Liberty Property Trust To Sell All Suburban Office Assets, Pivot To Industrial

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Great Valley Corporate Center In Malvern, Pa.

Liberty Property Trust is looking to fully exit the suburban office market this year.

The REIT is looking to sell all of its office properties outside of urban cores, including its remaining holdings in the Philadelphia suburbs, the Philadelphia Inquirer reports. That includes Vanguard Group's 1M SF campus within Great Valley Corporate center in Malvern, Pennsylvania.

The only property of that type Liberty intends to keep is its own headquarters within Great Valley. Liberty CEO William Hankowsky told the Inquirer he expects to net between $600M and $800M with the sales, which he hopes to complete by the end of the year.

Liberty plans to use the proceeds from the sell-off to fund its activity in industrial real estate, which remains the top-performing sector of commercial real estate, in both the Philadelphia and mid-Atlantic regions and farther afield, such as the industrial park it is building in the Dallas suburb of Irving, Texas.

It also will continue to hold onto its downtown assets, such as its properties in Logan Square and the Navy Yard in Philadelphia. With the impending completion of the Comcast Technology Center, Liberty will also have developed the two tallest buildings in Philadelphia by midyear.

Liberty had already sold a huge portion of its holdings in Great Valley in 2016 to Workspace Property Trust, but held back the buildings Vanguard occupies. Though Workspace has seen rough waters since acquiring the nearly $1B portfolio, Vanguard's long-term lease in Malvern should give Liberty substantial value.

In the Washington, D.C., suburbs, Liberty offloaded an eight-building portfolio within the Liberty Park corporate campus in the Dulles Corridor to MRP Realty in 2016

More recently, Liberty sold 14 office buildings in the Renaissance Park business campus in King of Prussia, Pennsylvania, to MLP Ventures (formerly O'Neill Properties Goup).

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