SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 11, 1998
LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP
------------------------------------
(Exact names of registrants as specified in their governing respective
documents)
MARYLAND 1-13130 23-7768996
PENNSYLVANIA 1-13132 23-2766549
- --------------------------- ------------- -------------------
State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
65 VALLEY STREAM PARKWAY, SUITE 100
MALVERN, PENNSYLVANIA 19355
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrants' telephone number, including area code: (610) 648-1700
ITEM 5: OTHER EVENTS
- ---------------------
Liberty Property Limited Partnership is a Pennsylvania limited
partnership (the "Operating Partnership"). Liberty Property Trust, a
Maryland real estate investment trust (the "Trust"), owns an approximate
92.40% interest in the Operating Partnership (as of March 31, 1998) (the
Trust and the Operating Partnership are collectively referred to as the
"Company").
On June 3, 1998, the Company acquired title to an industrial property,
comprising 164,000 leaseable square feet, located in Plymouth,
Minnesota, ("2800 Northwest Boulevard"). The Company's Total Investment
(as defined below) in this property is anticipated to be approximately
$12.6 million. The "Total Investment" for a property is defined as the
property's purchase price plus closing costs and management's estimate,
as determined at the time of acquisition, of the cost of necessary
building improvements in the case of acquisitions, or land costs and
land and building improvement costs in the case of development projects,
and where appropriate, other development costs and carrying costs
required to reach rent commencement.
Pursuant to Rule 3-14 of Regulation S-X, audited historical financial
information concerning 2800 Northwest Boulevard is provided in Item 7 of
this Current Report on Form 8-K. Additionally, certain pro forma
information is provided in Item 7.
Factors considered by the Company in determining the price to be paid
for 2800 Northwest Boulevard, included the historical and expected cash
flow, the nature of tenants and terms of leases in place, occupancy
rates, opportunities for alternative and new tenancies, current
operating costs and real estate taxes on the property and anticipated
changes therein under Company ownership, physical condition and location
of the property, the anticipated effect to the Company's financial
results (particularly funds from operations), the ability to sustain and
potentially increase its distributions to Company shareholders, and
other factors. The Company took into consideration the capitalization
rates at which it believed other comparable buildings were recently
sold, but determined the price it was willing to pay primarily on
factors discussed above relating to the property itself and its fit into
the Company's operations. The Company, after investigation of the
property, is not aware of any material fact, other than those enumerated
above, that would cause the financial information reported not to be
necessarily indicative of future operating results.
- -------------------------------
The statements contained in this filing may include forward-looking
statements within the meaning of the federal securities law. Although
the Company believes that the expectations reflected in such forward-
looking statements are based on reasonable assumptions, it can give no
assurance that its expectations will be achieved. As forward-looking
statements, these statements involve risks and uncertainties that could
cause actual results to differ materially from the expected results.
These risks and uncertainties include, but are not limited to,
uncertainties affecting real estate businesses generally, risks relating
to acquisition activities and risks relating to leasing and re-leasing
activities. Additional information on factors which could impact the
Company and the forward-looking statements contained herein are detailed
in the Company's filings with the Securities and Exchange Commission.
- -2-
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------
PAGE
----
(a) Financial Statements of Real Estate Operations
Acquired
Statement of Operating Revenues and Certain
Operating Expenses for 2800 Northwest Boulevard
Report of Independent Auditors........................ 4
Statement of Operating Revenues and Certain
Operating Expenses for 2800 Northwest Boulevard
for the three months ended March 31, 1998 (unaudited)
and for the year ended December 31, 1997............. 5
Notes to the Statement of Operating Revenues and
Certain Operating Expenses for 2800 Northwest Boulevard
for the three months ended March 31, 1998 (unaudited)
and for the year ended December 31, 1997............. 6
(b) Pro Forma Financial Information (unaudited)
Liberty Property Trust...................................... 8
Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 1998....................................... 9
Pro Forma Consolidated Statement of Operations for the
three months ended March 31, 1998.................... 10
Notes to Pro Forma Condensed Consolidated Financial
Statements as of and for the three months ended
March 31, 1998....................................... 11
Pro Forma Consolidated Statement of Operations for
the year ended December 31, 1997..................... 12
Notes to Pro Forma Consolidated Financial Statement
for the year ended December 31, 1997................. 13
Liberty Property Limited Partnership......................... 14
Pro Forma Condensed Consolidated Balance Sheet as of
March 31, 1998....................................... 15
Pro Forma Consolidated Statement of Operations for the
three months ended March 31, 1998.................... 16
Notes to Pro Forma Condensed Consolidated Financial
Statements as of and for the three months ended
March 31, 1998....................................... 17
Pro Forma Consolidated Statement of Operations for
the year ended December 31, 1997..................... 18
Notes to Pro Forma Consolidated Financial Statement
for the year ended December 31, 1997................. 19
Signatures......................................................... 20
(c) Exhibits
23 Consent of Fegley & Associates...................... 21
- -3-
REPORT OF INDEPENDENT AUDITORS
To The Board of Trustees and Shareholders
Liberty Property Trust
We have audited the accompanying Statement of Operating Revenues and
Certain Operating Expenses of 2800 Northwest Boulevard, as defined in
Note 1, for the year ended December 31, 1997. This financial statement
is the responsibility of the management of 2800 Northwest Boulevard.
Our responsibility is to express an opinion on this financial statement
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statement is
free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statement. An audit also includes assessing the accounting principles
used and significant estimates made by management as well as evaluating
the overall presentation of the financial statement. We believe that
our audit provides a reasonable basis for our opinion.
The accompanying Statement of Operating Revenues and Certain Operating
Expenses was prepared for the purpose of complying with the rules and
regulations of the Securities and Exchange Commission (for inclusion in
the Current Report on Form 8-K of Liberty Property Trust and Liberty
Property Limited Partnership) and, as described in Note 1, is not
intended to be a complete presentation of 2800 Northwest Boulevard's
revenues and expenses.
In our opinion, the Statement of Operating Revenues and Certain
Operating Expenses referred to above presents fairly, in all material
respects, the Operating Revenues and Certain Operating Expenses
described in Note 1 for the year ended December 31, 1997, in conformity
with generally accepted accounting principles.
/s/ FEGLEY & ASSOCIATES
Plymouth Meeting, Pennsylvania FEGLEY & ASSOCIATES
June 11, 1998
- -4-
STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES
FOR 2800 NORTHWEST BOULEVARD FOR THE THREE MONTHS
ENDED MARCH 31, 1998 (UNAUDITED) AND YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
THREE MONTHS YEAR ENDED
ENDED MARCH 31, DECEMBER 31,
1998 1997
--------------- ------------
Operating revenues:
Rental $ 261 $ 1,046
Operating expense reimbursement 33 132
------ --------
Total operating revenues 294 1,178
------ --------
Certain operating expenses:
Rental property expenses 15 61
Real estate taxes 21 85
------ --------
Total certain operating expenses 36 146
------ --------
Operating revenues in excess of certain
operating expenses $ 258 $ 1,032
====== ========
The accompanying notes are an integral part of this statement.
- -5-
NOTES TO THE STATEMENT OF OPERATING REVENUES AND
CERTAIN OPERATING EXPENSES FOR 2800 NORTHWEST BOULEVARD
FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1997
1. Summary of Significant Accounting Policies
- ----------------------------------------------
The Statement of Operating Revenues and Certain Operating Expenses (see
"Basis of Presentation" below) includes the operations of 2800 Northwest
Boulevard. Liberty Property Trust (the "Company") owns an approximate
92.40% partners' interest in the Operating Partnership (as of March 31,
1998) (the Trust and the Operating Partnership are collectively referred
to as the "Company").
PROPERTY NAME LOCATION DESCRIPTION
- -------------------------- -------------------- --------------------
2800 Northwest Boulevard Plymouth, Minnesota Industrial flex
building
164,122 square feet
USE OF ESTIMATES
- ----------------
Generally accepted accounting principles required management to make
estimates and assumptions in preparing financial statements. Those
estimates and assumptions affect the reported revenues and expenses.
BASIS OF PRESENTATION
- ---------------------
The Statement of Operating Revenues and Certain Operating Expenses is
presented in conformity with Rule 3-14 of the Securities and Exchange
Commission. Accordingly, depreciation, interest and income taxes are
not presented. The Company is not aware of any factors relating to 2800
Northwest Boulevard that would cause the reported financial information
not to be indicative of future operating results. General company
overhead has not been allocated to 2800 Northwest Boulevard.
2800 Northwest Boulevard consists of commercial industrial flex space
leased to tenants under leases with varying terms. Tenant renewal
options are available.
REVENUE RECOGNITION
- -------------------
Base rental income attributable to leases is recorded on a straight-line
basis over the applicable lease term. The leases also typically provide
for tenant reimbursement of common area maintenance and other operating
expenses which are included in the accompanying Statement of Operating
Revenue and Certain Operating Expenses as operating expense
reimbursements.
- -6-
2. MINIMUM FUTURE RENTALS
- ---------------------------
Future minimum rental payments due from tenants of 2800 Northwest
Boulevard under non-cancellable operating leases as of December 31, 1997
are as follows (in thousands):
1998 $ 1,341
1999 1,360
2000 1,333
2001 1,340
2002 876
Thereafter 4,377
--------
Total $10,627
========
- -7-
LIBERTY PROPERTY TRUST
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The unaudited, pro forma condensed consolidated balance sheet as of
March 31, 1998 reflects the incremental effect of 2800 Northwest
Boulevard described in Item 5 as if the acquisition had occurred on
March 31, 1998. The accompanying unaudited, pro forma consolidated
statements of operations for the three months ended March 31, 1998 and
the year ended December 31, 1997 reflect the incremental effect of 2800
Northwest Boulevard, as if such acquisition had occurred on January 1,
1997. These statements should be read in conjunction with respective
consolidated financial statements and notes thereto included in the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998 and its Annual Report on Form 10-K for the year ended December 31,
1997. In the opinion of management, the unaudited, pro forma
consolidated financial information provides for all adjustments
necessary to reflect the effects of 2800 Northwest Boulevard.
These pro forma statements may not necessarily be indicative of the
results that would have actually occurred if the acquisition of 2800
Northwest Boulevard had been in effect on the dates indicated, nor does
it purport to represent the financial position, results of operations or
cash flows for future periods.
- -8-
LIBERTY PROPERTY TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(UNAUDITED, IN THOUSANDS)
LIBERTY
2800 PROPERTY
HISTORICAL NORTHWEST TRUST
<F1> BOULEVARD CONSOLIDATED
---------- -------------- ------------
ASSETS:
Investment in real estate, net $2,286,903 $ 12,570 <F2> $2,299,473
Cash and cash equivalents 37,119 - 37,119
Deferred financing and
leasing costs, net 31,865 - 31,865
Other assets 50,877 - 50,877
---------- ----------- -----------
Total assets $2,406,764 $ 12,570 $2,419,334
========== =========== ===========
LIABILITIES:
Mortgage loans $ 376,701 $ - $ 376,701
Unsecured notes 525,000 - 525,000
Credit facility 148,000 12,570 <F3> 160,570
Convertible debentures 109,253 - 109,253
Other liabilities 103,113 - 103,113
---------- ----------- -----------
Total liabilities 1,262,067 12,570 1,274,637
---------- ----------- -----------
MINORITY INTEREST 86,997 - 86,997
SHAREHOLDERS' EQUITY:
Series A preferred shares 120,814 - 120,814
Common shares 57 - 57
Additional paid-in capital 950,829 - 950,829
Unearned compensation (879) - (879)
Dividends in excess of net income (13,121) - (13,121)
---------- ----------- -----------
Total shareholders' equity 1,057,700 - 1,057,700
---------- ----------- -----------
Total liabilities and
shareholders' equity $2,406,764 $ 12,570 $2,419,334
========== =========== ===========
The accompanying notes are an integral part of this unaudited, pro forma
condensed consolidated financial statement.
- -9-
LIBERTY PROPERTY TRUST
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
2800 LIBERTY
NORTHWEST PRO PROPERTY
HISTORICAL BOULEVARD FORMA TRUST
<F1> <F4> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
REVENUE
Rental $ 61,015 $ 261 $ 61,276
Operating expense reim-
bursement 20,250 33 20,283
Management fees 147 - 147
Interest and other 1,207 - 1,207
---------- --------- -----------
Total revenue 82,619 294 82,913
---------- --------- -----------
OPERATING EXPENSES
Rental property expenses 14,916 15 14,931
Real estate taxes 7,019 21 7,040
General and administrative 3,350 - 3,350
Depreciation and amorti-
zation 14,219 - $ 79 <F5> 14,298
---------- --------- --------- -----------
Total operating expenses 39,504 36 79 39,619
---------- --------- --------- -----------
Operating income 43,115 258 (79) 43,294
Interest expense 16,566 - 213 <F6> 16,779
---------- --------- --------- -----------
Income (loss) before
minority interest 26,549 258 (292) 26,515
Minority interest 1,809 19 (22) <F7> 1,806
---------- --------- --------- -----------
Net income (loss) 24,740 239 (270) 24,709 <F8>
Preferred dividend 2,750 - - 2,750
---------- --------- --------- -----------
Income available to
common shareholders $ 21,990 $ 239 $ (270) $ 21,959
========== ========= ========== ===========
Income per common
share - basic $ 0.40 $ 0.40
========== ===========
Income per common
share - diluted $ 0.40 $ 0.39
========== ==========
Weighted average number
of common shares out-
standing - basic 55,279 55,279
========== ===========
Weighted average number
of common shares out-
standing - diluted 55,667 55,667
========== ===========
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
- -10-
LIBERTY PROPERTY TRUST
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical financial information of the Company as of
March 31, 1998 and for the three months ended March 31, 1998.
<F2> Reflects the Total Investment in 2800 Northwest Boulevard.
<F3> Reflects the use of $12,570 from the credit facility to finance
the Total Investment in 2800 Northwest Boulevard.
<F4> Reflects incremental addition of revenues and certain expenses of
2800 Northwest Boulevard in order to reflect a full three months of
operations for the acquisition.
<F5> Reflects incremental depreciation of 2800 Northwest Boulevard
based on asset lives of 40 years.
<F6> Reflects an incremental increase in interest expense from the
assumed borrowings of $12,570 on the credit facility to fund the
purchase of 2800 Northwest Boulevard.
<F7> Reflects the allocation of the pro forma adjustment to minority
interest based upon pro forma minority interest in the Operating
Partnership of approximately 7.60%.
<F8> The Company's pro forma taxable income for the three months ended
March 31, 1998 is approximately $24,333 which has been calculated as pro
forma income from operations of approximately $24,709 plus GAAP
depreciation and amortization of $14,298 less tax basis depreciation and
amortization and other tax differences of approximately $14,774.
- -11-
LIBERTY PROPERTY TRUST
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
2800 LIBERTY
NORTHWEST PRO PROPERTY
HISTORICAL BOULEVARD FORMA TRUST
<F1> <F2> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
REVENUE
Rental $ 169,859 $ 1,046 $170,905
Operating expense reim-
bursement 55,502 132 55,634
Management fees 673 - 673
Interest and other 6,483 - 6,483
---------- --------- -----------
Total revenue 232,517 1,178 233,695
---------- --------- -----------
OPERATING EXPENSES
Rental property expenses 43,118 61 43,179
Real estate taxes 17,961 85 18,046
General and administrative 10,650 - 10,650
Depreciation and amorti-
zation 40,752 - $ 314 <F3> 41,066
---------- --------- --------- -----------
Total operating expenses 112,481 146 314 112,941
---------- --------- --------- -----------
Operating income 120,036 1,032 (314) 120,754
Premium on debenture
conversion 98 - - 98
Interest expense 53,888 - 854 <F4> 54,742
---------- --------- --------- -----------
Income (loss) before
minority interest 66,050 1,032 (1,168) 65,914
Minority interest 5,606 93 (106) <F5> 5,593
---------- --------- --------- -----------
Net income (loss) 60,444 939 (1,062) 60,321 <F6>
Preferred dividend 4,247 - - 4,247
---------- --------- --------- -----------
Income available to
common shareholders $ 56,197 $ 939 $ (1,062) $ 56,074
========== ========= ========== ===========
Income per common
share - basic $ 1.39 $ 1.38
========== ===========
Income per common
share - diluted $ 1.38 $ 1.37
========== ==========
Weighted average number
of common shares out-
standing - basic 40,493 40,493
========== ===========
Weighted average number
of common shares out-
standing - diluted 40,806 40,806
========== ===========
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
- -12-
LIBERTY PROPERTY TRUST
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENT
FOR YEAR ENDED DECEMBER 31, 1997
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical financial information of the Company for the
year ended December 31, 1997.
<F2> Reflects incremental addition of revenues and certain expenses of
2800 Northwest Boulevard in order to reflect a full year of operations
for the acquisition.
<F3> Reflects incremental depreciation of 2800 Northwest Boulevard
based on asset lives of 40 years.
<F4> Reflects an incremental increase in interest expense from the
assumed borrowings of $12,570 on the credit facility to fund the
purchase of 2800 Northwest Boulevard.
<F5> Reflects the allocation of the pro forma adjustment to minority
interest based upon pro forma minority interest in the Operating
Partnership of approximately 9.07%.
<F6> The Company's pro forma taxable income for the year ended December
31, 1997 is approximately $46,959 which has been calculated as pro forma
income from operations of approximately $60,321 plus GAAP depreciation
and amortization of $41,066 less tax basis depreciation and amortization
and other tax differences of approximately $54,428.
- -13-
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The unaudited, pro forma condensed consolidated balance sheet as of
March 31, 1998 reflects the incremental effect of 2800 Northwest
Boulevard described in Item 5 as if the acquisition had occurred on
March 31, 1998. The accompanying unaudited, pro forma consolidated
statements of operations for the three months ended March 31, 1998 and
the year ended December 31, 1997 reflect the incremental effect of 2800
Northwest Boulevard, as if such acquisition had occurred on January 1,
1997. These statements should be read in conjunction with respective
consolidated financial statements and notes thereto included in the
Company's Quarterly Report on Form 10-Q for the quarter ended March 31,
1998 and its Annual Report on Form 10-K for the year ended December 31,
1997. In the opinion of management, the unaudited, pro forma
consolidated financial information provides for all adjustments
necessary to reflect the effects of 2800 Northwest Boulevard.
These pro forma statements may not necessarily be indicative of the
results that would have actually occurred if the acquisition of 2800
Northwest Boulevard had been in effect on the dates indicated, nor does
it purport to represent the financial position, results of operations or
cash flows for future periods.
- -14-
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(UNAUDITED, IN THOUSANDS)
LIBERTY
PROPERTY
2800 LIMITED
HISTORICAL NORTHWEST PARTNERSHIP
<F1> BOULEVARD CONSOLIDATED
---------- -------------- ------------
ASSETS:
Investment in real estate, net $2,286,903 $ 12,570 <F2> $2,299,473
Cash and cash equivalents 37,119 - 37,119
Deferred financing and
leasing costs, net 31,865 - 31,865
Other assets 50,877 - 50,877
---------- ----------- -----------
Total assets $2,406,764 $ 12,570 $2,419,334
========== =========== ===========
LIABILITIES:
Mortgage loans $ 376,701 $ - $ 376,701
Unsecured notes 525,000 - 525,000
Credit facility 148,000 12,570 <F3> 160,570
Convertible debentures 109,253 - 109,253
Other liabilities 103,113 - 103,113
---------- ----------- -----------
Total liabilities 1,262,067 12,570 1,274,637
---------- ----------- -----------
OWNERS' EQUITY:
General partner's equity 1,057,700 - 1,057,700
Limited partners' equity 86,997 - 86,997
---------- ----------- -----------
Total owners' equity 1,144,697 - 1,144,697
---------- ----------- -----------
Total liabilities and
owners' equity $2,406,764 $ 12,570 $2,419,334
========== =========== ===========
The accompanying notes are an integral part of this unaudited, pro forma
condensed consolidated financial statement.
- -15-
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED AND IN THOUSANDS)
LIBERTY
2800 PROPERTY
NORTHWEST PRO LIMITED
HISTORICAL BOULEVARD FORMA PARTNERSHIP
<F1> <F4> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
REVENUE
Rental $ 61,015 $ 261 $ 61,276
Operating expense reim-
bursement 20,250 33 20,283
Management fees 147 - 147
Interest and other 1,207 - 1,207
---------- --------- ------------
Total revenue 82,619 294 82,913
---------- --------- ------------
OPERATING EXPENSES
Rental property expenses 14,916 15 14,931
Real estate taxes 7,019 21 7,040
General and administrative 3,350 - 3,350
Depreciation and amorti-
zation 14,219 - $ 79 <F5> 14,298
---------- --------- ---------- ------------
Total operating expenses 39,504 36 79 39,619
---------- --------- ---------- ------------
Operating income 43,115 258 (79) 43,294
Interest expense 16,566 - 213 <F6> 16,779
---------- --------- ---------- ------------
Net income (loss) $ 26,549 $ 258 $ (292) $ 26,515
========== ========= ========== ============
Net income (loss)
allocated to general
partner $ 24,740 $ 239 $ (270) $ 24,709
Net income (loss)
allocated to limited
partners 1,809 19 (22) <F7> 1,806
========== ========= ========== ============
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
- -16-
LIBERTY PROPERTY LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical financial information of the Company as of
March 31, 1998 and for the three months ended March 31, 1998.
<F2> Reflects the Total Investment in 2800 Northwest Boulevard.
<F3> Reflects the use of $12,570 from the credit facility to finance
the Total Investment in 2800 Northwest Boulevard.
<F4> Reflects the incremental addition of revenues and certain expenses
of 2800 Northwest Boulevard in order to reflect a full three months of
operations for the acquisition.
<F5> Reflects incremental depreciation of 2800 Northwest Boulevard
based on asset lives of 40 years.
<F6> Reflects an incremental increase in interest expense from the
assumed borrowings of $12,570 on the credit facility to fund the
purchase of 2800 Northwest Boulevard.
<F7> Reflects the allocation of the pro forma adjustment to the net
income allocated to the limited partners based upon pro forma ownership
in the Operating Partnership of approximately 7.60%.
- -17-
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED AND IN THOUSANDS)
LIBERTY
2800 PROPERTY
NORTHWEST PRO LIMITED
HISTORICAL BOULEVARD FORMA PARTNERSHIP
<F1> <F2> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
REVENUE
Rental $ 169,859 $ 1,046 $ 170,905
Operating expense reim-
bursement 55,502 132 55,634
Management fees 673 - 673
Interest and other 6,483 - 6,483
---------- --------- ------------
Total revenue 232,517 1,178 233,695
---------- --------- ------------
OPERATING EXPENSES
Rental property expenses 43,118 61 43,179
Real estate taxes 17,961 85 18,046
General and administrative 10,650 - 10,650
Depreciation and amorti-
zation 40,752 - $ 314 <F3> 41,066
---------- --------- ---------- ------------
Total operating expenses 112,481 146 314 112,941
---------- --------- ---------- ------------
Operating income 120,036 1,032 (314) 120,754
Premium on debenture
conversion 98 - - 98
Interest expense 53,888 - 854 <F4> 54,742
---------- --------- ---------- ------------
Net income (loss) $ 66,050 $ 1,032 $ (1,168) $ 65,914
========== ========= ========== ============
Net income (loss)
allocated to general
partner $ 60,444 $ 939 $ (1,062) $ 60,321
Net income (loss)
allocated to limited
partners 5,606 93 (106) <F5> 5,593
========== ========= ========== ============
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
- -18-
LIBERTY PROPERTY LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical financial information of the Company for the
year ended December 31, 1997.
<F2> Reflects the incremental addition of revenues and certain expenses
of 2800 Northwest Boulevard in order to reflect a full year of
operations for the acquisition.
<F3> Reflects incremental depreciation of 2800 Northwest Boulevard
based on asset lives of 40 years.
<F4> Reflects an incremental increase in interest expense from the
assumed borrowings of $12,570 on the credit facility to fund the
purchase of 2800 Northwest Boulevard.
<F5> Reflects the allocation of the pro forma adjustment to the net
income allocated to the limited partners based upon pro forma ownership
in the Operating Partnership of approximately 9.07%.
- -19-
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
each Registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
LIBERTY PROPERTY TRUST
Dated: June 11, 1998 BY: /s/ WILLARD G. ROUSE III
----------------------------------------
NAME: Willard G. Rouse III
TITLE: Chief Executive Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
BY: LIBERTY PROPERTY TRUST,
SOLE GENERAL PARTNER
Dated: June 11, 1998 BY: /s/ WILLARD G. ROUSE III
----------------------------------------
NAME: Willard G. Rouse III
TITLE: Chief Executive Officer
- -20-
EXHIBIT 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" and
to the incorporation by reference in the Registration Statement (Form S-
3 No. 333-43267) and related Prospectus of Liberty Property Trust and
Liberty Property Limited Partnership, to the incorporation by reference
in the Registration Statement (Form S-3 No. 333-53297) and related
Prospectus of Liberty Property Trust, to the incorporation by reference
in the Registration Statement (Form S-3 No. 33-94782) and related
Prospectus of Liberty Property Trust and Liberty Property Limited
Partnership, to the incorporation by reference in the Registration
Statement (Form S-3 No. 333-14139) and related Prospectus of Liberty
Property Trust, to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-94036) and related Prospectus of Liberty
Property Trust, to the incorporation by reference in the Registration
Statement (Form S-8 No. 333-44149) and related Prospectus of Liberty
Property Trust of our report dated June 11, 1998, with respect to the
Statement of Operating Revenues and Certain Operating Expenses for 2800
Northwest Boulevard, included in the Current Report on Form 8-K of
Liberty Property Trust and Liberty Property Limited Partnership dated
June 11, 1998, filed with the Securities and Exchange Commission.
/s/ FEGLEY & ASSOCIATES
Fegley & Associates
Plymouth Meeting, PA
June 11, 1998