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Liberty Property’s (LPT) Tenant Signs Long-Term Lease Deal


Liberty Property Trust’s LPT industrial facilities are not only grabbing attention from prospective tenants, but also experiencing decent demand from the existing ones.

Recently, its short-term tenant, COKeM International LTD, inked a long-term lease deal for 162,000 square feet of space at 5651 Innovation Boulevard, Valley Park Business Center, in Shakopee, MN.

COKeM’s move-in in early spring upshots the occupancy of the 197,000-square-foot industrial building to 100%. COKeM had previously leased space in the property on short-term basis in 2016.

Notably, COKeM is headquartered within a few miles from the Valley Park Business Center. The move seems a strategic fit for the distributor of video games and accessories, as it will help in conductingits warehouse operations in the neighboring industrial building. Moreover, the facility offers a larger warehouse facility, in line with the needs of the fast growing company.

In addition, recently, another existing tenant, Cameron's Coffee, struck a lease renewal and expansion for 75,495 square feet of space at 5555 12th Avenue East in Shakopee, MN. This comprises the tenant’s present occupancy of 68,176 square feet and an addition of 7,319 square feet of space.

In fact, Liberty Property’s industrial portfolio, spanning 92.3 million square feet, was 95.9% leased at the end of second-quarter 2017, reflecting strong demand for space at its properties. Additionally, industrial distribution rents escalated 11.9% on renewal and replacement leases signed during the quarter.

Shares of Liberty Property have outperformed the industry it belongs to year to date. In fact, the company’s shares have logged in a gain of 5.4% against the 3.4% rally of the industry. Also, the stock has seen the Zacks Consensus Estimate for current-year funds from operation (FFO) per share being revised 0.4% upward in a month’s time.

Liberty Property currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Better-ranked stocks in the real estate investment trust (REIT) space include Seritage Growth Properties SRG, Sabra Healthcare REIT, Inc. SBRA and CoreSite Realty Corporation COR. While Seritage and Sabra Healthcare sports a Zacks Rank of 1 (Strong Buy), CoreSite Realty carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Seritage’s 2017 FFO per share estimates remained unchanged at $2.01 in the past month.

Sabra Healthcare’s FFO per share estimates for the current year climbed 3.4% to $2.43duringthe same time period.

CoreSite Realty’s FFO per share estimates for full-year 2017 inched up 0.2% to $4.46 in two months’ time.

Note: All EPS numbers presented in this write up represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

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