Liberty Property in talks to sell massive office portfolio

Liberty Property Trust has indicated that it is in discussions with a prospective buyer to sell a “large portfolio of suburban office assets.”

In a brief statement issued by the Malvern, Pa., real estate investment trust, the company said it intends to sell between $900 million and $1.2 billion of noncore suburban properties this year. Though it is in conversations with a potential buyer, Liberty said that it has “not entered into any binding sale agreement” and would not comment further until and unless it reaches an agreement.

A report in Real Estate Alert indicated Liberty might be in discussions with Workspace Property Trust to sell its suburban Philadelphia portfolio as well as potentially its properties in Minnesota and South Florida. 

“While the scope of any deal is still in flux, it could potentially encompass some 6.6 million square feet of office and flex space. Market pros estimate the valuation would be in the vicinity of $100-$110/sf, or up to $726 million,” the report said.

Liberty (NYSE: LPT) owns nearly 4 million square feet of suburban office space in the Philadelphia suburbs between its Great Valley Corporate Center in Malvern, Pa., and King of Prussia, Pa.

In December, Liberty exited the Horsham, Pa., office market with a $245.3 million portfolio sale of 41 buildings to Workspace Property, which is a partnership that involves Rizk Ventures, Forum Partners, JMP Group, and EverWatch Capital, bought the portfolio.

Roger Thomas, president and chief operating office of Worspace, is in acquisition mode and very bullish on the suburban office market. In an interview last week, Thomas told the Business Journal that he was looking to buy large suburban portfolios in the Philadelphia area and across the country as Wall Street pushes companies such as Liberty and Brandywine Realty Trust to pare down those holdings. As he aggressively grows Workspace, he said an option would be to eventually take the company public. Thomas couldn’t be reached for comment on this latest market rumor.

Source: Philadelphia Business Journal