Liberty Property CEO: 'Fundamentals Remain Ugly'

MALVERN, PA-Liberty Property Trust is faring well in the recession compared to a number of other REITs, but the going for the firm isn’t exactly easy, said Bill Hankowsky, chief executive officer, during his company’s second-quarter conference call. “Real estate fundamentals remain ugly,” he said.

Part of that ugliness is the fact that tenants are trying to get recessions and rent breaks in this environment. “The pressure on rents is intense,” Hankowsky said. “Every deal is a fight.”

The area where Liberty, the owner of 77 million square feet of office and industrial, is seeing its toughest occupancy challenges is in the big box industrial sector, with single-use buildings more than 500,000 square feet that are normally housed by retailers or consumer-products companies. “These guys, fundamentally, are almost extinct in the market,” Hankowsky said. Liberty’s overall occupancy came in at 89.4%, down from 90.1% during the prior-year period.