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, 2013
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.) þ
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 $4.4 billion, based upon the closing price of $36.96 on the New York Stock Exchange composite tape on June 28, 2013. 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 25, 2014: 147,049,789
Documents Incorporated by Reference
Portions of the proxy statement for the annual meeting of shareholders of Liberty Property Trust to be held in May 2014 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, 2013 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” and “us” mean 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 97.6% of the common equity of the Operating Partnership at December 31, 2013. 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 previously issued several series of Cumulative Redeemable Preferred Units of the Operating Partnership (the “Preferred Units"). The outstanding Preferred Units of each series were 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 Preferred Units, except for the Series I-2 Preferred Units, were redeemed during the years ended December 31, 2013 and 2012. The ownership of the holders of Common and Preferred Units is reflected in the Trust's financial statements as “noncontrolling interest-operating partnership” both in mezzanine equity and as a component of total equity. The ownership of the holders of Common and Preferred Units not owned by the Trust is reflected in the Operating Partnership's financial statements as “limited partners' equity” both in mezzanine equity and as a component of total owners' equity.
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; 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 the Trust and Operating Partnership are compliant with Rule 13a-15 and Rule 15d-15 of the Securities Exchange Act of 1934, as amended.
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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. | ||
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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 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.”
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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, 2013, the Company owned and operated 489 industrial and 223 office properties (the "Wholly Owned Properties in Operation") totaling 89.5 million square feet. In addition, as of December 31, 2013, the Company owned 16 properties under development, which when completed are expected to comprise 5.0 million square feet (the "Wholly Owned Properties under Development") and 1,315 acres of developable land, substantially all of which is zoned for commercial use. Additionally, as of December 31, 2013, the Company had an ownership interest, through unconsolidated joint ventures, in 45 industrial and 34 office properties totaling 13.5 million square feet (the "JV Properties in Operation" and, together with the Wholly Owned Properties in Operation, the "Properties in Operation"), one property under development, which when completed is expected to comprise 203,000 square feet (the "JV Property under Development" and, collectively with the Wholly Owned Properties under Development, the "Properties under Development" and, collectively with the Properties in Operation, the "Properties"), and 518 acres of developable land, substantially all of which is zoned for commercial use.
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 to favor industrial properties nationally and metro-office properties in markets with favorable demographic and employment trends as well as certain urban characteristics such as population density and transportation access.
The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 97.6% of the common equity of the Operating Partnership at December 31, 2013. 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, 2013, the Common Units held by the limited partners were exchangeable for 3.6 million Common Shares. The Company previously issued several series of Cumulative Redeemable Preferred Units of the Operating Partnership (the "Preferred Units"). The outstanding Preferred Units of each series were 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 Preferred Units, except for the Series I-2 Preferred Units, were redeemed during the years ended December 31, 2012 and 2013. The ownership of the holders of Common and Preferred Units is reflected on the Trust's financial statements as “noncontrolling interest- operating partnership” both in mezzanine equity and as a component of total equity. The ownership of the holders of Common and Preferred Units not owned by the Trust is reflected on the Operating Partnership's financial statements as “limited partners' equity” both in mezzanine equity and as a component of total owners' equity.
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
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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
As of February 26, 2014, the Company's 453 employees operated under the direction of 18 senior executives, who have been affiliated with the Company and the Predecessor for an average of 21 years. The Company and the Predecessor have developed and managed commercial real estate for the past 41 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. In certain circumstances the Company also engages and directs the activities of third party property managers and leasing agents.
Segments and Markets
At December 31, 2013, the Company's reportable segments were based on the Company's method of internal reporting and are as follows:
Industrial:
• | Lehigh/Central PA; |
• | Chicago/Milwaukee; |
• | Houston; |
• | Carolinas; |
• | Other. |
The Industrial-Other category includes: Orlando; New Jersey; Maryland; Cincinnati, Columbus and Indianapolis; Dallas; Atlanta; Southern California.
Industrial/Office:
• | Minnesota; |
• | South Florida; |
• | Richmond/Hampton Roads; |
• | Arizona; |
• | United Kingdom; |
• | Other. |
The Industrial/Office-Other category includes: Jacksonville; Tampa; Seattle/Puget Sound, Boston, Delaware and Memphis; Northern Virginia.
Office:
• | Philadelphia; |
• | Southeastern PA; |
• | Washington D.C. |
Business Objective and Strategies for Growth
The Company's business objective is to maximize long-term profitability for its shareholders by operating as 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 three products (industrial-distribution, industrial-flex and office). The Company's strategy with respect to product and market selection is expected generally to favor industrial and metro-office properties
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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 owns and operates industrial properties nationally and owns and operates office properties primarily in Metro Philadelphia, Washington, D.C. and certain sunbelt cities. 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/or 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. Given the Company's desire to operate industrial properties on a national platform and based on analysis of its present markets the Company intends to operate a portfolio that derives approximately two-thirds of its net operating income from industrial properties and one-third from office properties. As of December 31, 2013, adjusting to remove the second tranche of the Portfolio Sale which closed on January 30, 2014 (see below), approximately 60% of the Company's net operating income came from industrial properties and 40% from office properties. 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 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.
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 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.
High Performance Buildings
The Company is committed to the sustainable design, development and operation of its portfolio. The Company strives to create work environments that limit resource consumption, improve building performance and promote human health and productivity. The Company believes that high performance buildings and environmentally responsible business practices are not only good for the environment, but that they also create value for the Company's tenants and shareholders.
The Company has set as a goal (1) to be an industry leader in sustainable real estate and high performance buildings; (2) to demonstrate improved performance year over year in resource consumption; and (3) to integrate sustainable business practices into our core business operations and decision making process.
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The Company's efforts have included research and development, tenant education and outreach and education and accreditation for its development, property management and leasing staff.
The Company has utilized the U.S. Green Building Council's LEED rating system and the U.S. Department of Energy's Energy Star system for its evaluation of sustainability. To date the Company has completed or has under construction 69 LEED buildings and has completed three buildings in the United Kingdom under the international BREEAM standards. The Company has certified over 110 ENERGY STAR buildings and has achieved a significant reduction of energy usage in the Properties in Operation.
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's development investment strategy focuses primarily on the development of high-quality industrial and office properties within its existing markets, including the markets recently entered as a result of the Cabot Acquisition (described below). When the Company's marketing efforts identify opportunities, the Company will consider pursuing such opportunities outside of the Company's established markets. The Company and its Predecessor have developed over 67 million square feet of commercial real estate during the past 41 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, 2013, the Company completed four build-to-suit projects and three inventory projects totaling 2.9 million square feet and representing an aggregate Total Investment of $280.7 million. As of December 31, 2013, these completed development properties were 44.3% leased.
As of December 31, 2013, the Company had 16 Wholly Owned Properties under Development, which are expected to comprise, upon completion, 5.0 million square feet and are expected to represent a Total Investment of $380.8 million. These Wholly Owned Properties under Development were 72.1% pre-leased as of December 31, 2013. The scheduled deliveries of the 5.0 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, 2013 | INVESTMENT | |||||||||||||
1st Quarter, 2014 | 502 | — | — | 502 | 77.8 | % | $ | 30,511 | |||||||||||
2nd Quarter, 2014 | 227 | — | — | 227 | 100.0 | % | 12,828 | ||||||||||||
3rd Quarter, 2014 | 2,638 | — | 201 | 2,839 | 100.0 | % | 195,985 | ||||||||||||
1st Quarter, 2015 | 534 | — | 80 | 614 | 21.5 | % | 62,213 | ||||||||||||
2nd Quarter, 2015 | 644 | — | — | 644 | — | % | 48,435 | ||||||||||||
4th Quarter, 2015 | — | — | 154 | 154 | — | % | 30,788 | ||||||||||||
TOTAL | 4,545 | — | 435 | 4,980 | 72.1 | % | $ | 380,760 | |||||||||||
“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 and lease transaction costs in the case of acquisitions, or land costs and land improvement, building improvement and lease transaction 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, 2013, the Company owned 1,315 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 13.1 million square feet of property. The Company's investment in land held for development as of December 31, 2013 was $233.1 million.
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Through a development agreement with Philadelphia Industrial Development Corporation, the Company has development rights for 143 acres of land located at the Navy Yard in Philadelphia. The Company estimates that these 143 acres would support, as and when developed, approximately 2.3 million 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 2,851 homes, of which approximately 825,000 square feet of commercial space has been built and 2,632 homes have been sold as of December 31, 2013.
Acquisitions/Dispositions
The Company seeks to acquire properties consistent with its business objectives and strategy. The Company executes its acquisition strategy by purchasing properties that the Company believes will create shareholder value over the long-term.
On October 8, 2013, the Company completed the acquisition (the "Cabot Acquisition") of 100% of the outstanding general partnership and limited partnership interests of the Cabot Industrial Value Fund III Operating Partnership, L.P. ("Cabot"). Pursuant to the Cabot Acquisition, the Company acquired a 100% ownership interest in 177 industrial assets totaling approximately 23.0 million square feet at a purchase price of $1.469 billion. These assets are located in 24 markets.
In addition, during the year ended December 31, 2013, the Company acquired three industrial properties and one office property for an aggregate purchase price of $201.1 million. These properties contain 1.6 million square feet of leaseable space.
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. On November 7, 2013, the Company entered into an Agreement of Sale and Purchase pursuant to which the Company agreed to sell a real estate portfolio which included the Company’s Jacksonville, Florida portfolio in its entirety, all of the office properties in Maryland, Southern New Jersey and the Fort Washington suburb of Philadelphia and flex properties in Minnesota for proceeds of $697.3 million (the "Portfolio Sale"). The properties consisted of 97 buildings containing an aggregate of 6.6 million square feet. On December 24, 2013, the Company closed on the first of two planned settlements under this agreement. The proceeds from the first settlement were $367.7 million and included 49 properties totaling 4.0 million square feet of space and 140 acres of land. The second settlement closed on January 30, 2014 and consisted of 48 properties containing an aggregate of 2.6 million square feet and 19 acres of land for proceeds of $329.6 million. In addition to the Portfolio Sale, during the year ended December 31, 2013, the Company sold nine operating properties containing an aggregate of 1.1 million square feet, and 17 acres of land, for aggregate proceeds of $140.0 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, 2013, the Company had investments in and advances to unconsolidated joint ventures totaling $179.7 million (see Note 7 to the Company's Consolidated Financial Statements).
Development
During the year ended December 31, 2013, none of the unconsolidated joint ventures in which the Company held an interest completed any development projects.
As of December 31, 2013, a joint venture in which the Company held a 25% interest had one property under development which is expected to comprise, upon completion, 203,000 square feet and is expected to represent a Total Investment of $11.8 million.
As of December 31, 2013, unconsolidated joint ventures in which the Company held an interest owned 518 acres of land held for development and had an option for a leasehold interest in an additional 27 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 6.5 million square feet of property.
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Acquisitions/Dispositions
During the year ended December 31, 2013, none of the unconsolidated joint ventures in which the Company held an interest acquired any properties.
During the year ended December 31, 2013, a joint venture in which the Company held a 20% interest sold one property, which contained 44,000 square feet, for proceeds of $9.6 million. During the year ended December 31, 2013, a joint venture in which the Company held a 25% interest sold four properties, which contained 171,000 square feet, for aggregate proceeds of $31.5 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
The Company's business is subject to the risks in this section.
Unfavorable events affecting our existing tenants and potential tenants, or negative market conditions that may affect our existing tenants and potential 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 |
• | 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 the tenant, 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.
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.
Recent weakness in the general economy continues to adversely affect our business and financial condition and has affected some of our existing tenants, and thus could continue to have an adverse impact on our cash flow from operations.
The recent weakness in the general economy that followed the economic dislocation that began in mid-2007 has negatively impacted the Company by reducing demand for our properties. This lack of demand has reduced our ability to achieve increases in rents as
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vacant spaces are leased, and in many cases has resulted in a decrease in rents as vacant spaces are leased. In addition, these economic conditions have had an adverse effect on many companies in numerous industries. We believe that some of our tenants have experienced and may be continuing to experience these adverse effects, thereby exacerbating the general leasing risks described in the Risk Factor immediately preceding this Risk Factor. While the general economy is recovering, the recovery has been weak. Should any of our tenants continue to 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.
We may face risks associated with our business strategy and the recent material acquisition and disposition transactions we have undertaken consistent with that strategy.
As previously reported, and as further summarized below in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” we undertook several significant transactions in 2013 consistent with our strategy to favor industrial and metro-office properties and markets with strong demographic and economic fundamentals, including the Cabot Acquisition and the Portfolio Sale.
While management believes that this strategy, and our completion of the Cabot Acquisition, the Portfolio Sale and the related equity and debt transactions will be in the best long-term interests of the Company and its shareholders, we cannot assure you that this strategy and the associated transactions will produce the intended benefit, or when, if ever, those intended benefits will be achieved. This strategy poses certain risks, including without limitation the following:
▪ | for similar investment dollars, cash flow from industrial properties is generally less than cash flow generated from suburban office properties |
▪ | our expectation of increasing demand and increasing stability of value in the industrial sector and metro-office sector may not materialize |
▪ | the relative advantages in the ownership of industrial properties and metro-office properties as opposed to suburban office properties will be affected by variable and unpredictable macro-economic and global conditions that are outside of our control |
▪ | our identification of markets with strong demographic and economic fundamentals may prove erroneous, due to macro-economic and global conditions that are outside of our control |
▪ | the execution of our strategy may divert our management's attention away from other business concerns |
▪ | we cannot assure you that we will be able to complete the integration of the Cabot properties without encountering difficulties or that any such difficulties will not have a material adverse effect on us |
Failure of our strategy and associated transactions to achieve the intended benefits could have a material adverse effect on our results of operations, financial condition and liquidity.
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
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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. 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 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 generally subject to the following risks, which risks can be exacerbated when we complete large acquisitions, such as the Cabot Acquisition:
▪ | 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.
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 |
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▪ | 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 $2.7 billion in unsecured notes issued in past public offerings, contain cross-default and/or cross-acceleration provisions, 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 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 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.
From time to time, we enter into interest rate swap agreements and other interest rate hedging contracts, including swaps, caps and floors. While these agreements are intended to lessen the impact of rising interest rates on us, they also expose us to the risk that the other parties to the agreements will not perform, we could incur significant costs associated with the settlement of the agreements, the agreements will be unenforceable and the underlying transactions will fail to qualify as highly-effective cash flow hedges under guidance included in ASC 815 “Derivatives and Hedging”. In addition, an increase in interest rates could decrease the amounts third parties are willing to pay for our assets, thereby limiting our ability to change our portfolio promptly in response to changes in economic or other conditions.
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.
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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 2014. 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 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 |
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▪ | 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.
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.
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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.
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.
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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 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.
Furthermore, changes in tax laws may affect the price of our securities. Pursuant to legislation newly enacted in 2013, the highest marginal ordinary income tax rate is 39.6% and the highest long-term capital gain rate is 20%; moreover, the Internal Revenue Service (“IRS”) issued final regulations in 2013 with respect to the Foreign Account Tax Compliance Act, adopting the effective dates for required withholding provided for in previous IRS guidance. In addition, beginning in 2013, the dividends paid by the Trust are also subject to the new Medicare tax on unearned income. That tax is a separate 3.8% tax payable on the net investment income of certain taxpayers, which includes income from business activities in which the taxpayer is not a material participant. It applies to married taxpayers filing jointly with a modified adjusted gross income of greater than $250,000, married taxpayers filing separately with a modified AGI greater than $125,000, and all other individuals with a modified AGI greater than $200,000.
The threshold amount for estates and trusts is the dollar amount at which the highest marginal income tax rate begins, $12,150 for the 2014 taxable year. While we do not expect that the new legislation and IRS regulations to have any significant impact on our operations and financial results, no assurance can be given that additional new tax laws will not adversely affect the value of our publicly traded securities.
We do not 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.
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ITEM 2. PROPERTIES
The Wholly Owned Properties in Operation, as of December 31, 2013, consisted of 489 industrial and 223 office properties. Single tenants occupy 239 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 473 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, 2013, the industrial Wholly Owned Properties in Operation were 92.1% leased. The average building size for the industrial Wholly Owned Properties in Operation was approximately 149,000 square feet. As of December 31, 2013, the office Wholly Owned Properties in Operation were 88.7% leased. The average building size for the office Wholly Owned Properties in Operation was approximately 75,000 square feet.
The JV Properties in Operation, as of December 31, 2013, consisted of 45 industrial and 34 office properties. Single tenants occupy 24 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 55 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, 2013, the industrial JV Properties in Operation were 94.8% leased. The average building size for the industrial JV Properties in Operation was approximately 208,000 square feet. As of December 31, 2013, the office JV Properties in Operation were 86.5% leased. The average building size for the office JV Properties in Operation was approximately 121,000 square feet.
As of December 31, 2013, the industrial Properties in Operation were 92.4% leased. The average building size for the industrial Properties in Operation was approximately 154,000 square feet. As of December 31, 2013, the office Properties in Operation were 88.3% leased. The average building size for the office Properties in Operation was approximately 81,000 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, 2013 (in thousands, except percentages).
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Type | Net Rent(1) | Straight Line Rent and Operating Expense Reimbursement (2) | Square Feet | % Leased | ||||||||||||||||
Industrial - | Lehigh/Central PA | Industrial | — | Distribution | $ | 79,682 | $ | 99,781 | 18,940 | 91.0 | % | |||||||||
— | Flex | 2,323 | 3,144 | 336 | 100.0 | % | ||||||||||||||
Office | 1,343 | 2,375 | 121 | 96.3 | % | |||||||||||||||
Total | 83,348 | 105,300 | 19,397 | 91.2 | % | |||||||||||||||
Chicago/Milwaukee | Industrial | — | Distribution | 25,636 | 33,733 | 6,816 | 98.1 | % | ||||||||||||
— | Flex | 299 | 502 | 94 | 86.8 | % | ||||||||||||||
Office | — | — | — | — | ||||||||||||||||
Total | 25,935 | 34,235 | 6,910 | 98.0 | % | |||||||||||||||
Houston | Industrial | — | Distribution | 22,529 | 31,726 | 4,749 | 99.3 | % | ||||||||||||
— | Flex | 8,196 | 11,313 | 1,210 | 88.4 | % | ||||||||||||||
Office | — | — | — | — | ||||||||||||||||
Total | 30,725 | 43,039 | 5,959 | 97.1 | % | |||||||||||||||
Carolinas | Industrial | — | Distribution | 22,261 | 29,881 | 5,787 | 98.5 | % | ||||||||||||
— | Flex | 1,483 | 1,863 | 263 | 100.0 | % | ||||||||||||||
Office | — | — | — | — | ||||||||||||||||
Total | 23,744 | 31,744 | 6,050 | 98.6 | % | |||||||||||||||
Other | Industrial | — | Distribution | 50,784 | 67,111 | 14,140 | 91.2 | % | ||||||||||||
— | Flex | 14,168 | 19,493 | 2,081 | 84.3 | % | ||||||||||||||
Office | 36,554 | 59,067 | 2,775 | 94.7 | % | |||||||||||||||
Total | 101,506 | 145,671 | 18,996 | 90.9 | % | |||||||||||||||
Industrial/Office - | Minnesota | Industrial | — | Distribution | 5,575 | 8,289 | 1,320 | 89.5 | % | |||||||||||
— | Flex | 8,751 | 14,329 | 1,211 | 91.5 | % | ||||||||||||||
Office | 17,894 | 28,741 | 1,866 | 81.3 | % | |||||||||||||||
Total | 32,220 | 51,359 | 4,397 | 86.6 | % | |||||||||||||||
South Florida | Industrial | — | Distribution | 10,031 | 13,969 | 1,654 | 91.8 | % | ||||||||||||
— | Flex | 2,991 | 4,205 | 388 | 87.1 | % | ||||||||||||||
Office | 18,335 | 31,272 | 1,235 | 92.1 | % | |||||||||||||||
Total | 31,357 | 49,446 | 3,277 | 91.3 | % | |||||||||||||||
Richmond/Hampton Roads | Industrial | — | Distribution | 14,258 | 17,647 | 4,020 | 89.3 | % | ||||||||||||
— | Flex | 1,591 | 2,053 | 261 | 87.1 | % | ||||||||||||||
Office | 13,474 | 20,773 | 1,230 | 89.3 | % | |||||||||||||||
Total | 29,323 | 40,473 | 5,511 | 89.2 | % | |||||||||||||||
Arizona | Industrial | — | Distribution | 4,031 | 5,310 | 1,565 | 57.5 | % | ||||||||||||
— | Flex | 302 | 415 | 47 | 100.0 | % | ||||||||||||||
Office | 19,273 | 24,469 | 1,202 | 96.5 | % | |||||||||||||||
Total | 23,606 | 30,194 | 2,814 | 74.8 | % | |||||||||||||||
United Kingdom | Industrial | — | Distribution | 11,644 | 11,644 | 1,381 | 100.0 | % | ||||||||||||
— | Flex | 1,303 | 1,303 | 44 | 100.0 | % | ||||||||||||||
Office | 2,641 | 2,622 | 90 | 92.4 | % | |||||||||||||||
Total | 15,588 | 15,569 | 1,515 | 99.5 | % | |||||||||||||||
Other | Industrial | — | Distribution | 9,515 | 13,150 | 2,190 | 91.8 | % | ||||||||||||
— | Flex | 13,846 | 19,420 | 1,758 | 89.2 | % | ||||||||||||||
Office | 16,685 | 25,787 | 1,217 | 94.1 | % | |||||||||||||||
Total | 40,046 | 58,357 | 5,165 | 91.4 | % | |||||||||||||||
Office - | Philadelphia | Industrial | — | Distribution | 3,714 | 5,656 | 346 | 100.0 | % | |||||||||||
— | Flex | 3,254 | 4,161 | 204 | 100.0 | % | ||||||||||||||
Office | 17,181 | 23,808 | 589 | 97.9 | % | |||||||||||||||
Total | 24,149 | 33,625 | 1,139 | 98.9 | % | |||||||||||||||
Southeastern PA | Industrial | — | Distribution | 3,063 | 3,931 | 407 | 91.6 | % | ||||||||||||
— | Flex | 15,298 | 22,843 | 1,611 | 91.1 | % | ||||||||||||||
Office | 76,583 | 118,530 | 5,944 | 84.1 | % | |||||||||||||||
Total | 94,944 | 145,304 | 7,962 | 85.9 | % |
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Washington D.C. | Industrial | — | Distribution | — | — | — | — | |||||||||||||
— | Flex | — | — | — | — | |||||||||||||||
Office | 11,628 | 18,887 | 437 | 84.0 | % | |||||||||||||||
Total | 11,628 | 18,887 | 437 | 84.0 | % | |||||||||||||||
TOTAL | Industrial | — | Distribution | 262,723 | 341,828 | 63,315 | 92.5 | % | ||||||||||||
— | Flex | 73,805 | 105,044 | 9,508 | 89.5 | % | ||||||||||||||
Office | 231,591 | 356,331 | 16,706 | 88.7 | % | |||||||||||||||
Total | $ | 568,119 | $ | 803,203 | 89,529 | 91.4 | % | |||||||||||||
Joint Ventures (3) | Industrial | — | Distribution | $ | 34,647 | $ | 48,332 | 9,269 | 94.8 | % | ||||||||||
— | Flex | 2,754 | 2,660 | 108 | 95.6 | % | ||||||||||||||
Office | 90,431 | 129,989 | 4,114 | 86.5 | % | |||||||||||||||
Total | $ | 127,832 | $ | 180,981 | 13,491 | 92.3 | % | |||||||||||||
(1) | Net rent represents the contractual rent per square foot multiplied by the tenant's square feet leased at December 31, 2013 for tenants in occupancy. As of December 31, 2013, net rent per square foot for the Wholly Owned Properties in Operation was $6.94 and for the Joint Venture Properties in Operation was $10.27. Net rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant at December 31, 2013 was within a free rent period its rent would equal zero for the purposes of this metric. |
(2) | Straight line rent and operating expense reimbursement represents the straight line rent including operating expense recoveries per square foot multiplied by the tenant's square feet leased at December 31, 2013 for tenants in occupancy. As of December 31, 2013, straight line rent and operating expense reimbursement per square foot for the Wholly Owned Properties in Operation was $9.81 and for the Joint Venture Properties in Operation was $14.43. |
(3) | Joint Ventures represent the 79 properties owned by unconsolidated joint ventures in which the Company has an interest. |
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The expiring number of tenants, square feet and annual rent by year for the Properties in Operation as of December 31, 2013 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 (1) Rent | % of Annual Rent | Number of Tenants | Square Feet | Annual (1) Rent | % of Annual Rent | Number of Tenants | Square Feet | Annual (1) Rent | % of Annual Rent | |||||||||||||||||||||||||||||||||||||
Wholly Owned Properties in Operation: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 126 | 7,691 | $ | 29,577 | 10.2 | % | 111 | 1,166 | $ | 9,120 | 11.1 | % | 207 | 1,672 | $ | 24,354 | 9.2 | % | 444 | 10,529 | $ | 63,051 | 9.9 | % | ||||||||||||||||||||||||||||
2015 | 121 | 9,505 | 42,610 | 14.7 | % | 103 | 1,235 | 11,390 | 13.9 | % | 169 | 2,257 | 33,248 | 12.6 | % | 393 | 12,997 | 87,248 | 13.7 | % | ||||||||||||||||||||||||||||||||
2016 | 121 | 9,583 | 47,027 | 16.3 | % | 102 | 1,621 | 14,502 | 17.7 | % | 146 | 1,858 | 32,066 | 12.1 | % | 369 | 13,062 | 93,595 | 14.7 | % | ||||||||||||||||||||||||||||||||
2017 | 115 | 7,806 | 38,225 | 13.2 | % | 80 | 1,232 | 10,264 | 12.5 | % | 110 | 1,932 | 32,332 | 12.2 | % | 305 | 10,970 | 80,821 | 12.7 | % | ||||||||||||||||||||||||||||||||
2018 | 102 | 8,865 | 46,859 | 16.2 | % | 58 | 912 | 8,563 | 10.4 | % | 100 | 1,706 | 28,711 | 10.9 | % | 260 | 11,483 | 84,133 | 13.2 | % | ||||||||||||||||||||||||||||||||
2019 | 53 | 5,521 | 27,477 | 9.5 | % | 30 | 888 | 9,177 | 11.2 | % | 72 | 1,949 | 38,265 | 14.5 | % | 155 | 8,358 | 74,919 | 11.8 | % | ||||||||||||||||||||||||||||||||
2020 | 28 | 4,236 | 23,145 | 8.0 | % | 19 | 476 | 6,388 | 7.8 | % | 36 | 925 | 18,004 | 6.8 | % | 83 | 5,637 | 47,537 | 7.5 | % | ||||||||||||||||||||||||||||||||
2021 | 13 | 810 | 4,304 | 1.5 | % | 8 | 205 | 2,317 | 2.8 | % | 20 | 368 | 5,996 | 2.3 | % | 41 | 1,383 | 12,617 | 2.0 | % | ||||||||||||||||||||||||||||||||
2022 | 12 | 1,053 | 5,724 | 2.0 | % | 11 | 355 | 3,503 | 4.3 | % | 13 | 424 | 7,536 | 2.8 | % | 36 | 1,832 | 16,763 | 2.6 | % | ||||||||||||||||||||||||||||||||
2023 | 7 | 766 | 4,522 | 1.6 | % | 11 | 242 | 4,406 | 5.4 | % | 9 | 218 | 5,420 | 2.0 | % | 27 | 1,226 | 14,348 | 2.3 | % | ||||||||||||||||||||||||||||||||
Thereafter | 10 | 2,701 | 19,495 | 6.8 | % | 4 | 179 | 2,474 | 2.9 | % | 27 | 1,516 | 38,674 | 14.6 | % | 41 | 4,396 | 60,643 | 9.6 | % | ||||||||||||||||||||||||||||||||
Total | 708 | 58,537 | $ | 288,965 | 100.0 | % | 537 | 8,511 | $ | 82,104 | 100.0 | % | 909 | 14,825 | $ | 264,606 | 100.0 | % | 2,154 | 81,873 | $ | 635,675 | 100.0 | % | ||||||||||||||||||||||||||||
Joint Venture Properties in Operation: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
2014 | 8 | 550 | $ | 2,808 | 7.1 | % | 2 | 25 | $ | 747 | 25.0 | % | 37 | 532 | $ | 13,050 | 12.1 | % | 47 | 1,107 | $ | 16,605 | 11.0 | % | ||||||||||||||||||||||||||||
2015 | 7 | 577 | 2,307 | 5.9 | % | 2 | 9 | 260 | 8.7 | % | 23 | 218 | 4,930 | 4.6 | % | 32 | 804 | 7,497 | 5.0 | % | ||||||||||||||||||||||||||||||||
2016 | 15 | 1,427 | 6,208 | 15.8 | % | 1 | 37 | 1,056 | 35.3 | % | 27 | 413 | 10,113 | 9.3 | % | 43 | 1,877 | 17,377 | 11.5 | % | ||||||||||||||||||||||||||||||||
2017 | 10 | 1,210 | 5,012 | 12.7 | % | 2 | 25 | 754 | 25.2 | % | 25 | 283 | 6,540 | 6.0 | % | 37 | 1,518 | 12,306 | 8.2 | % | ||||||||||||||||||||||||||||||||
2018 | 14 | 1,698 | 7,745 | 19.7 | % | 1 | 7 | 175 | 5.8 | % | 22 | 131 | 4,237 | 3.9 | % | 37 | 1,836 | 12,157 | 8.1 | % | ||||||||||||||||||||||||||||||||
2019 | 3 | 547 | 3,154 | 8.0 | % | — | — | — | — | % | 25 | 300 | 8,099 | 7.5 | % | 28 | 847 | 11,253 | 7.5 | % | ||||||||||||||||||||||||||||||||
2020 | 3 | 837 | 3,535 | 9.0 | % | — | — | — | — | % | 8 | 135 | 2,651 | 2.4 | % | 11 | 972 | 6,186 | 4.1 | % | ||||||||||||||||||||||||||||||||
2021 | 2 | 521 | 2,280 | 5.8 | % | — | — | — | — | % | 11 | 188 | 5,519 | 5.1 | % | 13 | 709 | 7,799 | 5.2 | % | ||||||||||||||||||||||||||||||||
2022 | 4 | 804 | 3,340 | 8.5 | % | — | — | — | — | % | 9 | 127 | 3,800 | 3.5 | % | 13 | 931 | 7,140 | 4.7 | % | ||||||||||||||||||||||||||||||||
2023 | 1 | 308 | 1,682 | 4.3 | % | — | — | — | — | % | 8 | 1,198 | 47,580 | 43.9 | % | 9 | 1,506 | 49,262 | 32.7 | % | ||||||||||||||||||||||||||||||||
Thereafter | 3 | 306 | 1,312 | 3.2 | % | — | — | — | — | % | 4 | 34 | 1,742 | 1.7 | % | 7 | 340 | 3,054 | 2.0 | % | ||||||||||||||||||||||||||||||||
Total | 70 | 8,785 | $ | 39,383 | 100.0 | % | 8 | 103 | $ | 2,992 | 100.0 | % | 199 | 3,559 | $ | 108,261 | 100.0 | % | 277 | 12,447 | $ | 150,636 | 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, 2013.
21
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, 2013. 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 | ||
Home Depot U.S.A., Inc. | 1.5 | % | |
Amazon.com | 1.1 | % | |
Kellogg USA, Inc. | 1.1 | % | |
Wakefern Food Corp. | 0.9 | % | |
CEVA Logistics U.S., Inc. | 0.9 | % | |
Flowers Foods, Inc. | 0.8 | % | |
Ozburn Hessey Logistics, L.L.C. | 0.8 | % | |
Kmart of Pennsylvania, LP | 0.8 | % | |
Federal Express Corporation | 0.7 | % | |
DSC Logistics, Inc. | 0.6 | % | |
9.2 | % | ||
Percentage of | |||
Top 10 Office Tenants | Annual Rent | ||
The Vanguard Group, Inc. | 3.4 | % | |
GlaxoSmithKline, LLC | 1.9 | % | |
United States of America | 1.5 | % | |
Comcast Corporation | 1.5 | % | |
United Healthcare Services, Inc. | 1.3 | % | |
Fidelity National Information Services | 0.9 | % | |
WellCare Health Plans, Inc. | 0.8 | % | |
The Urban Institute | 0.8 | % | |
The Pennsylvania Hospital | 0.7 | % | |
Yellow Book USA, Inc. | 0.6 | % | |
13.4 | % |
The table below details the vacancy activity during the year ended December 31, 2013:
Year Ended | |||||||||||
December 31, 2013 | |||||||||||
Square Feet | |||||||||||
Wholly Owned Properties in Operation | JV Properties in Operation | Properties in Operation | |||||||||
Vacancy Activity | |||||||||||
Vacancy at January 1, 2013 | 5,062,507 | 1,386,608 | 6,449,115 | ||||||||
Acquisitions | 2,369,300 | — | 2,369,300 | ||||||||
Completed development | 1,637,285 | — | 1,637,285 | ||||||||
Dispositions | (833,991 | ) | (49,068 | ) | (883,059 | ) | |||||
Expirations | 17,842,834 | 2,959,839 | 20,802,673 | ||||||||
Property structural changes/other | (37,616 | ) | (13,900 | ) | (51,516 | ) | |||||
Leasing activity | (18,384,773 | ) | (3,239,084 | ) | (21,623,857 | ) | |||||
Vacancy at December 31, 2013 | 7,655,546 | 1,044,395 | 8,699,941 | ||||||||
Lease transaction costs per square foot (1) | $ | 3.27 | $ | 2.95 | $ | 3.22 |
(1) Transaction costs include tenant improvement and lease transaction costs.
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ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any material litigation as of December 31, 2013.
ITEM 4. MINE SAFETY DISCLOSURES
Not applicable.
23
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. As of December 31, 2013, these shares were traded under the symbol "LRY." Commencing on February 28, 2014, these shares are traded under the symbol "LPT." 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 | |||||||
2013 | |||||||||
Fourth Quarter | $38.12 | $32.12 | $0.475 | ||||||
Third Quarter | 40.33 | 33.76 | 0.475 | ||||||
Second Quarter | 44.70 | 34.84 | 0.475 | ||||||
First Quarter | 40.18 | 36.04 | 0.475 | ||||||
2012 | |||||||||
Fourth Quarter | $37.46 | $33.28 | $0.475 | ||||||
Third Quarter | 38.57 | 35.41 | 0.475 | ||||||
Second Quarter | 37.03 | 33.84 | 0.475 | ||||||
First Quarter | 35.72 | 30.91 | 0.475 |
As of February 26, 2014, the Common Shares were held by 937 holders of record. Since its initial public offering in 1994, the Company has paid regular and uninterrupted quarterly dividends.
Although the Company currently expects 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.
24
The following line graph compares the cumulative total shareholder return on Common Shares for the period beginning December 31, 2008 and ended December 31, 2013 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, 2008, and assuming reinvestment of dividends in all cases.
![](https://capedge.com/proxy/10-K/0001445305-14-000732/mdachart13.jpg)
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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 five years ended December 31, 2013. 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) | 2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||
Total operating revenue | $645,930 | $560,279 | $533,699 | $522,524 | $508,503 | |||||||||||||||
Income from continuing operations | $97,755 | $96,747 | $104,645 | $95,281 | $(5,433) | |||||||||||||||
Income from discontinued operations | $121,839 | $51,004 | $106,065 | $58,094 | $84,425 | |||||||||||||||
Net income | $219,594 | $147,751 | $210,710 | $153,375 | $78,992 | |||||||||||||||
Basic: | ||||||||||||||||||||
Income (loss) from continuing operations | $0.70 | $0.75 | $0.71 | $0.62 | $(0.23) | |||||||||||||||
Income from discontinued operations | $0.91 | $0.43 | $0.89 | $0.51 | $0.75 | |||||||||||||||
Income per common share/unit | $1.61 | $1.18 | $1.60 | $1.13 | $0.52 | |||||||||||||||
Diluted: | ||||||||||||||||||||
Income (loss) from continuing operations | $0.70 | $0.75 | $0.70 | $0.62 | $(0.23) | |||||||||||||||
Income from discontinued operations | $0.90 | $0.42 | $0.89 | $0.50 | $0.75 | |||||||||||||||
Income per common share/unit | $1.60 | $1.17 | $1.59 | $1.12 | $0.52 | |||||||||||||||
Dividends paid per common share | $1.90 | $1.90 | $1.90 | $1.90 | $1.90 | |||||||||||||||
Trust - weighted average number of shares outstanding - basic (1) | 130,180 | 116,863 | 114,755 | 112,924 | 107,550 | |||||||||||||||
Trust - weighted average number of shares outstanding - diluted (2) | 130,909 | 117,694 | 115,503 | 113,606 | 108,002 | |||||||||||||||
Operating Partnership - weighted average number of units outstanding - basic (1) | 133,858 | 120,623 | 118,624 | 116,871 | 111,568 | |||||||||||||||
Operating Partnership - weighted average number of units outstanding - diluted (2) | 134,587 | 121,454 | 119,372 | 117,553 | 112,020 | |||||||||||||||
Balance Sheet Data | DECEMBER 31, | |||||||||||||||||||
(In thousands) | 2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||
Net real estate | $ | 5,668,775 | $ | 4,316,307 | $ | 3,928,908 | $ | 3,673,255 | $ | 3,702,450 | ||||||||||
Total assets | $ | 6,775,560 | $ | 5,174,179 | $ | 4,986,165 | $ | 5,060,478 | $ | 5,224,496 | ||||||||||
Total indebtedness | $ | 3,253,519 | $ | 2,653,606 | $ | 2,219,354 | $ | 2,355,501 | $ | 2,452,428 | ||||||||||
Liberty Property Trust shareholders' equity | $ | 3,035,844 | $ | 2,091,012 | $ | 2,103,594 | $ | 2,082,186 | $ | 2,122,295 | ||||||||||
Owners' equity (Liberty Property Limited Partnership) | $ | 3,096,179 | $ | 2,217,820 | $ | 2,459,756 | $ | 2,438,552 | $ | 2,483,169 | ||||||||||
Other Data | YEAR ENDED DECEMBER 31, | |||||||||||||||||||
(Dollars in thousands) | 2013 | 2012 | 2011 | 2010 | 2009 | |||||||||||||||
Net cash provided by operating activities | $ | 315,965 | $ | 317,166 | $ | 317,724 | $ | 292,264 | $ | 307,201 | ||||||||||
Net cash used in investing activities | $ | (1,197,914 | ) | $ | (312,669 | ) | $ | (56,223 | ) | $ | (103,461 | ) | $ | (14,332 | ) | |||||
Net cash provided by (used in) financing activities | $ | 1,005,766 | $ | 12,690 | $ | (351,513 | ) | $ | (315,842 | ) | $ | (74,033 | ) | |||||||
Funds from operations available to common shareholders - diluted (3) | $ | 335,535 | $ | 312,992 | $ | 311,841 | $ | 312,138 | $ | 310,439 | ||||||||||
Total leaseable square footage of Wholly Owned Properties in Operation at end of period (in thousands) | 89,528 | 67,181 | 65,202 | 65,241 | 64,384 | |||||||||||||||
Total leaseable square footage of JV Properties in Operation at end of period (in thousands) | 13,491 | 14,161 | 14,164 | 14,422 | 13,786 | |||||||||||||||
Wholly Owned Properties in Operation at end of period | 712 | 582 | 597 | 637 | 639 | |||||||||||||||
JV Properties in Operation at end of period | 79 | 96 | 96 | 98 | 96 | |||||||||||||||
Wholly Owned Properties in Operation percentage leased at end of period | 91 | % | 92 | % | 92 | % | 90 | % | 89 | % | ||||||||||
JV Properties in Operation percentage leased at end of period | 92 | % | 90 | % | 89 | % | 83 | % | 88 | % |
26
(1) | Basic weighted average number of shares includes vested Common Shares (Liberty Property Trust); Common Units (Liberty Property Limited Partnership) outstanding during the year. |
(2) | Diluted weighted average number of shares 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 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. |
27
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 owns and operates industrial properties nationally and owns and operates office properties primarily in metro Philadelphia, Washington, D.C. and certain sunbelt cities. Additionally, the Company owns certain assets in the United Kingdom.
As of December 31, 2013, the Company owned and operated 489 industrial and 223 office properties (the “Wholly Owned Properties in Operation”) totaling 89.5 million square feet. In addition, as of December 31, 2013, the Company owned 16 properties under development, which when completed are expected to comprise 5.0 million square feet (the “Wholly Owned Properties under Development”) and 1,315 acres of developable land, substantially all of which is zoned for commercial use. Additionally, as of December 31, 2013, the Company had an ownership interest, through unconsolidated joint ventures, in 45 industrial and 34 office properties totaling 13.5 million square feet (the “JV Properties in Operation” and, together with the Wholly Owned Properties in Operation, the “Properties in Operation”), one property under development, which when completed is expected to comprise 203,000 square feet (the "JV Property under Development" and, collectively with the Wholly Owned Properties under Development, the "Properties under Development" and, collectively with the Properties in Operation, the "Properties") and 518 acres of developable land, substantially all of which is zoned for commercial use.
The Company focuses on creating value for shareholders and 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 expects its strategy with respect to product and market selection to favor industrial and metro-office properties and markets with strong demographic and economic fundamentals. Given the Company's desire to operate industrial properties on a national platform and based on analysis of its present markets the Company intends to operate a portfolio that derives approximately two-thirds of its net operating income from industrial properties and one-third from office properties. As of December 31, 2013, adjusting to remove the second tranche of the Portfolio Sale discussed below which closed on January 30, 2014, approximately 60% of the Company's net operating income came from industrial properties and 40% came from office properties.
Consistent with its strategy, on October 8, 2013, the Company completed the acquisition of 100% of the outstanding general partnership and limited partnership interests of the Cabot Industrial Value Fund III Operating Partnership, L.P. ("Cabot"). The purchase price for the acquisition (the "Cabot Acquisition") was $1.469 billion, which was paid through the assumption of approximately $229.8 million of mortgage debt and the remainder in cash. The Company funded the cash portion of the acquisition consideration through a combination of proceeds from an August 2013 offering of common shares, proceeds from a September 2013 offering of senior notes and draws under its $500 million revolving credit facility. Pursuant to the purchase of Cabot, the Company acquired a 100% ownership interest in 177 industrial assets totaling approximately 23.0 million square feet at a purchase price of approximately $64 per square foot. These assets are located in 24 markets.
Also consistent with its strategy, on November 7, 2013, the Company entered into an Agreement of Sale and Purchase pursuant to which the Company agreed to sell a real estate portfolio which included the Company’s Jacksonville, Florida portfolio in its entirety, all of the office properties in Maryland, Southern New Jersey and the Fort Washington suburb of Philadelphia and flex properties in Minnesota for a purchase price of $697.3 million. The properties consisted of 97 buildings containing an aggregate of 6.6 million square feet. On December 24, 2013, the Company closed on the first of two planned settlements under this agreement. The proceeds from the first settlement were $367.7 million and included 49 properties containing approximately 4.0 million square feet of space and 140 acres of land. The remaining 48 properties containing an aggregate of 2.6 million square feet and 19 acres of land were sold for $329.6 million.
Due to long-term trends that the Company believes favor industrial properties and indicate potential erosion in value of suburban office properties, the Company has increased its investment in industrial and metro-office properties and decreased its investment in suburban office properties. The short-term implication of these activities is a decrease in net cash from operating activities, as rental income from industrial properties is less than that from office properties. The Company anticipates that over time it will realize the benefits of these activities, including increasing rental rates and lower lease transaction costs. In 2013, in the aggregate, the net cash provided by operating activities, less customary capital expenditures and leasing transaction costs, was less than
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dividend distributions primarily due to acquisition and one time financing costs relating to the Cabot Acquisition. The Company will continue to evaluate its dividend distribution policy in light of these circumstances.
The Company’s operating results depend primarily upon income from rental operations and are substantially influenced by rental demand for the Properties in Operation. During the year ended December 31, 2013, the Company operated in a national economic environment characterized by high unemployment, low growth in GDP and low interest rates. Although this low interest rate environment has created opportunity for the Company to borrow money at a low rate of interest, the economy is in a state of transition following the economic dislocation that began in mid-2007 and although the downward pressure on rents has lessened, the economy is still in a general state of recovery. During the year ended December 31, 2013, the Company successfully leased 26.8 million square feet and attained occupancy of 91.4% for the Wholly Owned Properties in Operation and 92.3% for the JV Properties in Operation for a combined occupancy of 91.6% for the Properties in Operation as of that date. At December 31, 2012, occupancy for the Wholly Owned Properties in Operation was 92.5% and for the JV Properties in Operation was 90.2% for a combined occupancy for the Properties in Operation of 92.1%. During the year ended December 31, 2013, straight line rents on renewal and replacement leases were on average 1.0% lower than rents on expiring leases. The Company believes that average occupancy for its Properties in Operation will remain flat or increase by up to 1% for 2014 compared to 2013. Furthermore, the Company believes that straight line rents on renewal and replacement leases for 2014 will decrease by up to 5% as compared to rents on expiring leases.
WHOLLY OWNED CAPITAL ACTIVITY
Acquisitions
Pursuant to the Cabot acquisition, the Company acquired a 100% ownership interest in 177 industrial assets totaling approximately 23.0 million square feet for a purchase price of $1.469 billion. These assets are located in 24 markets.
In addition, during the year ended December 31, 2013, the Company acquired three industrial properties and one office property for an aggregate purchase price of $201.1 million. These properties contain 1.6 million square feet of leaseable space. The Company's 2013 acquisition properties were 90.6% leased as of December 31, 2013. The Company also acquired six parcels of land totaling 330 acres for $50.5 million. For 2014, the Company anticipates that wholly owned property acquisitions will range from $200 million to $400 million and believes that certain of the acquired properties will be either vacant or underleased. In addition for 2014, the Company anticipates that it will acquire land parcels in a range of $50 million to $100 million.
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, 2013, the Company realized proceeds of $507.7 million from the sale of 58 operating properties representing 5.1 million square feet and 157 acres of land. These totals include the first settlement of the Portfolio Sale. For 2014, the Company anticipates that proceeds from wholly owned property dispositions will range from $500 million to $650 million. This total includes the second settlement of the Portfolio Sale.
Development
During the year ended December 31, 2013, the Company brought into service seven Wholly Owned Properties under Development representing 2.9 million square feet and a Total Investment of $280.7 million and began construction on 13 Wholly Owned Properties under Development with a projected Total Investment of $350.2 million. As of December 31, 2013, the Company had 16 Wholly Owned Properties under Development, which are expected to comprise, upon completion, 5.0 million square feet and are expected to represent a Total Investment of $380.8 million. These Wholly Owned Properties under Development were 72.1% pre-leased as of December 31, 2013. In addition, pursuant to a 21,000 square foot lease that the Company has executed, the Company has agreed to start the development of a 75,000 square foot office building. The building is 27.6% leased and represents an anticipated Total Investment of $13.1 million. For 2014, the Company anticipates that wholly owned development deliveries will total between $250 million and $350 million and that during 2014 it will commence development on wholly owned properties with an expected aggregate Total Investment in a range from $400 million to $600 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 and lease transaction costs in the case of acquisitions, or land costs and land improvement, building improvement and lease transaction costs in the case of development projects, and, where appropriate, other development costs and carrying costs.
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UNCONSOLIDATED JOINT VENTURE ACTIVITY
The Company periodically enters into unconsolidated joint venture relationships in connection with the execution of its real estate operating strategy.
Acquisitions/Dispositions
During the year ended December 31, 2013, none of the unconsolidated joint ventures in which the Company held an interest acquired any properties.
During the year ended December 31, 2013, a joint venture in which the Company held a 20% interest sold one property, which contained 44,000 square feet, for proceeds of $9.6 million. During the year ended December 31, 2013, a joint venture in which the Company held a 25% interest sold four properties, which contained 171,000 square feet, for aggregate proceeds of $31.5 million.
Consistent with the Company's strategy, from time to time the Company may consider transferring assets to or purchasing assets from an unconsolidated joint venture in which the Company holds an interest.
In October 2012, Blythe Valley JV Sarl, a joint venture in which the Company held an interest, defaulted on its mortgage loan. The mortgage loan was secured by all of the operating properties and land of the joint venture. In February 2013, the lender appointed a receiver, effectively taking control of the assets securing its loan. During the year ended December 31, 2012, the joint venture recorded an impairment charge, the Company's share of which was sufficient to bring the Company's investment in the joint venture to zero. The Company's share of this impairment charge was $4.6 million and is reflected in equity in (loss) earnings of unconsolidated joint ventures in the Company's 2012 consolidated statement of comprehensive income.
Development
During the year ended December 31, 2013, a joint venture in which the Company held a 25% interest started one property under development, which is expected to comprise, upon completion, 203,000 square feet and is expected to represent a Total Investment of $11.8 million. As of December 31, 2013, this was the only property under development for unconsolidated joint ventures in which the Company held an interest. For 2014, the Company anticipates that unconsolidated joint venture development deliveries will total up to $40 million.
On January 15, 2014, the Company announced that it has reached preliminary terms to develop, in a joint venture with Comcast Corporation, the “Comcast Innovation and Technology Center,” in Philadelphia, PA. The proposed project includes a 59-story, 1.5 million square foot tower incorporating 1.3 million square feet of office space and a 200+ room hotel. The project is expected to represent a Total Investment of $900 million to the joint venture, which we expect will be 20% owned by the Company. The Company is in discussions with Comcast Corporation regarding the formation of this joint venture, but there is no assurance that the joint venture will be finalized or that the development will be commenced. If the development does proceed, it is anticipated that it would commence in the latter half of 2014 and the project would be completed in late 2017. In addition to the potential project with Comcast Corporation, the Company anticipates that during 2014 unconsolidated joint ventures in which the Company owns an interest will commence development with an aggregate Total Investment of up to $60 million.
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 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.
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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
Acquisition costs related to the purchase of vacant operating properties and land are capitalized and included in net real estate. Acquisition costs related to the purchase of operating properties with in-place tenants are expensed as incurred. Acquisition-related expenses related to the Cabot Acquisition for the year ended December 31, 2013 were $7.6 million. In addition, the Company incurred $2.6 million in acquisition expenses related to other acquisitions for the year ended December 31, 2013. Acquisition-related expenses for the years ended December 31, 2012 and 2011 were $2.9 million and $2.6 million, respectively.
Expenditures directly related to the 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. These capitalized costs include pre-construction costs essential to the development of the property, construction costs, interest costs, real estate taxes, development related compensation 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. The total of capitalized compensation costs directly related to the development of property for the years ended December 31, 2013, 2012 and 2011 was $3.3 million, $2.1 million and $1.3 million, respectively.
Certain employees of the Company are compensated for leasing services related to the Company's properties. The compensation directly related to signed leases is capitalized and amortized as a deferred leasing cost. The total of this capitalized compensation was $2.8 million, $2.4 million and $2.1 million for the years ended December 31, 2013, 2012 and 2011, respectively.
Capitalized interest for the years ended December 31, 2013, 2012 and 2011 was $9.6 million, $9.9 million and $3.0 million, respectively.
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, 2013 and 2012, the Company's allowance for doubtful accounts totaled $7.8 million and $7.0 million, respectively. The Company had bad debt expense of $1.8 million and $540,000 for the years ended December 31, 2013 and 2012, respectively, as well as a net recovery of bad debts of $1.9 million for the year ended December 31, 2011.
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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 and holding periods. For these assumptions, 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, 2013, 2012 and 2011, the Company recognized impairment losses of $1.1 million, $2.3 million and $7.8 million, respectively. The determination of whether an impairment exists requires the Company to make estimates, judgments and assumptions about the future cash flows.
Intangibles
The Company allocates the purchase price of real estate acquired to land, building and improvements and intangibles based on the 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. Such amounts are also included in origination costs. 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 to rental income for market rental rate differences and to depreciation and amortization for origination costs 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 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 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.
The Company determined that one investment in a joint venture had an other-than-temporary impairment of $683,000 during the year ended December 31, 2012. No impairment losses on the Company's investments in unconsolidated joint ventures were recognized during the years ended December 31, 2013 or 2011.
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During the year ended December 31, 2013 the Kings Hill Unit Trust joint venture recorded an impairment charge. The Company's share of this impairment charge was $783,000 and is reflected in equity in earnings (loss) of unconsolidated joint ventures in the Company's 2013 consolidated statement of comprehensive income.
During the year ended December 31, 2012 the Blythe Valley JV Sarl joint venture recorded an impairment charge, the Company's share of which was sufficient to bring the Company's investment in the joint venture to zero. The Company's share of this impairment charge was $4.6 million and is reflected in equity in earnings (loss) of unconsolidated joint ventures in the Company's 2012 consolidated statement of comprehensive income.
Derivative Instruments and Hedging Activities
Derivative instruments and hedging activities require management to make judgments on the nature of its derivatives and their effectiveness as hedges. These judgments determine if the changes in fair value of the derivative instruments are reported in the consolidated statements of comprehensive income as a component of net income or as a component of other comprehensive income and as a component of equity on the Consolidated Balance Sheets. While management believes its judgments are reasonable, a change in a derivative’s effectiveness as a hedge could materially affect expenses, net income and equity.
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, 2013 with the results of operations of the Company for the year ended December 31, 2012, and the results of operations of the Company for the year ended December 31, 2012 with the results of operations of the Company for the year ended December 31, 2011. As a result of the varying levels of development, acquisition and disposition activities by the Company in 2013, 2012 and 2011, 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, 2013 to Year Ended December 31, 2012
Overview
The Company’s average gross investment in operating real estate owned for the year ended December 31, 2013 increased to $4,892.1 million from $4,021.5 million for the year ended December 31, 2012. This increase in operating real estate was primarily due to the Cabot Acquisition and resulted in increases in rental revenue, operating expense reimbursement, rental property operating expenses, real estate taxes and depreciation and amortization. Rental property operating expenses include utilities, insurance, janitorial, landscaping, snow removal and other costs necessary to maintain a property.
Total operating revenue increased to $645.9 million for the year ended December 31, 2013 from $560.3 million for the year ended December 31, 2012. This $85.6 million increase was primarily due to an increase in average gross investment in operating real estate and an increase in occupancy. This increase was partially offset by a decrease in rental rates as well as a decrease in termination fees, which totaled $1.5 million for the year ended December 31, 2013 as compared to $2.5 million for the year ended December 31, 2012. Changes in occupancy and rental rates are detailed below in "Same Store." 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 following table identifies changes in reportable segments (dollars in thousands):
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Reportable Segment Net Operating Income:
Year Ended December 31, | PERCENTAGE INCREASE (DECREASE) | |||||||||||
2013 | 2012 | |||||||||||
Industrial - | Lehigh/Central PA | $ | 68,504 | $ | 65,566 | 4.5 | % | |||||
Chicago/Milwaukee | 11,726 | 5,329 | 120.0 | % | (1) | |||||||
Houston | 22,632 | 17,862 | 26.7 | % | (1) | |||||||
Carolinas | 20,434 | 18,733 | 9.1 | % | ||||||||
Other | 60,531 | 51,863 | 16.7 | % | (1) | |||||||
Industrial/Office - | Minnesota | 30,016 | 26,348 | 13.9 | % | (1) | ||||||
South Florida | 20,943 | 18,921 | 10.7 | % | (1) | |||||||
Richmond/Hampton Roads | 24,063 | 24,762 | (2.8 | %) | ||||||||
Arizona | 17,189 | 14,228 | 20.8 | % | (1) | |||||||
United Kingdom | 1,924 | (257 | ) | 848.6 | % | (1) | ||||||
Other | 50,456 | 43,711 | 15.4 | % | (1) | |||||||
Office - | Philadelphia | 23,587 | 20,527 | 14.9 | % | (1) | ||||||
Southeastern PA | 91,193 | 98,729 | (7.6 | %) | ||||||||
Washington D.C. | 6,807 | 2,908 | 134.1 | % | (1) | |||||||
Total reportable segment net operating income | $ | 450,005 | $ | 409,230 | 10.0 | % |
(1) The change was primarily due to an increase in average gross investment in operating real estate.
Same Store
Property level operating income, exclusive of Termination Fees, for the Same Store properties increased to $419.5 million for the year ended December 31, 2013 from $414.3 million for the year ended December 31, 2012, on a straight line basis (which recognizes rental revenue evenly over the life of the lease), and increased to $417.4 million for the year ended December 31, 2013 from $409.3 million for the year ended December 31, 2012 on a cash basis.
The same store results were affected by an increase in occupancy and decreases in cash and straight line rental rates. The following details the Same Store occupancy and rental rates for the respective periods:
Year Ended | |||||||
December 31, | |||||||
2013 | 2012 | ||||||
Average occupancy % | 93.7 | % | 92.7 | % | |||
Average rental rate - cash basis (1) | $ | 7.78 | $ | 7.81 | |||
Average rental rate - straight line basis (2) | $ | 11.25 | $ | 11.32 |
(1) Represents the average contractual rent per square foot for the year ended December 31, 2013 or 2012 for tenants in occupancy in the Same Store properties. Cash rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant was within a free rent period at December 31, 2013 or 2012 its rent would equal zero for purposes of this metric.
(2) Straight line rent and operating expense reimbursement represents the average straight line rent including operating expense recoveries per square foot for the year ended December 31, 2013 or 2012 for tenants in occupancy in the Same Store properties.
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 490 properties totaling approximately 57.1 million square feet owned on January 1, 2012. Acquisitions and completed development during the years ended December 31, 2012 and 2013 are excluded from the Same Store properties. Properties obtained through acquisition and completed development are included in Same Store when they have been
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purchased in the case of acquisitions, and are stabilized in the case of completed development, prior to the beginning of the earliest year presented in the comparison. The 50 properties sold during 2012 and the 58 properties sold during 2013 are also excluded.
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, 2013 and 2012. Same Store property level operating income and cash basis property level operating income are non-US GAAP measures and do not represent income before gain on property dispositions, income taxes and equity in earnings (loss) of unconsolidated joint ventures 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).
Year Ended | |||||||
December 31, 2013 | December 31, 2012 | ||||||
Same Store: | |||||||
Rental revenue | $ | 423,251 | $ | 421,124 | |||
Operating expenses: | |||||||
Rental property expense | 120,710 | 121,049 | |||||
Real estate taxes | 70,646 | 68,469 | |||||
Operating expense recovery | (187,630 | ) | (182,669 | ) | |||
Unrecovered operating expenses | 3,726 | 6,849 | |||||
Property level operating income | 419,525 | 414,275 | |||||
Less straight line rent | 2,123 | 4,948 | |||||
Cash basis property level operating income | $ | 417,402 | $ | 409,327 | |||
Reconciliation of non-GAAP financial measure – Same Store: | |||||||
Cash basis property level operating income | $ | 417,402 | $ | 409,327 | |||
Straight line rent | 2,123 | 4,948 | |||||
Property level operating income | 419,525 | 414,275 | |||||
Non-same store property level operating income - continuing operations | 61,943 | 4,598 | |||||
Less: Property level operating income – properties held for sale at December 31, 2013 | (31,573 | ) | (31,197 | ) | |||
Termination fees | 1,500 | 2,475 | |||||
General and administrative expense | (74,564 | ) | (64,686 | ) | |||
Depreciation and amortization expense | (173,784 | ) | (135,523 | ) | |||
Other income (expense) | (117,236 | ) | (94,618 | ) | |||
Gain on property dispositions | 8,676 | 3,080 | |||||
Income taxes | (2,799 | ) | (976 | ) | |||
Equity in earnings (loss) of unconsolidated joint ventures | 6,067 | (681 | ) | ||||
Discontinued operations (1) | 121,839 | 51,004 | |||||
Net income | $ | 219,594 | $ | 147,751 |
(1) | Includes Termination Fees of $2.0 million and $1.8 million for the years ended December 31, 2013 and 2012, respectively. |
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General and Administrative
General and administrative expenses increased to $74.6 million for the year ended December 31, 2013 compared to $64.7 million for the year ended December 31, 2012. These increases were primarily due to increases in acquisition-related expenses and compensation. Acquisition-related expenses related to the Cabot Acquisition for the year ended December 31, 2013 were $7.6 million. In addition, the Company incurred $2.6 million in acquisition expenses related to other acquisitions for the year ended December 31, 2013. Acquisition-related expenses for the year ended December 31, 2012 were $2.9 million. General and administrative expenses include salaries, wages and incentive compensation for general and administrative staff along with related costs, consulting, marketing, public company expenses, costs associated with the acquisition of properties and other general and administrative costs.
Depreciation and Amortization
Depreciation and amortization increased to $173.8 million for the year ended December 31, 2013 from $135.5 million for the year ended December 31, 2012. This increase was primarily due to the increased investment in operating real estate.
Interest Expense
Interest expense increased to $127.1 million for the year ended December 31, 2013 from $103.4 million for the year ended December 31, 2012. This increase was primarily due to the increase in the average debt outstanding to $2,843.6 million for the year ended December 31, 2013 from $2,425.1 million for the year ended December 31, 2012. This increase in average debt was primarily due to financing related to and mortgage loans assumed in the Cabot Acquisition. This was partially offset by a decrease in the weighted average interest rate to 5.1% for the year ended December 31, 2013 from 5.3% for the year ended December 31, 2012. The increase was also partially due to a decrease in interest capitalized during the year ended December 31, 2013 compared to 2012.
Interest expense allocated to discontinued operations for the year ended December 31, 2013 and 2012 was $15.9 million and $19.8 million, respectively. This decrease was due to the level of dispositions in 2013 compared to 2012.
Equity in Earnings (Loss) of Unconsolidated Joint Ventures
Equity in earnings (loss) of unconsolidated joint ventures increased to income of $6.1 million for the year ended December 31, 2013 from a loss of $681,000 for the year ended December 31, 2012. This increase was primarily due to an impairment charge in the Blythe Valley JV Sarl joint venture during the year ended December 31, 2012, the Company's share of which was $4.6 million as well as an impairment charge of $683,000 relating to an other-than-temporary impairment of one of Company's investments in unconsolidated joint ventures. During the year ended December 31, 2013 the Kings Hill Unit Trust joint venture recorded an impairment charge, the Company's share of which was $783,000.
Other
Gain on property dispositions increased to $8.7 million for the year ended December 31, 2013 from $3.1 million for the year ended December 31, 2012.
Income from discontinued operations increased to $121.8 million for the year ended December 31, 2013 from $51.0 million for the year ended December 31, 2012. This increase was primarily due to an increase in gains recognized on sales which were $95.4 million for the year ended December 31, 2013 and $12.4 million for the year ended December 31, 2012.
As a result of the foregoing, the Company’s net income increased to $219.6 million for the year ended December 31, 2013 from $147.8 million for the year ended December 31, 2012.
Comparison of Year Ended December 31, 2012 to Year Ended December 31, 2011
Overview
The Company's average gross investment in operating real estate owned for the year ended December 31, 2012 increased to $4,018.1 million from $3,568.6 million for the year ended December 31, 2011. This increase in operating real estate resulted in increases in rental revenue, operating expense reimbursement, rental property operating expenses, real estate taxes and depreciation and amortization. Rental property operating expenses include utilities, insurance, janitorial, landscaping, snow removal and other costs necessary to maintain a property.
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Total operating revenue increased to $560.3 million for the year ended December 31, 2012 from $533.7 million for the year ended December 31, 2011. This $26.6 million increase was primarily due to the increase in investment in operating real estate and an increase in termination fees, which totaled $2.5 million for the year ended December 31, 2012 as compared to $2.4 million for the year ended December 31, 2011. These increases were partially offset by a decrease in rental rates. Changes in occupancy and rental rates are detailed below in "Same Store." 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). The following table identifies changes in reportable segments (dollars in thousands):
Reportable Segment Net Operating Income:
Year Ended December 31, | PERCENTAGE INCREASE (DECREASE) | |||||||||||
2012 | 2011 | |||||||||||
Industrial - | Lehigh/Central PA | $ | 65,566 | $ | 64,786 | 1.2 | % | |||||
Chicago/Milwaukee | 5,329 | 10,581 | (49.6 | %) | (1) | |||||||
Houston | 17,862 | 16,379 | 9.1 | % | ||||||||
Carolinas | 18,733 | 19,471 | (3.8 | %) | ||||||||
Other | 51,863 | 54,802 | (5.4 | %) | ||||||||
Industrial/Office - | Minnesota | 26,348 | 27,701 | (4.9 | %) | |||||||
South Florida | 18,921 | 19,431 | (2.6 | %) | ||||||||
Richmond/Hampton Roads | 24,762 | 29,324 | (15.6 | %) | (1) | |||||||
Arizona | 14,228 | 13,453 | 5.8 | % | ||||||||
United Kingdom | (257 | ) | (178 | ) | (44.4 | %) | ||||||
Other | 43,711 | 44,692 | (2.2 | %) | ||||||||
Office - | Philadelphia | 20,527 | 20,504 | 0.1 | % | |||||||
Southeastern PA | 98,729 | 101,982 | (3.2 | %) | ||||||||
Washington D.C. | 2,908 | (1,134 | ) | 356.4 | % | (2) | ||||||
Total reportable segment net operating income | $ | 409,230 | $ | 421,794 | (3.0 | %) |
(1) These decreases are primarily due to sales of operating properties during the year ended December 31, 2012.
(2) The increase was primarily due to an increase in average gross investment in operating real estate.
Same Store
Property level operating income, exclusive of Termination Fees, for the Prior Year Same Store properties decreased to $450.3 million for the year ended December 31, 2012 from $453.8 million for the year ended December 31, 2011, on a straight line basis, and decreased to $447.1 million for the year ended December 31, 2012 from $448.2 million for the year ended December 31, 2011 on a cash basis.
The same store results were affected by one-time reductions in certain operating expense items during the year ended December 31, 2011 that did not occur during the same period in 2012, decreases in cash and straight line rental rates and an increase in occupancy. The following details the Prior Year Same Store occupancy and rental rates for the respective periods:
Year Ended | |||||||
December 31, | |||||||
2012 | 2011 | ||||||
Average occupancy % | 93.1 | % | 91.9 | % | |||
Average rental rate - cash basis (1) | $ | 8.30 | $ | 8.39 | |||
Average rental rate - straight line basis (2) | $ | 12.01 | $ | 12.04 |
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(1) Represents the average contractual rent per square foot for the year ended December 31, 2012 or 2011 for tenants in occupancy in Prior Year Same Store properties. Net rent does not include the tenant's obligation to pay property operating expenses and real estate taxes. If a tenant was within a free rent period its rent would equal zero for purposes of this metric.
(2) Straight line rent and operating expense reimbursement represents the average straight line rent including operating expense recoveries per square foot for the year ended December 31, 2012 or 2011 for tenants in occupancy in the Prior Year Same Store 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 526 properties totaling approximately 58.0 million square feet owned on January 1, 2011. Acquisitions and completed development during the years ended December 31, 2011 and 2012 are excluded from the Same Store properties. Properties obtained through acquisition and completed development are included in Same Store when they have been purchased in the case of acquisitions, and are stabilized in the case of completed development, prior to the beginning of the earliest year presented in the comparison. The 62 properties sold during 2011 and the 50 properties sold during 2011 are also excluded.
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, 2012 and 2011. 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 and equity in (loss) earnings of unconsolidated joint ventures 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).
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Year Ended | |||||||
December 31, 2012 | December 31, 2011 | ||||||
Prior Year Same Store: | |||||||
Rental revenue | $ | 454,194 | $ | 457,219 | |||
Operating expenses: | |||||||
Rental property expense | 130,815 | 127,238 | |||||
Real estate taxes | 72,658 | 73,841 | |||||
Operating expense recovery | (199,621 | ) | (197,619 | ) | |||
Unrecovered operating expenses | 3,852 | 3,460 | |||||
Property level operating income | 450,342 | 453,759 | |||||
Less straight line rent | 3,266 | 5,519 | |||||
Cash basis property level operating income | $ | 447,076 | $ | 448,240 | |||
Reconciliation of non-GAAP financial measure – Prior Year Same Store: | |||||||
Cash basis property level operating income | $ | 447,076 | $ | 448,240 | |||
Straight line rent | 3,266 | 5,519 | |||||
Property level operating income | 450,342 | 453,759 | |||||
Non-same store property level operating income - continuing operations | 18,055 | 3,704 | |||||
Less: Property level operating income – 2013 discontinued operations | (80,721 | ) | (83,561 | ) | |||
Termination fees | 2,475 | 2,497 | |||||
General and administrative expense | (64,686 | ) | (59,186 | ) | |||
Depreciation and amortization expense | (135,523 | ) | (126,218 | ) | |||
Other income (expense) | (94,618 | ) | (93,851 | ) | |||
Gain on property dispositions | 3,080 | 5,025 | |||||
Income taxes | (976 | ) | (1,020 | ) | |||
Equity in (loss) earnings of unconsolidated joint ventures | (681 | ) | 3,496 | ||||
Discontinued operations at December 31, 2012 (1) | 13,921 | 70,649 | |||||
2013 discontinued operations (1) | 37,083 | 35,416 | |||||
Net income | $ | 147,751 | $ | 210,710 |
(1) | Includes Termination Fees of $1.8 million and $1.6 million in the aggregate for the years ended December 31, 2012 and 2011, respectively. |
General and Administrative
General and administrative expenses increased to $64.7 million for the year ended December 31, 2012 from $59.2 million for the year ended December 31, 2011. This increase was primarily due to increases in compensation, the writeoff of costs for canceled projects and costs associated with operating initiatives. General and administrative expenses include salaries, wages and incentive compensation for general and administrative staff along with related costs, consulting, marketing, public company expenses, costs associated with the acquisition of properties and other general and administrative costs.
Depreciation and Amortization
Depreciation and amortization increased to $135.5 million for the year ended December 31, 2012 from $126.2 million for the year ended December 31, 2011. The increase was primarily due to the increased investment in operating real estate.
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Interest Expense
Interest expense increased to $103.4 million for the year ended December 31, 2012 from $102.0 million for the year ended December 31, 2011. This increase was primarily due to an increase in the average debt outstanding, which was $2,425.1 million for the year ended December 31, 2012, compared to $2,214.9 million for the year ended December 31, 2011. The increase was partially offset by a decrease in the weighted average interest rate to 5.3% for the year ended December 31, 2012 from 5.8% for the year ended December 31, 2011 as well as an increase in interest capitalized during the year ended December 31, 2012 due to an increase in development activity.
Interest expense allocated to discontinued operations for the years ended December 31, 2012 and 2011 was $19.8 million and $29.1 million, respectively. This decrease was due to the level of dispositions in 2012 compared to 2011.
Other
Gain on property dispositions decreased to $3.1 million for the year ended December 31, 2012 from $5.0 million for the year ended December 31, 2011.
Income from discontinued operations decreased to $51.0 million from $106.1 million for the year ended December 31, 2012 compared to the year ended December 31, 2011. The decrease was due to a decrease in gains recognized on sales which were $12.4 million for the year ended December 31, 2012 compared to $60.6 million for the year ended December 31, 2011.
As a result of the foregoing, the Company's net income decreased to $147.8 million for the year ended December 31, 2012 from $210.7 million for the year ended December 31, 2011.
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 $300 million to $500 million to fund its investment in development properties in 2014. The Company’s 2014 debt maturities total approximately $213.7 million. The Company anticipates that it will invest $200 million to $400 million in property acquisitions and $50 million to $100 million in land acquisitions in 2014. The Company expects to realize approximately $500 million to $650 million in proceeds from asset sales in 2014. 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, 2013, the Company had cash and cash equivalents of $214.9 million, including $51.5 million in restricted cash.
Net cash provided by operating activities decreased to $316.0 million for the year ended December 31, 2013 from $317.2 million for the year ended December 31, 2012. This decrease primarily related to a reduction in restricted cash during 2012 related to the distribution of land sales proceeds in the United Kingdom. This was partially offset by an increase in operating income resulting from the Cabot Acquisition. 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 $1,197.9 million for the year ended December 31, 2013 compared to $312.7 million for the year ended December 31, 2012. This $885.2 million increase primarily related to cash expended for the Cabot Acquisition partially offset by an increase in net proceeds from dispositions of properties and land including $367.7 million in proceeds from the first settlement of the Portfolio Sale.
Net cash provided by financing activities was $1,005.8 million for the year ended December 31, 2013 compared to $12.7 million for the year ended December 31, 2012. This $993.1 million increase was primarily due to an increase in net proceeds from the issuance of common shares used to fund the Cabot Acquisition. Net cash provided by financing activities includes proceeds from the issuance of equity and debt, net of debt repayments, equity repurchases and shareholder distributions.
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 due 2011.
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In February 2012, the Company closed on a mortgage with $45.0 million of available funds bearing interest at 4.84%. As of December 31, 2013, there was $44.5 million outstanding on this loan. The net proceeds from this mortgage were used for construction costs on a property under development that was placed into service during the year ended December 31, 2013.
In June 2012, the Company issued $400.0 million of 4.125% senior unsecured notes due 2022. The net proceeds from this issuance were used to repay borrowings under the Company's unsecured credit facility and for general corporate purposes.
In August 2012, the Company used proceeds from its unsecured credit facility together with available cash on hand to repay $230.1 million of 10-year, 6.375% senior unsecured notes due August 2012.
In December 2012, the Company issued $300.0 million of 3.375% senior unsecured notes due 2023. The net proceeds from this issuance were used to repay borrowings under the Company's unsecured credit facility and for general corporate purposes.
During the year ended December 31, 2012, the Company redeemed $32.5 million of outstanding 6.65% Series F Cumulative Redeemable Preferred Units for $26.0 million. Also, the Company redeemed $95.0 million of outstanding 7.45% Series B Cumulative Redeemable Preferred Units and $100.0 million of outstanding 7.40% Series H Cumulative Redeemable Preferred Units at par.
In September 2013, the Company issued $450.0 million of 4.40% senior unsecured notes due 2024. The net proceeds from the offering were used to fund a portion of the cash consideration payable for the Cabot Acquisition.
In October 2013, as part of the Cabot Acquisition, the Company assumed $229.8 million in mortgages bearing interest at a weighted average rate of 5.85% with maturity dates from 2018 to 2021.
The Company sold 1.9 million common shares through its continuous offering program during the year ended December 31, 2013. The aggregate proceeds of $75.0 million were used to pay down outstanding borrowings under the Company's unsecured credit facility and for general corporate purposes.
In August 2013, the Company issued 24.2 million common shares for net proceeds of $834.1 million. The net proceeds from the offering were used to fund a portion of the cash consideration payable for the Cabot Acquisition. Prior to this use, the net proceeds were used for general corporate purposes which included the repayment of borrowings under the Company's credit facility.
During the year ended December 31, 2013, the Company redeemed or repurchased $20.0 million of outstanding 7.00% Series E Cumulative Redeemable Preferred Units, $17.5 million of outstanding 6.65% Series F Cumulative Redeemable Preferred Units and $27.0 million of outstanding 6.70% Series G Cumulative Redeemable Preferred Units, all at par.
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, 2013, a portion of these activities were funded through an unsecured $500 million credit facility. The Company has maintained an unsecured credit facility throughout 2011, 2012 and 2013. 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 at the Company's option, subject to the payment of a stated fee. Based upon the Company's credit ratings at December 31, 2013, borrowings under the facility would bear interest at LIBOR plus 107.5 basis points. Subsequent to December 31, 2013, as a result of changes in the Company's credit rating, this rate was increased to LIBOR plus 125 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, 2013, the Company’s debt to gross assets ratio was 40.9% and for the year ended December 31, 2013, the fixed charge coverage ratio was 3.0x. 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, 2013, $545.3 million (including $105.2 million fixed via a swap arrangement - see Footnote 21 in the notes to the consolidated financial statements) in mortgage loans and $2,708.2 million in unsecured notes were outstanding with a weighted average interest rate of 5.0%. The interest rates on $3,237.5 million of mortgage loans and unsecured notes are fixed and range from 3.0% to 7.5%. The weighted average remaining term for the mortgage loans and unsecured notes is 5.9 years.
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The Company's contractual obligations, as of December 31, 2013, are as follows (in thousands):
PAYMENTS DUE BY PERIOD | ||||||||||||||||||||
LESS THAN 1 | MORE THAN | |||||||||||||||||||
Contractual Obligations (2) | TOTAL | YEAR | 1-3 YEARS | 3-5 YEARS | 5 YEARS | |||||||||||||||
Long-term debt (1) | $ | 3,242,291 | $ | 366,330 | $ | 1,112,358 | $ | 605,439 | $ | 1,158,164 | ||||||||||
Land purchase obligations | 52,752 | 14,945 | 37,807 | — | — | |||||||||||||||
Operating lease obligations | 5,564 | 877 | 1,170 | 535 | 2,982 | |||||||||||||||
Share of debt of unconsolidated joint ventures (1) | 290,949 | 16,126 | 127,936 | 121,048 | 25,839 | |||||||||||||||
Tenant contractual obligations | 38,114 | 34,302 | 3,335 | 302 | 175 | |||||||||||||||
Share of tenant contractual obligations of unconsolidated joint ventures | 1,910 | 1,910 | — | — | — | |||||||||||||||
Letter of credit | 4,274 | 4,274 | — | — | — | |||||||||||||||
Share of letter of credit of unconsolidated joint ventures | 1,250 | 1,250 | — | — | — | |||||||||||||||
Land improvement and renovation commitments | 16,231 | 16,231 | — | — | — | |||||||||||||||
Development in progress | 160,501 | 139,072 | 21,429 | — | — | |||||||||||||||
Share of development in progress of unconsolidated joint ventures | 2,389 | 1,509 | 880 | — | — | |||||||||||||||
Development commitment | 13,095 | 10,696 | 2,399 | — | — | |||||||||||||||
Total | $ | 3,829,320 | $ | 607,522 | $ | 1,307,314 | $ | 727,324 | $ | 1,187,160 |
(1) | Includes principal and interest payments. Interest payments assume Credit Facility borrowings and interest rates remain at the December 31, 2013 level until maturity. |
(2) | The Company is contractually committed to build a minimum of 60,000 square feet of building space every two years at the Navy Yard Corporate Center in Philadelphia, with certain rights to defer these biannual requirements. The failure by the Company to meet these milestones could result in the loss of the Company’s exclusive development rights with respect to the Navy Yard Corporate Center. |
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, remaining capacity of $125.0 million under the Company's at-the-market equity offering program and net cash provided by operating activities. Additionally, the Company expects to incur variable rate debt, including borrowings under the Credit Facility, from time to time.
The Company's annual Common Share dividend paid was $1.90 per share in 2013, 2012 and 2011.
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, 2013, the Company had investments in and advances to unconsolidated joint ventures totaling $179.7 million (see Note 7 to the Company's Consolidated Financial Statements included in this report).
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
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(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.
Funds from operations (“FFO”) available to common shareholders for the year ended December 31, 2013, 2012, and 2011 are as follows (in thousands, except per share amounts):
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
Reconciliation of net income to FFO - basic: | |||||||||||
Net income available to common shareholders | $ | 209,738 | $ | 137,436 | $ | 183,999 | |||||
Basic - income available to common shareholders | 209,738 | 137,436 | 183,999 | ||||||||
Basic - income available to common shareholders per weighted average share | $ | 1.61 | $ | 1.18 | $ | 1.60 | |||||
Adjustments: | |||||||||||
Depreciation and amortization of unconsolidated joint ventures | 13,152 | 14,152 | 14,452 | ||||||||
Depreciation and amortization | 201,731 | 164,615 | 168,435 | ||||||||
Gain on property dispositions | (94,934 | ) | (7,589 | ) | (61,198 | ) | |||||
Noncontrolling interest share in addback for depreciation and amortization and gain on property dispositions | (3,171 | ) | (5,286 | ) | (3,926 | ) | |||||
Funds from operations available to common shareholders – basic | $ | 326,516 | $ | 303,328 | $ | 301,762 | |||||
Basic Funds from operations available to common shareholders per weighted average share | $ | 2.51 | $ | 2.60 | $ | 2.63 | |||||
Reconciliation of net income to FFO - diluted: | |||||||||||
Net income available to common shareholders | $ | 209,738 | $ | 137,436 | $ | 183,999 | |||||
Diluted - income available to common shareholders | 209,738 | 137,436 | 183,999 | ||||||||
Diluted - income available to common shareholders per weighted average share | $ | 1.60 | $ | 1.17 | $ | 1.59 | |||||
Adjustments: | |||||||||||
Depreciation and amortization of unconsolidated joint ventures | 13,152 | 14,152 | 14,452 | ||||||||
Depreciation and amortization | 201,731 | 164,615 | 168,435 | ||||||||
Gain on property dispositions | (94,934 | ) | (7,589 | ) | (61,198 | ) | |||||
Noncontrolling interest less preferred share distributions | 5,848 | 4,378 | 6,153 | ||||||||
Funds from operations available to common shareholders - diluted | $ | 335,535 | $ | 312,992 | $ | 311,841 | |||||
Diluted Funds from operations available to common shareholders per weighted average share | $ | 2.49 | $ | 2.58 | $ | 2.61 | |||||
Reconciliation of weighted average shares: | |||||||||||
Weighted average common shares - all basic calculations | 130,180 | 116,863 | 114,755 | ||||||||
Dilutive shares for long term compensation plans | 729 | 831 | 748 | ||||||||
Diluted shares for net income calculations | 130,909 | 117,694 | 115,503 | ||||||||
Weighted average common units | 3,678 | 3,760 | 3,869 | ||||||||
Diluted shares for Funds from operations calculations | 134,587 | 121,454 | 119,372 |
Inflation
Inflation has remained relatively low in recent years, and as a result, it has not had a significant impact on the Company during this period. To the extent an increase in inflation would result in increased operating costs, such as insurance, real estate taxes and utilities, the majority 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.
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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, 2013 for comparable loans, is greater than the aggregate carrying value by approximately $85.3 million at December 31, 2013.
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. Our interest rate risk objective is to limit the impact of interest rate changes on earnings and cash flows and lower our overall borrowing costs. To achieve these objectives, from time to time the Company enters into interest rate hedge contracts such as collars, swaps, caps and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. The Company does not hold or issue these derivative contracts for trading or speculative purposes.
If the interest rates for variable rate debt were 100 basis points higher or lower during 2013, the Company's interest expense would have increased or decreased by $2.2 million. If the interest rate for the fixed rate debt maturing in 2014 was 100 basis points higher or lower than its current rate of 5.66%, the Company's interest expense would have increased or decreased by $1.9 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 financial statement schedule 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.
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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, 2013. 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 (1992 Framework). Based on our assessment we believe that, as of December 31, 2013, 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 control 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.
45
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, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) (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, 2013, 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, 2013 and 2012, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2013 of Liberty Property Trust and our report dated February 28, 2014 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 28, 2014
46
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, 2013 and 2012, and the related consolidated statements of comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2013. 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, 2013 and 2012, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, 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, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) and our report dated February 28, 2014 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 28, 2014
47
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, 2013. 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 (1992 Framework). Based on our assessment we believe that, as of December 31, 2013, 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 control 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.
48
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, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) (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, 2013, 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, 2013 and 2012, and the related consolidated statements of comprehensive income, owners' equity, and cash flows for each of the three years in the period ended December 31, 2013 of Liberty Property Limited Partnership and our report dated February 28, 2014 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 28, 2014
49
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, 2013 and 2012, and the related consolidated statements of comprehensive income, owners' equity, and cash flows for each of the three years in the period ended December 31, 2013. 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, 2013 and 2012, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2013, 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, 2013, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (1992 Framework) and our report dated February 28, 2014 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
Philadelphia, Pennsylvania
February 28, 2014
50
CONSOLIDATED BALANCE SHEETS OF LIBERTY PROPERTY TRUST
(In thousands, except share and unit amounts)
December 31, | |||||||
2013 | 2012 | ||||||
ASSETS | |||||||
Real estate: | |||||||
Land and land improvements | $ | 1,139,455 | $ | 845,958 | |||
Building and improvements | 5,144,758 | 4,045,385 | |||||
Less accumulated depreciation | (1,057,680 | ) | (1,072,859 | ) | |||
Operating real estate | 5,226,533 | 3,818,484 | |||||
Development in progress | 209,187 | 248,602 | |||||
Land held for development | 233,055 | 249,221 | |||||
Net real estate | 5,668,775 | 4,316,307 | |||||
Cash and cash equivalents | 163,414 | 38,356 | |||||
Restricted cash | 51,456 | 33,147 | |||||
Accounts receivable | 13,900 | 8,988 | |||||
Deferred rent receivable | 99,956 | 101,621 | |||||
Deferred financing and leasing costs, net | 226,607 | 129,329 | |||||
Investments in and advances to unconsolidated joint ventures | 179,655 | 169,021 | |||||
Assets held for sale | 275,957 | 289,654 | |||||
Prepaid expenses and other assets | 95,840 | 87,756 | |||||
Total assets | $ | 6,775,560 | $ | 5,174,179 | |||
LIABILITIES | |||||||
Mortgage loans | $ | 545,306 | $ | 302,855 | |||
Unsecured notes | 2,708,213 | 2,258,751 | |||||
Credit facility | — | 92,000 | |||||
Accounts payable | 70,406 | 31,058 | |||||
Accrued interest | 25,777 | 20,164 | |||||
Dividend and distributions payable | 71,323 | 58,038 | |||||
Other liabilities | 250,819 | 185,956 | |||||
Total liabilities | 3,671,844 | 2,948,822 | |||||
Noncontrolling interest - operating partnership - 301,483 preferred units outstanding as of December 31, 2013 and December 31, 2012 | 7,537 | 7,537 | |||||
EQUITY | |||||||
Liberty Property Trust shareholders’ equity | |||||||
Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized; 147,846,801 (includes 1,249,909 in treasury) and 119,720,776 (includes 1,249,909 in treasury) shares issued and outstanding as of December 31, 2013 and December 31, 2012, respectively | 148 | 119 | |||||
Additional paid-in capital | 3,669,618 | 2,687,701 | |||||
Accumulated other comprehensive income | 9,742 | 2,900 | |||||
Distributions in excess of net income | (591,713 | ) | (547,757 | ) | |||
Common shares in treasury, at cost, 1,249,909 shares as of December 31, 2013 and 2012 | (51,951 | ) | (51,951 | ) | |||
Total Liberty Property Trust shareholders’ equity | 3,035,844 | 2,091,012 | |||||
Noncontrolling interest – operating partnership | |||||||
3,556,566 and 3,713,851 common units outstanding as of December 31, 2013 and December 31, 2012, respectively | 56,713 | 60,223 | |||||
1,290,000 preferred units outstanding as of December 31, 2012 | — | 63,264 | |||||
Noncontrolling interest – consolidated joint ventures | 3,622 | 3,321 | |||||
Total equity | 3,096,179 | 2,217,820 | |||||
Total liabilities, noncontrolling interest - operating partnership and equity | $ | 6,775,560 | $ | 5,174,179 |
See accompanying notes.
51
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OF LIBERTY PROPERTY TRUST
(In thousands, except per share amounts)
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
OPERATING REVENUE | |||||||||||
Rental | $ | 458,081 | $ | 396,418 | $ | 379,811 | |||||
Operating expense reimbursement | 187,849 | 163,861 | 153,888 | ||||||||
Total operating revenue | 645,930 | 560,279 | 533,699 | ||||||||
OPERATING EXPENSE | |||||||||||
Rental property | 114,617 | 104,431 | 95,192 | ||||||||
Real estate taxes | 79,918 | 65,697 | 62,108 | ||||||||
General and administrative | 74,564 | 64,686 | 59,186 | ||||||||
Depreciation and amortization | 173,784 | 135,523 | 126,218 | ||||||||
Total operating expense | 442,883 | 370,337 | 342,704 | ||||||||
Operating income | 203,047 | 189,942 | 190,995 | ||||||||
OTHER INCOME (EXPENSE) | |||||||||||
Interest and other income | 9,879 | 8,745 | 8,137 | ||||||||
Interest expense | (127,115 | ) | (103,363 | ) | (101,988 | ) | |||||
Total other income (expense) | (117,236 | ) | (94,618 | ) | (93,851 | ) | |||||
Income before gain on property dispositions, income taxes and equity in earnings (loss) of unconsolidated joint ventures | 85,811 | 95,324 | 97,144 | ||||||||
Gain on property dispositions | 8,676 | 3,080 | 5,025 | ||||||||
Income taxes | (2,799 | ) | (976 | ) | (1,020 | ) | |||||
Equity in earnings (loss) of unconsolidated joint ventures | 6,067 | (681 | ) | 3,496 | |||||||
Income from continuing operations | 97,755 | 96,747 | 104,645 | ||||||||
Discontinued operations (including net gain on property dispositions of $95,384, $12,426 and $60,582 for the years ended December 31, 2013, 2012 and 2011, respectively) | 121,839 | 51,004 | 106,065 | ||||||||
Net income | 219,594 | 147,751 | 210,710 | ||||||||
Noncontrolling interest – operating partnership | (9,203 | ) | (10,590 | ) | (27,222 | ) | |||||
Noncontrolling interest – consolidated joint ventures | (653 | ) | 275 | 511 | |||||||
Income available to common shareholders | $ | 209,738 | $ | 137,436 | $ | 183,999 | |||||
Net income | $ | 219,594 | $ | 147,751 | $ | 210,710 | |||||
Other comprehensive income (loss) - foreign currency translation | 5,397 | 3,436 | (280 | ) | |||||||
Other comprehensive income - change in net unrealized gain on derivative instruments | 1,584 | — | — | ||||||||
Other comprehensive income (loss) | 6,981 | 3,436 | (280 | ) | |||||||
Total comprehensive income | 226,575 | 151,187 | 210,430 | ||||||||
Less: comprehensive income attributable to noncontrolling interest | (9,995 | ) | (10,422 | ) | (26,706 | ) | |||||
Comprehensive income attributable to common shareholders | $ | 216,580 | $ | 140,765 | $ | 183,724 | |||||
Earnings per common share | |||||||||||
Basic: | |||||||||||
Income from continuing operations | $ | 0.70 | $ | 0.75 | $ | 0.71 | |||||
Income from discontinued operations | 0.91 | 0.43 | 0.89 | ||||||||
Income per common share – basic | $ | 1.61 | $ | 1.18 | $ | 1.60 | |||||
Diluted: | |||||||||||
Income from continuing operations | $ | 0.70 | $ | 0.75 | $ | 0.70 | |||||
Income from discontinued operations | 0.90 | 0.42 | 0.89 | ||||||||
Income per common share – diluted | $ | 1.60 | $ | 1.17 | $ | 1.59 | |||||
Weighted average number of common shares outstanding | |||||||||||
Basic | 130,180 | 116,863 | 114,755 | ||||||||
Diluted | 130,909 | 117,694 | 115,503 | ||||||||
Amounts attributable to common shareholders | |||||||||||
Income from continuing operations | $ | 91,274 | $ | 88,008 | $ | 81,392 | |||||
Discontinued operations | 118,464 | 49,428 | 102,607 | ||||||||
Net income available to common shareholders | $ | 209,738 | $ | 137,436 | $ | 183,999 |
See accompanying notes.
52
CONSOLIDATED STATEMENTS 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 INCOME (LOSS) | 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, 2011 | 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 | |||||||||||||||||||||||||||||||||
Other comprehensive income - 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 | |||||||||||||||||||||||||||||
Net proceeds from the issuance of common shares | 2,273,528 | 2 | 58,708 | — | — | — | 58,710 | — | — | — | 58,710 | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 137,436 | — | 137,436 | 4,378 | 6,212 | (275 | ) | 147,751 | ||||||||||||||||||||||||||||||||
Distributions | — | — | — | (223,695 | ) | — | (223,695 | ) | (7,109 | ) | (9,902 | ) | (179 | ) | (240,885 | ) | |||||||||||||||||||||||||||
Noncash compensation | — | 10,057 | — | — | — | 10,057 | — | — | — | 10,057 | |||||||||||||||||||||||||||||||||
Other comprehensive income - foreign currency translation adjustment | — | — | 3,329 | — | — | 3,329 | 107 | — | — | 3,436 | |||||||||||||||||||||||||||||||||
Redemption of noncontrolling interests – common units | 94,895 | — | 1,581 | — | — | — | 1,581 | (1,581 | ) | — | — | — | |||||||||||||||||||||||||||||||
Redemption of noncontrolling interest - preferred units | — | — | — | — | — | — | — | (224,694 | ) | — | (224,694 | ) | |||||||||||||||||||||||||||||||
Excess of preferred unit carrying amount over redemption | — | — | — | — | — | — | — | 3,689 | — | 3,689 | |||||||||||||||||||||||||||||||||
Balance at December 31, 2012 | 119,720,776 | 119 | 2,687,701 | 2,900 | (547,757 | ) | (51,951 | ) | 2,091,012 | 60,223 | 63,264 | 3,321 | 2,217,820 | ||||||||||||||||||||||||||||||
Net proceeds from the issuance of common shares | 27,968,740 | 29 | 969,439 | — | — | — | 969,468 | — | — | — | 969,468 | ||||||||||||||||||||||||||||||||
Net income | — | — | — | 209,738 | — | 209,738 | 5,848 | 3,355 | 653 | 219,594 | |||||||||||||||||||||||||||||||||
Distributions | — | — | — | (253,694 | ) | — | (253,694 | ) | (6,995 | ) | (2,119 | ) | (352 | ) | (263,160 | ) | |||||||||||||||||||||||||||
Noncash compensation | — | 9,976 | — | — | — | 9,976 | — | — | — | 9,976 | |||||||||||||||||||||||||||||||||
Other comprehensive income - foreign currency translation adjustment | — | — | 5,296 | — | — | 5,296 | 101 | — | — | 5,397 | |||||||||||||||||||||||||||||||||
Other comprehensive income - change in net unrealized gain on derivative instruments | — | — | 1,546 | — | — | 1,546 | 38 | — | — | 1,584 | |||||||||||||||||||||||||||||||||
Redemption of noncontrolling interests – common units | 157,285 | — | 2,502 | — | — | — | 2,502 | (2,502 | ) | — | — | — | |||||||||||||||||||||||||||||||
Redemption of noncontrolling interest - preferred units | — | — | — | — | — | — | — | (63,264 | ) | — | (63,264 | ) | |||||||||||||||||||||||||||||||
Excess of preferred unit redemption over carrying amount | — | — | — | — | — | — | — | (1,236 | ) | — | (1,236 | ) | |||||||||||||||||||||||||||||||
Balance at December 31, 2013 | 147,846,801 | $ | 148 | $ | 3,669,618 | $ | 9,742 | $ | (591,713 | ) | $ | (51,951 | ) | $ | 3,035,844 | $ | 56,713 | $ | — | $ | 3,622 | $ | 3,096,179 |
See accompanying notes.
53
CONSOLIDATED STATEMENTS OF CASH FLOWS OF LIBERTY PROPERTY TRUST
(In thousands)
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
OPERATING ACTIVITIES | |||||||||||
Net income | $ | 219,594 | $ | 147,751 | $ | 210,710 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 205,147 | 167,421 | 171,714 | ||||||||
Amortization of deferred financing costs/noncash portion of interest | 4,449 | 4,682 | 5,190 | ||||||||
Equity in (earnings) loss of unconsolidated joint ventures | (6,067 | ) | 681 | (3,496 | ) | ||||||
Distributions from unconsolidated joint ventures | 844 | 624 | 551 | ||||||||
Gain on property dispositions | (107,079 | ) | (15,506 | ) | (65,607 | ) | |||||
Noncash compensation | 9,976 | 10,057 | 10,555 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Restricted cash | (18,397 | ) | 30,713 | (14,114 | ) | ||||||
Accounts receivable | (4,889 | ) | (799 | ) | (1,320 | ) | |||||
Deferred rent receivable | (9,473 | ) | (6,363 | ) | (6,566 | ) | |||||
Prepaid expenses and other assets | (22,424 | ) | (10,871 | ) | 6,027 | ||||||
Accounts payable | 15,703 | 7,641 | (229 | ) | |||||||
Accrued interest | 5,613 | (3,983 | ) | (5,674 | ) | ||||||
Other liabilities | 22,968 | (14,882 | ) | 9,983 | |||||||
Net cash provided by operating activities | 315,965 | 317,166 | 317,724 | ||||||||
INVESTING ACTIVITIES | |||||||||||
Investment in properties – acquisitions | (1,429,822 | ) | (211,894 | ) | (233,568 | ) | |||||
Investment in properties – other | (74,345 | ) | (49,682 | ) | (75,834 | ) | |||||
Investments in and advances to unconsolidated joint ventures | (16,185 | ) | (1,461 | ) | (11,195 | ) | |||||
Distributions from unconsolidated joint ventures | 13,774 | 6,009 | 11,364 | ||||||||
Net proceeds from disposition of properties/land | 526,949 | 234,686 | 390,754 | ||||||||
Net proceeds from (advances on) public reimbursement receivable/escrow | 9,821 | (986 | ) | (10,237 | ) | ||||||
Investment in development in progress | (123,879 | ) | (199,384 | ) | (48,628 | ) | |||||
Investment in land held for development | (67,326 | ) | (67,513 | ) | (52,868 | ) | |||||
Investment in deferred leasing costs | (36,901 | ) | (22,444 | ) | (26,011 | ) | |||||
Net cash used in investing activities | (1,197,914 | ) | (312,669 | ) | (56,223 | ) | |||||
FINANCING ACTIVITIES | |||||||||||
Net proceeds from issuance of common shares | 969,468 | 58,710 | 44,552 | ||||||||
Redemption of preferred units | (64,500 | ) | (221,000 | ) | (9,060 | ) | |||||
Proceeds from unsecured notes | 448,646 | 700,000 | — | ||||||||
Repayments of unsecured notes | — | (230,100 | ) | (246,500 | ) | ||||||
Proceeds from mortgage loans | 10,401 | 34,599 | — | ||||||||
Repayments of mortgage loans | (10,605 | ) | (35,099 | ) | (29,860 | ) | |||||
Proceeds from credit facility | 611,550 | 839,250 | 650,500 | ||||||||
Repayments on credit facility | (703,550 | ) | (886,650 | ) | (511,100 | ) | |||||
Increase in deferred financing costs | (5,866 | ) | (7,206 | ) | (3,023 | ) | |||||
Distribution paid on common shares | (240,340 | ) | (222,573 | ) | (218,613 | ) | |||||
Distribution paid on units | (9,438 | ) | (17,241 | ) | (28,409 | ) | |||||
Net cash provided by (used in) financing activities | 1,005,766 | 12,690 | (351,513 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 123,817 | 17,187 | (90,012 | ) | |||||||
Increase (decrease) in cash and cash equivalents related to foreign currency translation | 1,241 | 2,965 | (193 | ) | |||||||
Cash and cash equivalents at beginning of year | 38,356 | 18,204 | 108,409 | ||||||||
Cash and cash equivalents at end of year | $ | 163,414 | $ | 38,356 | $ | 18,204 |
See accompanying notes.
54
CONSOLIDATED BALANCE SHEETS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(In thousands, except unit amounts)
December 31, | |||||||
2013 | 2012 | ||||||
ASSETS | |||||||
Real estate: | |||||||
Land and land improvements | $ | 1,139,455 | $ | 845,958 | |||
Building and improvements | 5,144,758 | 4,045,385 | |||||
Less accumulated depreciation | (1,057,680 | ) | (1,072,859 | ) | |||
Operating real estate | 5,226,533 | 3,818,484 | |||||
Development in progress | 209,187 | 248,602 | |||||
Land held for development | 233,055 | 249,221 | |||||
Net real estate | 5,668,775 | 4,316,307 | |||||
Cash and cash equivalents | 163,414 | 38,356 | |||||
Restricted cash | 51,456 | 33,147 | |||||
Accounts receivable | 13,900 | 8,988 | |||||
Deferred rent receivable | 99,956 | 101,621 | |||||
Deferred financing and leasing costs, net | 226,607 | 129,329 | |||||
Investments in and advances to unconsolidated joint ventures | 179,655 | 169,021 | |||||
Assets held for sale | 275,957 | 289,654 | |||||
Prepaid expenses and other assets | 95,840 | 87,756 | |||||
Total assets | $ | 6,775,560 | $ | 5,174,179 | |||
LIABILITIES | |||||||
Mortgage loans | $ | 545,306 | $ | 302,855 | |||
Unsecured notes | 2,708,213 | 2,258,751 | |||||
Credit facility | — | 92,000 | |||||
Accounts payable | 70,406 | 31,058 | |||||
Accrued interest | 25,777 | 20,164 | |||||
Distributions payable | 71,323 | 58,038 | |||||
Other liabilities | 250,819 | 185,956 | |||||
Total liabilities | 3,671,844 | 2,948,822 | |||||
Limited partners' equity - 301,483 preferred units outstanding as of December 31, 2013 and December 31, 2012 | 7,537 | 7,537 | |||||
OWNERS’ EQUITY | |||||||
General partner’s equity - 146,596,892 (net of 1,249,909 treasury units) and 118,470,867 (net of 1,249,909 treasury units) common units outstanding as of December 31, 2013 and December 31, 2012, respectively | 3,035,844 | 2,091,012 | |||||
Limited partners’ equity – 3,556,566 and 3,713,851 common units outstanding as of December 31, 2013 and December 31, 2012, respectively | 56,713 | 60,223 | |||||
Limited partners’ equity – 1,290,000 preferred units outstanding as of December 31, 2012 | — | 63,264 | |||||
Noncontrolling interest – consolidated joint ventures | 3,622 | 3,321 | |||||
Total owners’ equity | 3,096,179 | 2,217,820 | |||||
Total liabilities, limited partners' equity and owners’ equity | $ | 6,775,560 | $ | 5,174,179 | |||
See accompanying notes.
55
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(In thousands, except per unit amounts)
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
OPERATING REVENUE | |||||||||||
Rental | $ | 458,081 | $ | 396,418 | $ | 379,811 | |||||
Operating expense reimbursement | 187,849 | 163,861 | 153,888 | ||||||||
Total operating revenue | 645,930 | 560,279 | 533,699 | ||||||||
OPERATING EXPENSE | |||||||||||
Rental property | 114,617 | 104,431 | 95,192 | ||||||||
Real estate taxes | 79,918 | 65,697 | 62,108 | ||||||||
General and administrative | 74,564 | 64,686 | 59,186 | ||||||||
Depreciation and amortization | 173,784 | 135,523 | 126,218 | ||||||||
Total operating expense | 442,883 | 370,337 | 342,704 | ||||||||
Operating income | 203,047 | 189,942 | 190,995 | ||||||||
OTHER INCOME (EXPENSE) | |||||||||||
Interest and other income | 9,879 | 8,745 | 8,137 | ||||||||
Interest expense | (127,115 | ) | (103,363 | ) | (101,988 | ) | |||||
Total other income (expense) | (117,236 | ) | (94,618 | ) | (93,851 | ) | |||||
Income before gain on property dispositions, income taxes and equity in earnings (loss) of unconsolidated joint ventures | 85,811 | 95,324 | 97,144 | ||||||||
Gain on property dispositions | 8,676 | 3,080 | 5,025 | ||||||||
Income taxes | (2,799 | ) | (976 | ) | (1,020 | ) | |||||
Equity in earnings (loss) of unconsolidated joint ventures | 6,067 | (681 | ) | 3,496 | |||||||
Income from continuing operations | 97,755 | 96,747 | 104,645 | ||||||||
Discontinued operations (including net gain on property dispositions of $95,384, $12,426 and $60,582 for the years ended December 31, 2013, 2012 and 2011, respectively) | 121,839 | 51,004 | 106,065 | ||||||||
Net income | 219,594 | 147,751 | 210,710 | ||||||||
Noncontrolling interest – consolidated joint ventures | (653 | ) | 275 | 511 | |||||||
Preferred unit distributions | (2,119 | ) | (9,902 | ) | (21,069 | ) | |||||
Excess of preferred unit carrying amount over redemption | (1,236 | ) | 3,689 | — | |||||||
Income available to common unitholders | $ | 215,586 | $ | 141,813 | $ | 190,152 | |||||
Net income | $ | 219,594 | $ | 147,751 | $ | 210,710 | |||||
Other comprehensive income (loss) - foreign currency translation | 5,397 | 3,436 | (280 | ) | |||||||
Other comprehensive income - change in net unrealized gain on derivative instruments | 1,584 | — | — | ||||||||
Other comprehensive income (loss) | 6,981 | $ | 3,436 | $ | (280 | ) | |||||
Total comprehensive income | $ | 226,575 | $ | 151,187 | $ | 210,430 | |||||
Earnings per common unit | |||||||||||
Basic: | |||||||||||
Income from continuing operations | $ | 0.70 | $ | 0.75 | $ | 0.71 | |||||
Income from discontinued operations | 0.91 | 0.43 | 0.89 | ||||||||
Income per common unit - basic | $ | 1.61 | $ | 1.18 | $ | 1.60 | |||||
Diluted: | |||||||||||
Income from continuing operations | $ | 0.70 | $ | 0.75 | $ | 0.70 | |||||
Income from discontinued operations | 0.90 | 0.42 | 0.89 | ||||||||
Income per common unit - diluted | $ | 1.60 | $ | 1.17 | $ | 1.59 | |||||
Weighted average number of common units outstanding | |||||||||||
Basic | 133,858 | 120,623 | 118,624 | ||||||||
Diluted | 134,587 | 121,454 | 119,372 | ||||||||
Net income allocated to general partners | $ | 209,738 | $ | 137,436 | $ | 183,999 | |||||
Net income allocated to limited partners | 9,203 | 10,590 | 27,222 |
See accompanying notes.
56
CONSOLIDATED STATEMENTS 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, 2011 | 3,928,733 | $ | 2,082,186 | $ | 67,621 | $ | 287,959 | $ | 786 | $ | 2,438,552 | |||||||||||
Contributions from partners | 55,103 | — | — | — | 55,103 | |||||||||||||||||
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 | ) | — | — | — | ||||||||||||||
Contributions to partners | — | — | — | 3,500 | 3,500 | |||||||||||||||||
Balance at December 31, 2011 | 3,808,746 | 2,103,594 | 64,428 | 287,959 | 3,775 | 2,459,756 | ||||||||||||||||
Contributions from partners | 68,767 | — | — | — | 68,767 | |||||||||||||||||
Distributions to partners | (223,695 | ) | (7,109 | ) | (9,902 | ) | (179 | ) | (240,885 | ) | ||||||||||||
Foreign currency translation adjustment | 3,329 | 107 | — | — | 3,436 | |||||||||||||||||
Net income | 137,436 | 4,378 | 6,212 | (275 | ) | 147,751 | ||||||||||||||||
Redemption of limited partners common units for common shares | (94,895 | ) | 1,581 | (1,581 | ) | — | — | — | ||||||||||||||
Redemption of limited partners' preferred units | — | — | (224,694 | ) | — | (224,694 | ) | |||||||||||||||
Excess of preferred unit carrying amount over redemption | — | — | 3,689 | — | 3,689 | |||||||||||||||||
Balance at December 31, 2012 | 3,713,851 | 2,091,012 | 60,223 | 63,264 | 3,321 | 2,217,820 | ||||||||||||||||
Contributions from partners | 979,444 | — | — | — | 979,444 | |||||||||||||||||
Distributions to partners | (253,694 | ) | (6,995 | ) | (2,119 | ) | (352 | ) | (263,160 | ) | ||||||||||||
Foreign currency translation adjustment | 5,296 | 101 | — | — | 5,397 | |||||||||||||||||
Change in net unrealized gain on derivative instruments | 1,546 | 38 | — | — | 1,584 | |||||||||||||||||
Net income | 209,738 | 5,848 | 3,355 | 653 | 219,594 | |||||||||||||||||
Redemption of limited partners common units for common shares | (157,285 | ) | 2,502 | (2,502 | ) | — | — | — | ||||||||||||||
Redemption of limited partners' preferred units | — | — | (63,264 | ) | — | (63,264 | ) | |||||||||||||||
Excess of preferred unit redemption over carrying amount | — | — | (1,236 | ) | — | (1,236 | ) | |||||||||||||||
Balance at December 31, 2013 | 3,556,566 | $ | 3,035,844 | $ | 56,713 | $ | — | $ | 3,622 | $ | 3,096,179 |
See accompanying notes.
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CONSOLIDATED STATEMENTS OF CASH FLOWS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(In thousands)
Year Ended December 31, | |||||||||||
2013 | 2012 | 2011 | |||||||||
OPERATING ACTIVITIES | |||||||||||
Net income | $ | 219,594 | $ | 147,751 | $ | 210,710 | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||||||
Depreciation and amortization | 205,147 | 167,421 | 171,714 | ||||||||
Amortization of deferred financing costs/noncash portion of interest | 4,449 | 4,682 | 5,190 | ||||||||
Equity in (earnings) loss of unconsolidated joint ventures | (6,067 | ) | 681 | (3,496 | ) | ||||||
Distributions from unconsolidated joint ventures | 844 | 624 | 551 | ||||||||
Gain on property dispositions | (107,079 | ) | (15,506 | ) | (65,607 | ) | |||||
Noncash compensation | 9,976 | 10,057 | 10,555 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Restricted cash | (18,397 | ) | 30,713 | (14,114 | ) | ||||||
Accounts receivable | (4,889 | ) | (799 | ) | (1,320 | ) | |||||
Deferred rent receivable | (9,473 | ) | (6,363 | ) | (6,566 | ) | |||||
Prepaid expenses and other assets | (22,424 | ) | (10,871 | ) | 6,027 | ||||||
Accounts payable | 15,703 | 7,641 | (229 | ) | |||||||
Accrued interest | 5,613 | (3,983 | ) | (5,674 | ) | ||||||
Other liabilities | 22,968 | (14,882 | ) | 9,983 | |||||||
Net cash provided by operating activities | 315,965 | 317,166 | 317,724 | ||||||||
INVESTING ACTIVITIES | |||||||||||
Investment in properties – acquisitions | (1,429,822 | ) | (211,894 | ) | (233,568 | ) | |||||
Investment in properties – other | (74,345 | ) | (49,682 | ) | (75,834 | ) | |||||
Investments in and advances to unconsolidated joint ventures | (16,185 | ) | (1,461 | ) | (11,195 | ) | |||||
Distributions from unconsolidated joint ventures | 13,774 | 6,009 | 11,364 | ||||||||
Net proceeds from disposition of properties/land | 526,949 | 234,686 | 390,754 | ||||||||
Net proceeds from (advances on) public reimbursement receivable/escrow | 9,821 | (986 | ) | (10,237 | ) | ||||||
Investment in development in progress | (123,879 | ) | (199,384 | ) | (48,628 | ) | |||||
Investment in land held for development | (67,326 | ) | (67,513 | ) | (52,868 | ) | |||||
Investment in deferred leasing costs | (36,901 | ) | (22,444 | ) | (26,011 | ) | |||||
Net cash used in investing activities | (1,197,914 | ) | (312,669 | ) | (56,223 | ) | |||||
FINANCING ACTIVITIES | |||||||||||
Redemption of preferred units | (64,500 | ) | (221,000 | ) | (9,060 | ) | |||||
Proceeds from unsecured notes | 448,646 | 700,000 | — | ||||||||
Repayments of unsecured notes | — | (230,100 | ) | (246,500 | ) | ||||||
Proceeds from mortgage loans | 10,401 | 34,599 | — | ||||||||
Repayments of mortgage loans | (10,605 | ) | (35,099 | ) | (29,860 | ) | |||||
Proceeds from credit facility | 611,550 | 839,250 | 650,500 | ||||||||
Repayments on credit facility | (703,550 | ) | (886,650 | ) | (511,100 | ) | |||||
Increase in deferred financing costs | (5,866 | ) | (7,206 | ) | (3,023 | ) | |||||
Capital contributions | 969,468 | 58,710 | 44,552 | ||||||||
Distributions to partners | (249,778 | ) | (239,814 | ) | (247,022 | ) | |||||
Net cash provided by (used in) financing activities | 1,005,766 | 12,690 | (351,513 | ) | |||||||
Net increase (decrease) in cash and cash equivalents | 123,817 | 17,187 | (90,012 | ) | |||||||
Increase (decrease) in cash and cash equivalents related to foreign currency translation | 1,241 | 2,965 | (193 | ) | |||||||
Cash and cash equivalents at beginning of year | 38,356 | 18,204 | 108,409 | ||||||||
Cash and cash equivalents at end of year | $ | 163,414 | $ | 38,356 | $ | 18,204 |
See accompanying notes.
58
Liberty Property Trust and Liberty Property Limited Partnership
Notes to Consolidated Financial Statements
December 31, 2013
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 97.6% of the common equity of the Operating Partnership at December 31, 2013. The Company owns and operates industrial properties nationally and owns and operates office properties primarily in metro Philadelphia, Washington, D.C. and certain sunbelt cities. Additionally, the Company owns certain assets in 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” and “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 balance sheets for assets held for sale and the consolidated statements of comprehensive income 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 the 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.
The Company allocates the purchase price of real estate acquired to land, building and improvements and intangibles based on the 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 customer relationships.
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Acquisition-related costs for properties with in-place leases are expensed as incurred. Expenditures for maintenance and repairs are charged to operations as incurred.
The Company considers any renewal options in determining the lease term. 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 comprehensive income.
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 3 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, 2012, the Company recognized an impairment charge related to the decline in the fair value below the carrying value of one of the Company's investments in unconsolidated joint ventures. The Company considered the decline in fair value below the carrying value of $683,000 to be other-than-temporary. This impairment charge was recognized in the fourth quarter of 2012 and was related to the Company's United Kingdom reportable segment.
No impairment losses on unconsolidated joint ventures were recognized during the years ended December 31, 2011 or 2013.
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. Restricted cash also includes the undistributed proceeds from the sale of residential land in Kent County, United Kingdom.
60
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, 2013 and 2012 was $7.8 million and $7.0 million, respectively. The Company had bad debt expense of $1.8 million and $540,000 for the years ended December 31, 2013 and 2012, respectively, as well as a net recovery of bad debts of $1.9 million for the year ended December 31, 2011.
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 during the period that landlord services are rendered in accordance with Securities and Exchange Commission Staff Accounting Bulletin 104, "Revenue Recognition," after the following conditions are met:
a. | the termination agreement is executed, |
b. | the termination fee is determinable, and |
c. | 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. Certain employees of the Company are compensated for leasing services related to the Company's properties. The compensation directly related to these leasing services is capitalized and amortized as a deferred leasing cost.
Fair Value of Financial Instruments
The following disclosure of estimated fair value was determined by management using available market information and appropriate valuation methodologies. However, considerable judgment is necessary to interpret market data and develop estimated fair value. Accordingly, the following estimates are not necessarily indicative of the amounts the Company could have realized on disposition of the financial instruments at December 31, 2013 and December 31, 2012. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value amounts.
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 value because of the short-term nature of these instruments. The carrying value of the outstanding amounts under the Company's credit facility is also a reasonable estimate of fair value because interest rates float at a rate based on LIBOR.
The Company determines the fair value of its interest rate swaps by using the standard methodology of netting discounted future fixed cash payments with the discounted expected variable cash receipts. These variable cash receipts of interest rate swaps are based on expectations of future LIBOR interest rates (forward curves) estimated by observing market LIBOR interest rate curves. This is a Level 2 fair value calculation. Also, credit valuation adjustments are factored into the fair value calculations to account for potential nonperformance risk. These credit valuation adjustments were concluded to be not significant inputs for the fair value calculations for the periods presented.
The Company used a discounted cash flow model to determine the estimated fair value of its debt as of December 31, 2013 and December 31, 2012. This is a Level 3 fair value calculation. The inputs used in preparing the discounted cash flow model include actual maturity dates and scheduled cash flows as well as estimates for market value discount rates. The Company updates the
61
discounted cash flow model on a quarterly basis to reflect any changes in the Company's debt holdings and changes to discount rate assumptions.
The only significant unobservable input in the discounted cash flow model is the discount rate. For the fair value of the Company's unsecured notes, the Company uses a discount rate based on the indicative new issue pricing provided by lenders. For the Company's mortgage loans, the Company uses an estimate based on its knowledge of the mortgage market. The weighted average discount rate for the unsecured notes used as of December 31, 2013 was 3.90% compared to 2.70% at December 31, 2012. The weighted average discount rate for the mortgage loans used as of December 31, 2013 was 4.00% compared to 4.12% at December 31, 2012. An increase in the discount rate used in the discounted cash flow model would result in a decrease to the fair value of the Company's long-term debt. A decrease in the discount rate used in the discounted cash flow model would result in an increase to the fair value of the Company's long-term debt.
The following summarizes the changes in the fair value of the Company's mortgage loans and unsecured notes from December 31, 2012 to December 31, 2013 (in thousands):
Mortgage Loans | Unsecured Notes | |||||||||||||||||||||||
Carrying Value | Fair Value | Fair Value Above (Below) Carrying Value | Carrying Value | Fair Value | Fair Value Above (Below) Carrying Value | |||||||||||||||||||
As of December 31, 2012 | $ | 302,855 | $ | 330,109 | $ | 27,254 | $ | 2,258,751 | $ | 2,511,515 | $ | 252,764 | ||||||||||||
Payoffs and amortization | (10,605 | ) | (10,605 | ) | — | — | ||||||||||||||||||
Accretion of discount | — | — | 816 | — | (816 | ) | ||||||||||||||||||
Issuances/assumptions | 253,056 | 253,056 | 448,646 | 448,646 | — | |||||||||||||||||||
Changes in fair value assumptions | 1,384 | 1,384 | (195,330 | ) | (195,330 | ) | ||||||||||||||||||
As of December 31, 2013 | $ | 545,306 | $ | 573,944 | $ | 28,638 | $ | 2,708,213 | $ | 2,764,831 | $ | 56,618 |
Disclosure about fair value of financial instruments is based on pertinent information available to management as of December 31, 2013 and December 31, 2012. Although as of the date of this report, management is not aware of any factors that would significantly affect the fair value amounts, such amounts have not been comprehensively revalued for purposes of these financial statements since December 31, 2013 and current estimates of fair value may differ significantly from the amounts presented herein.
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, 2013, 2012 and 2011 and no interest and penalties accrued at December 31, 2013 or December 31, 2012.
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Certain of the Company's taxable REIT subsidiaries had net operating loss carryforwards available of approximately $27.4 million as of December 31, 2013. 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 wholly owned real estate was $7.4 billion and $6.1 billion at December 31, 2013 and 2012, 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.
Derivative Financial Instruments
We borrow funds at a combination of fixed and variable rates. Borrowings under our revolving credit facility and certain bank mortgage loans bear interest at variable rates. Our long-term debt typically bears interest at fixed rates. Our interest rate risk management objectives are to limit generally the impact of interest rate changes on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, from time to time, we enter into interest rate hedge contracts such as collars, swaps, caps and treasury lock agreements in order to mitigate our interest rate risk with respect to various debt instruments. We generally do not hold or issue these derivative contracts for trading or speculative purposes. The interest rate on all of our variable rate debt is generally adjusted at one or three month intervals, subject to settlements under interest rate hedge contracts.
Interest rate swaps involve the receipt of variable-rate amounts from a counterparty in exchange for making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (for the Trust) and general partner's equity and limited partners' equity - common units (for the Operating Partnership) and is subsequently reclassified into interest expense in the period that the hedged forecasted transaction affects earnings.
Foreign Currency
The functional currency of the Company's United Kingdom operations is pounds sterling. The Company translates the financial statements for the United Kingdom operations into US dollars. For the Trust, gains and losses resulting from this translation are included in accumulated other comprehensive income (loss) as a separate component of shareholders' equity and a proportionate amount of gain or loss is allocated to noncontrolling interest - operating partnership - common units. For the Operating Partnership, gains and losses resulting from this translation are included in general partner's equity and limited partners' equity - common units. Upon sale or upon complete or substantially complete liquidation of the Company'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 income (loss) and noncontrolling interest - operating partnership - common units (for the Trust) and in general partner's equity and limited partners' equity - common units (for the Operating Partnership).
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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):
2013 | 2012 | ||||||||||||||||||||
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 | $ | 91,274 | 130,180 | $ | 0.70 | $ | 88,008 | 116,863 | $ | 0.75 | |||||||||||
Dilutive shares for long-term compensation plans | — | 729 | — | 831 | |||||||||||||||||
Diluted income from continuing operations | |||||||||||||||||||||
Income from continuing operations net of noncontrolling interest | 91,274 | 130,909 | $ | 0.70 | 88,008 | 117,694 | $ | 0.75 | |||||||||||||
Basic income from discontinued operations | |||||||||||||||||||||
Discontinued operations net of noncontrolling interest | 118,464 | 130,180 | $ | 0.91 | 49,428 | 116,863 | $ | 0.43 | |||||||||||||
Dilutive shares for long-term compensation plans | — | 729 | — | 831 | |||||||||||||||||
Diluted income from discontinued operations | |||||||||||||||||||||
Discontinued operations net of noncontrolling interest | 118,464 | 130,909 | $ | 0.90 | 49,428 | 117,694 | $ | 0.42 | |||||||||||||
Basic income per common share | |||||||||||||||||||||
Net income available to common shareholders | 209,738 | 130,180 | $ | 1.61 | 137,436 | 116,863 | $ | 1.18 | |||||||||||||
Dilutive shares for long-term compensation plans | — | 729 | — | 831 | |||||||||||||||||
Diluted income per common share | |||||||||||||||||||||
Net income available to common shareholders | $ | 209,738 | 130,909 | $ | 1.60 | $ | 137,436 | 117,694 | $ | 1.17 |
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2011 | ||||||||||
Income (Numerator) | Weighted Average Shares (Denominator) | Per Share | ||||||||
Basic income from continuing operations | ||||||||||
Income from continuing operations net of noncontrolling interest | $ | 81,392 | 114,755 | $ | 0.71 | |||||
Dilutive shares for long-term compensation plans | — | 748 | ||||||||
Diluted income from continuing operations | ||||||||||
Income from continuing operations net of noncontrolling interest | 81,392 | 115,503 | $ | 0.70 | ||||||
Basic income from discontinued operations | ||||||||||
Discontinued operations net of noncontrolling interest | 102,607 | 114,755 | $ | 0.89 | ||||||
Dilutive shares for long-term compensation plans | — | 748 | ||||||||
Diluted income from discontinued operations | ||||||||||
Discontinued operations net of noncontrolling interest | 102,607 | 115,503 | $ | 0.89 | ||||||
Basic income per common share | ||||||||||
Net income available to common shareholders | 183,999 | 114,755 | $ | 1.60 | ||||||
Dilutive shares for long-term compensation plans | — | 748 | ||||||||
Diluted income per common share | ||||||||||
Net income available to common shareholders | $ | 183,999 | 115,503 | $ | 1.59 |
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 2013, 2012 and 2011 were 959,000, 905,000 and 1,685,000, respectively.
During the years ended December 31, 2013, 2012 and 2011, 504,000, 841,000 and 256,000 common shares, respectively, were issued upon the exercise of options.
During the years ended December 31, 2013, 2012 and 2011, individuals acquired 157,285, 94,895 and 119,987 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.
During the years ended December 31, 2013, 2012 and 2011, distributions per common share were $1.90 for each period.
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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):
2013 | 2012 | ||||||||||||||||||||
Income (Numerator) | Weighted Average Units (Denominator) | Per Unit | Income (Numerator) | Weighted Average Units (Denominator) | Per Unit | ||||||||||||||||
Income from continuing operations net of noncontrolling interest - consolidated joint ventures | $ | 97,102 | $ | 97,022 | |||||||||||||||||
Less: Preferred unit distributions | (2,119 | ) | (9,902 | ) | |||||||||||||||||
Excess of preferred unit (redemption over carrying amount) carrying amount over redemption | (1,236 | ) | 3,689 | ||||||||||||||||||
Basic income from continuing operations | |||||||||||||||||||||
Income from continuing operations available to common unitholders | 93,747 | 133,858 | $ | 0.70 | 90,809 | 120,623 | $ | 0.75 | |||||||||||||
Dilutive units for long-term compensation plans | — | 729 | — | 831 | |||||||||||||||||
Diluted income from continuing operations | |||||||||||||||||||||
Income from continuing operations available to common unitholders | 93,747 | 134,587 | $ | 0.70 | 90,809 | 121,454 | $ | 0.75 | |||||||||||||
Basic income from discontinued operations | |||||||||||||||||||||
Discontinued operations | 121,839 | 133,858 | $ | 0.91 | 51,004 | 120,623 | $ | 0.43 | |||||||||||||
Dilutive units for long-term compensation plans | — | 729 | — | 831 | |||||||||||||||||
Diluted income from discontinued operations | |||||||||||||||||||||
Discontinued operations | 121,839 | 134,587 | $ | 0.90 | 51,004 | 121,454 | $ | 0.42 | |||||||||||||
Basic income per common unit | |||||||||||||||||||||
Income available to common unitholders | 215,586 | 133,858 | $ | 1.61 | 141,813 | 120,623 | $ | 1.18 | |||||||||||||
Dilutive units for long-term compensation plans | — | 729 | — | 831 | |||||||||||||||||
Diluted income per common unit | |||||||||||||||||||||
Income available to common unitholders | $ | 215,586 | 134,587 | $ | 1.60 | $ | 141,813 | 121,454 | $ | 1.17 |
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2011 | ||||||||||
Income (Numerator) | Weighted Average Units (Denominator) | Per Unit | ||||||||
Income from continuing operations net of noncontrolling interest - consolidated joint ventures | $ | 105,156 | ||||||||
Less: Preferred unit distributions | (21,069 | ) | ||||||||
Basic income from continuing operations | ||||||||||
Income from continuing operations available to common unitholders | 84,087 | 118,624 | $ | 0.71 | ||||||
Dilutive units for long-term compensation plans | — | 748 | ||||||||
Diluted income from continuing operations | ||||||||||
Income from continuing operations available to common unitholders | 84,087 | 119,372 | $ | 0.70 | ||||||
Basic income from discontinued operations | ||||||||||
Discontinued operations | 106,065 | 118,624 | $ | 0.89 | ||||||
Dilutive units for long-term compensation plans | — | 748 | ||||||||
Diluted income from discontinued operations | ||||||||||
Discontinued operations | 106,065 | 119,372 | $ | 0.89 | ||||||
Basic income per common unit | ||||||||||
Income available to common unitholders | 190,152 | 118,624 | $ | 1.60 | ||||||
Dilutive units for long-term compensation plans | — | 748 | ||||||||
Diluted income per common unit | ||||||||||
Income available to common unitholders | $ | 190,152 | 119,372 | $ | 1.59 |
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 2013, 2012 and 2011 were 959,000, 905,000 and 1,685,000, respectively.
During the years ended December 31, 2013, 2012 and 2011, 504,000, 841,000 and 256,000 common units, respectively, were issued upon the exercise of options.
During the years ended December 31, 2013, 2012 and 2011, individuals acquired 157,285, 94,895 and 119,987 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.
During the years ended December 31, 2013, 2012 and 2011, distributions per common unit were $1.90 for each period.
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5. ACCUMULATED OTHER COMPREHENSIVE INCOME
The following table sets forth the components of Accumulated Other Comprehensive Income (in thousands):
December 31, | ||||||||
2013 | 2012 | |||||||
Foreign Currency Translation: | ||||||||
Beginning balance | $ | 3,195 | $ | (241 | ) | |||
Translation adjustment | 5,397 | 3,436 | ||||||
Ending balance | 8,592 | 3,195 | ||||||
Net unrealized gain on derivative instruments: | ||||||||
Beginning balance | — | — | ||||||
Unrealized gains | 1,584 | — | ||||||
Ending balance | 1,584 | — | ||||||
Total accumulated other comprehensive income | 10,176 | 3,195 | ||||||
Less: portion included in noncontrolling interest – operating partnership | (434 | ) | (295 | ) | ||||
Total accumulated other comprehensive income included in shareholders' equity | $ | 9,742 | $ | 2,900 |
6. REAL ESTATE
The Company owns and operates industrial and office properties. The carrying value of these properties by type as of December 31, 2013 and 2012 is as follows (in thousands):
Land | Building | |||||||||||
And Land | And | Accumulated | ||||||||||
Improvements | Improvements | Total | Depreciation | |||||||||
2013 | ||||||||||||
Industrial properties | $708,484 | $3,238,875 | $3,947,359 | $514,109 | ||||||||
Office properties | 430,971 | 1,905,883 | 2,336,854 | 543,571 | ||||||||
2013 Total | $1,139,455 | $5,144,758 | $6,284,213 | $1,057,680 | ||||||||
2012 | ||||||||||||
Industrial properties | $442,814 | $2,064,928 | $2,507,742 | $496,208 | ||||||||
Office properties | 403,144 | 1,980,457 | 2,383,601 | 576,651 | ||||||||
2012 Total | $845,958 | $4,045,385 | $4,891,343 | $1,072,859 |
Depreciation expense was $162.5 million, $140.6 million and $144.3 million for the years ended December 31, 2013, 2012 and 2011, respectively.
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Information on the operating properties the Company sold during the years ended December 31, 2013 and 2012 is as follows:
2013 Sales
Number of | Leaseable | ||||||||||
Reportable Segment | Buildings | Square Feet | Gross Proceeds | ||||||||
(in thousands) | |||||||||||
Industrial - | Lehigh/Central PA | 1 | 101,750 | $ | 8,650 | ||||||
Carolinas | 1 | 59,200 | 2,000 | ||||||||
Other | 2 | 80,635 | 4,422 | ||||||||
Industrial/Office - | Minnesota | 12 | 915,693 | 71,493 | |||||||
Richmond/Hampton Roads | 1 | 86,170 | 10,978 | ||||||||
Other | 34 | 2,226,500 | 187,853 | ||||||||
Office - | Philadelphia | 2 | 656,350 | 103,650 | |||||||
Southeastern PA | 5 | 996,874 | 102,734 | ||||||||
Total | 58 | 5,123,172 | $ | 491,780 |
2012 Sales
Number of | Leaseable | ||||||||||
Reportable Segment | Buildings | Square Feet | Gross Proceeds | ||||||||
(in thousands) | |||||||||||
Industrial - | Lehigh/Central PA | 1 | 45,000 | $ | 2,025 | ||||||
Chicago/Milwaukee | 20 | 996,115 | 69,861 | ||||||||
Carolinas | 13 | 704,120 | 55,228 | ||||||||
Other | 8 | 632,758 | 49,386 | ||||||||
Industrial/Office - | South Florida | 1 | 47,442 | 4,143 | |||||||
Richmond/Hampton Roads | 3 | 289,278 | 22,131 | ||||||||
Other | 1 | 15,000 | 2,386 | ||||||||
Office - | Southeastern PA | 3 | 308,344 | 23,300 | |||||||
Total | 50 | 3,038,057 | $ | 228,460 |
7. 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 comprehensive income. The Company may also receive a promoted interest if certain return thresholds are met.
Liberty Venture I, LP
As of December 31, 2013, the Company had 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 Industrial-Other reportable segment.
As of December 31, 2013, the joint venture owned 23 industrial properties totaling 3.1 million square feet and 43 acres of developable land. The joint venture also had one property under development, which is expected to comprise, upon completion, 203,000 square feet and is expected to represent a Total Investment of $11.8 million.
The Company recognized $578,000, $619,000 and $614,000 in fees for services during the years ended December 31, 2013, 2012 and 2011, respectively.
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Kings Hill Unit Trust
As of December 31, 2013, the Company had 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, 2013, the joint venture owned three industrial properties and 11 office properties totaling 490,000 square feet.
The Company had notes receivable from Kings Hill Unit Trust for an aggregate of $18.6 million and $14.4 million as of December 31, 2013 and 2012, respectively. The notes receivable bear interest at rates of 2% to 10% and are due in February 2016. 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 Kings Hill Unit Trust for $133,000 and $109,000 as of December 31, 2013 and 2012, respectively. This related party receivable is reflected in accounts receivable in the Company's consolidated balance sheets.
The Company had prepaid rent with Kings Hill Unit Trust for $47,000 and $46,000 as of December 31, 2013 and 2012, respectively. This related party asset is reflected in the prepaid expenses and other assets in the Company's consolidated balance sheets.
Income from fees and interest was $237,000, $333,000 and $427,000 during the years ended December 31, 2013, 2012 and 2011, respectively.
Liberty Illinois, LP
As of December 31, 2013, the Company had 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 Chicago/Milwaukee reportable segment.
As of December 31, 2013, the joint venture owned 15 industrial properties totaling 5.1 million square feet and 335 acres of developable land.
The Company recognized $952,000, $655,000 and $635,000 in fees for services during the years ended December 31, 2013, 2012 and 2011, respectively.
Blythe Valley JV Sarl
As of December 31, 2012, the Company had 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 was part of the Company's United Kingdom reportable segment.
In October 2012, the joint venture defaulted on its mortgage loan. The mortgage loan was secured by all of the operating properties and land of the joint venture. In February 2013, the lender appointed a receiver, effectively taking control of the assets securing its loan. The Company no longer holds an interest in this joint venture.
During the year ended December 31, 2012, the joint venture recorded an impairment charge, the Company's share of which was sufficient to bring the Company's investment in the joint venture to zero. The Company's share of this impairment charge was $4.6 million and is reflected in equity in earnings (loss) of unconsolidated joint ventures in the Company's consolidated statements of comprehensive income.
The Company had a receivable from Blythe Valley JV Sarl for $127,000 as of December 31, 2012. This related party receivable is reflected in accounts receivable in the Company's consolidated balance sheets. This receivable was collected during the year ended December 31, 2013.
The Company recognized $33,000, $355,000 and $335,000 in fees for services during the years ended December 31, 2013, 2012 and 2011, respectively.
Liberty Washington, LP
As of December 31, 2013, the Company had 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's properties are part of the Company's Industrial/Office-Other and the Washington, D.C. reportable segment.
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As of December 31, 2013, the joint venture owned 21 office properties totaling 2.4 million square feet and six acres of developable land.
The Company had a receivable from Liberty Washington, LP for $523,000 and $1.2 million as of December 31, 2013 and 2012, respectively. This related party receivable is reflected as prepaid expenses and other assets in the Company's consolidated balance sheets.
The Company recognized $4.9 million, $4.5 million and $4.0 million in fees for services during the years ended December 31, 2013, 2012 and 2011, respectively.
Liberty/Commerz 1701 JFK Boulevard, LP
As of December 31, 2013, the Company had 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 Philadelphia reportable segment.
The Company had a payable to this joint venture for $59,000 as of December 31, 2013 and a receivable from this joint venture for $266,000 as of December 31, 2012. This related party payable and receivable are 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 $323,000 and $175,000 as of December 31, 2013 and 2012, respectively. This related party receivable is reflected in prepaid expenses and other assets in the Company's consolidated balance sheets. Additionally, the Company had a receivable from this joint venture for $469,000 and $204,000 as of December 31, 2013 and 2012, respectively. This related party receivable is reflected in accounts receivable in the Company's consolidated balance sheets.
The Company recognized $2.2 million, $2.2 million and $2.1 million in fees for services during the years ended December 31, 2013, 2012 and 2011 respectively.
Other Joint Ventures
As of December 31, 2013, the Company had a 50% ownership interest in four 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 Industrial/Office Other 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. One of these joint ventures owns one acre of developable land and is part of the Company's Philadelphia reportable segment. The final 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, 2013 and 2012, the Company had a $3.0 million note payable due to this joint venture. The note payable is interest free and is due upon written notice from the joint venture. This related party payable is reflected in investments in and advances to unconsolidated joint ventures in the Company's consolidated balance sheets.
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 comprehensive income.
Summary Financial Data
The condensed balance sheets as of December 31, 2013 and 2012 and condensed statements of operations for Liberty Venture I, LP, Kings Hill Unit Trust, Liberty Illinois, LP, Blythe Valley JV Sarl (no remaining interest as of December 31, 2013), Liberty Washington, LP, Liberty/Commerz and the other unconsolidated joint ventures for the years ended December 31, 2013, 2012 and 2011 are as follows (in thousands):
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Condensed Balance Sheets:
December 31, 2013 | |||||||||||||||||||||||||||
Liberty | Kings Hill | Liberty | Liberty | Liberty/ | |||||||||||||||||||||||
Venture I, LP | Unit Trust | Illinois, LP | Washington, LP | Commerz | Other | Total | |||||||||||||||||||||
Real estate assets | $ | 129,354 | $ | 182,220 | $ | 261,375 | $ | 887,452 | $ | 494,150 | $ | 70,274 | $ | 2,024,825 | |||||||||||||
Accumulated depreciation | (32,617 | ) | (25,006 | ) | (43,304 | ) | (131,064 | ) | (83,461 | ) | (8,456 | ) | (323,908 | ) | |||||||||||||
Real estate assets, net | 96,737 | 157,214 | 218,071 | 756,388 | 410,689 | 61,818 | 1,700,917 | ||||||||||||||||||||
Development in progress | 2,226 | — | — | — | — | — | 2,226 | ||||||||||||||||||||
Land held for development | 2,842 | — | 42,770 | 2,000 | — | 47,549 | 95,161 | ||||||||||||||||||||
Other assets | 11,531 | 20,173 | 20,346 | 58,701 | 50,680 | 15,911 | 177,342 | ||||||||||||||||||||
Total assets | $ | 113,336 | $ | 177,387 | $ | 281,187 | $ | 817,089 | $ | 461,369 | $ | 125,278 | $ | 1,975,646 | |||||||||||||
Debt | $ | 72,121 | $ | 97,091 | $ | 140,400 | $ | 319,856 | $ | 321,401 | $ | 43,151 | $ | 994,020 | |||||||||||||
Other liabilities | 4,032 | 100,112 | 7,936 | 15,012 | 9,544 | 9,846 | 146,482 | ||||||||||||||||||||
Equity | 37,183 | (19,816 | ) | 132,851 | 482,221 | 130,424 | 72,281 | 835,144 | |||||||||||||||||||
Total liabilities and equity | $ | 113,336 | $ | 177,387 | $ | 281,187 | $ | 817,089 | $ | 461,369 | $ | 125,278 | $ | 1,975,646 | |||||||||||||
Company's net investment in | |||||||||||||||||||||||||||
unconsolidated joint ventures (1) | $ | 8,551 | $ | 12,772 | $ | 21,688 | $ | 72,981 | $ | 24,740 | $ | 38,923 | $ | 179,655 |
December 31, 2012 | |||||||||||||||||||||||||||||||
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 | $ | 129,296 | $ | 193,628 | $ | 259,786 | $ | 124,204 | $ | 929,790 | $ | 494,045 | $ | 69,680 | $ | 2,200,429 | |||||||||||||||
Accumulated depreciation | (28,849 | ) | (22,666 | ) | (36,978 | ) | (23,764 | ) | (116,072 | ) | (69,572 | ) | (6,853 | ) | (304,754 | ) | |||||||||||||||
Real estate assets, net | 100,447 | 170,962 | 222,808 | 100,440 | 813,718 | 424,473 | 62,827 | 1,895,675 | |||||||||||||||||||||||
Land held for development | 2,760 | — | 42,734 | 38,683 | 2,000 | — | 23,193 | 109,370 | |||||||||||||||||||||||
Other assets | 9,845 | 13,736 | 14,974 | 10,934 | 62,647 | 50,638 | 14,294 | 177,068 | |||||||||||||||||||||||
Total assets | $ | 113,052 | $ | 184,698 | $ | 280,516 | $ | 150,057 | $ | 878,365 | $ | 475,111 | $ | 100,314 | $ | 2,182,113 | |||||||||||||||
Debt | $ | 73,426 | $ | 117,308 | $ | 140,400 | $ | 192,803 | $ | 341,804 | $ | 324,000 | $ | 43,946 | $ | 1,233,687 | |||||||||||||||
Other liabilities | 3,754 | 77,832 | 7,675 | 80,326 | 21,989 | 9,257 | 6,173 | 207,006 | |||||||||||||||||||||||
Equity | 35,872 | (10,442 | ) | 132,441 | (123,072 | ) | 514,572 | 141,854 | 50,195 | 741,420 | |||||||||||||||||||||
Total liabilities and equity | $ | 113,052 | $ | 184,698 | $ | 280,516 | $ | 150,057 | $ | 878,365 | $ | 475,111 | $ | 100,314 | $ | 2,182,113 | |||||||||||||||
Company's net investment in | |||||||||||||||||||||||||||||||
unconsolidated joint ventures (1) | $ | 8,205 | $ | 10,341 | $ | 21,331 | $ | — | $ | 76,965 | $ | 27,305 | $ | 24,874 | $ | 169,021 |
(1) | Differences between the Company's net investment in unconsolidated joint ventures and its underlying equity in the net assets of the venture are 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 $41.7 million and $28.5 million as of December 31, 2013 and 2012, respectively. 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. |
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Condensed Statements of Operations (2):
Year Ended December 31, 2013 | |||||||||||||||||||||||||||
Liberty | Kings Hill | Liberty | Liberty | Liberty/ | |||||||||||||||||||||||
Venture I, LP | Unit Trust | Illinois, LP | Washington, LP | Commerz | Other | Total | |||||||||||||||||||||
Total revenue | $ | 16,238 | $ | 12,701 | $ | 24,455 | $ | 75,821 | $ | 62,411 | $ | 8,415 | $ | 200,041 | |||||||||||||
Operating expense | 5,248 | 4,187 | 8,353 | 27,549 | 23,074 | 2,636 | 71,047 | ||||||||||||||||||||
10,990 | 8,514 | 16,102 | 48,272 | 39,337 | 5,779 | 128,994 | |||||||||||||||||||||
Interest | (5,318 | ) | (5,133 | ) | (8,348 | ) | (18,946 | ) | (20,391 | ) | (2,933 | ) | (61,069 | ) | |||||||||||||
Depreciation and amortization | (4,414 | ) | (3,829 | ) | (7,382 | ) | (28,392 | ) | (14,734 | ) | (1,870 | ) | (60,621 | ) | |||||||||||||
Other income/(expense) | 53 | 71 | 38 | 122 | (233 | ) | (37 | ) | 14 | ||||||||||||||||||
Income (loss) from discontinued operations | — | (5,647 | ) | — | (8,731 | ) | — | — | (14,378 | ) | |||||||||||||||||
Net income (loss) | $ | 1,311 | $ | (6,024 | ) | $ | 410 | $ | (7,675 | ) | $ | 3,979 | $ | 939 | $ | (7,060 | ) | ||||||||||
Company's equity in earnings (loss) | |||||||||||||||||||||||||||
of unconsolidated joint ventures | $ | 530 | $ | (908 | ) | $ | 618 | $ | 3,748 | $ | 1,406 | $ | 673 | $ | 6,067 |
Year Ended December 31, 2012 | |||||||||||||||||||||||||||||||
Liberty | Kings Hill | Liberty | Blythe Valley | Liberty | Liberty/ | ||||||||||||||||||||||||||
Venture I, LP | Unit Trust | Illinois, LP | JV Sarl | Washington, LP | Commerz | Other | Total | ||||||||||||||||||||||||
Total revenue | $ | 15,328 | $ | 15,642 | $ | 22,156 | $ | 14,278 | $ | 81,128 | $ | 62,484 | $ | 7,481 | $ | 218,497 | |||||||||||||||
Operating expense | 5,277 | 4,237 | 8,093 | 3,921 | 27,901 | 22,935 | 2,392 | 74,756 | |||||||||||||||||||||||
10,051 | 11,405 | 14,063 | 10,357 | 53,227 | 39,549 | 5,089 | 143,741 | ||||||||||||||||||||||||
Interest | (5,402 | ) | (6,520 | ) | (8,348 | ) | (12,130 | ) | (21,260 | ) | (20,501 | ) | (2,989 | ) | (77,150 | ) | |||||||||||||||
Depreciation and amortization | (3,930 | ) | (3,731 | ) | (7,395 | ) | (4,148 | ) | (28,749 | ) | (15,411 | ) | (1,885 | ) | (65,249 | ) | |||||||||||||||
Other income/(expense) | 40 | (160 | ) | 31 | 211 | 149 | (80 | ) | 21 | 212 | |||||||||||||||||||||
Impairment | — | — | — | (77,026 | ) | — | — | — | (77,026 | ) | |||||||||||||||||||||
Net income (loss) | $ | 759 | $ | 994 | $ | (1,649 | ) | $ | (82,736 | ) | $ | 3,367 | $ | 3,557 | $ | 236 | $ | (75,472 | ) | ||||||||||||
Company's equity in earnings (loss) of | |||||||||||||||||||||||||||||||
unconsolidated joint ventures | $ | 306 | $ | 352 | $ | 106 | $ | (5,610 | ) | $ | 3,243 | $ | 1,304 | $ | (382 | ) | $ | (681 | ) |
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 |
(2) The years ended December 31, 2012 and 2011 have not been restated for discontinued operations.
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8. DEFERRED FINANCING AND LEASING COSTS
Deferred financing and leasing costs were comprised of the following as of December 31, 2013 and 2012 (in thousands):
December 31, | |||||||
2013 | 2012 | ||||||
Deferred financing costs | $ | 36,882 | $ | 32,023 | |||
Deferred leasing costs | 193,015 | 188,181 | |||||
Intangible - market rent | 19,411 | 6,935 | |||||
Intangible - origination value | 118,077 | 25,577 | |||||
367,385 | 252,716 | ||||||
Accumulated amortization: | |||||||
Deferred financing costs | (17,536 | ) | (14,465 | ) | |||
Deferred leasing costs | (92,462 | ) | (92,580 | ) | |||
Intangible - market rent | (4,185 | ) | (2,569 | ) | |||
Intangible - origination value | (26,595 | ) | (13,773 | ) | |||
(140,778 | ) | (123,387 | ) | ||||
Deferred financing and leasing costs, net | $ | 226,607 | $ | 129,329 |
Amortization of deferred financing costs was $4.1 million, $4.9 million and $5.4 million for the years ended December 31, 2013, 2012 and 2011, respectively. Amortization of deferred leasing costs and intangible - origination value was $39.2 million, $24.0 million and $24.6 million for the years ended December 31, 2013, 2012 and 2011, respectively.
As of December 31, 2013, the remaining weighted-average amortization period was 3.7 years for intangible - market rent and 4.5 years for intangible - origination value.
The table above includes intangible - market rent assets. There were also $9.1 million and $5.4 million of unamortized market rent - intangible liabilities as of December 31, 2013 and 2012, respectively. Amortization of the aggregate asset and liability for intangible - market rent was expense of $290,000 for the year ended December 31, 2013, and was income of $491,000 and $536,000 for the years ended December 31, 2012 and 2011, respectively. These amounts were included as a decrease or increase in rental revenue in the accompanying consolidated statements of comprehensive income as appropriate.
The aggregate amortization of intangible - market rent is a decrease (increase) in rental revenue over the next five years and thereafter as follows (in thousands):
2014 | $ | 2,628 | |
2015 | 2,039 | ||
2016 | 1,542 | ||
2017 | 579 | ||
2018 | 176 | ||
Thereafter | (864 | ) | |
Total | $ | 6,100 |
The aggregate amortization expense for intangible - origination value for the next five years and thereafter is as follows (in thousands):
2014 | $ | 29,808 | |
2015 | 21,720 | ||
2016 | 16,193 | ||
2017 | 10,180 | ||
2018 | 5,782 | ||
Thereafter | 7,799 | ||
Total | $ | 91,482 |
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9. 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, 2013, 2012 and 2011 were 5.1%, 5.3% and 5.8%, respectively. Interest costs during the years ended December 31, 2013, 2012 and 2011 in the amount of $9.6 million, $9.9 million and $3.0 million, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2013, 2012 and 2011 was $143.2 million, $132.2 million and $134.3 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, 2013, 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, 2013 are as follows (in thousands, except percentages):
Weighted | |||||||||||||||||||||||
Mortgages | Average | ||||||||||||||||||||||
Principal | Principal | Unsecured | Credit | Interest | |||||||||||||||||||
Amortization | Maturities | Notes | Facility | Total | Rate | ||||||||||||||||||
2014 | $ | 11,088 | $ | 2,696 | $ | 199,953 | $ | — | $ | 213,737 | 5.63 | % | |||||||||||
2015 | 12,138 | 44,469 | 315,869 | — | 372,476 | 5.16 | % | ||||||||||||||||
2016 | 11,720 | 182,318 | 299,362 | — | 493,400 | 6.08 | % | ||||||||||||||||
2017 | 10,916 | 2,349 | 295,861 | — | 309,126 | 6.57 | % | ||||||||||||||||
2018 | 8,730 | 27,051 | 99,968 | — | 135,749 | 6.80 | % | ||||||||||||||||
2019 | 8,680 | 50,043 | — | — | 58,723 | 3.99 | % | ||||||||||||||||
2020 | 4,280 | 67,361 | 349,441 | — | 421,082 | 4.83 | % | ||||||||||||||||
2021 | 2,716 | 65,008 | — | — | 67,724 | 4.06 | % | ||||||||||||||||
2022 | 2,172 | — | 399,342 | — | 401,514 | 4.14 | % | ||||||||||||||||
2023 and thereafter | 29,625 | 1,946 | 748,417 | — | 779,988 | 4.03 | % | ||||||||||||||||
$ | 102,065 | $ | 443,241 | $ | 2,708,213 | $ | — | $ | 3,253,519 | 5.05 | % |
Mortgage Loans, Unsecured Notes
Mortgage loans with maturities ranging from 2014 to 2033 are collateralized by and in some instances cross-collateralized by properties with a net book value of $997.3 million as of December 31, 2013.
The interest rates on $3,237.5 million of mortgage loans (including $105.2 million fixed via a swap arrangement - see Footnote 21 - Derivative Instruments) and unsecured notes are fixed and range from 3.0% to 7.5%. The weighted average remaining term for the mortgage loans and unsecured notes is 5.9 years.
Credit Facility
The Company has maintained an unsecured credit facility throughout 2011, 2012 and 2013. 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 ratings as of December 31, 2013, borrowings under the Credit Facility would bear interest at LIBOR plus 107.5 basis points. The Credit Facility expires in November 2015 and has a one-year extension option at the Company's option, subject to the payment of a stated fee. 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. There were no borrowings outstanding under the Credit Facility at December 31, 2013. 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; |
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• | 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 September 2013, the Company issued $450.0 million of 4.40% senior unsecured notes due 2024. The net proceeds from the offering were used to fund a portion of the cash consideration payable for the Cabot Acquisition (see Note 20).
In October 2013, as part of the Cabot Acquisition, the Company assumed $229.8 million in mortgages bearing interest at a weighted average rate of 5.85% with maturity dates from 2018 to 2021.
In February 2012, the Company closed on a mortgage with $45.0 million of available funds bearing interest at 4.84% and maturing in 2033. As of December 31, 2013, there was $44.5 million outstanding on this loan. The net proceeds from this mortgage were used for construction costs on a property under development that was placed in service during the year ended December 31, 2013.
In June 2012, the Company issued $400.0 million of 4.125% senior unsecured notes due 2022. The net proceeds from this issuance were used to repay borrowings under the Company's unsecured credit facility and for general corporate purposes.
In August 2012, the Company used proceeds from its unsecured credit facility together with available cash on hand to repay $230.1 million of 10-year, 6.375% senior unsecured notes due August 2012.
In December 2012, the Company issued $300.0 million of 3.375% senior unsecured notes due 2023. The net proceeds from this issuance were used to repay borrowings under the Company's unsecured credit facility and for general corporate purposes.
During the year ended December 31, 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.
10. LEASING ACTIVITY
Future minimum rental payments due from tenants under noncancelable operating leases as of December 31, 2013 are as follows (in thousands):
2014 | $ | 555,691 | ||
2015 | 498,377 | |||
2016 | 417,793 | |||
2017 | 328,969 | |||
2018 | 255,675 | |||
Thereafter | 819,870 | |||
TOTAL | $ | 2,876,375 |
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 comprehensive income.
11. NONCONTROLLING INTEREST - OPERATING PARTNERSHIP / LIMITED PARTNERS' EQUITY - PREFERRED UNITS
As of December 31, 2013, 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 putable 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.
Preferred distributions related to the Series I units were $471,000 for each of the years ended December 31, 2013 and 2012 and $57,000 for the year ended December 31, 2011.
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12. SHAREHOLDERS' EQUITY - TRUST
Common Shares
The Company paid to holders of its common shares and holders of its common units distributions of $247.4 million, $229.7 million and $226.0 million during the years ended December 31, 2013, 2012 and 2011, respectively. On a per share basis, the Company paid common share and common unit distributions of $1.90 during each of the years ended December 31, 2013, 2012 and 2011.
The following unaudited table summarizes the taxability of common share distributions (taxability for 2013 is estimated):
2013 | 2012 | 2011 | ||||||||||
Ordinary dividend | $ | 1.4312 | $ | 1.5036 | $ | 1.4300 | ||||||
Qualified dividend | — | — | — | |||||||||
Capital gain - 15% | — | — | 0.1708 | |||||||||
Capital gain - 20% | 0.0016 | — | — | |||||||||
IRC Sec 1250 unrecapture gain - 25% | 0.4672 | 0.0164 | 0.2992 | |||||||||
Return of capital | — | 0.3800 | — | |||||||||
Total | $ | 1.9000 | $ | 1.9000 | $ | 1.9000 |
The Company's tax return for the year ended December 31, 2013 has not been filed. The taxability information presented for the 2013 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 2013, 2012 or 2011.
Common units
The common units of the Operating Partnership not held by the Trust outstanding as of December 31, 2013 have the same economic characteristics as common shares of the Trust. The 3,556,566 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 3,556,566 outstanding common units based on the closing price of the common shares of the Company at December 31, 2013 was $120.5 million.
No common units were issued in connection with acquisitions during 2013, 2012 or 2011.
Preferred units
The Operating Partnership had no outstanding cumulative redeemable preferred units of the Operating Partnership as of December 31, 2013. During the year ended December 31, 2013, the Company redeemed or repurchased $20.0 million of outstanding 7.00% Series E Cumulative Redeemable Preferred Units, $17.5 million of outstanding 6.65% Series F Cumulative Redeemable Preferred Units and $27.0 million of outstanding 6.70% Series G Cumulative Redeemable Preferred Units, all at par. In connection with these redemptions and repurchases, the Company wrote off $1.2 million in origination costs. This amount was included in noncontrolling interest - operating partnership in the Trust's consolidated statements of comprehensive income.
During the year ended December 31, 2012, the Company redeemed $32.5 million of outstanding 6.65% Series F Cumulative Redeemable Preferred Units for $26.0 million. Also, the Company redeemed $95.0 million of outstanding 7.45% Series B Cumulative Redeemable Preferred Units and $100.0 million of outstanding 7.40% Series H Cumulative Redeemable Preferred Units at par. In connection with these redemptions, during the year ended December 31, 2012, the Company recognized a $3.7
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million net gain relating to the excess of preferred unit carrying amount over redemption price net of certain costs. This amount was included in noncontrolling interest - operating partnership in the Trust's consolidated statements of comprehensive income.
The Company paid the following Equity Preferred Unit distributions for the years ended December 31:
2013 | 2012 | 2011 | |||||
Distributions (in millions) | $1.6 | $9.9 | $21.0 | ||||
Distribution per unit: | |||||||
Series B | — | $0.45 | $1.86 | ||||
Series E | $1.21 | $3.50 | $3.50 | ||||
Series F | $1.32 | $1.43 | $3.33 | ||||
Series G | $1.33 | $3.35 | $3.35 | ||||
Series H | — | $0.77 | $1.85 |
As of December 31, 2013, the Company had 16,013,000 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, 2013, 2012, and 2011, 1,248,842, 1,037,712, and 1,181,776 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
The Company has a continuous equity offering program in place for up to $200 million of equity. During the year ended December 31, 2013, the Company sold 1.9 million common shares through this program. The aggregate proceeds from the offering of $75.0 million were used to pay down outstanding borrowings under the Company's unsecured credit facility and for general corporate purposes. The Company did not sell any common shares pursuant to a continuous offering program during 2012 or 2011.
Noncontrolling Interest - Consolidated Joint Ventures
Noncontrolling interest - consolidated joint ventures includes third-party ownership interests in consolidated joint venture investments.
13. 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, 2013 have the same economic characteristics as common shares of the Trust. The 3,556,566 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 3,556,566 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 3,556,566 outstanding common units at December 31, 2013 based on the closing price of the common shares of the Company at December 31, 2013 was $120.5 million.
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Preferred Units
The Operating Partnership had no outstanding cumulative redeemable preferred units of the Operating Partnership as of December 31, 2013. During the year ended December 31, 2013, the Company redeemed or repurchased $20.0 million of outstanding 7.00% Series E Cumulative Redeemable Preferred Units, $17.5 million of outstanding 6.65% Series F Cumulative Redeemable Preferred Units and $27.0 million of outstanding 6.70% Series G Cumulative Redeemable Preferred Units, all at par. In connection with these redemptions and repurchases, the Company wrote off $1.2 million in origination costs.
During the year ended December 31, 2012, the Company redeemed $32.5 million of outstanding 6.65% Series F Cumulative Redeemable Preferred Units for $26.0 million. Also, the Company redeemed $95.0 million of outstanding 7.45% Series B Cumulative Redeemable Preferred Units and $100.0 million of outstanding 7.40% Series H Cumulative Redeemable Preferred Units at par. In connection with these redemptions, during the year ended December 31, 2012, the Company recognized a $3.7 million net gain relating to the excess of preferred unit carrying amount over redemption price net of certain costs.
The Operating Partnership paid the following Equity Preferred Unit distributions for the years ended December 31:
2013 | 2012 | 2011 | |||||
Distributions (in millions) | $1.6 | $9.9 | $21.0 | ||||
Distribution per unit: | |||||||
Series B | — | $0.45 | $1.86 | ||||
Series E | $1.21 | $3.50 | $3.50 | ||||
Series F | $1.32 | $1.43 | $3.33 | ||||
Series G | $1.33 | $3.35 | $3.35 | ||||
Series H | — | $0.77 | $1.85 |
Continuous Equity Offering
The Company has a continuous equity offering program in place for up to $200 million of equity. During year ended December 31, 2013, the Company sold 1.9 million common shares through this program. The aggregate proceeds from the offering of $75.0 million were used to pay down outstanding borrowings under the Company's unsecured credit facility and for general corporate purposes. The Company did not sell any common shares pursuant to a continuous offering program during 2012 or 2011.
Noncontrolling Interest - Consolidated Joint Ventures
Noncontrolling interest - consolidated joint ventures includes third-party ownership interests in consolidated joint venture investments.
14. 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 $923,000, $865,000 and $768,000 for the years ended December 31, 2013, 2012 and 2011, respectively.
15. 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, restricted shares and restricted stock units have been made. The Company has authorized the grant of shares and options under the Plan and the 2008 Plan of up to 21.1 million common shares of the Company.
Options
All options granted have a 10-year term and most options vest and are expensed over a 3-year period, with options 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, 2013, 2012 and 2011 was $1.6 million, $1.7 million and $1.7 million, respectively.
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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, | |||||
2013 | 2012 | 2011 | |||
Risk-free interest rate | 1.1% | 1.1% | 2.1% | ||
Dividend yield | 5.4% | 5.7% | 6.1% | ||
Historical volatility factor | 0.356 | 0.377 | 0.366 | ||
Weighted-average expected life | 6 years | 5 years | 5 years |
The historical volatility factor is based on the Company's historical share prices. The weighted-average expected life is based on the contractual term of the options as well as the historical periods held before exercise.
A summary of the Company's share option activity and related information for the year ended December 31, 2013 follows:
Options (000s) | Weighted Average Exercise Price | ||||
Outstanding January 1, 2013 | 2,662 | $35.50 | |||
Granted | 228 | 38.78 | |||
Exercised | (505 | ) | 30.22 | ||
Forfeited | (30 | ) | 39.66 | ||
Outstanding December 31, 2013 | 2,355 | $36.90 | |||
Exercisable at December 31, 2013 | 1,795 | $37.14 |
The weighted average fair value of options granted during the years ended December 31, 2013, 2012 and 2011 was $7.18, $6.55 and $6.17, respectively. Exercise prices for options outstanding as of December 31, 2013 ranged from $20.32 to $49.74. The weighted average remaining contractual life of the options outstanding and exercisable at December 31, 2013 was 5.0 years and 3.9 years, respectively.
During the years ended December 31, 2013, 2012 and 2011, 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 $4.9 million, $5.9 million and $900,000, respectively. As of December 31, 2013, 920,000 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, 2013, 870,000 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 $2.9 million at that date. The total cash received from the exercise of options for the years ended December 31, 2013, 2012 and 2011 was $15.2 million, $22.9 million and $7.6 million, respectively. The Company has historically issued new shares to satisfy share option exercises.
As of December 31, 2013, there was $458,000 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 2013, 2012 and 2011, the Company granted restricted stock units to the executive officers pursuant to the 2008 Plan. For the chief executive officer's award, a portion of the restricted stock units will vest up to 272% at the end of a three-year period for the 2013 and 2012 awards and will vest up to 200% at the end of a 3-year period for the 2011 award. For the other executives, a portion of the restricted stock units will vest up to 200% at the end of a 3-year period for the 2013, 2012 and 2011 awards. A portion ("First Portion") of the award vests based on whether the Company's total return exceeds the average total returns of a selected group of peer companies. The grant date fair value of the First Portion was calculated based on a Monte Carlo simulation model and was determined to be 150% and 159% of the market value of a common share as of the grant date ("Market Value") for the chief executive officer and 121% and 127% of the Market Value for the other executives for the 2013 and 2012 grants, respectively. For the 2011 grant, this calculation was the same for all executives and was 146% of the Market Value. The First Portion is amortized over the respective 3-year period subject to certain accelerated vesting due to the age and years of service of certain executive officers. Another portion ("Second Portion") of the award vests based on the Company's Funds from operations. Targets are established for each of the 3 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 vest at the end of the award period.
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The fair 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, 2013, 2012 and 2011 were $9.1 million, $8.7 million and $8.2 million, respectively.
The Company's restricted LTI share activity for the year ended December 31, 2013 is as follows:
Shares (000s) | Weighted Avg. Grant Date Fair value | |||||
Nonvested at January 1, 2013 | 849 | $32.94 | ||||
Granted | 251 | 39.42 | ||||
Vested | (310 | ) | 31.98 | |||
Forfeited | (4 | ) | 34.69 | |||
Nonvested at December 31, 2013 | 786 | $35.37 |
The weighted average fair value of restricted shares granted during the years ended December 31, 2013, 2012 and 2011 was $39.42, $34.61 and $33.62 per share, respectively. As of December 31, 2013, there was $13.0 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 1.5 years. The total fair value of restricted shares vested during the years ended December 31, 2013, 2012 and 2011 was $9.9 million, $8.7 million and $6.2 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, 2013, 2012 and 2011 were 79,271, 80,573 and 85,471, respectively. Share-based compensation cost related to Bonus Shares for the years ended December 31, 2013, 2012 and 2011 was $3.1 million, $2.9 million and $2.8 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. Compensation cost related to the profit sharing plan for the years ended December 31, 2013, 2012 and 2011 was $698,000, $564,000 and $868,000 respectively.
An additional 6,637,761, 7,156,179 and 7,899,926 common shares were reserved for issuance for future grants under the Plan and the 2008 Plan at December 31, 2013, 2012 and 2011, 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 16,793, 18,611 and 18,818 shares issued, in accordance with the ESPP, during the years ended December 31, 2013, 2012 and 2011, respectively. Share-based compensation cost related to the ESPP for the years ended December 31, 2013, 2012 and 2011 was $71,000, $99,000 and $67,000, respectively.
16. 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.
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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, 2013, were as follows (in thousands):
Year | Amount | ||
2014 | $ | 203 | |
2015 | 203 | ||
2016 | 203 | ||
2017 | 203 | ||
2018 | 203 | ||
2019 though 2034 | 2,981 | ||
Total | $ | 3,996 |
Operating ground lease expense incurred by the Company during the years December 31, 2013, 2012 and 2011 totaled $210,000, $162,000 and $219,000, 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, 2013 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, 2013, the Company had letter of credit obligations of $4.3 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, 2013, the Company had 16 buildings under development. These buildings are expected to contain a total of 5.0 million square feet of leaseable space and represent an anticipated aggregate investment of $380.8 million. At December 31, 2013, Development in Progress totaled $209.2 million. In addition, as of December 31, 2013, the Company had invested $11.1 million in deferred leasing costs related to these development buildings. Also, the Company had a signed commitment for an inventory development not yet commenced for an anticipated investment of $13.1 million.
As of December 31, 2013, the Company was committed to $16.2 million in improvements on certain land parcels.
As of December 31, 2013, the Company was obligated to pay tenants for allowances for tenant improvements not yet completed for a maximum of $38.1 million.
As of December 31, 2013, the Company was committed to $52.8 million in future land purchases.
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.
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17. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
A summary of quarterly results of operations for the years ended December 31, 2013 and 2012 follows. Certain amounts have been reclassified to conform to the current presentation of discontinued operations (in thousands, except per share amounts).
QUARTER ENDED | ||||||||||||||||||||||||
DEC. 31, | SEPT. 30, | JUNE 30, | MAR. 31, | DEC. 31, | SEPT. 30, | JUNE 30, | MAR. 31, | |||||||||||||||||
2013 | 2013 | 2013 | 2013 | 2012 | 2012 | 2012 | 2012 | |||||||||||||||||
Operating revenue | $192,427 | $155,349 | $151,026 | $147,128 | $144,431 | $140,515 | $137,987 | $137,346 | ||||||||||||||||
Income from continuing operations | 19,911 | 23,406 | 29,611 | 24,827 | 23,776 | 22,358 | 24,725 | 25,888 | ||||||||||||||||
Discontinued operations | 51,832 | 6,544 | 13,633 | 49,830 | 16,795 | 7,539 | 12,956 | 13,714 | ||||||||||||||||
Net income | 71,743 | 29,950 | 43,244 | 74,657 | 40,571 | 29,897 | 37,681 | 39,602 | ||||||||||||||||
Income per common share - basic (1) | 0.48 | 0.21 | 0.33 | 0.60 | 0.33 | 0.24 | 0.29 | 0.32 | ||||||||||||||||
Income per common share - diluted (1) | 0.48 | 0.21 | 0.33 | 0.60 | 0.32 | 0.24 | 0.29 | 0.32 |
(1) | The sum of quarterly financial data may vary from the annual data due to rounding. |
18. SEGMENT INFORMATION
The Company operates its portfolio of industrial and office properties throughout the United States and the United Kingdom. During the year ended December 31, 2013, the Company realigned its reportable segments as follows.
Industrial:
• | Lehigh/Central PA; |
• | Chicago/Milwaukee; |
• | Houston; |
• | Carolinas; |
• | Other. |
The Industrial-Other category includes: Orlando; New Jersey; Maryland; Cincinnati, Columbus and Indianapolis; Dallas; Atlanta; Southern California.
Industrial/Office:
• | Minnesota; |
• | South Florida; |
• | Richmond/Hampton Roads; |
• | Arizona; |
• | United Kingdom; |
• | Other. |
The Industrial/Office Other category includes: Jacksonville; Tampa; Seattle/Puget Sound, Boston, Delaware and Memphis; Northern Virginia.
Office:
• | Philadelphia; |
• | Southeastern PA; |
• | Washington D.C. |
Comparative prior periods have been restated to reflect current segment disclosures.
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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 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.
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The operating information by reportable segment is as follows (in thousands):
Year ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Operating revenue | |||||||||||||
Industrial - | Lehigh/Central PA | $ | 101,101 | $ | 96,804 | $ | 99,311 | ||||||
Chicago/Milwaukee | 18,083 | 9,780 | 21,973 | ||||||||||
Houston | 37,773 | 30,172 | 27,325 | ||||||||||
Carolinas | 30,243 | 28,667 | 32,470 | ||||||||||
Other | 104,387 | 93,667 | 101,004 | ||||||||||
Industrial/Office - | Minnesota | 62,415 | 57,331 | 55,886 | |||||||||
South Florida | 38,464 | 35,628 | 36,792 | ||||||||||
Richmond/Hampton Roads | 40,247 | 41,395 | 49,714 | ||||||||||
Arizona | 26,559 | 23,033 | 21,083 | ||||||||||
United Kingdom | 7,669 | 4,690 | 4,408 | ||||||||||
Other | 81,487 | 73,126 | 72,608 | ||||||||||
Office - | Philadelphia | 31,690 | 28,153 | 28,129 | |||||||||
Southeastern PA | 165,248 | 169,645 | 174,063 | ||||||||||
Washington D.C. | 13,599 | 5,207 | 448 | ||||||||||
Segment-level operating revenue | 758,965 | 697,298 | 725,214 | ||||||||||
Reconciliation to total operating revenues | |||||||||||||
Discontinued operations | (113,586 | ) | (137,476 | ) | (191,723 | ) | |||||||
Other | 551 | 457 | 208 | ||||||||||
Total operating revenue | $ | 645,930 | $ | 560,279 | $ | 533,699 | |||||||
Net operating income | |||||||||||||
Industrial - | Lehigh/Central PA | $ | 68,504 | $ | 65,566 | $ | 64,786 | ||||||
Chicago/Milwaukee | 11,726 | 5,329 | 10,581 | ||||||||||
Houston | 22,632 | 17,862 | 16,379 | ||||||||||
Carolinas | 20,434 | 18,733 | 19,471 | ||||||||||
Other | 60,531 | 51,863 | 54,802 | ||||||||||
Industrial/Office - | Minnesota | 30,016 | 26,348 | 27,701 | |||||||||
South Florida | 20,943 | 18,921 | 19,431 | ||||||||||
Richmond/Hampton Roads | 24,063 | 24,762 | 29,324 | ||||||||||
Arizona | 17,189 | 14,228 | 13,453 | ||||||||||
United Kingdom | 1,924 | (257 | ) | (178 | ) | ||||||||
Other | 50,456 | 43,711 | 44,692 | ||||||||||
Office - | Philadelphia | 23,587 | 20,527 | 20,504 | |||||||||
Southeastern PA | 91,193 | 98,729 | 101,982 | ||||||||||
Washington D.C. | 6,807 | 2,908 | (1,134 | ) | |||||||||
Segment-level net operating income | 450,005 | 409,230 | 421,794 | ||||||||||
Reconciliation to income from continuing operations | |||||||||||||
Interest expense (1) | (143,018 | ) | (123,146 | ) | (131,046 | ) | |||||||
Depreciation/amortization expense (2) | (138,343 | ) | (104,643 | ) | (106,487 | ) | |||||||
Gain on property dispositions | 8,676 | 3,080 | 5,025 | ||||||||||
Equity in earnings (loss) of unconsolidated joint ventures | 6,067 | (681 | ) | 3,496 | |||||||||
General and administrative expense (2) | (50,998 | ) | (40,831 | ) | (36,140 | ) | |||||||
Discontinued operations excluding gain on property dispositions | (26,455 | ) | (38,578 | ) | (45,483 | ) | |||||||
Income taxes (2) | (2,748 | ) | (874 | ) | (841 | ) | |||||||
Other | (5,431 | ) | (6,810 | ) | (5,673 | ) | |||||||
Income from continuing operations | $ | 97,755 | $ | 96,747 | $ | 104,645 |
(1) | Includes interest on discontinued operations. |
(2) | Excludes costs which are included in determining segment-level net operating income. |
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The amount of depreciation and amortization expense related to tenant improvement and lease transaction costs within each reporting segment for the Net operating income calculation is as follows:
Year ended | |||||||||||||
December 31, | |||||||||||||
2013 | 2012 | 2011 | |||||||||||
Industrial - | Lehigh/Central PA | $ | 9,781 | $ | 9,753 | $ | 9,821 | ||||||
Chicago/Milwaukee | 251 | 233 | 1,695 | ||||||||||
Houston | 3,200 | 2,608 | 2,213 | ||||||||||
Carolinas | 1,935 | 1,726 | 2,194 | ||||||||||
Other | 10,061 | 10,461 | 11,254 | ||||||||||
Industrial/Office - | Minnesota | 5,797 | 5,132 | 5,014 | |||||||||
South Florida | 2,979 | 3,083 | 3,623 | ||||||||||
Richmond/Hampton Roads | 4,156 | 4,157 | 4,820 | ||||||||||
Arizona | 3,546 | 3,014 | 2,694 | ||||||||||
United Kingdom | 845 | 269 | 210 | ||||||||||
Other | 5,654 | 5,193 | 5,217 | ||||||||||
Office - | Philadelphia | 1,729 | 1,724 | 1,774 | |||||||||
Southeastern PA | 15,040 | 14,109 | 13,436 | ||||||||||
Washington D.C. | 248 | 156 | 63 | ||||||||||
Depreciation and amortization of tenant improvement and lease transaction costs | $ | 65,222 | $ | 61,618 | $ | 64,028 |
The Company's operating revenue by product type and by reportable segment for the years ended December 31, 2013, 2012 and 2011 is as follows (in thousands):
Year Ended | ||||||||||||||||||||||||||||||||||||
December 31, 2013 | December 31, 2012 | December 31, 2011 | ||||||||||||||||||||||||||||||||||
Industrial | Office | Total | Industrial | Office | Total | Industrial | Office | Total | ||||||||||||||||||||||||||||
Industrial - | Lehigh/Central PA | $ | 98,715 | $ | 2,386 | $ | 101,101 | $ | 94,440 | $ | 2,364 | $ | 96,804 | $ | 93,193 | $ | 6,118 | $ | 99,311 | |||||||||||||||||
Chicago/Milwaukee | 18,083 | — | 18,083 | 6,908 | 2,872 | 9,780 | 8,239 | 13,734 | 21,973 | |||||||||||||||||||||||||||
Houston | 37,773 | — | 37,773 | 30,172 | — | 30,172 | 27,325 | — | 27,325 | |||||||||||||||||||||||||||
Carolinas | 30,243 | — | 30,243 | 26,818 | 1,849 | 28,667 | 23,381 | 9,089 | 32,470 | |||||||||||||||||||||||||||
Other (1) | 44,672 | 59,715 | 104,387 | 32,313 | 61,354 | 93,667 | 33,847 | 67,157 | 101,004 | |||||||||||||||||||||||||||
Industrial/Office - | Minnesota | 32,043 | 30,372 | 62,415 | 27,810 | 29,521 | 57,331 | 24,398 | 31,488 | 55,886 | ||||||||||||||||||||||||||
South Florida | 7,955 | 30,509 | 38,464 | 5,213 | 30,415 | 35,628 | 5,887 | 30,905 | 36,792 | |||||||||||||||||||||||||||
Richmond/Hampton Roads | 19,073 | 21,174 | 40,247 | 18,490 | 22,905 | 41,395 | 18,889 | 30,825 | 49,714 | |||||||||||||||||||||||||||
Arizona | 4,231 | 22,328 | 26,559 | 2,393 | 20,640 | 23,033 | 1,407 | 19,676 | 21,083 | |||||||||||||||||||||||||||
United Kingdom | 4,205 | 3,464 | 7,669 | 1,307 | 3,383 | 4,690 | 1,288 | 3,120 | 4,408 | |||||||||||||||||||||||||||
Other | 35,318 | 46,169 | 81,487 | 26,986 | 46,140 | 73,126 | 27,805 | 44,803 | 72,608 | |||||||||||||||||||||||||||
Office - | Philadelphia | 9,534 | 22,156 | 31,690 | 8,356 | 19,797 | 28,153 | 7,817 | 20,312 | 28,129 | ||||||||||||||||||||||||||
Southeastern PA | 27,076 | 138,172 | 165,248 | 28,604 | 141,041 | 169,645 | 29,289 | 144,774 | 174,063 | |||||||||||||||||||||||||||
Washington D.C. | — | 13,599 | 13,599 | — | 5,207 | 5,207 | — | 448 | 448 | |||||||||||||||||||||||||||
$ | 368,921 | $ | 390,044 | 758,965 | $ | 309,810 | $ | 387,488 | 697,298 | $ | 302,765 | $ | 422,449 | 725,214 | ||||||||||||||||||||||
Reconciliation to total operating revenue | ||||||||||||||||||||||||||||||||||||
Discontinued operations | (113,586 | ) | (137,476 | ) | (191,723 | ) | ||||||||||||||||||||||||||||||
Corporate Other | 551 | 457 | 208 | |||||||||||||||||||||||||||||||||
Total operating revenue | $ | 645,930 | $ | 560,279 | $ | 533,699 |
(1) | A substantial portion of the office revenues were sold in conjunction with the Portfolio Sale. See Footnote 23. |
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The Company's total assets by reportable segment as of December 31, 2013 and 2012 is as follows (in thousands):
As of December 31, | ||||||||
2013 | 2012 | |||||||
Total assets | ||||||||
Industrial - | Lehigh/Central PA | $ | 938,824 | $ | 779,929 | |||
Chicago/Milwaukee | 413,585 | 153,128 | ||||||
Houston | 380,248 | 266,061 | ||||||
Carolinas | 257,230 | 249,479 | ||||||
Other | 1,315,732 | 639,629 | ||||||
Industrial/Office - | Minnesota | 335,613 | 353,428 | |||||
South Florida | 380,138 | 227,754 | ||||||
Richmond/Hampton Roads | 250,008 | 250,600 | ||||||
Arizona | 364,231 | 300,149 | ||||||
United Kingdom | 247,537 | 72,323 | ||||||
Other | 465,997 | 554,352 | ||||||
Office - | Philadelphia | 316,810 | 348,541 | |||||
Southeastern PA | 695,966 | 814,460 | ||||||
Washington D.C. | 180,621 | 50,575 | ||||||
Corporate Other | 233,020 | 113,771 | ||||||
Total assets | $ | 6,775,560 | $ | 5,174,179 |
The Company's real estate assets by reportable segment as of December 31, 2013 and 2012 is as follows (in thousands):
As of December 31, | ||||||||
2013 | 2012 | |||||||
Real estate assets | ||||||||
Industrial - | Lehigh/Central PA | $ | 877,969 | $ | 742,464 | |||
Chicago/Milwaukee | 371,149 | 127,125 | ||||||
Houston | 360,779 | 252,221 | ||||||
Carolinas | 245,938 | 239,052 | ||||||
Other | 964,322 | 323,200 | ||||||
Industrial/Office - | Minnesota | 308,272 | 333,380 | |||||
South Florida | 358,492 | 217,769 | ||||||
Richmond/Hampton Roads | 238,129 | 231,506 | ||||||
Arizona | 348,043 | 287,895 | ||||||
United Kingdom | 187,699 | 44,861 | ||||||
Other | 369,935 | 453,931 | ||||||
Office - | Philadelphia | 229,769 | 266,144 | |||||
Southeastern PA | 638,211 | 748,939 | ||||||
Washington D.C. | 170,068 | 47,820 | ||||||
Total real estate assets | $ | 5,668,775 | $ | 4,316,307 |
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The Company incurred the following costs related to its long-lived assets for the years ended December 31, 2013, 2012 and 2011 (in thousands):
Year Ended December 31, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
Costs incurred on long-lived assets | ||||||||||||
Industrial - | Lehigh/Central PA | $ | 161,925 | $ | 86,245 | $ | 66,472 | |||||
Chicago/Milwaukee | 248,640 | 49,941 | 55,077 | |||||||||
Houston | 116,024 | 46,003 | 10,188 | |||||||||
Carolinas | 15,582 | 26,860 | 85,732 | |||||||||
Other | 664,008 | 21,065 | 13,006 | |||||||||
Industrial/Office - | Minnesota | 38,434 | 41,821 | 45,595 | ||||||||
South Florida | 148,165 | 3,337 | 23,493 | |||||||||
Richmond/Hampton Roads | 15,880 | 8,612 | 5,920 | |||||||||
Arizona | 68,138 | 35,750 | 8,794 | |||||||||
United Kingdom | 155,829 | 6,110 | 4,838 | |||||||||
Other | 79,813 | 80,402 | 4,914 | |||||||||
Office - | Philadelphia | 17,941 | 93,673 | 49,407 | ||||||||
Southeastern PA | 39,590 | 11,577 | 14,851 | |||||||||
Washington D.C. | 125,480 | 621 | 48,786 | |||||||||
Total costs incurred on long-lived assets | $ | 1,895,449 | $ | 512,017 | $ | 437,073 |
19. 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 comprehensive income 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 $491.8 million, $228.5 million and $365.2 million for the years ended December 31, 2013, 2012 and 2011, 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, 2013 | December 31, 2012 | December 31, 2011 | |||||||||
Revenues | $ | 113,586 | $ | 137,476 | $ | 191,723 | |||||
Operating expenses | (41,875 | ) | (48,956 | ) | (73,462 | ) | |||||
Interest and other income | 213 | 580 | 577 | ||||||||
Interest expense | (15,903 | ) | (19,783 | ) | (29,058 | ) | |||||
Depreciation and amortization | (29,566 | ) | (30,739 | ) | (44,297 | ) | |||||
Income before property dispositions | 26,455 | 38,578 | 45,483 | ||||||||
Gain on property dispositions | 95,384 | 12,426 | 60,582 | ||||||||
Net income | $ | 121,839 | $ | 51,004 | $ | 106,065 |
On November 7, 2013, the Company entered into an Agreement of Sale and Purchase pursuant to which the Company agreed to sell a real estate portfolio which included the Company’s Jacksonville, Florida portfolio in its entirety, all of the office properties in Maryland, Southern New Jersey and the Fort Washington suburb of Philadelphia and flex properties in Minnesota for a purchase price of $697.3 million. The properties consisted of 97 buildings containing an aggregate of 6.6 million square feet. On December 24, 2013, the Company closed on the first of two planned settlements under this agreement. The proceeds from the first settlement were $367.7 million and included 49 properties totaling approximately 4.0 million square feet of space and 140 acres of land. The remaining settlement consisted of 47 properties and 19 acres totaling 2.6 million square feet in the Company's Industrial-Other reportable segment and one property totaling 37,000 square feet in the Company's Southeastern PA reportable segment. These properties and land parcels were considered held for sale and were sold subsequent to December 31, 2013 for proceeds of $329.6 million.
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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, 2013, 2012 and 2011, the Company recognized impairment losses of $1.9 million, $6.9 million and $7.8 million, respectively. 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):
Year Ended December 31, | ||||||||||||||
Reportable Segment | 2013 | 2012 | 2011 | |||||||||||
Industrial - | Chicago/Milwaukee | — | 514 | 5,985 | ||||||||||
Houston | — | — | 6 | |||||||||||
Carolinas | — | 36 | 670 | |||||||||||
Other | — | 29 | 538 | |||||||||||
Industrial/Office - | South Florida | — | (51 | ) | (1) | 160 | ||||||||
Richmond/Hampton Roads | — | 27 | 501 | |||||||||||
United Kingdom | 784 | 4,597 | — | |||||||||||
Other | 1,120 | — | (30 | ) | (1) | |||||||||
Office - | Southeastern PA | — | 1,699 | — | ||||||||||
Total | $ | 1,904 | $ | 6,851 | $ | 7,830 |
(1) Represents recovery of estimated sales costs on properties sold.
For the year ended December 31, 2013, $872,000 in impairments related to properties sold were included in the caption discontinued operations in the Company's consolidated statements of comprehensive income, $248,000 in impairments related to land parcels sold were included in the caption gain on property dispositions in the Company's consolidated statements of comprehensive income and $784,000 in impairments were included in the caption equity in earnings (loss) of unconsolidated joint ventures in the Company's consolidated statements of comprehensive income. For the year ended December 31, 2012, $2.3 million in impairments related to properties sold were included in the caption discontinued operations in the Company's consolidated statements of comprehensive income and $4.6 million in impairment was included in the caption equity in earnings (loss) of unconsolidated joint ventures in the Company's consolidated statements of comprehensive income. For the year ended December 31, 2011, $7.9 million in impairment related to properties sold was included in the caption discontinued operations in the Company's consolidated statements of comprehensive income. The Company determined these impairments through a comparison of the aggregate future cash flows (including quoted offer prices, a Level 1 input according to the fair value hierarchy established in ASC 820) 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, 2013.
20. BUSINESS COMBINATION
On October 8, 2013, the Company acquired all of the outstanding general and limited partnership interests of Cabot Industrial Fund III Operating Partnership, L.P., a Delaware limited partnership (the "Cabot Acquisition"). The acquisition resulted in the purchase of a 100% ownership interest in 177 industrial assets totaling approximately 23.0 million square feet. The purchase price for the Cabot Acquisition was $1.469 billion, which was paid through the assumption of approximately $229.8 million of mortgage debt and the remainder in cash. The Company funded the cash portion of the acquisition consideration through a combination of proceeds from an August 2013 equity offering, proceeds from a September 2013 offering of senior notes and draws under its Credit Facility.
89
The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the acquisition date. The allocation of purchase price of the Cabot Acquisition is preliminary pending the receipt of the information necessary to complete the resolution of certain tangible and intangible assets and liabilities including the reconciliation of working capital accounts and the completion of tenant operating expense reconciliations (in thousands):
Assets | |||
Real estate: | |||
Land and land improvements | $ | 247,393 | |
Building and improvements | 1,152,717 | ||
Operating real estate | 1,400,110 | ||
Intangible - in-place leases/market rent | 97,396 | ||
Other assets | 4,953 | ||
Total assets | 1,502,459 | ||
Liabilities | |||
Mortgage loans | 243,230 | ||
Other liabilities | 32,958 | ||
Intangible - market rent | 5,737 | ||
Total liabilities | 281,925 | ||
Net assets acquired | $ | 1,220,534 |
The weighted average amortization period of the in-place lease intangibles is 4.4 years.
Costs incurred in conjunction with the Cabot Acquisition and related funding include the following:
• | $7.6 million of acquisition costs in the year ended December 31, 2013 (included in general and administrative expenses on the Company’s consolidated statements of comprehensive income) and $4.2 million in financing fees in the year ended December 31, 2013 (included in interest expense in the Company’s consolidated statements of comprehensive income). |
• | Deferred financing costs of approximately $2.0 million associated with the assumption of $229.8 million in mortgage debt ($243.2 million fair value) assumed at closing. |
• | Deferred financing costs of $3.9 million incurred in conjunction with the financing of the September 27, 2013 $450.0 million senior unsecured notes offering (included in deferred financing and leasing costs in the Company’s consolidated balance sheets with amortization reflected in interest expense over the life of the related notes in the Company’s consolidated statements of comprehensive income). |
• | Costs of $35.3 million incurred in conjunction with the August 7, 2013 issuance of 24.2 million of the Company’s common shares (included as a reduction to equity in the Company’s consolidated balance sheets). |
The Company recognized $31.4 million of operating revenue and $22.0 million of net operating income (see description of net operating income in Footnote 18 - Segment Information) related to the properties acquired in the Cabot Acquisition. These amounts are included in the Company's consolidated statements of comprehensive income for the year ended December 31, 2013.
The following unaudited pro forma condensed income statement information has been prepared as if the Cabot Acquisition, the Trust’s August 2013 common share offering and the Operating Partnership’s September 2013 senior note offering had been completed on January 1, 2012. The pro forma condensed consolidated financial information does not purport to represent what the Company’s results of operations would have been assuming the completion of the Cabot Acquisition and the related financing activities had occurred on January 1, 2012 nor do they purport to project the results of operations of the Company for any future period (in thousands):
For the Year Ended | ||||||||
December 31, | ||||||||
2013 | 2012 | |||||||
Total operating revenue | $ | 750,896 | $ | 692,583 | ||||
Net income available to common shareholders | $ | 211,601 | $ | 134,295 |
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These amounts have been calculated after applying the Company's accounting policies and adjusting the results of the Cabot Acquisition to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to building and improvements and in-place lease intangibles had been applied on January 1, 2012.
21. DERIVATIVE INSTRUMENTS
In connection with the October 8, 2013 Cabot acquisition, the Company assumed the seller’s interest in three interest rate swap contracts (“Swaps”) that eliminate the impact of changes in interest rates on the payments required under variable rate mortgages that were also assumed. The Swaps had an aggregate notional amount of $105.2 million at December 31, 2013 and expire at various dates between 2018 and 2020.
The Company designated the Swaps as cash flow hedges on November 22, 2013. The change in the fair value of the Swaps from October 8, 2013 through November 22, 2013 in the amount of $813,000 is included as an increase in interest expense in the accompanying consolidated statements of comprehensive income. From November 22, 2013 through December 31, 2013, the effective portion of the change in the fair value of the swaps was an increase in the amount of $1.6 million and was recorded as an increase to other comprehensive income (“OCI”) and will be reclassified into earnings as a component of interest expense in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in the fair value of the Swaps from November 22, 2013 through December 31, 2013 in the amount of $266,000 was recorded as a reduction of interest expense in the accompanying consolidated statements of comprehensive income.
The fair value of the interest rate swaps in the amount of $8.4 million as of December 31, 2013 is included in other liabilities in the accompanying consolidated balance sheets. The Company estimates that $1.4 million will be reclassified from accumulated other comprehensive income as an increase to interest expense over the next twelve months.
The Company has agreements with its derivative counterparties that contain a provision whereby if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default on its derivative obligations. If the Company were to breach any of the contractual provisions of the derivative contracts, it would be required to settle its obligations under the agreements at their termination value including accrued interest for approximately $8.4 million.
22. SUPPLEMENTAL DISCLOSURE TO STATEMENT OF CASH FLOWS
The following are supplemental disclosures to the statements of cash flows for the years ended December 31, 2013, 2012 and 2011 (amounts in thousands):
2013 | 2012 | 2011 | |||||||||
Write-off of fully depreciated/amortized property and deferred costs | $ | 22,269 | $ | 31,069 | $ | 16,591 | |||||
Write-off of depreciated property and deferred costs due to sale | 202,695 | 106,698 | 110,414 | ||||||||
Write-off of preferred units costs due to redemption | 1,214 | 2,806 | — | ||||||||
Assumption of mortgage loans in connection with the acquisition of properties | (229,751 | ) | (12,537 | ) | — | ||||||
Equity contribution from consolidated joint venture partner | — | — | 3,500 | ||||||||
Issuance of preferred units | — | — | 16,597 | ||||||||
Unrealized gains on cash flow hedge | 1,584 | — | — |
Amounts paid in cash for deferred leasing costs incurred in connection with signed leases with tenants are paid in conjunction with improving (acquiring) property, plant and equipment. Such costs are not contained within net real estate. However, they are integral to the completion of a tenant lease and ultimately are related to the improvement and thus the value of the Company’s property, plant and equipment. They are therefore included in investing activities in the Company’s consolidated statements of cash flows.
23. SUBSEQUENT EVENTS
On January 30, 2014, the Company closed on the second settlement of a two-part sale of a real estate portfolio which included the Company’s Jacksonville, Florida portfolio in its entirety, all of the office properties in Maryland, Southern New Jersey and the Fort Washington suburb of Philadelphia and flex properties in Minnesota for an aggregate purchase price of $697.3 million
91
(the "Portfolio Sale"). The first settlement closed on December 24, 2013. The proceeds from the second settlement were $329.6 million and consisted of 48 properties containing an aggregate of 2.6 million square feet and 19 acres of land.
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LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||||||||||
1501 Perryman Road | Aberdeen, MD | $ | — | $ | 5,813,324 | $ | 18,874,059 | $ | 5,131,464 | $ | 5,816,839 | $ | 24,002,008 | $ | 29,818,847 | $ | 4,447,800 | 2005 | 5 - 40 | ||||||||||||||||||||
869 S Route 53 | Addison, IL | — | 1,194,223 | 4,201,881 | 50,460 | 1,194,223 | 4,252,342 | 5,446,565 | 32,013 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
901 S Route 53 | Addison, IL | — | 2,055,066 | 5,984,093 | 118,292 | 2,055,066 | 6,102,385 | 8,157,451 | 45,479 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
200 Boulder Drive | Allentown, PA | — | 4,722,683 | 18,922,645 | 440,557 | 4,722,683 | 19,363,202 | 24,085,885 | 4,655,569 | 2004 | 5 - 40 | ||||||||||||||||||||||||||||
250 Boulder Drive | Allentown, PA | — | 3,599,936 | 12,099,145 | 2,149,322 | 3,717,733 | 14,130,670 | 17,848,403 | 3,760,264 | 2004 | 5 - 40 | ||||||||||||||||||||||||||||
400 Nestle Way | Allentown, PA | — | 8,065,500 | — | 27,602,841 | 8,184,096 | 27,484,245 | 35,668,341 | 12,798,838 | 1997 | 5 - 40 | ||||||||||||||||||||||||||||
650 Boulder Drive | Allentown, PA | — | * | 5,208,248 | — | 31,938,579 | 9,961,788 | 27,185,039 | 37,146,827 | 7,512,248 | 2002 | 5 - 40 | |||||||||||||||||||||||||||
651 Boulder Drive | Allentown, PA | — | 4,308,646 | — | 17,689,842 | 4,308,646 | 17,689,842 | 21,998,488 | 6,583,129 | 2000 | 5 - 40 | ||||||||||||||||||||||||||||
700 Nestle Way | Allentown, PA | — | * | 3,473,120 | — | 20,186,320 | 4,174,970 | 19,484,470 | 23,659,440 | 8,849,079 | 1998 | 5 - 40 | |||||||||||||||||||||||||||
705 Boulder Drive | Allentown, PA | — | * | 10,594,027 | — | 28,536,883 | 10,596,767 | 28,534,143 | 39,130,910 | 9,283,319 | 2001 | 5 - 40 | |||||||||||||||||||||||||||
7165 Ambassador Drive | Allentown, PA | — | * | 792,999 | — | 4,556,918 | 804,848 | 4,545,069 | 5,349,917 | 1,590,637 | 2002 | 5 - 40 | |||||||||||||||||||||||||||
7248 Industrial Boulevard | Allentown, PA | — | 2,670,849 | 13,307,408 | 4,513,163 | 2,670,673 | 17,820,747 | 20,491,420 | 7,278,499 | 1988 | 5 - 40 | ||||||||||||||||||||||||||||
7339 Industrial Boulevard | Allentown, PA | — | 1,187,776 | — | 7,587,682 | 1,197,447 | 7,578,011 | 8,775,458 | 3,127,648 | 1996 | 5 - 40 | ||||||||||||||||||||||||||||
7437 Industrial Boulevard | Allentown, PA | — | 717,488 | 5,022,413 | 3,176,937 | 726,651 | 8,190,186 | 8,916,837 | 4,527,473 | 1976 | 5 - 40 | ||||||||||||||||||||||||||||
8014 Industrial Boulevard | Allentown, PA | — | * | 4,019,258 | — | 9,880,091 | 3,645,117 | 10,254,232 | 13,899,349 | 4,392,952 | 1999 | 5 - 40 | |||||||||||||||||||||||||||
8150 Industrial Boulevard | Allentown, PA | — | 2,564,167 | — | 8,961,554 | 2,571,466 | 8,954,255 | 11,525,721 | 2,579,485 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
8250 Industrial Boulevard | Allentown, PA | — | 1,025,667 | — | 5,245,086 | 1,035,854 | 5,234,899 | 6,270,753 | 1,651,004 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
8400 Industrial Boulevard | Allentown, PA | — | * | 6,725,948 | — | 27,079,140 | 7,521,211 | 26,283,877 | 33,805,088 | 5,400,471 | 2005 | 5 - 40 | |||||||||||||||||||||||||||
6330 Hedgewood Drive | Allentown, PA | — | 531,268 | — | 5,359,739 | 532,047 | 5,358,960 | 5,891,007 | 3,292,239 | 1988 | 5 - 40 | ||||||||||||||||||||||||||||
6350 Hedgewood Drive | Allentown, PA | — | 360,027 | — | 4,028,297 | 560,691 | 3,827,633 | 4,388,324 | 2,142,023 | 1989 | 5 - 40 | ||||||||||||||||||||||||||||
6370 Hedgewood Drive | Allentown, PA | — | 540,795 | — | 3,959,133 | 541,459 | 3,958,469 | 4,499,928 | 1,988,574 | 1990 | 5 - 40 | ||||||||||||||||||||||||||||
6390 Hedgewood Drive | Allentown, PA | — | 707,203 | — | 3,000,621 | 707,867 | 2,999,957 | 3,707,824 | 1,637,716 | 1990 | 5 - 40 | ||||||||||||||||||||||||||||
6520 Stonegate Drive | Allentown, PA | — | 453,315 | — | 1,712,509 | 484,361 | 1,681,463 | 2,165,824 | 894,982 | 1996 | 5 - 40 | ||||||||||||||||||||||||||||
6540 Stonegate Drive | Allentown, PA | — | 422,042 | — | 4,012,192 | 422,730 | 4,011,504 | 4,434,234 | 2,538,102 | 1988 | 5 - 40 | ||||||||||||||||||||||||||||
6560 Stonegate Drive | Allentown, PA | — | 458,281 | — | 2,805,111 | 458,945 | 2,804,447 | 3,263,392 | 1,843,559 | 1989 | 5 - 40 | ||||||||||||||||||||||||||||
6580 Snowdrift Road | Allentown, PA | — | 388,328 | — | 4,211,286 | 389,081 | 4,210,533 | 4,599,614 | 2,461,382 | 1988 | 5 - 40 | ||||||||||||||||||||||||||||
7620 Cetronia Road | Allentown, PA | — | 1,091,806 | 3,851,456 | 258,140 | 1,093,724 | 4,107,678 | 5,201,402 | 1,914,712 | 1990 | 5 - 40 | ||||||||||||||||||||||||||||
180,190 Cochrane Drive | Annapolis, MD | — | 545,757 | — | — | 545,757 | — | 545,757 | — | 1988 | 5 - 40 |
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LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||||||||||
3095 Presidential Drive | Atlanta, GA | — | 200,351 | 1,729,161 | 86,151 | 200,351 | 1,815,312 | 2,015,663 | 14,655 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
3097 Presidential Drive | Atlanta, GA | — | 188,680 | 1,721,048 | 82,483 | 188,680 | 1,803,531 | 1,992,211 | 20,624 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
7030 Buford Highway NE | Atlanta, GA | — | * | 919,850 | 4,051,340 | 406,470 | 919,850 | 4,457,810 | 5,377,660 | 43,359 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
Barton 150 | Barton Under Needwood, UK | — | 2,196,955 | 13,643,981 | — | 2,196,955 | 13,643,981 | 15,840,936 | 246,794 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
1055-1071 Kingsland Drive | Batavia, IL | — | 727,294 | 2,367,529 | 147,582 | 727,294 | 2,515,111 | 3,242,405 | 22,389 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
4606 Richlynn Drive | Belcamp, MD | — | 299,600 | 1,818,861 | 712,788 | 299,600 | 2,531,649 | 2,831,249 | 914,347 | 1985 | 5 - 40 | ||||||||||||||||||||||||||||
11800 Baltimore Avenue | Beltsville,MD | — | * | 2,769,962 | 1,829,028 | 85,389 | 2,769,962 | 1,914,418 | 4,684,380 | 20,796 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
11850 Baltimore Avenue | Beltsville,MD | — | * | 3,595,044 | 2,415,132 | 178,910 | 3,595,044 | 2,594,042 | 6,189,086 | 32,100 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
11900 Baltimore Avenue | Beltsville,MD | — | * | 3,492,036 | 2,024,038 | 237,559 | 3,492,036 | 2,261,597 | 5,753,633 | 39,318 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
12104 Indian Creek Court | Beltsville,MD | — | * | 2,021,752 | 2,503,802 | 214,416 | 2,021,752 | 2,718,218 | 4,739,970 | 34,626 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
12140 Indian Creek Court | Beltsville,MD | — | * | 1,196,726 | 1,949,555 | 91,813 | 1,196,726 | 2,041,367 | 3,238,093 | 16,680 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
12200 Indian Creek Court | Beltsville,MD | — | * | 1,347,882 | 1,460,291 | 102,190 | 1,347,882 | 1,562,481 | 2,910,363 | 13,071 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
12240 Indian Creek Court | Beltsville,MD | — | * | 1,479,307 | 2,159,997 | 124,828 | 1,479,307 | 2,284,826 | 3,764,133 | 18,678 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
1071 Thorndale Avenue | Bensenville,IL | — | 2,173,006 | 2,280,788 | 162,564 | 2,173,006 | 2,443,352 | 4,616,358 | 31,689 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
1260-1274 Ellis Street | Bensenville,IL | — | * | 2,298,560 | 4,020,382 | 358,604 | 2,298,560 | 4,378,986 | 6,677,546 | 44,404 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
371-377 Meyer Road | Bensenville,IL | — | * | 1,903,423 | 3,563,953 | 300,151 | 1,903,423 | 3,864,104 | 5,767,527 | 37,194 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
850-880 Devon Ave | Bensenville,IL | — | * | 2,958,756 | 7,959,013 | 548,843 | 2,958,756 | 8,507,856 | 11,466,612 | 76,496 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
2785 Commerce Center Boulevard | Bethlehem, PA | — | 11,961,623 | — | 45,390,365 | 12,009,985 | 45,342,003 | 57,351,988 | 420,478 | 2011 | 5 - 40 | ||||||||||||||||||||||||||||
74 West Broad Street | Bethlehem, PA | — | 1,096,127 | — | 14,202,628 | 1,099,079 | 14,199,676 | 15,298,755 | 5,877,473 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
10801 Nesbitt Avenue South | Bloomington, MN | — | 784,577 | — | 5,010,219 | 786,382 | 5,008,414 | 5,794,796 | 1,389,997 | 2001 | 5 - 40 | ||||||||||||||||||||||||||||
5705 Old Shakopee Road | Bloomington, MN | — | 2,113,223 | — | 5,520,731 | 2,148,571 | 5,485,383 | 7,633,954 | 1,632,626 | 2001 | 5 - 40 | ||||||||||||||||||||||||||||
5715 Old Shakopee Road West | Bloomington, MN | — | 1,263,226 | 2,360,782 | 2,081,249 | 1,264,758 | 4,440,499 | 5,705,257 | 1,494,873 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
5735 Old Shakopee Road West | Bloomington, MN | — | 1,263,226 | 2,360,782 | 1,028,892 | 1,264,758 | 3,388,142 | 4,652,900 | 1,090,634 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
5775 West Old Shakopee Road | Bloomington, MN | — | 2,052,018 | 3,849,649 | 1,669,598 | 2,060,644 | 5,510,621 | 7,571,265 | 1,948,075 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
6161 Green Valley Drive | Bloomington, MN | — | 740,378 | 3,311,602 | 2,114,197 | 709,961 | 5,456,216 | 6,166,177 | 1,906,331 | 1992 | 5 - 40 | ||||||||||||||||||||||||||||
6601-6625 W. 78th Street | Bloomington, MN | — | 2,263,060 | — | 41,314,332 | 2,310,246 | 41,267,146 | 43,577,392 | 15,344,697 | 1998 | 5 - 40 | ||||||||||||||||||||||||||||
750 Park of Commerce Boulevard | Boca Raton, FL | — | 2,430,000 | — | 22,129,358 | 2,473,406 | 22,085,952 | 24,559,358 | 2,712,965 | 2007 | 5 - 40 | ||||||||||||||||||||||||||||
777 Yamato Road | Boca Raton, FL | — | 4,101,247 | 16,077,347 | 6,795,258 | 4,501,247 | 22,472,605 | 26,973,852 | 8,814,520 | 1987 | 5 - 40 | ||||||||||||||||||||||||||||
951 Broken Sound Parkway | Boca Raton, FL | — | 1,426,251 | 6,098,952 | 1,818,945 | 1,426,251 | 7,917,897 | 9,344,148 | 3,374,737 | 1986 | 5 - 40 |
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LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
1455 Remington Boulevard | Bolingbrook, IL | — | 2,501,294 | 10,704,719 | — | 2,501,294 | 10,704,719 | 13,206,013 | 299,947 | 2012 | 5 - 40 | ||||||||||||||||||||
150 E Crossroads Parkway | Bolingbrook, IL | — | * | 3,078,949 | 14,143,377 | 845,243 | 3,078,949 | 14,988,620 | 18,067,569 | 127,295 | 2013 | 5 - 40 | |||||||||||||||||||
553 S Joliet Ave | Bolingbrook, IL | — | * | 3,764,831 | 15,109,947 | 621,121 | 3,764,831 | 15,731,068 | 19,495,899 | 155,088 | 2013 | 5 - 40 | |||||||||||||||||||
400 Boulder Drive | Breinigsville, PA | — | 2,859,106 | — | 10,599,615 | 2,865,575 | 10,593,146 | 13,458,721 | 2,496,467 | 2003 | 5 - 40 | ||||||||||||||||||||
8201 Industrial Boulevard | Breinigsville, PA | — | * | 2,089,719 | — | 8,353,910 | 2,222,168 | 8,221,461 | 10,443,629 | 1,624,672 | 2006 | 5 - 40 | |||||||||||||||||||
8500 Industrial Bouldvard | Breinigsville, PA | — | 8,752,708 | — | 39,685,301 | 11,511,499 | 36,926,510 | 48,438,009 | 6,658,524 | 2007 | 5 - 40 | ||||||||||||||||||||
860 Nestle Way | Breinigsville, PA | — | 8,118,881 | 18,885,486 | 7,400,855 | 8,118,881 | 26,286,341 | 34,405,222 | 6,820,111 | 2004 | 5 - 40 | ||||||||||||||||||||
1485 W. Commerce Avenue | Carlisle, PA | — | 4,249,868 | 13,886,039 | 2,241,826 | 4,095,262 | 16,282,471 | 20,377,733 | 4,752,884 | 2004 | 5 - 40 | ||||||||||||||||||||
40 Logistics Drive | Carlisle, PA | — | 7,981,850 | — | 30,108,809 | 8,081,272 | 30,009,387 | 38,090,659 | 459,967 | 2011 | 5 - 40 | ||||||||||||||||||||
135-195 East Elk Trail | Carol Stream, IL | — | 4,873,094 | 12,430,320 | 459,455 | 4,873,094 | 12,889,775 | 17,762,869 | 46,085 | 2013 | 5 - 40 | ||||||||||||||||||||
515 Kehoe Boulevard | Carol Stream, IL | — | 5,523,427 | 14,581,705 | — | 5,523,427 | 14,581,705 | 20,105,132 | 56,145 | 2013 | 5 - 40 | ||||||||||||||||||||
1413 Bradley Lane | Carrollton, TX | — | * | 247,477 | 2,028,322 | 83,523 | 247,477 | 2,111,845 | 2,359,322 | 18,245 | 2013 | 5 - 40 | |||||||||||||||||||
3200 Belmeade Drive | Carrollton, TX | — | 1,042,453 | 8,027,974 | 401,254 | 1,042,453 | 8,429,228 | 9,471,681 | 67,676 | 2013 | 5 - 40 | ||||||||||||||||||||
1475 Nitterhouse Dr | Chambersburg, PA | — | 7,081,007 | 39,002,011 | 2,083,301 | 7,081,007 | 41,085,312 | 48,166,319 | 337,082 | 2013 | 5 - 40 | ||||||||||||||||||||
95 Kriner Road | Chambersburg, PA | — | 8,695,501 | — | 34,926,589 | 9,407,871 | 34,214,219 | 43,622,090 | 4,617,807 | 2006 | 5 - 40 | ||||||||||||||||||||
9000 109th Street | Champlin, MN | — | * | 1,251,043 | 11,662,995 | 86,100 | 1,251,043 | 11,749,095 | 13,000,138 | 815,277 | 2011 | 5 - 40 | |||||||||||||||||||
11701 Goodrich Drive | Charlotte, NC | — | 2,054,621 | 6,356,151 | 461,642 | 2,054,621 | 6,817,792 | 8,872,413 | 108,858 | 2013 | 5 - 40 | ||||||||||||||||||||
12810 Virkler Drive | Charlotte, NC | — | 475,368 | 2,367,586 | 706,208 | 476,262 | 3,072,899 | 3,549,161 | 209,041 | 2010 | 5 - 40 | ||||||||||||||||||||
2700 Hutchinson McDonald Road | Charlotte, NC | — | 912,500 | 4,721,259 | 69,635 | 912,500 | 4,790,894 | 5,703,394 | 320,147 | 2011 | 5 - 40 | ||||||||||||||||||||
2701 Hutchinson McDonald Road | Charlotte, NC | — | 1,275,000 | 4,649,750 | 260,294 | 1,275,000 | 4,910,044 | 6,185,044 | 337,129 | 2011 | 5 - 40 | ||||||||||||||||||||
2730 Hutchinson McDonald Road | Charlotte, NC | — | 1,878,750 | 10,129,499 | 3,034 | 1,878,750 | 10,132,533 | 12,011,283 | 609,763 | 2011 | 5 - 40 | ||||||||||||||||||||
2801 Hutchinson McDonald Road | Charlotte, NC | — | 1,065,000 | 6,975,250 | 167,601 | 1,065,000 | 7,142,851 | 8,207,851 | 441,336 | 2011 | 5 - 40 | ||||||||||||||||||||
3000 Crosspoint Center Lane | Charlotte, NC | — | 1,831,250 | 10,779,412 | 171,533 | 1,831,250 | 10,950,945 | 12,782,195 | 705,320 | 2011 | 5 - 40 | ||||||||||||||||||||
3005 Crosspoint Center Lane | Charlotte, NC | — | 1,990,000 | 6,561,540 | 433,141 | 1,990,000 | 6,994,681 | 8,984,681 | 439,153 | 2011 | 5 - 40 | ||||||||||||||||||||
4045 Perimeter West Drive | Charlotte, NC | — | 1,418,928 | 7,511,050 | 26,915 | 1,418,928 | 7,537,965 | 8,956,893 | 568,940 | 2011 | 5 - 40 | ||||||||||||||||||||
4047 Perimeter West Drive | Charlotte, NC | — | 1,279,004 | — | 6,391,962 | 1,279,004 | 6,391,962 | 7,670,966 | 293,396 | 2011 | 5 - 40 | ||||||||||||||||||||
4525 Statesville Road | Charlotte, NC | — | 841,250 | 5,279,315 | 167,556 | 837,144 | 5,450,977 | 6,288,121 | 331,322 | 2011 | 5 - 40 | ||||||||||||||||||||
4835 Sirona Drive | Charlotte, NC | 4,243,165 | 690,750 | 5,086,388 | 172,041 | 690,750 | 5,258,429 | 5,949,179 | 207,403 | 2012 | 5 - 40 | ||||||||||||||||||||
4925 Sirona Drive | Charlotte, NC | 4,164,318 | 603,003 | 4,969,011 | — | 603,003 | 4,969,011 | 5,572,014 | 211,106 | 2012 | 5 - 40 |
95
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
5033 Sirona Drive | Charlotte, NC | 3,634,246 | 509,247 | 4,710,218 | 160,736 | 613,962 | 4,766,239 | 5,380,201 | 162,055 | 2012 | 5 - 40 | ||||||||||||||||||||
8910 Pioneer Avenue | Charlotte, NC | — | 527,873 | 4,959,206 | 46,726 | 527,873 | 5,005,932 | 5,533,805 | 302,605 | 2011 | 5 - 40 | ||||||||||||||||||||
8916 Pioneer Avenue | Charlotte, NC | — | 557,730 | 5,785,333 | 340,623 | 557,730 | 6,125,956 | 6,683,686 | 355,651 | 2011 | 5 - 40 | ||||||||||||||||||||
1301 Executive Boulevard | Chesapeake, VA | — | 997,570 | — | 5,163,173 | 970,151 | 5,190,592 | 6,160,743 | 1,164,892 | 2005 | 5 - 40 | ||||||||||||||||||||
1305 Executive Boulevard | Chesapeake, VA | — | 861,020 | — | 4,975,983 | 1,129,850 | 4,707,153 | 5,837,003 | 1,276,635 | 2002 | 5 - 40 | ||||||||||||||||||||
1309 Executive Boulevard | Chesapeake, VA | — | 926,125 | — | 5,098,066 | 955,374 | 5,068,817 | 6,024,191 | 1,628,773 | 2001 | 5 - 40 | ||||||||||||||||||||
1313 Executive Boulevard | Chesapeake, VA | — | 1,180,036 | — | 5,146,319 | 1,708,050 | 4,618,305 | 6,326,355 | 1,467,773 | 2002 | 5 - 40 | ||||||||||||||||||||
2601 Indian River Road | Chesapeake, VA | — | * | 1,711,746 | 10,418,032 | 433,142 | 1,711,746 | 10,851,174 | 12,562,920 | 91,239 | 2013 | 5 - 40 | |||||||||||||||||||
500 Independence Parkway | Chesapeake, VA | — | 864,150 | 4,427,285 | 660,242 | 866,609 | 5,085,068 | 5,951,677 | 1,418,193 | 2004 | 5 - 40 | ||||||||||||||||||||
501 Independence Parkway | Chesapeake, VA | — | 1,202,556 | 5,975,538 | 1,572,766 | 1,292,273 | 7,458,587 | 8,750,860 | 1,863,791 | 2005 | 5 - 40 | ||||||||||||||||||||
505 Independence Parkway | Chesapeake, VA | — | 1,292,062 | 6,456,515 | 1,274,225 | 1,292,254 | 7,730,547 | 9,022,801 | 1,773,034 | 2005 | 5 - 40 | ||||||||||||||||||||
510 Independence Parkway | Chesapeake, VA | — | 2,012,149 | 7,546,882 | 996,838 | 2,014,689 | 8,541,181 | 10,555,870 | 2,161,922 | 2005 | 5 - 40 | ||||||||||||||||||||
676 Independence Parkway | Chesapeake, VA | — | 1,527,303 | — | 11,321,991 | 1,562,903 | 11,286,391 | 12,849,294 | 1,339,355 | 2006 | 5 - 40 | ||||||||||||||||||||
700 Independence Parkway | Chesapeake, VA | — | 1,950,375 | 7,236,994 | 675,718 | 1,951,135 | 7,911,952 | 9,863,087 | 2,365,051 | 2004 | 5 - 40 | ||||||||||||||||||||
1540 S 54th Avenue | Cicero, IL | — | 3,540,236 | 20,130,552 | 927,655 | 3,540,236 | 21,058,207 | 24,598,443 | 162,747 | 2013 | 5 - 40 | ||||||||||||||||||||
4650 Lake Forest Drive | Cinncinnati, OH | — | 1,030,242 | 4,003,024 | 115,772 | 1,030,242 | 4,118,795 | 5,149,037 | 39,758 | 2013 | 5 - 40 | ||||||||||||||||||||
4750 Lake Forest Drive | Cinncinnati, OH | — | 1,138,166 | 5,914,789 | 197,670 | 1,138,166 | 6,112,459 | 7,250,625 | 58,433 | 2013 | 5 - 40 | ||||||||||||||||||||
9645 Gerwig Lane | Columbia, MD | — | 1,915,960 | 6,461,228 | 320,391 | 1,915,960 | 6,781,619 | 8,697,579 | 59,613 | 2013 | 5 - 40 | ||||||||||||||||||||
2550 John Glenn Avenue | Columbus, OH | — | 540,601 | 5,129,342 | 169,332 | 540,601 | 5,298,674 | 5,839,275 | 41,107 | 2013 | 5 - 40 | ||||||||||||||||||||
3800 Twin Creeks Drive | Columbus, OH | — | 549,393 | 4,643,302 | 181,695 | 549,393 | 4,824,997 | 5,374,390 | 41,734 | 2013 | 5 - 40 | ||||||||||||||||||||
455 Airline Drive | Coppell, TX | — | * | 312,701 | 2,311,531 | 334,283 | 312,701 | 2,645,814 | 2,958,515 | 17,627 | 2013 | 5 - 40 | |||||||||||||||||||
2130 Baldwin Avenue | Crofton, MD | — | 3,172,032 | 7,350,782 | 418,907 | 3,172,032 | 7,769,689 | 10,941,721 | 64,488 | 2013 | 5 - 40 | ||||||||||||||||||||
329-333 Herrod Blvd | Dayton, NJ | — | * | 4,039,559 | 20,863,051 | 937,014 | 4,039,559 | 21,800,065 | 25,839,624 | 155,086 | 2013 | 5 - 40 | |||||||||||||||||||
1250 Hall Court | Deer Park, TX | 2,722,013 | 829,570 | 4,778,327 | 47,399 | 831,611 | 4,823,685 | 5,655,296 | 934,423 | 2006 | 5 - 40 | ||||||||||||||||||||
301-321 S Goolsby Blvd | Deerfield Beach, FL | — | 498,136 | 2,781,180 | 18,971 | 498,136 | 2,800,151 | 3,298,287 | 22,061 | 2013 | 5 - 40 | ||||||||||||||||||||
1680 Executive Drive | Duluth, GA | — | 1,928,412 | 4,651,819 | 573,340 | 1,928,412 | 5,225,159 | 7,153,571 | 62,809 | 2013 | 5 - 40 | ||||||||||||||||||||
1700 Executive Drive | Duluth, GA | — | 1,082,072 | 2,496,599 | 319,679 | 1,082,072 | 2,816,278 | 3,898,350 | 30,845 | 2013 | 5 - 40 | ||||||||||||||||||||
2670 Breckinridge Blvd | Duluth, GA | — | 1,676,415 | 4,567,592 | 328,885 | 1,676,415 | 4,896,478 | 6,572,893 | 61,091 | 2013 | 5 - 40 | ||||||||||||||||||||
170 Parkway West | Duncan, SC | — | 598,348 | 3,643,756 | 203,325 | 598,918 | 3,846,511 | 4,445,429 | 860,720 | 2006 | 5 - 40 |
96
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
190 Parkway West | Duncan, SC | — | 551,663 | 3,310,993 | 153,027 | 552,211 | 3,463,471 | 4,015,682 | 680,980 | 2006 | 5 - 40 | ||||||||||||||||||||
265 Parkway East | Duncan, SC | — | 901,444 | 5,751,389 | 190,639 | 902,374 | 5,941,098 | 6,843,472 | 1,430,296 | 2006 | 5 - 40 | ||||||||||||||||||||
285 Parkway East | Duncan, SC | — | 975,433 | 5,851,990 | 358,457 | 976,393 | 6,209,487 | 7,185,880 | 1,219,786 | 2006 | 5 - 40 | ||||||||||||||||||||
3169 Dodd Road | Eagan, MN | — | 988,594 | 6,586,907 | — | 988,594 | 6,586,907 | 7,575,501 | 343,323 | 2012 | 5 - 40 | ||||||||||||||||||||
3255 Neil Armstrong Boulevard | Eagan, MN | — | 1,131,017 | — | 3,372,043 | 1,103,860 | 3,399,200 | 4,503,060 | 1,275,823 | 1998 | 5 - 40 | ||||||||||||||||||||
3711 Kennebec Drive | Eagan, MN | — | 999,702 | 4,042,589 | 4,966 | 999,702 | 4,047,555 | 5,047,257 | 381,896 | 2011 | 5 - 40 | ||||||||||||||||||||
917 Lone Oak Road | Eagan, MN | — | * | 1,493,115 | 6,120,455 | 535,886 | 1,493,115 | 6,656,341 | 8,149,456 | 66,015 | 2013 | 5 - 40 | |||||||||||||||||||
10301-10305 West 70th Street | Eden Prairie, MN | — | 120,622 | 1,085,226 | 474,001 | 118,300 | 1,561,549 | 1,679,849 | 722,729 | 1984 | 5 - 40 | ||||||||||||||||||||
10321 West 70th Street | Eden Prairie, MN | — | 145,198 | 1,305,700 | 568,632 | 142,399 | 1,877,131 | 2,019,530 | 666,111 | 1984 | 5 - 40 | ||||||||||||||||||||
10333 West 70th Street | Eden Prairie, MN | — | 110,746 | 995,868 | 351,149 | 108,610 | 1,349,153 | 1,457,763 | 637,325 | 1984 | 5 - 40 | ||||||||||||||||||||
10349-10357 West 70th Street | Eden Prairie, MN | — | 275,903 | 2,481,666 | 675,480 | 270,584 | 3,162,465 | 3,433,049 | 1,345,212 | 1985 | 5 - 40 | ||||||||||||||||||||
10365-10375 West 70th Street | Eden Prairie, MN | — | 291,077 | 2,618,194 | 629,305 | 285,464 | 3,253,112 | 3,538,576 | 1,378,360 | 1985 | 5 - 40 | ||||||||||||||||||||
10393-10394 West 70th Street | Eden Prairie, MN | — | 269,618 | 2,423,318 | 877,174 | 264,419 | 3,305,691 | 3,570,110 | 1,257,559 | 1985 | 5 - 40 | ||||||||||||||||||||
10400 Viking Drive | Eden Prairie, MN | — | 2,912,391 | — | 22,747,046 | 2,938,372 | 22,721,065 | 25,659,437 | 9,595,577 | 1999 | 5 - 40 | ||||||||||||||||||||
7075 Flying Cloud Drive | Eden Prairie, MN | — | 10,232,831 | 10,855,851 | 58,415 | 10,243,977 | 10,903,119 | 21,147,096 | 1,863,010 | 2007 | 5 - 40 | ||||||||||||||||||||
7078 Shady Oak Road | Eden Prairie, MN | — | 343,093 | 3,085,795 | 1,500,861 | 336,481 | 4,593,268 | 4,929,749 | 1,838,989 | 1985 | 5 - 40 | ||||||||||||||||||||
7615 Smetana Lane | Eden Prairie, MN | — | 1,011,517 | 8,469,751 | 3,000,555 | 6,480,713 | 9,481,268 | 2,309,902 | 2001 | 5 - 40 | |||||||||||||||||||||
7625 Smetana Lane | Eden Prairie, MN | — | 4,500,641 | — | 3,023,926 | 1,916,609 | 5,607,958 | 7,524,567 | 1,204,109 | 2006 | 5 - 40 | ||||||||||||||||||||
7695-7699 Anagram Drive | Eden Prairie, MN | — | 760,525 | 3,254,758 | 991,584 | 760,525 | 4,246,342 | 5,006,867 | 1,924,564 | 1997 | 5 - 40 | ||||||||||||||||||||
7777 Golden Triangle Drive | Eden Prairie, MN | — | 993,101 | 2,136,862 | 1,151,599 | 993,101 | 3,288,460 | 4,281,561 | 1,272,795 | 2000 | 5 - 40 | ||||||||||||||||||||
7800 Equitable Drive | Eden Prairie, MN | — | 2,188,525 | 3,788,762 | 392,378 | 2,188,525 | 4,181,139 | 6,369,664 | 1,472,735 | 1993 | 5 - 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 | 2,932,113 | 1994 | 5 - 40 | ||||||||||||||||||||
8855 Columbine Road | Eden Prairie, MN | — | 1,400,925 | 5,226,017 | 1,599,757 | 5,027,185 | 6,626,942 | 1,221,178 | 2000 | 5 - 40 | |||||||||||||||||||||
8911 Columbine Road (B2) | Eden Prairie, MN | — | 916,687 | 3,559,577 | 1,718,407 | 2,757,857 | 4,476,264 | 844,041 | 2000 | 5 - 40 | |||||||||||||||||||||
8937 Columbine Road | Eden Prairie, MN | — | 1,325,829 | 4,385,490 | 1,739,966 | 3,971,353 | 5,711,319 | 1,270,671 | 2001 | 5 - 40 | |||||||||||||||||||||
8967 Columbine Road | Eden Prairie, MN | — | 1,450,000 | — | 4,088,618 | 1,450,000 | 4,088,618 | 5,538,618 | 1,422,640 | 2000 | 5 - 40 | ||||||||||||||||||||
8995 Columbine Road | Eden Prairie, MN | — | 1,087,594 | 3,850,532 | 2,055,296 | 2,882,830 | 4,938,126 | 998,881 | 2001 | 5 - 40 | |||||||||||||||||||||
9023 Columbine Road | Eden Prairie, MN | — | 1,956,273 | — | 5,123,697 | 1,956,273 | 5,123,697 | 7,079,970 | 2,059,439 | 1999 | 5 - 40 | ||||||||||||||||||||
2250 Arthur Avenue | Elk Grove, IL | — | 1,403,196 | 2,386,396 | 51,263 | 1,403,196 | 2,437,659 | 3,840,855 | 20,679 | 2013 | 5 - 40 |
97
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
6600 Business Parkway | Elkridge, MD | — | 3,680,220 | 14,671,910 | 395,344 | 3,680,220 | 15,067,254 | 18,747,474 | 105,499 | 2013 | 5 - 40 | ||||||||||||||||||||
6675 Business Parkway | Elkridge, MD | — | * | 2,421,854 | 9,730,192 | 225,677 | 2,421,854 | 9,955,869 | 12,377,723 | 73,191 | 2013 | 5 - 40 | |||||||||||||||||||
7351 Coca Cola Drive | Elkridge, MD | — | 1,897,044 | — | 7,286,413 | 3,023,417 | 6,160,040 | 9,183,457 | 1,292,513 | 2006 | 5 - 40 | ||||||||||||||||||||
21705-21707 Mississippi Street | Elwood, IL | — | 10,594,259 | 30,329,802 | 892,439 | 10,594,259 | 31,222,242 | 41,816,501 | 2,032,198 | 2011 | 5 - 40 | ||||||||||||||||||||
27143 S. Baseline Road | Elwood, IL | — | 6,022,000 | 5,612,934 | 191,986 | 6,022,000 | 5,804,920 | 11,826,920 | 423,122 | 2011 | 5 - 40 | ||||||||||||||||||||
1800 Donaldson Road | Erlanger, KY | — | — | 13,211,604 | 616,661 | — | 13,828,265 | 13,828,265 | 115,624 | 2013 | 5 - 40 | ||||||||||||||||||||
180 Sheree Boulevard | Exton, PA | — | 2,647,861 | 11,334,403 | 2,676,399 | 2,649,426 | 14,009,237 | 16,658,663 | 3,117,837 | 2007 | 5 - 40 | ||||||||||||||||||||
6880 Fairfield Drive | Fairfield, OH | — | 412,136 | 3,029,177 | 74,745 | 412,136 | 3,103,922 | 3,516,058 | 24,226 | 2013 | 5 - 40 | ||||||||||||||||||||
7000-7018 Fairfield Business | Fairfield, OH | — | 367,925 | 2,205,817 | 79,892 | 367,925 | 2,285,709 | 2,653,634 | 19,689 | 2013 | 5 - 40 | ||||||||||||||||||||
2000 Southpointe Dr | Forest Park, GA | — | 756,221 | 9,115,626 | 429,263 | 756,221 | 9,544,889 | 10,301,110 | 81,581 | 2013 | 5 - 40 | ||||||||||||||||||||
1400 NW 65th Place | Fort Lauderdale, FL | — | * | 545,480 | 2,540,210 | 66,119 | 545,480 | 2,606,329 | 3,151,809 | 18,432 | 2013 | 5 - 40 | |||||||||||||||||||
6500 NW 12th Avenue | Fort Lauderdale, FL | — | * | — | 3,064,734 | 159,947 | — | 3,224,681 | 3,224,681 | 27,778 | 2013 | 5 - 40 | |||||||||||||||||||
6501 NW 12th Avenue | Fort Lauderdale, FL | — | 519,984 | 2,677,465 | 51,998 | 519,984 | 2,729,463 | 3,249,447 | 20,525 | 2013 | 5 - 40 | ||||||||||||||||||||
6600 NW 12th Avenue | Fort Lauderdale, FL | — | * | — | 2,988,181 | 159,201 | — | 3,147,382 | 3,147,382 | 28,193 | 2013 | 5 - 40 | |||||||||||||||||||
5400 Alliance Gateway Freeway | Fort Worth, TX | — | 1,515,860 | 6,710,118 | 403,669 | 1,515,860 | 7,113,787 | 8,629,647 | 72,186 | 2013 | 5 - 40 | ||||||||||||||||||||
101 Constitution Blvd | Franklin, MA | — | 532,339 | 4,206,412 | 310,120 | 532,339 | 4,516,532 | 5,048,871 | 96,829 | 2013 | 5 - 40 | ||||||||||||||||||||
20 Liberty Way | Franklin, MA | — | 618,521 | 4,570,341 | 339,916 | 618,521 | 4,910,257 | 5,528,778 | 50,621 | 2013 | 5 - 40 | ||||||||||||||||||||
9601 Cosner Drive | Fredericksburg, VA | — | 475,262 | 3,917,234 | 242,595 | 475,262 | 4,159,829 | 4,635,091 | 1,926,193 | 1995 | 5 - 40 | ||||||||||||||||||||
200 W Cypress Creek Road | Ft. Lauderdale, FL | — | 3,414,989 | 2,399,738 | 8,597,913 | 3,414,989 | 10,997,651 | 14,412,640 | 2,194,161 | 2003 | 5 - 40 | ||||||||||||||||||||
5410 - 5430 Northwest 33rd Avenue | Ft. Lauderdale, FL | — | 603,776 | 4,176,238 | 1,424,212 | 625,111 | 5,579,115 | 6,204,226 | 2,243,225 | 1985 | 5 - 40 | ||||||||||||||||||||
12601 Industry Street | Garden Grove, CA | — | 2,048,143 | 1,088,697 | 70,518 | 2,048,143 | 1,159,215 | 3,207,358 | 17,229 | 2013 | 5 - 40 | ||||||||||||||||||||
12641 Industry Street | Garden Grove, CA | — | 3,766,822 | 2,539,214 | 132,812 | 3,766,822 | 2,672,026 | 6,438,848 | 22,781 | 2013 | 5 - 40 | ||||||||||||||||||||
850 S Jupiter Road | Garland, TX | — | 799,707 | 6,122,065 | 249,660 | 799,707 | 6,371,725 | 7,171,432 | 50,441 | 2013 | 5 - 40 | ||||||||||||||||||||
2510 W Main Street | Grand Prairie, TX | — | * | 1,785,741 | 11,158,818 | 869,832 | 1,785,741 | 12,028,650 | 13,814,391 | 117,548 | 2013 | 5 - 40 | |||||||||||||||||||
4251 North Highway 121 | Grapevine, TX | — | * | 1,165,780 | 7,799,270 | 420,260 | 1,165,780 | 8,219,529 | 9,385,309 | 71,766 | 2013 | 5 - 40 | |||||||||||||||||||
116 Pleasant Ridge Road | Greenville, SC | — | 1,547,811 | — | 14,172,014 | 3,712,683 | 12,007,142 | 15,719,825 | 1,664,305 | 2006 | 5 - 40 | ||||||||||||||||||||
45 Brookfield Oaks Drive | Greenville, SC | — | 818,114 | — | 4,471,082 | 825,529 | 4,463,667 | 5,289,196 | 695,196 | 2006 | 5 - 40 | ||||||||||||||||||||
2011 Southtech Drive | Greenwood, IN | — | 223,702 | 3,574,142 | 310,465 | 223,702 | 3,884,607 | 4,108,309 | 41,409 | 2013 | 5 - 40 |
98
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
2121 Southtech Drive | Greenwood, IN | — | 272,823 | 3,606,920 | 411,808 | 272,823 | 4,018,729 | 4,291,552 | 51,669 | 2013 | 5 - 40 | ||||||||||||||||||||
800 Commerce Parkway West Dr | Greenwood, IN | — | 1,374,664 | 29,963,830 | 1,317,168 | 1,374,664 | 31,280,998 | 32,655,662 | 259,427 | 2013 | 5 - 40 | ||||||||||||||||||||
1487 South Highway 101 | Greer, SC | — | 464,237 | — | 5,829,595 | 1,301,738 | 4,992,094 | 6,293,832 | 612,898 | 2007 | 5 - 40 | ||||||||||||||||||||
2727 London Grove Road | Groveport, OH | — | 1,875,607 | 11,937,935 | 334,714 | 1,875,607 | 12,272,649 | 14,148,256 | 112,099 | 2013 | 5 - 40 | ||||||||||||||||||||
11841 Newgate Boulevard | Hagerstown, MD | — | 3,356,207 | — | 30,555,105 | 9,741,685 | 24,169,627 | 33,911,312 | 3,608,467 | 2008 | 5 - 40 | ||||||||||||||||||||
1 Enterprise Parkway | Hampton, VA | — | 974,675 | 5,579,869 | 1,739,690 | 974,675 | 7,319,559 | 8,294,234 | 3,146,481 | 1987 | 5 - 40 | ||||||||||||||||||||
1317 Executive Boulevard | Hampton, VA | — | 1,650,423 | — | 7,945,718 | 1,128,829 | 8,467,312 | 9,596,141 | 1,721,885 | 2006 | 5 - 40 | ||||||||||||||||||||
21 Enterprise Parkway | Hampton, VA | — | 263,668 | 8,167,118 | 1,136,137 | 265,719 | 9,301,204 | 9,566,923 | 3,214,411 | 1999 | 5 - 40 | ||||||||||||||||||||
22 Enterprise Parkway | Hampton, VA | — | 1,097,368 | 6,760,778 | 1,388,402 | 1,097,368 | 8,149,180 | 9,246,548 | 3,333,063 | 1990 | 5 - 40 | ||||||||||||||||||||
5 Manhattan Square | Hampton, VA | — | 207,368 | — | 1,535,912 | 212,694 | 1,530,586 | 1,743,280 | 595,962 | 1999 | 5 - 40 | ||||||||||||||||||||
521 Butler Farm Road | Hampton, VA | — | 750,769 | 2,911,149 | 225,580 | 710,486 | 3,177,012 | 3,887,498 | 900,610 | 2003 | 5 - 40 | ||||||||||||||||||||
1560 Hunter Road | Hanover Park, IL | — | * | 2,639,734 | 12,310,741 | 578,659 | 2,639,734 | 12,889,400 | 15,529,134 | 101,393 | 2013 | 5 - 40 | |||||||||||||||||||
1575 Hunter Road | Hanover Park, IL | — | * | 3,293,284 | 17,235,926 | 752,167 | 3,293,284 | 17,988,093 | 21,281,377 | 151,165 | 2013 | 5 - 40 | |||||||||||||||||||
7361 Coca Cola Drive | Hanover, MD | — | 2,245,187 | — | 9,391,010 | 3,822,710 | 7,813,487 | 11,636,197 | 986,214 | 2004 | 5 - 40 | ||||||||||||||||||||
500 McCarthy Drive | Harrisburg, PA | — | * | 5,194,872 | 19,991,436 | 4,534,843 | 5,687,013 | 24,034,138 | 29,721,151 | 6,506,685 | 2005 | 5 - 40 | |||||||||||||||||||
600 Industrial Drive | Harrisburg, PA | — | 7,743,800 | — | 29,107,932 | 9,368,557 | 27,483,175 | 36,851,732 | 6,194,273 | 2005 | 5 - 40 | ||||||||||||||||||||
7195 Grayson Road | Harrisburg, PA | — | 464,534 | 6,066,272 | 129,149 | 464,534 | 6,195,421 | 6,659,955 | 46,145 | 2013 | 5 - 40 | ||||||||||||||||||||
7253 Grayson Road | Harrisburg, PA | — | 954,130 | 10,585,367 | 280,506 | 954,130 | 10,865,873 | 11,820,003 | 76,147 | 2013 | 5 - 40 | ||||||||||||||||||||
12537 Cerise Avenue | Hawthorne, CA | — | 2,203,194 | 5,758,809 | 94,181 | 2,203,194 | 5,852,990 | 8,056,184 | 39,989 | 2013 | 5 - 40 | ||||||||||||||||||||
1010 Petersburg Road | Hebron, KY | — | 305,471 | 5,434,505 | 306,564 | 305,471 | 5,741,069 | 6,046,540 | 46,358 | 2013 | 5 - 40 | ||||||||||||||||||||
785 Lindbergh Court | Hebron, KY | — | 401,410 | 3,087,899 | 146,729 | 401,410 | 3,234,628 | 3,636,038 | 38,908 | 2013 | 5 - 40 | ||||||||||||||||||||
805 Lindbergh Court | Hebron, KY | — | 292,096 | 2,502,486 | 156,556 | 292,096 | 2,659,041 | 2,951,137 | 25,212 | 2013 | 5 - 40 | ||||||||||||||||||||
825 Lindbergh Court | Hebron, KY | — | 370,149 | 3,095,116 | 198,440 | 370,149 | 3,293,557 | 3,663,706 | 41,428 | 2013 | 5 - 40 | ||||||||||||||||||||
845 Lindbergh Court | Hebron, KY | — | 444,318 | 3,811,889 | 213,437 | 444,318 | 4,025,326 | 4,469,644 | 44,027 | 2013 | 5 - 40 | ||||||||||||||||||||
1498 Eagle Hill Drive | High Point, NC | — | 94,274 | — | 6,219,495 | 791,880 | 5,521,889 | 6,313,769 | 1,004,621 | 2005 | 5 - 40 | ||||||||||||||||||||
4183 Eagle Hill Drive | High Point, NC | — | 122,203 | — | 3,259,320 | 526,266 | 2,855,257 | 3,381,523 | 978,595 | 2001 | 5 - 40 | ||||||||||||||||||||
4189 Eagle Hill Drive | High Point, NC | — | 100,106 | — | 3,595,213 | 431,106 | 3,264,213 | 3,695,319 | 1,228,964 | 2001 | 5 - 40 |
99
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
4195 Eagle Hill Drive | High Point, NC | — | 107,586 | — | 3,543,904 | 505,700 | 3,145,790 | 3,651,490 | 804,486 | 2004 | 5 - 40 | ||||||||||||||||||||
4328, 4336 Federal Drive | High Point, NC | 2,020,222 | 521,122 | — | 7,525,947 | 825,092 | 7,221,977 | 8,047,069 | 4,379,264 | 1995 | 5 - 40 | ||||||||||||||||||||
4344 Federal Drive | High Point, NC | — | 484,001 | — | 2,848,373 | 173,623 | 3,158,751 | 3,332,374 | 1,489,961 | 1996 | 5 - 40 | ||||||||||||||||||||
4380 Federal Drive | High Point, NC | — | 282,996 | — | 2,160,892 | 283,368 | 2,160,520 | 2,443,888 | 914,535 | 1997 | 5 - 40 | ||||||||||||||||||||
4388 Federal Drive | High Point, NC | — | 143,661 | — | 1,213,832 | 132,655 | 1,224,838 | 1,357,493 | 493,837 | 1997 | 5 - 40 | ||||||||||||||||||||
4475 Premier Drive | High Point, NC | — | 748,693 | — | 6,805,541 | 1,525,421 | 6,028,813 | 7,554,234 | 826,571 | 2006 | 5 - 40 | ||||||||||||||||||||
4500 Green Point Drive | High Point, NC | — | 230,622 | — | 2,434,222 | 231,692 | 2,433,152 | 2,664,844 | 1,236,930 | 1989 | 5 - 40 | ||||||||||||||||||||
4501 Green Point Drive | High Point, NC | — | 319,289 | — | 3,156,348 | 320,450 | 3,155,187 | 3,475,637 | 1,466,476 | 1989 | 5 - 40 | ||||||||||||||||||||
4523 Green Point Drive | High Point, NC | — | 234,564 | — | 3,324,961 | 235,698 | 3,323,827 | 3,559,525 | 1,819,904 | 1988 | 5 - 40 | ||||||||||||||||||||
4524 Green Point Drive | High Point, NC | — | 182,810 | — | 2,756,119 | 183,888 | 2,755,041 | 2,938,929 | 1,503,373 | 1989 | 5 - 40 | ||||||||||||||||||||
Unit 5 Logix Road | Hinckley, UK | — | 10,547,677 | 29,691,911 | — | 10,547,677 | 29,691,911 | 40,239,588 | 548,662 | 2013 | 5 - 40 | ||||||||||||||||||||
1515 6th Street South | Hopkins,MN | — | 813,036 | 1,503,075 | 361,550 | 813,036 | 1,864,625 | 2,677,661 | 27,652 | 2013 | 5 - 40 | ||||||||||||||||||||
1600 5th Street South | Hopkins,MN | — | 339,336 | 2,106,454 | 80,794 | 339,336 | 2,187,249 | 2,526,585 | 17,021 | 2013 | 5 - 40 | ||||||||||||||||||||
100 Gibraltar Road | Horsham, PA | — | 38,729 | 349,811 | 59,073 | 38,729 | 408,884 | 447,613 | 155,147 | 1975 | 5 - 40 | ||||||||||||||||||||
100 Witmer Road | Horsham, PA | — | 3,102,784 | — | 20,452,861 | 3,764,784 | 19,790,861 | 23,555,645 | 6,480,136 | 1996 | 5 - 40 | ||||||||||||||||||||
100-107 Lakeside Drive | Horsham, PA | — | 239,528 | 2,163,498 | 617,512 | 255,528 | 2,765,010 | 3,020,538 | 1,042,612 | 1982 | 5 - 40 | ||||||||||||||||||||
101 Gibraltar Road | Horsham, PA | — | 651,990 | 5,888,989 | 2,069,897 | 732,552 | 7,878,324 | 8,610,876 | 3,284,305 | 1977 | 5 - 40 | ||||||||||||||||||||
101-111 Rock Road | Horsham, PA | — | 350,561 | 3,166,389 | 1,163,717 | 452,251 | 4,228,416 | 4,680,667 | 1,871,431 | 1975 | 5 - 40 | ||||||||||||||||||||
102 Rock Road | Horsham, PA | — | 1,110,209 | 2,301,302 | 1,203,842 | 1,185,635 | 3,429,717 | 4,615,352 | 1,132,494 | 1985 | 5 - 40 | ||||||||||||||||||||
103-109 Gibraltar Road | Horsham, PA | — | 270,906 | 2,448,500 | 362,165 | 270,906 | 2,810,664 | 3,081,570 | 1,188,356 | 1978 | 5 - 40 | ||||||||||||||||||||
104 Witmer Road | Horsham, PA | — | 1,248,148 | — | 593,447 | 189,793 | 1,651,802 | 1,841,595 | 643,313 | 1975 | 5 - 40 | ||||||||||||||||||||
110 Gibraltar Road | Horsham, PA | — | 673,041 | 5,776,369 | 1,969,345 | 673,041 | 7,745,714 | 8,418,755 | 3,132,658 | 1979 | 5 - 40 | ||||||||||||||||||||
111-159 Gibraltar Road | Horsham, PA | — | 489,032 | 4,126,151 | 1,235,014 | 489,032 | 5,361,165 | 5,850,197 | 2,365,400 | 1981 | 5 - 40 | ||||||||||||||||||||
113-123 Rock Road | Horsham, PA | — | 351,072 | 3,171,001 | 708,270 | 451,731 | 3,778,612 | 4,230,343 | 1,601,594 | 1975 | 5 - 40 | ||||||||||||||||||||
120 Gibraltar Road | Horsham, PA | — | 533,142 | 4,830,515 | 1,855,500 | 558,142 | 6,661,015 | 7,219,157 | 2,639,758 | 1980 | 5 - 40 | ||||||||||||||||||||
123-135 Rock Road | Horsham, PA | — | 292,360 | 2,411,677 | 2,125,649 | 393,019 | 4,436,667 | 4,829,686 | 1,769,955 | 1975 | 5 - 40 | ||||||||||||||||||||
132 Welsh Road | Horsham, PA | — | 1,333,642 | — | 3,752,651 | 1,408,041 | 3,678,252 | 5,086,293 | 1,523,111 | 1998 | 5 - 40 | ||||||||||||||||||||
161-175 Gibraltar Road | Horsham, PA | — | 294,673 | 2,663,722 | 957,148 | 294,673 | 3,620,870 | 3,915,543 | 1,559,023 | 1976 | 5 - 40 |
100
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
181-187 Gibraltar Road | Horsham, PA | — | 360,549 | 3,259,984 | 787,154 | 360,549 | 4,047,138 | 4,407,687 | 1,849,809 | 1982 | 5 - 40 | ||||||||||||||||||||
2 Walnut Grove Drive | Horsham, PA | — | 1,281,870 | 7,767,374 | 1,442,612 | 1,265,363 | 9,226,493 | 10,491,856 | 4,013,758 | 1989 | 5 - 40 | ||||||||||||||||||||
200 Gibraltar Road | Horsham, PA | — | 638,513 | 5,811,323 | 1,991,542 | 638,513 | 7,802,865 | 8,441,378 | 3,237,354 | 1990 | 5 - 40 | ||||||||||||||||||||
200-264 Lakeside Drive | Horsham, PA | — | 502,705 | 4,540,597 | 2,291,981 | 502,705 | 6,832,578 | 7,335,283 | 2,696,472 | 1982 | 5 - 40 | ||||||||||||||||||||
201 Gibraltar Road | Horsham, PA | — | 380,127 | 3,433,433 | 2,324,673 | 380,802 | 5,757,431 | 6,138,233 | 2,311,095 | 1983 | 5 - 40 | ||||||||||||||||||||
210-223 Witmer Road | Horsham, PA | — | 270,282 | 2,441,276 | 1,962,945 | 270,282 | 4,404,221 | 4,674,503 | 1,766,596 | 1972 | 5 - 40 | ||||||||||||||||||||
220 Gibraltar Road | Horsham, PA | — | 629,944 | 5,733,228 | 1,333,679 | 629,944 | 7,066,907 | 7,696,851 | 2,822,143 | 1990 | 5 - 40 | ||||||||||||||||||||
231-237 Gibraltar Road | Horsham, PA | — | 436,952 | 3,948,963 | 1,068,263 | 436,952 | 5,017,226 | 5,454,178 | 2,096,540 | 1981 | 5 - 40 | ||||||||||||||||||||
240 Gibraltar Road | Horsham, PA | — | 629,944 | 5,733,234 | 1,804,045 | 629,944 | 7,537,279 | 8,167,223 | 3,637,398 | 1990 | 5 - 40 | ||||||||||||||||||||
255 Business Center Drive | Horsham, PA | — | 1,154,289 | 2,007,214 | 770,989 | 1,140,597 | 2,791,895 | 3,932,492 | 888,099 | 2003 | 5 - 40 | ||||||||||||||||||||
261-283 Gibraltar Road | Horsham, PA | — | 464,871 | 3,951,972 | 1,781,425 | 464,871 | 5,733,397 | 6,198,268 | 2,402,519 | 1978 | 5 - 40 | ||||||||||||||||||||
300 Welsh Road | Horsham, PA | — | 696,061 | 3,339,991 | 640,370 | 696,061 | 3,980,360 | 4,676,421 | 1,715,407 | 1985 | 5 - 40 | ||||||||||||||||||||
300 Welsh Road - Building 3 | Horsham, PA | — | 180,459 | 1,441,473 | 633,163 | 180,459 | 2,074,635 | 2,255,094 | 843,190 | 1983 | 5 - 40 | ||||||||||||||||||||
300 Welsh Road - Building 4 | Horsham, PA | — | 282,493 | 2,256,508 | 1,780,163 | 282,493 | 4,036,671 | 4,319,164 | 1,761,750 | 1983 | 5 - 40 | ||||||||||||||||||||
300-309 Lakeside Drive | Horsham, PA | — | 369,475 | 3,338,761 | 1,832,004 | 376,475 | 5,163,765 | 5,540,240 | 2,556,952 | 1982 | 5 - 40 | ||||||||||||||||||||
355 Business Center Drive | Horsham, PA | — | 483,045 | 898,798 | 544,472 | 471,171 | 1,455,144 | 1,926,315 | 546,069 | 2003 | 5 - 40 | ||||||||||||||||||||
4 Walnut Grove | Horsham, PA | — | 2,515,115 | — | 10,809,109 | 2,515,115 | 10,809,109 | 13,324,224 | 4,516,707 | 1999 | 5 - 40 | ||||||||||||||||||||
400-445 Lakeside Drive | Horsham, PA | — | 543,628 | 4,910,226 | 2,440,949 | 583,628 | 7,311,175 | 7,894,803 | 3,193,874 | 1981 | 5 - 40 | ||||||||||||||||||||
455 Business Center Drive | Horsham, PA | — | 1,351,011 | 2,503,449 | 1,907,857 | 1,322,317 | 4,440,000 | 5,762,317 | 1,268,213 | 2003 | 5 - 40 | ||||||||||||||||||||
5 Walnut Grove Drive | Horsham, PA | — | 1,065,951 | — | 10,625,374 | 1,939,712 | 9,751,613 | 11,691,325 | 3,498,803 | 2000 | 5 - 40 | ||||||||||||||||||||
506 Prudential Road | Horsham, PA | — | 208,140 | 895,470 | 894,621 | 208,140 | 1,790,091 | 1,998,231 | 802,323 | 1973 | 5 - 40 | ||||||||||||||||||||
507 Prudential Road | Horsham, PA | — | 644,900 | 5,804,100 | 8,408,030 | 1,131,380 | 13,725,650 | 14,857,030 | 6,360,060 | 1988 | 5 - 40 | ||||||||||||||||||||
555 Business Center Drive | Horsham, PA | — | 727,420 | 1,353,650 | 883,754 | 709,967 | 2,254,858 | 2,964,825 | 464,979 | 2003 | 5 - 40 | ||||||||||||||||||||
680 Blair Mill Road | Horsham, PA | — | 3,527,151 | 17,475,489 | 4,138,577 | 16,864,063 | 21,002,640 | 5,312,518 | 2001 | 5 - 40 | |||||||||||||||||||||
7 Walnut Grove Drive | Horsham, PA | — | 2,631,696 | — | 18,432,489 | 2,631,956 | 18,432,229 | 21,064,185 | 2,968,622 | 2006 | 5 - 40 | ||||||||||||||||||||
700 Dresher Road | Horsham, PA | — | 2,551,777 | 3,020,638 | 2,866,350 | 2,565,140 | 5,873,625 | 8,438,765 | 2,331,100 | 1987 | 5 - 40 | ||||||||||||||||||||
747 Dresher Road | Horsham, PA | — | 1,607,238 | — | 5,032,964 | 1,607,977 | 5,032,225 | 6,640,202 | 2,984,537 | 1988 | 5 - 40 | ||||||||||||||||||||
767 Electronic Drive | Horsham, PA | — | 1,229,685 | — | 2,436,397 | 1,241,970 | 2,424,112 | 3,666,082 | 1,318,586 | 1996 | 5 - 40 |
101
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
1000 South Loop West | Houston, TX | — | * | 509,351 | 3,549,504 | 255,499 | 509,351 | 3,805,003 | 4,314,354 | 36,289 | 2013 | 5 - 40 | |||||||||||||||||||
10241 W Little York Rd | Houston, TX | — | 558,491 | 5,740,552 | 129,761 | 558,491 | 5,870,313 | 6,428,804 | 40,844 | 2013 | 5 - 40 | ||||||||||||||||||||
10245 W Little York Rd | Houston, TX | — | 426,927 | 3,460,513 | 64,622 | 426,927 | 3,525,135 | 3,952,062 | 32,514 | 2013 | 5 - 40 | ||||||||||||||||||||
10301 Round Up Lane | Houston, TX | — | 545,501 | 2,927,700 | 599,143 | 545,501 | 3,526,842 | 4,072,343 | 217,921 | 2010 | 5 - 40 | ||||||||||||||||||||
10305 Round Up Lane | Houston, TX | — | 1,340,609 | 7,489,720 | 3,381,308 | 1,340,609 | 10,871,027 | 12,211,636 | 899,234 | 2010 | 5 - 40 | ||||||||||||||||||||
10607 Haddington Drive | Houston, TX | — | * | 201,469 | 1,631,561 | 104,388 | 201,469 | 1,735,950 | 1,937,419 | 14,698 | 2013 | 5 - 40 | |||||||||||||||||||
10735 West Little York Road | Houston, TX | — | * | 1,110,988 | 6,351,946 | 2,271,088 | 1,135,483 | 8,598,539 | 9,734,022 | 2,297,741 | 2000 | 5 - 40 | |||||||||||||||||||
10739 West Little York Road | Houston, TX | — | * | 797,931 | 5,950,894 | 400,330 | 799,560 | 6,349,595 | 7,149,155 | 1,799,185 | 1999 | 5 - 40 | |||||||||||||||||||
11201 Greens Crossing Boulevard | Houston, TX | — | * | 1,006,194 | 5,412,584 | 2,777,537 | 1,008,542 | 8,187,773 | 9,196,315 | 1,677,006 | 2007 | 5 - 40 | |||||||||||||||||||
11502 South Main Street | Houston, TX | — | * | 588,865 | 3,479,264 | 186,713 | 588,865 | 3,665,977 | 4,254,842 | 46,550 | 2013 | 5 - 40 | |||||||||||||||||||
1283 N Post Oak Rd | Houston, TX | — | * | 80,730 | 870,656 | 40,876 | 80,730 | 911,532 | 992,262 | 6,872 | 2013 | 5 - 40 | |||||||||||||||||||
1287 N Post Oak Rd | Houston, TX | — | * | 146,654 | 1,620,780 | 59,710 | 146,654 | 1,680,489 | 1,827,143 | 16,877 | 2013 | 5 - 40 | |||||||||||||||||||
1291 N Post Oak Rd | Houston, TX | — | * | 510,102 | 4,129,042 | 217,109 | 510,102 | 4,346,151 | 4,856,253 | 54,758 | 2013 | 5 - 40 | |||||||||||||||||||
1416 N Sam Houston Parkway E | Houston, TX | — | * | 218,850 | 1,639,902 | 90,023 | 218,850 | 1,729,924 | 1,948,774 | 14,111 | 2013 | 5 - 40 | |||||||||||||||||||
1420 N Sam Houston Parkway E | Houston, TX | — | * | 211,279 | 1,554,156 | 107,515 | 211,279 | 1,661,671 | 1,872,950 | 14,273 | 2013 | 5 - 40 | |||||||||||||||||||
14200 Hollister Road | Houston, TX | — | 1,396,794 | — | 4,855,857 | 1,699,632 | 4,553,019 | 6,252,651 | 189,974 | 2011 | 5 - 40 | ||||||||||||||||||||
1424 N Sam Houston Parkway E | Houston, TX | — | * | 283,107 | 2,077,323 | 145,748 | 283,107 | 2,223,071 | 2,506,178 | 19,688 | 2013 | 5 - 40 | |||||||||||||||||||
1428 N Sam Houston Parkway E | Houston, TX | — | * | 367,446 | 1,952,453 | 102,727 | 367,446 | 2,055,179 | 2,422,625 | 20,402 | 2013 | 5 - 40 | |||||||||||||||||||
14400 Hollister Road | Houston, TX | — | 1,830,419 | — | 6,654,454 | 1,861,540 | 6,623,333 | 8,484,873 | 16,966 | 2012 | 5 - 40 | ||||||||||||||||||||
15102 Sommermeyer St | Houston, TX | — | 755,121 | 3,155,774 | 230,571 | 755,121 | 3,386,345 | 4,141,466 | 36,052 | 2013 | 5 - 40 | ||||||||||||||||||||
15150 Sommermeyer St | Houston, TX | — | 418,580 | 1,564,587 | 131,319 | 418,580 | 1,695,906 | 2,114,486 | 17,228 | 2013 | 5 - 40 | ||||||||||||||||||||
16405 Air Center Boulevard | Houston, TX | — | * | 438,853 | 3,030,396 | 515,937 | 438,853 | 3,546,333 | 3,985,186 | 1,493,111 | 1997 | 5 - 40 | |||||||||||||||||||
16420 West Hardy Road | Houston, TX | — | 529,876 | 3,267,872 | 118,332 | 529,876 | 3,386,204 | 3,916,080 | 35,961 | 2013 | 5 - 40 | ||||||||||||||||||||
16445 Air Center Boulevard | Houston, TX | — | * | 363,339 | 2,509,186 | 266,552 | 363,339 | 2,775,738 | 3,139,077 | 1,117,896 | 1997 | 5 - 40 | |||||||||||||||||||
1646 Rankin Road | Houston, TX | — | * | 329,961 | — | 5,210,202 | 592,234 | 4,947,929 | 5,540,163 | 1,300,632 | 2005 | 5 - 40 | |||||||||||||||||||
1655 Townhurst Drive | Houston, TX | — | * | 197,226 | 935,036 | 87,883 | 197,226 | 1,022,919 | 1,220,145 | 9,400 | 2013 | 5 - 40 | |||||||||||||||||||
16580 Air Center Boulevard | Houston, TX | — | * | 289,000 | 3,559,857 | 1,290,182 | 289,000 | 4,850,040 | 5,139,040 | 1,462,889 | 1997 | 5 - 40 | |||||||||||||||||||
16602 Central Green Boulevard | Houston, TX | — | * | 284,403 | — | 4,953,014 | 503,779 | 4,733,638 | 5,237,417 | 908,865 | 2005 | 5 - 40 |
102
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
16605 Air Center Boulevard | Houston, TX | — | * | 298,999 | 3,417,513 | 496,186 | 3,220,326 | 3,716,512 | 927,143 | 2002 | 5 - 40 | ||||||||||||||||||||
1665 Townhurst Drive | Houston, TX | — | * | 452,439 | 2,016,585 | 57,074 | 452,439 | 2,073,658 | 2,526,097 | 15,817 | 2013 | 5 - 40 | |||||||||||||||||||
16680 Central Green Boulevard | Houston, TX | — | * | 311,952 | — | 4,165,907 | 492,869 | 3,984,990 | 4,477,859 | 863,414 | 2001 | 5 - 40 | |||||||||||||||||||
16685 Air Center Boulevard | Houston, TX | — | * | 414,691 | — | 2,459,338 | 414,691 | 2,459,338 | 2,874,029 | 576,093 | 2004 | 5 - 40 | |||||||||||||||||||
1755 Trans Central Drive | Houston, TX | — | * | 293,534 | 3,036,269 | 518,093 | 306,147 | 3,541,749 | 3,847,896 | 1,107,572 | 1999 | 5 - 40 | |||||||||||||||||||
4301 S Pinemont Dr | Houston, TX | — | * | 226,973 | 1,174,979 | 46,852 | 226,973 | 1,221,831 | 1,448,804 | 21,677 | 2013 | 5 - 40 | |||||||||||||||||||
4401 S Pinemont Dr | Houston, TX | — | * | 244,240 | 1,412,622 | 35,635 | 244,240 | 1,448,257 | 1,692,497 | 23,544 | 2013 | 5 - 40 | |||||||||||||||||||
4501 S Pinemont Dr | Houston, TX | — | * | 252,907 | 1,504,053 | 52,253 | 252,907 | 1,556,306 | 1,809,213 | 25,380 | 2013 | 5 - 40 | |||||||||||||||||||
5200 N. Sam Houston Parkway | Houston, TX | — | * | 1,519,458 | 7,135,548 | 3,654,765 | 1,520,074 | 10,789,697 | 12,309,771 | 2,170,043 | 2007 | 5 - 40 | |||||||||||||||||||
5250 N. Sam Houston Parkway | Houston, TX | — | * | 2,173,287 | 8,868,256 | 2,748,599 | 2,173,942 | 11,616,200 | 13,790,142 | 1,974,496 | 2007 | 5 - 40 | |||||||||||||||||||
5500 N. Sam Houston Parkway West | Houston, TX | — | 1,243,541 | — | 6,452,951 | 1,513,152 | 6,183,340 | 7,696,492 | 295,882 | 2011 | 5 - 40 | ||||||||||||||||||||
5910 West by Northwest Blvd | Houston, TX | — | * | 891,397 | 3,765,299 | 203,141 | 891,397 | 3,968,440 | 4,859,837 | 40,200 | 2013 | 5 - 40 | |||||||||||||||||||
8017 Pinemont Drive | Houston, TX | — | 900,953 | 5,323,727 | 114,191 | 900,953 | 5,437,918 | 6,338,871 | 45,057 | 2013 | 5 - 40 | ||||||||||||||||||||
8272 El Rio Street | Houston, TX | — | * | 530,494 | 4,108,626 | 206,722 | 530,494 | 4,315,348 | 4,845,842 | 35,649 | 2013 | 5 - 40 | |||||||||||||||||||
8282 El Rio Street | Houston, TX | — | * | 450,422 | 3,304,942 | 180,261 | 450,422 | 3,485,203 | 3,935,625 | 30,003 | 2013 | 5 - 40 | |||||||||||||||||||
8301 Fallbrook Drive | Houston, TX | — | * | 4,515,862 | — | 24,080,332 | 5,877,884 | 22,718,310 | 28,596,194 | 3,572,248 | 2006 | 5 - 40 | |||||||||||||||||||
850 Greens Parkway | Houston, TX | — | * | 2,893,405 | 11,593,197 | 2,894,626 | 2,899,861 | 14,481,366 | 17,381,227 | 2,345,024 | 2007 | 5 - 40 | |||||||||||||||||||
860 Greens Parkway | Houston, TX | — | * | 1,399,365 | 6,344,650 | 1,579,558 | 1,374,012 | 7,949,561 | 9,323,573 | 1,285,909 | 2007 | 5 - 40 | |||||||||||||||||||
8801 A-E Wallisville Rd | Houston, TX | — | * | 444,205 | 2,340,333 | 108,163 | 444,205 | 2,448,496 | 2,892,701 | 22,120 | 2013 | 5 - 40 | |||||||||||||||||||
8801-19 & 8821-49 Fallbrook Drive | Houston, TX | — | * | 2,290,001 | 15,297,141 | 1,867,404 | 2,290,002 | 17,164,544 | 19,454,546 | 4,657,668 | 2000 | 5 - 40 | |||||||||||||||||||
8802-8824 Fallbrook Drive | Houston, TX | — | * | 2,774,995 | 6,364,767 | 1,362,915 | 2,775,021 | 7,727,655 | 10,502,676 | 2,101,491 | 2004 | 5 - 40 | |||||||||||||||||||
8811 A-E Wallisville Rd | Houston, TX | — | * | 373,412 | 1,963,599 | 96,907 | 373,412 | 2,060,506 | 2,433,918 | 20,969 | 2013 | 5 - 40 | |||||||||||||||||||
8825-8839 N Sam Houston Pkwy | Houston, TX | — | * | 638,453 | 3,258,815 | 650,142 | 638,477 | 3,908,932 | 4,547,409 | 958,990 | 2004 | 5 - 40 | |||||||||||||||||||
8850-8872 Fallbrook Drive | Houston, TX | — | * | 504,317 | 2,878,351 | 1,054,230 | 504,341 | 3,932,557 | 4,436,898 | 1,303,330 | 2004 | 5 - 40 | |||||||||||||||||||
9500-9540 Clay Road | Houston, TX | — | * | 1,412,849 | 7,279,448 | 336,295 | 1,412,849 | 7,615,743 | 9,028,592 | 63,534 | 2013 | 5 - 40 | |||||||||||||||||||
Liberty 11 at Central Green | Houston, TX | — | 1,748,348 | — | 9,336,316 | 2,120,319 | 8,964,345 | 11,084,664 | 164,651 | 2012 | 5 - 40 | ||||||||||||||||||||
Cabot III UK1B01 | Isle of Man, UK | — | 11,888,058 | 35,003,668 | — | 11,888,058 | 35,003,668 | 46,891,726 | 646,011 | 2013 | 5 - 40 | ||||||||||||||||||||
1011 N Hilltop Drive | Itasca, IL | — | 842,043 | 984,087 | 42,920 | 842,043 | 1,027,007 | 1,869,050 | 7,617 | 2013 | 5 - 40 |
103
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
1035 N Hilltop Drive | Itasca, IL | — | 875,172 | 2,071,051 | 52,042 | 875,172 | 2,123,094 | 2,998,266 | 16,965 | 2013 | 5 - 40 | ||||||||||||||||||||
1549 W Glenlake Avenue | Itasca, IL | — | * | 1,339,627 | 3,763,288 | 79,355 | 1,339,627 | 3,842,642 | 5,182,269 | 29,399 | 2013 | 5 - 40 | |||||||||||||||||||
901 N Hilltop Drive | Itasca, IL | — | 866,378 | 2,112,616 | 38,715 | 866,378 | 2,151,331 | 3,017,709 | 15,922 | 2013 | 5 - 40 | ||||||||||||||||||||
925 N Hilltop Drive | Itasca, IL | — | 945,251 | 2,010,181 | 46,316 | 945,251 | 2,056,497 | 3,001,748 | 15,961 | 2013 | 5 - 40 | ||||||||||||||||||||
8241 Sandy Court | Jessup, MD | — | 1,246,618 | 6,844,393 | 270,912 | 1,246,618 | 7,115,304 | 8,361,922 | 56,334 | 2013 | 5 - 40 | ||||||||||||||||||||
8242 Sandy Court | Jessup, MD | — | 1,488,746 | 9,072,440 | 363,544 | 1,488,746 | 9,435,984 | 10,924,730 | 70,410 | 2013 | 5 - 40 | ||||||||||||||||||||
8246 Sandy Court | Jessup, MD | — | 590,922 | 3,374,522 | 65,542 | 590,922 | 3,440,064 | 4,030,986 | 26,282 | 2013 | 5 - 40 | ||||||||||||||||||||
1305 Chastain Road NW | Kennesaw, GA | — | * | 808,159 | 5,712,959 | 536,521 | 808,159 | 6,249,480 | 7,057,639 | 63,945 | 2013 | 5 - 40 | |||||||||||||||||||
1325 Chastain Road NW | Kennesaw, GA | — | * | 1,612,924 | 9,771,680 | 1,055,382 | 1,612,924 | 10,827,062 | 12,439,986 | 117,822 | 2013 | 5 - 40 | |||||||||||||||||||
3600 Cobb International Bld NW | Kennesaw, GA | — | 716,860 | 6,962,212 | 409,426 | 716,860 | 7,371,639 | 8,088,499 | 67,898 | 2013 | 5 - 40 | ||||||||||||||||||||
Unit 1 Bear Way | Kettering, UK | — | 10,849,890 | 36,219,855 | — | 10,849,890 | 36,219,855 | 47,069,745 | 667,061 | 2013 | 5 - 40 | ||||||||||||||||||||
151 South Warner Road | King of Prussia, PA | — | 1,218,086 | 6,937,866 | 7,192,372 | 1,187,900 | 14,160,424 | 15,348,324 | 2,183,117 | 1980 | 5 - 40 | ||||||||||||||||||||
170 South Warner Road | King of Prussia, PA | — | 547,800 | 3,137,400 | 4,421,277 | 458,232 | 7,648,245 | 8,106,477 | 2,809,789 | 1980 | 5 - 40 | ||||||||||||||||||||
180 South Warner Drive | King of Prussia, PA | — | 995,393 | — | 8,754,035 | — | 9,749,428 | 9,749,428 | 870,655 | 2009 | 5 - 40 | ||||||||||||||||||||
190 South Warner Road | King of Prussia, PA | — | 552,200 | 3,162,600 | 1,063,496 | 461,909 | 4,316,387 | 4,778,296 | 2,112,178 | 1980 | 5 - 40 | ||||||||||||||||||||
2100 Renaissance Boulevard | King of Prussia, PA | — | 1,110,111 | — | 12,098,486 | 1,132,519 | 12,076,078 | 13,208,597 | 3,702,844 | 1999 | 5 - 40 | ||||||||||||||||||||
2201 Renaissance Boulevard | King of Prussia, PA | — | 2,370,895 | — | 15,284,223 | 2,413,514 | 15,241,604 | 17,655,118 | 5,481,014 | 2000 | 5 - 40 | ||||||||||||||||||||
2300 Renaissance Boulevard | King of Prussia, PA | — | 509,580 | — | 3,050,939 | 574,152 | 2,986,367 | 3,560,519 | 1,444,383 | 1999 | 5 - 40 | ||||||||||||||||||||
2301 Renaissance Boulevard | King of Prussia, PA | — | 1,645,246 | — | 30,080,438 | 4,581,649 | 27,144,035 | 31,725,684 | 10,059,898 | 2002 | 5 - 40 | ||||||||||||||||||||
2500 Renaissance Boulevard | King of Prussia, PA | — | 509,580 | — | 2,662,758 | 592,886 | 2,579,452 | 3,172,338 | 1,140,031 | 1999 | 5 - 40 | ||||||||||||||||||||
2520 Renaissance Boulevard | King of Prussia, PA | — | 1,020,000 | — | 4,622,740 | 978,402 | 4,664,338 | 5,642,740 | 2,198,388 | 1999 | 5 - 40 | ||||||||||||||||||||
2560 Renaissance Boulevard | King of Prussia, PA | — | 607,210 | — | 3,122,044 | 649,792 | 3,079,462 | 3,729,254 | 1,358,606 | 2000 | 5 - 40 | ||||||||||||||||||||
2700 Horizon Drive | King of Prussia, PA | — | 764,370 | — | 3,643,566 | 867,815 | 3,540,121 | 4,407,936 | 1,525,767 | 1998 | 5 - 40 | ||||||||||||||||||||
2900 Horizon Drive | King of Prussia, PA | — | 679,440 | — | 3,503,074 | 774,096 | 3,408,418 | 4,182,514 | 1,519,241 | 1998 | 5 - 40 | ||||||||||||||||||||
3000 Horizon Drive | King of Prussia, PA | — | 1,191,449 | — | 2,476,299 | 946,703 | 2,721,045 | 3,667,748 | 1,038,239 | 1997 | 5 - 40 | ||||||||||||||||||||
3100 Horizon Drive | King of Prussia, PA | — | 601,956 | — | 2,192,852 | 611,436 | 2,183,372 | 2,794,808 | 847,707 | 1995 | 5 - 40 | ||||||||||||||||||||
3200 Horizon Drive | King of Prussia, PA | — | 928,637 | — | 6,272,635 | 1,210,137 | 5,991,135 | 7,201,272 | 2,268,296 | 1996 | 5 - 40 | ||||||||||||||||||||
3400 Horizon Drive | King of Prussia, PA | — | 776,496 | 3,139,068 | 1,537,958 | 776,496 | 4,677,025 | 5,453,521 | 1,765,636 | 1995 | 5 - 40 |
104
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
3500 Horizon Drive | King of Prussia, PA | — | 1,204,839 | — | 2,830,072 | 1,223,875 | 2,811,036 | 4,034,911 | 1,200,183 | 1996 | 5 - 40 | ||||||||||||||||||||
3600 Horizon Drive | King of Prussia, PA | — | 236,432 | 1,856,252 | 743,039 | 236,432 | 2,599,291 | 2,835,723 | 1,034,493 | 1989 | 5 - 40 | ||||||||||||||||||||
3602 Horizon Drive | King of Prussia, PA | — | 217,734 | 1,759,489 | 385,029 | 217,809 | 2,144,443 | 2,362,252 | 888,596 | 1989 | 5 - 40 | ||||||||||||||||||||
3604 Horizon Drive | King of Prussia, PA | — | 397,178 | — | 1,836,269 | 350,874 | 1,882,573 | 2,233,447 | 771,370 | 1998 | 5 - 40 | ||||||||||||||||||||
440 East Swedesford Road | King of Prussia, PA | — | 717,001 | 4,816,121 | 2,824,138 | 717,001 | 7,640,259 | 8,357,260 | 3,604,214 | 1988 | 5 - 40 | ||||||||||||||||||||
460 East Swedesford Road | King of Prussia, PA | — | 705,317 | 4,737,487 | 4,083,817 | 705,317 | 8,821,304 | 9,526,621 | 3,708,707 | 1988 | 5 - 40 | ||||||||||||||||||||
650 Swedesford Road | King of Prussia, PA | — | 952,911 | 6,722,830 | 8,139,683 | 952,911 | 14,862,513 | 15,815,424 | 6,614,425 | 1971 | 5 - 40 | ||||||||||||||||||||
680 Swedesford Road | King of Prussia, PA | — | 952,361 | 6,722,830 | 7,217,277 | 952,361 | 13,940,107 | 14,892,468 | 6,234,016 | 1971 | 5 - 40 | ||||||||||||||||||||
1700 Interstate Drive | Lakeland, FL | — | 650,000 | 5,444,220 | — | 650,000 | 5,444,220 | 6,094,220 | 164,953 | 2012 | 5 - 40 | ||||||||||||||||||||
5801 Columbia Park Road | Landover,MD | — | 1,187,620 | 4,598,346 | 182,789 | 1,187,620 | 4,781,135 | 5,968,755 | 38,810 | 2013 | 5 - 40 | ||||||||||||||||||||
11425 State Highway 225 | LaPorte, TX | — | * | 975,974 | 3,409,036 | 8,957 | 977,542 | 3,416,424 | 4,393,966 | 714,598 | 2006 | 5 - 40 | |||||||||||||||||||
11503 State Highway 225 | LaPorte, TX | — | * | 2,561,931 | 9,695,493 | 237,274 | 2,566,047 | 9,928,651 | 12,494,698 | 1,945,902 | 2006 | 5 - 40 | |||||||||||||||||||
640 S State Road 39 | Lebanon,IN | — | 1,612,787 | 18,065,552 | 1,213,251 | 1,612,787 | 19,278,803 | 20,891,590 | 168,035 | 2013 | 5 - 40 | ||||||||||||||||||||
7528 Walker Way | Lehigh, PA | — | 893,441 | — | 5,510,457 | 779,330 | 5,624,568 | 6,403,898 | 1,613,828 | 2004 | 5 - 40 | ||||||||||||||||||||
8301 Industrial Boulevard | Lehigh, PA | — | 11,249,550 | — | 45,365,956 | 11,254,716 | 45,360,790 | 56,615,506 | 9,145,860 | 2005 | 5 - 40 | ||||||||||||||||||||
8500 Willard Drive | Lehigh, PA | 2,620,462 | 6,398,815 | — | 21,851,472 | 7,734,826 | 20,515,461 | 28,250,287 | 3,041,960 | 2004 | 5 - 40 | ||||||||||||||||||||
875 Maxham Road | Lithia Springs, GA | — | 445,493 | 10,160,616 | 558,420 | 445,493 | 10,719,036 | 11,164,529 | 86,272 | 2013 | 5 - 40 | ||||||||||||||||||||
2145 Center Square Road | Logan Township, NJ | — | 817,326 | 5,466,668 | 310,105 | 817,326 | 5,776,773 | 6,594,099 | 81,911 | 2013 | 5 - 40 | ||||||||||||||||||||
7533 Industrial Parkway | Lower Macungie, PA | — | 5,603,460 | 18,807,987 | 2,434,039 | 5,603,460 | 21,242,026 | 26,845,486 | 2,045,508 | 2011 | 5 - 40 | ||||||||||||||||||||
1901 Summit Tower Boulevard | Maitland, FL | — | 6,078,791 | 12,348,567 | 2,053,578 | 6,083,206 | 14,397,731 | 20,480,937 | 6,291,291 | 1998 | 5 - 40 | ||||||||||||||||||||
1 Country View Road | Malvern, PA | — | 400,000 | 3,600,000 | 6,360,798 | 406,421 | 9,954,377 | 10,360,798 | 3,704,662 | 1982 | 5 - 40 | ||||||||||||||||||||
1 Great Valley Parkway | Malvern, PA | — | 419,460 | 3,792,570 | 1,350,316 | 419,460 | 5,142,886 | 5,562,346 | 1,928,648 | 1982 | 5 - 40 | ||||||||||||||||||||
10 Great Valley Parkway | Malvern, PA | — | 823,540 | 1,341,376 | 459,973 | 832,244 | 1,792,645 | 2,624,889 | 590,788 | 2003 | 5 - 40 | ||||||||||||||||||||
10 Valley Stream Parkway | Malvern, PA | — | 509,075 | — | 2,726,213 | 509,899 | 2,725,389 | 3,235,288 | 1,789,979 | 1984 | 5 - 40 | ||||||||||||||||||||
10, 20 Liberty Boulevard | Malvern, PA | — | 724,058 | — | 5,827,720 | 724,846 | 5,826,932 | 6,551,778 | 3,506,696 | 1985 | 5 - 40 | ||||||||||||||||||||
100 Chesterfield Parkway | Malvern, PA | — | 1,320,625 | — | 7,321,902 | 1,965,944 | 6,676,583 | 8,642,527 | 3,366,709 | 1998 | 5 - 40 | ||||||||||||||||||||
1001 Cedar Hollow Road | Malvern, PA | — | 1,436,814 | — | 16,163,891 | 1,676,470 | 15,924,235 | 17,600,705 | 7,708,864 | 1998 | 5 - 40 |
105
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
11 Great Valley Parkway | Malvern, PA | — | 496,297 | — | 2,960,712 | 708,331 | 2,748,678 | 3,457,009 | 887,432 | 2001 | 5 - 40 | ||||||||||||||||||||
11,15 Great Valley Parkway | Malvern, PA | — | 1,837,050 | — | 14,960,110 | 1,837,878 | 14,959,282 | 16,797,160 | 11,580,321 | 1986 | 5 - 40 | ||||||||||||||||||||
12,14,16 Great Valley Parkway | Malvern, PA | — | 130,689 | — | 1,326,294 | 128,767 | 1,328,216 | 1,456,983 | 910,800 | 1982 | 5 - 40 | ||||||||||||||||||||
14 Lee Boulevard | Malvern, PA | — | 664,282 | — | 5,569,322 | 643,892 | 5,589,712 | 6,233,604 | 3,657,798 | 1988 | 5 - 40 | ||||||||||||||||||||
155 Great Valley Parkway | Malvern, PA | — | 625,147 | — | 2,640,082 | 626,068 | 2,639,161 | 3,265,229 | 1,954,876 | 1981 | 5 - 40 | ||||||||||||||||||||
18 Great Valley Parkway | Malvern, PA | — | 394,036 | 3,976,221 | 68,969 | 397,293 | 4,041,933 | 4,439,226 | 1,503,167 | 1980 | 5 - 40 | ||||||||||||||||||||
2 West Liberty Boulevard | Malvern, PA | — | 5,405,041 | — | 11,903,540 | 5,405,042 | 11,903,539 | 17,308,581 | 3,157,412 | 2003 | 5 - 40 | ||||||||||||||||||||
20 Valley Stream Parkway | Malvern, PA | — | 465,539 | — | 6,062,255 | 466,413 | 6,061,381 | 6,527,794 | 3,436,599 | 1987 | 5 - 40 | ||||||||||||||||||||
200 Chesterfield Parkway | Malvern, PA | — | 495,893 | 2,739,093 | 641,555 | 807,638 | 3,068,903 | 3,876,541 | 2,401,423 | 1989 | 5 - 40 | ||||||||||||||||||||
257-275 Great Valley Parkway | Malvern, PA | — | 504,611 | — | 5,086,503 | 505,458 | 5,085,656 | 5,591,114 | 3,457,782 | 1983 | 5 - 40 | ||||||||||||||||||||
27-43 Great Valley Parkway | Malvern, PA | — | 448,775 | — | 2,347,289 | 449,447 | 2,346,617 | 2,796,064 | 1,820,823 | 1977 | 5 - 40 | ||||||||||||||||||||
277-293 Great Valley Parkway | Malvern, PA | — | 530,729 | — | 2,268,833 | 531,534 | 2,268,028 | 2,799,562 | 1,616,657 | 1984 | 5 - 40 | ||||||||||||||||||||
3 Country View Road | Malvern, PA | — | 814,278 | — | 5,142,433 | 1,128,881 | 4,827,830 | 5,956,711 | 1,868,164 | 1998 | 5 - 40 | ||||||||||||||||||||
30 Great Valley Parkway | Malvern, PA | — | 128,126 | — | 554,378 | 128,783 | 553,721 | 682,504 | 372,198 | 1975 | 5 - 40 | ||||||||||||||||||||
300 Technology Drive | Malvern, PA | — | 368,626 | — | 1,351,625 | 374,497 | 1,345,754 | 1,720,251 | 884,437 | 1985 | 5 - 40 | ||||||||||||||||||||
300-400 Chesterfield Parkway | Malvern, PA | — | 937,212 | — | 5,607,142 | 1,393,919 | 5,150,435 | 6,544,354 | 2,944,236 | 1988 | 5 - 40 | ||||||||||||||||||||
311 Technology Drive | Malvern, PA | — | 397,131 | — | 2,713,845 | 397,948 | 2,713,028 | 3,110,976 | 1,805,580 | 1984 | 5 - 40 | ||||||||||||||||||||
333 Phoenixville Pike | Malvern, PA | — | 523,530 | — | 3,708,843 | 524,230 | 3,708,143 | 4,232,373 | 2,286,593 | 1985 | 5 - 40 | ||||||||||||||||||||
375 Technology Drive | Malvern, PA | — | 191,114 | — | 1,625,516 | 234,922 | 1,581,708 | 1,816,630 | 641,806 | 1998 | 5 - 40 | ||||||||||||||||||||
40 Liberty Boulevard | Malvern, PA | — | 4,241,137 | 17,737,090 | 2,904,729 | 4,241,168 | 20,641,787 | 24,882,955 | 8,383,098 | 1989 | 5 - 40 | ||||||||||||||||||||
40 Valley Stream Parkway | Malvern, PA | — | 322,918 | — | 2,315,958 | 325,775 | 2,313,101 | 2,638,876 | 1,534,806 | 1987 | 5 - 40 | ||||||||||||||||||||
420 Lapp Road | Malvern, PA | — | 1,054,418 | — | 8,850,116 | 1,055,243 | 8,849,291 | 9,904,534 | 4,249,871 | 1989 | 5 - 40 | ||||||||||||||||||||
425 Technology Drive | Malvern, PA | — | 191,114 | — | 1,700,603 | 321,473 | 1,570,244 | 1,891,717 | 654,666 | 1998 | 5 - 40 | ||||||||||||||||||||
45 Liberty Boulevard | Malvern, PA | — | 4,380,221 | — | 15,322,821 | 4,749,748 | 14,953,294 | 19,703,042 | 7,245,970 | 1999 | 5 - 40 | ||||||||||||||||||||
45-67 Great Valley Parkway | Malvern, PA | — | 795,143 | — | 4,331,125 | 795,831 | 4,330,437 | 5,126,268 | 2,927,317 | 1974 | 5 - 40 | ||||||||||||||||||||
5 Country View Road | Malvern, PA | — | 785,168 | 4,678,632 | 226,536 | 786,235 | 4,904,101 | 5,690,336 | 2,231,504 | 1985 | 5 - 40 | ||||||||||||||||||||
5 Great Valley Parkway | Malvern, PA | — | 684,200 | 6,181,661 | 1,652,942 | 684,200 | 7,834,603 | 8,518,803 | 3,356,876 | 1983 | 5 - 40 | ||||||||||||||||||||
50 Morehall Road | Malvern, PA | — | 849,576 | — | 13,104,302 | 1,337,076 | 12,616,802 | 13,953,878 | 6,568,093 | 1997 | 5 - 40 | ||||||||||||||||||||
50 Valley Stream Parkway | Malvern, PA | — | 323,971 | — | 2,434,613 | 323,792 | 2,434,792 | 2,758,584 | 1,538,462 | 1987 | 5 - 40 |
106
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
500 Chesterfield Parkway | Malvern, PA | — | 472,364 | — | 3,156,878 | 756,847 | 2,872,395 | 3,629,242 | 1,675,028 | 1988 | 5 - 40 | ||||||||||||||||||||
508 Lapp Road | Malvern, PA | — | 331,392 | — | 1,713,394 | 332,216 | 1,712,570 | 2,044,786 | 1,248,445 | 1984 | 5 - 40 | ||||||||||||||||||||
510 Lapp Road | Malvern, PA | — | 356,950 | — | 926,587 | 357,751 | 925,786 | 1,283,537 | 723,943 | 1983 | 5 - 40 | ||||||||||||||||||||
55 Valley Stream Parkway | Malvern, PA | — | 215,005 | — | 4,094,361 | 215,818 | 4,093,548 | 4,309,366 | 2,874,838 | 1983 | 5 - 40 | ||||||||||||||||||||
60 Morehall Road | Malvern, PA | — | 865,424 | 9,285,000 | 5,182,805 | 884,974 | 14,448,255 | 15,333,229 | 9,061,777 | 1989 | 5 - 40 | ||||||||||||||||||||
600 Chesterfield Parkway | Malvern, PA | — | 2,013,750 | — | 9,074,858 | 2,784,282 | 8,304,326 | 11,088,608 | 3,957,954 | 1999 | 5 - 40 | ||||||||||||||||||||
65 Valley Stream Parkway | Malvern, PA | — | 381,544 | — | 6,785,626 | 382,361 | 6,784,809 | 7,167,170 | 4,999,023 | 1983 | 5 - 40 | ||||||||||||||||||||
7 Great Valley Parkway | Malvern, PA | — | 176,435 | — | 6,593,330 | 177,317 | 6,592,448 | 6,769,765 | 3,104,195 | 1985 | 5 - 40 | ||||||||||||||||||||
700 Chesterfield Parkway | Malvern, PA | — | 2,013,750 | — | 8,829,877 | 2,771,540 | 8,072,087 | 10,843,627 | 3,926,051 | 1999 | 5 - 40 | ||||||||||||||||||||
75 Great Valley Parkway | Malvern, PA | — | 143,074 | — | 618,372 | 143,811 | 617,635 | 761,446 | 505,537 | 1977 | 5 - 40 | ||||||||||||||||||||
77-123 Great Valley Parkway | Malvern, PA | — | 887,664 | — | 5,232,375 | 888,359 | 5,231,680 | 6,120,039 | 3,789,228 | 1978 | 5 - 40 | ||||||||||||||||||||
1169 Canton Rd | Marietta, GA | — | * | 1,232,219 | 17,897,326 | 435,643 | 1,232,219 | 18,332,969 | 19,565,188 | 130,432 | 2013 | 5 - 40 | |||||||||||||||||||
65 Brookfield Oaks Drive | Mauldin, SC | — | 557,174 | — | 2,842,439 | 506,318 | 2,893,295 | 3,399,613 | 603,024 | 2004 | 5 - 40 | ||||||||||||||||||||
75 Brookfield Oaks Drive | Mauldin, SC | — | 419,731 | — | 2,332,292 | 430,909 | 2,321,114 | 2,752,023 | 565,611 | 2003 | 5 - 40 | ||||||||||||||||||||
126-132 Liberty Industrial Pkw | McDonough, GA | — | 600,666 | 4,184,131 | 480,533 | 600,666 | 4,664,663 | 5,265,329 | 72,925 | 2013 | 5 - 40 | ||||||||||||||||||||
95-115 Liberty Industrial Pkwy | McDonough, GA | — | 660,420 | 4,785,127 | 526,335 | 660,420 | 5,311,462 | 5,971,882 | 61,944 | 2013 | 5 - 40 | ||||||||||||||||||||
11401 NW 134th Street | Medley, FL | — | * | 5,558,619 | 17,678,237 | 730,681 | 5,558,619 | 18,408,918 | 23,967,537 | 176,279 | 2013 | 5 - 40 | |||||||||||||||||||
3824-3960 Crowfarn Drive | Memphis, TN | — | 291,223 | 1,044,953 | 74,204 | 291,223 | 1,119,156 | 1,410,379 | 23,364 | 2013 | 5 - 40 | ||||||||||||||||||||
4700 Nathan Lane North | Minneapolis, MN | — | 1,501,308 | 8,446,083 | 13,720,236 | 1,501,308 | 22,166,319 | 23,667,627 | 4,819,927 | 1996 | 5 - 40 | ||||||||||||||||||||
12501 & 12701 Whitewater Drive | Minnetonka, MN | — | 2,175,209 | 3,948,085 | 8,574,579 | 2,177,953 | 12,519,920 | 14,697,873 | 3,604,849 | 1986 | 5 - 40 | ||||||||||||||||||||
12800 Whitewater Drive | Minnetonka, MN | — | 1,273,600 | 3,158,737 | 1,082,966 | 1,273,731 | 4,241,571 | 5,515,302 | 240,525 | 2011 | 5 - 40 | ||||||||||||||||||||
12900 Whitewater Drive | Minnetonka, MN | — | 1,236,560 | 2,762,325 | 1,023,214 | 1,236,687 | 3,785,412 | 5,022,099 | 212,508 | 2011 | 5 - 40 | ||||||||||||||||||||
5400-5500 Feltl Road | Minnetonka, MN | — | 883,895 | 7,983,345 | 2,466,053 | 883,895 | 10,449,398 | 11,333,293 | 4,538,606 | 1985 | 5 - 40 | ||||||||||||||||||||
6000 Clearwater Drive | Minnetonka, MN | — | 985,016 | 2,091,371 | 2,503,007 | 985,117 | 4,594,277 | 5,579,394 | 253,018 | 2011 | 5 - 40 | ||||||||||||||||||||
456 International Parkway | Minooka, IL | — | 3,862,683 | 14,357,981 | 3,540 | 3,862,683 | 14,361,521 | 18,224,204 | 1,095,591 | 2012 | 5 - 40 | ||||||||||||||||||||
3100 SW 145th Avenue | Miramar, FL | — | 6,204,407 | — | 16,706,567 | 6,265,000 | 16,645,974 | 22,910,974 | 2,182,874 | 2007 | 5 - 40 | ||||||||||||||||||||
3350 SW 148th Avenue | Miramar, FL | — | 2,960,511 | — | 18,332,548 | 2,980,689 | 18,312,370 | 21,293,059 | 7,221,373 | 2000 | 5 - 40 |
107
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
3400 Lakeside Drive | Miramar, FL | — | 2,022,153 | 11,345,881 | 2,005,331 | 2,022,153 | 13,351,212 | 15,373,365 | 5,350,136 | 1990 | 5 - 40 | ||||||||||||||||||||
3450 Lakeside Drive | Miramar, FL | — | 2,022,152 | 11,357,143 | 2,802,516 | 2,022,152 | 14,159,659 | 16,181,811 | 6,059,965 | 1990 | 5 - 40 | ||||||||||||||||||||
21 S Middlesex Avenue | Monroe Township, NJ | — | * | 2,097,170 | 9,715,401 | 535,119 | 2,097,170 | 10,250,520 | 12,347,690 | 92,629 | 2013 | 5 - 40 | |||||||||||||||||||
4 S Middlesex Avenue | Monroe Township, NJ | — | * | 2,263,153 | 10,261,759 | 594,026 | 2,263,153 | 10,855,785 | 13,118,938 | 88,852 | 2013 | 5 - 40 | |||||||||||||||||||
323 Park Knoll Drive | Morrisville, NC | 2,614,609 | 1,071,600 | 4,397,807 | 1,022,728 | 1,071,600 | 5,420,535 | 6,492,135 | 683,726 | 2010 | 5 - 40 | ||||||||||||||||||||
324 Park Knoll Drive | Morrisville, NC | — | * | 1,449,092 | 4,424,932 | 305,792 | 1,449,450 | 4,730,366 | 6,179,816 | 850,539 | 2007 | 5 - 40 | |||||||||||||||||||
619 Distribution Drive | Morrisville, NC | — | * | 1,031,430 | 5,655,167 | 341,601 | 1,031,685 | 5,996,513 | 7,028,198 | 1,075,863 | 2007 | 5 - 40 | |||||||||||||||||||
627 Distribution Drive | Morrisville, NC | — | * | 1,061,370 | 5,152,110 | 600,687 | 1,061,632 | 5,752,535 | 6,814,167 | 953,626 | 2007 | 5 - 40 | |||||||||||||||||||
701 Distribution Drive | Morrisville, NC | — | * | 1,300,889 | 5,313,226 | 207,184 | 1,301,211 | 5,520,088 | 6,821,299 | 982,101 | 2007 | 5 - 40 | |||||||||||||||||||
220 Lake Drive | Newark, DE | — | 566,650 | 6,099,337 | 361,819 | 566,650 | 6,461,156 | 7,027,806 | 80,822 | 2013 | 5 - 40 | ||||||||||||||||||||
222 Lake Drive | Newark, DE | — | 1,045,238 | 1,975,553 | 149,013 | 1,045,238 | 2,124,565 | 3,169,803 | 29,443 | 2013 | 5 - 40 | ||||||||||||||||||||
1879 Lamont Avenue | Odenton, MD | — | 1,976,000 | 8,099,579 | 2,469,160 | 2,011,030 | 10,533,709 | 12,544,739 | 2,815,153 | 2004 | 5 - 40 | ||||||||||||||||||||
350 Winmeyer Avenue | Odenton, MD | — | 1,778,400 | 7,289,165 | 2,069,298 | 1,809,927 | 9,326,936 | 11,136,863 | 2,295,694 | 2004 | 5 - 40 | ||||||||||||||||||||
4000 E Airport Drive | Ontario, CA | — | 2,686,533 | 10,125,772 | 347,718 | 2,686,533 | 10,473,490 | 13,160,023 | 81,663 | 2013 | 5 - 40 | ||||||||||||||||||||
1000 Gills Drive | Orlando, FL | — | 415,906 | — | 2,713,878 | 435,400 | 2,694,384 | 3,129,784 | 408,256 | 2006 | 5 - 40 | ||||||||||||||||||||
10003 Satellite Boulevard | Orlando, FL | — | 680,312 | 2,120,754 | 1,367,678 | 680,312 | 3,488,432 | 4,168,744 | 1,060,925 | 2003 | 5 - 40 | ||||||||||||||||||||
10511 & 10611 Satellite Boulevard | Orlando, FL | — | 517,554 | 2,568,186 | 443,582 | 522,991 | 3,006,331 | 3,529,322 | 1,294,479 | 1985 | 5 - 40 | ||||||||||||||||||||
10771 Palm Bay Drive | Orlando, FL | — | 664,605 | 2,363,613 | 685,383 | 2,342,835 | 3,028,218 | 709,672 | 2001 | 5 - 40 | |||||||||||||||||||||
1090 Gills Drive | Orlando, FL | — | 878,320 | 2,558,833 | 1,401,321 | 878,320 | 3,960,154 | 4,838,474 | 1,039,531 | 2003 | 5 - 40 | ||||||||||||||||||||
1400-1440 Central Florida Parkway | Orlando, FL | — | 518,043 | 2,561,938 | 972,059 | 518,043 | 3,533,997 | 4,052,040 | 1,415,579 | 1962 | 5 - 40 | ||||||||||||||||||||
1902 Cypress Lake Drive | Orlando, FL | — | 523,512 | 3,191,790 | 1,501,108 | 538,512 | 4,677,898 | 5,216,410 | 1,811,632 | 1989 | 5 - 40 | ||||||||||||||||||||
1950 Summit Park Drive | Orlando, FL | — | 2,573,700 | 17,478,646 | 3,366,242 | 2,583,667 | 20,834,921 | 23,418,588 | 5,598,959 | 2005 | 5 - 40 | ||||||||||||||||||||
1958 Summit Park Drive | Orlando, FL | — | 2,573,961 | 11,206,937 | 10,302,131 | 2,583,216 | 21,499,813 | 24,083,029 | 4,753,999 | 2005 | 5 - 40 | ||||||||||||||||||||
2000 Park Oaks Avenue | Orlando, FL | — | * | 913,201 | 6,818,610 | 230,114 | 913,201 | 7,048,724 | 7,961,925 | 58,079 | 2013 | 5 - 40 | |||||||||||||||||||
201 Summit Park Drive | Orlando, FL | — | 4,435,921 | — | 38,416,263 | 4,510,990 | 38,341,194 | 42,852,184 | 4,114,956 | 2008 | 5 - 40 | ||||||||||||||||||||
2202 Taft-Vineland Road | Orlando, FL | — | 1,283,713 | — | 5,350,222 | 1,283,713 | 5,350,222 | 6,633,935 | 2,340,664 | 2004 | 5 - 40 | ||||||||||||||||||||
2212 Taft Vineland Road | Orlando, FL | — | 838,853 | — | 4,084,540 | 767,953 | 4,155,440 | 4,923,393 | 954,226 | 2006 | 5 - 40 |
108
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
2256 Taft-Vineland Road | Orlando, FL | — | 467,296 | — | 2,494,667 | 825,673 | 2,136,290 | 2,961,963 | 577,460 | 2005 | 5 - 40 | ||||||||||||||||||||
2351 Investors Row | Orlando, FL | — | 2,261,924 | 7,496,249 | 2,521,108 | 2,271,785 | 10,007,496 | 12,279,281 | 2,442,643 | 2004 | 5 - 40 | ||||||||||||||||||||
2400 South Lake Orange Drive | Orlando, FL | — | 385,964 | — | 3,215,820 | 642,427 | 2,959,357 | 3,601,784 | 920,539 | 2001 | 5 - 40 | ||||||||||||||||||||
2412 Sand Lake Road | Orlando, FL | — | 1,236,819 | 3,243,314 | 1,080,993 | 1,244,667 | 4,316,459 | 5,561,126 | 102,027 | 2012 | 5 - 40 | ||||||||||||||||||||
2416 Lake Orange Drive | Orlando, FL | — | 535,964 | 2,707,004 | 704,800 | 2,538,168 | 3,242,968 | 836,397 | 2002 | 5 - 40 | |||||||||||||||||||||
6200 Lee Vista Boulevard | Orlando, FL | — | 1,435,301 | 6,174,642 | 638,970 | 1,435,301 | 6,813,612 | 8,248,913 | 1,295,111 | 2006 | 5 - 40 | ||||||||||||||||||||
6501 Lee Vista Boulevard | Orlando, FL | — | 903,701 | 5,660,760 | 925,671 | 5,638,790 | 6,564,461 | 1,742,041 | 2001 | 5 - 40 | |||||||||||||||||||||
6918 Presidents Drive | Orlando, FL | — | 872,550 | 2,526,043 | 8,631 | 872,550 | 2,534,674 | 3,407,224 | 113,853 | 2012 | 5 - 40 | ||||||||||||||||||||
6923 Lee Vista Boulevard | Orlando, FL | — | 903,701 | — | 3,790,427 | 830,953 | 3,863,175 | 4,694,128 | 871,059 | 2006 | 5 - 40 | ||||||||||||||||||||
7022 TPC Drive | Orlando, FL | — | 1,443,510 | 6,775,194 | 538,223 | 1,457,286 | 7,299,642 | 8,756,928 | 1,442,201 | 2006 | 5 - 40 | ||||||||||||||||||||
7100 TPC Drive | Orlando, FL | — | 1,431,489 | 8,002,539 | 793,222 | 1,445,807 | 8,781,443 | 10,227,250 | 1,640,546 | 2006 | 5 - 40 | ||||||||||||||||||||
7101 TPC Drive | Orlando, FL | — | 1,553,537 | 5,702,243 | 329,099 | 1,570,863 | 6,014,016 | 7,584,879 | 1,154,156 | 2006 | 5 - 40 | ||||||||||||||||||||
7315 Kingspointe Parkway | Orlando, FL | — | 1,931,697 | 6,388,203 | 2,052,761 | 1,932,004 | 8,440,657 | 10,372,661 | 2,810,050 | 2004 | 5 - 40 | ||||||||||||||||||||
8201 Chancellor Drive | Orlando, FL | — | 4,295,972 | 15,564,905 | 2,994,969 | 4,295,972 | 18,559,875 | 22,855,847 | 3,178,833 | 2010 | 5 - 40 | ||||||||||||||||||||
851 Gills Drive | Orlando, FL | — | 332,992 | — | 2,861,135 | 373,500 | 2,820,627 | 3,194,127 | 460,129 | 2006 | 5 - 40 | ||||||||||||||||||||
950 Gills Drive | Orlando, FL | — | 443,989 | — | 2,907,134 | 464,800 | 2,886,323 | 3,351,123 | 411,719 | 2006 | 5 - 40 | ||||||||||||||||||||
9550 Satellite Boulevard | Orlando, FL | — | 574,831 | — | 2,507,801 | 587,319 | 2,495,313 | 3,082,632 | 1,044,792 | 1999 | 5 - 40 | ||||||||||||||||||||
9600 Satellite Boulevard | Orlando, FL | — | 252,850 | 1,297,923 | 102,860 | 252,850 | 1,400,783 | 1,653,633 | 549,904 | 1989 | 5 - 40 | ||||||||||||||||||||
9700 Satellite Boulevard | Orlando, FL | — | 405,362 | 1,146,546 | 298,443 | 405,362 | 1,444,989 | 1,850,351 | 550,617 | 1989 | 5 - 40 | ||||||||||||||||||||
13 Centennial Drive | Peabody, MA | — | 1,203,464 | 7,752,384 | 489,439 | 1,203,464 | 8,241,823 | 9,445,287 | 111,551 | 2013 | 5 - 40 | ||||||||||||||||||||
1 Crescent Drive | Philadelphia, PA | — | 567,280 | — | 15,417,229 | 347,892 | 15,636,617 | 15,984,509 | 3,015,280 | 2004 | 5 - 40 | ||||||||||||||||||||
12285 McNulty Road | Philadelphia, PA | — | 532,748 | 2,126,150 | 152,538 | 532,748 | 2,278,689 | 2,811,437 | 35,995 | 2013 | 5 - 40 | ||||||||||||||||||||
150 Rouse Boulevard | Philadelphia, PA | — | 567,531 | — | 13,999,552 | 569,349 | 13,997,734 | 14,567,083 | 496,978 | 2011 | 5 - 40 | ||||||||||||||||||||
3 Crescent Drive | Philadelphia, PA | — | 214,726 | — | 22,906,987 | 417,823 | 22,703,890 | 23,121,713 | 2,484,841 | 2008 | 5 - 40 | ||||||||||||||||||||
4000 S 26th Street | Philadelphia, PA | — | 51,784 | — | 7,097,969 | 616,467 | 6,533,286 | 7,149,753 | 228,285 | 2011 | 5 - 40 | ||||||||||||||||||||
4050 S 26th Street | Philadelphia, PA | — | 46,301 | — | 7,018,037 | 616,670 | 6,447,668 | 7,064,338 | 280,999 | 2011 | 5 - 40 | ||||||||||||||||||||
4300 South 26th Street | Philadelphia, PA | — | 402,673 | — | 34,872,598 | 413,030 | 34,862,241 | 35,275,271 | 3,880,730 | 2008 | 5 - 40 |
109
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
4751 League Island Boulevard | Philadelphia, PA | — | 992,965 | 331,924 | 7,223,254 | 1,022,081 | 7,526,062 | 8,548,143 | 2,041,669 | 2003 | 5 - 40 | ||||||||||||||||||||
4775 League Island Boulevard | Philadelphia, PA | — | 891,892 | — | 4,623,172 | 366,982 | 5,148,082 | 5,515,064 | 810,065 | 2006 | 5 - 40 | ||||||||||||||||||||
5 Crescent Drive | Philadelphia, PA | — | 1,765,341 | — | 74,982,228 | 1,897,041 | 74,850,528 | 76,747,569 | 1,827,449 | 2011 | 5 - 40 | ||||||||||||||||||||
8th & Walnut Streets | Philadelphia, PA | 44,463,003 | 734,275 | — | 45,224,560 | 4,349,661 | 41,609,174 | 45,958,835 | 341,951 | 2011 | 5 - 40 | ||||||||||||||||||||
2626 South 7th Street | Phoenix, AZ | — | 2,519,510 | 3,798,560 | 3,286,737 | 2,519,510 | 7,085,297 | 9,604,807 | 228,380 | 2012 | 5 - 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 | 1,401,486 | 2007 | 5 - 40 | ||||||||||||||||||||
4217 E. Cotton Center Boulevard | Phoenix, AZ | — | 6,920,980 | 10,045,599 | 3,757,067 | 6,690,321 | 14,033,325 | 20,723,646 | 2,988,108 | 2007 | 5 - 40 | ||||||||||||||||||||
4303 E. Cotton Center Boulvard | Phoenix, AZ | — | * | 2,619,964 | 9,675,711 | 43,651 | 2,619,964 | 9,719,362 | 12,339,326 | 1,883,829 | 2007 | 5 - 40 | |||||||||||||||||||
4313 E. Cotton Center Boulevard | Phoenix, AZ | — | * | 3,895,539 | 16,724,283 | 1,467,793 | 3,895,539 | 18,192,076 | 22,087,615 | 3,801,214 | 2007 | 5 - 40 | |||||||||||||||||||
4405 E. Cotton Center Boulevard | Phoenix, AZ | — | * | 2,646,318 | 9,697,439 | 825,620 | 2,646,318 | 10,523,059 | 13,169,377 | 1,931,623 | 2007 | 5 - 40 | |||||||||||||||||||
4410 E. Cotton Center Boulevard | Phoenix, AZ | — | 4,758,484 | 10,559,563 | 5,608,207 | 4,765,172 | 16,161,082 | 20,926,254 | 3,290,039 | 2007 | 5 - 40 | ||||||||||||||||||||
4415 E. Cotton Center Boulevard | Phoenix, AZ | — | * | 1,749,957 | 3,667,748 | 465,844 | 1,749,957 | 4,133,592 | 5,883,549 | 786,739 | 2007 | 5 - 40 | |||||||||||||||||||
4425 E. Cotton Center Boulvard | Phoenix, AZ | — | * | 7,318,457 | 24,549,401 | (473,426 | ) | 7,318,457 | 24,075,975 | 31,394,432 | 3,927,918 | 2007 | 5 - 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 | 1,040,886 | 2007 | 5 - 40 | ||||||||||||||||||||
4550 South 44th Street | Phoenix, AZ | — | 5,380,972 | — | 9,257,593 | 6,391,283 | 8,247,282 | 14,638,565 | 2,049,181 | 2007 | 5 - 40 | ||||||||||||||||||||
4610 South 44th Street | Phoenix, AZ | — | 6,539,310 | — | 10,331,533 | 6,827,288 | 10,043,555 | 16,870,843 | 1,663,976 | 2007 | 5 - 40 | ||||||||||||||||||||
4750 South 44th Place | Phoenix, AZ | — | 3,756,307 | 8,336,400 | 4,190,610 | 3,761,587 | 12,521,730 | 16,283,317 | 2,136,090 | 2007 | 5 - 40 | ||||||||||||||||||||
563 South 63rd Avenue | Phoenix, AZ | — | 5,523,427 | 14,581,705 | 7,876,524 | 5,636,070 | 22,345,586 | 27,981,656 | 281,487 | 2013 | 5 - 40 | ||||||||||||||||||||
9801 South 51st Street | Phoenix, AZ | — | 2,225,839 | 2,059,235 | 1,063,738 | 2,225,839 | 3,122,973 | 5,348,812 | 267,643 | 2012 | 5 - 40 | ||||||||||||||||||||
Cotton Center Building 18 | Phoenix, AZ | — | 11,222,938 | — | 15,254,730 | 11,318,033 | 15,159,635 | 26,477,668 | 309,257 | 2012 | 5 - 40 | ||||||||||||||||||||
1000 Klein Road | Plano, TX | — | 706,660 | 5,894,330 | 248,060 | 706,660 | 6,142,391 | 6,849,051 | 47,536 | 2013 | 5 - 40 | ||||||||||||||||||||
1901 10th Street | Plano, TX | — | * | 555,168 | 6,401,789 | 336,023 | 555,168 | 6,737,812 | 7,292,980 | 57,231 | 2013 | 5 - 40 | |||||||||||||||||||
1909 10th Street | Plano, TX | — | * | 551,706 | 5,797,440 | 262,150 | 551,706 | 6,059,590 | 6,611,296 | 51,828 | 2013 | 5 - 40 | |||||||||||||||||||
3605 East Plano Parkway | Plano, TX | — | 1,047,996 | 9,218,748 | 355,589 | 1,047,996 | 9,574,336 | 10,622,332 | 76,223 | 2013 | 5 - 40 | ||||||||||||||||||||
3701 East Plano Parkway | Plano, TX | — | 877,564 | 7,460,686 | 332,221 | 877,564 | 7,792,906 | 8,670,470 | 63,480 | 2013 | 5 - 40 | ||||||||||||||||||||
800 Klein Road | Plano, TX | — | 580,456 | 5,681,283 | 299,393 | 580,456 | 5,980,676 | 6,561,132 | 53,087 | 2013 | 5 - 40 | ||||||||||||||||||||
900 Klein Road | Plano, TX | — | 723,534 | 6,004,923 | 349,690 | 723,534 | 6,354,613 | 7,078,147 | 53,655 | 2013 | 5 - 40 | ||||||||||||||||||||
9801 80th Avenue | Pleasant Prairie, WI | — | 1,692,077 | 7,934,794 | 337,494 | 1,689,726 | 8,274,639 | 9,964,365 | 3,145,391 | 1994 | 5 - 40 | ||||||||||||||||||||
2250 Hickory Road | Plymouth Meeting, PA | — | 1,015,851 | 9,175,555 | 3,070,214 | 1,024,040 | 12,237,581 | 13,261,621 | 5,510,733 | 1985 | 5 - 40 |
110
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||
14630-14650 28th Avenue North | Plymouth, MN | — | 198,205 | 1,793,422 | 733,275 | 198,205 | 2,526,696 | 2,724,901 | 1,167,527 | 1978 | 5 - 40 | ||||||||||||||||||||
2920 Northwest Boulevard | Plymouth, MN | — | 392,026 | 3,433,678 | 434,126 | 384,235 | 3,875,595 | 4,259,830 | 1,549,911 | 1997 | 5 - 40 | ||||||||||||||||||||
5905 Trenton Lane North | Plymouth, MN | — | 1,616,360 | 4,487,462 | 388,509 | 1,616,360 | 4,875,970 | 6,492,330 | 45,381 | 2013 | 5 - 40 | ||||||||||||||||||||
6055 Nathan Lane North | Plymouth, MN | — | * | 1,327,017 | 4,527,404 | 319,429 | 1,327,017 | 4,846,833 | 6,173,850 | 43,172 | 2013 | 5 - 40 | |||||||||||||||||||
1400 SW 6th Court | Pompano Beach, FL | — | 1,157,049 | 4,620,956 | 1,294,899 | 1,157,049 | 5,915,855 | 7,072,904 | 2,116,446 | 1986 | 5 - 40 | ||||||||||||||||||||
1405 SW 6th Court | Pompano Beach, FL | — | 392,138 | 1,565,787 | 444,436 | 392,138 | 2,010,224 | 2,402,362 | 868,485 | 1985 | 5 - 40 | ||||||||||||||||||||
1500 SW 5th Court | Pompano Beach, FL | — | 972,232 | 3,892,085 | 503,712 | 972,232 | 4,395,797 | 5,368,029 | 1,730,940 | 1957 | 5 - 40 | ||||||||||||||||||||
1501 SW 5th Court | Pompano Beach, FL | — | 203,247 | 811,093 | 342,376 | 203,247 | 1,153,470 | 1,356,717 | 408,458 | 1990 | 5 - 40 | ||||||||||||||||||||
1601 SW 5th Court | Pompano Beach, FL | — | 203,247 | 811,093 | 78,411 | 203,247 | 889,505 | 1,092,752 | 345,590 | 1990 | 5 - 40 | ||||||||||||||||||||
1651 SW 5th Court | Pompano Beach, FL | — | 203,247 | 811,093 | 183,052 | 203,247 | 994,146 | 1,197,393 | 364,633 | 1990 | 5 - 40 | ||||||||||||||||||||
2201-2215 NW 30th Place | Pompano Beach, FL | — | 1,120,328 | 3,427,358 | 96,028 | 1,120,328 | 3,523,386 | 4,643,714 | 30,893 | 2013 | 5 - 40 | ||||||||||||||||||||
2250-2270 NW 30th Place | Pompano Beach, FL | — | 993,015 | 2,423,174 | 123,273 | 993,015 | 2,546,447 | 3,539,462 | 21,532 | 2013 | 5 - 40 | ||||||||||||||||||||
2280-2300 NW 30th Place | Pompano Beach, FL | — | 906,947 | 2,157,802 | 156,054 | 906,947 | 2,313,857 | 3,220,804 | 17,823 | 2013 | 5 - 40 | ||||||||||||||||||||
2301-2329 NW 30th Place | Pompano Beach, FL | — | 1,268,707 | 3,079,811 | 109,158 | 1,268,707 | 3,188,969 | 4,457,676 | 28,692 | 2013 | 5 - 40 | ||||||||||||||||||||
3000 NW 25th Avenue | Pompano Beach, FL | — | 1,087,554 | 2,897,117 | 107,430 | 1,087,554 | 3,004,547 | 4,092,101 | 28,291 | 2013 | 5 - 40 | ||||||||||||||||||||
3001-3037 NW 25th Avenue | Pompano Beach, FL | — | 1,548,542 | 3,512,041 | 182,217 | 1,548,542 | 3,694,259 | 5,242,801 | 34,966 | 2013 | 5 - 40 | ||||||||||||||||||||
3012-3050 NW 25th Avenue | Pompano Beach, FL | — | 1,112,781 | 2,763,862 | 209,767 | 1,112,781 | 2,973,628 | 4,086,409 | 24,616 | 2013 | 5 - 40 | ||||||||||||||||||||
595 SW 13th Terrace | Pompano Beach, FL | — | 359,933 | 1,437,116 | 624,145 | 359,933 | 2,061,261 | 2,421,194 | 840,297 | 1984 | 5 - 40 | ||||||||||||||||||||
601 SW 13th Terrace | Pompano Beach, FL | — | 164,413 | 655,933 | 279,326 | 164,413 | 935,259 | 1,099,672 | 434,373 | 1984 | 5 - 40 | ||||||||||||||||||||
605 SW 16th Terrace | Pompano Beach, FL | — | 310,778 | 1,238,324 | 186,248 | 310,178 | 1,425,172 | 1,735,350 | 663,040 | 1965 | 5 - 40 | ||||||||||||||||||||
8720 Rochester Avenue | Ranco Cucamonga, CA | — | 1,304,547 | 3,371,959 | 104,950 | 1,304,547 | 3,476,909 | 4,781,456 | 25,864 | 2013 | 5 - 40 | ||||||||||||||||||||
301 Hill Carter Parkway | Richmond, VA | — | 659,456 | 4,836,010 | 159,898 | 659,456 | 4,995,908 | 5,655,364 | 2,377,111 | 1989 | 5 - 40 | ||||||||||||||||||||
4101-4127 Carolina Avenue | Richmond, VA | — | 310,854 | 2,279,597 | 1,093,550 | 310,854 | 3,373,147 | 3,684,001 | 1,518,335 | 1973 | 5 - 40 | ||||||||||||||||||||
4201-4261 Carolina Avenue | Richmond, VA | — | 693,203 | 5,083,493 | 1,908,968 | 693,203 | 6,992,461 | 7,685,664 | 3,263,202 | 1975 | 5 - 40 | ||||||||||||||||||||
4263-4299 Carolina Avenue | Richmond, VA | — | 256,203 | 2,549,649 | 2,159,827 | 256,203 | 4,709,476 | 4,965,679 | 2,057,224 | 1976 | 5 - 40 | ||||||||||||||||||||
4263F-N. Carolina Avenue | Richmond, VA | — | 91,476 | — | 1,760,194 | 91,599 | 1,760,071 | 1,851,670 | 789,708 | 1975 | 5 - 40 | ||||||||||||||||||||
4301-4335 Carolina Avenue | Richmond, VA | — | 223,696 | 1,640,435 | 2,470,110 | 223,696 | 4,110,545 | 4,334,241 | 1,549,168 | 1978 | 5 - 40 | ||||||||||||||||||||
4337-4379 Carolina Avenue | Richmond, VA | — | 325,303 | 2,385,557 | 1,293,892 | 325,303 | 3,679,449 | 4,004,752 | 1,744,383 | 1979 | 5 - 40 | ||||||||||||||||||||
4401-4445 Carolina Avenue | Richmond, VA | — | 615,038 | 4,510,272 | 443,077 | 615,038 | 4,953,349 | 5,568,387 | 2,314,990 | 1988 | 5 - 40 |
111
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | ||||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | ||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | |||||||||||||||||||||
OPERATING PROPERTIES | ||||||||||||||||||||||||||||||||
4447-4491 Carolina Avenue | Richmond, VA | — | 454,056 | 2,729,742 | 364,252 | 454,056 | 3,093,994 | 3,548,050 | 1,580,731 | 1987 | 5 - 40 | |||||||||||||||||||||
4501-4549 Carolina Avenue | Richmond, VA | — | 486,166 | 3,565,211 | 553,422 | 486,166 | 4,118,633 | 4,604,799 | 1,882,892 | 1981 | 5 - 40 | |||||||||||||||||||||
4551-4593 Carolina Avenue | Richmond, VA | — | 474,360 | 3,478,646 | 944,590 | 474,360 | 4,423,236 | 4,897,596 | 2,088,072 | 1982 | 5 - 40 | |||||||||||||||||||||
4601-4643 Carolina Avenue | Richmond, VA | — | 652,455 | 4,784,675 | 769,136 | 652,455 | 5,553,811 | 6,206,266 | 2,805,560 | 1985 | 5 - 40 | |||||||||||||||||||||
4645-4683 Carolina Avenue | Richmond, VA | — | 404,616 | 2,967,187 | 541,284 | 404,616 | 3,508,471 | 3,913,087 | 1,624,533 | 1985 | 5 - 40 | |||||||||||||||||||||
4717-4729 Eubank Road | Richmond, VA | — | 449,447 | 3,294,697 | 2,212,870 | 452,263 | 5,504,751 | 5,957,014 | 2,275,160 | 1978 | 5 - 40 | |||||||||||||||||||||
510 Eastpark Court | Richmond, VA | — | 261,961 | 2,110,874 | 470,589 | 262,210 | 2,581,214 | 2,843,424 | 1,206,531 | 1989 | 5 - 40 | |||||||||||||||||||||
520 Eastpark Court | Richmond, VA | — | 486,118 | 4,083,582 | 698,931 | 486,598 | 4,782,033 | 5,268,631 | 1,931,125 | 1989 | 5 - 40 | |||||||||||||||||||||
530 Eastpark Court | Richmond, VA | — | 266,883 | — | 2,582,885 | 334,772 | 2,514,996 | 2,849,768 | 994,877 | 1999 | 5 - 40 | |||||||||||||||||||||
540 Eastpark Court | Richmond, VA | — | 742,300 | — | 5,415,233 | 1,066,839 | 5,090,694 | 6,157,533 | 751,308 | 2007 | 5 - 40 | |||||||||||||||||||||
5600-5626 Eastport Boulevard | Richmond, VA | — | 489,941 | 3,592,900 | 536,950 | 489,941 | 4,129,850 | 4,619,791 | 1,787,664 | 1989 | 5 - 40 | |||||||||||||||||||||
5601-5659 Eastport Boulevard | Richmond, VA | — | 705,660 | — | 4,769,910 | 720,100 | 4,755,470 | 5,475,570 | 2,165,001 | 1996 | 5 - 40 | |||||||||||||||||||||
5650-5674 Eastport Boulevard | Richmond, VA | — | 644,384 | 4,025,480 | 215,069 | 644,384 | 4,240,549 | 4,884,933 | 1,998,249 | 1990 | 5 - 40 | |||||||||||||||||||||
5700 Eastport Boulevard | Richmond, VA | — | 408,729 | 2,697,348 | 677,432 | 408,729 | 3,374,780 | 3,783,509 | 1,789,346 | 1990 | 5 - 40 | |||||||||||||||||||||
5701-5799 Eastport Boulevard | Richmond, VA | — | 694,644 | — | 5,612,200 | 700,503 | 5,606,341 | 6,306,844 | 2,084,265 | 1998 | 5 - 40 | |||||||||||||||||||||
5900 Eastport Boulevard | Richmond, VA | — | 676,661 | — | 4,974,338 | 687,898 | 4,963,101 | 5,650,999 | 2,222,816 | 1997 | 5 - 40 | |||||||||||||||||||||
6000 Eastport Blvd | Richmond, VA | — | 872,901 | — | 7,486,258 | 901,666 | 7,457,493 | 8,359,159 | 1,083,392 | 1997 | 5 - 40 | |||||||||||||||||||||
2020 US Highway 301 South | Riverview, FL | — | 1,233,639 | 13,608,485 | 109,899 | 1,233,800 | 13,718,223 | 14,952,023 | 2,769,053 | 2006 | 5 - 40 | |||||||||||||||||||||
6530 Judge Adams Road | Rock Creek, NC | — | 305,821 | — | 4,967,815 | 335,061 | 4,938,575 | 5,273,636 | 1,812,271 | 1999 | 5 - 40 | |||||||||||||||||||||
6532 Judge Adams Road | Rock Creek, NC | — | 354,903 | — | 4,016,834 | 399,988 | 3,971,749 | 4,371,737 | 1,626,000 | 1997 | 5 - 40 | |||||||||||||||||||||
13098 George Weber Drive | Rogers, MN | — | 895,811 | 6,004,189 | 645,566 | 895,811 | 6,649,755 | 7,545,566 | 564,459 | 2011 | 5 - 40 | |||||||||||||||||||||
1070 Windham Parkway | Romeoville, IL | — | 8,672,143 | 24,144,864 | — | 8,672,143 | 24,144,864 | 32,817,007 | 840,005 | 2012 | 5 - 40 | |||||||||||||||||||||
1550 Central Avenue | Roselle, IL | — | * | 2,884,492 | 10,439,793 | 484,562 | 2,884,492 | 10,924,355 | 13,808,847 | 96,728 | 2013 | 5 - 40 | ||||||||||||||||||||
1135 Aviation Place | San Fernando, CA | — | 3,035,034 | 2,844,962 | 135,218 | 3,035,034 | 2,980,180 | 6,015,214 | 22,470 | 2013 | 5 - 40 | |||||||||||||||||||||
8715 Bollman Place | Savage, MD | — | 1,263,237 | 2,633,210 | 99,509 | 1,263,237 | 2,732,719 | 3,995,956 | 21,816 | 2013 | 5 - 40 | |||||||||||||||||||||
8501 East Raintree Drive | Scottsdale, AZ | — | 4,076,412 | — | 27,621,159 | 4,115,137 | 27,582,434 | 31,697,571 | 7,042,077 | 2005 | 5 - 40 | |||||||||||||||||||||
1150 Gateway Drive | Shakopee, MN | — | 1,126,865 | 5,684,178 | — | 1,126,865 | 5,684,178 | 6,811,043 | 164,890 | 2012 | 5 - 40 | |||||||||||||||||||||
112
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | ||||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2012 | ||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | |||||||||||||||||||||
OPERATING PROPERTIES | ||||||||||||||||||||||||||||||||
5555 12th Avenue East | Shakopee, MN | — | 887,285 | 5,321,200 | 6,820 | 887,285 | 5,328,020 | 6,215,305 | 163,463 | 2012 | 5 - 40 | |||||||||||||||||||||
1210 Champion Way | Sharonville, OH | — | 1,337,271 | 6,135,118 | 489,270 | 1,337,271 | 6,624,389 | 7,961,660 | 112,936 | 2013 | 5 - 40 | |||||||||||||||||||||
3990 Heritage Oak Court | Simi Valley, CA | — | * | 1,964,140 | 10,667,267 | 345,689 | 1,964,140 | 11,012,956 | 12,977,096 | 79,863 | 2013 | 5 - 40 | ||||||||||||||||||||
3654-3668 Swenson Avenue | St. Charles, IL | — | 643,639 | 1,645,058 | 100,470 | 643,639 | 1,745,528 | 2,389,167 | 17,590 | 2013 | 5 - 40 | |||||||||||||||||||||
3701 Illinois Ave | St. Charles, IL | — | 672,500 | 1,288,924 | 117,765 | 672,500 | 1,406,689 | 2,079,189 | 14,779 | 2013 | 5 - 40 | |||||||||||||||||||||
3950-3980 Swenson Avenue | St. Charles, IL | — | 851,080 | 3,027,753 | 149,571 | 851,080 | 3,177,324 | 4,028,404 | 27,743 | 2013 | 5 - 40 | |||||||||||||||||||||
1501 102nd Avenue North | St. Petersburg, FL | — | * | 283,474 | 2,230,868 | 96,546 | 283,474 | 2,327,413 | 2,610,887 | 18,314 | 2013 | 5 - 40 | ||||||||||||||||||||
1527 102nd Avenue North | St. Petersburg, FL | — | * | 374,284 | 2,987,226 | 128,152 | 374,284 | 3,115,378 | 3,489,662 | 24,452 | 2013 | 5 - 40 | ||||||||||||||||||||
1551 102nd Avenue North | St. Petersburg, FL | — | * | 699,797 | 5,214,438 | 254,949 | 699,797 | 5,469,387 | 6,169,184 | 64,802 | 2013 | 5 - 40 | ||||||||||||||||||||
6900 Harbour View Boulevard | Suffolk, VA | — | 904,052 | — | 8,652,438 | 807,006 | 8,749,484 | 9,556,490 | 1,719,372 | 2006 | 5 - 40 | |||||||||||||||||||||
6920 Harbour View Boulevard | Suffolk, VA | — | 603,391 | — | 6,707,341 | 2,628,635 | 4,682,097 | 7,310,732 | 218,907 | 2005 | 5 - 40 | |||||||||||||||||||||
6950 Harbour View Blvd | Suffolk, VA | — | 929,844 | — | 6,485,717 | 794,848 | 6,620,713 | 7,415,561 | 1,337,252 | 2004 | 5 - 40 | |||||||||||||||||||||
1516 Fryar Avenue | Sumner, WA | — | 1,675,402 | 5,079,543 | 301,095 | 1,675,402 | 5,380,638 | 7,056,040 | 54,920 | 2013 | 5 - 40 | |||||||||||||||||||||
1301 International Parkway | Sunrise, FL | — | 5,100,162 | 24,219,956 | 7,381,868 | 5,100,791 | 31,601,195 | 36,701,986 | 5,568,038 | 2006 | 5 - 40 | |||||||||||||||||||||
13621 NW 12th Street | Sunrise, FL | — | 5,570,820 | 9,454,900 | 2,690,353 | 5,570,820 | 12,145,253 | 17,716,073 | 3,055,333 | 2008 | 5 - 40 | |||||||||||||||||||||
13630 NW 8th Street | Sunrise, FL | — | 659,797 | 2,596,275 | 540,787 | 659,825 | 3,137,033 | 3,796,858 | 1,145,342 | 1991 | 5 - 40 | |||||||||||||||||||||
13650 NW 8th Street | Sunrise, FL | — | 558,223 | 2,171,930 | 214,395 | 558,251 | 2,386,297 | 2,944,548 | 918,225 | 1991 | 5 - 40 | |||||||||||||||||||||
100 Dartmouth Drive | Swedesboro, NJ | — | 909,723 | 11,453,198 | 138,839 | 909,723 | 11,592,037 | 12,501,760 | 102,087 | 2013 | 5 - 40 | |||||||||||||||||||||
100 Gloucester Court | Swedesboro, NJ | — | 829,732 | 8,758,904 | 262,213 | 829,732 | 9,021,118 | 9,850,850 | 81,346 | 2013 | 5 - 40 | |||||||||||||||||||||
111 Kelsey Lane | Tampa, FL | — | 359,540 | 1,461,850 | 1,266,152 | 359,540 | 2,728,002 | 3,087,542 | 899,662 | 1990 | 5 - 40 | |||||||||||||||||||||
131 Kelsey Lane | Tampa, FL | — | 511,463 | — | 4,437,886 | 559,527 | 4,389,822 | 4,949,349 | 2,452,150 | 1,985 | 5 - 40 | |||||||||||||||||||||
150-182 Kelsey Lane | Tampa, FL | — | 403,541 | — | 5,260,899 | 1,181,609 | 4,482,831 | 5,664,440 | 625,275 | 2,006 | 5 - 40 | |||||||||||||||||||||
200-34 Kelsey Lane | Tampa, FL | — | 330,097 | — | 3,314,788 | 933,362 | 2,711,523 | 3,644,885 | 564,239 | 2,005 | 5 - 40 | |||||||||||||||||||||
3102,3104,3110 Cherry Palm Drive | Tampa, FL | — | 503,767 | 2,787,585 | 1,301,589 | 503,767 | 4,089,174 | 4,592,941 | 1,818,822 | 1,986 | 5 - 40 | |||||||||||||||||||||
3401-3409 Cragmont Drive | Tampa, FL | — | 556,952 | 3,849,236 | 5,141 | 556,952 | 3,854,377 | 4,411,329 | 104,522 | 2,012 | 5 - 40 | |||||||||||||||||||||
3502 Roga Boulevard | Tampa, FL | — | 201,600 | 1,263,131 | 21,392 | 201,600 | 1,284,523 | 1,486,123 | 35,575 | 2,012 | 5 - 40 | |||||||||||||||||||||
3505 Cragmont Drive | Tampa, FL | — | 936,336 | 7,155,520 | 1,313 | 936,336 | 7,156,833 | 8,093,169 | 212,052 | 2,012 | 5 - 40 | |||||||||||||||||||||
3608 Queen Palm Drive | Tampa, FL | — | 650,384 | 4,764,301 | 32,287 | 650,384 | 4,796,588 | 5,446,972 | 139,360 | 2,012 | 5 - 40 | |||||||||||||||||||||
113
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||||||||||
4502 Woodland Corporate Boulevard | Tampa, FL | — | 1,035,422 | — | 3,472,386 | 1,071,535 | 3,436,273 | 4,507,808 | 1,216,693 | 1999 | 5 - 40 | ||||||||||||||||||||||||||||
4503 Woodland Corporate Boulevard | Tampa, FL | — | 619,913 | — | 2,876,500 | 619,913 | 2,876,500 | 3,496,413 | 973,291 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
4505 Woodland Corporate Boulevard | Tampa, FL | — | 516,594 | — | 2,443,438 | 716,594 | 2,243,438 | 2,960,032 | 789,237 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
4508 Woodland Corporate Boulevard | Tampa, FL | — | 498,598 | — | 3,087,970 | 556,887 | 3,029,681 | 3,586,568 | 1,127,131 | 2000 | 5 - 40 | ||||||||||||||||||||||||||||
4511 Woodland Corporate Boulevard | Tampa, FL | — | 516,594 | — | 2,311,508 | 686,594 | 2,141,508 | 2,828,102 | 642,253 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
4520 Seedling Circle | Tampa, FL | — | 854,797 | 42,131 | 2,724,029 | 854,797 | 2,766,160 | 3,620,957 | 669,577 | 2003 | 5 - 40 | ||||||||||||||||||||||||||||
4630 Woodland Corporate Boulevard | Tampa, FL | — | 943,169 | — | 14,042,129 | 1,560,099 | 13,425,199 | 14,985,298 | 4,914,641 | 2000 | 5 - 40 | ||||||||||||||||||||||||||||
4631 Woodland Corporate Blvd | Tampa, FL | — | 1,453,367 | — | 13,375,916 | 1,908,792 | 12,920,491 | 14,829,283 | 1,715,755 | 2006 | 5 - 40 | ||||||||||||||||||||||||||||
501 US Highway 301 South | Tampa, FL | — | 898,884 | — | 3,412,262 | 900,508 | 3,410,638 | 4,311,146 | 1,040,719 | 2004 | 5 - 40 | ||||||||||||||||||||||||||||
5250 Eagle Trail Drive | Tampa, FL | — | 952,860 | — | 3,464,999 | 952,860 | 3,464,999 | 4,417,859 | 1,322,152 | 1998 | 5 - 40 | ||||||||||||||||||||||||||||
5501-5519 Pioneer Park Boulevard | Tampa, FL | — | 162,000 | 1,613,000 | 963,054 | 262,416 | 2,475,638 | 2,738,054 | 1,097,196 | 1981 | 5 - 40 | ||||||||||||||||||||||||||||
5690-5694 Crenshaw Street | Tampa, FL | — | 181,923 | 1,812,496 | 784,786 | 181,923 | 2,597,282 | 2,779,205 | 1,019,089 | 1979 | 5 - 40 | ||||||||||||||||||||||||||||
701-725 South US Hwy 301 | Tampa, FL | — | 419,683 | — | 3,418,844 | 661,680 | 3,176,847 | 3,838,527 | 1,261,568 | 2000 | 5 - 40 | ||||||||||||||||||||||||||||
7621 Bald Cypress Place (Bldg N) | Tampa, FL | — | 716,580 | 132,773 | 604,699 | 447,498 | 1,006,554 | 1,454,052 | 260,020 | 2001 | 5 - 40 | ||||||||||||||||||||||||||||
7724 Woodland Center Boulevard | Tampa, FL | — | 235,893 | — | 2,244,863 | 235,894 | 2,244,862 | 2,480,756 | 784,825 | 1998 | 5 - 40 | ||||||||||||||||||||||||||||
7725 Woodland Center Boulevard | Tampa, FL | — | 553,335 | — | 3,396,664 | 771,501 | 3,178,498 | 3,949,999 | 1,177,442 | 1999 | 5 - 40 | ||||||||||||||||||||||||||||
7802-50 Woodland Center Boulevard | Tampa, FL | — | 357,364 | — | 2,948,109 | 506,949 | 2,798,524 | 3,305,473 | 899,310 | 1999 | 5 - 40 | ||||||||||||||||||||||||||||
7851-7861 Woodland Center Blvd | Tampa, FL | — | 548,905 | 2,241,627 | 204,199 | 548,905 | 2,445,826 | 2,994,731 | 520,111 | 2006 | 5 - 40 | ||||||||||||||||||||||||||||
7852-98 Woodland Center Boulevard | Tampa, FL | — | 357,364 | — | 2,662,010 | 506,949 | 2,512,425 | 3,019,374 | 931,414 | 1999 | 5 - 40 | ||||||||||||||||||||||||||||
7920 Woodland Center Boulevard | Tampa, FL | — | 1,082,648 | 2,445,444 | 434,554 | 1,082,648 | 2,879,998 | 3,962,646 | 1,050,378 | 1997 | 5 - 40 | ||||||||||||||||||||||||||||
7930, 8010-20 Woodland Center Boulevard | Tampa, FL | — | 1,408,478 | 5,247,246 | 1,166,149 | 1,408,478 | 6,413,395 | 7,821,873 | 2,782,366 | 1990 | 5 - 40 | ||||||||||||||||||||||||||||
8001 Woodland Center Boulevard | Tampa, FL | — | 350,406 | — | 2,295,752 | 438,061 | 2,208,097 | 2,646,158 | 796,181 | 1999 | 5 - 40 | ||||||||||||||||||||||||||||
8110 Anderson Road | Tampa, FL | — | 912,663 | 5,425,143 | 70,834 | 912,663 | 5,495,977 | 6,408,640 | 177,417 | 2012 | 5 - 40 | ||||||||||||||||||||||||||||
8112-42 Woodland Center Boulevard | Tampa, FL | — | 513,263 | 3,230,239 | 649,274 | 513,263 | 3,879,513 | 4,392,776 | 1,782,213 | 1995 | 5 - 40 | ||||||||||||||||||||||||||||
8130 Anderson Road | Tampa, FL | — | 655,668 | 4,132,076 | 26,203 | 655,668 | 4,158,279 | 4,813,947 | 133,968 | 2012 | 5 - 40 | ||||||||||||||||||||||||||||
8154-8198 Woodland Center Boulevard | Tampa, FL | — | 399,088 | 2,868,834 | 1,074,969 | 399,088 | 3,943,803 | 4,342,891 | 1,561,150 | 1988 | 5 - 40 | ||||||||||||||||||||||||||||
8212 Woodland Center Boulevard | Tampa, FL | — | 820,882 | 2,322,720 | 37,907 | 820,882 | 2,360,627 | 3,181,509 | 983,441 | 1996 | 5 - 40 | ||||||||||||||||||||||||||||
8401-8408 Benjamin Road | Tampa, FL | — | 789,651 | 4,454,648 | 325,682 | 611,626 | 4,958,355 | 5,569,981 | 2,434,848 | 1986 | 5 - 40 | ||||||||||||||||||||||||||||
8705 Henderson Road | Tampa, FL | — | 4,303,870 | 23,688,409 | (15,944 | ) | 4,304,102 | 23,672,234 | 27,976,336 | 5,416,432 | 2006 | 5 - 40 |
114
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||||||||||
8715 Henderson Road | Tampa, FL | — | 3,343,910 | 18,325,599 | 323,223 | 3,344,090 | 18,648,642 | 21,992,732 | 4,784,886 | 2006 | 5 - 40 | ||||||||||||||||||||||||||||
8725 Henderson Road | Tampa, FL | — | 3,167,787 | 19,126,318 | 342,145 | 3,167,958 | 19,468,292 | 22,636,250 | 4,944,543 | 2006 | 5 - 40 | ||||||||||||||||||||||||||||
8735 Henderson Road | Tampa, FL | — | 3,166,130 | 18,735,573 | 1,276,725 | 3,166,300 | 20,012,128 | 23,178,428 | 4,997,971 | 2006 | 5 - 40 | ||||||||||||||||||||||||||||
8745 Henderson Road | Tampa, FL | — | 2,050,439 | 11,173,008 | (44,065 | ) | 2,050,548 | 11,128,834 | 13,179,382 | 1,936,630 | 2006 | 5 - 40 | |||||||||||||||||||||||||||
8900-34 Brittany Was | Tampa, FL | — | 537,194 | — | 3,664,883 | 978,019 | 3,224,058 | 4,202,077 | 871,357 | 2005 | 5 - 40 | ||||||||||||||||||||||||||||
8921 Brittany Way | Tampa, FL | — | 224,369 | 1,063,882 | 868,340 | 254,493 | 1,902,098 | 2,156,591 | 729,000 | 1998 | 5 - 40 | ||||||||||||||||||||||||||||
9001-9015 Brittany Way | Tampa, FL | — | 209,841 | — | 1,806,688 | 364,514 | 1,652,015 | 2,016,529 | 670,629 | 2000 | 5 - 40 | ||||||||||||||||||||||||||||
9002-9036 Brittany Way | Tampa, FL | — | 492,320 | — | 3,785,603 | 899,284 | 3,378,639 | 4,277,923 | 1,255,220 | 2004 | 5 - 40 | ||||||||||||||||||||||||||||
901-933 US Highway 301 South | Tampa, FL | — | 500,391 | — | 4,162,685 | 840,314 | 3,822,762 | 4,663,076 | 1,522,409 | 2001 | 5 - 40 | ||||||||||||||||||||||||||||
9020 King Palm Drive | Tampa, FL | — | 1,718,496 | 11,697,381 | 133,305 | 1,718,496 | 11,830,686 | 13,549,182 | 348,543 | 2012 | 5 - 40 | ||||||||||||||||||||||||||||
910-926 Chad Lane | Tampa, FL | — | 201,771 | — | 3,214,583 | 628,237 | 2,788,117 | 3,416,354 | 975,719 | 2006 | 5 - 40 | ||||||||||||||||||||||||||||
9110 King Palm Drive | Tampa, FL | — | 1,203,200 | 7,979,540 | 64,475 | 1,203,200 | 8,044,015 | 9,247,215 | 252,514 | 2012 | 5 - 40 | ||||||||||||||||||||||||||||
9203 King Palm Drive | Tampa, FL | — | 754,832 | 4,966,864 | 92,249 | 754,832 | 5,059,113 | 5,813,945 | 211,377 | 2012 | 5 - 40 | ||||||||||||||||||||||||||||
9306-24 East Broadway Avenue | Tampa, FL | — | 450,440 | — | 3,303,369 | 486,004 | 3,267,805 | 3,753,809 | 479,734 | 2007 | 5 - 40 | ||||||||||||||||||||||||||||
9319 Peach Palm Drive | Tampa, FL | — | 612,536 | 4,168,473 | 9,700 | 612,536 | 4,178,173 | 4,790,709 | 115,323 | 2012 | 5 - 40 | ||||||||||||||||||||||||||||
9704 Solar Drive | Tampa, FL | — | 374,548 | 1,354,800 | 126,348 | 374,548 | 1,481,148 | 1,855,696 | 37,252 | 2012 | 5 - 40 | ||||||||||||||||||||||||||||
9945 Currie Davis Drive | Tampa, FL | — | 1,134,286 | 9,241,807 | 380,833 | 1,134,286 | 9,622,639 | 10,756,925 | 75,495 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
1858 E Encanto Dr | Tempe, AZ | — | * | 877,611 | 4,485,427 | 190,934 | 877,611 | 4,676,361 | 5,553,972 | 40,311 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
475 W Vaughn St | Tempe, AZ | — | 1,112,245 | 2,260,348 | 134,556 | 1,112,245 | 2,394,904 | 3,507,149 | 23,366 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
921 South Park Lane | Tempe, AZ | — | 1,192,820 | 1,580,155 | 477,881 | 1,192,820 | 2,058,037 | 3,250,857 | 129,894 | 2011 | 5 - 40 | ||||||||||||||||||||||||||||
8313 West Pierce Street | Tolleson, AZ | — | 2,295,090 | 9,079,811 | 3,224,097 | 2,295,090 | 12,303,908 | 14,598,998 | 2,702,937 | 2007 | 5 - 40 | ||||||||||||||||||||||||||||
8591 West Washington Street | Tolleson, AZ | — | 1,574,912 | 7,308,021 | 274,301 | 1,574,912 | 7,582,322 | 9,157,234 | 347,237 | 2012 | 5 - 40 | ||||||||||||||||||||||||||||
8601 West Washington Street | Tolleson, AZ | — | 1,524,603 | 6,352,070 | 493,296 | 1,524,603 | 6,845,366 | 8,369,969 | 350,898 | 2012 | 5 - 40 | ||||||||||||||||||||||||||||
5111 S Royal Atlanta Drive | Tucker, GA | — | * | 435,776 | 1,875,685 | 214,242 | 435,776 | 2,089,928 | 2,525,704 | 23,119 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
5151 S Royal Atlanta Drive | Tucker, GA | — | * | 345,061 | 1,428,840 | 178,941 | 345,061 | 1,607,781 | 1,952,842 | 19,469 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
1457 Miller Store Road | Virginia Beach, VA | — | 473,689 | 2,663,045 | 413,058 | 474,746 | 3,075,046 | 3,549,792 | 910,738 | 2003 | 5 - 40 | ||||||||||||||||||||||||||||
200 Golden Oak Court | Virginia Beach, VA | — | 1,116,693 | 6,770,480 | 2,106,737 | 1,116,693 | 8,877,217 | 9,993,910 | 3,538,776 | 1988 | 5 - 40 | ||||||||||||||||||||||||||||
208 Golden Oak Court | Virginia Beach, VA | — | 965,177 | 6,728,717 | 1,870,956 | 965,177 | 8,599,673 | 9,564,850 | 3,552,417 | 1989 | 5 - 40 | ||||||||||||||||||||||||||||
115
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | |||||||||||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||||||||||
OPERATING PROPERTIES | |||||||||||||||||||||||||||||||||||||||
2809 South Lynnhaven Road | Virginia Beach, VA | — | 953,590 | 6,142,742 | 1,769,833 | 953,590 | 7,912,575 | 8,866,165 | 3,130,409 | 1987 | 5 - 40 | ||||||||||||||||||||||||||||
484 Viking Drive | Virginia Beach, VA | — | 891,753 | 3,607,890 | 513,437 | 891,753 | 4,121,326 | 5,013,079 | 1,655,629 | 1987 | 5 - 40 | ||||||||||||||||||||||||||||
629 Phoenix Drive | Virginia Beach, VA | — | 371,694 | 2,108,097 | 250,511 | 371,694 | 2,358,608 | 2,730,302 | 973,996 | 1996 | 5 - 40 | ||||||||||||||||||||||||||||
1100 17th Street NW | Washington, DC | — | 16,558,660 | 32,223,978 | 954,372 | 16,558,660 | 33,178,350 | 49,737,010 | 3,041,022 | 2011 | 5 - 40 | ||||||||||||||||||||||||||||
2100 M Street NW | Washington, DC | — | 70,000,000 | 55,123,783 | 27,462 | 70,000,000 | 55,151,245 | 125,151,245 | 1,775,617 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
1200 Liberty Ridge Drive | Wayne, PA | — | 6,215,667 | — | 9,208,335 | 5,223,660 | 10,200,342 | 15,424,002 | 3,867,751 | 2001 | 5 - 40 | ||||||||||||||||||||||||||||
1500 Liberty Ridge Drive | Wayne, PA | — | 8,287,555 | — | 34,049,515 | 11,636,499 | 30,700,571 | 42,337,070 | 10,277,630 | 2002 | 5 - 40 | ||||||||||||||||||||||||||||
825 Duportail Road | Wayne, PA | — | 5,536,619 | 16,179,213 | 5,024,030 | 5,539,281 | 21,200,581 | 26,739,862 | 7,648,775 | 1979 | 5 - 40 | ||||||||||||||||||||||||||||
400-500 Brandywine Parkway | West Chester, PA | — | 845,846 | 6,809,025 | 656,823 | 845,846 | 7,465,848 | 8,311,694 | 3,029,672 | 1988 | 5 - 40 | ||||||||||||||||||||||||||||
600 Brandywine Parkway | West Chester, PA | — | 664,899 | 5,352,410 | 814,645 | 664,899 | 6,167,055 | 6,831,954 | 2,577,095 | 1988 | 5 - 40 | ||||||||||||||||||||||||||||
1400 Powis Court | West Chicago, IL | — | * | 578,314 | 2,448,562 | 72,419 | 578,314 | 2,520,981 | 3,099,295 | 18,384 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
1 Kings Hill Aveune | West Malling, UK | — | 4,288,389 | — | 10,583,801 | 4,142,996 | 10,729,194 | 14,872,190 | 2,065,152 | 2006 | 5 - 40 | ||||||||||||||||||||||||||||
42 Kings Hill Avenue | West Malling, UK | — | 5,397,739 | — | 13,460,795 | 4,497,753 | 14,360,781 | 18,858,534 | 2,390,197 | 2005 | 5 - 40 | ||||||||||||||||||||||||||||
Liberty Square Retail Blocks | West Malling, UK | — | 559,590 | 5,113,902 | 3,984,564 | 1,191,419 | 8,466,637 | 9,658,056 | 1,790,561 | 2006 | 5 - 40 | ||||||||||||||||||||||||||||
1400 Northpoint Parkway | West Palm Beach, FL | — | * | 2,454,972 | 5,312,829 | 276,502 | 2,454,972 | 5,589,331 | 8,044,303 | 54,818 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
300 Northpoint Parkway | West Palm Beach, FL | — | * | 1,177,064 | 2,102,451 | 125,706 | 1,177,064 | 2,228,157 | 3,405,221 | 20,749 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
400 Northpoint Parkway | West Palm Beach, FL | — | * | 1,029,595 | 1,728,187 | 109,374 | 1,029,595 | 1,837,561 | 2,867,156 | 15,908 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
2935 West Corporate Lakes Blvd | Weston, FL | — | 4,682,521 | 25,905,126 | 558,332 | 4,682,521 | 26,463,458 | 31,145,979 | 179,132 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
2945 West Corporate Lakes Blvd | Weston, FL | — | 2,345,242 | 13,973,766 | 273,455 | 2,345,242 | 14,247,221 | 16,592,463 | 95,264 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
43-47 Hintz Road | Wheeling, IL | — | * | 2,051,093 | 18,283,480 | 536,842 | 2,051,093 | 18,820,323 | 20,871,416 | 134,175 | 2013 | 5 - 40 | |||||||||||||||||||||||||||
10 Cornell Place | Wilmington, MA | — | 598,120 | 2,142,736 | 232,897 | 598,120 | 2,375,632 | 2,973,752 | 26,040 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
265 Ballardvale Street | Wilmington, MA | — | 868,433 | 4,358,998 | 324,566 | 868,433 | 4,683,564 | 5,551,997 | 74,959 | 2013 | 5 - 40 | ||||||||||||||||||||||||||||
Subtotal Operating Real Estate | $ | 64,974,227 | $ | 1,079,681,038 | $ | 2,829,350,974 | $ | 2,375,181,699 | $ | 1,139,454,639 | $ | 5,144,759,070 | $ | 6,284,213,709 | $ | 1,057,679,601 |
116
LIBERTY PROPERTY TRUST AND LIBERTY PROPERTY LIMITED PARTNERSHIP | ||||||||||||||||||||||||||||||||||||||||
SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | ||||||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | ||||||||||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | |||||||||||||||||||||||||||||
Development Properties | ||||||||||||||||||||||||||||||||||||||||
1467 Perryman Road | Aberdeen, MD | $ | — | $ | 12,052,635 | $ | — | $ | 16,209,308 | $ | — | $ | 28,261,943 | $ | 28,261,943 | $ | — | 2013 | N/A | |||||||||||||||||||||
100 Caliber Ridge Drive | Greer, SC | — | 555,549 | — | 5,179,599 | — | 5,735,148 | 5,735,148 | — | 2013 | N/A | |||||||||||||||||||||||||||||
7460 New Ridge Road | Hanover, MD | — | 3,785,446 | — | 3,050,119 | — | 6,835,565 | 6,835,565 | — | 2013 | N/A | |||||||||||||||||||||||||||||
7462 New Ridge Road | Hanover, MD | — | 4,059,337 | — | 2,784,516 | — | 6,843,853 | 6,843,853 | — | 2013 | N/A | |||||||||||||||||||||||||||||
1050 Greens Parkway | Houston, TX | — | 973,482 | — | 2,634,974 | — | 3,608,456 | 3,608,456 | — | 2013 | N/A | |||||||||||||||||||||||||||||
11220 Ella Boulevard | Houston, TX | — | 1,505,855 | — | 6,103,964 | — | 7,609,819 | 7,609,819 | — | 2013 | N/A | |||||||||||||||||||||||||||||
14300 Hollister Road | Houston, TX | — | 1,377,193 | — | 5,204,006 | — | 6,581,199 | 6,581,199 | — | 2012 | N/A | |||||||||||||||||||||||||||||
16330 Central Green Boulevard | Houston, TX | — | 1,540,109 | — | 7,617,017 | — | 9,157,126 | 9,157,126 | — | 2012 | N/A | |||||||||||||||||||||||||||||
8303 Fallbrook Drive | Houston, TX | — | 4,613,370 | — | 3,282,520 | — | 7,895,890 | 7,895,890 | — | 2013 | N/A | |||||||||||||||||||||||||||||
425 Old Morehall Road | Malvern, PA | — | 3,847,501 | — | 24,622,365 | — | 28,469,866 | 28,469,866 | — | 2013 | N/A | |||||||||||||||||||||||||||||
11500 NW 122 Street | Miami, FL | — | 1,623,293 | — | 9,137,691 | — | 10,760,984 | 10,760,984 | — | — | 2013 | N/A | ||||||||||||||||||||||||||||
201 Rouse Boulevard | Philadelphia, PA | — | 243,905 | — | 3,859,694 | — | 4,103,599 | 4,103,599 | — | — | 2013 | N/A | ||||||||||||||||||||||||||||
13225 Brockton Lane | Rogers, MN | — | 1,048,093 | — | 4,636,867 | — | 5,684,960 | 5,684,960 | — | — | 2013 | N/A | ||||||||||||||||||||||||||||
13320 Wilfred Lane | Rogers, MN | — | 508,532 | — | 10,975,170 | — | 11,483,702 | 11,483,702 | — | — | 2012 | N/A | ||||||||||||||||||||||||||||
9300 Old Scotland Road | Shippensburg, PA | — | 10,232,633 | — | 50,083,929 | — | 60,316,562 | 60,316,562 | — | — | 2013 | N/A | ||||||||||||||||||||||||||||
1850 W Rio Salado Parkway | Tempe, AZ | — | 3,975,600 | — | 1,862,428 | — | 5,838,028 | 5,838,028 | — | — | 2013 | N/A | ||||||||||||||||||||||||||||
Subtotal Development in Progress | $ | — | $ | 51,942,533 | $ | — | $ | 157,244,167 | $ | — | $ | 209,186,700 | $ | 209,186,700 | $ | — | ||||||||||||||||||||||||
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SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||||||||||
LAND HELD FOR DEVELOPMENT | |||||||||||||||||||||||||||||||||||||||
4551 New York Avenue Land | Arlington, TX | $ | — | $ | 4,754,659 | $ | — | $ | (17,253 | ) | $ | 4,737,406 | $ | — | $ | 4,737,406 | $ | — | 2013 | N/A | |||||||||||||||||||
LVIP Area VII-Lots 3, 4, 5 Land | Bethlehem, PA | — | 6,058,664 | — | 2,832,704 | 8,891,368 | — | 8,891,368 | — | 2012 | N/A | ||||||||||||||||||||||||||||
Mill Creek Road Land | Bethlehem, PA | — | 18,548,585 | — | 1,256,223 | 19,804,808 | — | 19,804,808 | — | 2012 | N/A | ||||||||||||||||||||||||||||
Boca Colannade Yamato Road | Boca Raton, FL | — | 2,039,735 | — | 556,668 | 2,596,403 | — | 2,596,403 | — | 1998 | N/A | ||||||||||||||||||||||||||||
12912 Virkler Drive Land | Charlotte, NC | — | 208,646 | — | 14,743 | 223,389 | — | 223,389 | — | 2010 | N/A | ||||||||||||||||||||||||||||
Charlotte Distribution Center Land-Lot 1 | Charlotte, NC | — | 654,713 | — | (2,376 | ) | 652,337 | — | 652,337 | — | 2011 | N/A | |||||||||||||||||||||||||||
Amberpoint Business Park Land | Dallas, TX | — | 2,040,233 | — | 41,457 | 2,081,690 | — | 2,081,690 | — | 2012 | N/A | ||||||||||||||||||||||||||||
Flying Cloud Drive Land | Eden Pairie, MN | — | 2,051,631 | — | 17,695 | 2,069,326 | — | 2,069,326 | — | 2007 | N/A | ||||||||||||||||||||||||||||
Camelback 303 Business Center Land | Goodyear, AZ | — | 16,857,556 | — | 3,164,682 | 20,022,238 | — | 20,022,238 | — | 2007 | N/A | ||||||||||||||||||||||||||||
Pleasant Ridge Road Land | Greensboro, NC | — | 564,535 | — | 2,887,177 | 3,451,712 | — | 3,451,712 | — | 2006 | N/A | ||||||||||||||||||||||||||||
Caliber Ridge Ind. Park Land | Greer, SC | — | 1,811,803 | — | 2,639,848 | 4,451,651 | — | 4,451,651 | — | 2007 | N/A | ||||||||||||||||||||||||||||
Hunters Green Land | Hagerstown, MD | — | 5,489,586 | — | 8,581,024 | 14,070,610 | — | 14,070,610 | — | 2006 | N/A | ||||||||||||||||||||||||||||
Lakefront Plaza II Land | Hampton, VA | — | 138,101 | — | 100,289 | 238,390 | — | 238,390 | — | 2001 | N/A | ||||||||||||||||||||||||||||
Ridge Road & Hanover Road Land | Hanover, MD | — | 3,875,203 | — | 71,152 | 3,946,355 | — | 3,946,355 | — | 2012 | N/A | ||||||||||||||||||||||||||||
Ridge Road Land | Hanover, MD | — | 3,371,183 | — | 438,536 | 3,809,719 | — | 3,809,719 | — | 2008 | N/A | ||||||||||||||||||||||||||||
Piedmond Centre Land | High Point, NC | — | 913,276 | — | 907,686 | 1,820,962 | — | 1,820,962 | — | 2006 | N/A | ||||||||||||||||||||||||||||
Commonwealth Corporate Center Land | Horsham, PA | — | 3,043,938 | — | 14,024 | 3,057,962 | — | 3,057,962 | — | 2005 | N/A | ||||||||||||||||||||||||||||
Interwood Land | Houston, TX | — | 5,160,668 | — | (4,131 | ) | 5,156,537 | — | 5,156,537 | — | 2012 | N/A | |||||||||||||||||||||||||||
Rankin Road Land | Houston, TX | — | 5,756,865 | — | 252,866 | 6,009,731 | — | 6,009,731 | — | 2007 | N/A | ||||||||||||||||||||||||||||
Taub Beltway 8 Land | Houston, TX | — | 9,511,795 | — | 49,341 | 9,561,136 | — | 9,561,136 | — | 2012 | N/A | ||||||||||||||||||||||||||||
Kent County, UK | Kent, UK | — | — | — | — | 2,579,128 | — | 2,579,128 | 2012 | N/A | |||||||||||||||||||||||||||||
Commodore Business Park | Logan, NJ | — | 792,118 | — | 1,061,915 | 1,854,033 | — | 1,854,033 | — | 1995 | N/A | ||||||||||||||||||||||||||||
Spring Creek Land | Lower Macungie Twp, PA | — | 25,615,668 | — | 168,389 | 25,784,057 | — | 25,784,057 | — | 2013 | N/A | ||||||||||||||||||||||||||||
380 Old Morehall Road | Malvern, PA | — | 1,344,809 | — | (4,880 | ) | 1,339,929 | — | 1,339,929 | — | 2012 | N/A | |||||||||||||||||||||||||||
Quarry Ridge Land | Malvern, PA | — | 675,499 | — | — | 675,499 | — | 675,499 | — | 2001 | N/A | ||||||||||||||||||||||||||||
Miami International Tradeport Land | Medley, FL | — | 16,739,632 | — | 7,848,096 | 24,587,728 | — | 24,587,728 | — | 2011 | N/A | ||||||||||||||||||||||||||||
Monarch Towne Center Land | Mirarar, FL | — | 6,085,337 | — | 390,343 | 6,475,680 | — | 6,475,680 | — | 2006 | N/A |
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SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION | |||||||||||||||||||||||||||||||||||||||
AS OF DECEMBER 31, 2013 | |||||||||||||||||||||||||||||||||||||||
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 12/31/2013 | Accumulated Depreciation 12/31/2013 | Date of Construction or Acquisition | Depreciable life (years) | ||||||||||||||||||||||||||||
LAND HELD FOR DEVELOPMENT | |||||||||||||||||||||||||||||||||||||||
557 Nazareth Pike Land | Nazareth, PA | — | 4,667,646 | — | 38,720 | 4,706,366 | — | 4,706,366 | — | 2013 | N/A | ||||||||||||||||||||||||||||
South 27th Street Land | Oak Creek, WI | — | 2,169,232 | — | 2,066,217 | 4,235,449 | — | 4,235,449 | — | 2006 | N/A | ||||||||||||||||||||||||||||
Beachline Industrial Park Land | Orlando, FL | — | 365,230 | — | (1,325 | ) | 363,905 | — | 363,905 | — | 2006 | N/A | |||||||||||||||||||||||||||
26th Street North Land | Philadelphia, PA | — | 90,774 | — | 1,047,441 | 1,138,215 | — | 1,138,215 | — | 2009 | N/A | ||||||||||||||||||||||||||||
Buckeye Logistics Center West Land | Phoenix, AZ | — | 11,203,594 | — | (34,100 | ) | 11,169,494 | — | 11,169,494 | — | 2013 | N/A | |||||||||||||||||||||||||||
Cotton Center Land | Phoenix, AZ | — | 8,238,461 | — | (29,895 | ) | 8,208,566 | — | 8,208,566 | — | 2007 | N/A | |||||||||||||||||||||||||||
Eastport IX | Richmond, VA | — | 211,627 | — | 2,545 | 214,172 | — | 214,172 | — | 1997 | N/A | ||||||||||||||||||||||||||||
Eastport VIII | Richmond, VA | — | 382,698 | — | 1,925 | 384,623 | — | 384,623 | — | 1997 | N/A | ||||||||||||||||||||||||||||
Woodlands Center Land | Sandston, VA | — | 148,314 | — | 21,100 | 169,414 | — | 169,414 | — | 1996 | N/A | ||||||||||||||||||||||||||||
Northsight Land | Scottsdale, AZ | — | 6,176,464 | — | 2,174,185 | 8,350,649 | — | 8,350,649 | — | 2005 | N/A | ||||||||||||||||||||||||||||
Suffolk Land | Suffolk, VA | — | 2,715,714 | — | 767,883 | 3,483,597 | — | 3,483,597 | — | 2006 | N/A | ||||||||||||||||||||||||||||
6119 W. Linebaugh Avenue | Tampa, FL | — | 180,136 | — | 29,735 | 209,871 | — | 209,871 | — | 2000 | N/A | ||||||||||||||||||||||||||||
Legacy Park Land | Tampa, FL | — | 3,289,423 | — | 4,975,350 | 8,264,773 | — | 8,264,773 | — | 2006 | N/A | ||||||||||||||||||||||||||||
Renaissance Park Land | Tampa, FL | — | 1,995,375 | — | 211,062 | 2,206,437 | — | 2,206,437 | — | 2007 | N/A | ||||||||||||||||||||||||||||
Subtotal Land Held for Development | $ | — | $ | 185,939,126 | $ | — | $ | 44,537,061 | $ | 233,055,315 | $ | — | $ | 233,055,315 | $ | — | |||||||||||||||||||||||
Total All Properties | $64,974,227 | $1,317,562,696 | $2,829,350,974 | $2,576,962,929 | $1,372,509,954 | $5,353,945,770 | $6,726,455,724 | $1,057,679,601 |
* Denotes property is collateralized under mortgages with Allianz, John Hancock, LaSalle Bank, Aviva, New York Life and Wells Fargo totaling $475.8 million.
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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, | ||||||||||||
2013 | 2012 | 2011 | ||||||||||
REAL ESTATE: | ||||||||||||
Balance at beginning of year | $ | 5,389,166 | $ | 4,887,560 | $ | 4,518,560 | ||||||
Additions | 1,891,117 | 505,643 | 418,712 | |||||||||
Disposition of property | (553,828 | ) | (4,037 | ) | (49,712 | ) | ||||||
Balance at end of year | $ | 6,726,455 | $ | 5,389,166 | $ | 4,887,560 | ||||||
ACCUMULATED DEPRECIATION: | ||||||||||||
Balance at beginning of year | $ | 1,072,859 | $ | 958,652 | $ | 845,305 | ||||||
Depreciation expense | 162,546 | 140,570 | 144,284 | |||||||||
Disposition of property | (177,725 | ) | (26,363 | ) | (30,937 | ) | ||||||
Balance at end of year | $ | 1,057,680 | $ | 1,072,859 | $ | 958,652 |
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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, 2013 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, 2013 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.
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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 2014 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 2014 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 2014 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 2014 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 2014 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, 2013 and 2012
Statements of Comprehensive Income:
Liberty Property Trust Consolidated for the years ended December 31, 2013, 2012 and 2011
Statements of Equity:
Liberty Property Trust Consolidated for the years ended December 31, 2013, 2012 and 2011
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Statements of Cash Flows:
Liberty Property Trust Consolidated for the years ended December 31, 2013, 2012 and 2011
Financial Statements - Liberty Property Limited Partnership
Balance Sheets:
Liberty Property Limited Partnership Consolidated as of December 31, 2013 and 2012
Statements of Comprehensive Income:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2013, 2012 and 2011
Statements of Owners' Equity:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2013, 2012 and 2011
Statements of Cash Flows:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2013, 2012 and 2011
Notes to Consolidated Financial Statements
2. FINANCIAL STATEMENT SCHEDULES:
Schedule III - Real Estate and Accumulated Depreciation as of December 31, 2013 for Liberty Property Trust and 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.
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3. EXHIBITS
The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed.
Exhibit No. | Description |
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 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). |
3.1.9 | 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”)). |
3.1.10 | 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”)). |
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 June 30, 2005 (the “June 30, 2005 Form 8-K”)). |
124
3.1.12 | 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). |
3.1.13 | 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”)). |
3.1.14 | 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”)). |
3.1.15 | 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”)). |
3.1.16 | 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). |
3.1.17 | 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). |
3.1.18 | 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). |
3.1.19 | 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). |
3.1.20 | 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). |
3.1.21 | 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). |
3.1.22 | 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). |
3.1.23 | 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). |
125
3.1.24 | 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). |
3.1.25 | 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). |
3.1.26 | Ninth Amendment to the Second Amendment and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 3.1.25 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2011.) |
3.1.27* | Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership. |
3.1.28 | 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 | 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). |
4.2 | 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). |
4.3 | 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”)). |
4.4 | 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”)). |
4.5 | 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). |
4.6 | 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). |
126
4.7 | 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”)). |
4.8 | 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”)). |
4.9 | 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”)). |
4.10 | 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). |
4.11 | 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). |
4.12 | 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). |
4.13 | 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. (Incorporated by reference to Exhibit 4.19 to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2010.) |
127
4.14 | Second Supplemental Indenture, dated as of June 11, 2012, 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 $400,000,000 principal amount of 4.125% Senior Notes due 2022 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.1 filed with the Registrants' Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2012). |
4.15 | Third Supplemental Indenture, dated as of December 10, 2012, 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 $300,000,000 principal amount of 3.375% Senior Notes due 2023 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.15 filed with the Registrants' Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the "2012 Form 10-K")). |
4.16* | Fourth Supplemental Indenture, dated as of September 27, 2013, 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 $450,000,000 principal amount of 4.400% Senior Notes due 2024 of Liberty Property Limited Partnership. |
10.1@ | 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). |
10.8.1 | 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. (The "Third Amended and Restated Credit Agreement") (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). |
128
10.8.2 | Amendment No. 1 to the Third Amended and Restated Credit Agreement dated January 25, 2013, by and among Liberty Property Limited Partnership, as borrower, Liberty Property Trust, Bank of America, N.A., as administrative agent for itself and the lenders under the Third Amended and Restated Credit Agreement (incorporated by reference to Exhibit 10.8.2 filed with the 2012 Form 10-K). |
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 (Commission 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). |
10.15.1+ | 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”)). |
10.15.2+* | Substitution of Limited Partner Agreement, dated as of December 31, 2013, by and among Liberty Property Philadelphia Corporation IV East, as general partner, Liberty Property Limited Partnership and Comcast Philadelphia Holdings, LLC. |
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). |
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). |
129
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). |
10.20$+ | Partnership Interest Purchase Agreement, dated as of July 31, 2013, by and among Liberty Property Limited Partnership, Cabot Industrial Value Fund III Manager, Limited Partnership and Cabot Industrial Value Fund III, Inc. (Incorporated by reference to Exhibit 2.1 filed with the Registrants’ Current Report on Form 8-K filed with the Securities and Exchange Commission on October 15, 2013). |
10.21$ | Agreement of Sale and Purchase, dated as of November 7, 2013, by and among Liberty Property Limited Partnership, Liberty Property Development Corp., 9755 Patuxent Woods Drive Trust and Annapolis Development, LLC and Greenfield Real Estate, LLC (Incorporated by reference to Exhibit 2.1 filed with the Registrants’ Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2013). |
10.22 | First Amendment to Agreement of Sale and Purchase, dated as of December 4, 2013, by and among Liberty Property Limited Partnership, Liberty Property Development Corp., 9755 Patuxent Woods Drive Trust and Annapolis Development, LLC and Greenfield Real Estate, LLC(Incorporated by reference to Exhibit 2.2 filed with the Registrants’ Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2013). |
10.23 | Second Amendment to Agreement of Sale and Purchase, dated as of December 17, 2013, by and among Liberty Property Limited Partnership, Liberty Property Development Corp., 9755 Patuxent Woods Drive Trust and Annapolis Development, LLC and Greenfield Real Estate, LLC (Incorporated by reference to Exhibit 2.3 filed with the Registrants’ Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2013). |
10.24 | Third Amendment to Agreement of Sale and Purchase, dated as of December 23, 2013, by and among Liberty Property Limited Partnership, Liberty Property Development Corp., 9755 Patuxent Woods Drive Trust and Annapolis Development, LLC and Greenfield Real Estate, LLC (Incorporated by reference to Exhibit 2.4 filed with the Registrants’ Current Report on Form 8-K filed with the Securities and Exchange Commission on December 30, 2013). |
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. |
130
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.) |
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. |
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. |
131
____________ | |
* | Filed herewith. |
** | Furnished herewith |
+ | Confidential treatment has been granted by or requested from 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. |
$ | The Company will file supplementally a copy of any omitted schedule to the Securities and Exchange Commission upon request. |
132
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 28, 2014 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 28, 2014 |
William P. Hankowsky | ||
/s/ GEORGE J. ALBURGER, JR. | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | February 28, 2014 |
George J. Alburger, Jr. | ||
/s/ M. LEANNE LACHMAN | Trustee | February 28, 2014 |
M. Leanne Lachman | ||
/s/ FREDERICK F. BUCHHOLZ | Trustee | February 28, 2014 |
Frederick F. Buchholz | ||
/s/ DAVID L. LINGERFELT | Trustee | February 28, 2014 |
David L. Lingerfelt | ||
/s/ THOMAS C. DELOACH, JR. | Trustee | February 28, 2014 |
Thomas C. DeLoach, Jr. | ||
/s/ DANIEL P. GARTON | Trustee | February 28, 2014 |
Daniel P. Garton | ||
/s/ STEPHEN D. STEINOUR | Trustee | February 28, 2014 |
Stephen D. Steinour | ||
/s/ KATHERINE E. DIETZE | Trustee | February 28, 2014 |
Katherine E. Dietze |
133
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 28, 2014 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 28, 2014 |
William P. Hankowsky | ||
/s/ GEORGE J. ALBURGER, JR. | Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | February 28, 2014 |
George J. Alburger, Jr. | ||
/s/ M. LEANNE LACHMAN | Trustee | February 28, 2014 |
M. Leanne Lachman | ||
/s/ FREDERICK F. BUCHHOLZ | Trustee | February 28, 2014 |
Frederick F. Buchholz | ||
/s/ DAVID L. LINGERFELT | Trustee | February 28, 2014 |
David L. Lingerfelt | ||
/s/ THOMAS C. DELOACH, JR. | Trustee | February 28, 2014 |
Thomas C. DeLoach, Jr. | ||
/s/ DANIEL P. GARTON | Trustee | February 28, 2014 |
Daniel P. Garton | ||
/s/ STEPHEN D. STEINOUR | Trustee | February 28, 2014 |
Stephen D. Steinour | ||
/s/ KATHERINE E. DIETZE | Trustee | February 28, 2014 |
Katherine E. Dietze |
134
EXHIBIT INDEX
EXHIBIT NO. | |
3.1.27 | Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership. |
4.16 | Fourth Supplemental Indenture, dated as of September 27, 2013, 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 $450,000,000 principal amount of 4.400% Senior Notes due 2024 of Liberty Property Limited Partnership. |
10.15.2+ | Substitution of Limited Partner Agreement, dated as of December 31, 2013, by and among Liberty Property Philadelphia Corporation IV East, as general partner, Liberty Property Limited Partnership and Comcast Philadelphia Holdings, LLC. |
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. |
135
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB | XBRL Extension Labels Linkbase. |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
+ | Confidential treatment has been requested with respect to a portion of this exhibit pursuant to Rule 24b-2 under the Securities Exchange Act of 1934, as amended. |
136