Liberty REIT Trades $1B of Suburban Assets

Rizk says the deal represents “the next step of our strategic plan to build a portfolio of high quality, well-positioned suburban real estate assets.”

HORSHAM, PA—Privately held Workspace Property Trust will more than quadruple the size of its portfolio when its $969-million acquisition from Liberty Property Trust closes. The deal, which WPT is making in partnership with Safanad Ltd., will add 108 properties totaling 7.6 million square feet in four states to what currently is a 2.3-million-square-foot office and flex portfolio located entirely within WPT’s hometown of Horsham, PA. The Horsham portfolio was acquired from LPT this past December for $245.3 million, thus marking the debut of WPT, formed by CEO Thomas Rizk, president and COO Roger Thomas and EVP and CFO Howard Sipzner. This past spring, Malvern, PA-based LPT announced that it intended to sell between $900 million and $1.2 billion of non-core suburban properties during 2016; Monday’s announcement is consistent with that intent. “We are excited about entering into this new relationship with Safanad and this acquisition represents the next step of our strategic plan to build a portfolio of high quality, well-positioned suburban real estate assets,” says Rizk. At Safanad, founder and CEO Kamal Bahamdan says his company aligns itself with “experienced industry partners through carefully selected investments.  We are looking forward to working with Tom, Roger and the rest of the Workspace team who have extensive experience and a distinguished track record of creating value in suburban office markets. We have worked with and known them for over 20 years and this experience gives us great confidence in the future of this platform.” Although the acquisition from LPT will give WPT another 2.1 million square feet of suburban Philadelphia properties, including 406,578 square feet of industrial space, the largest share by state will come from Florida. The deal includes 1.1 million square feet in South Florida, along with 8.6 acres of developable land, and about 1.8 million square feet of mainly flex space in the state’s Tampa region. Another 1.1 million square feet is concentrated in suburban Phoenix, as well as 18.1 acres; the remaining 1.5 million square feet is located in Minnesota’s Twin Cities suburbs.  The properties were 88.9% leased as of June 30. LPT says the deal is not subject to due diligence or financing contingencies. The sale is expected to close late in the third quarter.