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): December 11, 1997
(November 26, 1997)
LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP
------------------------------------
(Exact name of registrant as specified in their governing 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)
Registrant's telephone number, including area code: (610) 648-1700
<PAGE>
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
90.11% interest in the Operating Partnership (as of September 30, 1997)
(the Trust and the Operating Partnership are collectively referred to as
the "Company"):
On November 26, 1997, the Company acquired title to two office
properties, comprising 420,520 leaseable square feet, located in
Greenville, South Carolina, (the "Greenville Properties"). The Company's
total investment in these properties is $46.3 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(the "Total Investment").
Pursuant to Rule 3-14 of Regulation S-X, audited historical financial
information concerning the Greenville Properties, 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 the Greenville Properties, included their 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 properties and anticipated
changes therein under Company ownership, physical condition and
locations of the properties, 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 properties
themselves and their fit into the Company's operations. The Company,
after investigation of the properties, 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.
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<PAGE>
- -------------------------------
Statements contained in this report contain forward-looking statements
with respect to estimates of Total Investment, pro forma financial
information and their underlying assumptions. As such, these statements
involve risks and uncertainties that could affect future results, and
accordingly, such results may differ from those expressed herein. 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 releasing
activities and rates.
-3-
<PAGE>
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------
PAGE
----
(a) Financial Statements of Businesses Acquired
(1) Statement of Operating Revenues and Certain
Operating Expenses for the Greenville Properties
Report of Independent Auditors........................ 6
Statement of Operating Revenues and Certain
Operating Expenses for the Greenville
Properties for the nine months ended September
30, 1997 (unaudited) and for the year ended
December 31, 1996.................................. 7
Notes to the Statement of Operating Revenues and
Certain Operating Expenses for the Greenville
Properties for the nine months ended September 30,
1997 (unaudited) and for the year December 31,
1996............................................... 8
(b) Pro Forma Financial Information (unaudited)
Liberty Property Trust...................................... 10
Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1997................................. 11
Pro Forma Consolidated Statement of Operations for
the nine months ended September 30, 1997........... 12
Notes to Pro Forma Condensed Consolidated Financial
Statements as of and for the nine months ended
September 30, 1997................................. 13
Pro Forma Consolidated Statement of Operations for
the year ended December 31, 1996................... 14
Notes to Pro Forma Consolidated Statement of
Operations for the year ended December 31, 1996.... 15
Liberty Property Limited Partnership......................... 16
Pro Forma Condensed Consolidated Balance Sheet as of
September 30, 1997................................. 17
Pro Forma Consolidated Statement of Operations for
the nine months ended September 30, 1997........... 18
Notes to Pro Forma Condensed Consolidated Financial
Statements as of and for the nine months ended
September 30, 1997.................................. 19
Pro Forma Consolidated Statement of Operations for
the year ended December 31, 1996................... 20
Notes to Pro Forma Consolidated Statement of
Operations for the year ended December 31, 1996.... 21
Signatures......................................................... 22
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<PAGE>
(c) Exhibits
23 Consent of Fegley & Associates...................... 23
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<PAGE>
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 the Greenville Properties, as defined in
Note 1, for the year ended December 31, 1996. This financial statement
is the responsibility of the management of the Greenville Properties.
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 the Greenville Properties'
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, 1996, in conformity
with generally accepted accounting principles.
/s/ FEGLEY & ASSOCIATES
Plymouth Meeting, Pennsylvania FEGLEY & ASSOCIATES
December 11, 1997
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<PAGE>
STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES
FOR THE GREENVILLE PROPERTIES FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1997 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)
NINE
MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1997 1996
------------- ------------
Operating revenues:
Rental $ 3,020 $ 3,924
Operating expense
reimbursement 1,831 2,223
------- -------
Total operating
revenues 4,851 6,147
------- -------
Certain operating
expenses:
Rental property
expenses 1,402 1,717
Real estate taxes 508 687
------- -------
Total certain
operating expenses 1,910 2,404
------- -------
Operating revenues in
excess of certain
operating expenses $ 2,941 $ 3,743
======= =======
The accompanying notes are an integral part of this statement.
-7-
<PAGE>
NOTES TO THE STATEMENT OF OPERATING REVENUES AND
CERTAIN OPERATING EXPENSES FOR THE GREENVILLE PROPERTIES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1996
1. Summary of Significant Accounting Policies
- ----------------------------------------------
The Statement of Operating Revenues and Certain Operating Expenses (see
"Basis of Presentation" below) includes the operations of the Greenville
Properties. Liberty Property Trust (the "Company") owns an approximate
90.11% partners' interest in the Operating Partnership (as of September
30, 1997) (the Trust and the Operating Partnership are collectively
referred to as the "Company").
PROPERTY NAME LOCATION DESCRIPTION
- -------------------------- -------------------- --------------------
55 Beattie Place Greenville, Multi-story office
South Carolina building
242,535 square feet
75 Beattie Place Greenville, Multi-story office
South Carolina building
177,985 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 the
Greenville Properties that would cause the reported financial
information not to be indicative of future operating results. General
company overhead has not been allocated to the Greenville Properties.
The financial information presented for the nine months ended September
30, 1997 is unaudited. In the opinion of management, the unaudited
financial information contains all adjustments, consisting of normal
recurring accruals, necessary for a fair presentation of the Statement
of Revenues and Certain Operating Expenses for the Greenville
Properties.
The properties consist of commercial office 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
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<PAGE>
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.
2. MINIMUM FUTURE RENTALS
- ---------------------------
Future minimum rental payments due from tenants of the Greenville
Properties under non-cancellable operating leases as of December 31,
1996 are as follows (in thousands):
1997 $ 4,173
1998 4,186
1999 4,014
2000 3,399
2001 2,943
Thereafter 8,212
-------
Total $26,927
=======
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<PAGE>
LIBERTY PROPERTY TRUST
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The unaudited, pro forma condensed consolidated balance sheet as of
September 30, 1997 reflects the incremental effect of the Greenville
Properties described in Item 5 as if the acquisitions had occurred on
September 30, 1997. The accompanying unaudited, pro forma consolidated
statement of operations for the nine months ended September 30, 1997 and
the year ended December 31, 1996 reflect the incremental effect of the
Greenville Properties, as if such acquisitions had occurred on January
1, 1996. 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 September
30, 1997 and its Annual Report on Form 10-K for the year ended December
31, 1996. In the opinion of management, the unaudited, pro forma
consolidated financial information provides for all adjustments
necessary to reflect the effects of the Greenville Properties.
These pro forma statements may not necessarily be indicative of the
results that would have actually occurred if the acquisition of the
Greenville Properties 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.
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<PAGE>
LIBERTY PROPERTY TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(UNAUDITED, IN THOUSANDS)
LIBERTY
THE PROPERTY
HISTORICAL GREENVILLE TRUST
<F1> PROPERTIES CONSOLIDATED
---------- ----------- ------------
ASSETS:
Investment in real estate, net $1,625,549 $ 46,310 <F2> $1,671,859
Cash and cash equivalents 24,097 - 24,097
Deferred financing and
leasing costs, net 29,439 - 29,439
Other assets 56,114 - 56,114
---------- ----------- -----------
Total assets $1,735,199 $ 46,310 $1,781,509
========== =========== ===========
LIABILITIES:
Mortgage loans $ 391,055 $ - $ 391,055
Unsecured notes 200,000 - 200,000
Subordinated debentures 114,820 - 114,820
Line of credit 146,000 46,310 <F3> 192,310
Other liabilities 86,633 - 86,633
---------- ----------- -----------
Total liabilities 938,508 46,310 984,818
---------- ----------- -----------
MINORITY INTEREST 66,430 - 66,430
SHAREHOLDERS' EQUITY:
Series A preferred shares 125,000 - 125,000
Common shares 43 - 43
Additional paid-in capital 606,309 - 606,309
Unearned compensation (1,091) - (1,091)
Retained earnings - - -
---------- ----------- -----------
Total shareholders' equity 730,261 - 730,261
---------- ----------- -----------
Total liabilities and
shareholders' equity $1,735,199 $ 46,310 $1,781,509
========== =========== ===========
The accompanying notes are an integral part of this unaudited, pro forma
condensed consolidated financial statement.
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<PAGE>
LIBERTY PROPERTY TRUST
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
THE LIBERTY
GREENVILLE PRO PROPERTY
HISTORICAL PROPERTIES FORMA TRUST
<F1> <F4> ADJUSTMENTS CONSOLIDATED
---------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 119,223 $ 3,020 $122,243
Operating expense reim-
bursement 38,121 1,831 39,952
Management fees 516 - 516
Interest and other 2,244 - 2,244
---------- --------- -----------
Total revenue 160,104 4,851 164,955
---------- --------- -----------
OPERATING EXPENSES
Rental property expenses 29,849 1,402 31,251
Real estate taxes 12,297 508 12,805
General and administrative 7,602 - 7,602
Depreciation and amorti-
zation 28,787 - $ 868 <F5> 29,655
---------- --------- --------- -----------
Total operating expenses 78,535 1,910 868 81,313
---------- --------- --------- -----------
Operating income 81,569 2,941 (868) 83,642
Premium on debenture
conversion 98 - - 98
Write off of deferred
financing costs 2,919 - - 2,919
Interest expense 37,252 - 2,358 <F6> 39,610
---------- --------- --------- -----------
Income (loss) before
minority interest 41,300 2,941 (3,226) 41,015
Minority interest 3,815 281 (310) <F7> 3,786
---------- --------- --------- -----------
Net income (loss) 37,485 2,660 (2,916) 37,229 <F8>
Preferred dividend 1,497 - - 1,497
---------- --------- --------- -----------
Income available to
common shareholders $ 35,988 $ 2,660 $(2,916) $ 35,732
========== ========= ========== ===========
Net income per common
share - primary $ .93
===========
Weighted average number
of common shares out-
standing 38,551
===========
</TABLE>
The accompanying notes are an integral part of this unaudited, proforma
consolidated financial statement.
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<PAGE>
LIBERTY PROPERTY TRUST
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical financial information of the Company as of
September 30, 1997 and for the nine months ended September 30, 1997.
<F2> Reflects the Total Investment in the Greenville Properties.
<F3> Reflects the use of $46,310 from the line of credit to finance the
Total Investment in the Greenville Properties.
<F4> Reflects incremental addition of revenues and certain expenses of
the Greenville Properties in order to reflect a full nine months of
operations for these acquisitions.
<F5> Reflects incremental depreciation of the Greenville Properties
based on asset lives of 40 years.
<F6> Reflects an incremental increase in interest expense from the
assumed borrowings of $46,310 on the line of credit to fund the purchase
of the Greenville Properties.
<F7> Reflects the allocation of the pro forma adjustment to minority
interest based upon pro forma minority interest in the Operating
Partnership of approximately 9.58%.
<F8> The Company's pro forma taxable income for the nine month period
ended September 30, 1997 is approximately $30,098 which has been
calculated as pro forma income from operations of approximately $37,229
plus GAAP depreciation and amortization of $29,655 less tax basis
depreciation and amortization and other tax differences of approximately
$36,786.
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<PAGE>
LIBERTY PROPERTY TRUST
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
THE LIBERTY
GREENVILLE PRO PROPERTY
HISTORICAL PROPERTIES FORMA TRUST
<F1> <F2> ADJUSTMENTS CONSOLIDATED
---------- ---------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 112,841 $ 3,924 $ 116,765
Operating expense reim-
bursement 35,886 2,223 38,109
Management fees 1,340 - 1,340
Interest and other 4,198 - 4,198
---------- -------- ---------
Total revenue 154,265 6,147 160,412
---------- -------- ---------
OPERATING EXPENSES
Rental property expenses 29,624 1,717 31,341
Real estate taxes 11,229 687 11,916
General and administrative 8,023 - 8,023
Depreciation and amorti-
zation 28,203 - $ 1,158 <F3> 29,361
---------- -------- -------- ---------
Total operating expenses 77,079 2,404 1,158 80,641
---------- -------- --------- ---------
Operating income 77,186 3,743 (1,158) 79,771
Premium on debenture con-
version 1,027 - - 1,027
Interest expense 38,528 - 3,144 <F4> 41,672
---------- -------- -------- ---------
Income (loss) before
minority interest 37,631 3,743 (4,302) 37,072
Minority interest 3,891 387 (445) <F5> 3,833
---------- -------- -------- ----------
Net income (loss) $ 33,740 $ 3,356 $(3,857) $ 33,239 <F6>
========== ======== ======== ==========
Net income per common
share - primary $ 1.12
==========
Weighted average number
of common shares out-
standing 29,678
==========
</TABLE>
The accompanying notes are an integral part of this unaudited, proforma
consolidated financial statement.
-14-
<PAGE>
LIBERTY PROPERTY TRUST
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical operations of the company for the year ended
December 31, 1996.
<F2> Reflects the incremental addition of revenues and certain expenses
of the Greenville Properties in order to reflect a full twelve months of
operations for these acquisitions.
<F3> Reflects incremental depreciation of the Greenville Properties
based on asset lives of 40 years.
<F4> Reflects an incremental increase in interest expense from the
assumed borrowings of $46,310 on the line of credit to fund the purchase
of the Greenville Properties.
<F5> Reflects the allocation of the pro forma adjustment to minority
interest based upon pro forma minority interest in the Operating
Partnership of approximately 10.34%.
<F6> The Company's pro forma taxable income for the year ended December
31, 1996 is approximately $31,907 which has been calculated as pro forma
income from operations of approximately $33,239 plus GAAP depreciation
and amortization of $29,361 less tax basis depreciation and amortization
and other tax differences of approximately $30,693.
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<PAGE>
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The unaudited, pro forma condensed consolidated balance sheet as of
September 30, 1997 reflects the incremental effect of the Greenville
Properties described in Item 5 as if the acquisitions had occurred on
September 30, 1997. The accompanying unaudited, pro forma consolidated
statement of operations for the nine months ended September 30, 1997 and
the year ended December 31, 1996 reflects the incremental effect of the
Greenville Properties, as if such acquisitions had occurred on January
1, 1996. 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 September
30, 1997 and its Annual Report on Form 10-K for the year ended December
31, 1996. In the opinion of management, the unaudited, pro forma
consolidated financial information provides for all adjustments
necessary to reflect the effects of the Greenville Properties.
These pro forma statements may not necessarily be indicative of the
results that would have actually occurred if the acquisition of the
Greenville Properties 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.
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<PAGE>
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1997
(UNAUDITED, IN THOUSANDS)
LIBERTY
PROPERTY
THE LIMITED
HISTORICAL GREENVILLE PARTNERSHIP
<F1> PROPERTIES CONSOLIDATED
---------- ----------- ------------
ASSETS:
Investment in real estate, net $1,625,549 $ 46,310 <F2> $1,671,859
Cash and cash equivalents 24,097 - 24,097
Deferred financing and
leasing costs, net 29,439 - 29,439
Other assets 56,114 - 56,114
---------- ----------- -----------
Total assets $1,735,199 $ 46,310 $1,781,509
========== =========== ===========
LIABILITIES:
Mortgage loans $ 391,055 $ - $ 391,055
Unsecured notes 200,000 - 200,000
Subordinated debentures 114,820 - 114,820
Line of credit 146,000 46,310 <F3> 192,310
Other liabilities 86,633 - 86,633
---------- ----------- -----------
Total liabilities 938,508 46,310 984,818
---------- ----------- -----------
OWNERS' EQUITY:
General partner's equity 730,261 - 730,261
Limited partners' equity 66,430 - 66,430
---------- ----------- -----------
Total owners' equity 796,691 - 796,691
---------- ----------- -----------
Total liabilities and
shareholders' equity $1,735,199 $ 46,310 $1,781,509
========== =========== ===========
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<PAGE>
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
THE PROPERTY
GREENVILLE PRO LIMITED
HISTORICAL PROPERTIES FORMA PARTNERSHIP
<F1> <F4> ADJUSTMENTS CONSOLIDATED
---------- ----------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 119,223 $ 3,020 $ 122,243
Operating expense reim-
bursement 38,121 1,831 39,952
Management fees 516 - 516
Interest and other 2,244 - 2,244
---------- --------- ------------
Total revenue 160,104 4,851 164,955
---------- --------- ------------
OPERATING EXPENSES
Rental property expenses 29,849 1,402 31,251
Real estate taxes 12,297 508 12,805
General and administrative 7,602 - 7,602
Depreciation and amorti-
zation 28,787 - $ 868 <F5> 29,655
---------- --------- ---------- ------------
Total operating expenses 78,535 1,910 868 81,313
---------- --------- ---------- ------------
Operating income 81,569 2,941 (868) 83,642
Premium on debenture
conversion 98 - - 98
Write off of deferred
financing costs 2,919 - - 2,919
Interest expense 37,252 - 2,358 <F6> 39,610
---------- --------- ---------- ------------
Net income (loss) $ 41,300 $ 2,941 $ (3,226) $ 41,015
========== ========= ========== ============
Net income (loss)
allocated to general
partner $ 37,485 $ 2,660 $ (2,916) $ 37,229
Net income (loss)
allocated to limited
partners 3,815 281 (310) <F7> 3,786
========== ========= ========== ============
</TABLE>
The accompanying notes are an integral part of this unaudited, proforma
consolidated financial statement.
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<PAGE>
LIBERTY PROPERTY LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical financial information of the Company as of
September 30, 1997 and for the nine months ended September 30, 1997.
<F2> Reflects the Total Investment in the Greenville Properties.
<F3> Reflects the use of $46,310 from the line of credit to finance the
Total Investment in the Greenville Properties.
<F4> Reflects the incremental addition of revenues and certain expenses
of the Greenville Properties in order to reflect a full nine months of
operations for these acquisitions.
<F5> Reflects incremental depreciation of the Greenville Properties
based on asset lives of 40 years.
<F6> Reflects an incremental increase in interest expense from the
assumed borrowings of $46,310 on the line of credit to fund the purchase
of the Greenville Properties.
<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 9.58%.
-19-
<PAGE>
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
THE PROPERTY
GREENVILLE PRO LIMITED
HISTORICAL PROPERTIES FORMA PARTNERSHIP
<F1> <F2> ADJUSTMENTS CONSOLIDATED
---------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 112,841 $ 3,924 $ 116,765
Operating expense reim-
bursement 35,886 2,223 38,109
Management fees 1,340 - 1,340
Interest and other 4,198 - 4,198
---------- ---------- ---------
Total revenue 154,265 6,147 160,412
---------- ---------- ---------
OPERATING EXPENSES
Rental property expenses 29,624 1,717 31,341
Real estate taxes 11,229 687 11,916
General and administrative 8,023 - 8,023
Depreciation and amorti-
zation 28,203 - $ 1,158 <F3> 29,361
---------- ---------- ---------- ---------
Total operating expenses 77,079 2,404 1,158 80,641
---------- ---------- ---------- ---------
Operating income 77,186 3,743 (1,158) 79,771
Premium on debenture con-
version 1,027 - - 1,027
Interest expense 38,528 - 3,144 <F4> 41,672
---------- ---------- ---------- ---------
Net income (loss) $ 37,631 $ 3,743 $ (4,302) $ 37,072
========== ========== ========== =========
Net income (loss)
allocated to general
partner $ 33,740 $ 3,356 $ (3,857) $ 33,239
Net income (loss)
allocated to limited
partners 3,891 387 (445) <F5> 3,833
========== ========== ========== =========
</TABLE>
The accompanying notes are an integral part of this unaudited, proforma
consolidated financial statement.
-20-
<PAGE>
LIBERTY PROPERTY LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED DECEMBER 31, 1996
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical financial information of the Company for the
year ended December 31, 1996.
<F2> Reflects the incremental addition of revenue and certain expenses
of the Greenville Properties in order to reflect a full twelve months of
operations for these acquisitions.
<F3> Reflects incremental depreciation of the Greenville Properties
based on asset lives of 40 years.
<F4> Reflects an incremental increase in interest expense from the
assumed borrowings of $46,310 on the line of credit to fund the purchase
of the Greenville Properties.
<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 10.34%.
-21-
<PAGE>
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: December 11, 1997 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: December 11, 1997 BY: /s/ WILLARD G. ROUSE, III
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NAME: Willard G. Rouse, III
TITLE: Chief Executive Officer
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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. 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-3 No. 333-22211) and related
Prospectus of Liberty Property Trust and Liberty Property Limited
Partnership, to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-94036) and related Prospectus of Liberty
Property Trust, of our report dated December 11, 1997, with respect to
the Statement of Operating Revenues and Certain Operating Expenses for
the Greenville Properties included in the Current Report on Form 8-K of
Liberty Property Trust and Liberty Property Limited Partnership dated
November 26, 1997, filed with the Securities and Exchange Commission.
/s/ FEGLEY & ASSOCIATES
Fegley & Associates
Plymouth Meeting, PA
December 11, 1997
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