This represents "an all-time high in terms of investment, and is exceptionally well leased," said Bill Hankowsky, CEO during a Q4, year-end conference call. During Q4, the locally based developer brought four new properties aggregating 650,000 sf into service at an investment of $51.2 million, and they are 93.9% leased.
At the same time, Liberty began development of eight properties totaling one million sf at an estimated investment of $62 million. They include a fully leased distribution facility in the Lehigh Valley, five properties in Orlando, one in Bloomington, MN, and a 341,000-sf distribution center in Greensboro, NC.
The developer now has 38 buildings under construction in 18 markets, and they are 50% leased, Hankowsky said. Nine are registered for LEED certification. He said the developments have a "low risk profile," because of the diversity of markets and product type, which includes office, industrial and flex.
By Dec. 31 Liberty had sold 25 Detroit properties, and has disposed of another 18 this year. Five more are in negations to be sold, and 30 have been listed for sale. Asked if it had been right to wait, Hankowsky said, "We haven't been waiting. There's no question it's the least attractive environment overall. It's not a great place to lease, and it's not a great place to sell, frankly. That's why we're getting out."
While closing its Detroit office, Liberty will open one in Phoenix within 30 days. In completing Vanguard Group Inc.'s call center in Scottsdale, AZ, Hankowsky said the company did thorough due diligence of the Phoenix market. It acquired a 115-acre site in nearby Goodyear that can accommodate 1.8 million sf of distribution and multi-tenant industrial space, and plans to break ground in late summer or early fall. Plans call for an additional investment of $150 million in that market this year.
The in-service portfolio of 65.3 million sf ended 2006 94.2% leased, "the best occupancy in the past five years," Hankowsky said. "Looking back five years, this is the most enthusiastic I have ever been."
Fourth-quarter operating revenue rose to $175.7 million, up from $160.5 million in the same quarter a year ago. Net income, however, fell to $60.8 million, down from $107.3 million in the prior-year quarter, because gains on the sale of properties were lower in the final quarter of 2006.
Shares of LRY hit a 52-week high of $52.94 a share on the NYSE on Feb. 1 and leveled to $52.51 a share by mid-day Feb. 2, but were still up nearly 1.2% since that day's opening. The 52-week low of $41.07 a share occurred on May 24, 2006.
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