8-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 23, 2006

LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP

(Exact name of registrant specified in its charter)

Maryland	1-13130	23-7768996
Pennsylvania	1-13132	23-2766549
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

500 Chesterfield Parkway
Malvern, PA	19355
(Address of principal executive offices)	(Zip Code)

Registrants’ telephone, including area code: (610) 648-1700

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Section Act (17 CFR 230.425).

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12).

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b)).

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c)).

TABLE OF CONTENTS

Press Release by the Registrants, dated October 23, 2006

Item 2.02. Results of Operations and Financial Condition.

     On October 23, 2006, the Registrants issued a press release announcing the Registrants’ financial results for the quarter ended September 30, 2006. The Registrants are furnishing the press release as Exhibit 99 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

          None.

(b) Pro Forma Financial Information.

          None.

(c) Exhibits.

Exhibit Number	Exhibit Title
99	Press Release by the Registrants, dated October 23, 2006, furnished in accordance with Item 2.02 of this Current Report on Form 8-K.

SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LIBERTY PROPERTY TRUST
By:	/s/ George J. Alburger, Jr.
	George J. Alburger, Jr.
	Chief Financial Officer

LIBERTY PROPERTY LIMITED PARTNERSHIP
By:	Liberty Property Trust, its sole General Partner

By:	/s/ George J. Alburger, Jr.
	George J. Alburger, Jr.
	Chief Financial Officer

Dated: October 24, 2006

2

EXHIBIT INDEX

Exhibit Number	Exhibit Title
99	Press Release by the Registrants, dated October 23, 2006, furnished in accordance with Item 2.02 of this Current Report on Form 8-K.

3

EX-99

Press Release

For Immediate Release	Inquiries:	Jeanne A. Leonard
October 23, 2006		Liberty Property Trust
		610/648-1704

LIBERTY PROPERTY TRUST ANNOUNCES
THIRD QUARTER RESULTS

Malvern, PA — Liberty Property Trust (NYSE:LRY) reported that net income per common share (diluted) was $0.52 per share for the quarter ended September 30, 2006, compared to $0.58 per share (diluted) for the quarter ended September 30, 2005. For the nine-month period ended September 30, 2006, net income per common share (diluted) was $2.28, compared to $1.61 for the same period in 2005.

Funds from operations available to common shareholders (diluted) (“FFO”) for the third quarter of 2006 was $0.79 per share, compared to $0.78 per share for the third quarter of 2005. Operating results for the third quarter of 2006 included lease termination fees of $0.5 million, or approximately $0.005 per share diluted FFO. FFO per share for the nine-month period ended September 30, 2006 was $2.36 per share compared to $2.42 for the same period in 2005. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release.

“Although macro signs point to a slowing economy, office and industrial real estate is well positioned to continue a measured but real upward trend,” said Bill Hankowsky, chairman and chief executive officer. “Liberty’s rental rates increased for the second quarter in a row, and same store performance is positive for the third straight quarter. We continue to see increasing development opportunities, and the yields being achieved are impressive. We believe that, barring some dramatic change, these conditions will continue well into the future.”

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LRY Third Quarter 2006 Results
Page 2

Real Estate Investments

Development: During the third quarter, Liberty brought into service six development properties totaling 312,000 square feet. At quarter-end the properties were 92.2% leased at a yield of 9.3% on the company’s investment of $35.1 million.

During the third quarter, Liberty began development of 10 properties totaling 1.2 million square feet, with an expected total investment of $116.4 million. The properties consist of:

• In Sturtevant, Wisconsin; a 552,000 square foot distribution center for JohnsonDiversey, Inc.;

• In Orlando, Florida, a 30,000 square foot build-to-suit office property for Attorney’s Title Insurance Fund;

• At Kings Hill, West Malling, United Kingdom, a 42,000 square foot flex property, 100% leased to Cabot Financial;

• In Elkridge, Maryland, a 50% pre-leased, 100,000 square foot flex building;

• In Columbia, Maryland, a 65,000 square foot office building;

• In the Lehigh Valley, Pennsylvania, two flex buildings totaling 68,000 square feet;

• In Greenville, South Carolina, an 83,000 square foot office building;

• In Mt. Laurel, New Jersey, a 104,000 square foot office project;

• In High Point, North Carolina, a 120,000 square foot distribution building.

As of September 30, Liberty had seven million square feet of wholly-owned and joint venture properties under development. This activity represents a total investment of $999.2 million, with an expected yield of 8.9%. The properties were 45.1% leased at quarter-end.

Acquisitions: During the third quarter, Liberty acquired nine properties for $127.6 million. The properties include four flex properties in Orlando, Florida totaling 325,000 square feet; an office building in Tampa, Florida totaling 99,000 square feet; an office building in Sunrise, Florida totaling 140,000 square feet; and two industrial distribution properties in Houston, Texas, totaling 290,000 square feet. In addition, a joint venture in which Liberty holds a 25% equity interest acquired a 409,000 square foot distribution facility in Joliet, Illinois, for $13.8 million.

Portfolio Performance

Leasing: At September 30, 2006, Liberty’s in-service portfolio of 64.8 million square feet was 93.1% occupied, compared to 92.8% at June 30, 2006 and 91.9% at September 30, 2005.

Same Store Performance: Property level operating income for same store properties increased by 5.3% on a cash basis and 4.5% on a straight line basis for the third quarter of 2006 compared to the same quarter in 2005. Same store results for the quarter were positively impacted by $2.0 million due to a tenant bankruptcy settlement. For the nine-month period ended September 30, 2006, property level operating income increased 2.4% on a cash basis and 1.8% on a straight line basis compared to the same period in 2005.

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LRY Third Quarter 2006 Results
Page 3

Dividend Increase

During the quarter Liberty raised the quarterly dividend by 0.8 percent from $0.615 per share to $0.62 per share.

Earnings Outlook

Liberty expects to report funds from operations for 2006 in the range of $3.13-$3.15 per share, and for 2007 in the range of $3.10-$3.25 per share. A reconciliation of FFO to GAAP net income for both 2006 and 2007 is below:

	2006 Range						2007 Range
	Low			High			Low			High
Projected net income per share	$	2.96		$	3.07		$	2.16		$	2.74
Depreciation and amortization of unconsolidated joint ventures		0.03			0.03			0.03			0.03
Depreciation and amortization		1.60			1.60			1.60			1.60
Gain on property dispositions		(1.45	)		(1.55	)		(0.65	)		(1.10	)
Minority interest share of addbacks		(0.01	)		—			(0.04	)		(0.02	)
Projected funds from operations per share	$	3.13		$	3.15		$	3.10		$	3.25

About the Company

Liberty Property Trust (NYSE:LRY) is a leader in commercial real estate, serving customers in the United States and United Kingdom, through the development, acquisition, ownership and management of superior office and industrial properties. Liberty’s 65 million square foot portfolio includes more than 700 properties which provide office, distribution and light manufacturing facilities to 2,100 tenants.

Additional information about the Company, including Liberty’s Quarterly Supplemental Package with detailed financial information is available in the Investor section of the Company’s web site at www.libertyproperty.com. If you are unable to access the web site, a copy of the supplemental package may be obtained by contacting Liberty by phone at 610-648-1708, or by e-mail to eberish@libertyproperty.com.

Liberty will host a conference call during which management will discuss second quarter results, on Tuesday, October 24, 2006, at 2:00 p.m. eastern time. To access the conference call in the United States or Canada, please dial 1-888-870-2815. For international access, dial 706-643-7691. No password or code is needed. A replay of the call will be available by dialing 1-800-642-1687 for US/Canada participants or 706-645-9291 for international participants. A passcode is needed for the replay: 5508806. The call can also be accessed via the Internet on the Investor Relations page of Liberty’s web site at www.libertyproperty.com for one week following the call.

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LRY Third Quarter 2006 Results
Page 4

The statements contained in this press release may include forward-looking statements within the meaning of the federal securities law. Although Liberty believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the expected results. These factors include, without limitation, the 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, the financial condition of tenants, the uncertainties of real estate development and construction activity, the costs and availability of financing, the effects of local economic and market conditions, regulatory changes, potential liability relative to environmental matters and other risks and uncertainties detailed in the company’s filings with the Securities and Exchange Commission. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

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Liberty Property Trust
Statement of Operations
September 30, 2006
(Unaudited and in thousands, except per share amounts)

	Quarter Ended						Year to Date
	September 30, 2006			September 30, 2005			September 30, 2006			September 30, 2005
Operating Revenue
Rental	$	118,745		$	114,400		$	352,791		$	347,168
Operating expense reimbursement		52,678			47,808			151,210			138,546
Total operating revenue		171,423			162,208			504,001			485,714
Operating Expenses
Rental property		35,526			34,880			105,914			101,350
Real estate taxes		18,202			16,805			53,333			48,078
General and administrative		11,996			9,302			33,511			27,301
Depreciation and amortization		37,763			35,105			110,422			102,380
Total operating expenses		103,487			96,092			303,180			279,109
Operating Income		67,936			66,116			200,821			206,605
Other Income/Expense
Interest and other		3,257			2,606			7,733			7,398
Interest		(30,840	)		(31,549	)		(90,894	)		(91,909	)
Total other income/expense		(27,583	)		(28,943	)		(83,161	)		(84,511	)
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures		40,353			37,173			117,660			122,094
Gain/(loss) on property dispositions, including impairment		(104	)		1,318			17,257			(3,611	)
Income taxes		625			(796	)		15			(2,241	)
Minority interest		(5,087	)		(4,699	)		(15,413	)		(13,805	)
Equity in earnings of unconsolidated joint ventures		334			231			1,250			2,433
Income from continuing operations		36,121			33,227			120,769			104,870
Discontinued operations net of minority interest (including net gain on property dispositions of $11,386 and $18,232 for the quarters ended September 30, 2006 and 2005 and $87,588 and $32,652 for the nine month periods ended September 30, 2006 and 2005)		10,764			18,648			84,993			37,163
Net Income	$	46,885		$	51,875		$	205,762		$	142,033
Basic income per common share
Continuing operations	$	0.40		$	0.38		$	1.36		$	1.21
Discontinued operations	$	0.12		$	0.21		$	0.95		$	0.43
Total basic income per common share	$	0.52		$	0.59		$	2.31		$	1.64
								2.31			1.64
Diluted income per common share
Continuing operations	$	0.40		$	0.37		$	1.34		$	1.19
Discontinued operations	$	0.12		$	0.21		$	0.94		$	0.42
Total diluted income per common share	$	0.52		$	0.58		$	2.28		$	1.61
Weighted average shares
Basic		89,675			87,443			88,923			86,670
Diluted		90,808			88,922			90,184			88,128

Liberty Property Trust
Statement of Funds From Operations
September 30, 2006
(Unaudited and in thousands, except per share amounts)

	Quarter Ended										Year to Date
	September 30, 2006					September 30, 2005					September 30, 2006					September 30, 2005
				Per					Per					Per					Per
				Weighted					Weighted					Weighted					Weighted
				Average					Average					Average					Average
	Dollars			Share		Dollars			Share		Dollars			Share		Dollars			Share
Reconciliation of net income to FFO — basic:
Basic — income available to common shareholders	$	46,885		$	0.52	$	51,875		$	0.59	$	205,762		$	2.31	$	142,033		$	1.64
Adjustments:
Depreciation and amortization of unconsolidated joint ventures		792					291					2,108					943
Depreciation and amortization		37,404					36,997					111,804					108,780
Gain on property dispositions		(12,192	)				(19,550	)				(106,487	)				(35,157	)
Minority interest share in addback for depreciation and amortization and gain on property dispositions		(1,160	)				(683	)				(479	)				(2,894	)
Funds from operations available to common shareholders — basic	$	71,729		$	0.80	$	68,930		$	0.79	$	212,708		$	2.39	$	213,705		$	2.47
Reconciliation of net income to FFO — diluted:
Diluted — income available to common shareholders	$	46,885		$	0.52	$	51,875		$	0.58	$	205,762		$	2.28	$	142,033		$	1.61
Adjustments:
Depreciation and amortization of unconsolidated joint ventures		792					291					2,108					943
Depreciation and amortization		37,404					36,997					111,804					108,780
Gain on property dispositions		(12,192	)				(19,550	)				(106,487	)				(35,157	)
Minority interest excluding preferred unit distributions and excess of preferred redemption over carrying amount		2,189					2,093					8,981					5,745
Funds from operations available to common shareholders — diluted	$	75,078		$	0.79	$	71,706		$	0.78	$	222,168		$	2.36	$	222,344		$	2.42
Reconciliation of weighted average shares:
Weighted average common shares — all basic calculations		89,675					87,443					88,923					86,670
Dilutive shares for long term compensation plans		1,133					1,479					1,261					1,458
Diluted shares for net income calculations		90,808					88,922					90,184					88,128
Weighted average common units		4,202					3,518					3,794					3,567
Diluted shares for funds from operations calculations		95,010					92,440					93,978					91,695

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 REIT’s 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.

Liberty Property Trust
Balance Sheet
September 30, 2006
(In thousands, except share amounts)

	September 30,			December 31, 2005
	2006
	(Unaudited)
Assets
Real estate:
Land and land improvements	$	661,109		$	625,693
Building and improvements		3,770,921			3,711,575
Less: accumulated depreciation		(794,612	)		(741,912	)
Operating real estate		3,637,418			3,595,356
Development in progress		472,836			324,924
Land held for development		169,734			158,653
Net real estate		4,279,988			4,078,933
Cash and cash equivalents		26,573			61,629
Restricted cash		13,891			29,085
Accounts receivable		24,067			14,761
Deferred rent receivable		71,656			72,818
Deferred financing and leasing costs, net of accumulated amortization (2006, $96,797; 2005, $108,103)		124,509			123,696
Investment in unconsolidated joint ventures		48,602			33,522
Assets held for sale		6,375			29,105
Prepaid expenses and other assets		83,164			56,773
Total assets	$	4,678,825		$	4,500,322
Liabilities
Mortgage loans	$	201,731		$	238,728
Unsecured notes		1,755,000			1,755,000
Credit facility		328,480			255,450
Accounts payable		41,486			32,919
Accrued interest		26,804			34,892
Dividend payable		58,472			56,490
Other liabilities		159,485			164,528
Total liabilities		2,571,458			2,538,007
Minority interest		270,719			253,133
Shareholders’ Equity
Common shares of beneficial interest, $.001 par value, 191,200,000 shares authorized, 90,170,972 (includes 59,100 in treasury) and 88,415,764 (includes 59,100 in treasury) shares issued and outstanding as of September 30, 2006 and December 31, 2005, respectively		90			88
Additional paid-in capital		1,879,429			1,799,068
Accumulated other comprehensive income		16,793			9,906
Distributions in excess of net income		(58,337	)		(98,553	)
Common shares in treasury, at cost, 59,100 shares as of September 30, 2006 and December 31, 2005, respectively		(1,327	)		(1,327	)
Total shareholders’ equity		1,836,648			1,709,182
Total liabilities & shareholders’ equity	$	4,678,825		$	4,500,322