,873,578

 
1,956,273

 
 
4,873,578

 
6,829,851

 
 
1,789,011

 
1999
 
40

7351 Coca Cola Drive
Elkridge, MD
 


1,897,044

 

 
7,161,614

 
3,023,417

 
 
6,035,242

 
9,058,659

 
 
873,352

 
2006
 
40


83


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
21705-21707 Mississippi Street
Elwood, IL
 


10,594,259

 
30,329,802

 
88,926

 
10,594,259

 
 
30,418,728

 
41,012,988

 
 
396,175

 
2011
 
40

27143 S Baseline Road
Elwood, IL
 


6,022,000

 
5,612,934

 
61,895

 
6,022,000

 
 
5,674,829

 
11,696,829

 
 
89,388

 
2011
 
40

180 Sheree Boulevard
Exton, PA
 
4,777,363


2,647,861

 
11,334,403

 
2,609,923

 
2,649,426

 
 
13,942,761

 
16,592,187

 
 
2,212,253

 
2007
 
40

7028 Snowdrift Road
Fogelville, PA
 


520,473

 
959,279

 
157,281

 
524,390

 
 
1,112,644

 
1,637,033

 
 
338,252

 
1982
 
40

1100 Virginia Drive
Fort Washington, PA
 


35,619,946

 
51,390,540

 
15,924,109

 
36,374,955

 
 
66,559,639

 
102,934,594

 
 
9,466,317

 
2006
 
40

1250 Virginia Drive
Fort Washington, PA
 


1,639,166

 
1,928,574

 
413,286

 
1,650,703

 
 
2,330,323

 
3,981,025

 
 
414,581

 
2005
 
40

275 Commerce Drive
Fort Washington, PA
 


1,775,894

 
2,160,855

 
7,599,497

 
1,790,041

 
 
9,746,205

 
11,536,246

 
 
1,188,999

 
2005
 
40

414 Commerce Drive
Fort Washington, PA
 


1,267,194

 
2,217,460

 
497,460

 
1,267,937

 
 
2,714,176

 
3,982,113

 
 
512,790

 
2004
 
40

420 Delaware Drive
Fort Washington, PA
 


2,766,931

 

 
8,862,835

 
2,826,994

 
 
8,802,772

 
11,629,767

 
 
1,251,062

 
2005
 
40

9601 Cosner Drive
Fredericksburg, VA
 


475,262

 
3,917,234

 
214,221

 
475,262

 
 
4,131,454

 
4,606,716

 
 
1,710,796

 
1995
 
40

200 W Cypress Creek Road
Ft Lauderdale, FL
 


3,414,989

 
2,399,738

 
9,624,047

 
3,414,989

 
 
12,023,785

 
15,438,774

 
 
2,672,389

 
2003
 
40

5410 - 5430 Northwest 33rd Avenue
Ft. Lauderdale, FL
 


603,776

 
4,176,238

 
1,419,852

 
625,111

 
 
5,574,755

 
6,199,866

 
 
2,063,151

 
1985
 
40

116 Pleasant Ridge Road
Greenville, SC
 


1,547,811

 

 
14,066,208

 
3,712,683

 
 
11,901,337

 
15,614,020

 
 
1,019,550

 
2006
 
40

45 Brookfield Oaks Drive
Greenville, SC
 


818,114

 

 
3,767,187

 
825,529

 
 
3,759,772

 
4,585,301

 
 
399,995

 
2006
 
40

1487 South Highway 101
Greer, SC
 


464,237

 

 
5,704,053

 
1,301,738

 
 
4,866,552

 
6,168,290

 
 
356,209

 
2007
 
40

11841 Newgate Boulevard
Hagerstown, MD
 


3,356,207

 

 
30,555,105

 
9,741,685

 
 
24,169,627

 
33,911,312

 
 
1,972,910

 
2008
 
40

1 Enterprise Parkway
Hampton, VA
 


974,675

 
5,579,869

 
1,674,322

 
974,675

 
 
7,254,191

 
8,228,866

 
 
2,547,689

 
1987
 
40

1317 Executive Boulevard
Hampton, VA
 


1,650,423

 

 
7,964,665

 
1,128,829

 
 
8,486,260

 
9,615,088

 
 
1,175,254

 
2006
 
40

21 Enterprise Parkway
Hampton, VA
 


263,668

 
8,167,118

 
1,023,917

 
265,719

 
 
9,188,985

 
9,454,704

 
 
2,569,826

 
1999
 
40

22 Enterprise Parkway
Hampton, VA
 


1,097,368

 
6,760,778

 
1,136,281

 
1,097,368

 
 
7,897,059

 
8,994,427

 
 
2,767,630

 
1990
 
40

5 Manhattan Square
Hampton, VA
 


207,368

 

 
1,535,913

 
212,694

 
 
1,530,586

 
1,743,281

 
 
523,910

 
1999
 
40

521 Butler Farm Road
Hampton, VA
 


750,769

 
2,911,149

 
365,781

 
710,486

 
 
3,317,212

 
4,027,699

 
 
762,813

 
2003
 
40

7361 Coca Cola Drive
Hanover, MD
 


2,245,187

 

 
9,368,648

 
3,822,710

 
 
7,791,125

 
11,613,835

 
 
557,320

 
2004
 
40

500 McCarthy Drive
Harrisburg, PA
 

*
5,194,872

 
19,991,436

 
4,534,843

 
5,687,013

 
 
24,034,138

 
29,721,151

 
 
5,231,748

 
2005
 
40

600 Industrial Drive
Harrisburg, PA
 


7,743,800

 

 
28,449,168

 
9,368,557

 
 
26,824,410

 
36,192,967

 
 
4,548,429

 
2005
 
40

1498 Eagle Hill Drive
High Point, NC
 


94,274

 

 
6,178,987

 
791,880

 
 
5,481,380

 
6,273,261

 
 
662,391

 
2005
 
40

4183 Eagle Hill Drive
High Point, NC
 


122,203

 

 
3,044,842

 
526,266

 
 
2,640,779

 
3,167,045

 
 
749,516

 
2001
 
40

4189 Eagle Hill Drive
High Point, NC
 


100,106

 

 
3,437,985

 
431,106

 
 
3,106,985

 
3,538,091

 
 
1,119,787

 
2001
 
40

4195 Eagle Hill Drive
High Point, NC
 


107,586

 

 
3,589,254

 
505,700

 
 
3,191,140

 
3,696,840

 
 
646,795

 
2004
 
40


84


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4300 Federal Drive
High Point, NC
 


264,038

 

 
2,229,747

 
276,038

 
 
2,217,747

 
2,493,784

 
 
665,822

 
1998
 
40

4328, 4336 Federal Drive
High Point, NC
 
2,902,105


521,122

 

 
7,534,416

 
825,092

 
 
7,230,446

 
8,055,538

 
 
4,450,496

 
1995
 
40

4344 Federal Drive
High Point, NC
 


484,001

 

 
2,651,429

 
173,623

 
 
2,961,807

 
3,135,430

 
 
1,324,928

 
1996
 
40

4380 Federal Drive
High Point, NC
 


282,996

 

 
2,251,375

 
283,368

 
 
2,251,003

 
2,534,371

 
 
877,211

 
1997
 
40

4388 Federal Drive
High Point, NC
 


143,661

 

 
1,213,832

 
132,655

 
 
1,224,838

 
1,357,493

 
 
413,884

 
1997
 
40

4475 Premier Drive
High Point, NC
 


748,693

 

 
6,801,791

 
1,525,421

 
 
6,025,063

 
7,550,484

 
 
524,955

 
2006
 
40

4500 Green Point Drive
High Point, NC
 


230,622

 

 
2,140,986

 
231,692

 
 
2,139,916

 
2,371,608

 
 
1,130,940

 
1989
 
40

4501 Green Point Drive
High Point, NC
 


319,289

 

 
2,540,927

 
320,450

 
 
2,539,766

 
2,860,216

 
 
1,300,200

 
1989
 
40

4523 Green Point Drive
High Point, NC
 


234,564

 

 
3,304,700

 
235,698

 
 
3,303,566

 
3,539,264

 
 
1,476,886

 
1988
 
40

4524 Green Point Drive
High Point, NC
 


182,810

 

 
2,739,234

 
183,888

 
 
2,738,156

 
2,922,044

 
 
1,250,350

 
1989
 
40

1 Walnut Grove Drive
Horsham, PA
 


1,058,901

 
5,343,606

 
381,107

 
1,058,901

 
 
5,724,712

 
6,783,614

 
 
2,109,884

 
1986
 
40

100 Gibraltar Road
Horsham, PA
 


38,729

 
349,811

 
21,275

 
38,729

 
 
371,086

 
409,815

 
 
126,378

 
1975
 
40

100 Witmer Road
Horsham, PA
 


3,102,784

 

 
20,148,393

 
3,764,784

 
 
19,486,393

 
23,251,177

 
 
5,358,065

 
1996
 
40

100-107 Lakeside Drive
Horsham, PA
 


239,528

 
2,163,498

 
441,510

 
255,528

 
 
2,589,008

 
2,844,536

 
 
904,540

 
1982
 
40

101 Gibraltar Road
Horsham, PA
 


651,990

 
5,888,989

 
1,771,602

 
732,552

 
 
7,580,029

 
8,312,581

 
 
2,713,392

 
1977
 
40

101-111 Rock Road
Horsham, PA
 


350,561

 
3,166,389

 
1,163,716

 
452,251

 
 
4,228,416

 
4,680,666

 
 
1,577,116

 
1975
 
40

102 Rock Road
Horsham, PA
 


1,110,209

 
2,301,302

 
1,199,449

 
1,181,242

 
 
3,429,717

 
4,610,959

 
 
944,470

 
1985
 
40

103-109 Gibraltar Road
Horsham, PA
 


270,906

 
2,448,500

 
361,465

 
270,906

 
 
2,809,964

 
3,080,870

 
 
1,043,057

 
1978
 
40

104 Rock Road
Horsham, PA
 


330,111

 
2,981,669

 
662,809

 
398,003

 
 
3,576,586

 
3,974,589

 
 
1,383,616

 
1974
 
40

104 Witmer Road
Horsham, PA
 


1,248,148

 

 
593,447

 
189,793

 
 
1,651,802

 
1,841,595

 
 
556,018

 
1975
 
40

110 Gibraltar Road
Horsham, PA
 


673,041

 
5,776,369

 
2,521,422

 
673,041

 
 
8,297,791

 
8,970,832

 
 
3,287,121

 
1979
 
40

111-159 Gibraltar Road
Horsham, PA
 


489,032

 
4,126,151

 
1,143,340

 
489,032

 
 
5,269,491

 
5,758,523

 
 
2,004,859

 
1981
 
40

113-123 Rock Road
Horsham, PA
 


351,072

 
3,171,001

 
708,270

 
451,731

 
 
3,778,612

 
4,230,343

 
 
1,315,307

 
1975
 
40

120 Gibraltar Road
Horsham, PA
 


533,142

 
4,830,515

 
1,840,146

 
558,142

 
 
6,645,661

 
7,203,803

 
 
2,201,528

 
1980
 
40

123-135 Rock Road
Horsham, PA
 


292,360

 
2,411,677

 
2,040,774

 
393,019

 
 
4,351,791

 
4,744,810

 
 
1,374,051

 
1975
 
40

132 Welsh Road
Horsham, PA
 


1,333,642

 

 
4,011,188

 
1,408,041

 
 
3,936,789

 
5,344,830

 
 
1,535,958

 
1998
 
40

161-175 Gibraltar Road
Horsham, PA
 


294,673

 
2,663,722

 
957,148

 
294,673

 
 
3,620,870

 
3,915,543

 
 
1,353,320

 
1976
 
40

181-187 Gibraltar Road
Horsham, PA
 


360,549

 
3,259,984

 
787,154

 
360,549

 
 
4,047,138

 
4,407,687

 
 
1,644,337

 
1982
 
40



85



LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2 Walnut Grove Drive
Horsham, PA
 


1,281,870

 
7,767,374

 
1,344,498

 
1,265,363

 
 
9,128,379

 
10,393,742

 
 
3,631,544

 
1989
 
40

200 Gibraltar Road
Horsham, PA
 


638,513

 
5,811,323

 
1,822,557

 
638,513

 
 
7,633,880

 
8,272,393

 
 
2,630,276

 
1990
 
40

200-264 Lakeside Drive
Horsham, PA
 


502,705

 
4,540,597

 
2,137,481

 
502,705

 
 
6,678,078

 
7,180,783

 
 
2,153,906

 
1982
 
40

201 Gibraltar Road
Horsham, PA
 


380,127

 
3,433,433

 
2,158,024

 
380,802

 
 
5,590,782

 
5,971,584

 
 
1,959,726

 
1983
 
40

210-223 Witmer Road
Horsham, PA
 


270,282

 
2,441,276

 
1,953,591

 
270,282

 
 
4,394,867

 
4,665,149

 
 
1,524,268

 
1972
 
40

220 Gibraltar Road
Horsham, PA
 


629,944

 
5,733,228

 
1,203,285

 
629,944

 
 
6,936,513

 
7,566,457

 
 
2,910,399

 
1990
 
40

231-237 Gibraltar Road
Horsham, PA
 


436,952

 
3,948,963

 
994,901

 
436,952

 
 
4,943,864

 
5,380,816

 
 
1,869,903

 
1981
 
40

240 Gibraltar Road
Horsham, PA
 


629,944

 
5,733,234

 
1,881,339

 
629,944

 
 
7,614,573

 
8,244,517

 
 
3,443,076

 
1990
 
40

255 Business Center Drive
Horsham, PA
 


1,154,289

 
2,007,214

 
689,357

 
1,140,597

 
 
2,710,262

 
3,850,860

 
 
680,290

 
2003
 
40

261-283 Gibraltar Road
Horsham, PA
 


464,871

 
3,951,972

 
1,781,426

 
464,871

 
 
5,733,397

 
6,198,268

 
 
1,917,881

 
1978
 
40

300 Welsh Road
Horsham, PA
 


696,061

 
3,339,991

 
570,429

 
696,061

 
 
3,910,420

 
4,606,480

 
 
1,487,819

 
1985
 
40

300 Welsh Road - Building 3
Horsham, PA
 


180,459

 
1,441,473

 
572,570

 
180,459

 
 
2,014,043

 
2,194,502

 
 
693,684

 
1983
 
40

300 Welsh Road - Building 4
Horsham, PA
 


282,493

 
2,256,508

 
1,786,769

 
282,493

 
 
4,043,277

 
4,325,770

 
 
1,503,382

 
1983
 
40

300-309 Lakeside Drive
Horsham, PA
 


369,475

 
3,338,761

 
2,033,132

 
376,475

 
 
5,364,892

 
5,741,368

 
 
2,387,042

 
1982
 
40

335 Commerce Drive
Horsham, PA
 



 

 
8,872,585

 
182,400

 
 
8,690,185

 
8,872,585

 
 
2,000,953

 
2002
 
40

355 Business Center Drive
Horsham, PA
 


483,045

 
898,798

 
364,949

 
471,171

 
 
1,275,621

 
1,746,793

 
 
360,960

 
2003
 
40

4 Walnut Grove
Horsham, PA
 


2,515,115

 

 
10,809,109

 
2,515,115

 
 
10,809,109

 
13,324,224

 
 
3,456,158

 
1999
 
40

400-445 Lakeside Drive
Horsham, PA
 


543,628

 
4,910,226

 
2,439,451

 
583,628

 
 
7,309,677

 
7,893,305

 
 
2,775,459

 
1981
 
40

455 Business Center Drive
Horsham, PA
 


1,351,011

 
2,503,449

 
1,497,807

 
1,322,317

 
 
4,029,951

 
5,352,267

 
 
1,152,339

 
2003
 
40

5 Walnut Grove Drive
Horsham, PA
 


1,065,951

 

 
10,316,050

 
1,939,712

 
 
9,442,289

 
11,382,001

 
 
2,860,664

 
2000
 
40

506 Prudential Road
Horsham, PA
 


208,140

 
895,470

 
894,621

 
208,140

 
 
1,790,091

 
1,998,231

 
 
649,195

 
1973
 
40

555 Business Center Drive
Horsham, PA
 


727,420

 
1,353,650

 
462,895

 
709,967

 
 
1,833,999

 
2,543,966

 
 
335,600

 
2003
 
40

680 Blair Mill Road
Horsham, PA
 


3,527,151

 

 
17,475,489

 
4,138,577

 
 
16,864,063

 
21,002,640

 
 
3,933,722

 
2001
 
40

7 Walnut Grove Drive
Horsham, PA
 


2,631,696

 

 
18,513,980

 
2,631,956

 
 
18,513,720

 
21,145,676

 
 
2,054,042

 
2006
 
40

700 Dresher Road
Horsham, PA
 


2,551,777

 
3,020,638

 
2,353,380

 
2,565,140

 
 
5,360,656

 
7,925,795

 
 
1,569,151

 
1987
 
40

507 Prudential Road
Horsham, PA
 


644,900

 
5,804,100

 
8,408,030

 
1,131,380

 
 
13,725,650

 
14,857,030

 
 
5,494,809

 
1988
 
40

747 Dresher Road
Horsham, PA
 


1,607,238

 

 
4,956,884

 
1,607,977

 
 
4,956,144

 
6,564,122

 
 
2,680,068

 
1988
 
40


86


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
767 Electronic Drive
Horsham, PA
 


1,229,685

 

 
2,436,397

 
1,241,970

 
 
2,424,112

 
3,666,082

 
 
1,087,488

 
1996
 
40

10301 Round Up Lane
Houston, TX
 


545,501

 
2,927,700

 
665,133

 
545,501

 
 
3,592,833

 
4,138,334

 
 
44,425

 
2010
 
40

10305 Round Up Lane
Houston, TX
 


1,340,609

 
7,489,720

 
1,074,284

 
1,340,609

 
 
8,564,004

 
9,904,613

 
 
106,371

 
2010
 
40

10735 West Little York Road
Houston, TX
 

*
1,110,988

 
6,351,946

 
1,968,676

 
1,135,483

 
 
8,296,128

 
9,431,610

 
 
1,722,546

 
2000
 
40

10739 West Little York Road
Houston, TX
 

*
797,931

 
5,950,894

 
148,370

 
799,560

 
 
6,097,635

 
6,897,195

 
 
1,473,983

 
1999
 
40

11201 Greens Crossing Boulevard
Houston, TX
 


1,006,194

 
5,412,584

 
2,964,529

 
1,008,542

 
 
8,374,765

 
9,383,307

 
 
1,222,406

 
2007
 
40

16405 Air Center Boulevard
Houston, TX
 

*
438,853

 
3,030,396

 
340,199

 
438,853

 
 
3,370,594

 
3,809,447

 
 
1,289,047

 
1997
 
40

16445 Air Center Boulevard
Houston, TX
 

*
363,339

 
2,509,186

 
199,444

 
363,339

 
 
2,708,630

 
3,071,969

 
 
946,078

 
1997
 
40

1646 Rankin Road
Houston, TX
 

*
329,961

 

 
4,895,432

 
592,234

 
 
4,633,159

 
5,225,393

 
 
995,904

 
2005
 
40

16580 Air Center Boulevard
Houston, TX
 

*
289,000

 
3,559,857

 
258,134

 
289,000

 
 
3,817,992

 
4,106,992

 
 
1,236,310

 
1997
 
40

16602 Central Green Boulevard
Houston, TX
 

*
284,403

 

 
4,495,522

 
503,779

 
 
4,276,146

 
4,779,925

 
 
690,106

 
2005
 
40

16605 Air Center Boulevard
Houston, TX
 

*
298,999

 

 
3,333,535

 
496,186

 
 
3,136,349

 
3,632,535

 
 
763,328

 
2002
 
40

16680 Central Green Boulevard
Houston, TX
 

*
311,952

 

 
4,165,907

 
492,869

 
 
3,984,990

 
4,477,859

 
 
532,854

 
2001
 
40

16685 Air Center Boulevard
Houston, TX
 

*

 

 
2,903,411

 
414,691

 
 
2,488,720

 
2,903,411

 
 
483,180

 
2004
 
40

1755 Trans Central Drive
Houston, TX
 

*
293,534

 
3,036,269

 
175,961

 
306,147

 
 
3,199,617

 
3,505,764

 
 
915,676

 
1999
 
40

5200 N. Sam Houston Parkway
Houston, TX
 

*
1,519,458

 
7,135,548

 
3,490,870

 
1,520,074

 
 
10,625,802

 
12,145,877

 
 
1,429,637

 
2007
 
40

5250 N. Sam Houston Parkway
Houston, TX
 

*
2,173,287

 
8,868,256

 
2,593,445

 
2,173,942

 
 
11,461,046

 
13,634,988

 
 
1,311,859

 
2007
 
40

8103 Fallbrook Drive
Houston, TX
 

*
4,515,862

 

 
23,946,674

 
5,877,884

 
 
22,584,652

 
28,462,536

 
 
2,273,833

 
2006
 
40

850 Greens Parkway
Houston, TX
 

*
2,893,405

 
11,593,197

 
2,716,438

 
2,899,861

 
 
14,303,179

 
17,203,040

 
 
1,527,593

 
2007
 
40

860 Greens Parkway
Houston, TX
 

*
1,399,365

 
6,344,650

 
1,524,550

 
1,374,012

 
 
7,894,553

 
9,268,565

 
 
867,255

 
2007
 
40

8801-19 & 8821-49 Fallbrook Drive
Houston, TX
 

*
2,290,001

 
15,297,141

 
1,927,534

 
2,290,002

 
 
17,224,674

 
19,514,676

 
 
3,779,187

 
2000
 
40

8802-8824 Fallbrook Drive
Houston, TX
 

*
2,774,995

 
6,364,767

 
1,250,771

 
2,775,021

 
 
7,615,511

 
10,390,532

 
 
1,635,071

 
2004
 
40

8825-8839 N Sam Houston Pkwy
Houston, TX
 

*
638,453

 
3,258,815

 
702,938

 
638,477

 
 
3,961,728

 
4,600,205

 
 
807,107

 
2004
 
40

8850-8872 Fallbrook Drive
Houston, TX
 

*
504,317

 
2,878,351

 
1,051,761

 
504,341

 
 
3,930,088

 
4,434,429

 
 
935,125

 
2004
 
40

10 North Park Drive
Hunt Valley, MD
 


2,211,969

 
7,816,042

 
3,972,815

 
2,211,969

 
 
11,788,857

 
14,000,826

 
 
1,949,832

 
2003
 
40

20 Wright Avenue
Hunt Valley, MD
 


1,205,946

 

 
10,018,759

 
1,861,025

 
 
9,363,679

 
11,224,704

 
 
3,021,230

 
2001
 
40

307 International Circle
Hunt Valley, MD
 


3,538,319

 
14,190,832

 
14,099,284

 
3,542,881

 
 
28,285,553

 
31,828,435

 
 
5,720,116

 
2004
 
40

309 International Circle
Hunt Valley, MD
 


613,667

 
2,458,204

 
897,071

 
615,096

 
 
3,353,845

 
3,968,941

 
 
560,140

 
2004
 
40


87


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
311 International Circle
Hunt Valley, MD
 


313,365

 
1,281,093

 
120,579

 
314,572

 
 
1,400,465

 
1,715,038

 
 
220,146

 
2004
 
40

4 North Park Drive
Hunt Valley, MD
 


3,269,948

 
13,551,370

 
2,560,795

 
3,269,948

 
 
16,112,165

 
19,382,112

 
 
3,787,209

 
2003
 
40

6 North Park Drive
Hunt Valley, MD
 


2,077,949

 
8,770,566

 
1,800,111

 
2,077,949

 
 
10,570,677

 
12,648,627

 
 
2,626,169

 
2003
 
40

10245 Centurion Parkway North
Jacksonville, FL
 


852,644

 
3,510,889

 
914,042

 
853,704

 
 
4,423,871

 
5,277,575

 
 
1,401,666

 
1996
 
40

4190 Belfort Road
Jacksonville, FL
 


821,000

 
5,866,000

 
2,402,659

 
827,420

 
 
8,262,239

 
9,089,659

 
 
3,442,276

 
1986
 
40

4345 Southpoint Parkway
Jacksonville, FL
 



 

 
8,465,552

 
418,093

 
 
8,047,459

 
8,465,552

 
 
2,767,630

 
1998
 
40

4801 Executive Park Court - 100
Jacksonville, FL
 


554,993

 
2,993,277

 
280,904

 
554,542

 
 
3,274,631

 
3,829,174

 
 
1,148,026

 
1990
 
40

4801 Executive Park Court - 200
Jacksonville, FL
 


370,017

 
1,995,518

 
186,685

 
370,039

 
 
2,182,181

 
2,552,220

 
 
796,333

 
1990
 
40

4810 Executive Park Court
Jacksonville, FL
 


369,694

 
3,045,639

 
657,134

 
370,039

 
 
3,702,428

 
4,072,467

 
 
1,393,249

 
1990
 
40

4815 Executive Park Court - 100
Jacksonville, FL
 


366,317

 
1,975,393

 
107,814

 
366,339

 
 
2,083,185

 
2,449,524

 
 
789,560

 
1995
 
40

4815 Executive Park Court - 200
Jacksonville, FL
 


462,522

 
2,494,397

 
353,339

 
462,549

 
 
2,847,708

 
3,310,258

 
 
957,960

 
1995
 
40

4820 Executive Park Court
Jacksonville, FL
 


555,173

 
2,693,130

 
609,686

 
555,213

 
 
3,302,777

 
3,857,989

 
 
1,237,066

 
1997
 
40

4825 Executive Park Court
Jacksonville, FL
 


601,278

 
3,242,491

 
50,343

 
601,401

 
 
3,292,711

 
3,894,112

 
 
1,177,369

 
1996
 
40

4875 Belfort Road
Jacksonville, FL
 


2,089,347

 

 
13,024,417

 
2,287,152

 
 
12,826,612

 
15,113,764

 
 
1,347,376

 
1998
 
40

4887 Belfort Road
Jacksonville, FL
 


1,299,202

 

 
7,866,815

 
1,665,915

 
 
7,500,102

 
9,166,017

 
 
2,482,153

 
2002
 
40

4899 Belfort Road
Jacksonville, FL
 


1,299,201

 

 
7,914,539

 
1,168,062

 
 
8,045,679

 
9,213,740

 
 
2,584,420

 
2000
 
40

4901 Belfort Road
Jacksonville, FL
 


877,964

 
2,360,742

 
1,900,700

 
877,964

 
 
4,261,442

 
5,139,406

 
 
1,784,487

 
1986
 
40

4905 Belfort Street
Jacksonville, FL
 


638,154

 

 
3,257,563

 
641,272

 
 
3,254,446

 
3,895,717

 
 
1,076,116

 
2000
 
40

5201 Gate Parkway
Jacksonville, FL
 


3,836,532

 

 
21,433,694

 
4,269,346

 
 
21,000,880

 
25,270,226

 
 
4,408,028

 
2005
 
40

6600 Southpoint Parkway
Jacksonville, FL
 


998,432

 
4,055,727

 
903,983

 
1,002,704

 
 
4,955,438

 
5,958,142

 
 
2,159,755

 
1986
 
40

6601 Executive Park Circle North
Jacksonville, FL
 


551,250

 
3,128,361

 
271,987

 
551,250

 
 
3,400,348

 
3,951,598

 
 
1,157,086

 
1992
 
40

6602 Executive Park Court - 100
Jacksonville, FL
 


388,519

 
2,095,293

 
222,710

 
388,541

 
 
2,317,981

 
2,706,522

 
 
819,527

 
1993
 
40

6602 Executive Park Court - 200
Jacksonville, FL
 


296,014

 
1,596,347

 
395,485

 
296,032

 
 
1,991,815

 
2,287,846

 
 
675,199

 
1993
 
40

6631 Executive Park Court - 100
Jacksonville, FL
 


251,613

 
1,356,849

 
369,768

 
251,627

 
 
1,726,603

 
1,978,230

 
 
795,843

 
1994
 
40

6631 Executive Park Court - 200
Jacksonville, FL
 


406,561

 
2,195,070

 
447,582

 
407,043

 
 
2,642,169

 
3,049,213

 
 
1,000,982

 
1994
 
40

6700 Southpoint Parkway
Jacksonville, FL
 


620,719

 
2,989,746

 
185,447

 
624,215

 
 
3,171,698

 
3,795,912

 
 
1,217,887

 
1987
 
40

7014 AC Skinner Parkway
Jacksonville, FL
 


574,198

 

 
3,259,741

 
780,486

 
 
3,053,453

 
3,833,939

 
 
1,029,573

 
1999
 
40

7016 AC Skinner Parkway
Jacksonville, FL
 


597,181

 

 
2,373,250

 
602,633

 
 
2,367,799

 
2,970,431

 
 
1,283,115

 
1996
 
40


88


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7018 AC Skinner Parkway
Jacksonville, FL
 


840,996

 

 
3,581,479

 
846,461

 
 
3,576,014

 
4,422,475

 
 
1,406,491

 
1997
 
40

7020 AC Skinner Parkway
Jacksonville, FL
 


398,257

 

 
2,327,622

 
749,811

 
 
1,976,068

 
2,725,879

 
 
827,600

 
1996
 
40

7022 AC Skinner Parkway
Jacksonville, FL
 


706,934

 

 
2,984,235

 
853,981

 
 
2,837,188

 
3,691,169

 
 
1,206,504

 
1996
 
40

7077 Bonneval Road
Jacksonville, FL
 


768,000

 
5,789,000

 
2,516,266

 
774,020

 
 
8,299,246

 
9,073,266

 
 
3,873,381

 
1988
 
40

7251 Salisbury Road
Jacksonville, FL
 



 

 
3,382,617

 
662,559

 
 
2,720,058

 
3,382,617

 
 
723,724

 
2000
 
40

7255 Salisbury Road
Jacksonville, FL
 


392,060

 

 
2,503,681

 
680,766

 
 
2,214,975

 
2,895,741

 
 
525,127

 
2002
 
40

8665,8667,8669 Baypine Road
Jacksonville, FL
 


966,552

 

 
5,331,507

 
974,959

 
 
5,323,100

 
6,298,059

 
 
2,736,182

 
1987
 
40

8775 Baypine Road
Jacksonville, FL
 


906,804

 

 
9,842,207

 
913,013

 
 
9,835,997

 
10,749,011

 
 
3,761,228

 
1989
 
40

151 South Warner Road
King of Prussia, PA
 


1,218,086

 
6,937,866

 
7,153,361

 
1,187,900

 
 
14,121,413

 
15,309,313

 
 
1,409,405

 
1980
 
40

180 South Warner Drive
King of Prussia, PA
 



 

 
9,741,628

 

 
 
9,741,628

 
9,741,628

 
 
354,820

 
2009
 
40

2100 Renaissance Boulevard
King of Prussia, PA
 


1,110,111

 

 
11,121,375

 
1,132,519

 
 
11,098,967

 
12,231,486

 
 
2,656,663

 
1999
 
40

2201 Renaissance Boulevard
King of Prussia, PA
 



 

 
17,648,408

 
2,413,514

 
 
15,234,894

 
17,648,408

 
 
4,319,699

 
2000
 
40

2300 Renaissance Boulevard
King of Prussia, PA
 


509,580

 

 
3,042,297

 
574,152

 
 
2,977,725

 
3,551,877

 
 
1,249,993

 
1999
 
40

2301 Renaissance Boulevard
King of Prussia, PA
 


1,645,246

 

 
30,080,439

 
4,581,649

 
 
27,144,035

 
31,725,685

 
 
8,671,065

 
2002
 
40

2500 Renaissance Boulevard
King of Prussia, PA
 


509,580

 

 
2,670,729

 
592,886

 
 
2,587,422

 
3,180,309

 
 
1,053,946

 
1999
 
40

2520 Renaissance Boulevard
King of Prussia, PA
 


1,020,000

 

 
4,621,206

 
978,402

 
 
4,662,804

 
5,641,206

 
 
1,743,326

 
1999
 
40

2560 Renaissance Boulevard
King of Prussia, PA
 



 

 
3,729,254

 
649,792

 
 
3,079,462

 
3,729,254

 
 
1,208,593

 
2000
 
40

2700 Horizon Drive
King of Prussia, PA
 


764,370

 

 
3,643,566

 
867,815

 
 
3,540,121

 
4,407,936

 
 
1,236,792

 
1998
 
40

2900 Horizon Drive
King of Prussia, PA
 


679,440

 

 
3,503,074

 
774,096

 
 
3,408,418

 
4,182,514

 
 
1,361,526

 
1998
 
40

3200 Horizon Drive
King of Prussia, PA
 


928,637

 

 
6,397,780

 
1,210,137

 
 
6,116,280

 
7,326,417

 
 
1,952,920

 
1996
 
40

3400 Horizon Drive
King of Prussia, PA
 


776,496

 
3,139,068

 
1,489,498

 
776,496

 
 
4,628,565

 
5,405,061

 
 
1,412,543

 
1995
 
40

3600 Horizon Drive
King of Prussia, PA
 


236,432

 
1,856,252

 
784,645

 
236,432

 
 
2,640,897

 
2,877,328

 
 
1,172,527

 
1989
 
40

3602 Horizon Drive
King of Prussia, PA
 


217,734

 
1,759,489

 
263,517

 
217,809

 
 
2,022,931

 
2,240,740

 
 
800,482

 
1989
 
40

3604 Horizon Drive
King of Prussia, PA
 


397,178

 

 
1,856,788

 
350,874

 
 
1,903,092

 
2,253,966

 
 
532,925

 
1998
 
40

440 East Swedesford Road
King of Prussia, PA
 


717,001

 
4,816,121

 
2,516,259

 
717,001

 
 
7,332,381

 
8,049,381

 
 
3,095,196

 
1988
 
40

460 East Swedesford Road
King of Prussia, PA
 


705,317

 
4,737,487

 
4,016,354

 
705,317

 
 
8,753,842

 
9,459,158

 
 
3,084,146

 
1988
 
40

650 Swedesford Road
King of Prussia, PA
 


952,911

 
6,722,830

 
7,863,229

 
952,911

 
 
14,586,058

 
15,538,969

 
 
5,918,316

 
1971
 
40

680 Swedesford Road
King of Prussia, PA
 


952,361

 
6,722,830

 
6,971,052

 
952,361

 
 
13,693,883

 
14,646,243

 
 
5,332,982

 
1971
 
40


89


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
170 South Warner Road
King of Prussia, PA
 


547,800

 
3,137,400

 
2,866,911

 
458,232

 
 
6,093,879

 
6,552,111

 
 
2,976,010

 
1980
 
40

190 South Warner Road
King of Prussia, PA
 


552,200

 
3,162,600

 
1,063,497

 
461,909

 
 
4,316,387

 
4,778,297

 
 
1,879,608

 
1980
 
40

3000 Horizon Drive
King of Prussia, PA
 


1,191,449

 

 
2,476,299

 
946,703

 
 
2,721,045

 
3,667,748

 
 
891,488

 
1997
 
40

3100 Horizon Drive
King of Prussia, PA
 


601,956

 

 
1,823,484

 
611,436

 
 
1,814,005

 
2,425,441

 
 
672,267

 
1995
 
40

3500 Horizon Drive
King of Prussia, PA
 


1,204,839

 

 
2,830,072

 
1,223,875

 
 
2,811,036

 
4,034,911

 
 
1,047,261

 
1996
 
40

11425 State Highway 225
LaPorte, TX
 

*
975,974

 
3,409,036

 
8,956

 
977,542

 
 
3,416,424

 
4,393,966

 
 
545,933

 
2006
 
40

11503 State Highway 225
LaPorte, TX
 

*
2,561,931

 
9,695,493

 
235,343

 
2,566,047

 
 
9,926,720

 
12,492,767

 
 
1,378,793

 
2006
 
40

7528 Walker Way
Lehigh Valley, PA
 


893,441

 

 
5,510,456

 
779,330

 
 
5,624,568

 
6,403,897

 
 
1,216,171

 
2004
 
40

8301 Industrial Boulevard
Lehigh, PA
 


11,249,550

 

 
44,324,333

 
11,254,716

 
 
44,319,167

 
55,573,883

 
 
6,890,126

 
2005
 
40

8500 Willard Drive
Lehigh, PA
 
3,543,408


6,398,815

 

 
21,851,739

 
7,734,826

 
 
20,515,729

 
28,250,554

 
 
1,920,709

 
2004
 
40

7533 Insurtial Parkway
Lower Macungie, PA
 


5,603,460

 
18,807,987

 
2,612,392

 
5,603,460

 
 
21,420,379

 
27,023,839

 
 
349,401

 
2011
 
40

31700 Research Park Drive
Madison Heights, MI
 


373,202

 
1,824,721

 
(649,436
)
 
373,203

 
 
1,175,284

 
1,548,487

 
 
726,104

 
1988
 
40

1901 Summit Tower Boulevard
Maitland, FL
 


6,078,791

 
12,348,567

 
2,047,678

 
6,083,206

 
 
14,391,831

 
20,475,037

 
 
5,249,881

 
1998
 
40

1 Country View Road
Malvern, PA
 


400,000

 
3,600,000

 
437,856

 
406,421

 
 
4,031,435

 
4,437,856

 
 
1,721,281

 
1982
 
40

1 Great Valley Parkway
Malvern, PA
 


419,460

 
3,792,570

 
504,443

 
419,460

 
 
4,297,013

 
4,716,473

 
 
1,523,780

 
1982
 
40

10 Great Valley Parkway
Malvern, PA
 


823,540

 
1,341,376

 
459,973

 
832,244

 
 
1,792,645

 
2,624,889

 
 
448,788

 
2003
 
40

100 Chesterfield Parkway
Malvern, PA
 


1,320,625

 

 
6,709,379

 
1,451,139

 
 
6,578,865

 
8,030,004

 
 
3,099,686

 
1998
 
40

1001 Cedar Hollow Road
Malvern, PA
 


1,436,814

 

 
16,081,159

 
1,676,470

 
 
15,841,503

 
17,517,973

 
 
7,041,576

 
1998
 
40

11 Great Valley Parkway
Malvern, PA
 


496,297

 

 
3,227,678

 
708,331

 
 
3,015,644

 
3,723,975

 
 
1,016,895

 
2001
 
40

11,15 Great Valley Parkway
Malvern, PA
 


1,837,050

 

 
14,959,980

 
1,837,878

 
 
14,959,152

 
16,797,030

 
 
11,094,196

 
1986
 
40

18 Great Valley Parkway
Malvern, PA
 


394,036

 
3,976,221

 
99,539

 
397,293

 
 
4,072,504

 
4,469,796

 
 
1,331,736

 
1980
 
40

2 West Liberty Boulevard
Malvern, PA
 


5,405,041

 

 
11,849,135

 
5,405,042

 
 
11,849,135

 
17,254,176

 
 
2,464,714

 
2003
 
40

200 Chesterfield Parkway
Malvern, PA
 


495,893

 
2,739,093

 
578,651

 
588,384

 
 
3,225,253

 
3,813,637

 
 
2,375,198

 
1989
 
40

27-43 Great Valley Parkway
Malvern, PA
 


448,775

 

 
2,365,913

 
449,447

 
 
2,365,241

 
2,814,688

 
 
1,705,584

 
1977
 
40

3 Country View Road
Malvern, PA
 


814,278

 

 
5,142,433

 
1,128,881

 
 
4,827,830

 
5,956,711

 
 
1,584,731

 
1998
 
40

375 Technology Drive
Malvern, PA
 


191,114

 

 
1,616,195

 
234,922

 
 
1,572,387

 
1,807,309

 
 
558,325

 
1998
 
40

40 Liberty Boulevard
Malvern, PA
 


4,241,137

 
17,737,090

 
2,412,139

 
4,241,167

 
 
20,149,198

 
24,390,365

 
 
7,481,130

 
1989
 
40

425 Technology Drive
Malvern, PA
 


191,114

 

 
1,571,919

 
321,473

 
 
1,441,560

 
1,763,033

 
 
527,452

 
1998
 
40


90


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
45 Liberty Boulevard
Malvern, PA
 


4,380,221

 

 
15,318,415

 
4,749,748

 
 
14,948,888

 
19,698,636

 
 
6,637,319

 
1999
 
40

45-67 Great Valley Parkway
Malvern, PA
 


795,143

 

 
4,051,620

 
795,831

 
 
4,050,932

 
4,846,763

 
 
2,644,029

 
1974
 
40

5 Great Valley Parkway
Malvern, PA
 


684,200

 
6,181,661

 
1,611,073

 
684,200

 
 
7,792,734

 
8,476,934

 
 
2,904,582

 
1983
 
40

50 Morehall Road
Malvern, PA
 


849,576

 

 
13,051,932

 
1,337,076

 
 
12,564,432

 
13,901,508

 
 
6,043,706

 
1997
 
40

600 Chesterfield Parkway
Malvern, PA
 


2,013,750

 

 
8,255,848

 
2,171,080

 
 
8,098,519

 
10,269,598

 
 
3,618,724

 
1999
 
40

700 Chesterfield Parkway
Malvern, PA
 


2,013,750

 

 
8,216,674

 
2,158,337

 
 
8,072,087

 
10,230,424

 
 
3,592,381

 
1999
 
40

10 Valley Stream Parkway
Malvern, PA
 


509,075

 

 
2,698,038

 
509,899

 
 
2,697,215

 
3,207,113

 
 
1,651,654

 
1984
 
40

10, 20 Liberty Boulevard
Malvern, PA
 


724,058

 

 
5,650,270

 
724,846

 
 
5,649,482

 
6,374,328

 
 
3,127,794

 
1985
 
40

12,14,16 Great Valley Parkway
Malvern, PA
 


130,689

 

 
1,326,294

 
128,767

 
 
1,328,216

 
1,456,983

 
 
844,715

 
1982
 
40

14 Lee Boulevard
Malvern, PA
 


664,282

 

 
5,569,322

 
643,892

 
 
5,589,712

 
6,233,604

 
 
3,305,169

 
1988
 
40

155 Great Valley Parkway
Malvern, PA
 


625,147

 

 
2,640,081

 
626,068

 
 
2,639,161

 
3,265,228

 
 
1,819,590

 
1981
 
40

20 Valley Stream Parkway
Malvern, PA
 


465,539

 

 
5,123,276

 
466,413

 
 
5,122,402

 
5,588,815

 
 
3,153,379

 
1987
 
40

205 Great Valley Parkway
Malvern, PA
 


1,368,259

 

 
9,572,260

 
1,369,003

 
 
9,571,516

 
10,940,519

 
 
6,407,092

 
1981
 
40

257-275 Great Valley Parkway
Malvern, PA
 


504,611

 

 
4,690,816

 
505,458

 
 
4,689,969

 
5,195,427

 
 
3,116,298

 
1983
 
40

277-293 Great Valley Parkway
Malvern, PA
 


530,729

 

 
2,389,465

 
531,534

 
 
2,388,660

 
2,920,194

 
 
1,540,101

 
1984
 
40

30 Great Valley Parkway
Malvern, PA
 


128,126

 

 
352,088

 
128,783

 
 
351,431

 
480,214

 
 
318,442

 
1975
 
40

300 Technology Drive
Malvern, PA
 


368,626

 

 
1,350,184

 
374,497

 
 
1,344,313

 
1,718,810

 
 
821,773

 
1985
 
40

300-400 Chesterfield Parkway
Malvern, PA
 


937,212

 

 
4,942,075

 
1,012,843

 
 
4,866,445

 
5,879,287

 
 
2,572,056

 
1988
 
40

311 Technology Drive
Malvern, PA
 


397,131

 

 
2,848,506

 
397,948

 
 
2,847,689

 
3,245,637

 
 
1,792,412

 
1984
 
40

333 Phoenixville Pike
Malvern, PA
 


523,530

 

 
3,708,843

 
524,230

 
 
3,708,143

 
4,232,373

 
 
2,053,866

 
1985
 
40

40 Valley Stream Parkway
Malvern, PA
 


322,918

 

 
3,233,318

 
325,775

 
 
3,230,461

 
3,556,236

 
 
2,137,009

 
1987
 
40

420 Lapp Road
Malvern, PA
 


1,054,418

 

 
7,066,555

 
1,055,243

 
 
7,065,731

 
8,120,973

 
 
3,568,585

 
1989
 
40

5 Country View Road
Malvern, PA
 


785,168

 
4,678,632

 
860,806

 
786,235

 
 
5,538,370

 
6,324,606

 
 
2,599,572

 
1985
 
40

50 Valley Stream Parkway
Malvern, PA
 


323,971

 

 
3,112,784

 
323,792

 
 
3,112,964

 
3,436,755

 
 
1,888,562

 
1987
 
40

500 Chesterfield Parkway
Malvern, PA
 


472,364

 

 
2,854,263

 
519,742

 
 
2,806,885

 
3,326,627

 
 
1,529,933

 
1988
 
40

508 Lapp Road
Malvern, PA
 


331,392

 

 
1,694,108

 
332,216

 
 
1,693,284

 
2,025,500

 
 
1,148,407

 
1984
 
40

510 Lapp Road
Malvern, PA
 


356,950

 

 
933,487

 
357,751

 
 
932,686

 
1,290,437

 
 
680,722

 
1983
 
40

55 Valley Stream Parkway
Malvern, PA
 


215,005

 

 
4,008,392

 
215,818

 
 
4,007,580

 
4,223,397

 
 
2,549,300

 
1983
 
40


91



LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
60 Morehall Road
Malvern, PA
 


865,424

 
9,285,000

 
5,141,509

 
884,974

 
 
14,406,959

 
15,291,933

 
 
8,489,319

 
1989
 
40

65 Valley Stream Parkway
Malvern, PA
 


381,544

 

 
6,715,903

 
382,361

 
 
6,715,086

 
7,097,447

 
 
4,577,246

 
1983
 
40

7 Great Valley Parkway
Malvern, PA
 


176,435

 

 
5,274,039

 
177,317

 
 
5,273,157

 
5,450,474

 
 
2,705,453

 
1985
 
40

75 Great Valley Parkway
Malvern, PA
 
67,191


143,074

 

 
618,372

 
143,811

 
 
617,635

 
761,446

 
 
475,647

 
1977
 
40

77-123 Great Valley Parkway
Malvern, PA
 


887,664

 

 
5,512,689

 
888,359

 
 
5,511,994

 
6,400,353

 
 
3,881,036

 
1978
 
40

7550 Meridian Circle
Maple Grove, MN
 


513,250

 
2,901,906

 
851,435

 
513,250

 
 
3,753,340

 
4,266,590

 
 
1,273,423

 
1989
 
40

301 Lippincott Drive
Marlton, NJ
 


1,069,837

 
4,780,163

 
2,656,361

 
1,069,838

 
 
7,436,523

 
8,506,361

 
 
2,334,081

 
1988
 
40

303 Lippincott Drive
Marlton, NJ
 


1,069,837

 
4,780,163

 
2,826,662

 
1,069,838

 
 
7,606,825

 
8,676,662

 
 
3,710,913

 
1988
 
40

400 Lippincott Drive
Marlton, NJ
 


69,402

 

 
3,665,348

 
317,799

 
 
3,416,951

 
3,734,750

 
 
1,404,247

 
1999
 
40

406 Lippincott Drive
Marlton, NJ
 


321,455

 
1,539,871

 
898,946

 
327,554

 
 
2,432,718

 
2,760,272

 
 
1,105,349

 
1990
 
40

65 Brookfield Oaks Drive
Mauldin, SC
 


557,174

 

 
2,855,272

 
506,318

 
 
2,906,129

 
3,412,447

 
 
538,079

 
2004
 
40

75 Brookfield Oaks Drive
Mauldin, SC
 


419,731

 

 
2,338,692

 
430,909

 
 
2,327,514

 
2,758,423

 
 
413,806

 
2003
 
40

11520 West Calumet Road
Milwaukee, WI
 


341,698

 
1,527,548

 
49,694

 
341,698

 
 
1,577,242

 
1,918,940

 
 
468,669

 
1995
 
40

4600 Nathan Lane
Minneapolis, MN
 


1,063,558

 

 
8,308,857

 
1,038,197

 
 
8,334,218

 
9,372,415

 
 
3,032,980

 
2002
 
40

4700 Nathan Lane North
Minneapolis, MN
 


1,501,308

 
8,446,083

 
13,470,521

 
1,501,308

 
 
21,916,604

 
23,417,912

 
 
3,523,133

 
1996
 
40

12501 & 12701 Whitewater Drive
Minnegonka, MN
 


2,175,209

 
3,948,085

 
7,939,428

 
2,177,953

 
 
11,884,769

 
14,062,722

 
 
2,819,988

 
1986
 
40

12800 Whitewater Drive
Minnetonka, MN
 


1,273,600

 
3,158,737

 
1,483

 
1,273,600

 
 
3,160,219

 
4,433,819

 
 
21,983

 
2011
 
40

12900 Whitewater Drive
Minnetonka, MN
 


1,236,560

 
2,762,325

 
1,482

 
1,236,560

 
 
2,763,808

 
4,000,368

 
 
19,260

 
2011
 
40

5400-5500 Feltl Road
Minnetonka, MN
 


883,895

 
7,983,345

 
2,109,459

 
883,895

 
 
10,092,804

 
10,976,699

 
 
3,785,589

 
1985
 
40

5600 & 5610 Rowland Road
Minnetonka, MN
 


828,650

 
7,399,409

 
1,273,810

 
829,263

 
 
8,672,606

 
9,501,869

 
 
3,080,667

 
1988
 
40

6000 Clearwater Drive
Minnetonka, MN
 


985,016

 
2,091,371

 

 
985,016

 
 
2,091,371

 
3,076,387

 
 
14,464

 
2011
 
40

3100 SW 145th Avenue
Miramar, FL
 


6,204,407

 

 
16,692,437

 
6,265,000

 
 
16,631,844

 
22,896,844

 
 
1,158,058

 
2007
 
40

3350 SW 148th Avenue
Miramar, FL
 


2,960,511

 

 
18,585,409

 
2,980,689

 
 
18,565,230

 
21,545,920

 
 
6,561,785

 
2000
 
40

3400 Lakeside Drive
Miramar, FL
 


2,022,153

 
11,345,881

 
1,543,794

 
2,022,153

 
 
12,889,674

 
14,911,828

 
 
4,603,718

 
1990
 
40

3450 Lakeside Drive
Miramar, FL
 


2,022,152

 
11,357,143

 
2,664,027

 
2,022,152

 
 
14,021,170

 
16,043,322

 
 
5,176,435

 
1990
 
40

323 Park Knoll Drive
Morrisville, NC
 
2,761,516


1,071,600

 
4,397,807

 
493,095

 
1,071,600

 
 
4,890,902

 
5,962,502

 
 
243,600

 
2010
 
40

324 Park Knoll Drive
Morrisville, NC
 

*
1,449,092

 
4,424,932

 
290,618

 
1,449,450

 
 
4,715,192

 
6,164,642

 
 
611,045

 
2007
 
40


92


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
619 Distribution Drive
Morrisville, NC
 

*
1,031,430

 
5,655,167

 
341,601

 
1,031,685

 
 
5,996,513

 
7,028,198

 
 
747,721

 
2007
 
40

627 Distribution Drive
Morrisville, NC
 

*
1,061,370

 
5,152,110

 
402,352

 
1,061,632

 
 
5,554,200

 
6,615,832

 
 
639,133

 
2007
 
40

701 Distribution Drive
Morrisville, NC
 

*
1,300,889

 
5,313,226

 
207,183

 
1,301,211

 
 
5,520,088

 
6,821,298

 
 
699,641

 
2007
 
40

330 Fellowship Road
Mount Laurel, NJ
 


3,730,570

 

 
17,127,143

 
3,758,270

 
 
17,099,443

 
20,857,713

 
 
1,574,453

 
2006
 
40

300 Fellowship Road
Mt Laurel, NJ
 



 

 
7,350,519

 
1,098,904

 
 
6,251,616

 
7,350,519

 
 
1,466,669

 
2004
 
40

3001 Leadenhall Road
Mt Laurel, NJ
 


1,925,719

 
191,390

 
10,965,396

 
1,936,489

 
 
11,146,016

 
13,082,505

 
 
3,009,603

 
2003
 
40

302 Fellowship Road
Mt Laurel, NJ
 


1,512,120

 

 
2,881,267

 
539,060

 
 
3,854,327

 
4,393,387

 
 
711,497

 
2001
 
40

350 Fellowship Road
Mt Laurel, NJ
 


2,960,159

 
1,449,611

 
4,622,152

 
2,970,687

 
 
6,061,236

 
9,031,922

 
 
1,029,227

 
2006
 
40

1000 Briggs Road
Mt. Laurel, NJ
 


288,577

 
2,546,537

 
1,582,304

 
288,577

 
 
4,128,841

 
4,417,418

 
 
1,300,800

 
1986
 
40

1001 Briggs Road
Mt. Laurel, NJ
 


701,705

 
3,505,652

 
1,974,794

 
701,705

 
 
5,480,446

 
6,182,151

 
 
2,488,205

 
1986
 
40

1015 Briggs Road
Mt. Laurel, NJ
 


356,987

 

 
3,588,277

 
470,659

 
 
3,474,605

 
3,945,264

 
 
1,196,611

 
2000
 
40

1020 Briggs Road
Mt. Laurel, NJ
 


494,334

 

 
3,393,424

 
569,184

 
 
3,318,575

 
3,887,758

 
 
1,313,785

 
1999
 
40

1025 Briggs Road
Mt. Laurel, NJ
 


430,990

 
3,714,828

 
1,353,899

 
430,990

 
 
5,068,727

 
5,499,717

 
 
2,018,565

 
1987
 
40

11000, 15000 Commerce Parkway
Mt. Laurel, NJ
 


310,585

 
4,394,900

 
263,774

 
311,950

 
 
4,657,309

 
4,969,260

 
 
2,053,523

 
1985
 
40

12000, 14000 Commerce Parkway
Mt. Laurel, NJ
 


361,800

 
3,285,817

 
787,561

 
362,855

 
 
4,072,323

 
4,435,178

 
 
1,891,177

 
1985
 
40

16000, 18000 Commerce Parkway
Mt. Laurel, NJ
 


289,700

 
2,512,683

 
1,084,817

 
290,545

 
 
3,596,655

 
3,887,200

 
 
1,601,646

 
1985
 
40

17000 Commerce Parkway
Mt. Laurel, NJ
 


144,515

 

 
3,346,494

 
144,515

 
 
3,346,494

 
3,491,009

 
 
1,116,457

 
2001
 
40

5000 Dearborn Court
Mt. Laurel, NJ
 


1,057,763

 
4,191,827

 
1,484,953

 
1,058,832

 
 
5,675,711

 
6,734,543

 
 
2,319,608

 
1988
 
40

6000 Commerce Parkway
Mt. Laurel, NJ
 


234,151

 
2,022,683

 
509,729

 
234,151

 
 
2,532,412

 
2,766,563

 
 
872,927

 
1985
 
40

8000 Commerce Parkway
Mt. Laurel, NJ
 


234,814

 
1,995,098

 
587,719

 
234,814

 
 
2,582,817

 
2,817,631

 
 
975,609

 
1983
 
40

9000 Commerce Parkway
Mt. Laurel, NJ
 


286,587

 
2,474,820

 
1,353,535

 
286,587

 
 
3,828,355

 
4,114,942

 
 
1,378,232

 
1983
 
40

550-590 Hale Avenue
Oakdale, MN
 


765,535

 
3,488,754

 
305,459

 
766,390

 
 
3,793,358

 
4,559,748

 
 
1,198,544

 
1996
 
40

1879 Lamont Avenue
Odenton, MD
 


1,976,000

 
8,099,579

 
2,469,160

 
2,011,030

 
 
10,533,709

 
12,544,739

 
 
2,161,185

 
2004
 
40

350 Winmeyer Avenue
Odenton, MD
 


1,778,400

 
7,289,165

 
2,060,935

 
1,809,927

 
 
9,318,573

 
11,128,500

 
 
1,715,055

 
2004
 
40

1000 Gills Drive
Orlando, FL
 


415,906

 

 
2,712,378

 
435,400

 
 
2,692,883

 
3,128,283

 
 
263,779

 
2006
 
40

10003 Satellite Boulevard
Orlando, FL
 


680,312

 
2,120,754

 
1,219,087

 
680,312

 
 
3,339,841

 
4,020,152

 
 
861,594

 
2003
 
40

10511 & 10611 Satellite Boulevard
Orlando, FL
 


517,554

 
2,568,186

 
343,526

 
522,991

 
 
2,906,275

 
3,429,266

 
 
1,108,405

 
1985
 
40

10771 Palm Bay Drive
Orlando, FL
 


664,605

 

 
2,363,614

 
685,383

 
 
2,342,835

 
3,028,219

 
 
592,268

 
2001
 
40

1090 Gills Drive
Orlando, FL
 


878,320

 
2,558,833

 
1,400,491

 
878,320

 
 
3,959,324

 
4,837,644

 
 
835,596

 
2003
 
40


93



LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1400-1440 Central Florida Parkway
Orlando, FL
 


518,043

 
2,561,938

 
780,780

 
518,043

 
 
3,342,718

 
3,860,761

 
 
1,163,890

 
1962
 
40

1902 Cypress Lake Drive
Orlando, FL
 


523,512

 
3,191,790

 
914,639

 
538,512

 
 
4,091,429

 
4,629,941

 
 
1,563,118

 
1989
 
40

1950 Summit Park Drive
Orlando, FL
 


2,573,700

 
17,478,646

 
3,254,034

 
2,583,667

 
 
20,722,713

 
23,306,380

 
 
3,798,815

 
2005
 
40

1958 Summit Park Drive
Orlando, FL
 


2,573,961

 
11,206,937

 
9,973,148

 
2,583,216

 
 
21,170,829

 
23,754,046

 
 
3,463,759

 
2005
 
40

201 Summit Park Drive
Orlando, FL
 


4,435,921

 

 
38,434,995

 
4,510,990

 
 
38,359,926

 
42,870,916

 
 
1,809,137

 
2008
 
40

2202 Taft-Vineland Road
Orlando, FL
 



 

 
6,631,110

 
1,283,713

 
 
5,347,397

 
6,631,110

 
 
1,833,110

 
2004
 
40

2256 Taft-Vineland Road
Orlando, FL
 


467,296

 

 
2,494,666

 
825,673

 
 
2,136,290

 
2,961,963

 
 
441,210

 
2005
 
40

2351 Investors Row
Orlando, FL
 


2,261,924

 
7,496,249

 
1,201,589

 
2,263,211

 
 
8,696,551

 
10,959,762

 
 
1,446,141

 
2004
 
40

2400 South Lake Orange Drive
Orlando, FL
 


385,964

 

 
3,002,042

 
642,427

 
 
2,745,579

 
3,388,006

 
 
661,545

 
2001
 
40

2416 Lake Orange Drive
Orlando, FL
 


535,964

 

 
2,935,605

 
704,800

 
 
2,766,769

 
3,471,569

 
 
872,247

 
2002
 
40

6200 Lee Vista Boulevard
Orlando, FL
 


1,435,301

 
6,174,642

 
346,148

 
1,435,301

 
 
6,520,790

 
7,956,091

 
 
888,934

 
2006
 
40

6501 Lee Vista Boulevard
Orlando, FL
 


903,701

 

 
5,660,761

 
925,671

 
 
5,638,790

 
6,564,462

 
 
1,452,887

 
2001
 
40

6923 Lee Vista Boulevard
Orlando, FL
 


903,701

 

 
3,790,427

 
830,953

 
 
3,863,175

 
4,694,128

 
 
609,911

 
2006
 
40

7022 TPC Drive
Orlando, FL
 


1,443,510

 
6,775,194

 
599,828

 
1,457,286

 
 
7,361,247

 
8,818,533

 
 
1,168,913

 
2006
 
40

7100 TPC Drive
Orlando, FL
 


1,431,489

 
8,002,539

 
624,873

 
1,445,807

 
 
8,613,094

 
10,058,901

 
 
1,376,003

 
2006
 
40

7101 TPC Drive
Orlando, FL
 


1,553,537

 
5,702,243

 
289,159

 
1,570,863

 
 
5,974,076

 
7,544,939

 
 
820,012

 
2006
 
40

7315 Kingspointe Parkway
Orlando, FL
 


1,931,697

 
6,388,203

 
2,135,046

 
1,932,004

 
 
8,522,943

 
10,454,946

 
 
2,267,067

 
2004
 
40

8201 Chancellor Drive
Orlando, FL
 


4,295,972

 
15,564,905

 
2,966,361

 
4,295,972

 
 
18,531,266

 
22,827,239

 
 
1,250,544

 
2010
 
40

851 Gills Drive
Orlando, FL
 


332,992

 

 
2,877,002

 
373,500

 
 
2,836,494

 
3,209,994

 
 
251,222

 
2006
 
40

950 Gills Drive
Orlando, FL
 


443,989

 

 
2,812,728

 
464,800

 
 
2,791,917

 
3,256,717

 
 
227,044

 
2006
 
40

9550 Satellite Boulevard
Orlando, FL
 


574,831

 

 
2,446,025

 
587,319

 
 
2,433,536

 
3,020,856

 
 
792,078

 
1999
 
40

9600 Satellite Boulevard
Orlando, FL
 


252,850

 
1,297,923

 
32,928

 
252,850

 
 
1,330,851

 
1,583,701

 
 
480,917

 
1989
 
40

9700 Satellite Boulevard
Orlando, FL
 


405,362

 
1,146,546

 
236,492

 
405,362

 
 
1,383,038

 
1,788,400

 
 
479,698

 
1989
 
40

South Center Land-Phase II
Orlando, FL
 


838,853

 

 
4,084,539

 
767,953

 
 
4,155,440

 
4,923,392

 
 
691,730

 
2006
 
40

1 Crescent Drive
Philadelphia, PA
 


567,280

 

 
12,113,684

 
347,892

 
 
12,333,072

 
12,680,964

 
 
2,520,508

 
2004
 
40

3 Crescent Drive
Philadelphia, PA
 


214,726

 

 
23,772,950

 
417,823

 
 
23,569,853

 
23,987,676

 
 
936,289

 
2008
 
40

3 Franklin Plaza
Philadelphia, PA
 


2,483,144

 

 
32,165,537

 
2,514,519

 
 
32,134,162

 
34,648,681

 
 
10,362,797

 
1999
 
40


94


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4300 South 26th Street
Philadelphia, PA
 


402,673

 

 
36,419,033

 
413,030

 
 
36,408,677

 
36,821,707

 
 
2,145,275

 
2008
 
40

4751 League Island Boulevard
Philadelphia, PA
 


992,965

 
331,924

 
6,791,359

 
1,022,081

 
 
7,094,168

 
8,116,249

 
 
1,616,209

 
2003
 
40

4775 League Island Boulevard
Philadelphia, PA
 


891,892

 

 
5,757,514

 
366,982

 
 
6,282,425

 
6,649,406

 
 
677,992

 
2006
 
40

8801 Tinicum Boulevard
Philadelphia, PA
 


2,474,031

 

 
43,774,779

 
125,087

 
 
46,123,723

 
46,248,810

 
 
19,689,892

 
1997
 
40

4207 E. Cotton Center Boulevard
Phoenix, AZ
 


1,409,908

 
4,680,808

 
1,100,202

 
1,410,248

 
 
5,780,670

 
7,190,918

 
 
1,028,343

 
2007
 
40

4217 E. Cotton Center Boulevard
Phoenix, AZ
 


7,922,480

 
10,045,599

 
2,755,567

 
6,690,321

 
 
14,033,325

 
20,723,646

 
 
2,009,429

 
2007
 
40

4303 E. Cotton Center Boulevard
Phoenix, AZ
 

*
2,619,964

 
9,675,711

 
43,652

 
2,619,964

 
 
9,719,362

 
12,339,326

 
 
1,381,214

 
2007
 
40

4313 E. Cotton Center Boulevard
Phoenix, AZ
 

*
3,895,539

 
16,724,283

 
1,401,012

 
3,895,539

 
 
18,125,296

 
22,020,834

 
 
2,705,935

 
2007
 
40

4405 E. Cotton Center Boulevard
Phoenix, AZ
 

*
2,646,318

 
9,697,439

 
264,679

 
2,646,318

 
 
9,962,118

 
12,608,436

 
 
1,407,159

 
2007
 
40

4410 E. Cotton Center Boulevard
Phoenix, AZ
 


4,758,484

 
10,559,563

 
5,587,577

 
4,765,172

 
 
16,140,451

 
20,905,624

 
 
2,042,809

 
2007
 
40

4415 E. Cotton Center Boulevard
Phoenix, AZ
 

*
1,749,957

 
3,667,748

 
493,421

 
1,749,957

 
 
4,161,169

 
5,911,126

 
 
412,534

 
2007
 
40

4425 E. Cotton Center Boulevard
Phoenix, AZ
 

*
7,318,457

 
24,549,401

 
(473,426
)
 
7,318,457

 
 
24,075,975

 
31,394,432

 
 
2,620,521

 
2007
 
40

4435 E. Cotton Center Boulevard
Phoenix, AZ
 


1,910,584

 
1,954,020

 
2,166,648

 
1,911,045

 
 
4,120,208

 
6,031,253

 
 
675,054

 
2007
 
40

4550 South 44th Street
Phoenix, AZ
 


5,380,972

 

 
9,260,382

 
6,391,283

 
 
8,250,072

 
14,641,355

 
 
706,289

 
2007
 
40

4610 South 44th Street
Phoenix, AZ
 


6,539,310

 

 
10,331,534

 
6,827,288

 
 
10,043,555

 
16,870,843

 
 
835,345

 
2007
 
40

4750 S. 44th Place
Phoenix, AZ
 


3,756,307

 
8,336,400

 
4,190,610

 
3,761,587

 
 
12,521,730

 
16,283,317

 
 
1,334,839

 
2007
 
40

9801 80th Avenue
Pleasant Prairie, WI
 


1,692,077

 
7,934,794

 
275,264

 
1,689,726

 
 
8,212,409

 
9,902,135

 
 
2,700,981

 
1994
 
40

2250 Hickory Road
Plymouth Meeting, PA
 


1,015,851

 
9,175,555

 
3,042,053

 
1,024,040

 
 
12,209,419

 
13,233,460

 
 
4,627,676

 
1985
 
40

14630-14650 28th Avenue North
Plymouth, MN
 


198,205

 
1,793,422

 
724,834

 
198,205

 
 
2,518,256

 
2,716,461

 
 
1,000,391

 
1978
 
40

2800 Campus Drive
Plymouth, MN
 


395,366

 
3,554,512

 
813,500

 
395,366

 
 
4,368,012

 
4,763,378

 
 
1,721,227

 
1985
 
40

2905 Northwest Boulevard
Plymouth, MN
 


516,920

 
4,646,342

 
2,377,010

 
516,920

 
 
7,023,352

 
7,540,272

 
 
2,366,535

 
1983
 
40

2920 Northwest Boulevard
Plymouth, MN
 


392,026

 
3,433,678

 
459,193

 
384,235

 
 
3,900,662

 
4,284,897

 
 
1,388,343

 
1997
 
40

2955 Xenium Lane
Plymouth, MN
 


151,238

 
1,370,140

 
506,303

 
151,238

 
 
1,876,443

 
2,027,681

 
 
748,084

 
1985
 
40

9600 54th Avenue
Plymouth, MN
 


332,317

 
3,077,820

 
1,124,550

 
534,993

 
 
3,999,694

 
4,534,687

 
 
1,236,880

 
1998
 
40

1400 SW 6th Court
Pompano Beach, FL
 


1,157,049

 
4,620,956

 
594,570

 
1,157,049

 
 
5,215,526

 
6,372,575

 
 
1,733,317

 
1986
 
40

1405 SW 6th Court
Pompano Beach, FL
 


392,138

 
1,565,787

 
444,870

 
392,138

 
 
2,010,658

 
2,402,796

 
 
725,031

 
1985
 
40

1500 SW 5th Court
Pompano Beach, FL
 


972,232

 
3,892,085

 
368,198

 
972,232

 
 
4,260,284

 
5,232,515

 
 
1,518,402

 
1957
 
40



95



LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1501 SW 5th Court
Pompano Beach, FL
 


203,247

 
811,093

 
200,027

 
203,247

 
 
1,011,120

 
1,214,367

 
 
325,445

 
1990
 
40

1601 SW 5th Court
Pompano Beach, FL
 


203,247

 
811,093

 
248,833

 
203,247

 
 
1,059,926

 
1,263,173

 
 
446,894

 
1990
 
40

1651 SW 5th Court
Pompano Beach, FL
 


203,247

 
811,093

 
57,614

 
203,247

 
 
868,708

 
1,071,955

 
 
291,363

 
1990
 
40

595 SW 13th Terrace
Pompano Beach, FL
 


359,933

 
1,437,116

 
624,145

 
359,933

 
 
2,061,261

 
2,421,194

 
 
664,570

 
1984
 
40

601 SW 13th Terrace
Pompano Beach, FL
 


164,413

 
655,933

 
263,508

 
164,413

 
 
919,441

 
1,083,853

 
 
373,541

 
1984
 
40

605 SW 16th Terrace
Pompano Beach, FL
 


310,778

 
1,238,324

 
221,760

 
310,178

 
 
1,460,685

 
1,770,862

 
 
599,048

 
1965
 
40

301 Hill Carter Parkway
Richmond, VA
 


659,456

 
4,836,010

 
159,898

 
659,456

 
 
4,995,908

 
5,655,364

 
 
2,091,170

 
1989
 
40

4101-4127 Carolina Avenue
Richmond, VA
 


310,854

 
2,279,597

 
1,080,673

 
310,854

 
 
3,360,270

 
3,671,124

 
 
1,273,109

 
1973
 
40

4201-4261 Carolina Avenue
Richmond, VA
 


693,203

 
5,083,493

 
1,838,267

 
693,203

 
 
6,921,760

 
7,614,963

 
 
2,796,841

 
1975
 
40

4263-4299 Carolina Avenue
Richmond, VA
 


256,203

 
2,549,649

 
2,038,507

 
256,203

 
 
4,588,156

 
4,844,359

 
 
1,719,065

 
1976
 
40

4263F-N. Carolina Avenue
Richmond, VA
 


91,476

 

 
1,755,808

 
91,599

 
 
1,755,685

 
1,847,284

 
 
659,149

 
1975
 
40

4301-4335 Carolina Avenue
Richmond, VA
 


223,696

 
1,640,435

 
2,400,246

 
223,696

 
 
4,040,681

 
4,264,377

 
 
1,235,265

 
1978
 
40

4337-4379 Carolina Avenue
Richmond, VA
 


325,303

 
2,385,557

 
1,163,576

 
325,303

 
 
3,549,133

 
3,874,436

 
 
1,468,967

 
1979
 
40

4401-4445 Carolina Avenue
Richmond, VA
 


615,038

 
4,510,272

 
477,087

 
615,038

 
 
4,987,359

 
5,602,397

 
 
2,031,972

 
1988
 
40

4447-4491 Carolina Avenue
Richmond, VA
 


454,056

 
2,729,742

 
362,531

 
454,056

 
 
3,092,273

 
3,546,329

 
 
1,370,707

 
1987
 
40

4501-4549 Carolina Avenue
Richmond, VA
 


486,166

 
3,565,211

 
427,390

 
486,166

 
 
3,992,601

 
4,478,767

 
 
1,634,659

 
1981
 
40

4551-4593 Carolina Avenue
Richmond, VA
 


474,360

 
3,478,646

 
814,875

 
474,360

 
 
4,293,521

 
4,767,881

 
 
1,736,416

 
1982
 
40

4601-4643 Carolina Avenue
Richmond, VA
 


652,455

 
4,784,675

 
762,195

 
652,455

 
 
5,546,870

 
6,199,325

 
 
2,408,887

 
1985
 
40

4645-4683 Carolina Avenue
Richmond, VA
 


404,616

 
2,967,187

 
457,396

 
404,616

 
 
3,424,583

 
3,829,199

 
 
1,394,191

 
1985
 
40

4717-4729 Eubank Road
Richmond, VA
 


449,447

 
3,294,697

 
1,399,752

 
452,263

 
 
4,691,632

 
5,143,896

 
 
1,819,882

 
1978
 
40

510 Eastpark Court
Richmond, VA
 


261,961

 
2,110,874

 
427,164

 
262,210

 
 
2,537,789

 
2,799,999

 
 
1,060,044

 
1989
 
40

520 Eastpark Court
Richmond, VA
 


486,118

 
4,083,582

 
263,481

 
486,598

 
 
4,346,583

 
4,833,181

 
 
1,701,858

 
1989
 
40

530 Eastpark Court
Richmond, VA
 


266,883

 

 
2,535,792

 
334,772

 
 
2,467,903

 
2,802,675

 
 
933,171

 
1999
 
40

540 Eastpark Court
Richmond, VA
 


742,300

 

 
5,415,233

 
1,066,839

 
 
5,090,694

 
6,157,533

 
 
410,645

 
2007
 
40

5600-5626 Eastport Boulevard
Richmond, VA
 


489,941

 
3,592,900

 
210,765

 
489,941

 
 
3,803,665

 
4,293,606

 
 
1,593,435

 
1989
 
40

5601-5659 Eastport Boulevard
Richmond, VA
 


705,660

 

 
4,589,984

 
720,100

 
 
4,575,544

 
5,295,644

 
 
1,793,897

 
1996
 
40

5650-5674 Eastport Boulevard
Richmond, VA
 


644,384

 
4,025,480

 
87,419

 
644,384

 
 
4,112,899

 
4,757,283

 
 
1,774,328

 
1990
 
40


96


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5700 Eastport Boulevard
Richmond, VA
 


408,729

 
2,697,348

 
676,233

 
408,729

 
 
3,373,581

 
3,782,310

 
 
1,532,486

 
1990
 
40

5701-5799 Eastport Boulevard
Richmond, VA
 


694,644

 

 
5,394,868

 
700,503

 
 
5,389,009

 
6,089,512

 
 
1,970,942

 
1998
 
40

5900 Eastport Boulevard
Richmond, VA
 


676,661

 

 
4,942,774

 
687,898

 
 
4,931,537

 
5,619,435

 
 
1,923,676

 
1997
 
40

6000 Eastport Blvd
Richmond, VA
 


872,901

 

 
7,486,258

 
901,666

 
 
7,457,493

 
8,359,159

 
 
702,711

 
1997
 
40

2020 US Highway 301 South
Riverview, FL
 


1,233,639

 
13,608,485

 
109,898

 
1,233,800

 
 
13,718,223

 
14,952,022

 
 
2,070,114

 
2006
 
40

6530 Judge Adams Road
Rock Creek, NC
 


305,821

 

 
4,782,967

 
335,061

 
 
4,753,727

 
5,088,788

 
 
1,511,927

 
1999
 
40

6532 Judge Adams Road
Rock Creek, NC
 


354,903

 

 
3,981,740

 
399,988

 
 
3,936,655

 
4,336,643

 
 
1,376,294

 
1997
 
40

13098 George Weber Drive
Rogers, MN
 


895,811

 
6,004,189

 
3,000

 
895,811

 
 
6,007,188

 
6,903,000

 
 
58,003

 
2011
 
40

8501 East Raintree Drive
Scottsdale, AZ
 


4,076,412

 

 
27,621,159

 
4,115,137

 
 
27,582,434

 
31,697,571

 
 
5,159,433

 
2005
 
40

6900 Harbor View Boulevard
Suffolk, VA
 


904,052

 

 
8,566,884

 
807,006

 
 
8,663,931

 
9,470,936

 
 
1,130,317

 
2006
 
40

6950 Harbor View Blvd
Suffolk, VA
 


929,844

 

 
6,229,627

 
794,848

 
 
6,364,624

 
7,159,471

 
 
1,115,211

 
2004
 
40

1301 International Parkway
Sunrise, FL
 


5,100,162

 
24,219,956

 
7,793,804

 
5,100,791

 
 
32,013,131

 
37,113,922

 
 
4,275,773

 
2006
 
40

13621 NW 12th Street
Sunrise, FL
 


5,570,820

 
9,454,900

 
2,665,402

 
5,570,821

 
 
12,120,301

 
17,691,122

 
 
2,157,009

 
2008
 
40

13630 NW 8th Street
Sunrise, FL
 


659,797

 
2,596,275

 
146,456

 
659,825

 
 
2,742,702

 
3,402,528

 
 
938,360

 
1991
 
40

13650 NW 8th Street
Sunrise, FL
 


558,223

 
2,171,930

 
184,108

 
558,251

 
 
2,356,010

 
2,914,261

 
 
759,392

 
1991
 
40

111 Kelsey Lane
Tampa, FL
 


359,540

 
1,461,850

 
533,128

 
359,540

 
 
1,994,978

 
2,354,518

 
 
796,292

 
1990
 
40

131 Kelsey Lane
Tampa, FL
 


511,463

 

 
4,437,886

 
559,527

 
 
4,389,822

 
4,949,349

 
 
2,294,223

 
1985
 
40

150-182 Kelsey Lane
Tampa, FL
 


403,541

 

 
5,549,284

 
1,181,609

 
 
4,771,216

 
5,952,825

 
 
1,617,980

 
2006
 
40

200-34 Kelsey Lane
Tampa, FL
 


330,097

 

 
3,321,485

 
933,362

 
 
2,718,220

 
3,651,582

 
 
417,917

 
2005
 
40

3102,3104,3110 Cherry Palm Drive
Tampa, FL
 


503,767

 
2,787,585

 
1,127,273

 
503,767

 
 
3,914,858

 
4,418,625

 
 
1,702,932

 
1986
 
40

4502 Woodland Corporate Boulevard
Tampa, FL
 



 

 
4,875,253

 
1,071,535

 
 
3,803,718

 
4,875,253

 
 
1,163,127

 
1999
 
40

4503 Woodland Corporate Boulevard
Tampa, FL
 



 

 
3,496,413

 
619,913

 
 
2,876,500

 
3,496,413

 
 
809,689

 
2002
 
40

4505 Woodland Corporate Boulevard
Tampa, FL
 



 

 
3,019,029

 
716,594

 
 
2,302,435

 
3,019,029

 
 
841,605

 
2002
 
40

4508 Woodland Corporate Boulevard
Tampa, FL
 


498,598

 

 
3,057,752

 
556,887

 
 
2,999,463

 
3,556,350

 
 
975,787

 
2000
 
40

4511 Woodland Corporate Boulevard
Tampa, FL
 



 

 
2,662,517

 
686,594

 
 
1,975,923

 
2,662,517

 
 
501,472

 
2002
 
40

4520 Seedling Circle
Tampa, FL
 


854,797

 
42,131

 
2,721,233

 
854,797

 
 
2,763,364

 
3,618,161

 
 
531,255

 
2003
 
40

4630 Woodland Corporate Boulevard
Tampa, FL
 


943,169

 

 
13,340,415

 
1,560,099

 
 
12,723,485

 
14,283,585

 
 
3,940,356

 
2000
 
40

4631 Woodland Corporate Blvd
Tampa, FL
 


1,453,367

 

 
13,396,486

 
1,908,792

 
 
12,941,061

 
14,849,853

 
 
1,010,606

 
2006
 
40

501 US Highway 301 South
Tampa, FL
 


898,884

 

 
3,501,039

 
900,508

 
 
3,499,416

 
4,399,923

 
 
1,090,227

 
2004
 
40


97


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
5250 Eagle Trail Drive
Tampa, FL
 


952,860

 

 
3,464,999

 
952,860

 
 
3,464,999

 
4,417,859

 
 
1,146,389

 
1998
 
40

5501-5519 Pioneer Park Boulevard
Tampa, FL
 


162,000

 
1,613,000

 
976,773

 
262,416

 
 
2,489,357

 
2,751,773

 
 
991,427

 
1981
 
40

5690-5694 Crenshaw Street
Tampa, FL
 


181,923

 
1,812,496

 
506,037

 
181,923

 
 
2,318,534

 
2,500,457

 
 
834,554

 
1979
 
40

701-725 South US Hwy 301
Tampa, FL
 


419,683

 

 
3,388,719

 
661,680

 
 
3,146,722

 
3,808,402

 
 
1,125,861

 
2000
 
40

7621 Bald Cypress Place (Bldg N)
Tampa, FL
 



 

 
1,482,613

 
447,498

 
 
1,035,115

 
1,482,613

 
 
277,997

 
2001
 
40

7622 Bald Cypress Place
Tampa, FL
 



 

 
1,305,584

 
300,000

 
 
1,005,584

 
1,305,584

 
 
305,610

 
2000
 
40

7724 Woodland Center Boulevard
Tampa, FL
 


235,893

 

 
2,127,887

 
235,894

 
 
2,127,886

 
2,363,780

 
 
802,814

 
1998
 
40

7725 Woodland Center Boulevard
Tampa, FL
 


553,335

 

 
3,366,114

 
771,501

 
 
3,147,947

 
3,919,449

 
 
994,204

 
1999
 
40

7802-50 Woodland Center Boulevard
Tampa, FL
 


357,364

 

 
2,578,607

 
506,949

 
 
2,429,023

 
2,935,971

 
 
814,765

 
1999
 
40

7851-7861 Woodland Center Blvd
Tampa, FL
 


548,905

 
2,241,627

 
204,883

 
548,905

 
 
2,446,510

 
2,995,415

 
 
379,044

 
2006
 
40

7852-98 Woodland Center Boulevard
Tampa, FL
 


357,364

 

 
2,671,312

 
506,949

 
 
2,521,727

 
3,028,676

 
 
832,453

 
1999
 
40

7920 Woodland Center Boulevard
Tampa, FL
 


1,082,648

 
2,445,444

 
77,964

 
1,082,648

 
 
2,523,408

 
3,606,056

 
 
907,145

 
1997
 
40

7930, 8010-20 Woodland Center Boulevard
Tampa, FL
 


1,408,478

 
5,247,246

 
1,061,494

 
1,408,478

 
 
6,308,741

 
7,717,218

 
 
2,521,608

 
1990
 
40

8001 Woodland Center Boulevard
Tampa, FL
 


350,406

 

 
2,377,320

 
438,061

 
 
2,289,666

 
2,727,726

 
 
759,767

 
1999
 
40

8112-42 Woodland Center Boulevard
Tampa, FL
 


513,263

 
3,230,239

 
649,273

 
513,263

 
 
3,879,513

 
4,392,775

 
 
1,524,538

 
1995
 
40

8154-8198 Woodland Center Boulevard
Tampa, FL
 


399,088

 
2,868,834

 
898,405

 
399,088

 
 
3,767,239

 
4,166,327

 
 
1,274,743

 
1988
 
40

8212 Woodland Center Boulevard
Tampa, FL
 


820,882

 
2,322,720

 
37,906

 
820,882

 
 
2,360,627

 
3,181,509

 
 
858,971

 
1996
 
40

8401-8408 Benjamin Road
Tampa, FL
 


789,651

 
4,454,648

 
275,040

 
611,626

 
 
4,907,713

 
5,519,339

 
 
2,265,187

 
1986
 
40

8705 Henderson Road
Tampa, FL
 


4,303,870

 
23,688,409

 
295,627

 
4,304,102

 
 
23,983,805

 
28,287,907

 
 
4,999,976

 
2006
 
40

8715 Henderson Road
Tampa, FL
 


3,343,910

 
18,325,599

 
325,089

 
3,344,090

 
 
18,650,508

 
21,994,598

 
 
3,445,088

 
2006
 
40

8725 Henderson Road
Tampa, FL
 


3,167,787

 
19,126,318

 
314,323

 
3,167,958

 
 
19,440,471

 
22,608,428

 
 
3,825,288

 
2006
 
40

8735 Henderson Road
Tampa, FL
 


3,166,130

 
18,735,573

 
1,163,921

 
3,166,300

 
 
19,899,324

 
23,065,624

 
 
3,917,666

 
2006
 
40

8745 Henderson Road
Tampa, FL
 


2,050,439

 
11,173,008

 
515,886

 
2,050,548

 
 
11,688,785

 
13,739,333

 
 
2,275,379

 
2006
 
40

8900-34 Brittany Was
Tampa, FL
 


537,194

 

 
3,622,389

 
978,019

 
 
3,181,564

 
4,159,583

 
 
679,802

 
2005
 
40

8921 Brittany Way
Tampa, FL
 


224,369

 
1,063,882

 
990,985

 
254,493

 
 
2,024,743

 
2,279,236

 
 
742,858

 
1998
 
40

9001-9015 Brittany Way
Tampa, FL
 


209,841

 

 
1,806,688

 
364,514

 
 
1,652,015

 
2,016,529

 
 
522,998

 
2000
 
40

9002-9036 Brittany Way
Tampa, FL
 


492,320

 

 
3,853,643

 
899,284

 
 
3,446,679

 
4,345,963

 
 
987,410

 
2004
 
40

901-933 US Highway 301 South
Tampa, FL
 


500,391

 

 
3,874,192

 
840,314

 
 
3,534,270

 
4,374,584

 
 
1,275,936

 
2001
 
40

910-926 Chad Lane
Tampa, FL
 


201,771

 

 
3,214,583

 
628,237

 
 
2,788,117

 
3,416,354

 
 
692,547

 
2006
 
40


98



LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
 OPERATING PROPERTIES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
9306-24 East Broadway Avenue
Tampa, FL
 


450,440

 

 
3,303,369

 
486,004

 
 
3,267,805

 
3,753,809

 
 
307,730

 
2007
 
40

921 South Park Lane
Tempe, AZ
 


1,192,820

 
1,548,313

 

 
1,192,820

 
 
1,548,313

 
2,741,133

 
 

 
2011
 
40

8313 West Pierce Street
Tolleson, AZ
 


2,295,090

 
9,079,811

 
3,224,098

 
2,295,090

 
 
12,303,908

 
14,598,999

 
 
1,730,579

 
2007
 
40

1457 Miller Store Road
Virginia Beach, VA
 


473,689

 
2,663,045

 
545,166

 
474,746

 
 
3,207,155

 
3,681,900

 
 
826,492

 
2003
 
40

200 Golden Oak Court
Virginia Beach, VA
 


1,116,693

 
6,770,480

 
1,861,264

 
1,116,693

 
 
8,631,744

 
9,748,437

 
 
2,992,287

 
1988
 
40

208 Golden Oak Court
Virginia Beach, VA
 


965,177

 
6,728,717

 
1,473,357

 
965,177

 
 
8,202,074

 
9,167,251

 
 
3,019,532

 
1989
 
40

2809 South Lynnhaven Road
Virginia Beach, VA
 


953,590

 
6,142,742

 
1,746,798

 
953,590

 
 
7,889,540

 
8,843,130

 
 
2,817,822

 
1987
 
40

484 Viking Drive
Virginia Beach, VA
 


891,753

 
3,607,890

 
615,653

 
891,753

 
 
4,223,543

 
5,115,296

 
 
1,569,056

 
1987
 
40

5700 Cleveland Street
Virginia Beach, VA
 


700,112

 
9,592,721

 
1,981,495

 
700,564

 
 
11,573,763

 
12,274,328

 
 
4,406,863

 
1989
 
40

629 Phoenix Drive
Virginia Beach, VA
 


371,694

 
2,108,097

 
341,152

 
371,694

 
 
2,449,249

 
2,820,943

 
 
910,170

 
1996
 
40

1100 17th Street NW
Washington, DC
 


16,558,660

 
32,223,978

 
3,200

 
16,558,660

 
 
32,227,178

 
48,785,838

 
 
164,631

 
2011
 
40

1200 Liberty Ridge Drive
Wayne, PA
 


6,215,667

 

 
8,602,185

 
5,223,660

 
 
9,594,192

 
14,817,852

 
 
3,168,838

 
2001
 
40

1500 Liberty Ridge
Wayne, PA
 


8,287,555

 

 
31,934,588

 
11,636,499

 
 
28,585,645

 
40,222,144

 
 
8,564,000

 
2002
 
40

825 Duportail Road
Wayne, PA
 


5,536,619

 
16,179,213

 
4,448,311

 
5,539,281

 
 
20,624,863

 
26,164,144

 
 
5,987,793

 
1979
 
40

400-500 Brandywine Parkway
West Chester, PA
 


845,846

 
6,809,025

 
656,823

 
845,846

 
 
7,465,848

 
8,311,694

 
 
2,596,611

 
1988
 
40

600 Brandywine Parkway
West Chester, PA
 


664,899

 
5,352,410

 
806,694

 
664,899

 
 
6,159,105

 
6,824,003

 
 
2,238,066

 
1988
 
40

1 Kings Hill Aveune
West Malling, UK
 



 

 
13,960,474

 
3,889,016

 
 
10,071,458

 
13,960,474

 
 
1,358,577

 
2006
 
40

42 Kings Hill Avenue
West Malling, UK
 



 

 
17,820,185

 
4,222,025

 
 
13,598,161

 
17,820,186

 
 
1,624,350

 
2005
 
40

Liberty Square Retail Blocks
West Malling, UK
 


559,590

 
5,113,902

 
3,417,808

 
1,118,387

 
 
7,972,912

 
9,091,299

 
 
1,320,887

 
2006
 
40

7805 Hudson Road
Woodbury, MN
 


1,279,834

 

 
10,293,862

 
1,385,739

 
 
10,187,958

 
11,573,697

 
 
4,055,430

 
2002
 
40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Subtotal Operating Real Estate
 
 
$40,715,747
 
$781,189,164
 
$1,763,612,230
 
$2,429,160,915
 
$856,783,741
 
 
$4,117,178,569
 
$4,973,962,310
 
 
$1,062,229,638
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


99



LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
 Costs Capitalized Subsequent to Acquisition
 
Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2011
 
Date of Construction or Acquisition
 
Depreciable life (years)
Development Properties
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2785 Commerce Center Boulevard
Bethlehem, PA
 
$

 
$
11,961,623

 
$

 
$
4,421,184

 
$
11,961,623

 
 
$
4,421,184

 
$
16,382,807

 
 
$

 
2011
 
N/A
40 Logistics Drive
Carlisle, PA
 

 
7,981,850

 

 
5,619,357

 
7,981,850

 
 
5,619,357

 
13,601,207

 
 

 
2011
 
N/A
4047 Perimeter West Drive
Charlotte, NC
 

 
1,279,004

 

 
267,512

 
1,279,004

 
 
267,512

 
1,546,516

 
 

 
2011
 
N/A
14031 Hollister Road
Houston, TX
 

 
1,396,794

 

 
4,349,731

 
1,396,794

 
 
4,349,731

 
5,746,525

 
 

 
2011
 
N/A
5500 N. Sam Houston Parkway West
Houston, TX
 

 
1,243,541

 

 
3,360,651

 
1,243,541

 
 
3,360,651

 
4,604,192

 
 

 
2011
 
N/A
100 Diagonal Boulevard
Philadelphia, PA
 

 
567,531

 

 
1,600,305

 
567,531

 
 
1,600,305

 
2,167,835

 
 

 
2011
 
N/A
4000 S 26th Street
Philadelphia, PA
 

 
51,784

 

 
5,029,705

 
51,784

 
 
5,029,705

 
5,081,489

 
 

 
2011
 
N/A
4050 S 26th Street
Philadelphia, PA
 

 
46,301

 

 
5,460,148

 
46,301

 
 
5,460,148

 
5,506,449

 
 

 
2011
 
N/A
5 Crescent Drive
Philadelphia, PA
 

 
1,765,341

 

 
22,429,330

 
1,765,341

 
 
22,429,330

 
24,194,671

 
 

 
2011
 
N/A
8th & Walnut Streets
Philadelphia, PA
 

 
734,275

 

 
9,281,645

 
734,275

 
 
9,281,645

 
10,015,920

 
 

 
2011
 
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Subtotal Development in Progress
 
 
$

 
$
27,028,044

 
$

 
$
61,819,568

 
$
27,028,044

 
 
$
61,819,568

 
$
88,847,611

 
 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 


100



LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
  Costs Capitalized Subsequent to Acquisition
 
 Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2010
 
Date of Construction or Acquisition
 
 Depreciable life (years)
LAND HELD FOR DEVELOPMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Perryman Road Land
Aberdeen, MD
 
$

 
$
12,052,635

 
$

 
$
279,456

 
$
12,332,091

 
 
$

 
$
12,332,091

 
 
$

 
2005
 
 N/A
2 Womack Drive Land
Annapolis, MD
 

 
5,796,667

 

 
13,676

 
5,810,344

 
 

 
5,810,344

 
 

 
2007
 
 N/A
Boca Colannade Yamato Road
Boca Raton, FL
 

 
2,039,735

 

 
566,124

 
2,605,859

 
 

 
2,605,859

 
 

 
1998
 
 N/A
12912 Virkler Drive Land
Charlotte, NC
 

 
208,646

 

 
384

 
209,030

 
 

 
209,030

 
 

 
2010
 
 N/A
Charlotte Distribution Center Land-Lot 1
Charlotte, NC
 

 
652,844

 

 

 
652,844

 
 

 
652,844

 
 

 
2011
 
 N/A
Flying Cloud Drive Land
Eden Pairie, MN
 

 
2,051,631

 

 
23,887

 
2,075,518

 
 

 
2,075,518

 
 

 
2007
 
 N/A
Camelback 303 Business Center Land
Goodyear, AZ
 

 
16,857,556

 

 
3,191,071

 
20,048,627

 
 

 
20,048,627

 
 

 
2007
 
 N/A
Pleasant Ridge Road Land
Greensboro, NC
 

 
564,535

 

 
2,893,669

 
3,458,204

 
 

 
3,458,204

 
 

 
2006
 
 N/A
Southchase Business Park Land
Greenville, SC
 

 
98,242

 

 
88,146

 
186,388

 
 

 
186,388

 
 

 
1998
 
 N/A
Caliber Ridge Ind. Park Land
Greer, SC
 

 
2,297,492

 

 
3,621,228

 
5,918,720

 
 

 
5,918,720

 
 

 
2007
 
 N/A
Hunters Green Land
Hagerstown, MD
 

 
5,489,586

 

 
8,361,340

 
13,850,926

 
 

 
13,850,926

 
 

 
2006
 
 N/A
Lakefront Plaza II Land
Hampton, VA
 
229,953

 
138,101

 

 
101,157

 
239,258

 
 

 
239,258

 
 

 
2001
 
 N/A
Ridge Road Land
Hanover, MD
 

 
3,371,183

 

 
452,208

 
3,823,391

 
 

 
3,823,391

 
 

 
2008
 
 N/A
Piedmond Centre Land
High Point, NC
 

 
913,276

 

 
914,318

 
1,827,594

 
 

 
1,827,594

 
 

 
2006
 
 N/A
Commonwealth Corporate Center Land
Horsham, PA
 

 
3,043,938

 

 
25,160

 
3,069,098

 
 

 
3,069,098

 
 

 
2005
 
 N/A
Beltway 8 @Bammel Bus Park Land
Houston, TX
 

 
1,072,634

 

 
14,445

 
1,087,079

 
 

 
1,087,079

 
 

 
2007
 
 N/A
Central Green Land - Tract 5
Houston, TX
 

 
3,492,547

 

 
217,069

 
3,709,616

 
 

 
3,709,616

 
 

 
2007
 
 N/A
Greens Crossing Land
Houston, TX
 

 
2,476,892

 

 
49,045

 
2,525,938

 
 

 
2,525,938

 
 

 
2007
 
 N/A
Hollister Beltway 8 Land
Houston, TX
 

 
3,641,897

 

 
9,515

 
3,651,411

 
 

 
3,651,411

 
 

 
2008
 
 N/A
Rankin Road Land
Houston, TX
 

 
5,756,865

 

 
162,436

 
5,919,301

 
 

 
5,919,301

 
 

 
2007
 
 N/A
Noxell Land
Hunt Valley, MD
 

 
2,040,690

 

 
1,173

 
2,041,863

 
 

 
2,041,863

 
 

 
2001
 
 N/A
7024 AC Skinner Parkway
Jacksonville, FL
 

 
751,448

 

 
73,504

 
824,952

 
 

 
824,952

 
 

 
1995
 
 N/A
Belfort Road
Jacksonville, FL
 

 
492,908

 

 
87,649

 
580,557

 
 

 
580,557

 
 

 
1998
 
 N/A
Imeson Road Land
Jacksonville, FL
 

 
4,153,948

 

 
2,053,506

 
6,207,454

 
 

 
6,207,454

 
 

 
2008
 
 N/A
Liberty Business Park Land
Jacksonville, FL
 

 
456,269

 

 
82,690

 
538,959

 
 

 
538,959

 
 

 
1995
 
 N/A
Salisbury Road Land
Jacksonville, FL
 

 
1,402,337

 

 
220,472

 
1,622,809

 
 

 
1,622,809

 
 

 
2000
 
 N/A
Skinner Land Parcel B
Jacksonville, FL
 

 
2,295,790

 

 
1,231,240

 
3,527,030

 
 

 
3,527,030

 
 

 
2005
 
 N/A

101


LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION
 AS OF DECEMBER 31, 2011
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Initial Cost
 
 
 
 Gross Amount Carried at End of Period
 
 
 
 
 
 
 
 Project
 Location
 
 Encumbrances
 
 Land
 
 Building
 
  Costs Capitalized Subsequent to Acquisition
 
 Land and Improvements
 
 
 Building and Improvements
 
 Total 12/31/2011
 
 
 Accumulated Depreciation 12/31/2010
 
Date of Construction or Acquisition
 
 Depreciable life (years)
LAND HELD FOR DEVELOPMENT
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Kent County, UK
Kent County, UK
 

 

 

 
4,933,923

 
4,933,923

 
 

 
4,933,923

 
 

 
1999
 
 N/A
Commodore Business Park
Logan, NJ
 

 
792,118

 

 
1,194,790

 
1,986,908

 
 

 
1,986,908

 
 

 
1995
 
 N/A
Quarry Ridge Land
Malvern, PA
 

 
4,774,994

 

 
4,962,649

 
9,737,643

 
 

 
9,737,643

 
 

 
2001
 
 N/A
Miami International Tradeport Land
Medley, FL
 

 
17,506,630

 

 
1,433,344

 
18,939,974

 
 

 
18,939,974

 
 

 
2011
 
 N/A
Monarch Towne Center Land
Mirarar, FL
 

 
6,085,337

 

 
413,926

 
6,499,264

 
 

 
6,499,264

 
 

 
2006
 
 N/A
South 27th Street Land
Oak Creek, WI
 

 
2,169,232

 

 
2,468,138

 
4,637,370

 
 

 
4,637,370

 
 

 
2006
 
 N/A
Beachline Industrial Park Land
Orlando, FL
 

 
365,230

 

 

 
365,230

 
 

 
365,230

 
 

 
2006
 
 N/A
26th Street North Land
Philadelphia, PA
 

 
90,774

 

 
1,052,171

 
1,142,945

 
 

 
1,142,945

 
 

 
2009
 
 N/A
Cotton Center Land
Phoenix, AZ
 

 
1,359,134

 

 
18,197,359

 
19,556,493

 
 

 
19,556,493

 
 

 
2007
 
 N/A
Eastport IX
Richmond, VA
 

 
211,627

 

 
3,325

 
214,952

 
 

 
214,952

 
 

 
1997
 
 N/A
Eastport VIII
Richmond, VA
 

 
382,698

 

 
3,325

 
386,023

 
 

 
386,023

 
 

 
1997
 
 N/A
1315 Brockton Lane North
Rogers, MN
 

 
2,165,447

 

 
243,430

 
2,408,877

 
 

 
2,408,877

 
 

 
2011
 
 N/A
Woodlands Center Land
Sandston, VA
 

 
148,314

 

 
21,717

 
170,031

 
 

 
170,031

 
 

 
1996
 
 N/A
Northsight Land (LPLP)
Scottsdale, AZ
 

 
6,176,464

 

 
2,204,597

 
8,381,061

 
 

 
8,381,061

 
 

 
2005
 
 N/A
Old Scotland Road Land
Shippensburg, PA
 

 
8,322,686

 

 
3,298,406

 
11,621,093

 
 

 
11,621,093

 
 

 
2007
 
 N/A
Bridgeway II Land
Suffolk, VA
 

 
603,391

 

 
2,025,243

 
2,628,635

 
 

 
2,628,635

 
 

 
2005
 
 N/A
Suffolk Land
Suffolk, VA
 

 
2,715,714

 

 
733,927

 
3,449,641

 
 

 
3,449,641

 
 

 
2006
 
 N/A
6119 W. Linebaugh Avenue
Tampa, FL
 

 
180,136

 

 
30,500

 
210,635

 
 

 
210,635

 
 

 
2000
 
 N/A
Renaissance Park Land
Tampa, FL
 

 
1,995,375

 

 
219,098

 
2,214,473

 
 

 
2,214,473

 
 

 
2007
 
 N/A
Tampa Triangle Land
Tampa, FL
 

 
10,358,826

 

 
1,186,226

 
11,545,052

 
 

 
11,545,052

 
 

 
2006
 
 N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Subtotal Land Held for Development
 
 
$
229,953

 
$
150,014,419

 
$

 
$
69,360,662

 
$
219,375,084

 
 
$

 
$
219,375,084

 
 
$

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total All Properties
 
 
$40,945,700
 
$958,231,628
 
$1,763,612,230
 
$2,560,341,147
 
$1,076,158,825
 
 
$4,206,026,180
 
$5,282,185,005
 
 
$1,062,229,638
 
 
 
 

* Denotes property is collateralized under mortgages with Metropolitan Life, LaSalle Bank, Allianz and John Hancock totaling $238.8 million.

102


SCHEDULE III
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
(In thousands)
A summary of activity for real estate and accumulated depreciation is as follows:
 
 
Year Ended December 31,
 
 
2011
 
2010
 
2009
REAL ESTATE:
 
 
 
 
 
 
Balance at beginning of year
 
$
4,907,973

 
$
4,838,869

 
$
4,758,471

Additions
 
423,924

 
108,760

 
164,580

Disposition of property
 
(49,712
)
 
(39,656
)
 
(84,182
)
 
 
 
 
 
 
 
Balance at end of year
 
$
5,282,185

 
$
4,907,973

 
$
4,838,869

 
 
 
 
 
 
 
ACCUMULATED DEPRECIATION:
 
 
 
 
 
 
Balance at beginning of year
 
$
938,044

 
$
836,146

 
$
733,688

Depreciation expense
 
144,284

 
147,299

 
144,548

Disposition of property
 
(20,098
)
 
(45,401
)
 
(42,090
)
 
 
 
 
 
 
 
Balance at end of year
 
$
1,062,230

 
$
938,044

 
$
836,146

 


103


ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES
Controls and Procedures with respect to the Trust
(a) Evaluation of Disclosure Controls and Procedures
The Trust’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, the Trust’s Chief Executive Officer and Chief Financial Officer have concluded that the Trust’s disclosure controls and procedures, as of the end of the period covered by this report, were effective to provide reasonable assurance that information required to be disclosed by the Trust in its reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms and (ii) accumulated and communicated to the Trust’s management, including its principal executive and principal financial officers, or persons performing similar function, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting
There were no changes in the Trust’s internal control over financial reporting during the quarter ended December 31, 2011 that have materially affected or are reasonable likely to materially affect the Company’s internal control over financial reporting.
Controls and Procedures with respect to the Operating Partnership
(a) Evaluation of Disclosure Controls and Procedures
The Trust’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, on behalf of the Trust in its capacity as the general partner of the Operating Partnership, evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of the end of the period covered by this report. Based on this evaluation, the Trust’s Chief Executive Officer and Chief Financial Officer have concluded that the Operating Partnership’s disclosure controls and procedures, as of the end of the period covered by this report, were effective to provide reasonable assurance that information required to be disclosed by the Operating Partnership in its reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms and (ii) accumulated and communicated to the Trust’s management, including its principal executive and principal financial officers, or persons performing similar function, as appropriate to allow timely decisions regarding required disclosure.
(b) Changes in Internal Control Over Financial Reporting
There were no changes in the Operating Partnership’s internal control over financial reporting during the quarter ended December 31, 2011 that have materially affected or are reasonable likely to materially affect the Operating Partnership’s internal control over financial reporting.
ITEM 9B. OTHER INFORMATION
None.

104


PART III
ITEM 10. TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The information required by Item 10 shall be included in the Proxy Statement to be filed relating to the Company's 2012 Annual Meeting of Shareholders and is incorporated herein by reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 11 shall be included in the Proxy Statement to be filed relating to the Company's 2012 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 12.SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

The information required by Item 12 shall be included in the Proxy Statement to be filed relating to the Company's 2012 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 13.CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND TRUSTEE INDEPENDENCE

The information required by Item 13 shall be included in the Proxy Statement to be filed relating to the Company's 2012 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 shall be included in the Proxy Statement to be filed relating to the Company's 2012 Annual Meeting of Shareholders and is incorporated herein by reference.

PART IV


ITEM 15.EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
The following consolidated financial statements of Liberty Property Trust and Liberty Property Limited Partnership are included in Item 8.

1.REPORTS OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND CONSOLIDATED FINANCIAL STATEMENTS

Management's Annual Report on Internal Control Over Financial Reporting - Liberty Property Trust

Reports of Independent Registered Public Accounting Firm - Liberty Property Trust

Management's Annual Report on Internal Control Over Financial Reporting - Liberty Property Limited Partnership

Reports of Independent Registered Public Accounting Firm - Liberty Property Limited Partnership

Financial Statements - Liberty Property Trust

Balance Sheets:
Liberty Property Trust Consolidated as of December 31, 2011 and 2010

Statements of Operations:
Liberty Property Trust Consolidated for the years ended December 31, 2011, 2010 and 2009

Statements of Equity:
Liberty Property Trust Consolidated for the years ended December 31, 2011, 2010 and 2009

Statements of Cash Flows:

105


Liberty Property Trust Consolidated for the years ended December 31, 2011, 2010 and 2009

Financial Statements - Liberty Property Limited Partnership

Balance Sheets:
Liberty Property Limited Partnership Consolidated as of December 31, 2011 and 2010

Statements of Operations:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2011, 2010 and 2009

Statements of Owners' Equity:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2011, 2010 and 2009

Statements of Cash Flows:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2011, 2010 and 2009

Notes to Consolidated Financial Statements

2.    FINANCIAL STATEMENT SCHEDULES:

Schedule III - Real Estate and Accumulated Depreciation as of December 31, 2011 for Liberty Property Trust

All other schedules are omitted because they are either not required or the required information is shown in the financial statements or notes thereto.

Schedule III - Real Estate and Accumulated Depreciation as of December 31, 2011 for Liberty Property Limited Partnership

All other schedules are omitted because they are either not required or the required information is shown in the financial statements or notes thereto.

106


3.    EXHIBITS

The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed.

Exhibit No.
Description
 
 
2.1
Agreement and Plan Merger, dated as of July 23, 2007, by and among Liberty Property Trust, Liberty Property Limited Partnership, Liberty Acquisition LLC, Republic Property Trust and Republic Property Limited Partnership. (Incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on July 24, 2007).
 
 
3.1.1
Amended and Restated Declaration of Trust of the Trust (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants' Current Report on Form 8-K filed with the Commission on June 25, 1997 (the “June 1997 Form 8-K”)).
 
 
3.1.2
Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust Relating to Designation, Preferences, and Rights of Series A Junior Participating Preferred Shares of the Trust (Incorporated by reference to Exhibit 3.1.3 filed with the Registrants' Annual Report on Form 10-K for the fiscal year ended December 3l, 1997).
 
 
3.1.3
Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 9.25% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 3.1.2 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1999 (the “Second Quarter 1999 Form 10-Q”)).
 
 
3.1.4
Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 9.125% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2000).

 
 
3.1.5
Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.625% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002).

 
 
3.1.6
Articles of Amendment to the Amended and Restated Declaration of Trust of the Trust, filed with the State Department of Assessments and Taxation of Maryland on June 21, 2004 (Incorporated by reference to Exhibit 3.1 with Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2004 (the “Second Quarter 2004 Form 10-Q”)).
 
 
3.1.7
Restatement of the Amended Restated Declaration of Trust of the Trust, filed with the State Department of Assessments and Taxation of Maryland on June 21, 2004 (Incorporated by reference to Exhibit 3.2 to the Second Quarter 2004 Form 10-Q).
 
 
3.1.8
Articles Supplementary, as filed with the State Department of Assessments and Taxation of Maryland on September 1, 2004 (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Commission on September 2, 2004 (the “September 2, 2004 Form 8-K”)).
 
 
3.1.9
Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.00% Series E Cumulative Redeemable Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Commission on June 17, 2005 (the “June 17, 2005 Form 8-K”)).
 
 

107


3.1.10
Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 6.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Commission on June 30, 2005 (the “June 30, 2005 Form 8-K”)).
 
 
3.1.11
Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 6.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Commission on August 24, 2005).
 
 
3.1.12
Articles Supplementary to the amended and Restated Declaration of Trust of the Trust relating to the 6.70% Series G Cumulative Redeemable Shares of Beneficial Interest (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Commission on December 18, 2006 (the “December 18, 2006 Form 8-K”)).
 
 
3.1.13
Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.40% Series H Cumulative Redeemable Preferred Partnership Interests (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Commission on August 23, 2007 (the “August 23, 2007 Form 8-K”)).
 
 
3.1.14
Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership, dated as of October 22, 1997 (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1997 (the “Third Quarter 1997 Form 10-Q”)).
 
 
3.1.15
First Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 3.1.1 to the Second Quarter 1999 Form 10-Q).
 
 
3.1.16
Second Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 3.1.2 to the First Quarter 2000 Form 10-Q).
 
 
3.1.17
Third Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 3.1.2 to the Second Quarter Form 2002 10-Q).
 
 
3.1.18
Fourth Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 10 to the September 2, 2004 Form 8-K).
 
 
3.1.19
Fifth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 10 to the June 17, 2005 8-K).
 
 
3.1.20
Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 10 to the June 30, 2005 8-K).
 
 
3.1.21
Amendment No. 1 to the Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of the Registrants, filed with the Commission on August 24, 2005).
 
 

108


3.1.22
Amendment No. 2 to the Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of the Registrants, filed with the Commission on December 23, 2005).
 
 
3.1.23
Seventh Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 10 to the December 18, 2006 Form 8-K).
 
 
3.1.24
Eighth Amendment to the Second Amendment and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 10 to the August 23, 2007 Form 8-K).
 
 
3.1.25*
Ninth amendment to the Second Amendment and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership.
 
 
3.1.26*
Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership.
 
 
3.1.27
Liberty Property Trust First Amended and Restated By-Laws of the Trust, as Amended on December 6, 2007 (Incorporated by reference to Exhibit 3.1 filed with the Current Report on Form 8-K filed with the Commission on December 12, 2007).
 
 
4.1
Articles of Amendment to the Amended and Restated Declaration of Trust of the Trust (Incorporated by reference to Annex A to the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders held on May 20, 2010, filed with the Commission on April 20, 2010).

Indenture (the “First Indenture”), dated as of August 14, 1997, between the Operating Partnership, as Obligor, and The First National Bank of Chicago (“First Chicago”), as Trustee (Incorporated by reference to Exhibit 10.1 filed with the Third Quarter 1997 Form 10-Q).
 
 
4.2
First Supplemental Indenture, dated as of August 14, 1997, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the First Indenture and relating to $100,000,000 principal amount of the 7.10% Senior Notes due 2004 and $100,000,000 principal amount of the 7.25% Senior Notes due 2007 of the Operating Partnership (Incorporated by reference to Exhibit 10.2 filed with the Third Quarter 1997 Form 10-Q).
 
 
4.3
Senior Indenture (the “Second Indenture”), dated as of October 24, 1997, between the Operating Partnership, as Obligor, and First Chicago, as Trustee (Incorporated by reference to Exhibit 10.3 filed with the Third Quarter 1997 Form 10-Q).
 
 
4.4
First Supplemental Indenture, dated as of October 24, 1997, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the Second Indenture and relating to the Fixed Rate and Floating Rate Medium-Term Notes due Nine Months or More from Date of Issue of the Operating Partnership (Incorporated by reference to Exhibit 10.4 filed with the Third Quarter 1997 Form 10-Q).
 
 
4.5
Second Supplemental Indenture, dated as of January 12, 1998, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the Second Indenture, and relating to the Fixed Rate and Floating Rate Medium-Term Notes due Nine Months or more from Date of Issue of the Operating Partnership (Incorporated by reference to Exhibit 4.1 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1998 (the “First Quarter 1998 Form 10-Q”)).
 
 
4.6
Third Supplemental Indenture, dated as of April 20, 1999, between the Operating Partnership, as Issuer, and the First National Bank of Chicago, as Trustee, supplementing the Second Indenture and relating to the $250,000,000 principal amount of 7.75% Senior Notes, due 2009 of the Operating Partnership (Incorporated by reference to Exhibit 4 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1999 (the “First Quarter 1999 Form 10-Q”)).
 
 

109


4.7
Fourth Supplemental Indenture, dated as of July 26, 2000, between the Operating Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between the Operating Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $200,000,000 principal amount of 8.5% Senior Notes due 2010 of the Operating Partnership (Incorporated by reference to Exhibit 4 to the Second Quarter 2000 Form 10-Q).
 
 
4.8
Fifth Supplemental Indenture, dated as of March 14, 2001, between the Operating Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between the Operating Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $250,000,000 principal amount of 7.25% Senior Notes due 2011 of the Operating Partnership (Incorporated by reference to Exhibit 4.10 filed with the Registrants' Annual Report on Form 10-K for the fiscal year ended December 31, 2000).
 
 
4.9
Sixth Supplemental Indenture, dated as of August 22, 2002, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $150,000,000 principal amount of 6.375% Senior Notes due 2012 of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002 (the “Third Quarter 2002 Form 10-Q”)).
 
 
4.1
Seventh Supplemental Indenture, dated as of August 10, 2004, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, National Association. (as successor to the First National Bank of Chicago), as Trustee, and relating to $200,000,000 principal amount of 5.65% Senior Notes due 2012 of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 4.1.2 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (the “Third Quarter 2004 Form 10-Q”)).
 
 
4.11
Eighth Supplemental Indenture, dated as of March 1, 2005, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, National Association (as successor to the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 5.125% Senior Notes due 2015 of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 4.2 filed with the Registrants' Current Report on Form 8-K/A filed with the Commission on March 1, 2005 (the “March 2005 Form 8-K”)).
 
 
4.12
Ninth Supplemental Indenture, dated as of December 18, 2006, between Liberty Property Limited Partnership, as Issuer, and The Bank of New York Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and The Bank of New York Trust Company, N.A., (as successor to J.P. Morgan Trust Company, National Association and the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 5.50% Senior Notes due 2016 of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 4.13 to the Registrants' Annual Report on Form 10-K for the fiscal year ended December 31, 2006).
 
 
4.13
Tenth Supplemental Indenture, dated as of September 25, 2007, between Liberty Property Limited Partnership, as Issuer, and The Bank of New York Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and The Bank of New York Trust Company, N.A., (as successor to J.P. Morgan Trust Company, National Association and the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 6.625% Senior Notes due 2017 of Liberty Property Limited Partnership (Incorporated by reference to Exhibit 4.1 to the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2007).
 
 

110


4.14
Note, Relating to the Issuance by the Operating Partnership, on January 22, 1998, of $75 Million Principal Amount of its 6.375% Medium-Term Notes due 2013, Putable/Callable 2003 (Incorporated by reference to Exhibit 4.2 filed with the First Quarter 1998 Form 10-Q).
 
 
4.15
Note, Relating to the Issuance by the Operating Partnership, on January 23, 1998, of $100 Million Principal Amount of its 7.50% Medium-Term Notes due 2018 (Incorporated by reference to Exhibit 4.3 filed with the First Quarter 1998 Form 10-Q).
 
 
4.16
Note, Relating to the Issuance by the Operating Partnership, on June 5, 1998, of $100 Million Principal Amount of its 6.60% Medium-Term Notes due 2002 (Incorporated by reference to Exhibit 4 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998 (the “Second Quarter 1998 Form 10-Q”)).
 
 
4.17
Note, Relating to the Issuance by the Operating Partnership on November 24, 1998, of $20 Million Principal Amount of its 8.125% Medium-Term Notes due January 15, 2009 (Incorporated by reference to Exhibit 4.11 filed with the Registrants' Annual Report on Form 10-K for the fiscal year ended December 31, 1998).
 
 
4.18
Senior Indenture, dated as of September 22, 2010, between the Operating Partnership, as Obligor, and U.S. Bank National Association, as Trustee (Incorporated by reference to Exhibit 4.3 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-3 of the Registrants (Commission File No. 333-150737) filed with the Commission on September 22, 2010).
 
 
4.19





10.1@
First Supplemental Indenture, dated as of September 27, 2010, between the Operating Partnership, as Issuer, and U.S. Bank National Association, as Trustee, supplementing the Senior Indenture, dated as of September 22, 2010, between the Operating Partnership, as Obligor, and U.S. Bank National Association, as Trustee, and relating to $350,000,000 principal amount of 4.75% Senior Notes due 2020 of Liberty Property Limited Partnership.

Liberty Property Trust Amended and Restated Share Incentive Plan as amended effective May 21, 2009 (Incorporated by reference to Appendix A to the Registrant's Definitive Proxy Statement for the Annual Meeting of Shareholders held on May 21, 2009, filed with the Commission on April 17, 2009).
 
 
10.2
Contribution Agreement (Incorporated by reference to Exhibit 10.5 filed with the Form S-11).
 
 
10.3
Amended and Restated Limited Partnership Agreements of Pre-existing Pennsylvania Partnerships (Incorporated by reference to Exhibit 10.6 filed with the Form S-11).
 
 
10.4
Agreement of Sale for the Acquisition Properties (Incorporated by reference to Exhibit 10.7 filed with the Form S-11).
 
 
10.5
Option Agreement and Right of First Offer (Incorporated by reference to Exhibit 10.8 filed with the Form S-11).
 
 
10.6
Form of Indemnity Agreement (Incorporated by reference to Exhibit 10.9 filed with the Form S-11).
 
 
10.7
Contribution Agreement among the Trust, the Operating Partnership and the Contributing Owners described therein, related to the Lingerfelt Properties (Incorporated by reference to Exhibit 10.1 filed with the Registrants' Current Report on Form 8-K filed with the Commission on March 3, 1995).
 
 

111


10.8.1
 
Second Amended and Restated Credit Agreement, dated as of August 31, 2010, by and among Liberty Property Limited Partnership, Liberty Property Trust, Bank of America, N.A. as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, Wells Fargo Bank, N.A., Citizens Bank, SunTrust Bank and PNC Bank, National Association as Documentation Agents, Citicorp North America, Inc., UBS Loan Finance LLC, The Bank of Nova Scotia, Capital One Bank and U.S. Bank National Association, as Managing Agents, Banc of America Securities LLC and J.P. Morgan Securities Inc., as Joint Bookrunners and Joint Lead Arrangers, and the lenders a party thereto. (Incorporated by reference to Exhibit 10.1 filed with the Registrants' Current Report on Form 8-K filed with the Commission on September 17, 2010).
 
 
10.8.2
Third Amended and Restated Credit Agreement, dated as of October 21, 2011, by and among Liberty Property Limited Partnership, Liberty Property Trust, Bank of America, N.A. as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, Wells Fargo Bank, N.A., SunTrust Bank and Citizens Bank of Pennsylvania, as Documentation Agents, PNC Bank, National Association, as Co-Documentation Agent, Citibank, N.A., UBS Securities LLC, U.S. Bank National Association, Capital One, N.A. and Bank of Tokyo Mitsubishi UFJ, Ltd., as Managing Agents, Merrill Lynch, Pierce, Fenner & Smith Incorporated and J.P. Morgan Securities LLC, as Joint Bookrunners and Joint Lead Arrangers, and the lenders a party thereto. (Incorporated by reference to Exhibit 99.1 filed with the Registrants' Current Report on Form 8-K filed with the Commission on October 27, 2011).

 
 
10.9@
Liberty Property Trust - Amended Management Severance Plan (Incorporated by reference to Exhibit 10.9 to the Registrant's Annual Report on Form 10-K for the fiscal year ended December 31, 2008).
 
 
10.10@
Liberty Property Trust - Employee Stock Purchase Plan (Incorporated by reference to Exhibit 4.1 filed with the Trust's Registration Statement on Form S-8 (Comission File No. 333-175263)).
 
 
10.11@
Liberty Property Trust 2008 Long-Term Incentive Plan (Incorporated by reference to Exhibit 10.1 filed with the Registrant's Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2008 (the “First Quarter 2008 Form 10-Q”)).
 
 
10.12@
Form of Restricted Share Grant under the Liberty Property Trust Amended and Restated Share Incentive Plan. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registrants filed with the Commission on February 24, 2005 (the “February 24, 2005 8-K”)).
 
 
10.13@
Form of Option Grant Agreement under the Liberty Property Trust Amended and Restated Share Incentive Plan (Incorporated by reference to Exhibit 10.2 filed with the First Quarter 2008 Form 10-Q).
 
 
10.14@
Form of 2009 Long Term Incentive Plan Target Unit Award Agreement (Incorporated by reference to Exhibit 10.2 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2009).
 
 
10.15
Amended and Restated Limited Partnership of Liberty/Commerz 1701 JFK Boulevard Limited Partnership, dated as of April 11, 2006, by and among Liberty Property Philadelphia Corporation IV East, as general partner, and the Operating Partnership and 1701 JFK Boulevard Philadelphia, L.P. as limited partners (Incorporated by reference to Exhibit 10.3 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006 (the “Second Quarter 2006 Form 10-Q”)).
 
 
10.16
NOI Support Agreement, dated as of April 11, 2006, by Liberty Property Limited Partnership in favor of Liberty/Commerz 1701 JFK Boulevard, L.P. and 1701 JFK Boulevard Philadelphia, L.P. (Incorporated by reference to Exhibit 10.4 filed with the Registrants' Second Quarter 2006 Form 10-Q).
 
 

112


10.17
Completion and Payment Agreement and Guaranty, dated as of April 11, 2006, by the Operating Partnership for the benefit of 1701 JFK Boulevard Philadelphia, L.P. and Liberty/Commerz 1701 JFK Boulevard L.P. (Incorporated by reference to Exhibit 10.5 filed with the Registrants' Second Quarter 2006 Form 10-Q).
 
 
10.18+
Agreement of Limited Partnership of Liberty Washington, L.P. by and between Liberty Washington Venture, LLC and New York State Common Retirement Fund dated as of October 4, 2007 (Incorporated by reference to Exhibit 10.18 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2010).
 
 
10.19+
Contribution Agreement among New York State Common Retirement Fund and Liberty Property Limited Partnership and Liberty Washington, L.P. dated October 4, 2007 (Incorporated by reference to Exhibit 10.19 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2010).
 
 
12*
Statement Re: Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges
 
 
21*
Subsidiaries.
 
 
23.1*
Consent of Ernst & Young LLP relating to the Trust.
 
 
23.2*
Consent of Ernst & Young LLP relating to the Operating Partnership.
 
 
31.1*
Certifications of the Chief Executive Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
 
 
31.2*
Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
 
 
31.3*
Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
 
 
31.4*
Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
 
 
32.1*
Certifications of the Chief Executive Officer of Liberty Property Trust required under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
 
 
32.2*
Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
 
 

113


32.3*
Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
 
 
32.4*
Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
 
 
101.INS
XBRL Instance Document (furnished herewith).
 
 
101.SCH
XBRL Taxonomy Extension Schema Document (furnished herewith).
 
 
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document (furnished herewith).
 
 
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document (furnished herewith).
 
 
101.LAB
XBRL Extension Labels Linkbase (furnished herewith).
 
 
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document (furnished herewith).
 
____________
*
Filed herewith.
 
 
+
Confidential treatment has been granted by the Securities and Exchange Commission with respect to portions of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended.
 
 
@
Compensatory plan or arrangement.


114


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LIBERTY PROPERTY TRUST

Date: February 24, 2012                    By: /s/ WILLIAM P. HANKOWSKY
--------------------
WILLIAM P. HANKOWSKY
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


/s/WILLIAM P. HANKOWSKY
Chairman of the Board of Trustees, President and Chief Executive Officer (Principal Executive Officer)
February 24, 2012
William P. Hankowsky
 
 
 
 
 

/s/GEORGE J. ALBURGER, JR.
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
February 24, 2012
George J. Alburger, Jr.
 
 
 
 
 
/s/M. LEANNE LACHMAN
Trustee
February 24, 2012
M. Leanne Lachman
 
 
 
 
 
/s/FREDERICK F. BUCHHOLZ
Trustee
February 24, 2012
Frederick F. Buchholz
 
 
 
 
 
/s/DAVID L. LINGERFELT
Trustee
February 24, 2012
David L. Lingerfelt
 
 
 
 
 
/s/STEPHEN B. SIEGEL
Trustee
February 24, 2012
Stephen B. Siegel
 
 
 
 
 
/s/THOMAS C. DELOACH, JR.
Trustee
February 24, 2012
Thomas C. DeLoach, Jr.
 
 
 
 
 
/s/DANIEL P. GARTON
Trustee
February 24, 2012
Daniel P. Garton
 
 
 
 
 
/s/ STEPHEN D. STEINOUR
Trustee
February 24, 2012
Stephen D. Steinour
 
 
 
 
 
/s/ KATHERINE E. DIETZE
Trustee
February 24, 2012
Katherine E. Dietze
 
 


115


SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

LIBERTY PROPERTY LIMITED PARTNERSHIP

Date: February 24, 2012                    By: /s/ WILLIAM P. HANKOWSKY
--------------------
WILLIAM P. HANKOWSKY
CHAIRMAN, PRESIDENT AND
CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


/s/WILLIAM P. HANKOWSKY
Chairman of the Board of Trustees, President and Chief Executive Officer (Principal Executive Officer)
February 24, 2012
William P. Hankowsky
 
 
 
 
 

/s/GEORGE J. ALBURGER, JR.
Executive Vice President and Chief Financial Officer
(Principal Financial and Accounting Officer)
February 24, 2012
George J. Alburger, Jr.
 
 
 
 
 
/s/M. LEANNE LACHMAN
Trustee
February 24, 2012
M. Leanne Lachman
 
 
 
 
 
/s/FREDERICK F. BUCHHOLZ
Trustee
February 24, 2012
Frederick F. Buchholz
 
 
 
 
 
/s/DAVID L. LINGERFELT
Trustee
February 24, 2012
David L. Lingerfelt
 
 
 
 
 
/s/STEPHEN B. SIEGEL
Trustee
February 24, 2012
Stephen B. Siegel
 
 
 
 
 
/s/THOMAS C. DELOACH, JR.
Trustee
February 24, 2012
Thomas C. DeLoach, Jr.
 
 
 
 
 
/s/DANIEL P. GARTON
Trustee
February 24, 2012
Daniel P. Garton
 
 
 
 
 
/s/ STEPHEN D. STEINOUR
Trustee
February 24, 2012
Stephen D. Steinour
 
 
 
 
 
/s/ KATHERINE E. DIETZE
Trustee
February 24, 2012
Katherine E. Dietze
 
 


116


EXHIBIT INDEX
 
EXHIBIT
NO.
 
 
 
3.1.25
Ninth Amendment to the Second Amendment and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership.

 
 
3.1.26
Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership.
 
 
12
Statement Re: Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings to Combined Fixed Charges
 
 
21
Subsidiaries.
 
 
23.1
Consent of Ernst & Young LLP relating to the Trust.
 
 
23.2
Consent of Ernst & Young LLP relating to the Operating Partnership.
 
 
31.1
Certification of the Chief Executive Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
 
 
31.2
Certification of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
 
 
31.3
Certification of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
 
 
31.4
Certification of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.
 
 
32.1
Certification of the Chief Executive Officer of Liberty Property Trust required under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
 
 
32.2
Certification of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
 
 
32.3
Certification of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
 
 
32.4
Certification of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)
 
 
101.INS
XBRL Instance Document.
 
 
101.SCH
XBRL Taxonomy Extension Schema Document.
 
 
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document.
 
 
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document.
 
 
101.LAB
XBRL Extension Labels Linkbase.
 
 
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document.
 
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