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 24, 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
92.40% 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 23, 1998, the Company entered into a contract to acquire title
to an office property, comprising 156,000 leaseable square feet, located
in Boca Raton, Florida ("Boca Colonnade"). The Company's Total
Investment (as defined below) in this property is anticipated to be
approximately $20.2 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 Boca Colonnade 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 Boca Colonnade, 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 properties themselves and their
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-
<PAGE>
ITEM 7: FINANCIAL STATEMENTS AND EXHIBITS
- ------------------------------------------
PAGE
----
(a) Financial Statements of Real Estate Operations to be
Acquired
Statement of Operating Revenues and Certain
Operating Expenses for Boca Colonnade
Report of Independent Auditors........................ 4
Statement of Operating Revenues and Certain
Operating Expenses for Boca Colonnade
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 Boca Colonnade
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-
<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 Boca Colonnade, as defined in Note 1, for
the year ended December 31, 1997. This financial statement is the
responsibility of the management of Boca Colonnade. 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 Boca Colonnade'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 24, 1998
- -4-
<PAGE>
STATEMENT OF OPERATING REVENUES AND CERTAIN OPERATING EXPENSES
FOR BOCA COLONNADE FOR THE THREE MONTHS ENDED MARCH 31, 1998 (UNAUDITED)
AND FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)
THREE MONTHS YEAR ENDED
ENDED MARCH 31, DECEMBER 31,
1998 1997
--------------- ------------
Operating revenues:
Rental $ 398 $ 1,592
Operating expense reimbursement 273 1,090
------ --------
Total operating revenues 671 2,682
------ --------
Certain operating expenses:
Rental property expenses 249 997
Real estate taxes 48 190
------ --------
Total certain operating expenses 297 1,187
------ --------
Operating revenues in excess of certain
operating expenses $ 374 $ 1,495
====== ========
The accompanying notes are an integral part of this statement.
- -5-
<PAGE>
NOTES TO THE STATEMENT OF OPERATING REVENUES AND
CERTAIN OPERATING EXPENSES FOR BOCA COLONNADE
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 Boca
Colonnade. 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
- -------------------------- -------------------- --------------------
777 Yamato Road Boca Raton, FL Office building
156,024 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 Boca
Colonnade that would cause the reported financial information not to be
indicative of future operating results. General company overhead has
not been allocated to Boca Colonnade.
Boca Colonnade consists 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
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-
<PAGE>
2. MINIMUM FUTURE RENTALS
- ---------------------------
Future minimum rental payments due from tenants of Boca Colonnade under
non-cancellable operating leases as of March 31, 1998 are as follows (in
thousands):
1998 $ 1,645
1999 1,692
2000 1,080
2001 266
2002 143
Thereafter 15
--------
Total $ 4,841
========
- -7-
<PAGE>
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 Boca Colonnade
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 Boca Colonnade, 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 Boca
Colonnade.
These pro forma statements may not necessarily be indicative of the
results that would have actually occurred if the acquisition of Boca
Colonnade 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-
<PAGE>
LIBERTY PROPERTY TRUST
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
PROPERTY
HISTORICAL TRUST
<F1> BOCA COLONNADE CONSOLIDATED
---------- -------------- ------------
<S> <C> <C> <C>
ASSETS:
Investment in real estate, net $2,286,903 $ 20,180 <F2> $2,307,083
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 $ 20,180 $2,426,944
========== =========== ===========
LIABILITIES:
Mortgage loans $ 376,701 $ - $ 376,701
Unsecured notes 525,000 - 525,000
Credit facility 148,000 20,180 <F3> 168,180
Convertible debentures 109,253 - 109,253
Other liabilities 103,113 - 103,113
---------- ----------- -----------
Total liabilities 1,262,067 20,180 1,282,247
---------- ----------- -----------
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 $ 20,180 $2,426,944
========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
condensed consolidated financial statement.
- -9-
<PAGE>
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)
<TABLE>
<CAPTION>
LIBERTY
BOCA PRO PROPERTY
HISTORICAL COLONNADE FORMA TRUST
<F1> <F4> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 61,015 $ 398 $ 61,413
Operating expense reim-
bursement 20,250 273 20,523
Management fees 147 - 147
Interest and other 1,207 - 1,207
---------- --------- -----------
Total revenue 82,619 671 83,290
---------- --------- -----------
OPERATING EXPENSES
Rental property expenses 14,916 249 15,165
Real estate taxes 7,019 48 7,067
General and administrative 3,350 - 3,350
Depreciation and amorti-
zation 14,219 - $ 126 <F5> 14,345
---------- --------- --------- -----------
Total operating expenses 39,504 297 126 39,927
---------- --------- --------- -----------
Operating income 43,115 374 (126) 43,363
Interest expense 16,566 - 343 <F6> 16,909
---------- --------- --------- -----------
Income (loss) before
minority interest 26,549 374 (469) 26,454
Minority interest 1,809 28 (35) <F7> 1,802
---------- --------- --------- -----------
Net income (loss) 24,740 346 (434) 24,652 <F8>
Preferred dividend 2,750 - - 2,750
---------- --------- --------- -----------
Income available to
common shareholders $ 21,990 $ 346 $ (434) $ 21,902
========== ========= ========== ===========
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
========== ===========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
- -10-
<PAGE>
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 Boca Colonnade.
<F3> Reflects the use of $20,180 from the credit facility to finance
the Total Investment in Boca Colonnade.
<F4> Reflects incremental addition of revenues and certain expenses of
Boca Colonnade in order to reflect a full three months of operations for
the acquisition.
<F5> Reflects incremental depreciation of Boca Colonnade based on asset
lives of 40 years.
<F6> Reflects an incremental increase in interest expense from the
assumed borrowings of $20,180 on the credit facility to fund the
purchase of Boca Colonnade.
<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 year ended December
31, 1997 is approximately $24,177 which has been calculated as pro forma
income from operations of approximately $24,652 plus GAAP depreciation
and amortization of $14,345 less tax basis depreciation and amortization
and other tax differences of approximately $14,820.
- -11-
<PAGE>
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>
LIBERTY
BOCA PRO PROPERTY
HISTORICAL COLONNADE FORMA TRUST
<F1> <F2> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 169,859 $ 1,592 $171,451
Operating expense reim-
bursement 55,502 1,090 56,592
Management fees 673 - 673
Interest and other 6,483 - 6,483
---------- --------- -----------
Total revenue 232,517 2,682 235,199
---------- --------- -----------
OPERATING EXPENSES
Rental property expenses 43,118 997 44,115
Real estate taxes 17,961 190 18,151
General and administrative 10,650 - 10,650
Depreciation and amorti-
zation 40,752 - $ 505 <F3> 41,257
---------- --------- --------- -----------
Total operating expenses 112,481 1,187 505 114,173
---------- --------- --------- -----------
Operating income 120,036 1,495 (505) 121,026
Premium on debenture
conversion 98 - - 98
Interest expense 53,888 - 1,370 <F4> 55,258
---------- --------- --------- -----------
Income (loss) before
minority interest 66,050 1,495 (1,875) 65,670
Minority interest 5,606 135 (170) <F5> 5,571
---------- --------- --------- -----------
Net income (loss) 60,444 1,360 (1,705) 60,099 <F6>
Preferred dividend 4,247 - - 4,247
---------- --------- --------- -----------
Income available to
common shareholders $ 56,197 $ 1,360 $ (1,705) $ 55,852
========== ========= ========== ===========
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
========== ===========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
- -12-
<PAGE>
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
Boca Colonnade in order to reflect a full year of operations for the
acquisition.
<F3> Reflects incremental depreciation of Boca Colonnade based on asset
lives of 40 years.
<F4> Reflects an incremental increase in interest expense from the
assumed borrowings of $20,180 on the credit facility to fund the
purchase of Boca Colonnade.
<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 $46,737 which has been calculated as pro forma
income from operations of approximately $60,099 plus GAAP depreciation
and amortization of $41,257 less tax basis depreciation and amortization
and other tax differences of approximately $54,619.
- -13-
<PAGE>
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 Boca Colonnade
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 Boca Colonnade, 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 Boca
Colonnade.
These pro forma statements may not necessarily be indicative of the
results that would have actually occurred if the acquisition of Boca
Colonnade 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-
<PAGE>
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF MARCH 31, 1998
(UNAUDITED, IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
PROPERTY
LIMITED
HISTORICAL PARTNERSHIP
<F1> BOCA COLONNADE CONSOLIDATED
---------- -------------- ------------
<S> <C> <C> <C>
ASSETS:
Investment in real estate, net $2,286,903 $ 20,180 <F2> $2,307,083
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 $ 20,180 $2,426,944
========== =========== ===========
LIABILITIES:
Mortgage loans $ 376,701 $ - $ 376,701
Unsecured notes 525,000 - 525,000
Credit facility 148,000 20,180 <F3> 168,180
Convertible debentures 109,253 - 109,253
Other liabilities 103,113 - 103,113
---------- ----------- -----------
Total liabilities 1,262,067 20,180 1,282,247
---------- ----------- -----------
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 $ 20,180 $2,426,944
========== =========== ===========
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
condensed consolidated financial statement.
- -15-
<PAGE>
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1998
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
PROPERTY
PRO LIMITED
HISTORICAL BOCA COLONNADE FORMA PARTNERSHIP
<F1> <F4> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 61,015 $ 398 $ 61,413
Operating expense reim-
bursement 20,250 273 20,523
Management fees 147 - 147
Interest and other 1,207 - 1,207
---------- --------- ------------
Total revenue 82,619 671 83,290
---------- --------- ------------
OPERATING EXPENSES
Rental property expenses 14,916 249 15,165
Real estate taxes 7,019 48 7,067
General and administrative 3,350 - 3,350
Depreciation and amorti-
zation 14,219 - $ 126 <F5> 14,345
---------- --------- ---------- ------------
Total operating expenses 39,504 297 126 39,927
---------- --------- ---------- ------------
Operating income 43,115 374 (126) 43,363
Interest expense 16,566 - 343 <F6> 16,909
---------- --------- ---------- ------------
Net income (loss) $ 26,549 $ 374 $ (469) $ 26,454
========== ========= ========== ============
Net income (loss)
allocated to general
partner $ 24,740 $ 346 $ (434) $ 24,652
Net income (loss)
allocated to limited
partners 1,809 28 (35) <F7> 1,802
========== ========= ========== ============
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
- -16-
<PAGE>
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 Boca Colonnade.
<F3> Reflects the use of $20,180 from the credit facility to finance
the Total Investment in Boca Colonnade.
<F4> Reflects the incremental addition of revenues and certain expenses
of Boca Colonnade in order to reflect a full three months of operations
for the acquisition.
<F5> Reflects incremental depreciation of Boca Colonnade based on asset
lives of 40 years.
<F6> Reflects an incremental increase in interest expense from the
assumed borrowings of $20,180 on the credit facility to fund the
purchase of Boca Colonnade.
<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-
<PAGE>
LIBERTY PROPERTY LIMITED PARTNERSHIP
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
LIBERTY
PROPERTY
BOCA PRO LIMITED
HISTORICAL COLONNADE FORMA PARTNERSHIP
<F1> <F2> ADJUSTMENTS CONSOLIDATED
---------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
REVENUE
Rental $ 169,859 $ 1,592 $ 171,451
Operating expense reim-
bursement 55,502 1,090 56,592
Management fees 673 - 673
Interest and other 6,483 - 6,483
---------- --------- ------------
Total revenue 232,517 2,682 235,199
---------- --------- ------------
OPERATING EXPENSES
Rental property expenses 43,118 997 44,115
Real estate taxes 17,961 190 18,151
General and administrative 10,650 - 10,650
Depreciation and amorti-
zation 40,752 - $ 505 <F3> 41,257
---------- --------- ---------- ------------
Total operating expenses 112,481 1,187 505 114,173
---------- --------- ---------- ------------
Operating income 120,036 1,495 (505) 121,026
Premium on debenture
conversion 98 - - 98
Interest expense 53,888 - 1,370 <F4> 55,258
---------- --------- ---------- ------------
Net income (loss) $ 66,050 $ 1,495 $ (1,875) $ 65,670
========== ========= ========== ============
Net income (loss)
allocated to general
partner $ 60,444 $ 1,360 $ (1,705) $ 60,099
Net income (loss)
allocated to limited
partners 5,606 135 (170) <F5> 5,571
========== ========= ========== ============
</TABLE>
The accompanying notes are an integral part of this unaudited, pro forma
consolidated financial statement.
- -18-
<PAGE>
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 Boca Colonnade in order to reflect a full year of operations for the
acquisition.
<F3> Reflects incremental depreciation of Boca Colonnade based on asset
lives of 40 years.
<F4> Reflects an incremental increase in interest expense from the
assumed borrowings of $20,180 on the credit facility to fund the
purchase of Boca Colonnade.
<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-
<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: June 24, 1998 BY: /s/ WILLARD G. ROUSE III
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NAME: Willard G. Rouse III
TITLE: Chief Executive Officer
LIBERTY PROPERTY LIMITED PARTNERSHIP
BY: LIBERTY PROPERTY TRUST,
SOLE GENERAL PARTNER
Dated: June 24, 1998 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. 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 24, 1998, with respect to the
Statement of Operating Revenues and Certain Operating Expenses for Boca
Colonnade, included in the Current Report on Form 8-K of Liberty
Property Trust and Liberty Property Limited Partnership dated June 24,
1998, filed with the Securities and Exchange Commission.
/s/ FEGLEY & ASSOCIATES
Fegley & Associates
Plymouth Meeting, PA
June 24, 1998
