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 22, 1998
LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP
------------------------------------
(Exact names of registrants as specified in their respective 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)
Registrants' 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
92.57% interest in the Operating Partnership (as of September 30, 1998)
(the Trust and the Operating Partnership are collectively referred to as
the "Company").
On December 22, 1998, the Company acquired title to three industrial
properties, comprising 434,055 leaseable square feet, located in
Pleasant Prairie, Wisconsin (the "Wispark Properties"). The Company's
Total Investment (as defined below) in the Wispark Properties is
anticipated to be approximately $19.4 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 the Wispark 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 Wispark Properties 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 properties and anticipated
changes therein under Company ownership, physical condition and location
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 Wispark 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.
- -------------------------------
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.
<PAGE> 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 the Wispark Properties
Report of Independent Auditors........................ 4
Statement of Operating Revenues and Certain Operating
Expenses for the Wispark Properties for the nine
months ended September 30, 1998 (unaudited) and for
the year ended December 31, 1997..................... 5
Notes to the Statement of Operating Revenues and
Certain Operating Expenses for the Wispark Properties
for the nine months ended September 30, 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
September 30, 1998................................... 9
Pro Forma Consolidated Statement of Operations for
the nine months ended September 30, 1998............. 10
Notes to Pro Forma Condensed Consolidated Financial
Statements as of and for the nine months ended
September 30, 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
September 30, 1998................................... 15
Pro Forma Consolidated Statement of Operations for the
nine months ended September 30, 1998................. 16
Notes to Pro Forma Condensed Consolidated Financial
Statements as of and for the nine months ended
September 30, 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
<PAGE> 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 the Wispark Properties, as defined in Note
1, for the year ended December 31, 1997. This financial statement is
the responsibility of the management of the Wispark 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 Wispark 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, 1997, in conformity
with generally accepted accounting principles.
/s/ FEGLEY & ASSOCIATES
Plymouth Meeting, Pennsylvania FEGLEY & ASSOCIATES
December 22, 1998
<PAGE> 4
STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES
FOR THE WISPARK PROPERTIES FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1998 (UNAUDITED) AND FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
NINE
MONTHS ENDED YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
1998 1997
-------------- ------------
Operating revenues:
Rental $ 1,190 $ 1,640
Operating expense reimbursement 375 536
------- -------
Total operating revenues 1,565 2,176
------- -------
Certain operating expenses:
Rental property expenses 82 147
Real estate taxes 246 321
------- -------
Total certain operating expenses 328 468
------- -------
Operating revenues in excess of certain
operating expenses $ 1,237 $ 1,708
======= =======
The accompanying notes are an integral part of this statement.
<PAGE> 5
NOTES TO THE STATEMENT OF OPERATING REVENUES AND
CERTAIN OPERATING EXPENSES FOR THE WISPARK PROPERTIES
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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 the Wispark
Properties. Liberty Property Trust (the "Company") owns an approximate
92.57% partners' interest in the Operating Partnership (as of September
30, 1998) (the Trust and the Operating Partnership are collectively
referred to as the "Company").
PROPERTY NAME LOCATION DESCRIPTION
- ------------------- -------------------- ---------------------------
9801 80th Avenue Pleasant Prairie, WI Industrial building 277,454
leaseable square feet
8400 Lakeview Parkway Pleasant Prairie, WI Industrial building 84,250
leaseable square feet
8401 Lakeview Parkway Pleasant Prairie, WI Industrial building 72,351
leaseable 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
Wispark 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 Wispark Properties.
The Wispark Properties consist of commercial industrial 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.
<PAGE> 6
2. MINIMUM FUTURE RENTALS
- ---------------------------
Future minimum rental payments due from tenants of the Wispark
Properties under non-cancellable operating leases as of December 31,
1997 are as follows (in thousands):
1998 $ 1,546
1999 1,375
2000 977
2001 863
2002 848
Thereafter 1,976
--------
Total $ 7,585
========
<PAGE> 7
LIBERTY PROPERTY TRUST
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The unaudited, pro forma condensed consolidated balance sheet as of
September 30, 1998 reflects the incremental effect of the Wispark
Properties described in Item 5 as if the acquisition had occurred on
September 30, 1998. The accompanying unaudited, pro forma consolidated
statements of operations for the nine months ended September 30, 1998
and the year ended December 31, 1997 reflect the incremental effect the
Wispark Properties, 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 September
30, 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 the Wispark Properties.
These pro forma statements may not necessarily be indicative of the
results that would have actually occurred if the acquisition of the
Wispark 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.
<PAGE> 8
LIBERTY PROPERTY TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
THE PROPERTY
HISTORICAL WISPARK TRUST
<F1> PROPERTIES CONSOLIDATED
---------- -------------- ------------
<S> <C> <C> <C>
ASSETS:
Investment in real estate, net $2,722,507 $ 19,400 <F2> $2,741,907
Cash and cash equivalents 10,610 - 10,610
Deferred financing and
leasing costs, net 35,513 - 35,513
Other assets 57,136 - 57,136
---------- ----------- -----------
Total assets $2,825,766 $ 19,400 $2,845,166
========== =========== ===========
LIABILITIES:
Mortgage loans $ 414,917 $ - $ 414,917
Unsecured notes 625,000 - 625,000
Credit facility 198,000 19,400 <F3> 217,400
Convertible debentures 104,034 - 104,034
Other liabilities 117,901 - 117,901
---------- ----------- -----------
Total liabilities 1,459,852 19,400 1,479,252
---------- ----------- -----------
MINORITY INTEREST 101,487 - 101,487
SHAREHOLDERS' EQUITY:
Series A preferred shares 120,814 - 120,814
Common shares 65 - 65
Additional paid-in capital 1,162,897 - 1,162,897
Unearned compensation (667) - (667)
Dividends in excess of net income (18,682) - (18,682)
---------- ----------- -----------
Total shareholders' equity 1,264,427 - 1,264,427
---------- ----------- -----------
Total liabilities and
shareholders' equity $2,825,766 $ 19,400 $2,845,166
========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
condensed consolidated financial statement.
<PAGE> 9
LIBERTY PROPERTY TRUST
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THE LIBERTY
WISPARK PRO PROPERTY
HISTORICAL PROPERTIES FORMA TRUST
<F1> <F4> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 203,297 $ 1,190 $ 204,487
Operating expense reim-
bursement 71,048 375 71,423
Management fees 447 - 447
Interest and other 2,781 - 2,781
---------- --------- ----------
Total revenue 277,573 1,565 279,138
---------- --------- ----------
OPERATING EXPENSES
Rental property expenses 51,786 82 51,868
Real estate taxes 23,765 246 24,011
General and administrative 11,409 - 11,409
Depreciation and amorti-
zation 48,809 - $ 364 <F5> 49,173
---------- --------- --------- ----------
Total operating expenses 135,769 328 364 136,461
---------- --------- --------- ----------
Operating income 141,804 1,237 (364) 142,677
Interest expense 56,255 - 978 <F6> 57,233
---------- --------- --------- ----------
Income (loss) before
minority interest 85,549 1,237 (1,342) 85,444
Minority interest 5,962 94 (104) <F7> 5,952
---------- --------- --------- ----------
Net income (loss) 79,587 1,143 (1,238) 79,492 <F8>
Preferred dividend 8,250 - - 8,250
---------- --------- --------- ----------
Income available to
common shareholders $ 71,337 $ 1,143 $ (1,238) $ 71,242
========== ========= ========== ==========
Income per common
share - basic $ 1.20 $ 1.20
========== ==========
Income per common
share - diluted $ 1.19 $ 1.19
========== ==========
Weighted average number
of common shares out-
standing - basic 59,507 59,507
========== ==========
Weighted average number
of common shares out-
standing - diluted 59,810 59,810
========== ===========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
<PAGE> 10
LIBERTY PROPERTY TRUST
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical financial information of the Company as of
September 30, 1998 and for the nine months ended September 30, 1998.
<F2> Reflects the Total Investment in the Wispark Properties.
<F3> Reflects the use of $19,400 from the credit facility to finance
the Total Investment in the Wispark Properties.
<F4> Reflects incremental addition of revenues and certain expenses of
the Wispark Properties in order to reflect a full nine months of
operations for the acquisition.
<F5> Reflects incremental depreciation of the Wispark Properties based
on asset lives of 40 years.
<F6> Reflects an incremental increase in interest expense from the
assumed borrowings of $19,400 on the credit facility to fund the
purchase of the Wispark 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 7.71%.
<F8> The Company's pro forma taxable income for the nine month period
ended September 30, 1998 is approximately $80,114 which has been
calculated as pro forma income from operations of approximately $79,492
plus GAAP depreciation and amortization of $49,173 less tax basis
depreciation and amortization and other tax differences of approximately
$48,551.
<PAGE> 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)
<TABLE>
<CAPTION>
THE LIBERTY
WISPARK PRO PROPERTY
HISTORICAL PROPERTIES FORMA TRUST
<F1> <F2> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 169,859 $ 1,640 $ 171,499
Operating expense reim-
bursement 55,502 536 56,038
Management fees 673 - 673
Interest and other 6,483 - 6,483
---------- --------- ----------
Total revenue 232,517 2,176 234,693
---------- --------- ----------
OPERATING EXPENSES
Rental property expenses 43,118 147 43,265
Real estate taxes 17,961 321 18,282
General and administrative 10,650 - 10,650
Depreciation and amorti-
zation 40,752 - $ 485 <F3> 41,237
---------- --------- --------- ----------
Total operating expenses 112,481 468 485 113,434
---------- --------- --------- ----------
Operating income 120,036 1,708 (485) 121,259
Premium on debenture
conversion 98 - - 98
Interest expense 53,888 - 1,305 <F4> 55,193
---------- --------- --------- ----------
Income (loss) before
minority interest 66,050 1,708 (1,790) 65,968
Minority interest 5,606 154 (162) <F5> 5,598
---------- --------- --------- ----------
Net income (loss) 60,444 1,554 (1,628) 60,370
<F6>
Preferred dividend 4,247 - - 4,247
---------- --------- --------- ----------
Income available to
common shareholders $ 56,197 $ 1,554 $ (1,628) $ 56,123
========== ========= ========== ==========
Income per common
share - basic $ 1.39 $ 1.39
========== ==========
Income per common
share - diluted $ 1.38 $ 1.38
========== ==========
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
========== ==========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
<PAGE> 12
LIBERTY PROPERTY TRUST
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL STATEMENT
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 incremental addition of revenues and certain expenses of
the Wispark Properties in order to reflect a full year of operations for
the acquisition.
<F3> Reflects incremental depreciation of the Wispark Properties based
on asset lives of 40 years.
<F4> Reflects an incremental increase in interest expense from the
assumed borrowings of $19,400 on the credit facility to fund the
purchase of the Wispark 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 9.07%.
<F6> The Company's pro forma taxable income for the year ended December
31, 1997 is approximately $47,015 which has been calculated as pro forma
income from operations of approximately $60,370 plus GAAP depreciation
and amortization of $41,237 less tax basis depreciation and amortization
and other tax differences of approximately $54,592.
<PAGE> 13
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA FINANCIAL INFORMATION (UNAUDITED)
The unaudited, pro forma condensed consolidated balance sheet as of
September 30, 1998 reflects the incremental effect of the Wispark
Properties described in Item 5 as if the acquisition had occurred on
September 30, 1998. The accompanying unaudited, pro forma consolidated
statements of operations for the nine months ended September 30, 1998
and the year ended December 31, 1997 reflect the incremental effect of
the Wispark Properties, 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 September
30, 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 the Wispark Properties.
These pro forma statements may not necessarily be indicative of the
results that would have actually occurred if the acquisition of the
Wispark 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.
<PAGE> 14
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF SEPTEMBER 30, 1998
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
PROPERTY
THE LIMITED
HISTORICAL WISPARK PARTNERSHIP
<F1> PROPERTIES CONSOLIDATED
---------- -------------- ------------
<S> <C> <C> <C>
ASSETS:
Investment in real estate, net $2,722,507 $ 19,400 <F2> $2,741,907
Cash and cash equivalents 10,610 - 10,610
Deferred financing and
leasing costs, net 35,513 - 35,513
Other assets 57,136 - 57,136
---------- ----------- -----------
Total assets $2,825,766 $ 19,400 $2,845,166
========== =========== ===========
LIABILITIES:
Mortgage loans $ 414,917 $ - $ 414,917
Unsecured notes 625,000 - 625,000
Credit facility 198,000 19,400 <F3> 217,400
Convertible debentures 104,034 - 104,034
Other liabilities 117,901 - 117,901
---------- ----------- -----------
Total liabilities 1,459,852 19,400 1,479,252
---------- ----------- -----------
OWNERS' EQUITY:
General partner's equity 1,264,427 - 1,264,427
Limited partners' equity 101,487 - 101,487
---------- ----------- -----------
Total owners' equity 1,365,914 - 1,365,914
---------- ----------- -----------
Total liabilities and
owners' equity $2,825,766 $ 19,400 $2,845,166
========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
condensed consolidated financial statement.
<PAGE> 15
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
THE PROPERTY
WISPARK PRO LIMITED
HISTORICAL PROPERTIES FORMA PARTNERSHIP
<F1> <F4> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 203,297 $ 1,190 $ 204,487
Operating expense reim-
bursement 71,048 375 71,423
Management fees 447 - 447
Interest and other 2,781 - 2,781
---------- --------- -----------
Total revenue 277,573 1,565 279,138
---------- --------- -----------
OPERATING EXPENSES
Rental property expenses 51,786 82 51,868
Real estate taxes 23,765 246 24,011
General and administrative 11,409 - 11,409
Depreciation and amorti-
zation 48,809 - $ 364 <F5> 49,173
---------- --------- --------- -----------
Total operating expenses 135,769 328 364 136,461
---------- --------- --------- -----------
Operating income 141,804 1,237 (364) 142,677
Interest expense 56,255 - 978 <F6> 57,233
---------- --------- --------- -----------
Net income (loss) $ 85,549 $ 1,237 $ (1,342) $ 85,444
========== ========= ========= ===========
Net income (loss)
allocated to general
partner $ 79,587 $ 1,143 $ (1,238) $ 79,492
Net income (loss)
allocated to limited
partners 5,962 94 (104) <F7> 5,952
========== ========= ========= ===========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
<PAGE> 16
LIBERTY PROPERTY LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1998
(UNAUDITED, DOLLARS IN THOUSANDS)
<F1> Reflects historical financial information of the Company as of
September 30, 1998 and for the nine months ended September 30, 1998.
<F2> Reflects the Total Investment in the Wispark Properties.
<F3> Reflects the use of $19,400 from the credit facility to finance
the Total Investment in the Wispark Properties.
<F4> Reflects the incremental addition of revenues and certain expenses
of the Wispark Properties in order to reflect a full nine months of
operations for the acquisition.
<F5> Reflects incremental depreciation of the Wispark Properties based
on asset lives of 40 years.
<F6> Reflects an incremental increase in interest expense from the
assumed borrowings of $19,400 on the credit facility to fund the
purchase of the Wispark 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 7.71%.
<PAGE> 17
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
THE PROPERTY
WISPARK PRO LIMITED
HISTORICAL PROPERTIES FORMA PARTNERSHIP
<F1> <F2> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 169,859 $ 1,640 $ 171,499
Operating expense reim-
bursement 55,502 536 56,038
Management fees 673 - 673
Interest and other 6,483 - 6,483
---------- --------- -----------
Total revenue 232,517 2,176 234,693
---------- --------- -----------
OPERATING EXPENSES
Rental property expenses 43,118 147 43,265
Real estate taxes 17,961 321 18,282
General and administrative 10,650 - 10,650
Depreciation and amorti-
zation 40,752 - $ 485 <F3> 41,237
---------- --------- ---------- -----------
Total operating expenses 112,481 468 485 113,434
---------- --------- ---------- -----------
Operating income 120,036 1,708 (485) 121,259
Premium on debenture
conversion 98 - - 98
Interest expense 53,888 - 1,305 <F4> 55,193
---------- --------- ---------- -----------
Net income (loss) $ 66,050 $ 1,708 $ (1,790) $ 65,968
========== ========= ========== ===========
Net income (loss)
allocated to general
partner $ 60,444 $ 1,554 $ (1,628) $ 60,370
Net income (loss)
allocated to limited
partners 5,606 154 (162) <F5> 5,598
========== ========= =========== ===========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
<PAGE> 18
LIBERTY PROPERTY LIMITED PARTNERSHIP
NOTES TO PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND 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 the Wispark Properties in order to reflect a full year of operations
for the acquisition.
<F3> Reflects incremental depreciation of the Wispark Properties based
on asset lives of 40 years.
<F4> Reflects an incremental increase in interest expense from the
assumed borrowings of $19,400 on the credit facility to fund the
purchase of the Wispark 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 9.07%.
<PAGE> 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: December 22, 1998 BY: /s/ GEORGE J. ALBURGER, JR.
----------------------------------------
NAME: George J. Alburger, Jr.
TITLE: Chief Financial Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
BY: LIBERTY PROPERTY TRUST,
SOLE GENERAL PARTNER
Dated: December 22, 1998 BY: /s/ GEORGE J. ALBURGER, JR.
----------------------------------------
NAME: George J. Alburger, Jr.
TITLE: Chief Financial Officer
<PAGE> 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. 333-63115) 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 December 22, 1998, with respect to
the Statement of Operating Revenues and Certain Operating Expenses for
the Wispark Properties, included in the Current Report on Form 8-K of
Liberty Property Trust and Liberty Property Limited Partnership dated
December 22, 1998, filed with the Securities and Exchange Commission.
/s/ FEGLEY & ASSOCIATES
Fegley & Associates
Plymouth Meeting, PA
December 22, 1998
