Liberty Property Trust (LRY), a real estate investment trust (REIT), has recently acquired ‘1100 17th Street NW’ – a premium office property spanning 146,472 square feet of space, in Washington DC from Glenborough, LLC – a privately held full service real estate investment and management company. The purchase price of approximately $50.0 million equated to about $340 per square foot.
The acquired property, which is currently 82% leased, is strategically located in the heart of Washington’s central business district area at about three blocks away from the White House, and is in close proximity to multiple Metro stations. Developed in 1963, the 12-storied office building was substantially renovated in 1998 to add incremental value in tune with its indispensable location.
The acquisition is expected to be accretive to future earnings due to its significant untapped potential. Liberty Property presently intends to focus on leasing the building’s 53,827 square feet of vacant space in the short-term. On a long-term basis, the company expects to undertake considerable redevelopment initiatives to create a Class-A property which is more commensurate with its superior location advantage.
Based in Pennsylvania, Liberty Property provides leasing, property management, development, construction management, design management, and related services for a portfolio of industrial and office properties. The company has a strong portfolio of multi-tenant industrial and office properties in prime business locations in the U.S. and U.K., and operates across multiple markets that enable mitigation of geographical risk.
Liberty Property specifically focuses on metro-office, multi-tenant industrial and flex properties and markets that possess strong demographic and economic fundamentals, which ensure a steady revenue stream for the company.
We maintain our long-term ‘Neutral’ recommendation for Liberty Property, which currently has a Zacks #3 Rank that translates into a short-term ‘Hold’ rating. We also have a long-term ‘Neutral’ recommendation and a Zacks #3 Rank for Duke Realty Corp. (DRE), one of the competitors of Liberty Property.
