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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)


þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2006


o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


Commission file numbers:		1-13130 (Liberty Property Trust)
		1-13132 (Liberty Property Limited Partnership)

LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP

(Exact Names of Registrants as Specified in Their Governing Documents)


MARYLAND (Liberty Property Trust)		23-7768996
PENNSYLVANIA (Liberty Property Limited Partnership)		23-2766549


(State or Other Jurisdiction		(I.R.S. Employer
of Incorporation or Organization)		Identification Number)

500 Chesterfield Parkway Malvern, Pennsylvania		19355

(Address of Principal Executive Offices)		(Zip Code)

Registrants’ Telephone Number, including Area Code		(610) 648-1700

Securities registered pursuant to Section 12(b) of the Act:
		NAME OF EACH EXCHANGE
TITLE OF EACH CLASS		ON WHICH REGISTERED

Common Shares of Beneficial Interest,
$0.001 par value
(Liberty Property Trust)		New York Stock Exchange

Preferred Share Purchase Rights,
$0.0001 par value
(Liberty Property Trust)		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

YES þ NO o

Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act.

YES o NO þ

Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past ninety (90) days.

YES þ NO o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of the Registrants’ knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer or a non-accelerated filer. (See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act). (Check one):

LARGE ACCELERATED FILER þ ACCELERATED FILER o NON-ACCELERATED FILER o

Indicate by check mark if the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES o NO þ

The aggregate market value of the Common Shares of Beneficial Interest, $0.001 par value (the “Common Shares”), of Liberty Property Trust held by non-affiliates of Liberty Property Trust was $4.0 billion, based upon the closing price of $44.20 on the New York Stock Exchange composite tape on June 30, 2006. Non-affiliate ownership is calculated by excluding all Common Shares that may be deemed to be beneficially owned by executive officers and trustees, without conceding that any such person is an “affiliate” for purposes of the federal securities laws.

Number of Common Shares outstanding as of February 23, 2007: 91,402,800

Documents Incorporated by Reference

Portions of the proxy statement for the annual meeting of shareholders of Liberty Property Trust to be held in 2007 are incorporated by reference into Part III of this Form 10-K.

The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking statements. Certain information included in this Annual Report on Form 10-K and other materials filed or to be filed by the Company (as defined herein) with the Securities and Exchange Commission (“SEC”) (as well as information included in oral statements or other written statements made or to be made by the Company) contain statements that are or will be forward-looking, such as statements relating to rental operations, business and property development activities, joint venture relationships, acquisitions (including related pro forma financial information), dispositions, future capital expenditures, financing sources and availability, and the effects of regulation (including environmental regulation) and competition. These forward-looking statements generally are accompanied by words such as “believes,” “anticipates,” “hopes,” “expects,” “estimates,” “should,” “seeks,” “intends,” “planned,” “outlook” and “goal” or similar expressions. Although the Company believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, the Company can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve important risks, uncertainties and other factors that could cause actual results to differ materially from the expected results and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of the Company. The Company assumes no obligation to update or supplement forward looking statements that become untrue because of subsequent events. These risks, uncertainties and other factors include, without limitation, uncertainties affecting real estate businesses generally (such as entry into new leases, renewals of leases and dependence on tenants’ business operations), risks relating to our ability to maintain and increase property occupancy and rental rates, risks relating to construction and development activities, risks relating to acquisition and disposition activities, risks relating to joint venture relationships and any possible need to perform under certain guarantees that we have issued or may issue in connection with such relationships, possible environmental liabilities, risks relating to leverage and debt service (including availability of financing terms acceptable to the Company and sensitivity of the Company’s operations and financing arrangements to fluctuations in interest rates), dependence on the primary markets in which the Company’s properties are located, the existence of complex regulations relating to status as a REIT and the adverse consequences of the failure to qualify as a REIT, and the potential adverse impact of market interest rates on the market price for the Company’s securities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Forward-Looking Statements.”

PART I

ITEM 1. BUSINESS

The Company

The Company completed its initial public offering in 1994 to continue and expand the commercial real estate business of Rouse & Associates, a Pennsylvania general partnership, and certain affiliated entities (collectively, the “Predecessor”) which was founded in 1972. As of December 31, 2006, the Company’s portfolio consisted of 720 industrial and office properties (the “Properties in Operation”) totaling 65.3 million square feet. In addition, at that date, the Company had 38 properties under development, which when completed are expected to add 7.4 million square feet to the Company’s portfolio (the “Properties Under Development” and, together with the Properties in Operation, the “Properties”), and owned 1,607 acres of land, substantially all of which was zoned for commercial use. Included in the above totals are 48 Properties in Operation comprising 6.2 million square feet, five Properties Under Development expected to add 1.1 million square feet and 283 acres of developable land owned by unconsolidated joint ventures in which the Company has an interest.

The Company provides leasing, property management, development, acquisition and other tenant-related services for the Properties in Operation. The Company’s industrial Properties consist of a variety of warehouse, distribution, service, assembly, light manufacturing and research and development facilities. They include both single-tenant and multi-tenant facilities, with most designed flexibly to accommodate various types of tenants, space requirements and industrial uses. The Company’s office Properties are multi-story and single-story office buildings located principally in suburban mixed-use developments or office parks. Substantially all of the Company’s Properties are located in prime business locations within established business communities. In addition, the Company is developing a 1.25 million square foot office tower, known as the Comcast Center, in Philadelphia’s central business district.

The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 95.6% of the common equity of the Operating Partnership at December 31, 2006. The common units of limited partnership interest in the Operating Partnership (the “Common Units”), other than those owned by the Trust, are exchangeable on a one-for-one basis (subject to anti-dilution protections) for the Trust’s Common Shares of Beneficial Interest, $0.001 par value per share (the “Common Shares”). The Common Units held by the limited partners were exchangeable for 4.2 million Common Shares on December 31, 2006. The Company has issued Cumulative Redeemable Preferred Units of the Operating Partnership (the “Preferred Units”). The outstanding Preferred Units are exchangeable on a one-for-one basis after stated dates into Cumulative Redeemable Preferred Shares of the Trust. Collectively, the ownership of the holders of Common and Preferred Units is reflected on the Trust’s financial statements as minority interest.

In addition to this Annual Report on Form 10-K, the Company files periodic and current reports, proxy statements and other information with the SEC. The Company makes these documents available on its website, www.libertyproperty.com, free of charge, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the SEC. You may also read and copy any document the Company files with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington, DC 20549. Please call the SEC at (800) SEC-0330 for further information about the public reference facilities. These documents also may be accessed through the SEC’s electronic data gathering, analysis and retrieval system (“EDGAR”) via electronic means, including the SEC’s home page on the Internet, www.sec.gov.

Also posted on the Company’s website is the Company’s Code of Conduct, which applies to all of its employees and also serves as a code of ethics for its chief executive officer, chief financial officer and persons performing similar functions. The Company will send the Code of Conduct, free of charge, to anyone who requests a copy in writing from its Investor Relations Department at the address set forth on the cover of this filing. The Company intends to satisfy the disclosure requirement under Item 5.05 of Form 8-K regarding any amendments to or waivers of the Code of Conduct by posting the required information in the Corporate Governance area of its website.

Management and Employees

The Company’s 474 employees (as of February 23, 2007) operate under the direction of 19 senior executives, who, on average, have been affiliated with the Company and the Predecessor for 15 years. The Company and the Predecessor have developed and managed commercial real estate for the past 34 years. The Company’s in-house leasing and property management staff operate in markets where it has a significant presence. This structure enables the Company to better understand the characteristics of the local markets in which it operates, to respond quickly and directly to tenant needs and to better identify local real estate opportunities. At December 31, 2006, the Company’s reportable segments were based on the Company’s method of internal reporting and are as follows:


Reportable Segments		Markets
Delaware Valley		Southeastern Pennsylvania; New Jersey
Midwest		Lehigh Valley, Pennsylvania; Michigan; Minnesota; Milwaukee; Chicago
Mid-Atlantic		Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia Beach
Florida		Jacksonville; Orlando; Boca Raton; Tampa; Texas
United Kingdom		County of Kent

Business Objective and Strategies for Growth

The Company’s business objective is to maximize long-term profitability for its shareholders by being a recognized leader in commercial real estate through the ownership, management, development and acquisition of superior office and industrial properties. The Company intends to achieve this objective through offering office and industrial properties in multiple markets and operating as a leading landlord in the industry. The Company believes that this objective will provide the benefits of enhanced investment opportunities, economies of scale, risk diversification both in terms of geographic market and real estate product type, access to capital, and the ability to attract and retain personnel. The Company also strives to be a leading provider of customer service, providing an exceptional and positive customer experience. In pursuing its business objective, the Company seeks to achieve a combination of internal and external growth, maintain a conservative balance sheet and pursue a strategy of financial flexibility.

Products

The Company strives to be a recognized quality provider of five products (industrial properties, including big box warehouse, multi-tenant industrial, and flex/R&D; and office properties, including single-story office and multi-story office). When the Company’s marketing efforts identify opportunities, the Company will, on occasion, pursue other office and industrial product types including high rise office towers.

Markets

The Company operates primarily in the Mid-Atlantic, Southeastern and Midwestern United States. Additionally, the Company owns certain assets in the United Kingdom. The Company recently announced its intention to enter the Phoenix, Arizona market and exit the Michigan market. The Company’s goal is to operate in each of its markets with an appropriate product mix of office and industrial properties. Generally, the Company seeks to have a presence that allows it to be viewed as a significant participant in each market. The Company’s efforts emphasize business park development and asset aggregation. The Company gathers information from internal sources and independent third parties and analyzes this information to support its evaluation of markets and market conditions.

Organizational Plan

The Company seeks to maintain a management organization that facilitates efficient execution of the Company’s strategy. As part of this effort, the Company pursues a human resources plan designed to create and maintain a highly regarded real estate company through recruiting, training and retaining capable people. The structure is designed to support a local office entrepreneurial platform operating within a value-added corporate structure. The Company upgrades its information technology periodically to keep pace with advances in available technology.

Internal Growth Strategies

The Company seeks to maximize the profitability of its Properties by endeavoring to maintain high occupancy levels while obtaining competitive rental rates, controlling costs and focusing on customer service efforts.

Maintain High Occupancies

The Company believes that the quality and diversity of its tenant base and its strategy of operating in multiple markets is integral to achieving its goal of attaining high occupancy levels for its portfolio. The Company targets financially stable tenants in an effort to minimize uncertainty relating to the ability of the tenants to meet their lease obligations.

Cost Controls

The Company seeks to identify best practices to apply throughout the Company in order to enhance cost savings and other efficiencies. The Company also employs an annual capital improvement and preventative maintenance program designed to reduce the operating costs of the Properties and maintain the long-term value of the Properties.

Customer Service

The Company seeks to achieve high tenant retention through a comprehensive customer service program, which is designed to provide an exceptional and positive customer experience. The customer service program establishes best practices and provides an appropriate customer feedback process. The Company believes that the program has been helpful in increasing customer satisfaction.

Energy Efficient Initiatives

The Company is committed to improving the energy efficiency of the existing buildings in its portfolio and has made a substantial effort to design environmentally friendly features in the buildings it develops.

The Company has been an active participant in the U.S. Green Building Council’s Leadership in Energy and Environmental Design (“LEED”) program. The LEED program, which was created to recognize environmental leadership in the building industry, establishes a voluntary, consensus-based national standard for developing high-performance, sustainable buildings. The Company currently has over three million square feet of LEED projects completed or under construction. In 2006, the Company earned the U.S. Green Building Council LEED Award for Corporate Leadership.

The Company believes that building in accordance with LEED standards is environmentally responsible and can lead to significant operating efficiencies. The Company belives that green building techniques such as construction waste management (recycling waste onsite); energy conservation (occupancy sensors associated with lighting and high performance HVAC systems); and improvement of environmental quality (maximization of daylight and use of low-emitting materials) can result in positive environmental results and significant economic returns to tenants in terms of savings in operating costs and improved employee performance.

The Company has also taken significant steps to improve the energy efficiency of the existing buildings in the portfolio. These efforts have included, in various cases: (1) performing lighting retrofits to upgrade older fluorescent bulbs with magnetic ballasts with newer bulbs utilizing electronic ballasts; (2) installing and upgrading building automation systems to provide a greater level of control in order to reduce energy consumed; (3) installing white roof systems designed to lower thermal heat gains associated with traditional black roof surfaces; (4) installing “economizer” fresh air units that allow cooling from outside fresh air on cooler days; (5) implementing common area and parking lot lighting controls designed to increase energy efficiency; and (6) establishing a green property management guide and green training program for its property management staff.

External Growth Strategies

The Company seeks to enhance its long-term profitability through the development, acquisition and disposition of properties either directly or through joint ventures.

Development

The Company pursues attractive development opportunities, focusing primarily on high-quality suburban industrial and office properties within its existing markets. When the Company’s marketing efforts identify opportunities, the Company will consider pursuing urban opportunities and development opportunities outside of the Company’s established markets. The Company and its Predecessor have developed over 50 million square feet of commercial real estate during the past 34 years. The Company’s development activities generally fall into two categories: build-to-suit projects and projects built for inventory (projects that are less than 75% leased prior to commencement of construction). The Company develops build-to-suit projects for existing and new tenants. The Company also builds properties for inventory where the Company has identified sufficient demand at market rental rates to justify such construction.

During the year ended December 31, 2006, the Company completed five build-to-suit projects and 16 inventory projects totaling 2.3 million square feet and representing an aggregate Total Investment, as defined below, of $211.8

million. As of December 31, 2006, these completed development properties were 96.2% leased. The “Total Investment” for a Property is defined as the Property’s purchase price plus closing costs and management’s estimate, as determined at the time of acquisition, of the cost of necessary building improvements in the case of acquisitions, or land costs and land and building improvement costs in the case of development projects, and, where appropriate, other development costs and carrying costs.

As of December 31, 2006 the Company had 32 wholly owned Properties Under Development, excluding Comcast Center, which are expected to comprise, upon completion, 5.0 million square feet and are expected to represent a Total Investment of $456.3 million. These Properties Under Development were 50.3% pre-leased as of December 31, 2006. The scheduled deliveries of the 5.0 million square feet in Properties Under Development are as follows (in thousands, except percentages):



	Square Feet								Percent Leased			Total
Scheduled In-Service Date	Ind-Dist.		Ind-Flex		Office		Total		December 31, 2006			Investment
1^st Quarter 2007		—		79		134		213		78.4	%	$	25,281
2^nd Quarter 2007		1,063		34		160		1,257		88.7	%		98,417
3^rd Quarter 2007		552		139		230		921		79.8	%		89,022
4^th Quarter 2007		968		—		450		1,418		31.7	%		124,804
1^st Quarter 2008		–		83		74		157		—			19,924
2^nd Quarter 2008		461		208		—		669		7.5	%		44,660
3^rd Quarter 2008		—		116		251		367		—			54,183

Total		3,044		659		1,299		5,002		50.3	%	$	456,291

In addition to the above Properties Under Development, the Company is constructing the Comcast Center, a 1.25 million square foot office tower in Philadelphia’s central business district. In February 2007, Comcast Corporation signed an amendment to its lease for an additional 152,000 square feet. Comcast’s lease is now for 1,095,000 square feet and is for 15 ¹/2 years. The Comcast Center is designed to achieve LEED Certification. Costs associated with incremental leasing and certain other costs have increased the projected Total Investment of this building to $495 million.

In addition, unconsolidated joint ventures in which the Company has an interest had five Properties Under Development at December 31, 2006 which are expected to comprise, upon completion, 1.1 million leaseable square feet and are expected to represent a Total Investment of $85.1 million.

The Company believes that, because it is a fully integrated real estate firm, its base of commercially zoned land in existing industrial and office business parks provides a competitive advantage for future development activities. As of December 31, 2006, the Company owned 1,324 acres of land held for development and unconsolidated joint ventures in which the Company has an interest owned 283 acres of land held for development, substantially all of which is zoned for commercial use. Substantially all of the land is located adjacent to or within existing industrial or business parks with site improvements, such as public sewers, water and utilities, available for service. The Company anticipates that its land holdings would support, as and when developed, 16.3 million square feet of property. The Company’s investment in land held for development as of December 31, 2006 was $195.3 million.

Acquisitions/Dispositions

The Company seeks to acquire properties consistent with its business objectives and strategies. The Company executes its acquisition strategy by purchasing properties that management believes will create shareholder value over the long-term.

During the year ended December 31, 2006, the Company acquired 23 properties comprising 2.5 million square feet for a Total Investment of $306.5 million. In addition, a joint venture in which the Company has a 25% interest acquired one property comprising 409,000 square feet for $13.8 million.

The Company disposes of properties and land held for development which no longer fit within the Company’s strategic plan, or with respect to which the Company believes it can optimize cash proceeds. During the year ended December 31, 2006, the Company sold 40 operating properties, which contained 4.0 million square feet of leaseable space, and five acres of land, for an aggregate of $398.2 million. The Company also sold six operating properties which contained 2.1 million square feet and 104 acres of land in Chicago to an unconsolidated joint venture in which the Company retained a 25% interest for $125.0 million. In addition, unconsolidated joint ventures in which the Company has an interest sold two properties which contained 143,000 square feet of leaseable space and six acres of land for $9.9 million. See Joint Ventures below.

Joint Ventures

The Company, from time to time, considers joint venture opportunities with institutional investors or other real estate companies. Joint venture partnerships provide the Company with additional sources of capital to share investment risk and fund capital requirements. In some instances, joint venture partnerships provide the Company with additional local market or product type expertise.

In April 2006, the Company entered into a joint venture with an affiliate of Commerzleasing und Immobilien AG, a wholly-owned subsidiary of Commerzbank AG, whereby the Company sold an 80% interest in the equity of Comcast Center. The transaction valued the property at $512 million. The joint venture obtained a $324 million forward loan commitment from Citigroup Global Markets Realty Corp, at a rate of 6.15% assuming the loan will close in March 2008. The Company is the managing general partner of the joint venture. In addition to retaining a 20% interest in the joint venture, the Company will earn leasing and property management fees, as well as a possible promoted interest if certain return thresholds are met. The development of Comcast Center is on schedule for a phased occupancy beginning in late 2007. Including the lease with the Comcast Corporation and leases with other tenants, there are signed leases for 91.2% of the Comcast Center’s leaseable space. Under the terms of the joint venture agreement, the Company is obligated to complete development of the building, the cost of which is approximately $495 million, and also complete the initial leasing of the property. The criteria for sale recognition in accordance with SFAS No. 66 “Accounting for the Sale of Real Estate,” have not been met and this transaction is being accounted for as a financing arrangement.

In April 2006, the Company entered into a joint venture with the New York State Common Retirement Fund. The Company sold six distribution buildings totaling 2.1 million square feet and 104 acres of developable land, valued at an aggregate of $125.0 million, to the joint venture. The Company retained a 25% ownership position in the joint venture, and will receive development, leasing and property management fees, and may receive a promoted interest if certain return thresholds are met. The venture is financed with approximately 60% leverage. The joint venture will seek to grow its portfolio through acquisition, development and redevelopment of under-utilized distribution properties. It is expected that the joint venture will grow to hold approximately $500 million in assets.

As of December 31, 2006, the Company had investments in unconsolidated joint ventures totaling $47.2 million.

United Kingdom Operations

The Company maintains a presence in certain markets in the United Kingdom. Its principal operations are located in the County of Kent, England. The Company has an agreement with the Kent County Council for the development of an 800 acre mixed commercial and residential community in the County of Kent. The community known as “Kings Hill” is located approximately 25 miles southeast of London. The community has been developed over the past decade pursuant to the development agreement between the Kent County Council and the Company. The development agreement with the Kent County Council requires the Company to construct land infrastructure and allows the Company to develop commercial space and entitles it to receive certain proceeds from the sale of land parcels.

In December 2005, the Company partnered with Doughty Hanson & Co. Real Estate on a $219.9 million joint venture comprising the majority of the Company’s office and flex portfolio in the first phase at Kings Hill. The Company sold 15 Properties in Operation totaling 535,000 square feet to this joint venture. The joint venture was financed with $163.4 million of secured debt and the Company retained a 20% interest in the joint venture. The Company earns fees for managing the assets and may receive a promoted interest if certain return thresholds are met.

The Company has received planning consent for a second phase which provides for the development of an additional one million square feet of commercial space and for 750 residential units. The Doughty Hanson joint venture does not own an interest in the second phase.

The Company has also invested in two additional joint ventures to develop projects in separate locations in England. The Company believes that its development expertise, its access to capital and its relationship with tenants engaged in international business will create opportunities to service the needs of these tenants in both the United States and the United Kingdom.

The Company continues to attempt to identify other development and acquisition opportunities in the United Kingdom.

ITEM 1A. RISK FACTORS

The Company’s results of operations and the ability to make distributions to our shareholders and pay debt service on our indebtedness may be affected by the risk factors set forth below. (The Company refers to itself as “we”, “us” or “our” in the following risk factors.) This section contains some forward looking statements. You should refer to the explanation of the qualifications and limitations on forward looking statements on page 3.

Risks Related to Our Business

Unfavorable events affecting our existing tenants, or negative market conditions that may affect our existing tenants, could have an adverse impact on our ability to attract new tenants, relet space, collect rent or renew leases, and thus could have a negative effect on our cash flow from operations and inhibit growth.
Our cash flow from operations depends on our ability to lease space to tenants on economically favorable terms. Therefore, we could be adversely affected by various facts and events over which we have limited control, such as:

	•		lack of demand for space in the areas where our Properties are located

	•		inability to retain existing tenants and attract new tenants

	•		oversupply of or reduced demand for space and changes in market rental rates

	•		defaults by our tenants or their failure to pay rent on a timely basis

	•		the need to periodically renovate and repair our space

	•		physical damage to our Properties

	•		economic or physical decline of the areas where our Properties are located

	•		potential risk of functional obsolescence of our Properties over time

At any time, any of our tenants may experience a downturn in its business that may weaken its financial condition. As a result, a tenant may delay lease commencement, fail to make rental payments when due, decline to extend a lease upon its expiration, become insolvent or declare bankruptcy. Any tenant bankruptcy or insolvency, leasing delay or failure to make rental payments when due could result in the termination of the tenant’s lease and material losses to our Company.

If our tenants do not renew their leases as they expire, we may not be able to rent the space. Furthermore, leases that are renewed, and some new leases for space that is relet, may have terms that are less economically favorable to us than current lease terms, or may require us to incur significant costs, such as for renovations, tenant improvements or lease transaction costs.

Any of these events could adversely affect our cash flow from operations and our ability to make expected distributions to our shareholders and service our indebtedness.

A significant portion of our costs, such as real estate taxes, insurance costs, and debt service payments, generally are not reduced when circumstances cause a decrease in cash flow from our Properties.

We may not be able to compete successfully with other entities that operate in our industry.

We experience a great deal of competition in attracting tenants for our Properties and in locating land to develop and properties to acquire.

In our effort to lease our Properties, we compete for tenants with a broad spectrum of other landlords in each of our markets. These competitors include, among others, publicly-held REITs, privately-held entities, individual property owners and tenants who wish to sublease their space. Some of these competitors may be able to offer prospective tenants more attractive financial or other terms than we are able to offer.

We may experience increased operating costs, which could adversely affect our operations.

Our Properties are subject to increases in operating expenses such as insurance, cleaning, electricity, heating, ventilation and air conditioning, general and administrative costs and other costs associated with security, landscaping, repairs and maintenance. While our current tenants generally are obligated to pay a significant portion of these costs, there is no assurance that these tenants will make such payments or agree to pay these costs upon renewal or that new tenants will agree to pay these costs. If operating expenses increase in our markets, we may not be able to increase rents or reimbursements in all of these markets so as to meet increased expenses without at the same time decreasing occupancy rates. If this occurs, our ability to make distributions to shareholders and service our indebtedness could be adversely affected.

Our ability to achieve growth in operating income depends in part on our ability to develop properties which may suffer under certain circumstances.

We intend to continue to develop properties where warranted by market conditions. We have a number of ongoing development projects and a number of land projects being readied for development. These projects include the Comcast Center, a 1.25 million square foot office tower in Philadelphia’s central business district, which is discussed below.

Additionally, our general construction and development activities include the risks that:

	•		construction and leasing of a property may not be completed on schedule, which could result in increased expenses and construction costs, and would result in reduced profitability for that property

	•		construction costs may exceed our original estimates due to increases in interest rates and increased materials, labor or other costs, possibly making the property unprofitable because we may not be able to increase rents to compensate for the increase in construction costs

	•		some developments may fail to achieve expectations, possibly making them unprofitable

	•		we may be unable to obtain, or may face delays in obtaining, required zoning, land-use, building, occupancy, and other governmental permits and authorizations, which could result in increased costs and could require us to abandon our activities entirely with respect to a project

	•		we may abandon development opportunities after we begin to explore them and as a result, we may fail to recover costs already incurred. If we alter or discontinue our development efforts, past and future costs of the investment may need to be expensed rather than capitalized and we may determine the investment is impaired, resulting in a loss

	•		we may expend funds on and devote management’s time to projects that we do not complete

	•		occupancy rates and rents at newly completed properties may fluctuate depending on a number of factors, including market and economic conditions, and may result in lower than projected rental rates with the result that our investment is not profitable

Our Comcast Center project is subject to a number of risks related to its development, construction and leasing.

We commenced construction of the 1.25 million square foot Comcast Center, located in downtown Philadelphia, in January 2005. The office tower is expected to be ready for initial occupancy to commence on the lower floors in the fall of 2007. Comcast Corporation has signed a 15¹/2 year lease for 1,095,000 square feet, or 87.4%, of the building’s leaseable space. Including the lease with Comcast Corporation and leases with other tenants, there are signed leases for 91.2% of the Comcast Center’s leaseable space. The total project cost to be incurred by us is expected to be $495 million.

In April 2006, the Company entered into a joint venture with an affiliate of Commerzleasing and Immobilien AG, a wholly-owned subsidiary of Commerzbank AG, whereby the Company sold an 80% interest in the equity of Comcast Center. Under the terms of the joint venture, the Company is obligated to complete development of the building and complete the initial leasing of the property.

Development of a project such as Comcast Center is subject to the general development and construction risks noted above. Those risks are magnified by the size of the project, and include construction risks associated with undertaking a construction project with the engineering and design complexities of an office tower. If we fail to achieve the completion deadlines set forth in the lease with Comcast, we will be responsible for damages incurred by Comcast Corporation.

The project is subject to leasing risk as to the portion of the building not leased.

We face risks associated with property acquisitions.

We acquire individual properties and portfolios of properties, and intend to continue to do so. Our acquisition activities and their success are subject to the following risks:

	•		when we are able to locate a desirable property, competition from other real estate investors may significantly increase the purchase price

	•		acquired properties may fail to perform as expected

	•		the actual costs of repositioning or redeveloping acquired properties may be higher than our estimates

	•		acquired properties may be located in new markets where we face risks associated with an incomplete knowledge or understanding of the local market, a limited number of established business relationships in the area and a relative unfamiliarity with local governmental and permitting procedures

•

we may be unable to quickly and efficiently integrate new acquisitions, particularly acquisitions of portfolios of properties, into our existing operations, and as a result, our results of operations and financial condition could be adversely affected

We may acquire properties subject to liabilities and without any recourse, or with only limited recourse, with respect to unknown liabilities. As a result, if a liability were asserted against us based upon ownership of those properties, we might have to pay substantial sums to settle it, which could adversely affect our cash flow.

Many of our Properties are concentrated in our primary markets, and we therefore may suffer economic harm as a result of adverse conditions in those markets.

Our Properties are located principally in specific geographic areas in the Mid-Atlantic, Southeastern and Midwestern United States and the United Kingdom. Due to the concentration of our Properties in these areas, performance is dependent on economic conditions in these areas. These areas have experienced periods of economic decline.

We may not be able to access financial markets to obtain capital on a timely basis, or on acceptable terms.

In order to qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our taxable income to shareholders each year, and thus cannot reinvest this portion of income in the business. As a result, retained cash flows are somewhat limited and we rely on proceeds from property dispositions and third party capital sources for a portion of our capital needs, including capital for acquisitions and development. The public debt and equity markets are among the sources we rely on. There is no guarantee that we will be able to access these markets, or any other source of capital, on attractive terms or at all. The ability to access the public debt and equity markets depends on a variety of factors, including:

	•		general economic conditions affecting these markets

	•		our own financial structure and performance

	•		the market’s opinion of REITs in general

	•		the market’s opinion of REITs that own properties like ours

We may suffer adverse effects as a result of the terms of and covenants relating to our indebtedness.

Required payments on our indebtedness generally are not reduced if the economic performance of the portfolio declines. If the economic performance declines, net income, cash flow from operations and cash available for distribution to shareholders will be reduced. If payments on debt cannot be made, we could sustain a loss, or in the case of mortgages, suffer foreclosures by mortgagees or suffer judgments. Further, some obligations, including our $600 million credit facility and $2.0 billion in unsecured notes issued in past public offerings, contain cross-default and/or cross-acceleration provisions, as does $44.2 million in outstanding mortgage indebtedness at December 31, 2006, which means that a default on one obligation may constitute a default on other obligations.

We anticipate that only a small portion of the principal of our debt will be repaid prior to maturity. Therefore, we generally need to refinance our outstanding debt as it matures. There is a risk that we may not be able to refinance existing debt or that the terms of any refinancing will not be as favorable as the terms of our existing debt. If principal payments due at maturity cannot be refinanced, extended or repaid with proceeds from other sources, such as the proceeds of sales of assets or new equity securities, our cash flow will not be sufficient to repay all maturing debt in years when significant “balloon” payments come due.

Our credit facility and unsecured debt securities contain customary restrictions, requirements and other limitations on our ability to incur indebtedness, including total debt to asset ratios, secured debt to total asset ratios, debt service coverage ratios and minimum ratios of unencumbered assets to unsecured debt which we must maintain. Our continued ability to borrow under our $600 million credit facility is subject to compliance with our financial and other covenants. In addition, our failure to comply with such covenants could cause a default under this credit facility, and we may then be required to repay such debt with capital from other sources. Under those circumstances, other sources of capital may not be available to us, or be available only on unattractive terms.

Our degree of leverage could limit our ability to obtain additional financing or affect the market price of our common stock.

Our degree of leverage could affect our ability to obtain additional financing for working capital, capital expenditures, acquisitions, development or other general corporate purposes. Our senior unsecured debt is currently rated investment grade by the three major rating agencies. However, there can be no assurance we will be able to maintain this rating, and in the event our senior debt is downgraded from its current rating, we would likely incur higher borrowing costs. Our degree of leverage could also make us more vulnerable to a downturn in business or the economy generally.

Further issuances of equity securities may be dilutive to current shareholders.

The interests of our existing shareholders could be diluted if we issue additional equity securities to finance future developments, acquisitions, or repay indebtedness. Our Board of Trustees can authorize the issuance of additional securities without shareholder approval. Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, including unsecured lines of credit and other forms of secured and unsecured debt, and equity financing, including issuances of common and preferred equity.

An increase in interest rates would increase our interest costs on variable rate debt and could adversely impact our ability to refinance existing debt.

We currently have, and may incur more, indebtedness that bears interest at variable rates. Accordingly, if interest rates increase, so will our interest costs, which would adversely affect our cash flow and our ability to pay principal and interest on our debt and our ability to make distributions to our shareholders. Further, rising interest rates could limit our ability to refinance existing debt when it matures.

Property ownership through joint ventures will limit our ability to act exclusively in our interests.

From time to time we invest in joint ventures in which we do not hold a controlling interest. These investments involve risks that do not exist with properties in which we own a controlling interest, including the possibility that our partners may, at any time, have business, economic or other objectives that are inconsistent with our objectives. In instances where we lack a controlling interest, our partners may be in a position to require action that is contrary to our objectives. While we seek to negotiate the terms of these joint ventures in a way that secures our ability to act in our best interests, there can be no assurance that those terms will be sufficient to fully protect us against actions contrary to our interests. If the objectives of our co-venturers are inconsistent with ours, we may not in every case be able to act exclusively in our interests.

Risks Related to the Real Estate Industry

Real estate investments are illiquid, and we may not be able to sell our Properties if and when we determine it is appropriate to do so.

Real estate generally cannot be sold quickly. We may not be able to dispose of Properties promptly in response to economic or other conditions. In addition, provisions of the Internal Revenue Code (the “Code”) limit a REITs ability to sell properties in some situations when it may be economically advantageous to do so, thereby adversely affecting returns to shareholders and adversely impacting our ability to meet our obligations to the holders of other securities.

We may experience economic harm if any damage to our Properties is not covered by insurance.

We believe all of our Properties are adequately insured. However, we cannot guarantee that the limits of our current policies will be sufficient in the event of a catastrophe to our Properties. Our existing property and liability policies expire during 2007. We cannot guarantee that we will be able to renew or duplicate our current coverages in adequate amounts or at reasonable prices.

We may suffer losses that are not covered under our comprehensive liability, fire, extended coverage and rental loss insurance policies. For example, we may not be insured for losses resulting from acts of war, certain acts of terrorism, or from environmental liabilities. If an uninsured loss or a loss in excess of insured limits should occur, we would nevertheless remain liable for the loss which could adversely affect cash flow from operations.

Potential liability for environmental contamination could result in substantial costs.

Under federal, state and local environmental laws, ordinances and regulations, we may be required to investigate and clean up the effects of releases of hazardous or toxic substances or petroleum products at our Properties simply because of our current or past ownership or operation of the real estate. If unidentified environmental problems arise, we may have to make substantial payments which could adversely affect our cash flow and our ability to make distributions to our shareholders because:

	•		as owner or operator, we may have to pay for property damage and for investigation and clean-up costs incurred in connection with the contamination

	•		the law typically imposes clean-up responsibility and liability regardless of whether the owner or operator knew of or caused the contamination

	•		even if more than one person may be responsible for the contamination, each person who shares legal liability under the environmental laws may be held responsible for all of the clean-up costs

	•		governmental entities and third parties may sue the owner or operator of a contaminated site for damages and costs

These costs could be substantial. The presence of hazardous or toxic substances or petroleum products or the failure to properly remediate contamination may materially and adversely affect our ability to borrow against, sell or rent an affected property. In addition, applicable environmental laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with a contamination. Changes in laws increasing the potential liability for environmental conditions existing at our Properties may result in significant unanticipated expenditures.

It is our policy to retain independent environmental consultants to conduct Phase I environmental site assessments and asbestos surveys with respect to our acquisition of properties. These assessments generally include a visual inspection of the properties and the surrounding areas, an examination of current and historical uses of the properties and the surrounding areas and a review of relevant state, federal and historical documents, but do not involve invasive techniques such as soil and ground water sampling. Where appropriate, on a property-by-property basis, our practice is to have these consultants conduct additional testing, including sampling for asbestos, for lead in drinking water, for soil contamination where underground storage tanks are or were located or where other past site usages create a potential environmental problem, and for contamination in groundwater. Even though these environmental assessments are conducted, there is still the risk that:

	•		the environmental assessments and updates will not identify all potential environmental liabilities

	•		a prior owner created a material environmental condition that is not known to us or the independent consultants preparing the assessments

	•		new environmental liabilities have developed since the environmental assessments were conducted

	•		future uses or conditions such as changes in applicable environmental laws and regulations could result in environmental liability for us

While we test indoor air quality on a regular basis and have an ongoing maintenance program in place to address this aspect of property operations, inquiries about indoor air quality may necessitate special investigation and, depending on the results, remediation. Indoor air quality issues can stem from inadequate ventilation, chemical contaminants from indoor or outdoor sources, pollen, viruses and bacteria. Indoor exposure to chemical or biological contaminants above certain levels can be alleged to be connected to allergic reactions or other health effects and symptoms in susceptible individuals. If these conditions were to occur at one of our Properties, we may need to undertake a targeted remediation program, including without limitation, steps to increase indoor ventilation rates and eliminate sources of contaminants. Such remediation programs could be costly, necessitate the temporary relocation of some or all of the Property’s tenants or require rehabilitation of the affected Property.

Our Properties may contain or develop harmful mold, which could lead to liability for adverse health effects and costs of remediating the problem.

When excessive moisture accumulates in buildings or on building materials, mold growth may occur, particularly if the moisture problem remains undiscovered or is not addressed over a period of time. Some molds may produce airborne toxins or irritants. Concern about indoor exposure to mold has been increasing as exposure to mold may cause a variety of adverse health effects and symptoms, including allergic or other reactions. As a result, the presence of significant mold at any of our Properties could require us to undertake a costly remediation program to contain or remove the mold from the affected Property. In addition, the presence of significant mold could expose us to liability from our tenants, employees of our tenants and others if property damage or health concerns arise.

Compliance with the Americans with Disabilities Act and fire, safety and other regulations may require us to make expenditures that adversely impact our operating results.

All of our Properties are required to comply with the Americans with Disabilities Act (“ADA”). The ADA generally requires that buildings be made accessible to people with disabilities. Compliance with the ADA requirements could require removal of access barriers, and non-compliance could result in imposition of fines by the United States government or an award of damages to private litigants, or both. Expenditures related to complying with the provisions of the ADA could adversely affect our results of operations and financial condition and our ability to make distributions to shareholders. In addition, we are required to operate our Properties in compliance with fire and safety regulations, building codes and other land use regulations, as they may be adopted by governmental agencies and bodies and become applicable to our Properties. We may be required to make substantial capital expenditures to comply with those requirements and these expenditures could have a material adverse effect on our operating results and financial condition, as well as our ability to make distributions to shareholders.

Terrorist attacks and other acts of violence or war may adversely impact our operating results and may affect markets on which our securities are traded.

Terrorist attacks against our Properties, or against the United States or United States interests generally, may negatively affect our operations and your investment in our securities. Attacks or armed conflicts could have a direct

adverse impact on our Properties or operations through damage, destruction, loss or increased security costs. Any terrorism insurance that we obtain may be insufficient to cover the loss for damages to our Properties as a result of terrorist attacks.

Furthermore, any terrorist attacks or armed conflicts could result in increased volatility in or damage to the United States and worldwide financial markets and economy. Adverse economic conditions could affect the ability of our tenants to pay rent, which could have an adverse impact on our operating results.

Risks Related to Our Organization and Structure

We have elected REIT status under the federal tax laws, and could suffer adverse consequences if we fail to qualify as a REIT.

We have elected REIT status under federal tax laws and have taken the steps known to us to perfect that status, but we cannot be certain that we qualify, or that we will remain qualified. Qualification as a REIT involves the application of highly technical and complex provisions of the Code, as to which there are only limited judicial or administrative interpretations. The complexity of these provisions and of the related income tax regulations is greater in the case of a REIT that holds its assets in partnership form, as we do. Moreover, no assurance can be given that new tax laws will not significantly affect our qualification as a REIT or the federal income tax consequences of such qualification. New laws could be applied retroactively, which means that past operations could be found to be in violation, which would have a negative effect on the business.

If we fail to qualify as a REIT in any taxable year, the distributions to shareholders would not be deductible when computing taxable income. If this happened, we would be subject to federal income tax on our taxable income at regular corporate rates. Also, we could be prevented from qualifying as a REIT for the four years following the year in which we were disqualified. Further, if we requalified as a REIT after failing to qualify, we might have to pay the full corporate-level tax on any unrealized gain in our assets during the period we were not qualified as a REIT. We would then have to distribute to our shareholders the earnings we accumulated while we were not qualified as a REIT. These additional taxes would reduce our funds available for distribution to our shareholders. In addition, while we were disqualified as a REIT, we would not be required by the Code to make distributions to our shareholders. A failure by the Company to qualify as a REIT and the resulting requirement to pay taxes and interest (and perhaps penalties) would cause us to default under various agreements to which we are a party, including under our credit facility, and would have a material adverse effect on our business, prospects, results of operations, earnings, financial condition and our ability to make distributions to shareholders.

Future economic, market, legal, tax or other considerations may lead our Board of Trustees to authorize the revocation of our election to qualify as a REIT. A revocation of our REIT status would require the consent of the holders of a majority of the voting interests of all of our outstanding Common Shares.

Risks associated with potential borrowings necessary to make distributions to qualify as a REIT.

We intend to make distributions to shareholders to comply with the distribution provisions of the Code necessary to maintain qualification as a REIT and to avoid income taxes and the non-deductible excise tax. Under certain circumstances, we may be required to borrow funds to meet the distribution requirements necessary to achieve the tax benefits associated with qualifying as a REIT. In such circumstances, we might need to borrow funds to avoid adverse tax consequences, even if our management believes that the prevailing market conditions are not generally favorable for such borrowings or that such borrowings would not be advisable in the absence of such tax considerations.

Certain officers of the Trust may not have the same interests as shareholders as to certain tax laws.

Certain officers of the Trust own Common Units. These units may be exchanged for our Common Shares. The officers who own those units and have not yet exchanged them for our Common Shares may suffer different and more adverse tax consequences than holders of our Common Shares suffer in certain situations:

	•		when certain of our Properties are sold

	•		when debt on those Properties is refinanced

	•		if we are involved in a tender offer or merger

Because these officers own units and face different consequences than shareholders do, the Trust and those officers may have different objectives as to these transactions than shareholders do.

Certain aspects of our organization could have the effect of restricting or preventing a change of control of our Company, which could have an adverse effect on the price of our shares.

Our charter contains an ownership limit on shares. To qualify as a REIT, five or fewer individuals cannot own, directly or indirectly, more than 50% in value of the outstanding shares of beneficial interest. To this end, our Declaration of Trust, among other things, generally prohibits any holder of the Trust’s shares from owning more than 5% of the Trust’s outstanding shares of beneficial interest, unless that holder gets the consent from the Board of Trustees. This limitation could prevent the acquisition of control of the Company by a third party without the consent from the Board of Trustees.

We have a staggered board and certain restrictive nominating procedures. The Board of Trustees has three classes of trustees. The term of office of one class expires each year. Trustees for each class are elected for three-year terms as that class’ term expires. The terms of the Class I, Class II, and Class III trustees expire in 2007, 2008, and 2009, respectively. Any nominee for trustee must be selected under the nominating provisions contained in our Declaration of Trust and By-Laws. The staggered terms for trustees and the nominating procedures may affect shareholders’ ability to take control of the Company, even if a change in control were in the shareholders’ interest.

We can issue preferred shares. Our Declaration of Trust authorizes the Board of Trustees to establish the preferences and rights of any shares issued. The issuance of preferred shares could have the effect of delaying, making more difficult or preventing a change of control of the Company, even if a change in control were in the shareholder’s interest.

We have a poison pill. Under the shareholder rights plan, rights are issued along with each of the Trust’s Common Shares. Holders of these rights can purchase, under certain conditions, a portion of a preferred share of beneficial interest, or receive Common Shares, or common shares of an entity acquiring us, or other consideration, having a value equal to twice the exercise price of the right. The exercise price of the right is $200. This arrangement is often called a “poison pill.” Our poison pill could have the effect of delaying or preventing a change of control of the Company, even if a change in control were in the shareholders’ interest.

There are limitations on acquisition of and changes in control pursuant to, and fiduciary protections of The Board under Maryland law. The Maryland General Corporation Law (“MGCL”) contains provisions which are applicable to the Trust as if the Trust were a corporation. Among these provisions is a section, referred to as the “control share acquisition statute,” which eliminates the voting rights of shares acquired in quantities so as to constitute “control shares,” as defined under the MGCL. The MGCL also contains provisions applicable to us that are referred to as the “business combination statute,” which would generally limit business combinations between the Company and any 10% owners of the Trust’s shares or any affiliate thereof. Further, Maryland law provides broad discretion to the Board with respect to its fiduciary duties in considering a change in control of our Company, including that the Board is subject to no greater level of scrutiny in considering a change in control transaction than with respect to any other act by the Board. Finally, the “unsolicited takeovers” provisions of the MGCL permit the Board, without shareholder approval and regardless of what is currently provided in our Declaration of Trust or By-Laws, to implement takeover defenses that our Company does not yet have, including: permitting only the Board to fix the size of the Board and permitting only the Board to fill a vacancy on the Board. All of these provisions may have the effect of inhibiting a third party from making an acquisition proposal for our Company or of delaying, deferring or preventing a change in control of the Company under circumstances that otherwise could provide the holders of Common Shares with the opportunity to realize a premium over the then current market price.

Various factors out of our control could hurt the market value of our publicly traded securities.

General market conditions could worsen. The value of our publicly traded securities depends on various market conditions, which may change from time to time. In addition to general economic and market conditions and our particular financial condition and performance, the value of our publicly traded securities could be affected by, among other things, the extent of institutional investor interest in us and the market’s opinion of REITs in general and, in particular, REITs that own and operate properties similar to ours.

The market value of the equity securities of a REIT may be based primarily upon the market’s perception of the REITs growth potential and its current and future cash distributions, and may be secondarily based upon the real estate market value of the underlying assets. The failure to meet the market’s expectations with regard to future earnings and cash distributions likely would adversely affect the market price of publicly traded securities.

Rising market interest rates could make an investment in publicly traded securities less attractive. If market interest rates increase, purchasers of publicly traded securities may demand a higher annual yield on the price they pay for their securities. This could adversely affect the market price of publicly traded securities.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 2. PROPERTIES

The Properties in Operation, as of December 31, 2006, consisted of 422 industrial and 298 office properties. Single tenants completely occupy 241 Properties in Operation. These tenants generally require a reduced level of service in connection with the operation or maintenance of these properties. The remaining 479 of the Company’s Properties in Operation are multi-tenant properties for which the Company renders a range of building, operating and maintenance services.

As of December 31, 2006, the industrial Properties in Operation were 95.4% leased. The average building size for the industrial Properties in Operation was approximately 106,000 square feet. As of December 31, 2006, the office Properties in Operation were 91.4% leased. The average building size for the office Properties in Operation was approximately 70,000 square feet.

A complete listing of the Properties in Operation appears as Schedule III to the financial statements of the Company included in this report. The table below sets forth certain information on the Company’s Properties in Operation as of December 31, 2006 (in thousands, except percentages).


	Type		Net Rent (1)		Square Feet		% Leased
Delaware Valley	Industrial	-Distribution	$	6,756		781		100.0	%
		-Flex		29,130		2,787		96.9	%
	Office			116,619		8,418		92.4	%

	Total			152,505		11,986		94.0	%

Midwest	Industrial	-Distribution		53,862		13,462		98.1	%
		-Flex		41,307		5,293		95.1	%
	Office			46,585		4,050		90.5	%

	Total			141,754		22,805		96.1	%

Mid-Atlantic	Industrial	-Distribution		28,090		7,590		88.8	%
		-Flex		8,003		992		94.8	%
	Office			51,415		4,380		90.3	%

	Total			87,508		12,962		89.7	%

Florida	Industrial	-Distribution		19,981		4,390		100.0	%
		-Flex		26,535		3,484		93.9	%
	Office			39,260		3,498		90.8	%

	Total			85,776		11,372		95.3	%

United Kingdom	Industrial	-Distribution		—		—		—
		-Flex		—		—		—
	Office			987		35		97.0	%

	Total			987		35		97.0	%

Joint Ventures (2)	Industrial	-Distribution		21,285		5,638		94.4	%
		-Flex		5,352		170		100.0	%
	Office			12,688		364		98.1	%

	Total			39,325		6,172		94.8	%

TOTAL	Industrial	-Distribution		129,974		31,861		95.5	%
		-Flex		110,327		12,726		95.2	%
	Office			267,554		20,745		91.4	%

	Total		$	507,855		65,332		94.2	%


(1)		Net rent represents the contractual rent per square foot times the tenant’s square feet leased at December 31, 2006 for tenants in occupancy. Net rent does not include the tenant’s obligation to pay property operating expenses and real estate taxes.

(2)		Joint Ventures represent the 48 properties owned by unconsolidated joint ventures in which the Company has an interest.

The expiring square feet and annual net rent by year for the Properties in Operation as of December 31, 2006 are as follows (in thousands except percentages):

Total Properties in Operation

Wholly Owned Properties:


	Industrial-
	Distribution					Industrial-Flex					Office					Total
	Square		Annual			Square		Annual			Square		Annual			Square		Annual
Year	Feet		Net Rent (1)			Feet		Net Rent (1)			Feet		Net Rent (1)			Feet		Net Rent (1)
2007		3,079	$	13,729			1,641	$	14,143			1,934	$	25,702			6,654	$	53,574
2008		3,915		15,410			2,351		22,234			2,529		37,024			8,795		74,668
2009		4,051		18,857			2,238		20,789			2,968		43,813			9,257		83,459
2010		2,654		13,114			1,615		15,409			2,607		37,342			6,876		65,865
2011		3,271		15,004			1,220		12,426			2,481		38,357			6,972		65,787
2012		2,762		14,043			1,025		10,181			1,352		24,896			5,139		49,120
Thereafter		5,385		30,787			1,855		21,065			4,735		79,125			11,975		130,977


Total		25,117	$	120,944			11,945	$	116,247			18,606	$	286,259			55,668	$	523,450

Total Square Feet		26,223					12,556					20,381					59,160

Percent of Total Annual Net Rent				23.1	%				22.2	%				54.7	%				100.0	%

Joint Venture Properties:


	Industrial-
	Distribution					Industrial-Flex					Office					Total
	Square		Annual			Square		Annual			Square		Annual			Square		Annual
Year	Feet		Net Rent (1)			Feet		Net Rent (1)			Feet		Net Rent (1)			Feet		Net Rent (1)
2007		833	$	3,230			65	$	1,958			29	$	1,018			927	$	6,206
2008		920		3,883			9		296			31		1,050			960		5,229
2009		751		2,874			11		316			61		2,197			823		5,387
2010		57		296			20		723			65		2,470			142		3,489
2011		362		1,524			10		333			86		2,966			458		4,823
2012		94		563			—		—			85		3,009			179		3,572
Thereafter		2,304		11,372			55		1,800			—		—			2,359		13,172

Total		5,321	$	23,742			170	$	5,426			357	$	12,710			5,848	$	41,878


Total Square Feet		5,638					170					364					6,172

Percent of Total Annual Net Rent				56.7	%				13.0	%				30.3	%				100.0	%


(1)		Annual net rent equals the contractual rent per square foot at the time of lease expiration for those tenants in occupancy at December 31, 2006 times the tenant’s square feet leased at December 31, 2006.

The table below highlights, for the Properties in Operation, the Company’s top ten office tenants and the top ten industrial tenants as of December 31, 2006.


	Percentage		Percentage
Top 10 Office Tenants	of Net Rent	Top 10 Industrial Tenants	of Net Rent
The Vanguard Group, Inc	3.8%	Kellogg USA, Inc.	1.0%
GlaxoSmithKline, LLC	1.9%	Wakefern Food Corporation	1.0%
General Motors Acceptance Corporation	1.3%	United States of America	0.7%
PHH Corporation	1.2%	Amazon.com, Inc.	0.6%
Sanofi-Aventis U.S., Inc.	1.1%	United Parcel Service, Inc.	0.5%
PNC Bank, National Association	1.0%	Centocor, Inc.	0.5%
Aetna Life Insurance Company	1.0%	LTD Commodities, Inc.	0.5%
Express Scripts	0.9%	Whirlpool Corporation	0.5%
Well Care Health Plan, Inc.	0.9%	Bosch Rexroth Corporation	0.5%
Sungard Data Systems, Inc.	0.7%	Dial Corporation	0.4%

	13.8%		6.2%

ITEM 3. LEGAL PROCEEDINGS

The ownership of property and provision of services to the public entails an inherent risk of liability. Although the Company is engaged in litigation incidental to its business, there is no legal proceeding to which it is a party which, in the opinion of management, will materially adversely affect the results of the Company’s operations. The Company carries liability insurance against certain types of claims that management believes meets industry standards; however, there can be no assurance that any future legal proceedings (including any related judgments, settlements or costs) will not materially adversely affect the Company’s financial condition, liquidity, or results of operations.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

No matters were submitted to a vote of security holders during the fourth quarter of the year ended December 31, 2006.

PART II

ITEM 5. MARKET FOR THE REGISTRANTS’ COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND RELATED ISSUER PURCHASES OF EQUITY SECURITIES

The Common Shares are traded on the New York Stock Exchange under the symbol “LRY.” There is no established public trading market for the Common Units. The following table sets forth, for the calendar quarters indicated, the high and low closing prices of the Common Shares on the New York Stock Exchange, and the dividends declared per Common Share for such calendar quarter.


					Dividends
					Declared Per
	High		Low		Common Share
2006
Fourth Quarter	$	52.35	$	45.73	$	0.62
Third Quarter		48.23		43.80		0.62
Second Quarter		46.41		41.32		0.615
First Quarter		48.99		43.20		0.615
2005
Fourth Quarter	$	43.98	$	39.15	$	0.615
Third Quarter		45.80		40.80		0.615
Second Quarter		44.77		38.19		0.61
First Quarter		43.09		38.77		0.61

As of February 23, 2007, the Common Shares were held by 1,360 holders of record. Since its initial public offering in 1994, the Company has paid regular and uninterrupted quarterly dividends.

Although the Company currently anticipates that comparable cash dividends will continue to be paid in the future, the payment of future dividends by the Company will be at the discretion of the Board of Trustees and will depend on numerous factors including the Company’s cash flow, its financial condition, capital requirements, annual distribution requirements under the REIT provisions of the Internal Revenue Code of 1986, as amended, and such other factors as the Board of Trustees deems relevant.

ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth Selected Financial Data for Liberty Property Trust and Liberty Property Limited Partnership as of and for the years ended December 31, 2006, 2005, 2004, 2003 and 2002. The information set forth below should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the financial statements and notes thereto appearing elsewhere in this report. Certain amounts from prior years have been reclassified to conform to current-year presentation.


Operating Data	Year Ended December 31,
In thousands, except per share data	2006		2005		2004		2003		2002
Total operating revenue	$	666,719	$	633,494	$	585,284	$	552,183	$	521,122
Income from continuing operations	$	153,697	$	204,841	$	137,588	$	133,525	$	132,933
Income available to common shareholders	$	266,574	$	249,351	$	161,443	$	163,610	$	150,237

Basic:
Income from continuing operations	$	1.72	$	2.36	$	1.63	$	1.70	$	1.62
Income from discontinued operations	$	1.26	$	0.51	$	0.28	$	0.38	$	0.38
Income per common share — basic	$	2.98	$	2.87	$	1.91	$	2.08	$	2.00
Diluted:
Income from continuing operations	$	1.70	$	2.32	$	1.60	$	1.67	$	1.59
Income from discontinued operations	$	1.25	$	0.50	$	0.28	$	0.38	$	0.38
Income per common share — diluted	$	2.95	$	2.82	$	1.88	$	2.05	$	1.97
Distributions paid per common share	$	2.465	$	2.445	$	2.425	$	2.405	$	2.37
Distributions paid per preferred share	$	—	$	—	$	—	$	—	$	1.82
Weighted average number of shares outstanding — basic (1)		89,313		86,986		84,534		78,575		75,041
Weighted average number of shares outstanding — diluted (2)		90,492		88,376		86,024		79,868		76,272


Balance Sheet Data	December 31,
In thousands	2006		2005		2004		2003		2002
Net real estate	$	4,419,838	$	4,035,529	$	3,738,758	$	3,483,188	$	3,312,229
Total assets		4,910,911		4,500,322		4,163,997		3,833,528		3,625,099
Total indebtedness		2,387,938		2,249,178		2,133,171		1,885,866		1,866,187
Shareholders’ equity		1,871,604		1,709,182		1,596,259		1,544,897		1,354,431


Other Data	Year Ended December 31,
Dollars in thousands	2006			2005			2004			2003			2002
Cash provided by operating activities	$	344,901		$	360,749		$	293,336		$	263,811		$	288,243
Cash used in investing activities		(355,270	)		(286,633	)		(373,975	)		(195,133	)		(165,604	)
Cash (used in) provided by financing activities		(327	)		(39,470	)		89,618			(58,111	)		(131,818	)
Funds from operations available to common shareholders (3)		294,801			293,973			291,144			280,921			260,750
Total leaseable square footage of properties at end of period (in thousands) (4)		65,332			64,371			61,655			57,149			54,166
Number of properties at end of period (4)		720			718			723			702			680
Percentage leased at end of period (4)		94	%		92	%		92	%		92	%		91	%


(1)		Basic weighted average number of shares includes only vested Common Shares outstanding during the year.

(2)		Diluted weighted average number of shares outstanding includes the vested and unvested Common Shares outstanding during the year as well as the dilutive effect of outstanding options.

(3)		The National Association of Real Estate Investment Trusts (“NAREIT”) has issued a standard definition for Funds from operations (as defined below). The Securities and Exchange Commission has agreed to the disclosure of this non-GAAP financial measure on a per share basis in its Release No. 34-47226, Conditions for Use of Non-GAAP Financial Measures. The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company’s operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company’s financial performance when compared to other REITs since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company’s operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP. A reconciliation of Funds from operations to net income may be found on page 31.

(4)		Leasing statistics include 48 properties equaling 6.2 million square feet owned by joint ventures in which the Company has an ownership interest. The joint venture properties are 94.8% leased at December 31, 2006.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

As of December 31, 2006, the Company had an ownership interest in and operated 422 industrial and 298 office properties located primarily in the Mid-Atlantic, Southeastern and Midwestern United States and the United Kingdom (the “Properties in Operation”) totaling 65.3 million square feet. The Company recently announced its intention to enter the Phoenix, Arizona market and exit the Michigan market. In addition, as of December 31, 2006, the Company had an ownership interest in 38 properties under development (the “Properties under Development” and, together with the Properties in Operation, the “Properties”) and had an ownership interest in 1,607 acres of land, substantially all of which is zoned for commercial use. Included within the Properties and land above are 38 industrial and 10 office properties comprising 6.2 million square feet, five development properties comprising 1.1 million square feet and 283 acres of developable land owned by unconsolidated joint ventures in which the Company has an interest.

The Company focuses on creating value for shareholders and increasing profitability and cash flow. With respect to its Properties in Operation, the Company endeavors to maintain high occupancy levels while increasing rental rates. The Company pursues development opportunities that it believes will create value and yield acceptable returns. The Company also acquires properties that it believes will create long-term value, and disposes of properties that no longer fit within the Company’s strategic objectives or in situations where it can optimize cash proceeds. The Company’s operating results depend primarily upon income from rental operations and are substantially influenced by rental demand for the Properties in Operation.

Rental demand for the Properties in Operation generally improved during the year ended December 31, 2006. Although in some markets the Company continues to experience market conditions characterized by an oversupply of leaseable space and soft demand, the Company believes that the majority of its markets are recovering from a generally slow real estate economy. Rental rates in many of the Company’s markets have stabilized or improved. The Company successfully leased 14.9 million square feet during the year ended December 31, 2006 and attained occupancy of 94.2% as of that date. The Company believes that straight line rents on renewal and replacement leases for 2007 will on average be 1% to 3% greater than rents on expiring leases, notwithstanding selected decreases. Furthermore, the Company believes that average occupancy for its Properties in Operation will improve by 1% to 2% for 2007 compared to 2006.

Conditions in 2006 for the acquisition of properties continued to be very competitive. During the year ended December 31, 2006, the Company acquired 23 properties representing 2.5 million square feet for a Total Investment, as defined below, of $306.5 million. These acquisitions generally served to increase the Company’s presence or balance the product mix in markets the Company believes to have significant potential. For 2007, the Company believes that property acquisitions will be in the $450 to $550 million range and that, similar to 2006, certain of the acquired properties will be either vacant or underleased. The Company executes acquisitions of such properties when it believes that they are attractively priced and will positively contribute to earnings upon lease up and stabilization. As previously noted, the Company has recently announced its intention to enter the Phoenix, Arizona market. It is anticipated that a substantial portion of the overall planned acquisition activity will be used to facilitate the Company’s entry into this market. “Total Investment” for a property is defined as the property’s purchase price plus closing costs and management’s estimate, as determined at the time of acquisition, of the cost of necessary building improvements in the case of acquisitions, or land costs and land and building improvement costs in the case of development projects, and, where appropriate, other development costs and carrying costs.

As the Company expected, dispositions of properties in 2006 were significant. This disposition activity allowed the Company to (1) reduce its holdings in certain markets and product types within a market; (2) lower the average age of the portfolio; and (3) take advantage of favorable market conditions to optimize the cash proceeds from the sale of certain assets. During 2006, the Company realized proceeds of $398.2 million from the sale of 40 operating properties representing 4.0 million square feet and five acres of land. Additionally, during 2006, the Company sold six operating properties and 104 acres of land to a joint venture in which the Company retained a 25% interest for $125.0 million. The real estate investment market continues to be very strong. Given this situation, the Company anticipates that disposition

activity will be in the $350 million to $450 million range for 2007. A substantial portion of the planned disposition activity will be related to the Company’s planned exit from the Michigan market.

In 2006, the Company also continued to pursue development opportunities. During the year ended December 31, 2006, the Company brought into service 21 development properties representing 2.3 million square feet and a Total Investment of $211.8 million and initiated $310.1 million in real estate development. As of December 31, 2006, the projected Total Investment of the wholly owned Properties under Development (excluding the Comcast Center) was $456.3 million. The projected Total Investment for the 1.25 million square foot Comcast Center is $495 million. Although in April 2006 the Company entered into a joint venture, whereby the Company sold an 80% interest in the equity of the Comcast Center, the terms of the joint venture obligate the Company to complete the development of the building and consequently this development is treated as a wholly owned Property under Development. In 2007, the Company will continue to pursue development opportunities and the Company believes that it will bring into service from its development pipeline approximately $325 to $350 million of Total Investment in operating real estate.

The Company periodically enters into joint venture relationships in connection with the execution of its real estate operating strategy. During the year ended December 31, 2006, the Company entered into two joint ventures. See Note 4 to the Company’s financial statements. The Company believes that joint ventures in which the Company holds an ownership interest will acquire properties in the $75 to $100 million range in 2007. In addition, during the year ended December 31, 2006, unconsolidated joint ventures initiated $85.1 million in real estate development.

Forward-Looking Statements

When used throughout this report, the words “believes,” “anticipates,” “hopes” and “expects” and similar expressions are intended to identify forward-looking statements. Such statements indicate that assumptions have been used that are subject to a number of risks and uncertainties which could cause actual financial results or management plans and objectives to differ materially from those projected or expressed herein, including: the effect of national and regional economic conditions; rental demand; the Company’s ability to identify and secure additional properties and sites that meet its criteria for acquisition or development; the availability and cost of capital; the effect of prevailing market interest rates; and other risks described from time to time in the Company’s filings with the SEC. Given these uncertainties, readers are cautioned not to place undue reliance on such statements.

Critical Accounting Policies and Estimates

The Company’s discussion and analysis of its financial condition and results of operations are based upon the Company’s consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting principles. The preparation of these financial statements requires the Company to make estimates, judgments and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. The Company bases these estimates, judgments and assumptions on historical experience and on other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions.

The Company believes the following critical policies affect its more significant estimates and assumptions used in the preparation of its consolidated financial statements.

Capitalized Costs

Expenditures directly related to the acquisition, or improvement of real estate, including interest and other costs capitalized on development projects and land being readied for development, are included in net real estate and are stated at cost. The Company considers a development property substantially complete upon the completion of tenant build-out, but no later than one year after the completion of major construction activity. The capitalized costs include pre-construction costs essential to the development of the property, construction costs, interest costs, real estate taxes, development related salaries and other costs incurred during the period of development. Capitalized development related salaries and benefits historically represent approximately 1% to 2% of the cost of developed properties. The determination to capitalize rather than expense costs requires the Company to evaluate the status of the development activity. Capitalized interest for the years ended December 31, 2006, 2005, and 2004 was $30.8 million, $17.7 million and $13.2 million, respectively.

Revenue Recognition

Rental revenue is recognized on a straight line basis over the terms of the respective leases. Deferred rent receivable represents the amount by which straight line rental revenue exceeds rents currently billed in accordance with the lease agreements. Above-market and below-market lease values for acquired properties are recorded based on the present value (using a discount rate which reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to each in-place lease and (ii) management’s estimate of fair market lease rates for each corresponding in-place lease. The capitalized above or below-market lease values are amortized as a component of rental revenue over the remaining term of the respective leases.

Allowance for Doubtful Accounts

The Company monitors the liquidity and creditworthiness of its tenants on an on-going basis. Based on these reviews, provisions are established, and an allowance for doubtful accounts for estimated losses resulting from the inability of its tenants to make required rental payments is maintained. As of December 31, 2006 and 2005, the Company’s allowance for doubtful accounts totaled $5.1 million and $6.7 million, respectively. The Company’s bad debt expense for the years ended December 31, 2006, 2005 and 2004 was $1.0 million, $2.6 million and $2.4 million, respectively. During the year ended December 31, 2006, the Company realized $2.0 million from the settlement of a tenant bankruptcy.

Impairment of Real Estate

The Company evaluates its real estate investments and investments in unconsolidated joint ventures upon occurrence of significant adverse changes in operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If any real estate investment is considered impaired, the carrying value of the property is written down to its estimated fair value. During the years ended December 31, 2006 and 2005, the Company recognized impairment losses of $4.2 million and $5.3 million, respectively. The 2006 impairment loss of $4.2 million was primarily related to a 352,000 square foot portfolio of operating properties in Michigan. These properties were sold in January 2007. The 2005 impairment loss was primarily related to a 615,000 square foot portfolio of operating properties in Michigan. A portion of these propebties equaling 477,000 square feet were sold prior to December 31, 2006. The determination of whether impairment exists requires the Company to make estimates, judgments and assumptions about the future utility of the assets. The Company has evaluated each of its Properties and land held for development and investments in unconsolidated joint ventures and has determined that there are no additional valuation adjustments that need to be made at December 31, 2006.

Intangibles

In accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Standards (“SFAS”) No. 141, “Business Combinations,” the Company allocates the purchase price of real estate acquired to land, building and improvements and intangibles based on the relative fair value of each component. The value ascribed to in-place leases is based on the rental rates for the existing leases compared to the Company’s estimate of the fair market lease rates for leases of similar terms and present valuing the difference based on an interest rate which reflects the risks associated with the leases acquired. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships. Origination cost estimates include the costs to execute leases with terms similar to the remaining lease terms of the in-place leases, including leasing commissions, legal and other related expenses. Additionally, the Company estimates carrying costs during the expected lease-up periods including real estate taxes, other operating expenses and lost rentals at contractual rates. The Company depreciates the amounts allocated to building and improvements over 40 years. The amounts allocated to the intangible relating to in-place leases, which are included in deferred financing and leasing costs or in other liabilities in the accompanying balance sheets, are amortized over the remaining term of the related leases. In the event that a tenant terminates its lease, the unamortized portion of the intangible is written off.

Results of Operations

The following discussion is based on the consolidated financial statements of the Company. It compares the results of operations of the Company for the year ended December 31, 2006 with the results of operations of the Company for the year ended December 31, 2005, and the results of operations of the Company for the year ended December 31, 2005 with the results of operations of the Company for the year ended December 31, 2004. As a result of the varying level of development, acquisition and disposition activities by the Company in 2006, 2005 and 2004, the overall operating results of the Company during such periods are not directly comparable. However, certain data, including the Same Store results, do lend themselves to direct comparison.

This information should be read in conjunction with the accompanying consolidated financial statements and notes included elsewhere in this report.

Comparison of Year Ended December 31, 2006 to Year Ended December 31, 2005

Overview

The Company’s average gross investment in operating real estate owned for the year ended December 31, 2006 increased to $4,168.0 million from $3,697.6 million for the year ended December 31, 2005. This increase in operating real estate resulted in increases in rental revenue, operating expense reimbursement, rental property expenses, real estate taxes, and depreciation and amortization expense.

Total operating revenue increased to $666.7 million for the year ended December 31, 2006 from $633.5 million for the year ended December 31, 2005. This $33.2 million increase was primarily due to the increase in investment in operating real estate and the increase in operating revenue from the Same Store group of properties – see below. These increases were partially offset by a decrease in “Termination Fees,” which totaled $6.2 million for the year ended December 31, 2006 as compared to $16.6 million for the year ended December 31, 2005. Termination Fees are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their leases prior to the contractual expiration date. Termination Fees are included in rental revenue.

Segments

The Company evaluates the performance of the Properties in Operation by reportable segment (see Note 13 to the Company’s financial statements for a reconciliation to net income). The following table identifies changes in reportable segments (dollars in thousands):

Property level operating income:


	Year Ended December 31,				Percentage
	2006		2005		Increase (Decrease)
Delaware Valley
– SE Pennsylvania	$	129,272	$	131,506		(1.7%	)(1)
– Other		26,012		24,382		6.7%	(2)
Midwest
– Lehigh Valley		66,433		57,558		15.4%	(3)
– Other		73,485		70,312		4.5%
Mid-Atlantic		84,448		73,180		15.4%	(4)
Florida		75,360		64,673		16.5%	(4)
United Kingdom		1,002		16,651		(94.0%	) (5)

Total property level operating income (6)	$	456,012	$	438,262		4.1	%


(1)		The decrease for the year ended December 31, 2006 versus the year ended December 31, 2005 is due to decreased termination fees accepted during 2006. This decrease was partially offset by increased occupancy and an increase in average gross investment in operating real estate.

(2)		The increase for the year ended December 31, 2006 versus the year ended December 31, 2005 is primarily due to an increase in average gross investment in operating real estate and increased termination fees accepted during 2006.

(3)		The increase for the year ended December 31, 2006 versus the year ended December 31, 2005 is primarily due to increased occupancy, an increase in average gross investment in operating real estate, increased termination fees accepted, and a $2.0 million settlement of a tenant bankruptcy received during 2006.

(4)		The increase for the year ended December 31, 2006 versus the year ended December 31, 2005 is primarily due to increased occupancy and an increase in average gross investment in operating real estate during 2006.

(5)		The decrease for the year ended December 31, 2006 versus the year ended December 31, 2005 is primarily due to the sale of 15 operating properties to a joint venture in December 2005.

(6)		See a reconciliation of property level operating income to net income in the Same Store comparison below.

Same Store

Property level operating income, exclusive of Termination Fees, for the Same Store properties increased to $401.8 million for the year ended December 31, 2006 from $391.1 million for the year ended December 31, 2005, on a straight line basis (which recognizes rental revenue evenly over the life of the lease), and increased to $397.6 million for the year ended December 31, 2006 from $384.4 million for the year ended December 31, 2005 on a cash basis. These increases of 2.8% and 3.4%, respectively, are primarily due to an increase in occupancy.

Management generally considers the performance of the Same Store properties to be a useful financial performance measure because the results are directly comparable from period to period. Management further believes that the performance comparison should exclude Termination Fees since they are more event specific and are not representative of ordinary performance results. In addition, Same Store property level operating income exclusive of Termination Fees is considered by management to be a more reliable indicator of the portfolio’s baseline performance. The Same Store properties consist of the 597 properties totaling approximately 50.2 million square feet owned on January 1, 2005.

Set forth below is a schedule comparing the property level operating income, on a straight line basis and on a cash basis, for the Same Store properties for the years ended December 31, 2006 and 2005. Same Store property level income is a non-GAAP measure and does not represent income before property dispositions, income taxes, minority interest and equity in earnings (loss) of unconsolidated joint ventures because it does not reflect the consolidated operations of the Company. Investors should review Same Store results, along with Funds from operations (see “Liquidity and Capital Resources” section), GAAP net income and cash flow from operating activities, investing activities and financing activities when considering the Company’s operating performance. Also, set forth below is a reconciliation of Same Store property level operating income to net income (in thousands).


	Year Ended December 31,
	2006			2005
Same Store:
Rental revenue	$	409,066		$	402,794

Operating expenses:
Rental property expense		126,076			124,831
Real estate taxes		63,940			61,720
Operating expense recovery		(182,795	)		(174,831	)

Unrecovered operating expenses		7,221			11,720

Property level operating income		401,845			391,074
Less straight line rent		4,282			6,700

Cash basis property level operating income	$	397,563		$	384,374


Reconciliation of non-GAAP financial measure:
Property level operating income – Same Store	$	401,845		$	391,074
Property level operating income – properties purchased or developed subsequent to January 1, 2005		47,954			30,543
Termination fees		6,213			16,645
General and administrative expense		(45,991	)		(38,099	)
Depreciation and amortization expense		(144,692	)		(135,846	)
Other income (expense)		(109,993	)		(111,606	)
Gain on property dispositions		17,628			85,593
Income taxes		(288	)		(14,827	)
Minority interest		(20,411	)		(21,176	)
Equity in earnings of unconsolidated joint ventures		1,432			2,540
Discontinued operations, net of minority interest		112,877			44,510

Net income	$	266,574		$	249,351

General and Administrative

General and administrative expenses increased to $46.0 million for the year ended December 31, 2006 from $38.1 million for the year ended December 31, 2005. This increase was primarily due to increases in salaries and increases in personnel consistent with the increase in the size of the Company. The increase in general and administrative expenses was also due to the expensing of long term incentive compensation.

Depreciation and Amortization

Depreciation and amortization increased to $144.7 million for the year ended December 31, 2006 from $135.8 million for the year ended December 31, 2005. The increase was primarily due to the increase in gross investment in operating real estate during the respective periods and particularly the increased investment in tenant improvement costs, which are amortized over a relatively shorter period than buildings.

Interest Expense

Interest expense was $119.6 million both in the year ended December 31, 2006 and in the year ended December 31, 2005. Interest expense allocated to discontinued operations for the years ended December 31, 2006 and 2005 was $4.7 million and $15.8 million, respectively. This decrease was due to the level of dispositions in 2006 versus 2005. Although there was an increase in average debt outstanding for 2006 compared to 2005 there was essentially no change in total interest expense because of the increase in capitalized interest costs which is consistent with the increased investment in Properties under Development. The average debt outstanding for the year ended December 31, 2006 was $2,263.9 million compared to $2,241.1 million for the year ended December 31, 2005. The weighted average interest rate for the years ended December 31, 2006 and 2005 was unchanged at 6.6% for both years.

Other

Costs directly related to the development of Properties Under Development and land being readied for development are capitalized. Capitalized development costs include interest, development-related salaries, property taxes, insurance and other directly identifiable costs incurred during the period of development. Capitalized development-related salaries and benefits historically represent approximately 1% to 2% of the cost of developed properties.

Gain on property dispositions and income taxes decreased to $17.6 million and $0.3 million, respectively, for the year ended December 31, 2006 from $85.6 million and $14.8 million, respectively, for the year ended December 31, 2005. In 2005, an $89.6 million gain and a resultant $14.5 million of tax liability was recognized on the sale of 15 United Kingdom Properties in Operation to the Kings Hill Unit Trust joint venture. In 2006, a $17.6 million gain was recognized on the sale of certain Properties in Operation and land located in Chicago to the Liberty Illinois, LP joint venture.

Income from discontinued operations increased to $112.9 million from $44.5 million for the year ended December 31, 2006 compared to the year ended December 31, 2005. The increase is due to the increase in gains realized on sales which were $112.6 million for the year ended December 31, 2006 compared to $36.6 million for the year ended December 31, 2005.

As a result of the foregoing, the Company’s net income increased to $266.6 million for the year ended December 31, 2006 from $249.4 million for the year ended December 31, 2005.

Comparison of Year Ended December 31, 2005 to Year Ended December 31, 2004

Overview

The Company’s average gross investment in operating real estate owned for the year ended December 31, 2005 increased to $3,697.6 million from $3,380.8 million for the year ended December 31, 2004. This increase in operating real estate resulted in increases in rental revenue, operating expense reimbursement, rental property expenses, real estate taxes, and depreciation and amortization expense.

Total operating revenue increased to $633.5 million for the year ended December 31, 2005 from $585.3 million for the year ended December 31, 2004. This $48.2 million increase was primarily due to the increase in investment in operating real estate. Contributing to this increase was an increase in Termination Fees, which totaled $16.6 million for the year ended December 31, 2005 as compared to $10.9 million for the year ended December 31, 2004. Termination Fees are included in rental revenue.

Segments

Property level operating income:


	Year Ended December 31,				Percentage
	2005		2004		Increase (Decrease)
Delaware Valley
– SE Pennsylvania	$	131,506	$	125,712		4.6%
– Other		24,382		21,632		12.7%	(1)
Midwest
– Lehigh Valley		57,558		49,644		15.9%	(1)
– Other		70,312		65,483		7.4%	(2)
Mid-Atlantic		73,180		72,680		0.7%
Florida		64,673		59,523		8.7%	(1)
United Kingdom		16,651		16,566		0.5%

Total property level operating income (3)	$	438,262	$	411,240		6.6%


(1)		The increase for the year ended December 31, 2005 versus the year ended December 31, 2004 is primarily due to an increase in average gross investment in operating real estate during 2005.

(2)		The increase for the year ended December 31, 2005 versus the year ended December 31, 2004 is primarily due to increased occupancy and an increase in average gross investment in operating real estate during 2005.

(3)		See a reconciliation of property level operating income to net income in the Same Store comparison below.

Same Store

Property level operating income, exclusive of Termination Fees, for the “Prior Year Same Store” (as defined below) properties decreased to $397.7 million for the year ended December 31, 2005 from $402.6 million for the year ended December 31, 2004, on a straight line basis and decreased to $391.7 million for the year ended December 31, 2005 from $392.6 million for the year ended December 31, 2004 on a cash basis. These decreases of 1.2% and 0.3%, respectively, were primarily due to a decrease in the occupancy of the office properties, which is the higher rent paying portion of the portfolio.

Management generally considers the performance of the Prior Year Same Store properties to be a useful financial performance measure because the results are directly comparable from period to period. Management further believes that the performance comparison should exclude Termination Fees since they are more event specific and are not representative of ordinary performance results. In addition, Prior Year Same Store property level operating income exclusive of Termination Fees is considered by management to be a more reliable indicator of the portfolio’s baseline performance. The Prior Year Same Store properties consist of the 611 properties totaling approximately 50.0 million square feet owned on January 1, 2004.

Set forth below is a schedule comparing the property level operating income, on a straight line basis and on a cash basis, for the Prior Year Same Store properties for the years ended December 31, 2005 and 2004. Prior Year Same Store property level income is a non-GAAP measure and does not represent income before property dispositions, income taxes, minority interest, and equity in earnings (loss) of unconsolidated real estate ventures because it does not reflect the consolidated operations of the Company. Investors should review Prior Year Same Store results, along with Funds from operations (see Liquidity and Capital Resources section), GAAP net income and cash flow from operating activities, investing activities and financing activities when considering the Company’s operating performance. Also, set forth below is a reconciliation of Prior Year Same Store property level operating income to net income (in thousands).


	Year Ended December 31,
	2005			2004
Prior Year Same Store:
Rental revenue	$	411,465		$	416,292

Operating expenses:
Rental property expense		130,713			122,963
Real estate taxes		62,000			60,826
Operating expense recovery		(178,953	)		(170,126	)

Unrecovered operating expenses		13,760			13,663

Property level operating income		397,705			402,629
Less straight line rent		6,046			9,986

Cash basis property level operating income	$	391,659		$	392,643


Reconciliation of non-GAAP financial measure:
Property level operating income – prior year Same Store	$	397,705		$	402,629
Property level operating income – properties purchased or developed subsequent to January 1, 2004		23,912			(2,266	)
Termination fees		16,645			10,877
General and administrative expense		(38,099	)		(33,724	)
Depreciation and amortization expense		(135,846	)		(119,934	)
Other income (expense)		(111,606	)		(100,761	)
Gain on property dispositions		85,593			496
Income taxes		(14,827	)		(1,820	)
Minority interest		(21,176	)		(17,134	)
Equity in (loss) earnings of unconsolidated joint ventures		2,540			(775	)
Discontinued operations, net of minority interest		44,510			23,855

Net income	$	249,351		$	161,443

General and Administrative

General and administrative expenses increased to $38.1 million for the year ended December 31, 2005 from $33.7 million for the year ended December 31, 2004. This increase was primarily due to increases in salaries and increases in personnel consistent with the increase in the size of the Company. The increase in general and administrative expenses was also due to the expensing of stock options and related long term incentive compensation and increased costs relating to compliance with the requirements of the Sarbanes-Oxley legislation and related regulatory requirements.

Depreciation and Amortization

Depreciation and amortization increased to $135.8 million for the year ended December 31, 2005 from $119.9 million for the year ended December 31, 2004. The increase is primarily due to the increase in gross investment in operating real estate during the respective periods and particularly the increased investment in tenant improvement costs, which are amortized over a relatively shorter period than buildings.

Interest Expense

Interest expense increased to $119.6 million for the year ended December 31, 2005 from $107.0 million for the year ended December 31, 2004. This increase was due to an increase in the average debt outstanding for the respective periods, which was $2,241.1 million in 2005 and $1,990.3 million in 2004. The effect of the increases in the average debt outstanding was offset by decreases in the weighted average interest rates for the periods, to 6.58% in 2005 from 6.70% in 2004.

Other

Costs directly related to the development of Properties Under Development and land being readied for development are capitalized. Capitalized development costs include interest, development-related salaries, property taxes, insurance and other directly identifiable costs during the period of development. Capitalized interest for the year ended December 31, 2005 was $17.7 million as compared to $13.2 million for the year ended December 31, 2004. Capitalized development-related salaries and benefits historically represent approximately 1% to 2% of the cost of developed properties.

Gain on property dispositions and income taxes increased to $85.6 million and $14.8 million, respectively for the year ended December 31, 2005 from $0.5 million and $1.8 million, respectively for the year ended December 31, 2004. These increases are due to the $89.6 million gain recognized on the sale of 15 United Kingdom Properties in Operation to the Kings Hill Unit Trust joint venture and the resultant $14.5 million tax on this gain.

Income from discontinued operations increased to $44.5 million from $23.9 million for the year ended December 31, 2005 compared to the year ended December 31, 2004. The increase is due to the increase in the gains realized on property dispositions, which were primarily due to the increase in dispositions activity for 2005 compared to 2004. For the year ended December 31, 2005, there was $36.6 million in net gains on $200.9 million in dispositions and for the year ended December 31, 2004, there was $59.6 million in dispositions resulting in $11.6 million in net gains.

As a result of the foregoing, the Company’s net income increased to $249.4 million for the year ended December 31, 2005 from $161.4 million for the year ended December 31, 2004.

Liquidity and Capital Resources

As of December 31, 2006, the Company had cash and cash equivalents of $109.4 million, including $55.7 million in restricted cash.

Net cash flow provided by operating activities decreased to $344.9 million for the year ended December 31, 2006 from $360.7 million for the year ended December 31, 2005. This $15.8 million decrease was primarily due to an increase in restricted cash partially offset by an increase in net income. The increase in restricted cash is due to the increase in proceeds from the sale of land in the United Kingdom. These proceeds are restricted for the payment of infrastructure costs. Net cash flow provided by operations is the primary source of liquidity to fund distributions to shareholders and for the recurring capital expenditures and leasing transaction costs for the Company’s Properties in Operation.

Net cash used in investing activities increased to $355.3 million for the year ended December 31, 2006 from $286.6 million for the year ended December 31, 2005. This $68.7 million increase was primarily due to an increased investment in properties and an increased investment in development in progress partially offset by an increase in net proceeds from the disposition of properties and land.

Net cash used in financing activities decreased to $0.3 million for the year ended December 31, 2006 compared to $39.5 million for the year ended December 31, 2005. This change was due to the change in debt, and partially offset by a decrease in net proceeds from the issuance of preferred units. Net cash provided by or used in financing activities includes proceeds from the issuance of equity and debt, net of debt repayments and shareholder distributions. Net cash provided by financing activities is a source of capital utilized by the Company to fund investment activities.

The Company funds its development and acquisitions with long-term capital sources including proceeds from the disposition of properties. For the year ended December 31, 2006, a significant portion of these activities were funded through a $600 million Credit Facility (the “$600 million Credit Facility”). The interest rate on borrowings under the $600 million Credit Facility fluctuates based upon ratings from Moody’s Investors Service, Inc. (“Moody’s”), Standard and Poor’s Ratings Group (“S&P”) and Fitch, Inc. (“Fitch”). The current ratings for the Company’s senior unsecured debt are Baa2, BBB and BBB+ from Moody’s, S&P and Fitch, respectively. At these ratings, the interest rate for borrowings under the $600 million Credit Facility is 65 basis points over LIBOR. The $600 million Credit Facility contains an accordion feature whereby the Company may borrow an additional $200 million. The $600 million Credit Facility expires in January 2010, and has a one-year extension option.

The Company uses debt financing to lower its overall cost of capital in an attempt to increase the return to shareholders. The Company staggers its debt maturities and maintains debt levels it considers to be prudent. In determining its debt levels, the Company considers various financial measures including the debt to gross assets ratio and the fixed charge coverage ratio. As of December 31, 2006 the Company’s debt to gross assets ratio was 41.8%, and for the year ended December 31, 2006 the fixed charge coverage ratio was 2.5x. Debt to gross assets equals total long-term debt, borrowings under the $600 million Credit Facility, and borrowings under the Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement divided by total assets plus accumulated depreciation. The fixed charge coverage ratio equals income from continuing operations before property dispositions and minority interest, including operating activity from discontinued operations, plus interest expense and depreciation and amortization, divided by interest expense, including capitalized interest, plus distributions on preferred units.

As of December 31, 2006, $186.0 million in mortgage loans and $1,955.0 million in unsecured notes were outstanding with a weighted average interest rate of 6.63%. The interest rates on these mortgage loans and unsecured notes are fixed and range from 4.6% to 8.8%. The weighted average remaining term for these mortgage loans and unsecured notes is 6.0 years.

In 2007, $1.6 million in mortgage loans with various interest rates and $100.0 million in unsecured notes will mature. The Company anticipates that it will refinance or retire these borrowings through its available sources of capital.

The Company’s contractual obligations, as of December 31, 2006, are as follows (in thousands):


	Payments Due By Period
			Less than 1						More than
Contractual Obligations	Total		year		1-3 years		3-5 years		5 years
Long-term debt (1)	$	3,200,328	$	264,685	$	788,184	$	741,153	$	1,406,306
Capital lease obligations		7,373		1,684		661		362		4,666
Operating lease obligations		13,102		716		929		812		10,645
Share of debt of unconsolidated joint ventures (1)		101,602		3,762		34,515		43,858		19,467
Property development commitments (2)		412,987		290,234		122,753		—		—
Share of property development commitments of unconsolidated joint ventures		34,296		24,517		9,779		—		—
Joint venture capital commitments		1,012		1,012		—		—		—
Letter of credit		1,583		1,583		—		—		—
Purchase obligations (3)		132,430		112,330		20,100		—		—
Master lease obligation (4)		5,532		5,532		—		—		—

Total	$	3,910,245	$	706,055	$	976,921	$	786,185	$	1,441,084


(1)		Includes principal and interest payments. Interest payments assume current credit facility borrowings and interest rates remain at the December 31, 2006 level until maturity.

(2)		The Comcast Center commitment is included at the current projected Total Investment of $495 million.

(3)		Purchase obligations include obligations to acquire property and land.

(4)		Includes Comcast Center net operating income support agreement and a master lease arrangement in the United Kingdom.

General

The Company believes that its existing sources of capital will provide sufficient funds to finance its continued development and acquisition activities. The Company’s existing sources of capital include the public debt and equity markets, proceeds from property dispositions, equity capital from joint venture partners and net cash provided from operating activities. Additionally, the Company expects to incur variable rate debt, including borrowings under the $600 million Credit Facility, from time to time.

In February 2005, the Company issued a $300 million 5.125% senior unsecured note due 2015. The net proceeds from such issuance were $296.4 million. The net proceeds were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

In June 2005, the Company redeemed for $20 million its outstanding 9.125% Series C Cumulative Redeemable Preferred Units and issued $20 million of 7.0% Series E Cumulative Redeemable Preferred Units.

During 2005, the Company raised $50 million through the placement of 6.65% Series F Cumulative Redeemable Preferred Units. The net proceeds from these offerings were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

In December 2006, the Company satisfied a $100 million 6.95% medium term note and issued a $300 million 5.50% senior unsecured note due 2016. The net proceeds of the $300 million offering were $295.4 million and were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

In December 2006, the Company raised $27 million through the placement of 6.70% Series G Cumulative Redeemable Preferred Units. The net proceeds from this offering were used to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

In September 2006, the quarterly Common Share dividend was increased to $0.62 per share from $0.615 per share. The Company’s annual Common Share dividend paid was $2.465 per share, $2.445 per share, and $2.425 per share in 2006, 2005, and 2004, respectively. In 2006, the Company’s dividend payout ratio was approximately 79.2% of Funds from operations (as defined below).

The Company has an effective S-3 shelf registration statement on file with the SEC (the “Shelf Registration Statement”). As of February 23, 2007, pursuant to the Shelf Registration Statement, the Trust had the capacity to issue up to $586.1 million in equity securities and the Operating Partnership had the capacity to issue up to $508.4 million in debt securities.

Off-Balance Sheet Arrangements

As of December 31, 2006, the Company had investments in unconsolidated joint ventures totaling $47.2 million.

Calculation of Funds from Operations

The National Association of Real Estate Investment Trusts (“NAREIT”) has issued a standard definition for Funds from operations (as defined below). The SEC has agreed to the disclosure of this non-GAAP financial measure on a per share basis in its Release No. 34-47226, Conditions for Use of Non-GAAP Financial Measures. The Company believes that the calculation of Funds from operations is helpful to investors and management as it is a measure of the Company’s operating performance that excludes depreciation and amortization and gains and losses from property dispositions. As a result, year over year comparison of Funds from operations reflects the impact on operations from trends in occupancy rates, rental rates, operating costs, development activities, general and administrative expenses, and interest costs, providing perspective not immediately apparent from net income. In addition, management believes that Funds from operations provides useful information to the investment community about the Company’s financial performance when compared to other REITs since Funds from operations is generally recognized as the standard for reporting the operating performance of a REIT. Funds from operations available to common shareholders is defined by NAREIT as net income (computed in accordance with generally accepted accounting principles (“GAAP”)), excluding gains (or losses) from sales of property, plus depreciation and amortization, and after adjustments for unconsolidated partnerships and joint ventures. Funds from operations available to common shareholders does not represent net income or cash flows from operations as defined by GAAP and does not necessarily indicate that cash flows will be sufficient to fund cash needs. It should not be considered as an alternative to net income as an indicator of the Company’s operating performance or to cash flows as a measure of liquidity. Funds from operations available to common shareholders also does not represent cash flows generated from operating, investing or financing activities as defined by GAAP.

Funds from operations (“FFO”) available to common shareholders for the years ended December 31, 2006, 2005, and 2004 are as follows (in thousands, except per share amounts):


	Year Ended December 31,
	2006			2005			2004

Reconciliation of net income to FFO – basic
Net income	$	266,574		$	249,351		$	161,443

Basic — income available to common shareholders		266,574			249,351			161,443
*Basic – income available to common shareholders per weighted average share*	$	2.98		$	2.87		$	1.91

Adjustments:
Depreciation and amortization of unconsolidated joint ventures		2,871			1,316			2,566
Depreciation and amortization		149,606			147,669			133,682
Gain on property dispositions		(136,036	)		(114,381	)		(13,502	)
Minority interest share in addback for depreciation and amortization and gain on property dispositions		(877	)		(1,363	)		(5,093	)

Funds from operations available to common shareholders — basic	$	282,138		$	282,592		$	279,096


*Basic Funds from operations available to common shareholders per weighted average share*	$	3.16		$	3.25		$	3.30

Reconciliation of net income to FFO – diluted Net income	$	266,574		$	249,351		$	161,443

Diluted – income available to common shareholders		266,574			249,351			161,443
*Diluted – income available to common shareholders per weighted average share*	$	2.95		$	2.82		$	1.88

Adjustments:
Depreciation and amortization of unconsolidated joint ventures		2,871			1,316			2,566
Depreciation and amortization		149,606			147,669			133,682
Gain on property dispositions		(136,036	)		(114,381	)		(13,502	)
Minority interest less preferred share distributions		11,786			10,018			6,955

Funds from operations available to common shareholders – diluted	$	294,801		$	293,973		$	291,144

*Diluted Funds from operations available to common shareholders per weighted average share*	$	3.12		$	3.20		$	3.25

Reconciliation of weighted average shares:
Weighted average common shares – all basic calculations		89,313			86,986			84,534
Dilutive shares for long term compensation plans		1,179			1,390			1,490

Diluted shares for net income calculations		90,492			88,376			86,024
Weighted average common units		3,895			3,555			3,676

Diluted shares for Funds from operations calculations		94,387			91,931			89,700

Inflation

Inflation has remained relatively low during the last three years, and as a result, it has not had a significant impact on the Company during this period. The $600 million Credit Facility and the financing related to the Comcast Center, (see Note 6 to the Company’s financial statements) bear interest at variable rates; therefore, the amount of interest payable under the $600 million Credit Facility and the financing related to the Comcast Center is influenced by changes in short-term interest rates, which tend to be sensitive to inflation. To the extent an increase in inflation would result in increased operating costs, such as in insurance, real estate taxes and utilities, substantially all of the tenants’ leases require the tenants to absorb these costs as part of their rental obligations. In addition, inflation also may have the effect of increasing market rental rates.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The following discussion about the Company’s risk management includes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from the results discussed in the forward-looking statements.

The Company’s primary market risk exposure is to changes in interest rates. The Company is exposed to market risk related to its $600 million Credit Facility and certain other indebtedness as discussed in “Management’s Discussion and Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources.” The interest on the $600 million Credit Facility and certain other indebtedness is subject to fluctuations in the market.

The Company also uses long-term and medium-term debt as a source of capital. These debt instruments are typically issued at fixed interest rates. When these debt instruments mature, the Company typically refinances such debt at then-existing market interest rates which may be more or less than the interest rates on the maturing debt. In addition, the Company may attempt to reduce interest rate risk associated with a forecasted issuance of new debt. In order to reduce interest rate risk associated with these transactions, the Company occasionally enters into interest rate protection agreements.

If the interest rates for variable rate debt were 100 basis points higher or lower during 2006, the Company’s interest expense would have increased or decreased by $3.2 million. If the interest rate for the fixed rate debt maturing in 2007 was 100 basis points higher or lower than its current rate of 7.3%, the Company’s interest expense would have increased or decreased by $500,000.

The sensitivity analysis above assumes no changes in the Company’s financial structure. It also does not consider future fluctuations in interest rates or the specific actions that might be taken by management to mitigate the impact of such fluctuations.

The Company is also exposed to currency risk on its net investment in the United Kingdom. The Company does not believe that this currency risk exposure is material to its financial statements.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The dual presentation of financial statements for the Company is required by the SEC. The Company is comprised of two SEC registrants: Liberty Property Trust and Liberty Property Limited Partnership. Accordingly, financial statements are required for each registrant. The financial information contained within the two sets of financial statements is essentially the same.

Management’s Annual Report on Internal Control Over Financial Reporting

To the Shareholders of Liberty Property Trust:

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a – 15 (f) and 15d – 15(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management and Board of Trustees regarding the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) in Internal Control – Integrated Framework. Based on our assessment we believe that, as of December 31, 2006, the Company’s internal control over financial reporting is effective based on those criteria.

Management’s assertion regarding its assessment of internal control over financial reporting has been audited by Ernst & Young LLP, an independent registered public accounting firm, whose reports appear on the following pages.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

February 23, 2007

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of Liberty Property Trust:

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, that Liberty Property Trust (the “Trust”) maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Trust’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Trust’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, evaluating management’s assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

In our opinion, management’s assessment that Liberty Property Trust maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, the Trust maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Liberty Property Trust as of December 31, 2006 and 2005, and the related consolidated statements of operations, shareholders’ equity, and cash flows for the each of the three years in the period ended December 31, 2006 of the Trust and our report dated February 23, 2007 expressed an unqualified opinion thereon.


		/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
February 23, 2007

Report of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of Liberty Property Trust:

We have audited the accompanying consolidated balance sheets of Liberty Property Trust (the “Trust”) as of December 31, 2006 and 2005, and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Trust’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Liberty Property Trust at December 31, 2006 and 2005, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Liberty Property Trust’s internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2007 expressed an unqualified opinion thereon.


		/s/Ernst & Young LLP

Philadelphia, Pennsylvania
February 23, 2007

CONSOLIDATED BALANCE SHEETS OF LIBERTY PROPERTY TRUST
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)


	December 31,
	2006			2005
ASSETS
Real estate:
Land and land improvements	$	678,075		$	620,355
Buildings and improvements		3,814,437			3,664,036
Less accumulated depreciation		(806,309	)		(732,439	)

Operating real estate		3,686,203			3,551,952

Development in progress		538,303			324,924
Land held for development		195,332			158,653

Net real estate		4,419,838			4,035,529

Cash and cash equivalents		53,737			61,629
Restricted cash		55,671			29,085
Accounts receivable		23,809			14,761
Deferred rent receivable		71,894			72,818
Deferred financing and leasing costs, net		129,745			122,994
Investments in unconsolidated joint ventures		47,196			33,522
Assets held for sale		40,715			73,211
Prepaid expenses and other assets		68,306			56,773

Total assets	$	4,910,911		$	4,500,322


LIABILITIES
Mortgage loans	$	185,978		$	238,728
Unsecured notes		1,955,000			1,755,000
Credit facility		246,960			255,450
Accounts payable		40,633			32,919
Accrued interest		36,297			34,892
Dividends and distributions payable		58,961			56,490
Other liabilities		217,751			164,528

Total liabilities		2,741,580			2,538,007

Minority interest		297,727			253,133

SHAREHOLDERS’ EQUITY
Common shares of beneficial interest, $.001 par value, 187,987,000 shares authorized, 90,972,979 (includes 59,100 in treasury) and 88,415,764 (includes 59,100 in treasury) shares issued and outstanding as of December 31, 2006 and 2005, respectively		91			88
Additional paid-in capital		1,906,403			1,799,068
Accumulated other comprehensive income		20,323			9,906
Distributions in excess of net income		(53,886	)		(98,553	)
Common shares held in treasury, at cost, 59,100 shares as of December 31, 2006 and 2005		(1,327	)		(1,327	)

Total shareholders’ equity		1,871,604			1,709,182

Total liabilities and shareholders’ equity	$	4,910,911		$	4,500,322

See accompanying notes.

CONSOLIDATED STATEMENTS OF OPERATIONS OF LIBERTY PROPERTY TRUST
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)


	Year Ended December 31,
	2006			2005			2004
OPERATING REVENUE
Rental	$	464,714		$	451,608		$	421,712
Operating expense reimbursement		202,005			181,886			163,572

Total operating revenue		666,719			633,494			585,284


OPERATING EXPENSE
Rental property		139,055			130,353			115,143
Real estate taxes		71,652			64,879			58,901
General and administrative		45,991			38,099			33,724
Depreciation and amortization		144,692			135,846			119,934

Total operating expenses		401,390			369,177			327,702

Operating income		265,329			264,317			257,582

OTHER INCOME (EXPENSE)
Interest and other income		9,591			8,008			6,266
Interest expense		(119,584	)		(119,614	)		(107,027	)

Total other income (expense)		(109,993	)		(111,606	)		(100,761	)


Income before property dispositions, income taxes, minority interest and equity in earnings (loss) of unconsolidated joint ventures		155,336			152,711			156,821
Gain on property dispositions		17,628			85,593			496
Income taxes		(288	)		(14,827	)		(1,820	)
Minority interest		(20,411	)		(21,176	)		(17,134	)
Equity in earnings (loss) of unconsolidated joint ventures		1,432			2,540			(775	)

Income from continuing operations		153,697			204,841			137,588

Discontinued operations, net of minority interest (including net gain on property dispositions of $112,620, $36,617, and $11,603 for the years ended December 31, 2006, 2005 and 2004, respectively)		112,877			44,510			23,855

Net income	$	266,574		$	249,351		$	161,443


Earnings per share
Basic:
Income from continuing operations	$	1.72		$	2.36		$	1.63
Income from discontinued operations		1.26			0.51			0.28

Income per common share – basic	$	2.98		$	2.87		$	1.91


Diluted:
Income from continuing operations	$	1.70		$	2.32		$	1.60
Income from discontinued operations		1.25			0.50			0.28

Income per common share – diluted	$	2.95		$	2.82		$	1.88

Weighted average number of common shares outstanding Basic		89,313			86,986			84,534
Diluted		90,492			88,376			86,024

See accompanying notes.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY OF LIBERTY PROPERTY TRUST
(IN THOUSANDS)


	Common											Common
	Shares of		Additional			Accumulated			Distributions			Shares			Total
	Beneficial		Paid-In			Other			in Excess of			Held			Shareholders’
	Interest		Capital			Comprehensive Income			Net Income			in Treasury			Equity
Balance at January 1, 2004	$	83	$	1,619,949		$	14,710		$	(88,518	)	$	(1,327	)	$	1,544,897
Net proceeds from the issuance of common shares		3		85,168			—			—			—			85,171
Net income		—		—			—			161,443			—			161,443
Distributions on common shares		—		—			—			(206,443	)		—			(206,443	)
Noncash compensation		—		2,388			—			—			—			2,388
Minority interest reclassification		—		(1,592	)		—			—			—			(1,592	)
Foreign currency translation adjustment		—		—			10,395			—			—			10,395


Balance at December 31, 2004		86		1,705,913			25,105			(133,518	)		(1,327	)		1,596,259
Net proceeds from the issuance of common shares		2		86,460			—			—			—			86,462
Net income		—		—			—			249,351			—			249,351
Distributions on common shares		—		—			—			(214,386	)		—			(214,386	)
Noncash compensation		—		5,032			—			—			—			5,032
Minority interest reclassification		—		1,663			—			—			—			1,663
Foreign currency translation adjustment		—		—			(15,199	)		—			—			(15,199	)


Balance at December 31, 2005		88		1,799,068			9,906			(98,553	)		(1,327	)		1,709,182
Net proceeds from the issuance of common shares		3		87,040			—			—			—			87,043
Net income		—		—			—			266,574			—			266,574
Distributions on common shares		—		—			—			(221,907	)		—			(221,907	)
Noncash compensation		—		6,212			—			—			—			6,212
Minority interest reclassification		—		14,083			—			—			—			14,083
Foreign currency translation adjustment		—		—			10,417			—			—			10,417

Balance at December 31, 2006	$	91	$	1,906,403		$	20,323		$	(53,886	)	$	(1,327	)	$	1,871,604

See accompanying notes.

CONSOLIDATED STATEMENTS OF CASH FLOWS OF LIBERTY PROPERTY TRUST
(IN THOUSANDS)


	Year Ended December 31,
	2006			2005			2004
OPERATING ACTIVITIES
Net income	$	266,574		$	249,351		$	161,443
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		151,966			150,722			136,700
Amortization of deferred financing costs		4,244			4,758			4,315
Equity in (earnings) loss of unconsolidated joint ventures		(1,432	)		(2,540	)		775
Distributions from unconsolidated joint ventures		5,692			4,651			682
Minority interest in net income		25,469			22,965			18,167
Gain on property dispositions		(130,248	)		(122,210	)		(12,099	)
Noncash compensation		6,212			5,032			2,388
Changes in operating assets and liabilities:
Restricted cash		(21,692	)		3,849			(19,334	)
Accounts receivable		(6,879	)		1,804			(8,449	)
Deferred rent receivable		924			(6,290	)		(8,513	)
Prepaid expenses and other assets		(14,394	)		(12,488	)		(12,046	)
Accounts payable		7,648			8,894			8,859
Accrued interest		1,405			(102	)		2,166
Other liabilities		49,412			52,353			18,282

Net cash provided by operating activities		344,901			360,749			293,336


INVESTING ACTIVITIES
Investment in properties		(372,610	)		(324,340	)		(253,017	)
Investments in unconsolidated joint ventures		(6,239	)		(13,790	)		(6,198	)
Net proceeds from disposition of properties/land		492,548			415,144			54,140
Investment in development in progress		(359,959	)		(235,078	)		(105,208	)
Investment in land held for development		(79,976	)		(91,436	)		(34,132	)
Increase in deferred leasing costs		(29,034	)		(37,133	)		(29,560	)

Net cash used in investing activities		(355,270	)		(286,633	)		(373,975	)


FINANCING ACTIVITIES
Net proceeds from issuance of common shares		87,043			86,462			85,171
Net proceeds from issuance of preferred units		26,305			48,686			—
Net proceeds from issuance of unsecured notes		295,393			296,424			197,517
Repayments of unsecured notes		(100,000	)		—			(100,000	)
Proceeds from mortgage loans		—			—			9,618
Repayments of mortgage loans		(56,406	)		(173,926	)		(23,592	)
Proceeds from credit facility		725,025			784,800			477,800
Repayments on credit facility		(733,515	)		(841,350	)		(332,800	)
Increase in deferred financing costs		(1,635	)		(3,465	)		(199	)
Distributions paid on common shares		(219,873	)		(212,305	)		(204,339	)
Contributions from minority interests		—			—			1,158
Distributions to minority interests		—			(3,937	)		—
Distributions paid on units		(22,664	)		(20,859	)		(20,716	)

Net cash (used in) provided by financing activities		(327	)		(39,470	)		89,618

(Decrease) increase in cash and cash equivalents		(10,696	)		34,646			8,979
Increase (decrease) in cash and cash equivalents related to foreign currency translation		2,804			(6,684	)		2,879
Cash and cash equivalents at beginning of year		61,629			33,667			21,809

Cash and cash equivalents at end of year	$	53,737		$	61,629		$	33,667


SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
Write-off of fully depreciated property and deferred costs	$	87,424		$	83,794		$	27,990
Issuance of operating partnership common units		30,000			—			—
Acquisition of properties		(3,066	)		(51,716	)		(11,305	)
Assumption of mortgage loans		3,066			51,716			11,305

See accompanying notes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF LIBERTY PROPERTY TRUST

1. ORGANIZATION

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by Liberty Property Limited Partnership (the “Operating Partnership” and, together with the Trust and their consolidated subsidiaries, the “Company”). The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 95.6% of the common equity of the Operating Partnership at December 31, 2006. The Company provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties which are located principally within the Mid-Atlantic, Southeastern and Midwestern United States and the United Kingdom.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“US GAAP”) requires management to make estimates and assumptions that affect amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Principles of Consolidation

The consolidated financial statements of the Company include the Trust, the Operating Partnership and wholly owned subsidiaries and those subsidiaries in which the Company owns a majority voting interest with the ability to control operations of the subsidiaries and where no approval, veto or other important rights have been granted to the minority shareholders. All significant intercompany transactions and accounts have been eliminated.

Reclassifications

Certain amounts from prior years have been reclassified to conform to current-year presentation.

Real Estate and Depreciation

The properties are recorded at cost and are depreciated using the straight line method over their estimated useful lives. The estimated useful lives are as follows:


Building and improvements		40 years (blended)
Equipment		5 – 10 years
Tenant improvements		Term of the related lease

Expenditures directly related to acquisition or improvement of real estate, including interest and other costs capitalized during development, are included in net real estate and are stated at cost. The capitalized costs include pre-construction costs essential to the development of the property, development and construction costs, interest costs, real estate taxes, development-related salaries and other costs incurred during the period of development. Expenditures for maintenance and repairs are charged to operations as incurred.

Once a property is designated as held for sale, no further depreciation expense is recorded. Operations for properties identified as held for sale and/or sold where no continuing involvement exists are presented in discontinued operations for all periods presented.

The Company evaluates its real estate investments and its investments in unconsolidated joint ventures upon occurrence of a significant adverse change in its operations to assess whether any impairment indicators are present that affect the recovery of the recorded value. If any real estate investment or investment in unconsolidated joint

ventures is considered impaired, a loss is recognized to reduce the carrying value of the property to its estimated fair value.

Investments in Unconsolidated Joint Ventures

The Company accounts for its investments in unconsolidated joint ventures using the equity method of accounting as the Company exercises significant influence, but does not control these entities. Under the equity method of accounting, the net equity investment of the Company is reflected in the accompanying consolidated balance sheets and the Company’s share of net income from the joint ventures is included in the accompanying consolidated statements of operations.

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents.

Restricted Cash

Restricted cash includes tenant security deposits and escrow funds that the Company maintains pursuant to certain mortgage loans. Restricted cash also includes the undistributed proceeds from the sale of residential land in Kent County, United Kingdom.

Accounts Receivable

The Company’s accounts receivable are comprised of rents and charges for property operating costs due from tenants. The Company periodically performs a detailed review of amounts due from tenants to determine if accounts receivable balances are collectible. Based on this review, accounts receivable are reduced by an allowance for doubtful accounts. The Company considers tenant credit quality and payment history and general economic conditions in determining the allowance for doubtful accounts. If the accounts receivable balance is subsequently deemed uncollectible, the receivable and allowance for doubtful account balance is written off.

The allowance for doubtful accounts at December 31, 2006 and 2005 was $5.1 million and $6.7 million, respectively.

Deferred Rent Receivable

The Company’s deferred rent receivable represents the cumulative difference between rent revenue recognized on a straight line basis and contractual payments due under the terms of tenant leases.

Revenues

The Company earns rental income under operating leases with tenants. Rental income is recognized on a straight line basis over the applicable lease term. Operating expense reimbursements consisting of amounts due from tenants for real estate taxes, utilities and other recoverable costs are recognized as revenue in the period in which the corresponding expenses are incurred.

Termination fees (included in rental revenue) are fees that the Company has agreed to accept in consideration for permitting certain tenants to terminate their lease prior to the contractual expiration date. The Company recognizes termination fees in accordance with Staff Accounting Bulletin 104 when the following conditions are met:

	a)		the termination agreement is executed,

	b)		the termination fee is determinable,

	c)		all landlord services, pursuant to the terminated lease, have been rendered, and

	d)		collectibility of the termination fee is assured.

Deferred Financing and Leasing Costs

Costs incurred in connection with financing or leasing are capitalized and amortized over the term of the related loan or lease. Deferred financing cost amortization is reported as interest expense. Intangible assets related to acquired in-place leases are amortized over the terms of the related leases.

Costs Incurred for Preferred Unit Issuance

Costs incurred in connection with the Company’s preferred unit issuances are reflected as a reduction of minority interest.

Income per Common Share

The following table sets forth the computation of basic and diluted income per common share (in thousands, except per share amounts):


	2006						2005
			Weighted						Weighted
			Average						Average
	Income		Shares		Per		Income		Shares		Per
	(Numerator)		(Denominator)		Share		(Numerator)		(Denominator)		Share
Basic income from continuing operations
Income from continuing operations	$	153,697		89,313	$	1.72	$	204,841		86,986	$	2.36

Dilutive shares for long-term compensation plans		—		1,179				—		1,390


Diluted income from continuing operations
Income from continuing operations and assumed conversions		153,697		90,492	$	1.70		204,841		88,376	$	2.32


Basic income from discontinued operations
Discontinued operations net of minority interest		112,877		89,313	$	1.26		44,510		86,986	$	0.51

Dilutive shares for long-term compensation plans		—		1,179				—		1,390


Diluted income from discontinued operations
Discontinued operations net of minority interest		112,877		90,492	$	1.25		44,510		88,376	$	0.50


Basic income per common share
Net income		266,574		89,313	$	2.98		249,351		86,986	$	2.87

Dilutive shares for long-term compensation plans		—		1,179				—		1,390

Diluted income per common share
Net income and assumed conversions	$	266,574		90,492	$	2.95	$	249,351		88,376	$	2.82


	2004
			Weighted
			Average
	Income		Shares		Per
	(Numerator)		(Denominator)		Share
Basic income from continuing operations
Income from continuing operations	$	137,588		84,534	$	1.63

Dilutive shares for long-term compensation plans		—		1,490


Diluted income from continuing operations
Income from continuing operations and assumed conversions		137,588		86,024	$	1.60


Basic income from discontinued operations
Discontinued operations net of minority interest		23,855		84,534	$	0.28

Dilutive shares for long-term compensation plans		—		1,490


Diluted income from discontinued operations
Discontinued operations net of minority interest		23,855		86,024	$	0.28


Basic income per common share
Net income		161,443		84,534	$	1.91

Dilutive shares for long-term compensation plans		—		1,490


Diluted income per common share
Net income and assumed conversions	$	161,443		86,024	$	1.88

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, deferred rent receivable, accounts payable, accrued interest, dividends and distributions payable and other liabilities are reasonable estimates of fair values because of the short-term nature of these instruments. The fair value of the Company’s long-term debt, which is based on estimates by management and on rates quoted on December 31, 2006 for comparable loans, exceeds the aggregate carrying value by approximately $91 million at December 31, 2006.

Income Taxes

The Company has elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the “Code”). As a result, the Company generally is not subject to federal income taxation at the corporate level to the extent it distributes annually at least 90% of its REIT taxable income, as defined in the Code, to its shareholders and satisfies certain other organizational and operational requirements. The Company has met these requirements and, accordingly, no provision has been made for federal income taxes in the accompanying consolidated financial statements.

Several of the Company’s subsidiaries are taxable REIT subsidiaries (each a “TRS”) and are subject to federal income taxes. In general, a TRS may perform additional services for tenants and generally may engage in real estate or non-real estate business that are not permitted REIT activities. The Company is also taxed in certain states and the United Kingdom. Accordingly, the Company has recognized federal, state and United Kingdom income taxes in accordance with US GAAP, as applicable. If the Company fails to qualify as a REIT in any taxable year, the Company will be subject to federal income tax on its taxable income at regular corporate rates.

Certain of the Company’s taxable REIT subsidiaries have net operating loss carryforwards of approximately $9.7 million available as of December 31, 2006. These carryforwards begin to expire in 2013. We have considered estimated future taxable income and have determined that a valuation allowance for the full carrying value of net operating loss carryforwards is appropriate.

The Federal tax cost basis of the real estate at December 31, 2006 was $5.0 billion.

Share Based Compensation

At December 31, 2006, the Company had a share-based employee compensation plan as fully described in Note 10. Effective January 1, 2006 the Company adopted for its share-based employee compensation plan (the “Plan”) the provisions of SFAS No. 123(R), “Share-Based Payment” (“SFAS No. 123(R)”), using the modified prospective application method. In accordance with SFAS No. 123(R), share-based compensation cost is measured at the grant date, based on the fair value of the award, and is recognized as expense over the employees’ requisite service period. In January 2003, the Company adopted the fair value recognition provisions of SFAS No. 123, “Accounting for Stock-Based Compensation", prospectively for all employee option awards granted, modified, or settled after January 1, 2003. Prior to 2003, the Company accounted for the Plan under the recognition and measurement provisions of Accounting Principles Board (“APB”) Opinion No. 25, “Accounting for Stock Issued to Employees", and related Interpretations.

Under the modified prospective application method, results for prior periods have not been restated to reflect the effects of implementing SFAS No. 123(R).

Certain restricted share awards and option awards are subject to accelerated vesting upon retirement. The Company historically accounted for these awards over the explicit service period. Upon adoption of SFAS No. 123(R), the Company began expensing new awards to individuals qualifying for share acceleration over the substantive service period. Compensation costs relating to awards granted prior to the adoption of SFAS No. 123(R) continue to be expensed over the explicit service period. Had the Company accounted for those awards over the substantive service period, compensation costs for the year ended December 31, 2005 would have increased by $0.2 million and for the year ended December 31, 2004 would have increased by $0.5 million.

Included in compensation costs for the year ended December 31, 2006 was a charge of $0.2 million, which resulted from the accelerated vesting of unvested options and shares during the year ended December 31, 2006.

Foreign Currency Translation

The functional currency of the Company’s United Kingdom operations is pounds sterling. The Company translates the financial statements for the United Kingdom operations into US dollars. Gains and losses resulting from this translation do not impact the results of operations and are included in accumulated other comprehensive income as a separate component of shareholders’ equity. Accumulated other comprehensive income consists solely of translation adjustments as described. Other comprehensive income (loss) was $10.4 million, ($15.2 million) and $10.4 million for the years ended December 31, 2006, 2005 and 2004, respectively. Upon sale or upon complete or substantially complete liquidation of a foreign investment, the gain or loss on the sale will include the cumulative translation adjustments that have been previously recorded in other comprehensive income.

Recently Issued Accounting Standards

SFAS No. 153

In December 2004, the FASB issued SFAS No. 153, “Accounting for Non-monetary Transactions” (“SFAS No. 153”). SFAS No.153 requires non-monetary exchanges to be accounted for at fair value, recognizing any gain or loss, if the transactions meet a commercial-substance criterion and fair value is determinable. The provisions of SFAS No. 153 are effective for non-monetary asset exchanges occurring in fiscal years beginning after June 15, 2005. The Company adopted the provisions of SFAS No. 153 on January 1, 2006 and the adoption did not have a material impact on the Company’s results of operations or its financial position.

EITF Issue 04-5

In June 2005, the FASB ratified its consensus in EITF Issue 04-5, “Determining Whether a General Partner, or the General Partners as a Group, Controls a Limited Partnership or Similar Entity When the Limited Partners Have Certain Rights” (“Issue 04-5”). The effective date for Issue 04-5 was June 29, 2005 for all new or modified partnerships and January 1, 2006 for all other partnerships. The adoption of Issue 04-5 did not have a material impact on the Company’s results of operations or its financial position.

SFAS No. 157

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS No. 157”), which defines fair value, establishes a framework for consistently measuring fair value under GAAP, and expands disclosures about fair value measurements. SFAS No. 157 is effective for the Company beginning January 1, 2008, and the provisions of SFAS No. 157 will be applied prospectively as of that date. The Company does not anticipate that the adoption of this statement will have a material effect on its financial position or results of operations.

FIN 48

In July 2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes” (“FIN 48”). FIN 48 is an interpretation of SFAS No. 109, “Accounting for Income Taxes,” and it seeks to reduce the diversity in practice associated with certain aspects of measurement and recognition in accounting for income taxes. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, and accounting in interim periods and requires expanded disclosure with respect to the uncertainty in income taxes. FIN 48 is effective for the Company beginning January 1, 2007. The cumulative effect, if any, of applying FIN 48 is to be reported as an adjustment to the opening balance of retained earnings in the year of adoption. The Company is currently evaluating the financial impact, if any, of the interpretation and will adopt the provisions of FIN 48 on January 1, 2007.

3. REAL ESTATE

The Company owns and operates industrial and office properties located principally in suburban mixed-use developments or business parks. The carrying value of these properties by type as of December 31, 2006 and 2005 is as follows (in thousands):


	Land		Buildings
	And Land		And				Accumulated
	Improvements		Improvements		Total		Depreciation
2006
Industrial properties	$	309,119	$	1,652,100	$	1,961,219	$	372,444
Office properties		368,956		2,162,337		2,531,293		433,865

2006 Total	$	678,075	$	3,814,437	$	4,492,512	$	806,309


2005
Industrial properties	$	305,207	$	1,657,992	$	1,963,199	$	336,721
Office properties		315,148		2,006,044		2,321,192		395,718

2005 Total	$	620,355	$	3,664,036	$	4,284,391	$	732,439

Depreciation expense was $124.9 million in 2006, $123.3 million in 2005 and $114.2 million in 2004.

As of December 31, 2006, the Company commenced development on 38 properties, which upon completion are expected to comprise 7.4 million square feet of leaseable space. As of December 31, 2006, $538.3 million had been expended for the development of these projects and an additional $475.0 million is estimated to be required for completion.

Information on the operating properties the Company sold during the years ended December 31, 2006 and 2005 is as follows:


2006 Sales	Number of		Leaseable
Segment	Buildings		Square Feet		Proceeds
					(in thousands)
Delaware Valley
Southeastern Pennsylvania		3		1,146,940	$	101,700
Other		3		155,056		10,760
Midwest
Lehigh Valley		5		716,758		109,255
Other		16		2,519,409		134,375
Mid-Atlantic		16		1,449,464		139,300
Florida		3		147,262		7,474

Total		46		6,134,889	$	502,864


2005 Sales	Number of		Leaseable
Segment	Buildings		Square Feet		Proceeds
					(in thousands)
Delaware Valley
Southeastern Pennsylvania		2		139,760	$	7,864
Other		3		177,733		12,333
Midwest
Lehigh Valley		2		142,204		8,676
Other		18		400,262		23,236
Mid-Atlantic		4		727,732		51,570
Florida		6		726,632		53,834
United Kingdom		16		602,175		263,343

Total		51		2,916,498	$	420,856

4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

Liberty Venture I, LP

The Company has a 25% interest in Liberty Venture I, LP, an entity engaged in ownership of industrial distribution properties in New Jersey (the Delaware Valley — Other segment). The Company also provides development, leasing and property management services for a fee, and may receive a promoted interest if certain return thresholds are met.

The Company recognized $634,000, $934,000, and $742,000 for development, leasing and property management services during the years ended December 31, 2006, 2005 and 2004, respectively.

Kings Hill Unit Trust

On December 14, 2005, the Company entered into a joint venture agreement (“Kings Hill Unit Trust”) with Doughty Hanson & Co. Real Estate. The Company sold 15 properties with a net book value of $125.8 million to the joint venture for proceeds of $219.9 million. In addition, the Company holds a $7.5 million note receivable from the Kings Hill Unit Trust and retained a 20% ownership interest in the joint venture. The note receivable bears interest at a 9% rate. The Company recognized a $75.1 million gain net of $14.5 million of tax on the sale of the properties to the Kings Hill Unit Trust. Due to the Company’s continuing involvement in this joint venture, the operations to the date of sale, as well as the gain on sale and related taxes are included in income from continuing operations in the accompanying consolidated statements of operations. The properties which were sold are industrial-flex and office properties and were included in the Company’s United Kingdom segment. The Company provides property management services for a fee, and may receive a promoted interest if certain return thresholds are met.

Income from property management fees and interest was $1.3 million during the year ended December 31, 2006.

Liberty/Commerz 1701 JFK Boulevard, LP

On April 13, 2006, the Company entered into a joint venture (“Liberty/Commerz 1701 JFK Boulevard, LP”) with an affiliate of Commerzleasing und Immobilien AG, a wholly owned subsidiary of Commerzbank AG, pursuant to which it sold an 80% interest in the equity of Comcast Center, a 1.25 million square foot office tower the Company is developing in Philadelphia, Pennsylvania. The transaction valued the property at $512 million. In connection with the transaction, the joint venture obtained a $324 million forward loan commitment at a rate of 6.15% assuming the loan closes in

March 2008. In addition to retaining a 20% interest, the Company will earn leasing and property management fees and may receive a promoted interest if certain return thresholds are met.

Under the terms of the joint venture arrangement, the Company is obligated to complete development of the building, the estimated cost of which is approximately $495 million, and is also obligated to complete the initial lease up of the property. Based on the updated leasing schedule Liberty may have to fund $3.5 million in rent support. The criteria for sale recognition in accordance with SFAS No. 66, “Accounting for the Sale of Real Estate,” have not been met and this transaction is accounted for as a financing arrangement.

Liberty Illinois, LP

On April 25, 2006, the Company entered into a joint venture (“Liberty Illinois, LP”) with the New York State Common Retirement Fund, selling a 75% equity interest in six distribution buildings totaling 2.1 million square feet and 104 acres of developable land. The joint venture valued the buildings and land at $125.0 million. The Company retained a 25% ownership interest in the joint venture, and will earn development, leasing and property management fees, and may receive a promoted interest if certain return thresholds are met.

During the year ended December 31, 2006 the joint venture began construction on two buildings. Under the terms of the joint venture arrangement, the Company is obligated to complete development of the buildings, the estimated cost of which is approximately $39 million.

The Company recognized $777,000 for development and property management services during the year ended December 31, 2006.

Other Joint Ventures

As of December 31, 2006, the Company had a 50% ownership interest in three additional unconsolidated joint ventures. These joint ventures have investments in properties under development, land or in leaseholds and do not operate or own operating properties.

The Company’s share of each of the joint venture’s earnings is included in equity in earnings (loss) of unconsolidated joint ventures in the accompanying consolidated statements of operations.

The condensed balance sheets as of December 31, 2006 and 2005 and statements of operations for Liberty Venture I, LP, Liberty Illinois, LP, Kings Hill Unit Trust and other unconsolidated joint ventures for the years ended December 31, 2006, 2005 and 2004 are as follows (in thousands):

Balance Sheets:


	December 31, 2006
	Liberty			Liberty			Kings Hill
	Venture I, LP			Illinois, LP			Unit Trust			Other		Total
Real estate assets	$	116,324		$	119,787		$	228,120		$	—	$	464,231
Accumulated depreciation		(10,183	)		(1,842	)		(4,213	)		—		(16,238	)

Real estate assets, net		106,141			117,945			223,907			—		447,993
Development in progress		—			28,420			—			24,088		52,508
Land held for development		2,733			8,246			—			31,078		42,057
Other assets		13,723			6,214			20,838			13,024		53,799

Total assets	$	122,597		$	160,825		$	244,745		$	68,190	$	596,357


Debt	$	74,063		$	86,681		$	186,010		$	10,600	$	357,354
Other liabilities		1,182			5,005			49,584			4,420		60,191
Equity		47,352			69,139			9,151			53,170		178,812

Total liabilities and equity	$	122,597		$	160,825		$	244,745		$	68,190	$	596,357


Company’s net investment in unconsolidated joint ventures (1)	$	11,293		$	11,259		$	—		$	24,644	$	47,196

Balance Sheets:


	December 31, 2005
	Liberty			Liberty		Kings Hill
	Venture I, LP			Illinois, LP		Unit Trust			Other		Total
Real estate assets	$	121,092		$	—	$	202,200		$	—	$	323,292
Accumulated depreciation		(7,579	)		—		(284	)		—		(7,863	)

Real estate assets, net		113,513			—		201,916			—		315,429
Development in progress		—			—		—			—		—
Land held for development		2,750			—		—			37,812		40,562
Other assets		14,922			—		18,499			9,980		43,401

Total assets	$	131,185		$	—	$	220,415		$	47,792	$	399,392

Debt	$	77,826		$	—	$	163,448		$	—	$	241,274
Other liabilities		2,284			—		44,028			678		46,990
Equity		51,075			—		12,939			47,114		111,128

Total liabilities and equity	$	131,185		$	—	$	220,415		$	47,792	$	399,392

Company’s net investment in unconsolidated joint ventures (1)	$	12,310		$	—	$	—		$	21,212	$	33,522


(1)		Differences between the Company’s net investment in unconsolidated joint ventures and its underlying equity in the net assets of the venture is primarily a result of the deferral of gains associated with the sales of properties to joint ventures in which the Company retains an ownership interest. Deferred gains are amortized to equity in earnings (loss) of joint ventures over the average estimated useful lives of the assets sold.

Statements of Operations:


	Year Ended December 31, 2006
	Liberty			Liberty			Kings Hill
	Venture I, LP			Illinois, LP			Unit Trust			Other			Total
Total revenue	$	18,395		$	7,471		$	18,183		$	—		$	44,049
Operating expense		5,364			1,833			2,181			171			9,549

		13,031			5,638			16,002			(171	)		34,500
Interest		(4,501	)		(2,527	)		(13,455	)		—			(20,483	)
Depreciation and amortization		(4,544	)		(2,502	)		(6,267	)		—			(13,313	)
Other income/(expense)		(127	)		5			(604	)		392			(334	)
Gain on sale		2,644			—			—			138			2,782

Net income (loss)	$	6,503		$	614		$	(4,324	)	$	359		$	3,152

Company’s equity in earnings (loss) of unconsolidated joint ventures	$	1,651		$	259		$	(657	)	$	179		$	1,432


	Year Ended December 31, 2005
	Liberty			Liberty		Kings Hill
	Venture I, LP			Illinois, LP		Unit Trust			Other			Total
Total revenue	$	18,592		$	—	$	745		$	—		$	19,337
Operating expense		5,859			—		201			32			6,092

		12,733			—		544			(32	)		13,245
Interest		(4,569	)		—		(634	)		—			(5,203	)
Depreciation and amortization		(4,933	)		—		(386	)		—			(5,319	)
Other income/(expense)		(184	)		—		(33	)		3,066			2,849
Gain on sale		7,555			—		—			—			7,555

Net income (loss)	$	10,602		$	—	$	(509	)	$	3,034		$	13,127

Company’s equity in earnings (loss) of unconsolidated joint ventures	$	2,650		$	—	$	(110	)	$	—		$	2,540

Statements of Operations:


	Year Ended December 31, 2004
	Liberty			Liberty		Kings Hill
	Venture I, LP			Illinois, LP		Unit Trust		Other		Total
Total revenue	$	18,746		$	—	$	—	$	—	$	18,746
Operating expense		6,736			—		—		—		6,736

		12,010			—		—		—		12,010
Interest		(4,426	)		—		—		—		(4,426	)
Depreciation and amortization		(10,683	)		—		—		—		(10,683	)

Net loss	$	(3,099	)	$	—	$	—	$	—	$	(3,099	)

Company’s equity in loss of unconsolidated joint ventures	$	(775	)	$	—	$	—	$	—	$	(775	)

5. DEFERRED FINANCING AND LEASING COSTS

Deferred financing and leasing costs at December 31, 2006 and 2005 are as follows (in thousands):


	December 31,
	2006			2005
Deferred leasing costs	$	150,179		$	154,886
Deferred financing costs		8,476			23,266
In-place lease value and related intangible asset		71,496			52,945

		230,151			231,097
Accumulated amortization		(100,406	)		(108,103	)

Total	$	129,745		$	122,994

6. INDEBTEDNESS

Indebtedness consists of mortgage loans, unsecured notes, borrowings under the credit facility and the Liberty/Commerz 1701 JFK Boulevard, LP, financing arrangement. The weighted average interest rates for the years ended December 31, 2006, 2005 and 2004, were 6.6%, 6.6% and 6.7%, respectively. Interest costs during the years ended December 31, 2006, 2005 and 2004 in the amount of $30.8 million, $17.7 million and $13.2 million, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2006, 2005 and 2004, was $150.2 million, $148.8 million and $130.4 million, respectively.

During the year ended December 31, 2006, the Company satisfied a $100 million 6.95% medium term note and issued a $300 million 5.50% senior unsecured note due December 15, 2016. The Company used the net proceeds to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

During the year ended December 31, 2005, the Company issued a $300 million 5.125% senior unsecured note due March 2, 2015. The Company used the net proceeds to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

The Company is subject to financial covenants contained in some of the debt agreements, the most restrictive of which are detailed below under the heading “Credit Facility.” As of December 31, 2006 the Company was in compliance with all financial covenants.

Mortgage Loans, Unsecured Notes

Mortgage loans with maturities ranging from 2007 to 2021 are collateralized by and in some instances cross-collateralized by properties with a net book value of $330.0 million.

The interest rates on $2,141.0 million of mortgage loans and unsecured notes are fixed and range from 4.6% to 8.8%. The weighted average remaining term for the mortgage loans and unsecured notes is 6.0 years.

Credit Facility

$600 Million Unsecured Revolving Credit Facility

During the fourth quarter of 2005, the Company obtained a four-year, $600 million unsecured revolving credit facility (the “$600 million Credit Facility”) replacing a $450 million unsecured revolving credit facility due January 16, 2006. Based on the Company’s present ratings, borrowings under the $600 million Credit Facility are priced at LIBOR plus 65 basis points. The $600 million Credit Facility contains a competitive bid option, whereby participating lenders bid on the interest rate to be charged. This feature is available for up to 50% of the amount of the facility. The interest rate on the $94.0 million of borrowings outstanding as of December 31, 2006 was 5.59%. The current ratings for the Company’s senior unsecured debt are Baa2, BBB, and BBB+ from Moody’s, S&P and Fitch, respectively. The $600 million Credit Facility has an accordion feature for an additional $200 million. There is also a 15 basis point annual facility fee on the current borrowing capacity. The $600 million Credit Facility expires on January 16, 2010 and may be extended for a one-year period. The $600 million Credit Facility contains financial covenants, certain of which are set forth below:

	•		total debt to total assets may not exceed 0.60:1;

	•		earnings before interest, taxes, depreciation and amortization to fixed charges may not be less than 1.50:1;

	•		unsecured debt to unencumbered asset value must equal or be less than 60%; and

	•		unencumbered net operating income to unsecured interest expense must equal or exceed 200%.

Liberty/Commerz 1701 JFK Boulevard, LP Financing Arrangement

The equity contribution from the Company’s joint venture partner in the Liberty/Commerz 1701 JFK Boulevard, LP is treated as a financing arrangement- see Note 4. This equity contribution receives a return equal to the greater of 5% or the current rate on the $600 million Credit Facility.

The scheduled principal amortization and maturities of the Company’s mortgage loans, unsecured notes outstanding, the $600 million Credit Facility, the Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement and the related weighted average interest rates are as follows (in thousands, except percentages):


												Weighted
	Mortgages											Average
	Principal		Principal		Unsecured		Credit					Interest
	Amortization		Maturities		Notes		Facility			Total		Rate
2007	$	8,820	$	1,553	$	100,000	$	—		$	110,373		7.22	%
2008		7,975		39,753		—		152,960	(1)		200,688		6.15	%
2009		5,699		46,148		270,000		—			321,847		7.77	%
2010		4,877		4,738		200,000		94,000			303,615		7.51	%
2011		4,153		10,730		250,000		—			264,883		7.26	%
2012		3,274		32,911		235,000		—			271,185		6.47	%
2013		2,751		—		—		—			2,751		6.00	%
2014		2,894		2,681		200,000		—			205,575		5.65	%
2015		3,033		—		300,000		—			303,033		5.13	%
2016		2,220		—		300,000		—			302,220		5.50	%
2017 & thereafter		1,768		—		100,000		—			101,768		7.47	%

	$	47,464	$	138,514	$	1,955,000	$	246,960		$	2,387,938		6.55	%


(1)		Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement — see above.

7. LEASING ACTIVITY

Future minimum rental payments due from tenants under noncancelable operating leases as of December 31, 2006 are as follows (in thousands):


2007	$	446,997
2008		399,549
2009		333,841
2010		269,376
2011		203,081
Thereafter		468,809

TOTAL	$	2,121,653

In addition to minimum rental payments, most leases require the tenants to pay for their pro rata share of specified operating expenses. These payments are included as operating expense reimbursement in the accompanying consolidated statements of operations.

8. SHAREHOLDERS’ EQUITY

Common Shares

The Company paid to holders of its common shares and holders of its common units distributions of $228.6 million, $220.8 million and $213.3 million during the years ended December 31, 2006, 2005, and 2004, respectively. On a per share basis, the Company paid Common Share and Unit distributions of $2.465, $2.445 and $2.425 during the years ended December 31, 2006, 2005, and 2004, respectively.

For federal income tax purposes, the following table summarizes the portions of the Common Share distributions relating to return of capital, ordinary income, and capital gains:


	2006			2005			2004
Return of capital		—			—			8.0	%
Ordinary income		66.6	%		62.8	%		87.3	%
Capital gains		33.4	%		37.2	%		4.7	%

The Company’s federal income tax returns are subject to examination by taxing authorities. Because the application of tax laws and regulations is susceptible to varying interpretations, the taxability of distributions could be changed at a later date upon final determination by taxing authorities.

Treasury Shares

The Company’s Board of Trustees authorized a share repurchase plan under which the Company may purchase up to $100 million of the Company’s Common Shares and preferred shares (as defined below).

Minority Interest

Minority interest in the accompanying consolidated financial statements represents the interests of the common and preferred units in Liberty Property Limited Partnership not held by the Trust. Minority interest is adjusted at each period end to reflect the ownership percentage of the common and preferred unitholders at that time. A minority interest reclassification occurs between minority interest and shareholders’ equity each period there is a transaction involving ownership interests in Liberty Property Limited Partnership. In addition, minority interest includes third-party ownership interests in two consolidated joint venture investments in the United Kingdom. During 2006, 684,432 common units were issued in connection with an acquisition. No common units were issued in connection with acquisitions during 2005 or 2004. The common units outstanding as of December 31, 2006 have the same economic characteristics as common shares. The 4,189,967 common units share proportionately in the net income or loss and in any distributions of the Operating Partnership and are exchangeable into the same number of common shares of the Trust.

As of December 31, 2006, the Company has 5,800,000 authorized but unissued preferred shares.

The Company has outstanding the following Cumulative Redeemable Preferred Units of the Operating Partnership, (the “Preferred Units”):


Date of							Liquidation		Dividend			Redeemable
Issue		Issue	Amount		Units		Preference		Rate			As of		Exchangeable after
			(in 000’s)
	7/28/99	Series B	$	95,000		3,800	$	25		7.45	%		8/31/09	1/1/14 into Series B Cumulative Redeemable Preferred Shares of the Trust

	6/10/02	Series D	$	23,650		473	$	50		7.625	%		6/10/07	6/10/12 into Series D Cumulative Redeemable Preferred Shares of the Trust

	6/16/05	Series E	$	20,000		400	$	50		7.00	%		6/16/10	6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust

	6/30/05	Series F	$	44,000		880	$	50		6.65	%		6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust

	8/23/05	Series F	$	6,000		120	$	50		6.65	%		6/30/10	6/30/15 into Series F Cumulative RedeemablePreferred Shares of the Trust

	12/15/06	Series G	$	27,000		540	$	50		6.70	%		12/12/11	12/12/16 into Series G Cumulative Redeemable Preferred Shares of the Trust

Effective August 31, 2004, the distribution rate on the $95 million Series B preferred units was reduced from 9.25% to 7.45%.

During the year ended December 31, 2005, the Company redeemed for $20 million its outstanding 9.125% Series C Cumulative Redeemable Preferred Units.

The Company paid the following Preferred Unit distributions for the year ended December 31:


	2006		2005		2004
Distributions (in millions)	$	13.7	$	12.1	$	11.8
Distribution per unit:
Series B	$	1.86	$	1.86	$	2.16
Series C		—	$	1.05	$	2.28
Series D	$	3.81	$	3.81	$	3.81
Series E	$	3.50	$	1.90		—
Series F	$	3.33	$	1.61		—
Series G	$	0.16		—		—

Shareholder Rights Plan

In December 1997, the Board of Trustees of the Company adopted a shareholder rights plan (the “Shareholder Rights Plan”). Under the Shareholder Rights Plan, one Right (as defined in the Shareholder Rights Plan) was attached to each outstanding common share at the close of business on December 31, 1997. In addition, a Right will be attached to each share of common stock issued in the future. Each Right entitles the registered holder to purchase from the Company, under certain conditions, a unit (a “Rights Plan Unit”) consisting of one one-thousandth of a share of a Series A Junior Participating Preferred Share, $0.0001 par value, (the “Junior Preferred Stock”), of the Company, for $100 per Rights Plan Unit, subject to adjustment. The Rights become exercisable only if a person or group of affiliated or associated persons (an “Acquiring Person”) acquires, or obtains the right to acquire, beneficial ownership of common shares or other voting securities (“Voting Stock”) that have 10% or more of the voting power of the outstanding shares of Voting Stock, or if an Acquiring Person commences to make a tender offer or exchange offer to acquire beneficial ownership of Voting Stock that has 10% or more of the voting power of the outstanding shares of Voting Stock. The Rights are redeemable by the Company at a price of $0.0001 per Right. If not exercised or redeemed, all Rights will expire on December 31, 2007.

Dividend Reinvestment and Share Purchase Plan

The Company has a Dividend Reinvestment and Share Purchase Plan under which holders of common shares may elect to automatically reinvest their distributions in additional common shares and may make optional cash payments for additional common shares. The Company may issue additional common shares or repurchase common shares in the open market for purposes of financing its obligations under the Dividend Reinvestment and Share Purchase Plan. During the years ended December 31, 2006, 2005, and 2004, 1,297,867, 1,767,187, and 1,590,488, common shares, respectively, were issued through the Dividend Reinvestment and Share Purchase Plan. The Company used the proceeds to pay down outstanding borrowings under the Company’s unsecured credit facility and for general corporate purposes.

9. EMPLOYEE BENEFIT PLANS

The Company maintains a 401(k) plan for the benefit of its full-time employees. The Company matches the employees’ contributions up to 3% of the employees’ salary and may also make annual discretionary contributions. Total 401(k) expense recognized by the Company was $940,000, $716,000 and $739,000 for the years ended 2006, 2005 and 2004 respectively.

10. SHARE BASED COMPENSATION

Options

The Company has authorized the grant of options under the Plan to executive officers, other key employees, non-employee trustees and consultants of up to 12.8 million common shares of the Company. All options granted have 10-year terms and most options vest over a 3-year period, with options to purchase up to 20% of the shares exercisable after the first anniversary, up to 50% after the second anniversary and 100% after the third anniversary of the date of grant.

Share based compensation cost related to options for the years ended December 31, 2006, 2005 and 2004 was $764,000, $616,000 and $349,000, respectively.

Because option awards under the Plan vest over three years, the cost related to share-based employee compensation included in the determination of net income for 2005 and 2004 is less than that which would have been recognized if the fair value based method had been applied to all option awards since the original effective date of SFAS No. 123. The following table illustrates the effect on net income and earnings per share if the fair value based method had been applied to all outstanding and unvested option awards in each period (in thousands, except per share amounts).


	Year Ended December 31,
	2005			2004
Net income	$	249,351		$	161,443

Add: Share-based compensation expense included in reported net income		616			349

Deduct: Total share-based employee compensation expense determined under fair value based methods for all awards		(746	)		(1,199	)

Pro forma net income	$	249,221		$	160,593


Net income per common share:
Basic — as reported	$	2.87		$	1.91
Basic — pro forma	$	2.87		$	1.90

Diluted — as reported	$	2.82		$	1.88
Diluted — pro forma	$	2.82		$	1.87

Pro forma disclosures are not likely to be representative of the effects on reported net income for future years because of the staggered vesting periods of the options.

The fair value of share option awards is estimated on the date of the grant using the Black-Scholes option valuation model. The following weighted-average assumptions were utilized in calculating the fair value of options granted during the periods indicated:


	Year Ended December 31,
	2006			2005			2004
Risk-free interest rate		4.8	%		4.4	%		4.0	%
Dividend yield		5.8	%		5.9	%		6.2	%
Volatility factor		0.188			0.184			0.172
Weighted-average expected life	7 years			8 years			8 years

A summary of the Company’s share option activity, and related information for the year ended December 31, 2006 follows:


				Weighted
				Average
	Options			Exercise
	(000s)			Price
Outstanding at January 1, 2006		3,521		$	29.31
Granted		175			46.94
Exercised		(1,123	)		26.17
Forfeited		(16	)		42.55

Outstanding at December 31, 2006		2,557		$	31.83

Exercisable at December 31, 2006		2,080		$	29.07

The weighted average fair value of options granted during the years ended December 31, 2006, 2005 and 2004 was $5.06, $3.86 and $3.15, respectively. Exercise prices for options outstanding as of December 31, 2006 ranged from $21.88 to $48.54. The weighted average remaining contractual life of the options outstanding and exercisable at December 31, 2006 was 5.2 years and 4.5 years, respectively.

During the years ended December 31, 2006, 2005 and 2004, the total intrinsic value of share options exercised (the difference between the market price at exercise and the price paid by the individual to exercise the option) was $23.5 million, $9.5 million and $13.7 million, respectively. As of December 31, 2006, the aggregate intrinsic value of options outstanding was $44.2 million and the aggregate intrinsic value of options exercisable was $41.7 million. The total cash received from the exercise of options for the years ended December 31, 2006, 2005 and 2004 was $29.4 million, $15.8 million and $22.0 million, respectively. The Company has historically issued new shares to satisfy share option exercises.

As of December 31, 2006, there was $2.0 million of unrecognized compensation costs related to nonvested options granted under the Plan. That cost is expected to be recognized over a weighted average period of 1.4 years.

Long Term Incentive Shares (“LTI”)

Restricted LTI share grants made under the Plan are valued at the grant date fair value, which is the market price of the underlying common shares, and vest ratably over a 5-year period beginning with the first anniversary of the grant.

Share-based compensation cost related to restricted LTI share grants for the years ended December 31, 2006, 2005 and 2004 were $3.1 million, $2.4 million and $1.5 million, respectively.

The following table shows a summary of the Company’s restricted LTI share activity for the year ended December 31, 2006:


				Weighted Avg
	Shares			Grant Date
	(000s)			Fair value
Nonvested at January 1, 2006		253		$	39.10
Granted		78			48.08
Vested		(50	)		37.12
Forfeited		(10	)		40.26

Nonvested at December 31, 2006		271		$	42.02

The weighted average fair value of restricted shares granted during the years ended December 31, 2006, 2005 and 2004 was $48.08 per share, $41.14 per share and $42.47 per share. As of December 31, 2006, there was $11.4 million of total unrecognized compensation cost related to nonvested shares granted under the Plan. That cost is expected to be recognized over a weighted average period of 2.3 years. The total fair value of restricted shares vested during the years ended December 31, 2006, 2005 and 2004 was $1.9 million, $1.6 million and $0.9 million, respectively.

Bonus Shares

The Plan provides that employees of the Company may elect to receive bonuses or commissions in the form of common shares in lieu of cash (“Bonus Shares”). By making such election, the employee receives shares equal to 120% of the cash value of the bonus or commission, less applicable withholding tax. Bonus Shares issued for the years ended December 31, 2006, 2005 and 2004 were 39,207, 51,055 and 38,575, respectively. Share-based compensation cost related to Bonus Shares for the years ended December 31, 2006, 2005 and 2004 was $1.9 million, $2.1 million and $1.7 million, respectively.

Profit Sharing Plan

The Plan provides that employees of the Company, below the officer level, may receive up to 5% of base pay in the form of common shares depending on Company performance. Shares issued in conjunction with the profit sharing plan for the years ended December 31, 2006, 2005 and 2004 were 3,072, 3,126 and 4,092 shares, respectively.

An additional 3,063,169, 1,935,042 and 2,309,159 common shares were reserved for issuance for future grants under the Share Incentive Plan at December 31, 2006, 2005, and 2004, respectively.

Employee Share Purchase Plan

The Company registered 750,000 common shares under the Securities Act of 1933, as amended, in connection with an employee share purchase plan (“ESPP”). The ESPP enables eligible employees to purchase shares of the Company, in amounts up to 10% of the employee’s salary, at a 15% discount to fair market value. There were 10,491, 8,814 and 9,227 shares issued, in accordance with the ESPP, during the years ended December 31, 2006, 2005 and 2004, respectively.

11. COMMITMENTS AND CONTINGENCIES

Substantially all of the Properties and land were subject to Phase I Environmental Assessments and when appropriate Phase II Environmental Assessments (collectively, the “Environmental Assessments”) obtained in contemplation of their acquisition by the Company. The Environmental Assessments consisted of, among other activities, a visual inspection of each Property and its neighborhood and a check of pertinent public records. The Environmental Assessments did not reveal, nor is the Company aware of, any non-compliance with environmental laws, environmental liability or other environmental claim that the Company believes would likely have a material adverse effect on the Company.

Although the Company is engaged in litigation incidental to its business, there is no legal proceeding to which it is a party which, in the opinion of management, will materially adversely affect the results of the Company’s operations.

The Company is obligated to make additional capital contributions to unconsolidated joint ventures of $1.0 million.

The Company has letter of credit obligations of $1.6 million related to development requirements.

The Company maintains cash and cash equivalents at financial institutions. The combined account balances at each institution typically exceed FDIC insurance coverage and, as a result, there is a concentration of credit risk related to amounts on deposit in excess of FDIC insurance coverage. The Company believes the risk is not significant.

12. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

A summary of quarterly results of operations for the years ended December 31, 2006 and 2005 follows. Certain amounts have been reclassified to conform to the current presentation of discontinued operations (in thousands, except per share amounts).


	Quarter Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,
	2006		2006		2006		2006		2005		2005		2005		2005
Operating revenue	$	175,702	$	167,026	$	163,799	$	160,192	$	160,517	$	157,949	$	162,754	$	152,274

Income from continuing operations		36,130		35,032		50,800		31,735		102,495		31,779		34,788		35,779

Discontinued operations		24,684		11,853		17,649		58,691		4,821		20,096		9,769		9,824

Income available to common shareholders		60,814		46,885		68,449		90,426		107,316		51,875		44,557		45,603

Income per common share - basic (1)	$	0.67	$	0.52	$	0.77	$	1.02	$	1.22	$	0.59	$	0.51	$	0.53

Income per common share - diluted (1)	$	0.67	$	0.52	$	0.76	$	1.01	$	1.20	$	0.58	$	0.51	$	0.52


(1)		The sum of quarterly financial data may vary from the annual data due to rounding.

13. SEGMENT INFORMATION

The Company operates its portfolio of properties primarily throughout the Mid-Atlantic, Southeastern and Midwestern United States. Additionally, the Company owns certain assets in the United Kingdom. The Company reviews the performance of the portfolio on a geographical basis. As such, the following regions are considered the Company’s reportable segments:


Reportable Segments		Markets
Delaware Valley		Southeastern Pennsylvania; New Jersey
Midwest		Lehigh Valley, Pennsylvania; Michigan; Minnesota; Milwaukee; Chicago
Mid-Atlantic		Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia Beach
Florida		Jacksonville; Orlando; Boca Raton; Tampa; Texas
United Kingdom		County of Kent

The Company’s reportable segments are distinct business units which are each managed separately in order to concentrate market knowledge within a geographic area. Within these reportable segments, the Company derives its revenues from its two product types: industrial properties and office properties.

The Company evaluates performance of the reportable segments based on property level operating income, which is calculated as rental revenue and operating expense reimbursement less rental property expenses and real estate taxes. The accounting policies of the reportable segments are the same as those for the Company on a consolidated basis. The operating information by segment is as follows (in thousands):

YEAR ENDED DECEMBER 31, 2006


	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	187,817	$	38,730	$	85,180	$	116,324	$	122,014	$	112,788	$	3,866	$	666,719
Rental property expenses and real estate taxes		58,545		12,718		18,747		42,839		37,566		37,428		2,864		210,707

Property level operating income	$	129,272	$	26,012	$	66,433	$	73,485	$	84,448	$	75,360	$	1,002		456,012

Interest and other income																9,591
Interest expense																(119,584	)
General and administrative																(45,991	)
Depreciation and amortization																(144,692	)

Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																155,336
Gain on property dispositions																17,628
Income taxes																(288	)
Minority interest																(20,411	)
Equity in earnings of unconsolidated joint ventures																1,432
Discontinued operations, net of minority interest																112,877

Net income															$	266,574

YEAR ENDED DECEMBER 31, 2005


	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	187,212	$	37,521	$	77,219	$	110,190	$	104,794	$	96,229	$	20,329	$	633,494
Rental property expenses and real estate taxes		55,706		13,139		19,661		39,878		31,614		31,556		3,678		195,232


Property level operating income	$	131,506	$	24,382	$	57,558	$	70,312	$	73,180	$	64,673	$	16,651		438,262


Interest and other income																8,008
Interest expense																(119,614	)
General and administrative																(38,099	)
Depreciation and amortization																(135,846	)


Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																152,711
Gain on property dispositions																85,593
Income taxes																(14,827	)
Minority interest																(21,176	)
Equity in earnings of unconsolidated joint ventures																2,540
Discontinued operations, net of minority interest																44,510

Net income															$	249,351

YEAR ENDED DECEMBER 31, 2004


	Delaware Valley				Midwest
	Southeastern				Lehigh								United
	Pennsylvania		Other		Valley		Other		Mid-Atlantic		Florida		Kingdom		Total
Operating revenue	$	177,655	$	32,680	$	66,731	$	102,824	$	99,395	$	86,267	$	19,732	$	585,284
Rental property expenses and real estate taxes		51,943		11,048		17,087		37,341		26,715		26,744		3,166		174,044


Property level operating income	$	125,712	$	21,632	$	49,644	$	65,483	$	72,680	$	59,523	$	16,566		411,240


Interest and other income																6,266
Interest expense																(107,027	)
General and administrative																(33,724	)
Depreciation and amortization																(119,934	)


Income before property dispositions, income taxes, minority interest and equity in loss of unconsolidated joint ventures																156,821
Gain on property dispositions																496
Income taxes																(1,820	)
Minority interest																(17,134	)
Equity in loss of unconsolidated joint ventures																(775	)
Discontinued operations, net of minority interest																23,855

Net income															$	161,443


Product Type Information	Real Estate Related Revenues
	Year Ended December 31,
	2006		2005		2004
Industrial	$	284,551	$	268,958	$	247,379
Office		382,168		364,536		337,905

Total operating revenue	$	666,719	$	633,494	$	585,284

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT


	Delaware Valley						Midwest
	Southeastern						Lehigh						Mid-					United
	Pennsylvania			Other			Valley			Other			Atlantic			Florida		Kingdom		Total
January 1, 2006	$	1,060,198		$	183,020		$	637,301		$	833,618		$	913,735		$	646,681	$	9,838	$	4,284,391
Additions		74,852			36,807			15,006			37,853			104,185			275,474		1,597		545,774
Dispositions		(55,255	)		(4,422	)		(69,832	)		(91,464	)		(116,680	)		—		—		(337,653	)


December 31, 2006	$	1,079,795		$	215,405		$	582,475		$	780,007		$	901,240		$	922,155	$	11,435		4,492,512


Accumulated depreciation																					(806,309	)
Development in progress																					538,303
Land held for development																					195,332
Assets held for sale																					40,715
Other assets																					450,358

Total assets at December 31, 2006																				$	4,910,911

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT


	Delaware Valley						Midwest
	Southeastern						Lehigh						Mid-						United
	Pennsylvania			Other			Valley			Other			Atlantic			Florida			Kingdom			Total
January 1, 2005	$	1,020,714		$	190,116		$	558,590		$	746,207		$	828,809		$	651,123		$	169,304		$	4,164,863
Additions		44,071			14,857			84,698			114,253			115,341			37,772			10,832			421,824
Dispositions		(4,587	)		(21,953	)		(5,987	)		(26,842	)		(30,415	)		(42,214	)		(170,298	)		(302,296	)

December 31, 2005	$	1,060,198		$	183,020		$	637,301		$	833,618		$	913,735		$	646,681		$	9,838			4,284,391

Accumulated depreciation																							(732,439	)
Development in progress																							324,924
Land held for development																							158,653
Assets held for sale																							73,211
Other assets																							391,582

Total assets at December 31, 2005																						$	4,500,322

14. SFAS NO. 144, “ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS”

Discontinued Operations

In accordance with SFAS No. 144, the operating results and gain/(loss) on disposition of real estate for properties sold and held for sale are reflected in the consolidated statements of operations as discontinued operations. Prior year financial statements have been adjusted for discontinued operations. The proceeds from dispositions of operating properties with no continuing involvement were $395.9 million and $200.9 million for the years ended December 31, 2006 and 2005, respectively.

Below is a summary of the results of operations of the properties disposed of and held for sale through the respective disposition dates (in thousands):


	Year Ended December 31,
	2006			2005			2004
Revenues	$	28,399		$	60,202		$	70,580
Operating expenses		(11,170	)		(20,332	)		(23,244	)
Interest expense		(4,662	)		(15,814	)		(17,470	)
Depreciation and amortization		(7,252	)		(14,374	)		(16,581	)

Income before property dispositions and minority interest	$	5,315		$	9,682		$	13,285

The held for sale properties consist of three properties totaling 352,000 square feet in the Company’s Midwest — Other segment. The properties held for sale as of December 31, 2006 were sold in January 2007.

Interest expense is allocated to discontinued operations as permitted under EITF Issue 87-24, "Allocation of Interest to Discontinued Operations,” and such interest expense has been included in computing income from discontinued operations. The allocation of interest expense to discontinued operations was based on the ratio of net assets sold (without continuing involvement) or held for sale to the sum of total net assets plus consolidated debt.

Asset Impairment

In accordance with SFAS No. 144, during the years ended December 31, 2006 and 2005, the Company recognized impairment losses of $4.2 million and $5.3 million, respectively. The 2006 impairment loss of $4.2 million was primarily related to a 352,000 square foot portfolio of operating properties in the Midwest — Other segment. The 2005 impairment loss of $5.3 million was primarily related to a portfolio of operating properties equaling 615,000 square feet in the Midwest — Other segment. For the years ended December 31, 2006 and 2005, respectively, $4.2 million and $3.7 million related to properties sold or held for sale were included in the caption discontinued operations in the Company’s statement of operations. For the years ended December 31, 2005 and 2004, respectively, $1.6 million and $1.4 million in impairments were included in the caption gain on property dispositions as a component of income from continuing operations. The Company determined these impairments through a comparison of the aggregate future cash flows (including quoted offer prices) to be generated by the properties to the carrying value of the properties. The Company has evaluated each of the properties and land held for development and has determined that there are no additional valuation adjustments necessary at December 31, 2006.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
				Initial Cost				Capitalized		Gross Amount Carried at End of Period							Date of
								Subsequent								Accumulated	Construction		Depreciable
								to		Land and		Building and		Total		Depreciation	or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06	Acquisition		(years)
OPERATING PROPERTIES
1501 Perryman Road	Aberdeen, MD	$	—	$	5,813,324	$	18,874,059	$	3,274,480	$	5,816,839	$	22,145,024	$	27,961,863	$7,560		2005	40 yrs.
2196 Avenue C	Allentown, PA		—		101,159		—		1,347,970		107,307		1,341,822		1,449,129	750,775		1980	40 yrs.
2202 Hanger Place	Allentown, PA		*		137,439		—		1,341,155		138,127		1,340,466		1,478,594	826,310		1981	40 yrs.
7437 Industrial Boulevard	Allentown, PA		—		717,488		5,022,413		2,425,462		726,651		7,438,711		8,165,362	2,459,321		1976	40 yrs.
7339 Industrial Boulevard	Allentown, PA		*		1,187,776		—		6,324,599		1,197,447		6,314,928		7,512,376	1,930,459		1996	40 yrs.
400 Nestle Way	Allentown, PA		22,630,797		8,065,500		—		27,253,022		8,184,096		27,134,426		35,318,522	7,218,734		1997	40 yrs.
7248 Industrial Boulevard	Allentown, PA		—		2,670,849		13,307,408		1,101,923		2,670,673		14,409,506		17,080,179	3,732,710		1988	40 yrs.
700 Nestle Way	Allentown, PA		—		3,473,120		—		18,116,440		4,174,970		17,414,590		21,589,560	4,014,467		1998	40 yrs.
7562 Penn Drive	Allentown, PA		—		269,614		844,069		184,443		269,614		1,028,512		1,298,126	259,319		1989	40 yrs.
7277 Williams Avenue	Allentown, PA		—		462,964		1,449,009		322,599		463,123		1,771,449		2,234,572	538,729		1989	40 yrs.
7355 Williams Avenue	Allentown, PA		—		489,749		1,658,091		304,958		489,749		1,963,049		2,452,798	465,129		1998	40 yrs.
794 Roble Road	Allentown, PA		—		1,147,541		6,088,041		1,125,815		1,147,541		7,213,857		8,361,398	1,802,850		1985	40 yrs.
6923 Schantz Spring Road	Allentown, PA		*		1,127,805		3,309,132		348,419		1,127,805		3,657,551		4,785,355	839,583		1993	40 yrs.
7132 Daniels Drive	Allentown, PA		—		1,623,326		3,464,626		4,174,016		1,695,610		7,566,357		9,261,967	1,576,367		1988	40 yrs.
8014 Industrial Boulevard	Allentown, PA		—		4,019,258		—		9,446,162		3,645,117		9,820,303		13,465,420	2,218,246		1999	40 yrs.
705 Boulder Drive	Allentown, PA		—		4,484,096		—		14,878,034		4,486,836		14,875,294		19,362,130	2,387,484		2001	40 yrs.
651 Boulder Drive	Allentown, PA		*		4,308,646		—		13,284,432		4,308,646		13,284,432		17,593,078	2,467,753		2000	40 yrs.
8150 Industrial Boulevard	Allentown, PA		—		2,564,167		—		8,906,845		2,571,466		8,899,547		11,471,013	1,421,039		2002	40 yrs.
8250 Industrial Boulevard	Allentown, PA		—		1,025,667		—		5,346,179		1,035,854		5,335,991		6,371,846	633,244		2002	40 yrs.
650 Boulder Drive	Allentown, PA		—		5,208,248		—		31,404,856		9,961,788		26,651,316		36,613,104	2,728,758		2002	40 yrs.
7165 Ambassador Drive	Allentown, PA		*		792,999		—		4,533,868		804,848		4,522,019		5,326,867	586,086		2002	40 yrs.
200 Boulder Drive	Allentown, PA		—		4,722,683		18,922,645		240,929		4,722,683		19,163,574		23,886,258	1,081,207		2004	40 yrs.
250 Boulder Drive	Allentown, PA		—		3,623,328		12,099,145		1,144,216		3,719,772		13,146,917		16,866,689	690,330		2004	40 yrs.
6560 Stonegate Drive	Allentown, PA		—		458,281		—		2,839,996		458,945		2,839,332		3,298,277	1,116,992		1989	40 yrs.
6370 Hedgewood Drive	Allentown, PA		—		540,795		—		3,608,143		541,459		3,607,479		4,148,938	1,356,701		1990	40 yrs.
6390 Hedgewood Drive	Allentown, PA		—		707,203		—		2,765,090		707,867		2,764,425		3,472,293	1,317,332		1990	40 yrs.
6350 Hedgewood Drive	Allentown, PA		*		360,027		—		3,470,090		560,691		3,269,426		3,830,117	1,390,438		1989	40 yrs.
6330 Hedgewood Drive	Allentown, PA		—		531,268		—		4,910,864		532,047		4,910,085		5,442,132	2,333,532		1988	40 yrs.
6580 Snowdrift Road	Allentown, PA		—		388,328		—		3,284,907		389,081		3,284,155		3,673,235	1,459,264		1988	40 yrs.
6540 Stonegate Drive	Allentown, PA		—		422,042		—		3,893,307		422,730		3,892,620		4,315,349	1,829,429		1988	40 yrs.
974 Marcon Boulevard	Allentown, PA		—		143,500		—		2,469,917		144,248		2,469,170		2,613,417	1,308,676		1987	40 yrs.
964 Marcon Boulevard	Allentown, PA		—		138,816		—		1,983,002		139,480		1,982,338		2,121,818	913,043		1985	40 yrs.
764 Roble Road	Allentown, PA		—		141,069		—		864,405		141,746		863,728		1,005,474	446,399		1985	40 yrs.
3174 Airport Road	Allentown, PA		—		98,986		—		1,157,004		98,986		1,157,004		1,255,990	727,271		1979	40 yrs.
2201 Hanger Place	Allentown, PA		—		128,454		—		1,906,472		129,142		1,905,783		2,034,926	1,121,868		1987	40 yrs.
954 Marcon Boulevard	Allentown, PA		—		103,665		—		1,110,937		104,453		1,110,149		1,214,602	586,982		1981	40 yrs.
754 Roble Road	Allentown, PA		—		162,115		1,731,885		279,310		163,735		2,009,575		2,173,310	677,125		1986	40 yrs.
744 Roble Road	Allentown, PA		—		159,771		1,734,229		266,454		161,371		1,999,083		2,160,454	663,735		1986	40 yrs.
944 Marcon Boulevard	Allentown, PA		—		118,521		1,435,479		464,628		119,711		1,898,917		2,018,628	633,568		1986	40 yrs.
6520 Stonegate Drive	Allentown, PA		—		453,315		—		1,787,903		484,361		1,756,857		2,241,218	593,896		1996	40 yrs.
2041 Avenue C	Allentown, PA		—		213,599		1,095,217		83,135		213,879		1,178,072		1,391,951	353,869		1990	40 yrs.
7144 Daniels Drive	Allentown, PA		—		2,390,217		2,342,761		3,721,684		1,579,169		6,875,493		8,454,662	1,849,083		1975	40 yrs.
7620 Cetronia Road	Allentown, PA		—		1,091,806		3,851,456		356,371		1,093,724		4,205,910		5,299,633	1,364,080		1990	40 yrs.
180,190 Cochrane Drive	Annapolis, MD		—		3,670,256		—		22,322,825		3,752,293		22,240,788		25,993,081	8,676,942		1988	40 yrs.
4606 Richlynn Drive	Belcamp, MD		—		299,600		1,818,861		712,787		299,600		2,531,649		2,831,249	470,711		1985	40 yrs.
41199 Van Born Road	Bellville, MI		—		1,829,396		6,765,015		509,937		1,829,396		7,274,952		9,104,347	5,269		2005	40 yrs.
41133 Van Born Road	Bellville, MI		—		1,829,560		6,454,755		463,975		1,829,560		6,918,730		8,748,290	5,877		2005	40 yrs.
1655 Valley Center Parkway	Bethlehem, PA		—		214,431		—		2,019,753		215,095		2,019,088		2,234,184	935,846		1993	40 yrs.
1455 Valley Center Parkway	Bethlehem, PA		—		670,290		—		3,743,118		545,172		3,868,235		4,413,408	1,742,880		1997	40 yrs.
1640 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,538,675		190,728		2,706,947		2,897,675	1,142,900		1996	40 yrs.
1650 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,215,932		188,896		2,386,036		2,574,932	942,344		1997	40 yrs.
1660 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,278,206		188,721		2,448,485		2,637,206	737,276		1998	40 yrs.
83 South Commerce Way	Bethlehem, PA		—		143,661		888,128		520,095		212,744		1,339,140		1,551,884	521,859		1989	40 yrs.
85 South Commerce Way	Bethlehem, PA		—		236,708		987,949		169,265		237,078		1,156,844		1,393,922	312,464		1989	40 yrs.
87 South Commerce Way	Bethlehem, PA		—		253,886		1,062,881		223,146		253,886		1,286,027		1,539,913	383,776		1989	40 yrs.
89 South Commerce Way	Bethlehem, PA		—		320,000		—		2,011,186		367,706		1,963,481		2,331,186	701,530		1998	40 yrs.
1525 Valley Center Parkway	Bethlehem, PA		—		475,686		—		7,721,312		804,104		7,392,894		8,196,998	1,900,307		1999	40 yrs.
74 West Broad Street	Bethlehem, PA		—		1,096,127		—		13,371,415		1,099,079		13,368,463		14,467,542	2,582,086		2002	40 yrs.
1605 Valley Center Parkway	Bethlehem, PA		—		729,751		—		11,065,717		1,766,196		10,029,272		11,795,468	1,779,914		2000	40 yrs.
3400 High Point Boulevard	Bethlehem, PA		—		298,227		—		3,053,506		662,809		2,688,924		3,351,733	367,073		2002	40 yrs.
1495 Valley Center Parkway	Bethlehem, PA		—		434,640		—		4,695,697		435,303		4,695,034		5,130,337	1,544,454		1990	40 yrs.
1550 Valley Center Parkway	Bethlehem, PA		—		196,954		—		3,827,587		197,700		3,826,842		4,024,541	1,470,951		1988	40 yrs.
1560 Valley Center Parkway	Bethlehem, PA		—		240,069		—		4,638,646		240,732		4,637,983		4,878,715	2,078,924		1988	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
				Initial Cost				Capitalized			Gross Amount Carried at End of Period							Date of
								Subsequent									Accumulated	Construction		Depreciable
								to			Land and		Building and		Total		Depreciation	or		life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06	Acquisition		(years)
OPERATING PROPERTIES
1510 Valley Center Parkway	Bethlehem, PA		—		312,209		—		3,762,171			312,873		3,761,507		4,074,380	1,704,910		1988	40 yrs.
1530 Valley Center Parkway	Bethlehem, PA		—		211,747		—		3,008,631			212,492		3,007,886		3,220,378	1,256,732		1988	40 yrs.
57 South Commerce Way	Bethlehem, PA		—		390,839		2,701,161		764,168			395,459		3,460,709		3,856,168	1,189,140		1986	40 yrs.
1685 Valley Center Parkway	Bethlehem, PA		—		244,029		—		2,283,047			198,482		2,328,594		2,527,076	838,903		1996	40 yrs.
6601-6625 W. 78th Street	Bloomington, MN		—		2,263,060		—		38,629,236			2,310,246		38,582,050		40,892,296	7,893,682		1998	40 yrs.
4801 West 81st Street	Bloomington, MN		—		1,624,701		2,494,368		809,469			1,624,701		3,303,836		4,928,537	864,938		1984	40 yrs.
8100 Cedar Avenue	Bloomington, MN		—		501,313		3,675,416		971,824			501,313		4,647,240		5,148,553	1,214,704		1983	40 yrs.
6161 Green Valley Drive	Bloomington, MN		—		740,378		3,311,602		732,919			741,194		4,043,704		4,784,898	745,201		1992	40 yrs.
10801 Nesbitt Avenue South	Bloomington, MN		—		784,577		—		4,105,182			786,382		4,103,377		4,889,759	944,251		2001	40 yrs.
5775 West Old Shakopee Road	Bloomington, MN		—		2,052,018		3,849,649		3,311,678			2,060,644		7,152,700		9,213,345	2,366,472		2002	40 yrs.
5715 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,954,672			1,264,758		4,313,922		5,578,680	810,571		2002	40 yrs.
5735 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,089,640			1,264,758		3,448,890		4,713,648	447,722		2002	40 yrs.
1701 Clint Moore Boulevard	Boca Raton, FL		—		1,430,884		3,043,553		1,302,089			1,430,937		4,345,589		5,776,526	839,133		1985	40 yrs.
951 Broken Sound Parkway	Boca Raton, FL		—		1,426,251		6,098,952		1,234,056			1,426,251		7,333,008		8,759,259	2,037,449		1986	40 yrs.
777 Yamato Road	Boca Raton, FL		—		4,101,247		16,077,347		4,498,115			4,501,247		20,175,462		24,676,709	5,014,867		1987	40 yrs.
1801 Clint Moore Road	Boca Raton, FL		—		1,065,068		4,481,644		640,426			1,065,068		5,122,070		6,187,139	1,249,779		1986	40 yrs.
400 Boulder Drive	Breinigsville, PA		*		—		—		13,376,989			2,865,575		10,511,414		13,376,989	629,760		2003	40 yrs.
860 Nestle Way	Breinigsville, PA		—		8,118,881		18,885,486		1,403,042			8,118,881		20,288,528		28,407,408	671,096		2004	40 yrs.
602 Heron Drive	Bridgeport, NJ		—		524,728		2,240,478		7,650			524,728		2,248,128		2,772,856	491,389		1996	40 yrs.
245 Executive Drive	Brookfield, WI		—		577,067		5,197,903		3,816,157			577,067		9,014,060		9,591,127	1,549,221		1984	40 yrs.
16620-16650 W Bluemound Road	Brookfield, WI		—		586,665		4,289,907		828,882			586,665		5,118,789		5,705,454	984,048		1999	40 yrs.
15800 West Bluemound Road	Brookfield, WI		—		1,289,204		8,128,035		948,664			1,306,811		9,059,092		10,365,903	1,391,720		1994	40 yrs.
20700 Swenson Drive	Brookfield, WI		12,858,381		830,008		12,276,445		478,954			830,999		12,754,408		13,585,406	429,906		2005	40 yrs.
20800 Swenson Drive	Brookfield, WI		—		1,023,466		10,729,219		418,157			1,025,082		11,145,759		12,170,841	474,180		2005	40 yrs.
20935 Swenson Drive	Brookfield, WI		5,295,966		571,389		10,238,547		658,028			572,158		10,895,806		11,467,963	391,207		2005	40 yrs.
20975 Swenson Drive	Brookfield, WI		7,584,291		675,422		8,910,651		602,016			678,637		9,509,452		10,188,089	398,554		2005	40 yrs.
20825 Swenson Drive	Brookfield, WI		—		644,563		3,640,734		64,858			646,518		3,703,639		4,350,156	111,258		2006	40 yrs.
1485 W. Commerce Avenue	Carlisle, PA		—		4,249,868		13,886,039		173,427			4,253,027		14,056,308		18,309,335	699,441		2004	40 yrs.
3773 Corporate Parkway	Center Valley, PA		—		738,108		—		7,605,349			794,874		7,548,583		8,343,457	1,666,953		2001	40 yrs.
1309 Executive Boulevard	Cheaspeake, VA		—		926,125		—		5,086,632			955,374		5,057,383		6,012,757	733,464		2001	40 yrs.
7 Carnegie Plaza	Cherry Hill, NJ		*		2,000,000		3,493,983		3,217,287			2,005,475		6,705,794		8,711,270	543,140		2004	40 yrs.
1305 Executive Boulevard	Chesapeake, VA		—		861,020		—		4,878,062			1,129,850		4,609,232		5,739,082	691,749		2002	40 yrs.
1313 Executive Boulevard	Chesapeake, VA		—		1,180,036		—		4,629,615			1,708,050		4,101,602		5,809,652	554,643		2002	40 yrs.
500 Independence Parkway	Chesapeake, VA		3,588,914		864,150		4,427,285		66,501			866,609		4,491,328		5,357,937	352,536		2004	40 yrs.
700 Independence Parkway	Chesapeake, VA		6,903,981		1,950,375		8,273,910		(614,501	)		1,951,135		7,658,648		9,609,783	650,222		2004	40 yrs.
501 Independence Parkway	Chesapeake, VA		4,967,909		1,202,556		5,975,538		1,185,556			1,292,273		7,071,376		8,363,650	336,396		2005	40 yrs.
505 Independence Parkway	Chesapeake, VA		5,793,893		1,292,062		6,456,515		1,141,115			1,292,254		7,597,437		8,889,691	380,615		2005	40 yrs.
510 Independence Parkway	Chesapeake, VA		—		2,012,149		7,546,882		394,344			2,014,689		7,938,686		9,953,375	422,930		2005	40 yrs.
1301 Executive Boulevard	Chesapeake, VA		—		—		—		6,113,029			997,570		5,115,459		6,113,029	108,314		2005	40 yrs.
600 H P Way	Chester, VA		—		146,126		—		6,429,625			501,752		6,073,999		6,575,751	1,193,352		1997	40 yrs.
500 H P Way	Chester, VA		—		142,692		—		5,563,992			491,919		5,214,765		5,706,684	1,090,627		1997	40 yrs.
6230 Old Dobbin Lane	Colombia, MD		—		3,004,075		—		7,729,322			2,746,455		7,986,942		10,733,397	161,577		2004	40 yrs.
9101,9111,9115 Guilford Road	Columbia, MD		—		758,951		—		3,519,455			765,952		3,512,453		4,278,406	1,941,815		1984	40 yrs.
9125,9135,9145 Guilford Road	Columbia, MD		—		900,154		—		5,815,495			920,439		5,795,210		6,715,649	3,426,185		1983	40 yrs.
7178-80 Columbia Gateway	Columbia, MD		—		1,569,237		4,786,887		1,836,281			1,571,105		6,621,299		8,192,405	2,215,458		1987	40 yrs.
9770 Patuxent Woods Drive	Columbia, MD		—		341,663		3,033,309		907,405			341,663		3,940,714		4,282,377	791,142		1986	40 yrs.
9780 Patuxent Woods Drive	Columbia, MD		—		218,542		1,940,636		125,207			218,542		2,065,843		2,284,384	504,644		1986	40 yrs.
9790 Patuxent Woods Drive	Columbia, MD		—		243,791		2,164,094		223,402			243,791		2,387,496		2,631,287	669,572		1986	40 yrs.
9810 Patuxent Woods Drive	Columbia, MD		—		266,684		2,366,901		644,582			266,684		3,011,483		3,278,167	794,236		1986	40 yrs.
9800 Patuxent Woods Drive	Columbia, MD		—		299,099		2,654,069		531,960			299,099		3,186,029		3,485,129	815,523		1988	40 yrs.
9820 Patuxent Woods Drive	Columbia, MD		—		237,779		2,110,835		711,722			237,779		2,822,557		3,060,336	569,893		1988	40 yrs.
9830 Patuxent Woods Drive	Columbia, MD		—		296,262		2,628,933		143,928			296,262		2,772,861		3,069,124	717,517		1986	40 yrs.
9050 Red Branch Road	Columbia, MD		—		290,950		2,577,153		802,675			290,950		3,379,828		3,670,778	720,137		1972	40 yrs.
8945-8975 Guilford Road	Columbia, MD		—		2,428,795		7,493,740		873,148			2,427,065		8,368,619		10,795,684	1,959,626		1986	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,590,872			1,295,000		3,253,978		4,548,978	602,208		2002	40 yrs.
6200 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,736,325			1,295,000		3,399,431		4,694,431	532,591		2002	40 yrs.
6210 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,724,707			1,307,300		3,375,513		4,682,813	622,557		2002	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,780,749			1,599,259		3,139,595		4,738,854	349,799		2000	40 yrs.
5950 Symphony Woods Road	Columbia, MD		—		1,462,762		11,310,187		1,368,440			1,467,623		12,673,767		14,141,389	1,845,734		1986	40 yrs.
9755 Patuxent Woods Drive	Columbia, MD		—		3,917,094		16,219,721		110,510			3,922,382		16,324,943		20,247,324	—		2006	40 yrs.
5150 International Drive	Cudahy, WI		—		739,673		5,108,025		250,327			741,858		5,356,167		6,098,024	420,347		2003	40 yrs.
1250 Hall Court	Deer Park, TX		3,063,690		829,570		4,778,327		—			829,570		4,778,327		5,607,897	8,813		2006	40 yrs.
170 Parkway West	Duncan, SC		—		598,348		3,643,756		68,364			598,918		3,711,550		4,310,468	86,944		2006	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
190 Parkway West	Duncan, SC		—		551,663		3,463,858		34,737		552,211		3,498,047		4,050,258		95,141	2006	40 yrs.
265 Parkway East	Duncan, SC		—		901,444		5,751,389		18,391		902,374		5,768,850		6,671,224		174,266	2006	40 yrs.
285 Parkway East	Duncan, SC		—		975,433		6,149,465		23,682		976,393		6,172,187		7,148,580		313,732	2006	40 yrs.
3255 Neil Armstrong Boulevard	Eagan, MN		—		1,131,017		—		3,393,423		1,131,017		3,393,423		4,524,441		677,048	1998	40 yrs.
6321-6325 Bury Drive	Eden Prairie, MN		—		462,876		4,151,790		317,011		462,876		4,468,801		4,931,677		1,213,996	1988	40 yrs.
7660-7716 Golden Triangle Drive	Eden Prairie, MN		—		568,706		5,115,177		2,817,841		1,289,215		7,212,509		8,501,724		2,440,957	1988	40 yrs.
7400 Flying Cloud Drive	Eden Prairie, MN		—		195,982		1,762,027		157,281		195,982		1,919,309		2,115,290		441,713	1987	40 yrs.
10301-10305 West 70th Street	Eden Prairie, MN		—		120,622		1,085,226		121,763		118,300		1,209,311		1,327,611		304,525	1984	40 yrs.
10321 West 70th Street	Eden Prairie, MN		—		145,198		1,305,700		369,479		142,399		1,677,978		1,820,377		479,554	1984	40 yrs.
10333 West 70th Street	Eden Prairie, MN		—		110,746		995,868		90,782		108,610		1,088,786		1,197,396		257,962	1984	40 yrs.
10349-10357 West 70th Street	Eden Prairie, MN		—		275,903		2,481,666		584,392		270,584		3,071,377		3,341,961		737,188	1985	40 yrs.
10365-10375 West 70th Street	Eden Prairie, MN		—		291,077		2,618,194		506,997		285,464		3,130,804		3,416,267		756,087	1985	40 yrs.
10393-10394 West 70th Street	Eden Prairie, MN		—		269,618		2,423,318		775,855		264,419		3,204,372		3,468,791		761,414	1985	40 yrs.
7078 Shady Oak Road	Eden Prairie, MN		—		343,093		3,085,795		217,201		336,481		3,309,608		3,646,089		790,055	1985	40 yrs.
10400 Viking Drive	Eden Prairie, MN		—		2,912,391		—		22,843,159		2,938,372		22,817,178		25,755,550		5,724,688	1999	40 yrs.
7695-7699 Anagram Drive	Eden Prairie, MN		—		760,525		3,254,758		605,146		760,525		3,859,903		4,620,429		843,591	1997	40 yrs.
7800 Equitable Drive	Eden Prairie, MN		—		2,188,525		3,788,762		179,519		2,188,525		3,968,281		6,156,806		841,929	1993	40 yrs.
7905 Fuller Road	Eden Prairie, MN		—		1,229,862		4,075,167		33,365		1,230,965		4,107,430		5,338,395		833,068	1994	40 yrs.
9023 Columbine Road	Eden Prairie, MN		—		1,956,273		—		4,873,578		1,956,273		4,873,578		6,829,851		1,058,231	1999	40 yrs.
8967 Columbine Road	Eden Prairie, MN		—		1,450,000		—		3,575,107		1,450,000		3,575,107		5,025,107		717,864	2000	40 yrs.
7777 Golden Triangle Drive	Eden Prairie, MN		—		993,101		2,136,862		1,191,303		993,101		3,328,165		4,321,266		542,633	2000	40 yrs.
8937 Columbine Road	Eden Prairie, MN		—		1,325,829		—		4,287,274		1,739,966		3,873,137		5,613,103		676,755	2001	40 yrs.
7615 Smetana Lane	Eden Prairie, MN		—		1,011,517		—		8,665,025		3,000,555		6,675,988		9,676,542		1,378,155	2001	40 yrs.
8995 Columbine Road	Eden Prairie, MN		—		1,087,594		—		3,664,053		2,055,296		2,696,352		4,751,648		429,638	2001	40 yrs.
8911 Columbine Road (B2)	Eden Prairie, MN		—		916,687		—		3,608,469		1,718,407		2,806,748		4,525,156		377,488	2000	40 yrs.
8855 Columbine Road	Eden Prairie, MN		—		1,400,925		—		5,226,016		1,599,757		5,027,185		6,626,941		325,388	2000	40 yrs.
27260 Haggerty Road	Farmington Hills, MI		—		456,877		4,091,196		754,780		456,877		4,845,977		5,302,854		1,273,497	1983	40 yrs.
27200 Haggerty Road	Farmington Hills, MI		—		382,754		3,425,227		363,784		382,754		3,789,011		4,171,765		1,043,115	1983	40 yrs.
27280 Haggerty Road	Farmington Hills, MI		—		452,860		4,055,512		443,764		452,860		4,499,276		4,952,136		1,150,855	1983	40 yrs.
27220 Haggerty Road	Farmington Hills, MI		—		203,064		1,802,592		174,777		203,064		1,977,369		2,180,433		530,662	1985	40 yrs.
27240 Haggerty Road	Farmington Hills, MI		—		171,518		1,518,192		280,526		171,518		1,798,718		1,970,236		445,822	1985	40 yrs.
27300 Haggerty Road	Farmington Hills, MI		—		370,378		3,311,366		732,514		370,378		4,043,880		4,414,259		967,017	1985	40 yrs.
26442-26450 Haggerty Road	Farmington Hills, MI		—		237,687		2,143,478		152,517		237,691		2,295,991		2,533,682		534,548	1988	40 yrs.
26500 Haggerty Road	Farmington Hills, MI		—		311,093		2,791,804		433,388		311,097		3,225,188		3,536,285		737,282	1986	40 yrs.
26650 Haggerty Road	Farmington Hills, MI		—		173,166		1,562,704		143,228		173,170		1,705,928		1,879,098		378,883	1988	40 yrs.
26700 Haggerty Road	Farmington Hills, MI		—		253,338		2,290,696		104,078		253,341		2,394,770		2,648,112		542,406	1986	40 yrs.
26750 Haggerty Road	Farmington Hills, MI		—		292,717		2,638,688		250,110		292,720		2,888,795		3,181,515		750,106	1988	40 yrs.
26800 Haggerty Road	Farmington Hills, MI		—		175,489		1,583,362		243,691		175,492		1,827,050		2,002,542		500,064	1986	40 yrs.
26842-26850 Haggerty Road	Farmington Hills, MI		—		239,606		2,160,470		364,314		239,609		2,524,781		2,764,390		707,486	1988	40 yrs.
26600 Haggerty Road	Farmington Hills, MI		—		455,846		—		2,921,972		537,693		2,840,125		3,377,818		819,672	1999	40 yrs.
26550 Haggerty Road	Farmington Hills, MI		—		368,083		—		2,647,709		535,179		2,480,613		3,015,792		658,542	2000	40 yrs.
7028 Snowdrift Road	Fogelville, PA		—		520,473		959,279		262,203		524,390		1,217,565		1,741,954		292,366	1982	40 yrs.
420 Delaware Drive	Fort Washington, PA		—		2,766,931		—		8,814,580		2,823,257		8,758,255		11,581,511		49,754	2005	40 yrs.
414 Commerce Drive	Fort Washington, PA		—		1,267,194		2,217,460		177,437		1,267,937		2,394,153		3,662,091		63,339	2004	40 yrs.
275 Commerce Drive	Fort Washington, PA		—		1,775,894		2,160,855		1,870,359		1,789,302		4,017,806		5,807,108		—	2005	40 yrs.
1250 Virginia Drive	Fort Washington, PA		—		1,639,166		1,928,574		422,241		1,650,703		2,339,278		3,989,980		23,113	2005	40 yrs.
1100 Virginia Drive	Fort Washington, PA		—		13,007,509		11,480,744		53,906		13,035,013		11,507,146		24,542,159		197,270	2006	40 yrs.
106 Southchase Boulevard	Fountain Inn, SC		—		201,944		—		5,133,389		684,003		4,651,330		5,335,333		125,941	2005	40 yrs.
9601 Cosner Drive	Fredericksburg, VA		—		475,262		3,917,234		214,221		475,262		4,131,454		4,606,716		1,177,660	1995	40 yrs.
200 W Cypress Creek Road	Ft Lauderdale, FL		—		3,414,989		2,399,738		9,866,832		3,414,989		12,266,571		15,681,559		452,897	2003	40 yrs.
5410 - 5430 Northwest 33rd Avenue	Ft. Lauderdale, FL		—		603,776		4,176,238		1,101,013		625,111		5,255,916		5,881,027		1,288,523	1985	40 yrs.
6500 NW 12th Avenue	Ft. Lauderdale, FL		—		7,099		3,046,309		438,216		—		3,491,624		3,491,624		884,615	1989	40 yrs.
6600 NW 12th Avenue	Ft. Lauderdale, FL		—		7,102		3,047,462		486,427		—		3,540,992		3,540,992		912,641	1989	40 yrs.
4880 Cox Road	Glen Allen, VA		—		743,898		4,499,807		2,746,479		743,898		7,246,286		7,990,184		1,217,434	1995	40 yrs.
5000 Cox Road	Glen Allen, VA		—		770,214		3,685,248		185,433		771,029		3,869,867		4,640,895		1,080,246	1990	40 yrs.
5500 Cox Road	Glen Allen, VA		—		443,485		—		3,347,885		483,263		3,308,107		3,791,370		793,756	1999	40 yrs.
4801 Cox Road	Glen Allen, VA		—		1,072,896		—		10,197,775		1,075,620		10,195,051		11,270,671		2,394,924	1998	40 yrs.
4198 Cox Road	Glen Allen, VA		—		670,292		3,839,245		981,346		670,292		4,820,591		5,490,883		1,290,221	1984	40 yrs.
4510 Cox Road	Glen Allen, VA		—		1,010,024		7,151,729		1,751,122		1,010,044		8,902,831		9,912,875		2,447,991	1990	40 yrs.
4121 Cox Road	Glen Allen, VA		—		1,083,006		6,035,653		519,164		1,083,006		6,554,817		7,637,824		436,918	2004	40 yrs.
420 Park Avenue	Greenville, SC		*		522,548		2,730,261		977,573		522,548		3,707,834		4,230,382		1,096,196	1986	40 yrs.
One Independence Pointe	Greenville, SC		—		780,881		6,199,230		6,430,871		784,617		12,626,365		13,410,982		2,240,553	1982	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
15 Brendan Way	Greenville, SC		—		614,192		3,012,019		1,767,666		614,192		4,779,684		5,393,876		1,424,079	1988	40 yrs.
4 Independence Pointe	Greenville, SC		—		—		—		3,555,776		467,438		3,088,339		3,555,776		587,548	2002	40 yrs.
5 Independence Pointe	Greenville, SC		—		—		—		3,286,804		467,438		2,819,366		3,286,804		616,674	2002	40 yrs.
200 Southchase Boulevard	Greenville, SC		—		512,911		—		6,273,615		515,542		6,270,984		6,786,525		478,893	2003	40 yrs.
6 Independence Pointe	Greenville, SC		—		—		—		3,061,966		545,698		2,516,268		3,061,966		195,504	2003	40 yrs.
2 Independence Point	Greenville, SC		—		371,600		—		3,168,228		682,881		2,856,946		3,539,828		30,935	2005	40 yrs.
1 Enterprise Parkway	Hampton, VA		—		974,675		5,579,869		1,182,175		974,675		6,762,044		7,736,719		1,737,849	1987	40 yrs.
22 Enterprise Parkway	Hampton, VA		—		1,097,368		6,760,778		856,086		1,097,368		7,616,864		8,714,232		2,061,113	1990	40 yrs.
5 Manhattan Square	Hampton, VA		—		207,368		—		1,663,695		212,694		1,658,368		1,871,063		428,848	1999	40 yrs.
21 Enterprise Parkway	Hampton, VA		383,605		263,668		8,167,118		511,240		265,719		8,676,307		8,942,026		1,386,213	1999	40 yrs.
521 Butler Farm Road	Hampton, VA		—		750,769		2,911,149		260,815		710,486		3,212,247		3,922,733		264,018	2003	40 yrs.
7317 Parkway Drive	Hanover, MD		—		1,104,359		1,959,671		79,319		1,104,359		2,038,990		3,143,349		453,669	1983	40 yrs.
500 McCarthy Drive	Harrisburg, PA		—		5,194,872		19,991,436		4,120,570		5,687,013		23,619,865		29,306,878		1,197,404	2005	40 yrs.
4170 Mendenhall Oaks Parkway	High Point , NC		—		143,699		—		2,210,943		373,502		1,981,140		2,354,642		543,603	1999	40 yrs.
4180 Mendenhall Oaks Parkway	High Point , NC		—		121,329		—		1,836,257		315,614		1,641,972		1,957,586		506,298	1999	40 yrs.
4050 Piedmont Parkway	High Point , NC		—		801,902		—		19,610,267		2,042,159		18,370,011		20,412,169		3,868,705	1998	40 yrs.
4523 Green Point Drive	High Point, NC		—		234,564		—		2,404,561		235,698		2,403,427		2,639,125		1,058,454	1988	40 yrs.
4501 Green Point Drive	High Point, NC		—		319,289		—		2,630,880		320,450		2,629,719		2,950,169		1,156,811	1989	40 yrs.
4500 Green Point Drive	High Point, NC		—		230,622		—		2,333,337		231,692		2,332,268		2,563,959		1,087,232	1989	40 yrs.
2427 Penny Road	High Point, NC		—		1,165,664		—		3,467,001		655,240		3,977,424		4,632,665		1,593,141	1990	40 yrs.
4524 Green Point Drive	High Point, NC		—		182,810		—		2,364,005		183,888		2,362,926		2,546,815		1,039,384	1989	40 yrs.
4328, 4336 Federal Drive	High Point, NC		4,545,898		521,122		—		7,238,387		825,092		6,934,416		7,759,509		3,316,305	1995	40 yrs.
4344 Federal Drive	High Point, NC		—		484,001		—		2,755,206		173,623		3,065,585		3,239,208		1,019,455	1996	40 yrs.
4000 Piedmont Parkway	High Point, NC		—		592,885		4,825,615		807,718		597,368		5,628,850		6,226,218		1,733,031	1989	40 yrs.
4380 Federal Drive	High Point, NC		—		282,996		—		2,210,549		283,368		2,210,177		2,493,545		727,018	1997	40 yrs.
4388 Federal Drive	High Point, NC		—		143,661		—		1,225,791		132,655		1,236,797		1,369,452		430,335	1997	40 yrs.
4160 Mendenhall Oaks Parkway	High Point, NC		—		285,882		—		3,351,586		545,627		3,091,841		3,637,468		725,642	1998	40 yrs.
4194 Mendenhall Oaks Parkway	High Point, NC		—		102,372		—		2,598,532		265,991		2,434,913		2,700,904		647,095	1999	40 yrs.
4196 Mendenhall Oaks Parkway	High Point, NC		—		66,731		—		2,250,342		173,889		2,143,184		2,317,073		709,040	1999	40 yrs.
4300 Federal Drive	High Point, NC		—		264,038		—		2,090,460		276,038		2,078,460		2,354,498		367,817	1998	40 yrs.
4135 Mendenall Oaks Parkway	High Point, NC		—		499,500		—		3,052,846		500,980		3,051,365		3,552,346		563,934	2000	40 yrs.
4183 Eagle Hill Drive	High Point, NC		—		122,203		—		3,748,139		526,266		3,344,076		3,870,342		1,096,678	2001	40 yrs.
4189 Eagle Hill Drive	High Point, NC		—		100,106		—		3,430,702		431,106		3,099,702		3,530,808		723,686	2001	40 yrs.
4020 Meeting Way	High Point, NC		—		94,232		—		1,682,699		378,101		1,398,830		1,776,931		313,939	2001	40 yrs.
1400 Mendenhall Oaks Parkway	High Point, NC		—		172,320		—		7,145,926		984,672		6,333,574		7,318,246		1,020,098	2002	40 yrs.
4191 Mendenhall Oaks Parkway	High Point, NC		—		217,943		—		3,119,682		611,166		2,726,459		3,337,625		422,224	2002	40 yrs.
4015 Meeting Way	High Point, NC		—		510,000		—		2,792,495		511,869		2,790,626		3,302,495		141,901	2003	40 yrs.
4195 Eagle Hill Drive	High Point, NC		—		107,586		—		3,349,592		505,700		2,951,478		3,457,178		120,322	2004	40 yrs.
400 Mendenhall Oaks Parkway	High Point, NC		—		—		—		1,860,213		665,239		1,194,974		1,860,213		14,800	2004	40 yrs.
100 Witmer Road	Horsham, PA		5,804,315		3,102,784		—		11,902,626		3,764,784		11,240,627		15,005,410		2,877,003	1996	40 yrs.
132 Welsh Road	Horsham, PA		—		1,333,642		—		4,219,965		1,408,041		4,145,566		5,553,607		1,331,664	1998	40 yrs.
300 Welsh Road — Building 3	Horsham, PA		—		180,459		1,441,473		358,107		180,459		1,799,579		1,980,038		566,487	1983	40 yrs.
300 Welsh Road — Building 4	Horsham, PA		—		282,493		2,256,508		1,347,544		282,493		3,604,051		3,886,545		1,094,113	1983	40 yrs.
2 Walnut Grove Drive	Horsham, PA		—		1,281,870		7,767,374		1,614,038		1,265,363		9,397,919		10,663,282		2,775,835	1989	40 yrs.
5 Walnut Grove Drive	Horsham, PA		—		1,065,951		—		9,658,857		1,939,712		8,785,096		10,724,809		1,749,887	2000	40 yrs.
200 Gibraltar Road	Horsham, PA		—		638,513		5,811,323		1,627,733		638,513		7,439,056		8,077,569		2,202,723	1990	40 yrs.
220 Gibraltar Road	Horsham, PA		—		629,944		5,733,228		1,201,778		629,944		6,935,006		7,564,950		2,143,096	1990	40 yrs.
240 Gibraltar Road	Horsham, PA		—		629,944		5,733,234		1,578,115		629,944		7,311,349		7,941,293		2,295,152	1990	40 yrs.
1 Walnut Grove Drive	Horsham, PA		—		1,058,901		5,343,606		1,041,557		1,058,901		6,385,163		7,444,064		2,059,580	1986	40 yrs.
181-187 Gibraltar Road	Horsham, PA		—		360,549		3,259,984		506,596		360,549		3,766,580		4,127,129		1,094,203	1982	40 yrs.
104 Rock Road	Horsham, PA		—		330,111		2,981,669		233,299		330,111		3,214,968		3,545,079		705,425	1974	40 yrs.
123-135 Rock Road	Horsham, PA		—		292,360		2,411,677		871,555		393,019		3,182,573		3,575,591		970,834	1975	40 yrs.
111-159 Gibraltar Road	Horsham, PA		—		489,032		4,126,151		613,296		489,032		4,739,447		5,228,479		1,272,980	1981	40 yrs.
161-175 Gibraltar Road	Horsham, PA		—		294,673		2,663,722		987,299		294,673		3,651,020		3,945,694		856,934	1976	40 yrs.
103-109 Gibraltar Road	Horsham, PA		—		270,906		2,448,500		795,126		270,906		3,243,625		3,514,531		1,044,383	1978	40 yrs.
261-283 Gibraltar Road	Horsham, PA		*		464,871		3,951,972		141,841		464,871		4,093,813		4,558,684		942,660	1978	40 yrs.
210-223 Witmer Road	Horsham, PA		—		270,282		2,441,276		1,761,333		270,282		4,202,609		4,472,891		959,764	1972	40 yrs.
231-237 Gibraltar Road	Horsham, PA		*		436,952		3,948,963		699,674		436,952		4,648,636		5,085,589		1,155,695	1981	40 yrs.
100 Gibraltar Road	Horsham, PA		—		38,729		349,811		9,589		38,729		359,400		398,129		81,406	1975	40 yrs.
101 Gibraltar Road	Horsham, PA		—		651,990		5,888,989		1,376,885		732,552		7,185,312		7,917,864		1,741,900	1977	40 yrs.
506 Prudential Road	Horsham, PA		—		208,140		895,470		652,633		208,140		1,548,102		1,756,243		357,080	1973	40 yrs.
113-123 Rock Road	Horsham, PA		—		351,072		3,171,001		334,495		451,731		3,404,836		3,856,568		823,288	1975	40 yrs.
101-111 Rock Road	Horsham, PA		—		350,561		3,166,389		640,212		452,251		3,704,911		4,157,162		892,449	1975	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
120 Gibraltar Road	Horsham, PA		—		533,142		4,830,515		973,788		558,142		5,779,303		6,337,445		1,392,610	1980	40 yrs.
110 Gibraltar Road	Horsham, PA		—		673,041		5,776,369		2,170,108		673,041		7,946,477		8,619,518		1,938,777	1979	40 yrs.
100-107 Lakeside Drive	Horsham, PA		—		239,528		2,163,498		659,861		255,528		2,807,359		3,062,887		844,384	1982	40 yrs.
200-264 Lakeside Drive	Horsham, PA		—		502,705		4,540,597		915,265		502,705		5,455,862		5,958,567		1,609,702	1982	40 yrs.
300-309 Lakeside Drive	Horsham, PA		—		369,475		3,338,761		1,710,844		376,475		5,042,605		5,419,080		1,681,475	1982	40 yrs.
400-445 Lakeside Drive	Horsham, PA		—		543,628		4,910,226		2,760,384		583,628		7,630,610		8,214,238		2,059,164	1981	40 yrs.
104 Witmer Road	Horsham, PA		*		1,248,148		—		1,133,479		189,793		2,191,834		2,381,627		735,818	1975	40 yrs.
201 Gibraltar Road	Horsham, PA		—		380,127		3,433,433		1,997,494		380,802		5,430,252		5,811,054		1,285,924	1983	40 yrs.
719 Dresher Road	Horsham, PA		*		493,426		2,812,067		205,125		495,112		3,015,506		3,510,618		669,434	1987	40 yrs.
4 Walnut Grove	Horsham, PA		*		2,515,115		—		7,329,299		2,515,115		7,329,299		9,844,415		1,405,252	1999	40 yrs.
300 Welsh Road	Horsham, PA		—		696,061		3,339,991		547,772		696,061		3,887,762		4,583,823		866,821	1985	40 yrs.
700 Dresher Road	Horsham, PA		—		2,551,777		3,020,638		4,641,908		2,565,140		7,649,183		10,214,323		3,175,714	1987	40 yrs.
680 Blair Mill Road	Horsham, PA		—		3,527,151		—		12,039,009		4,138,577		11,427,583		15,566,160		2,583,511	2001	40 yrs.
102 Rock Road	Horsham, PA		—		1,110,209		2,301,302		1,133,191		1,114,985		3,429,717		4,544,702		474,800	1985	40 yrs.
335 Commerce Drive	Horsham, PA		—		—		—		8,736,456		182,400		8,554,056		8,736,456		470,505	2002	40 yrs.
255 Business Center Drive	Horsham, PA		—		1,086,356		2,007,214		496,797		1,078,769		2,511,597		3,590,366		206,020	2003	40 yrs.
355 Business Center Drive	Horsham, PA		—		483,045		898,798		275,266		479,200		1,177,910		1,657,110		129,780	2003	40 yrs.
455 Business Center Drive	Horsham, PA		—		1,351,011		2,503,449		1,668,600		1,343,370		4,179,690		5,523,060		548,149	2003	40 yrs.
555 Business Center Drive	Horsham, PA		—		727,420		1,353,650		213,228		723,016		1,571,283		2,294,299		212,922	2003	40 yrs.
747 Dresher Road	Horsham, PA		—		1,607,238		—		4,935,054		1,607,977		4,934,315		6,542,292		2,185,045	1988	40 yrs.
507 Prudential Road	Horsham, PA		6,268,630		644,900		5,804,100		8,784,448		1,131,380		14,102,068		15,233,448		3,726,697	1988	40 yrs.
767 Electronic Drive	Horsham, PA		*		1,229,685		—		3,319,209		1,241,970		3,306,924		4,548,893		1,461,410	1996	40 yrs.
16445 Air Center Boulevard	Houston, TX		—		363,339		2,509,186		545,867		363,339		3,055,053		3,418,392		940,458	1997	40 yrs.
16405 Air Center Boulevard	Houston, TX		—		438,853		3,030,396		404,912		438,853		3,435,307		3,874,160		822,102	1997	40 yrs.
16580 Air Center Boulevard	Houston, TX		—		289,000		3,559,857		265,899		289,000		3,825,756		4,114,756		834,181	1997	40 yrs.
1755 Trans Central Drive	Houston, TX		—		293,534		3,036,269		190,651		306,147		3,214,306		3,520,453		579,451	1999	40 yrs.
16605 Air Center Boulevard	Houston, TX		—		298,999		—		3,770,315		496,186		3,573,128		4,069,314		790,837	2002	40 yrs.
10739 West Little York Road	Houston, TX		—		797,931		5,950,894		242,625		799,560		6,191,890		6,991,450		803,207	1999	40 yrs.
10735 West Little York Road	Houston, TX		—		1,110,988		6,351,946		1,657,286		1,135,483		7,984,738		9,120,220		712,611	2000	40 yrs.
8801-19 & 8821-49 Fallbrook Drive	Houston, TX		—		2,290,001		15,297,141		1,535,943		2,290,002		16,833,084		19,123,085		1,587,024	2000	40 yrs.
16685 Air Center Boulevard	Houston, TX		—		—		—		2,935,268		414,691		2,520,577		2,935,268		184,042	2004	40 yrs.
8825-8839 N Sam Houston Pkwy	Houston, TX		—		638,453		3,258,815		567,574		638,477		3,826,364		4,464,842		194,007	2004	40 yrs.
8850-8872 Fallbrook Drive	Houston, TX		—		504,317		2,878,351		1,014,679		504,341		3,893,006		4,397,347		227,912	2004	40 yrs.
8802-8824 Fallbrook Drive	Houston, TX		—		1,114,406		6,364,767		663,613		1,114,433		7,028,353		8,142,786		542,346	2004	40 yrs.
16602 Central Green Boulevard	Houston, TX		—		284,403		—		4,496,262		503,779		4,276,886		4,780,665		149,476	2005	40 yrs.
20 Wright Avenue	Hunt Valley, MD		—		1,205,946		—		9,669,027		1,861,025		9,013,948		10,874,973		1,351,645	2001	40 yrs.
4 North Park Drive	Hunt Valley, MD		—		3,269,948		13,551,370		993,133		3,269,948		14,544,504		17,814,451		1,298,941	2003	40 yrs.
6 North Park Drive	Hunt Valley, MD		—		2,077,949		8,770,566		1,109,669		2,077,949		9,880,235		11,958,184		976,602	2003	40 yrs.
10 North Park Drive	Hunt Valley, MD		—		2,211,969		7,816,042		210,820		2,211,969		8,026,862		10,238,831		625,778	2003	40 yrs.
307 International Circle	Hunt Valley, MD		—		3,538,319		14,190,832		11,315,040		3,542,881		25,501,310		29,044,191		735,562	2004	40 yrs.
309 International Circle	Hunt Valley, MD		—		613,667		2,458,204		648,156		615,096		3,104,930		3,720,026		120,826	2004	40 yrs.
311 International Circle	Hunt Valley, MD		—		313,365		1,281,093		69,591		314,572		1,349,478		1,664,050		35,808	2004	40 yrs.
8775 Baypine Road	Jacksonville, FL		—		906,804		—		3,352,809		913,013		3,346,599		4,259,613		1,490,769	1989	40 yrs.
6255 Lake Gray Boulevard	Jacksonville, FL		—		813,067		—		3,960,328		812,634		3,960,761		4,773,395		2,061,279	1987	40 yrs.
8665,8667,8669 Baypine Road	Jacksonville, FL		—		966,552		—		5,892,549		974,959		5,884,142		6,859,101		2,590,822	1987	40 yrs.
7970 Bayberry Road	Jacksonville, FL		—		127,520		—		1,369,921		129,979		1,367,462		1,497,441		1,018,453	1978	40 yrs.
7077 Bonneval Road	Jacksonville, FL		—		768,000		5,789,000		3,066,996		774,020		8,849,976		9,623,996		3,280,922	1988	40 yrs.
4190 Belfort Road	Jacksonville, FL		—		821,000		5,866,000		3,229,138		827,420		9,088,718		9,916,138		3,843,929	1986	40 yrs.
7020 AC Skinner Parkway	Jacksonville, FL		—		398,257		—		2,780,426		749,811		2,428,873		3,178,683		1,020,424	1996	40 yrs.
7022 AC Skinner Parkway	Jacksonville, FL		—		706,934		—		3,593,671		853,981		3,446,624		4,300,605		1,319,301	1996	40 yrs.
11777 Central Highway	Jacksonville, FL		—		92,207		429,997		1,275,050		140,426		1,656,828		1,797,254		1,012,104	1985	40 yrs.
4345 Southpoint Parkway	Jacksonville, FL		—		—		—		8,791,159		418,093		8,373,065		8,791,159		2,354,624	1998	40 yrs.
7016 AC Skinner Parkway	Jacksonville, FL		—		597,181		—		2,377,385		602,633		2,371,934		2,974,566		1,042,593	1996	40 yrs.
7018 AC Skinner Parkway	Jacksonville, FL		—		840,996		—		4,643,140		846,461		4,637,675		5,484,136		1,887,918	1997	40 yrs.
7014 AC Skinner Parkway	Jacksonville, FL		—		574,198		—		3,633,593		780,486		3,427,305		4,207,791		1,137,784	1999	40 yrs.
6620 Southpoint Drive	Jacksonville, FL		—		614,602		4,267,477		984,847		614,602		5,252,323		5,866,926		1,528,012	1984	40 yrs.
7980 Bayberry Road	Jacksonville, FL		—		330,726		1,338,101		32,776		330,726		1,370,877		1,701,603		333,506	1978	40 yrs.
6600 Southpoint Parkway	Jacksonville, FL		—		998,432		4,055,727		851,752		1,002,704		4,903,207		5,905,911		1,442,391	1986	40 yrs.
6700 Southpoint Parkway	Jacksonville, FL		—		620,719		2,989,746		750,311		624,215		3,736,561		4,360,776		1,326,619	1987	40 yrs.
4801 Executive Park Court - 100	Jacksonville, FL		—		554,993		2,993,277		1,312,090		554,542		4,305,817		4,860,360		1,335,378	1990	40 yrs.
4801 Executive Park Court - 200	Jacksonville, FL		—		370,017		1,995,518		348,996		370,039		2,344,492		2,714,531		575,497	1990	40 yrs.
4810 Executive Park Court	Jacksonville, FL		—		369,694		3,045,639		370,039		941,958		3,987,251		4,357,291		884,986	1990	40 yrs.
6602 Executive Park Court - 100	Jacksonville, FL		—		388,519		2,095,293		297,873		388,541		2,393,144		2,781,685		624,753	1993	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
6602 Executive Park Court - 200	Jacksonville, FL		—		296,014		1,596,347		449,559			296,032		2,045,888		2,341,920		515,311	1993	40 yrs.
6631 Executive Park Court - 100	Jacksonville, FL		—		251,613		1,356,849		482,785			251,627		1,839,620		2,091,247		609,302	1994	40 yrs.
6631 Executive Park Court - 200	Jacksonville, FL		—		406,561		2,195,070		221,980			407,043		2,416,568		2,823,611		677,090	1994	40 yrs.
4815 Executive Park Court - 100	Jacksonville, FL		—		366,317		1,975,393		340,258			366,339		2,315,629		2,681,968		712,134	1995	40 yrs.
4815 Executive Park Court - 200	Jacksonville, FL		—		462,522		2,494,397		459,048			462,549		2,953,418		3,415,967		852,379	1995	40 yrs.
4825 Executive Park Court	Jacksonville, FL		—		601,278		3,242,491		282,810			601,401		3,525,178		4,126,579		959,847	1996	40 yrs.
4820 Executive Park Court	Jacksonville, FL		—		555,173		2,693,130		768,348			555,213		3,461,439		4,016,651		909,913	1997	40 yrs.
6601 Executive Park Circle North	Jacksonville, FL		—		551,250		3,128,361		640			551,250		3,129,001		3,680,251		703,615	1992	40 yrs.
4901 Belfort Road	Jacksonville, FL		—		877,964		2,360,742		1,966,868			877,964		4,327,610		5,205,574		1,599,696	1986	40 yrs.
4899 Belfort Road	Jacksonville, FL		—		1,299,201		—		8,179,240			1,207,751		8,270,690		9,478,441		1,787,670	2000	40 yrs.
4905 Belfort Street	Jacksonville, FL		—		638,154		—		3,461,206			641,272		3,458,088		4,099,360		880,635	2000	40 yrs.
7251 Salisbury Road	Jacksonville, FL		—		—		—		3,567,820			662,559		2,905,261		3,567,820		747,221	2000	40 yrs.
10245 Centurion Parkway North	Jacksonville, FL		—		852,644		3,510,889		968,204			853,704		4,478,033		5,331,737		1,002,121	1996	40 yrs.
4887 Belfort Road	Jacksonville, FL		—		1,299,202		—		7,890,278			1,665,915		7,523,565		9,189,480		1,444,468	2002	40 yrs.
7255 Salisbury Road	Jacksonville, FL		—		392,060		—		2,982,347			680,766		2,693,641		3,374,407		481,925	2002	40 yrs.
5201 Gate Parkway	Jacksonville, FL		—		3,836,532		—		21,192,513			4,269,346		20,759,699		25,029,045		446,736	2005	40 yrs.
3200 Horizon Drive	King of Prussia, PA		—		928,637		—		7,053,358			1,210,137		6,771,857		7,981,995		2,424,253	1996	40 yrs.
440 East Swedesford Road	King of Prussia, PA		—		717,001		4,816,121		2,684,214			717,001		7,500,335		8,217,336		2,723,279	1988	40 yrs.
460 East Swedesford Road	King of Prussia, PA		—		705,317		4,737,487		3,799,506			705,317		8,536,993		9,242,310		1,888,272	1988	40 yrs.
151 South Warner Road	King of Prussia, PA		—		1,218,086		6,937,866		360,761			1,186,972		7,329,741		8,516,713		1,860,186	1980	40 yrs.
3604 Horizon Drive	King of Prussia, PA		—		397,178		—		1,628,512			350,874		1,674,816		2,025,690		688,143	1998	40 yrs.
3606 Horizon Drive	King of Prussia, PA		—		789,409		—		1,947,590			815,855		1,921,144		2,736,999		771,104	1997	40 yrs.
650 Swedesford Road	King of Prussia, PA		—		952,911		6,722,830		9,647,843			952,911 1		6,370,672		17,323,583		5,840,247	1971	40 yrs.
680 Swedesford Road	King of Prussia, PA		—		952,361		6,722,830		8,367,206			952,361 1		5,090,036		16,042,397		5,693,790	1971	40 yrs.
3600 Horizon Drive	King of Prussia, PA		—		236,432		1,856,252		610,135			236,432		2,466,387		2,702,818		487,948	1989	40 yrs.
3602 Horizon Drive	King of Prussia, PA		—		217,734		1,759,489		338,288			217,809		2,097,701		2,315,510		545,130	1989	40 yrs.
2700 Horizon Drive	King of Prussia, PA		—		764,370		—		3,682,257			867,815		3,578,812		4,446,627		1,125,765	1998	40 yrs.
2900 Horizon Drive	King of Prussia, PA		—		679,440		—		3,503,074			774,096		3,408,418		4,182,514		910,904	1998	40 yrs.
2500 Renaissance Boulevard	King of Prussia, PA		—		509,580		—		2,786,056			592,886		2,702,749		3,295,636		904,721	1999	40 yrs.
2300 Renaissance Boulevard	King of Prussia, PA		—		509,580		—		3,038,151			574,152		2,973,578		3,547,731		764,372	1999	40 yrs.
2100 Renaissance Boulevard	King of Prussia, PA		—		1,110,111		—		9,382,851			1,132,519		9,360,443		10,492,962		2,601,425	1999	40 yrs.
3400 Horizon Drive	King of Prussia, PA		—		776,496		3,139,068		976,974			776,496		4,116,042		4,892,538		1,110,392	1995	40 yrs.
2301 Renaissance Boulevard	King of Prussia, PA		—		1,645,246		—		30,063,879			4,581,649		27,127,475		31,709,124		4,096,749	2002	40 yrs.
2520 Renaissance Boulevard	King of Prussia, PA		—		1,020,000		—		5,005,045			978,402		5,046,643		6,025,045		1,852,202	1999	40 yrs.
2201 Renaissance Boulevard	King of Prussia, PA		—		—		—		15,548,161			2,413,514		13,134,647		15,548,161		3,185,717	2000	40 yrs.
2540 Renaissance Boulevard	King of Prussia, PA		—		—		—		1,625,497			274,341		1,351,156		1,625,497		346,016	2000	40 yrs.
2560 Renaissance Boulevard	King of Prussia, PA		—		—		—		3,729,254			649,792		3,079,462		3,729,254		758,039	2000	40 yrs.
170 South Warner Road	King of Prussia, PA		—		547,800		3,137,400		3,783,307			458,232		7,010,275		7,468,507		2,965,120	1980	40 yrs.
190 South Warner Road	King of Prussia, PA		—		552,200		3,162,600		1,739,928			461,909		4,992,819		5,454,728		2,170,397	1980	40 yrs.
3100 Horizon Drive	King of Prussia, PA		—		601,956		—		2,068,047			611,436		2,058,568		2,670,003		750,766	1995	40 yrs.
3500 Horizon Drive	King of Prussia, PA		—		1,204,839		—		2,630,229			1,223,875		2,611,193		3,835,068		696,574	1996	40 yrs.
3000 Horizon Drive	King of Prussia, PA		—		1,191,449		—		2,309,358			946,703		2,554,103		3,500,806		559,994	1997	40 yrs.
800 Town Center Drive	Langhorne, PA		—		1,617,150		—		10,797,563			1,619,288		10,795,425		12,414,713		5,032,511	1987	40 yrs.
11425 State Highway 225	LaPorte, TX		—		975,974		3,409,036		7,682			977,519		3,415,173		4,392,692		31,583	2006	40 yrs.
11503 State Highway 225	LaPorte, TX		—		2,561,931		9,779,023		20,165			2,565,988		9,795,132		12,361,120		72,104	2006	40 yrs.
7528 Walker Way	Lehigh Valley, PA		—		893,441		—		5,514,510			779,330		5,628,622		6,407,952		157,996	2004	40 yrs.
8301 Industrial Boulevard	Lehigh, PA		—		11,249,550		—		44,122,702			11,254,716		44,117,536		55,372,252		1,310,158	2005	40 yrs.
32853 Edward Avenue	Madison Heights, MI		—		138,121		784,426		(5,207	)		138,121		779,219		917,340		210,450	1973	40 yrs.
750 East Mandoline Avenue	Madison Heights, MI		—		151,458		741,185		(80,456	)		151,458		660,728		812,187		172,982	1969	40 yrs.
900 East Mandoline Avenue	Madison Heights, MI		—		157,729		771,872		(43,850	)		157,729		728,022		885,751		223,686	1972	40 yrs.
31700 Research Park Drive	Madison Heights, MI		—		373,202		1,824,721		(158,741	)		373,203		1,665,979		2,039,182		382,957	1988	40 yrs.
31771 Sherman Avenue	Madison Heights, MI		—		150,944		645,040		(7,564	)		150,944		637,475		788,420		203,445	1982	40 yrs.
31791 Sherman Avenue	Madison Heights, MI		—		105,606		649,891		(54,791	)		105,606		595,100		700,706		143,185	1983	40 yrs.
31811 Sherman Avenue	Madison Heights, MI		—		207,599		1,179,010		(149,901	)		207,599		1,029,110		1,236,709		254,186	1983	40 yrs.
1201 East Whitcomb Avenue	Madison Heights, MI		—		302,567		1,213,232		(175,088	)		302,567		1,038,144		1,340,711		266,116	1980	40 yrs.
1901 Summit Tower Boulevard	Maitland, FL		—		6,078,791		12,348,567		1,625,469			6,083,206		13,969,622		20,052,828		2,792,232	1998	40 yrs.
45-67 Great Valley Parkway	Malvern, PA		—		795,143		—		3,352,726			795,831		3,352,038		4,147,869		2,136,395	1974	40 yrs.
11,15 Great Valley Parkway	Malvern, PA		*		1,837,050		—		15,005,064			1,837,878		15,004,237		16,842,114		9,920,837	1986	40 yrs.
27-43 Great Valley Parkway	Malvern, PA		—		448,775		—		2,545,542			449,447		2,544,870		2,994,317		1,549,853	1977	40 yrs.
1 Country View Road	Malvern, PA		—		400,000		3,600,000		1,007,648			406,421		4,601,227		5,007,648		1,396,584	1982	40 yrs.
200 Chesterfield Parkway	Malvern, PA		—		495,893		2,739,093		558,159			544,649		3,248,496		3,793,145		1,920,292	1989	40 yrs.
50 Morehall Road	Malvern, PA		—		849,576		—		13,043,717			1,337,076		12,556,217		13,893,293		4,337,326	1997	40 yrs.
1 Great Valley Parkway	Malvern, PA		—		419,460		3,792,570		330,704			419,460		4,123,273		4,542,734		1,064,218	1982	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
5 Great Valley Parkway	Malvern, PA		—		684,200		6,181,661		1,305,825		684,200		7,487,486		8,171,686		1,853,061	1983	40 yrs.
1001 Cedar Hollow Road	Malvern, PA		—		1,436,814		—		16,077,184		1,676,470		15,837,528		17,513,998		4,972,256	1998	40 yrs.
3 Country View Road	Malvern, PA		*		814,278		—		5,142,433		1,128,881		4,827,830		5,956,711		984,217	1998	40 yrs.
425 Technology Drive	Malvern, PA		—		191,114		—		2,101,323		321,473		1,970,964		2,292,437		698,708	1998	40 yrs.
375 Technology Drive	Malvern, PA		—		191,114		—		1,958,524		234,922		1,914,715		2,149,638		703,554	1998	40 yrs.
45 Liberty Boulevard	Malvern, PA		—		4,380,221		—		15,314,868		4,749,748		14,945,341		19,695,089		4,425,097	1999	40 yrs.
100 Chesterfield Parkway	Malvern, PA		—		1,320,625		—		7,019,034		1,349,954		6,989,705		8,339,659		2,255,284	1998	40 yrs.
600 Chesterfield Parkway	Malvern, PA		—		2,013,750		—		8,135,324		2,050,555		8,098,519		10,149,074		2,360,776	1999	40 yrs.
700 Chesterfield Parkway	Malvern, PA		—		2,013,750		—		8,096,150		2,037,813		8,072,087		10,109,900		2,337,776	1999	40 yrs.
18 Great Valley Parkway	Malvern, PA		—		394,036		3,976,221		99,539		397,293		4,072,504		4,469,796		823,431	1980	40 yrs.
11 Great Valley Parkway	Malvern, PA		—		496,297		—		3,226,924		708,331		3,014,890		3,723,221		672,667	2001	40 yrs.
40 Liberty Boulevard	Malvern, PA		—		4,241,137		17,737,090		2,182,842		4,241,167		19,919,901		24,161,068		5,326,655	1989	40 yrs.
2 West Liberty Boulevard	Malvern, PA		—		5,405,041		—		11,415,086		5,405,042		11,415,085		16,820,127		400,621	2003	40 yrs.
10 Great Valley Parkway	Malvern, PA		—		823,540		1,341,376		256,839		832,244		1,589,510		2,421,754		135,101	2003	40 yrs.
10, 20 Liberty Boulevard	Malvern, PA		—		724,058		—		5,767,715		724,846		5,766,927		6,491,773		2,492,462	1985	40 yrs.
420 Lapp Road	Malvern, PA		—		1,054,418		—		6,995,922		1,055,243		6,995,097		8,050,340		3,081,121	1989	40 yrs.
14 Lee Boulevard	Malvern, PA		—		664,282		—		5,855,867		643,892		5,876,257		6,520,149		2,676,923	1988	40 yrs.
500 Chesterfield Parkway	Malvern, PA		—		472,364		—		3,276,521		473,139		3,275,746		3,748,885		1,665,286	1988	40 yrs.
300-400 Chesterfield Parkway	Malvern, PA		—		937,212		—		5,616,170		937,942		5,615,440		6,553,382		2,587,331	1988	40 yrs.
40 Valley Stream Parkway	Malvern, PA		—		322,918		—		3,224,458		325,775		3,221,601		3,547,376		1,327,967	1987	40 yrs.
50 Valley Stream Parkway	Malvern, PA		—		323,971		—		2,694,447		323,792		2,694,627		3,018,418		1,147,301	1987	40 yrs.
20 Valley Stream Parkway	Malvern, PA		—		465,539		—		5,726,197		466,413		5,725,323		6,191,736		2,874,409	1987	40 yrs.
257-275 Great Valley Parkway	Malvern, PA		—		504,611		—		5,186,454		505,458		5,185,606		5,691,065		2,963,952	1983	40 yrs.
300 Technology Drive	Malvern, PA		—		368,626		—		1,344,816		374,497		1,338,945		1,713,442		706,537	1985	40 yrs.
277-293 Great Valley Parkway	Malvern, PA		—		530,729		—		2,330,242		531,534		2,329,436		2,860,971		1,322,006	1984	40 yrs.
311 Technology Drive	Malvern, PA		—		397,131		—		2,724,819		397,948		2,724,002		3,121,950		1,423,585	1984	40 yrs.
7 Great Valley Parkway	Malvern, PA		—		176,435		—		5,036,553		177,317		5,035,671		5,212,988		2,814,524	1985	40 yrs.
55 Valley Stream Parkway	Malvern, PA		—		215,005		—		4,281,663		215,818		4,280,850		4,496,668		1,915,746	1983	40 yrs.
65 Valley Stream Parkway	Malvern, PA		—		381,544		—		7,597,364		382,361		7,596,548		7,978,908		3,914,905	1983	40 yrs.
508 Lapp Road	Malvern, PA		—		331,392		—		2,033,164		332,216		2,032,340		2,364,556		1,228,001	1984	40 yrs.
10 Valley Stream Parkway	Malvern, PA		*		509,075		—		3,089,935		509,899		3,089,111		3,599,010		1,714,026	1984	40 yrs.
333 Phoenixville Pike	Malvern, PA		—		523,530		—		2,917,373		524,230		2,916,673		3,440,903		1,580,984	1985	40 yrs.
30 Great Valley Parkway	Malvern, PA		—		128,126		—		85,634		128,783		384,977		513,760		315,346	1975	40 yrs.
75 Great Valley Parkway	Malvern, PA		350,090		143,074		—		772,841		143,811		772,103		915,915		577,889	1977	40 yrs.
77-123 Great Valley Parkway	Malvern, PA		—		887,664		—		5,700,921		888,359		5,700,225		6,588,585		3,391,343	1978	40 yrs.
256 Great Valley Parkway	Malvern, PA		—		161,098		—		1,785,717		161,949		1,784,866		1,946,815		1,157,980	1980	40 yrs.
205 Great Valley Parkway	Malvern, PA		—		1,368,259		—		10,706,926		1,369,003		10,706,182		12,075,185		6,686,126	1981	40 yrs.
12,14,16 Great Valley Parkway	Malvern, PA		—		130,689		—		1,562,994		128,767		1,564,916		1,693,683		884,224	1982	40 yrs.
155 Great Valley Parkway	Malvern, PA		—		625,147		—		2,627,280		626,068		2,626,359		3,252,427		1,541,665	1981	40 yrs.
510 Lapp Road	Malvern, PA		*		356,950		—		926,587		357,751		925,786		1,283,537		572,178	1983	40 yrs.
60 Morehall Road	Malvern, PA		—		865,424		9,285,000		4,971,296		884,974		14,236,746		15,121,720		6,358,326	1989	40 yrs.
5 Country View Road	Malvern, PA		*		785,168		4,678,632		1,178,927		786,235		5,856,492		6,642,727		1,953,040	1985	40 yrs.
7550 Meridian Circle	Maple Grove, MN		—		513,250		2,901,906		222,006		513,250		3,123,911		3,637,161		721,019	1989	40 yrs.
8 Stow Road	Marlton, NJ		—		172,600		1,704,436		188,555		172,945		1,892,646		2,065,591		651,714	1988	40 yrs.
10 Stow Road	Marlton, NJ		—		147,000		1,451,536		527,956		147,318		1,979,174		2,126,492		962,254	1988	40 yrs.
12 Stow Road	Marlton, NJ		—		103,300		1,021,036		342,868		103,618		1,363,587		1,467,205		588,823	1988	40 yrs.
14 Stow Road	Marlton, NJ		—		93,100		920,336		431,684		93,418		1,351,703		1,445,120		576,452	1988	40 yrs.
701A Route 73 South	Marlton, NJ		—		264,387		3,772,000		3,501,001		271,743		7,265,645		7,537,388		3,312,275	1987	40 yrs.
701C Route 73 South	Marlton, NJ		—		84,949		1,328,000		422,106		96,161		1,738,894		1,835,055		672,972	1987	40 yrs.
400 Lippincott Drive	Marlton, NJ		—		69,402		—		3,671,296		317,799		3,422,899		3,740,699		910,493	1999	40 yrs.
406 Lippincott Drive	Marlton, NJ		—		321,455		1,539,871		888,175		327,554		2,421,947		2,749,501		975,306	1990	40 yrs.
301 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		1,469,444		1,069,838		6,249,607		7,319,444		2,078,211	1988	40 yrs.
303 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		2,194,896		1,069,838		6,975,059		8,044,896		2,276,639	1988	40 yrs.
901 Route 73	Marlton, NJ		—		334,411		2,733,314		894,989		334,411		3,628,303		3,962,714		1,045,261	1985	40 yrs.
404 Lippincott Drive	Marlton, NJ		—		131,896		—		1,653,262		131,896		1,653,262		1,785,158		657,060	1997	40 yrs.
402 Lippincott Drive	Marlton, NJ		—		131,896		—		1,736,907		131,896		1,736,907		1,868,803		682,815	1997	40 yrs.
9 Stow Road	Marlton, NJ		—		652,642		1,765,065		922,394		654,779		2,685,323		3,340,101		766,449	1989	40 yrs.
75 Brookfield Oaks Drive	Mauldin, SC		—		419,731		—		2,444,403		430,909		2,433,225		2,864,134		68,857	2003	40 yrs.
65 Brookfield Oaks Drive	Mauldin, SC		—		557,174		—		2,728,911		506,318		2,779,768		3,286,086		67,739	2004	40 yrs.
8301 West Parkland Court	Milwaukee, WI		—		358,442		3,233,707		532,301		358,442		3,766,008		4,124,449		971,466	1982	40 yrs.
7800 N. 113th Street	Milwaukee, WI		—		1,711,964		6,847,857		392,036		1,711,964		7,239,893		8,951,858		1,726,879	1991	40 yrs.
11950 W. Lake Park Drive	Milwaukee, WI		—		391,813		2,340,118		539,517		394,938		2,876,510		3,271,448		719,848	1986	40 yrs.
11400 W. Lake Park Drive	Milwaukee, WI		—		439,595		2,357,904		234,658		443,101		2,589,056		3,032,157		521,325	1986	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
11425 W. Lake Park Drive	Milwaukee, WI		—		382,256		2,350,619		957,723		385,305		3,305,293		3,690,598		982,930	1987	40 yrs.
11301 W. Lake Park Drive	Milwaukee, WI		—		614,477		2,626,456		101,328		619,465		2,722,797		3,342,261		542,487	1987	40 yrs.
11900 W. Lake Park Drive	Milwaukee, WI		—		347,853		2,396,887		1,057,251		350,628		3,451,364		3,801,992		910,149	1987	40 yrs.
11414 West Park Place	Milwaukee, WI		—		234,443		—		10,202,898		491,531		9,945,810		10,437,341		2,308,691	2001	40 yrs.
11520 West Calumet Road	Milwaukee, WI		—		341,698		1,527,548		78,494		341,698		1,606,042		1,947,740		281,217	1995	40 yrs.
12100 West Park Place	Milwaukee, WI		—		534,470		3,239,389		565,184		532,370		3,806,673		4,339,043		779,371	1984	40 yrs.
10855 West Park Place	Milwaukee, WI		—		122,894		—		3,045,358		424,710		2,743,541		3,168,251		447,822	2002	40 yrs.
11100 West Liberty Drive	Milwaukee, WI		—		1,800,000		—		7,690,908		1,801,024		7,689,884		9,490,908		730,540	2003	40 yrs.
11050 West Liberty Drive	Milwaukee, WI		—		—		—		3,813,517		914,760		2,898,757		3,813,517		25,802	2005	40 yrs.
4700 Nathan Lane North	Minneapolis, MN		—		1,501,308		8,446,083		225,056		1,501,308		8,671,139		10,172,447		1,567,239	1996	40 yrs.
4600 Nathan Lane	Minneapolis, MN		—		1,063,558		—		6,683,083		1,038,197		6,708,444		7,746,641		1,363,486	2002	40 yrs.
12501 & 12701 Whitewater Drive	Minnegonka, MN		—		2,175,209		3,948,085		7,249,452		2,177,953		11,194,793		13,372,746		788,290	1986	40 yrs.
5600 & 5610 Rowland Road	Minnetonka, MN		—		828,650		7,399,409		1,595,422		829,263		8,994,217		9,823,481		2,892,234	1988	40 yrs.
5400-5500 Feltl Road	Minnetonka, MN		—		883,895		7,983,345		2,275,102		883,895		10,258,447		11,142,342		2,480,922	1985	40 yrs.
10300 Bren Road	Minnetonka, MN		—		344,614		3,110,477		894,944		344,614		4,005,421		4,350,034		857,897	1981	40 yrs.
3400 Lakeside Drive	Miramar, FL		—		2,022,153		11,345,881		1,214,422		2,022,153		12,560,302		14,582,456		3,135,197	1990	40 yrs.
3450 Lakeside Drive	Miramar, FL		—		2,022,152		11,357,143		2,078,093		2,022,152		13,435,235		15,457,387		3,478,905	1990	40 yrs.
3350 SW 148th Avenue	Miramar, FL		—		2,960,511		—		19,294,616		2,980,689		19,274,437		22,255,127		4,341,655	2000	40 yrs.
300 Fellowship Road	Mt Laurel, NJ		—		—		—		7,330,090		1,098,904		6,231,186		7,330,090		420,257	2004	40 yrs.
302 Fellowship Road	Mt Laurel, NJ		—		1,512,120		—		2,801,598		539,060		3,774,658		4,313,718		88,186	2001	40 yrs.
3001 Leadenhall Road	Mt Laurel, NJ		—		1,925,719		191,390		10,965,396		1,936,489		11,146,016		13,082,505		879,074	2003	40 yrs.
350 Fellowship Road	Mt Laurel, NJ		—		2,960,159		1,449,611		3,535,489		2,966,686		4,978,573		7,945,259		9,251	2006	40 yrs.
4001 Leadenhall Road	Mt. Laurel, NJ		—		3,207,885		391,167		18,844,592		2,784,694		19,658,950		22,443,644		2,744,761	2002	40 yrs.
3000 Atrium Way	Mt. Laurel, NJ		—		500,000		4,500,000		4,498,462		512,018		8,986,445		9,498,462		3,980,005	1987	40 yrs.
11000, 15000 Commerce Parkway	Mt. Laurel, NJ		—		310,585		4,394,900		254,820		311,950		4,648,355		4,960,305		1,942,493	1985	40 yrs.
12000, 14000 Commerce Parkway	Mt. Laurel, NJ		—		361,800		3,285,817		783,587		362,855		4,068,349		4,431,204		1,426,020	1985	40 yrs.
16000, 18000 Commerce Parkway	Mt. Laurel, NJ		—		289,700		2,512,683		573,915		290,545		3,085,753		3,376,298		1,126,581	1985	40 yrs.
1300 Route 73 North	Mt. Laurel, NJ		—		449,400		3,074,850		1,704,275		450,558		4,777,967		5,228,525		1,530,369	1988	40 yrs.
6000 Commerce Parkway	Mt. Laurel, NJ		—		234,151		2,022,683		925,491		234,151		2,948,174		3,182,325		811,584	1985	40 yrs.
7000 Commerce Parkway	Mt. Laurel, NJ		—		260,014		2,236,684		427,949		260,014		2,664,633		2,924,647		746,489	1984	40 yrs.
8000 Commerce Parkway	Mt. Laurel, NJ		—		234,814		1,995,098		317,849		234,814		2,312,947		2,547,761		604,374	1983	40 yrs.
9000 Commerce Parkway	Mt. Laurel, NJ		—		286,587		2,474,820		595,749		286,587		3,070,569		3,357,156		1,010,672	1983	40 yrs.
1000 Briggs Road	Mt. Laurel, NJ		—		288,577		2,546,537		1,450,255		288,577		3,996,792		4,285,369		1,422,723	1986	40 yrs.
1025 Briggs Road	Mt. Laurel, NJ		773,515		430,990		3,714,828		1,320,195		430,990		5,035,023		5,466,013		1,496,665	1987	40 yrs.
1020 Briggs Road	Mt. Laurel, NJ		—		494,334		—		3,162,455		569,184		3,087,606		3,656,789		825,078	1999	40 yrs.
2000 Crawford Place	Mt. Laurel, NJ		—		310,831		2,797,744		2,814,041		310,831		5,611,785		5,922,616		2,067,243	1986	40 yrs.
5000 Dearborn Court	Mt. Laurel, NJ		—		1,057,763		4,191,827		531,794		1,057,763		4,723,621		5,781,384		1,129,274	1988	40 yrs.
1001 Briggs Road	Mt. Laurel, NJ		—		701,705		3,505,652		2,115,996		701,705		5,621,649		6,323,354		1,805,100	1986	40 yrs.
1015 Briggs Road	Mt. Laurel, NJ		—		356,987		—		3,666,093		470,659		3,552,421		4,023,080		792,151	2000	40 yrs.
17000 Commerce Parkway	Mt. Laurel, NJ		—		144,515		—		3,010,679		144,515		3,010,679		3,155,194		691,482	2001	40 yrs.
9401-9443 Science Center Drive	New Hope, MN		—		431,295		3,888,684		480,123		510,064		4,290,038		4,800,102		1,115,258	1989	40 yrs.
6 Terry Drive	Newtown, PA		—		622,029		2,228,851		828,769		622,205		3,057,443		3,679,648		824,454	1981	40 yrs.
550-590 Hale Avenue	Oakdale, MN		—		765,535		3,488,754		510,819		766,390		3,998,718		4,765,107		847,827	1996	40 yrs.
1879 Lamont Avenue	Odenton, MD		—		1,976,000		8,099,579		3,032,136		2,011,030		11,096,685		13,107,715		524,714	2004	40 yrs.
350 Winmeyer Avenue	Odenton, MD		—		1,778,400		7,289,165		1,924,628		1,809,927		9,182,266		10,992,193		388,054	2004	40 yrs.
9600 Satellite Boulevard	Orlando, FL		—		252,850		1,297,923		62,116		252,850		1,360,039		1,612,889		336,709	1989	40 yrs.
9700 Satellite Boulevard	Orlando, FL		—		405,362		1,146,546		350,999		405,362		1,497,545		1,902,907		387,847	1989	40 yrs.
1902 Cypress Lake Drive	Orlando, FL		—		523,512		3,191,790		880,341		538,512		4,057,131		4,595,643		1,116,154	1989	40 yrs.
9550 Satellite Boulevard	Orlando, FL		—		574,831		—		2,330,526		587,319		2,318,038		2,905,357		594,480	1999	40 yrs.
10511 & 10611 Satellite Boulevard	Orlando, FL		—		517,554		2,568,186		405,635		522,991		2,968,384		3,491,375		848,378	1985	40 yrs.
1400-1440 Central Florida Parkway	Orlando, FL		—		518,043		2,561,938		337,852		518,043		2,899,790		3,417,833		713,673	1962	40 yrs.
2216 Directors Row	Orlando, FL		—		453,918		2,572,202		27,479		453,918		2,599,681		3,053,599		555,992	1998	40 yrs.
3701-3727 Vineland Road	Orlando, FL		—		767,929		2,096,504		430,124		767,929		2,526,628		3,294,557		549,972	1985	40 yrs.
2400 South Lake Orange Drive	Orlando, FL		—		385,964		—		2,461,057		642,427		2,204,594		2,847,021		355,814	2001	40 yrs.
6501 Lee Vista Boulevard	Orlando, FL		—		903,701		—		5,560,142		925,671		5,538,172		6,463,843		746,789	2001	40 yrs.
2416 Lake Orange Drive	Orlando, FL		—		535,964		—		3,166,980		704,800		2,998,143		3,702,944		741,196	2002	40 yrs.
10771 Palm Bay Drive	Orlando, FL		—		664,605		—		2,362,814		685,383		2,342,035		3,027,419		299,543	2001	40 yrs.
10003 Satellite Boulevard	Orlando, FL		—		680,312		2,120,754		1,498,831		680,312		3,619,585		4,299,897		366,260	2003	40 yrs.
1090 Gills Drive	Orlando, FL		—		878,320		2,558,833		1,872,262		878,320		4,431,096		5,309,415		310,566	2003	40 yrs.
2202 Taft-Vineland Road	Orlando, FL		—		—		—		6,630,654		1,283,713		5,346,941		6,630,654		565,267	2004	40 yrs.
South Center Land-Phase II	Orlando, FL		—		838,853		—		4,047,910		767,953		4,118,811		4,886,763		36,846	2006	40 yrs.
7315 Kingspointe Parkway	Orlando, FL		—		1,931,697		6,388,203		2,479,134		1,932,004		8,867,030		10,799,034		589,186	2004	40 yrs.
2351 Investors Row	Orlando, FL		—		2,261,924		7,496,249		124,169		2,263,211		7,619,131		9,882,342		376,159	2004	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
2256 Taft-Vineland Road	Orlando, FL		—		467,296		—		2,462,307		825,673		2,103,930		2,929,603		104,125	2005	40 yrs.
1950 Summit Park Drive	Orlando, FL		—		2,573,700		17,478,646		531,233		2,583,667		17,999,912		20,583,579		791,297	2005	40 yrs.
1958 Summit Park Drive	Orlando, FL		—		2,573,961		11,206,937		8,761,919		2,583,216		19,959,601		22,542,817		892,725	2005	40 yrs.
6200 Lee Vista Boulevard	Orlando, FL		—		1,423,584		6,399,510		84,494		1,435,301		6,472,287		7,907,588		67,921	2006	40 yrs.
7022 TPC Drive	Orlando, FL		—		1,443,510		6,845,559		357,904		1,457,286		7,189,688		8,646,973		—	2006	40 yrs.
7100 TPC Drive	Orlando, FL		—		1,431,489		7,948,341		203,122		1,445,807		8,137,144		9,582,951		—	2006	40 yrs.
7101 TPC Drive	Orlando, FL		—		1,553,537		5,301,499		225,850		1,570,863		5,510,023		7,080,886		—	2006	40 yrs.
N26 W23445 Paul Road	Pewaukee, WI		—		561,904		1,928,064		113,241		561,904		2,041,305		2,603,209		357,110	1985	40 yrs.
8801 Tinicum Boulevard	Philadelphia, PA		—		2,474,031		—		43,598,952		125,087		45,947,896		46,072,983		12,300,012	1997	40 yrs.
3 Franklin Plaza	Philadelphia, PA		—		2,483,144		—		32,150,134		2,514,519		32,118,759		34,633,278		6,127,052	1999	40 yrs.
4751 League Island Boulevard	Philadelphia, PA		—		992,965		331,924		6,753,197		1,022,081		7,056,006		8,078,087		573,955	2003	40 yrs.
1 Crescent Drive	Philadelphia, PA		—		567,280		—		12,752,342		347,892		12,971,730		13,319,622		57,493	2004	40 yrs.
9801 80th Avenue	Pleasant Prairie, WI		—		1,692,077		7,934,794		62,495		1,689,726		7,999,640		9,689,366		1,617,933	1994	40 yrs.
2250 Hickory Road	Plymouth Meeting, PA		—		1,015,851		9,175,555		2,338,832		1,032,507		11,497,732		12,530,239		2,838,418	1985	40 yrs.
2905 Northwest Boulevard	Plymouth, MN		—		516,920		4,646,342		1,702,547		516,920		6,348,890		6,865,809		1,853,696	1983	40 yrs.
2800 Campus Drive	Plymouth, MN		—		395,366		3,554,512		1,008,452		395,366		4,562,964		4,958,330		1,357,056	1985	40 yrs.
2955 Xenium Lane	Plymouth, MN		—		151,238		1,370,140		401,075		151,238		1,771,215		1,922,453		605,963	1985	40 yrs.
2920 Northwest Boulevard	Plymouth, MN		—		392,026		3,433,678		655,417		384,235		4,096,886		4,481,121		1,151,892	1997	40 yrs.
14630-14650 28th Avenue North	Plymouth, MN		—		198,205		1,793,422		644,591		198,205		2,438,013		2,636,218		669,648	1978	40 yrs.
2800 Northwest Boulevard	Plymouth, MN		—		1,934,438		10,952,503		484,440		1,934,438		11,436,943		13,371,380		2,695,022	1995	40 yrs.
9600 54th Avenue	Plymouth, MN		—		332,317		3,077,820		1,075,534		332,317		4,153,354		4,485,671		931,060	1998	40 yrs.
1500 SW 5th Court	Pompano Beach, FL		—		972,232		3,892,085		245,724		972,232		4,137,810		5,110,041		987,730	1957	40 yrs.
1651 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		126,108		203,247		937,202		1,140,449		283,351	1990	40 yrs.
1601 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		403,403		203,247		1,214,496		1,417,743		301,897	1990	40 yrs.
1501 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		40,396		203,247		851,489		1,054,737		204,419	1990	40 yrs.
1400 SW 6th Court	Pompano Beach, FL		—		1,157,049		4,620,956		308,055		1,157,049		4,929,010		6,086,060		1,155,658	1986	40 yrs.
1405 SW 6th Court	Pompano Beach, FL		—		392,138		1,565,787		126,972		392,138		1,692,759		2,084,897		403,837	1985	40 yrs.
595 SW 13th Terrace	Pompano Beach, FL		—		359,933		1,437,116		95,541		359,933		1,532,657		1,892,590		356,011	1984	40 yrs.
601 SW 13th Terrace	Pompano Beach, FL		—		164,413		655,933		151,781		164,413		807,714		972,127		184,683	1984	40 yrs.
605 SW 16th Terrace	Pompano Beach, FL		—		310,778		1,238,324		307,582		310,178		1,546,507		1,856,684		319,660	1965	40 yrs.
4300 Carolina Avenue	Richmond, VA		—		2,007,717		14,927,608		555,417		2,009,136		15,481,606		17,490,742		4,505,494	1985	40 yrs.
301 Hill Carter Parkway	Richmond, VA		—		659,456		4,836,010		625		659,456		4,836,635		5,496,091		1,430,892	1989	40 yrs.
4001 Carolina Avenue	Richmond, VA		—		29,443		215,914		305,691		29,443		521,605		551,048		122,714	1935	40 yrs.
5600-5626 Eastport Boulevard	Richmond, VA		—		489,941		3,592,900		389,883		489,941		3,982,783		4,472,724		1,217,321	1989	40 yrs.
5650-5674 Eastport Boulevard	Richmond, VA		—		644,384		4,025,480		235,079		644,384		4,260,559		4,904,943		1,393,734	1990	40 yrs.
5700 Eastport Boulevard	Richmond, VA		—		408,729		2,697,348		803,670		408,729		3,501,018		3,909,747		984,143	1990	40 yrs.
4101-4127 Carolina Avenue	Richmond, VA		—		310,854		2,279,597		567,636		310,854		2,847,233		3,158,087		768,190	1973	40 yrs.
4201-4261 Carolina Avenue	Richmond, VA		—		693,203		5,083,493		1,305,385		693,203		6,388,878		7,082,081		1,911,966	1975	40 yrs.
4263-4299 Carolina Avenue	Richmond, VA		—		256,203		2,549,649		1,647,276		256,203		4,196,925		4,453,128		1,163,759	1976	40 yrs.
4301-4335 Carolina Avenue	Richmond, VA		—		223,696		1,640,435		1,920,216		223,696		3,560,651		3,784,347		546,076	1978	40 yrs.
4337-4379 Carolina Avenue	Richmond, VA		—		325,303		2,385,557		880,278		325,303		3,265,835		3,591,138		1,282,851	1979	40 yrs.
4501-4549 Carolina Avenue	Richmond, VA		—		486,166		3,565,211		471,129		486,166		4,036,340		4,522,506		1,177,796	1981	40 yrs.
4551-4593 Carolina Avenue	Richmond, VA		—		474,360		3,478,646		272,695		474,360		3,751,341		4,225,701		1,087,264	1982	40 yrs.
4601-4643 Carolina Avenue	Richmond, VA		—		652,455		4,784,675		507,154		652,455		5,291,829		5,944,284		1,738,991	1985	40 yrs.
4645-4683 Carolina Avenue	Richmond, VA		—		404,616		2,967,187		1,079,890		404,616		4,047,077		4,451,693		1,760,935	1985	40 yrs.
4447-4491 Carolina Avenue	Richmond, VA		—		454,056		2,729,742		293,897		454,056		3,023,639		3,477,695		958,366	1987	40 yrs.
4401-4445 Carolina Avenue	Richmond, VA		—		615,038		4,510,272		397,983		615,038		4,908,255		5,523,293		1,459,049	1988	40 yrs.
2300 East Parham Road	Richmond, VA		—		221,947		1,011,088		2,443		221,947		1,013,531		1,235,478		325,610	1988	40 yrs.
5601-5659 Eastport Boulevard	Richmond, VA		*		705,660		—		4,718,370		720,100		4,703,930		5,424,030		1,653,017	1996	40 yrs.
5900 Eastport Boulevard	Richmond, VA		—		676,661		—		4,818,232		687,898		4,806,995		5,494,893		1,265,045	1997	40 yrs.
4717-4729 Eubank Road	Richmond, VA		*		449,447		3,294,697		546,131		452,263		3,838,011		4,290,274		1,127,629	1978	40 yrs.
4263F-N. Carolina Avenue	Richmond, VA		—		91,476		—		1,643,294		91,599		1,643,171		1,734,770		446,236	1975	40 yrs.
510 Eastpark Court	Richmond, VA		—		261,961		2,110,874		316,688		262,210		2,427,312		2,689,523		800,917	1989	40 yrs.
520 Eastpark Court	Richmond, VA		—		486,118		4,083,582		336,701		486,598		4,419,803		4,906,401		1,203,497	1989	40 yrs.
5701-5799 Eastport Boulevard	Richmond, VA		—		694,644		—		5,651,198		700,503		5,645,340		6,345,842		1,630,865	1998	40 yrs.
530 Eastpark Court	Richmond, VA		—		266,883		—		3,068,901		334,772		3,001,012		3,335,784		1,026,669	1999	40 yrs.
3829-3855 Gaskins Road	Richmond, VA		—		364,165		3,264,114		39,764		364,165		3,303,879		3,668,044		728,169	1988	40 yrs.
10800 Nuckols Boulevard	Richmond, VA		—		1,432,462		—		14,420,839		1,794,162		14,059,139		15,853,301		2,428,731	2000	40 yrs.
100 Westgate Parkway	Richmond, VA		—		1,140,648		101,824		8,408,649		1,456,084		8,195,037		9,651,121		1,230,590	2001	40 yrs.
200 Westgate Parkway	Richmond, VA		—		1,623,612		—		5,900,380		1,072,797		6,451,195		7,523,992		923,936	2002	40 yrs.
1001 Boulders Parkway	Richmond, VA		—		2,073,739		5,634,796		892,592		2,079,643		6,521,484		8,601,127		257,425	2005	40 yrs.
7400 Beaufont Springs Drive	Richmond, VA		—		808,581		7,273,850		837,566		810,743		8,109,253		8,919,996		304,103	2005	40 yrs.
1100 Boulders Parkway	Richmond, VA		—		1,276,936		12,052,192		709,835		1,280,662		12,758,301		14,038,963		181,763	2005	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
12 S. Third Street	Richmond, VA		—		40,539		184,682		14,061			40,539		198,743		239,282		57,182	1900	40 yrs.
2020 US Highway 301 South	Riverview, FL		—		1,233,639		13,608,485		1,144			1,233,800		13,609,469		14,843,268		158,254	2006	40 yrs.
6532 Judge Adams Road	Rock Creek, NC		—		354,903		—		3,740,561			399,988		3,695,477		4,095,464		996,239	1997	40 yrs.
6530 Judge Adams Road	Rock Creek, NC		—		305,821		—		4,458,256			335,061		4,429,015		4,764,076		903,045	1999	40 yrs.
6509 Franz Warner Parkway	Rock Creek, NC		—		360,494		—		2,829,679			372,494		2,817,679		3,190,173		506,475	2001	40 yrs.
38100 Ecorse Road	Romulus, MI		—		955,063		—		8,900,259			853,063		9,002,259		9,855,322		1,360,828	2000	40 yrs.
38000 Ecourse Road	Romulus, MI		—		807,660		—		12,732,352			1,053,337		12,486,675		13,540,012		2,529,890	2001	40 yrs.
6505 Cogswell Road	Romulus, MI		—		594,523		—		17,282,074			4,195,047		13,681,551		17,876,598		2,078	2005	40 yrs.
38100 Ecorse Road Expansion	Romulus, MI		—		—		—		1,538,262			—		1,538,262		1,538,262		28,999	2005	40 yrs.
8501 East Raintree Drive	Scottsdale, AZ		—		4,076,412		—		27,576,974			4,115,137		27,538,249		31,653,386		459,720	2005	40 yrs.
26911-26957 Northwestern Highway	Southfield, MI		—		7,799,515		66,268,817		8,771,128			7,799,515		75,039,945		82,839,460		18,643,965	1985	40 yrs.
6950 Harbor View Blvd	Suffolk, VA		—		929,844		—		6,197,285			794,848		6,332,282		7,127,129		96,284	2004	40 yrs.
13650 NW 8th Street	Sunrise, FL		—		558,223		2,171,930		99,234			558,251		2,271,136		2,829,387		624,170	1991	40 yrs.
13630 NW 8th Street	Sunrise, FL		—		659,797		2,596,275		772,671			659,825		3,368,917		4,028,742		883,443	1991	40 yrs.
1301 International Parkway	Sunrise, FL		—		5,100,162		24,219,956		1,264,535			5,100,791		25,483,861		30,584,653		—	2006	40 yrs.
5501-5519 Pioneer Park Boulevard	Tampa, FL		—		162,000		1,613,000		637,115			262,416		2,149,700		2,412,115		605,615	1981	40 yrs.
5690-5694 Crenshaw Street	Tampa, FL		—		181,923		1,812,496		217,470			181,923		2,029,967		2,211,890		598,290	1979	40 yrs.
3102,3104,3110 Cherry Palm Drive	Tampa, FL		—		503,767		2,787,585		1,948,416			982,207		4,257,561		5,239,768		1,234,238	1986	40 yrs.
8401-8408 Benjamin Road	Tampa, FL		—		789,651		4,454,648		1,974,397			769,789		6,448,907		7,218,696		2,203,217	1986	40 yrs.
3501 Riga Boulevard	Tampa, FL		—		617,289		3,048,379		454,271			617,289		3,502,650		4,119,939		1,026,027	1987	40 yrs.
111 Kelsey Lane	Tampa, FL		—		359,540		1,461,850		934,298			359,540		2,396,148		2,755,688		729,735	1990	40 yrs.
7930, 8010-20 Woodland Center Boulevard	Tampa, FL		*		1,408,478		5,247,246		911,481			1,408,478		6,158,727		7,567,205		1,671,637	1990	40 yrs.
7920 Woodland Center Boulevard	Tampa, FL		*		1,382,648		2,445,444		(276,436	)		1,082,648		2,469,008		3,551,656		607,836	1997	40 yrs.
8154-8198 Woodland Center Boulevard	Tampa, FL		*		399,088		2,868,834		441,572			399,088		3,310,406		3,709,494		967,807	1988	40 yrs.
8112-42 Woodland Center Boulevard	Tampa, FL		*		513,263		3,230,239		662,940			513,263		3,893,180		4,406,442		889,518	1995	40 yrs.
8212 Woodland Center Boulevard	Tampa, FL		*		820,882		2,322,720		14,210			820,882		2,336,931		3,157,813		563,816	1996	40 yrs.
131 Kelsey Lane	Tampa, FL		—		511,463		—		4,455,291			559,527		4,407,227		4,966,754		1,699,463	1985	40 yrs.
7724 Woodland Center Boulevard	Tampa, FL		—		235,893		—		2,285,235			235,894		2,285,234		2,521,128		611,383	1998	40 yrs.
7802-50 Woodland Center Boulevard	Tampa, FL		—		357,364		—		2,711,761			506,949		2,562,177		3,069,125		1,019,925	1999	40 yrs.
7852-98 Woodland Center Boulevard	Tampa, FL		—		357,364		—		2,708,532			506,949		2,558,947		3,065,896		965,711	1999	40 yrs.
8921 Brittany Way	Tampa, FL		—		224,369		1,063,882		965,576			254,493		1,999,334		2,253,827		446,634	1998	40 yrs.
5250 Eagle Trail Drive	Tampa, FL		—		952,860		—		3,581,057			952,860		3,581,057		4,533,916		739,406	1998	40 yrs.
7725 Woodland Center Boulevard	Tampa, FL		—		553,335		—		3,351,584			771,501		3,133,418		3,904,919		637,170	1999	40 yrs.
8001 Woodland Center Boulevard	Tampa, FL		—		350,406		—		2,488,771			438,061		2,401,117		2,839,178		517,144	1999	40 yrs.
4630 Woodland Corporate Boulevard	Tampa, FL		—		943,169		—		12,592,708			1,560,099		11,975,778		13,535,877		2,279,782	2000	40 yrs.
701-725 South US Hwy 301	Tampa, FL		—		419,683		—		3,817,508			661,680		3,575,511		4,237,191		1,130,146	2000	40 yrs.
4502 Woodland Corporate Boulevard	Tampa, FL		—		—		—		4,005,900			1,071,535		2,934,365		4,005,900		528,300	1999	40 yrs.
9001-9015 Brittany Way	Tampa, FL		—		209,841		—		1,575,906			364,514		1,421,234		1,785,748		334,370	2000	40 yrs.
4508 Woodland Corporate Boulevard	Tampa, FL		—		498,598		—		3,057,752			556,887		2,999,463		3,556,350		573,747	2000	40 yrs.
7622 Bald Cypress Place	Tampa, FL		—		—		—		1,305,584			300,000		1,005,584		1,305,584		171,340	2000	40 yrs.
901-933 US Highway 301 South	Tampa, FL		—		500,391		—		4,032,028			840,314		3,692,105		4,532,419		978,648	2001	40 yrs.
4503 Woodland Corporate Boulevard	Tampa, FL		—		—		—		3,454,328			619,913		2,834,415		3,454,328		414,660	2002	40 yrs.
4505 Woodland Corporate Boulevard	Tampa, FL		—		—		—		3,110,391			716,594		2,393,797		3,110,391		528,279	2002	40 yrs.
4511 Woodland Corporate Boulevard	Tampa, FL		—		—		—		2,840,466			686,594		2,153,872		2,840,466		386,162	2002	40 yrs.
7621 Bald Cypress Place (Bldg N)	Tampa, FL		—		—		—		1,482,613			447,498		1,035,115		1,482,613		121,194	2001	40 yrs.
4520 Seedling Circle	Tampa, FL		—		854,797		42,131		2,721,233			854,797		2,763,364		3,618,161		185,881	2003	40 yrs.
501 US Highway 301 South	Tampa, FL		—		898,884		—		3,499,853			900,508		3,498,229		4,398,737		261,909	2004	40 yrs.
9002-9036 Brittany Way	Tampa, FL		—		492,320		—		3,964,055			899,284		3,557,092		4,456,375		343,327	2004	40 yrs.
8900-34 Brittany Was	Tampa, FL		—		537,194		—		4,248,195			978,019		3,807,371		4,785,389		14,913	2005	40 yrs.
200-34 Kelsey Lane	Tampa, FL		—		330,097		—		3,623,009			933,362		3,019,744		3,953,106		90,303	2005	40 yrs.
8725 Henderson Road	Tampa, FL		—		3,171,906		19,126,156		(3,957	)		3,167,787		19,126,318		22,294,105		162,502	2006	40 yrs.
8735 Henderson Road	Tampa, FL		—		3,170,247		18,749,873		(18,416	)		3,166,130		18,735,573		21,901,703		160,241	2006	40 yrs.
8705 Henderson Road	Tampa, FL		—		4,309,467		23,688,189		21,765			4,303,870		23,715,550		28,019,421		299,401	2006	40 yrs.
8715 Henderson Road	Tampa, FL		—		3,348,258		18,325,427		(4,177	)		3,343,910		18,325,599		21,669,509		133,957	2006	40 yrs.
8745 Henderson Road	Tampa, FL		—		2,053,105		11,158,441		11,901			2,050,439		11,173,008		13,223,447		95,859	2006	40 yrs.
7851-7861 Woodland Center Blvd	Tampa, FL		—		549,043		2,242,204		95,559			548,905		2,337,901		2,886,806		17,050	2006	40 yrs.
1650 Research Drive	Troy, MI		—		763,067		7,201,677		1,328,964			763,067		8,530,641		9,293,708		1,885,343	1985	40 yrs.
1775 Research Drive	Troy, MI		—		331,422		2,788,073		648,020			331,422		3,436,093		3,767,515		789,861	1985	40 yrs.
1875 Research Drive	Troy, MI		—		329,863		2,774,006		378,366			329,863		3,152,372		3,482,235		747,631	1986	40 yrs.
1850 Research Drive	Troy, MI		—		781,054		7,364,300		2,083,387			781,054		9,447,687		10,228,741		2,340,733	1986	40 yrs.
1965 Research Drive	Troy, MI		—		419,090		3,578,928		346,058			419,090		3,924,986		4,344,077		1,054,465	1987	40 yrs.
1960 Research Drive	Troy, MI		—		419,146		3,579,166		635,418			419,146		4,214,584		4,633,730		1,115,137	1987	40 yrs.
1101 Allen Drive	Troy, MI		—		98,144		887,935		326,837			98,148		1,214,768		1,312,916		450,766	1974	40 yrs.

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
1151 Allen Drive	Troy, MI		—		164,483		1,486,220		438,250			164,486		1,924,467		2,088,953		529,177	1974	40 yrs.
1300 Rankin Street	Troy, MI		—		134,090		1,212,752		498,931			134,094		1,711,679		1,845,773		632,783	1979	40 yrs.
1350 Rankin Street	Troy, MI		—		111,776		1,011,497		168,477			111,779		1,179,971		1,291,750		298,176	1979	40 yrs.
1376-1400 Rankin Street	Troy, MI		—		134,292		1,213,626		313,374			134,296		1,526,996		1,661,292		384,503	1979	40 yrs.
1352-1374 Rankin Street	Troy, MI		—		153,275		1,385,098		336,226			153,279		1,721,321		1,874,599		463,034	1979	40 yrs.
1324-1346 Rankin Street	Troy, MI		—		134,090		1,212,214		161,394			134,094		1,373,604		1,507,698		313,707	1979	40 yrs.
1301-1307 Rankin Street	Troy, MI		—		111,776		1,011,121		183,667			111,779		1,194,785		1,306,564		284,538	1978	40 yrs.
1409 Allen Drive	Troy, MI		—		142,370		1,286,048		430,773			142,374		1,716,818		1,859,191		479,131	1978	40 yrs.
1334 Maplelawn Road	Troy, MI		—		124,296		1,122,802		54,070			124,300		1,176,868		1,301,168		275,534	1983	40 yrs.
1290 Maplelawn Road	Troy, MI		—		85,321		771,621		223,628			85,325		995,245		1,080,570		231,123	1984	40 yrs.
1070 Maplelawn Road	Troy, MI		—		68,560		620,595		106,856			68,563		727,447		796,011		189,305	1982	40 yrs.
950 Maplelawn Road	Troy, MI		—		252,429		2,265,259		181,631			252,433		2,446,886		2,699,319		596,700	1982	40 yrs.
894 Maplelawn Road	Troy, MI		—		181,749		1,632,243		763,375			181,753		2,395,615		2,577,367		698,188	1986	40 yrs.
1311-1331 Maplelawn Road	Troy, MI		—		125,407		1,132,810		204,037			125,410		1,336,843		1,462,254		421,557	1986	40 yrs.
2354 Bellingham Street	Troy, MI		—		87,340		789,817		19,928			87,344		809,741		897,085		191,097	1990	40 yrs.
2360 Bellingham Street	Troy, MI		—		87,340		789,817		58,250			87,344		848,063		935,407		194,192	1985	40 yrs.
1600-1630 East Big Beaver Road	Troy, MI		—		1,454,406		2,952,884		53,694			1,458,737		3,002,247		4,460,984		537,518	1982	40 yrs.
2600 Bellingham Drive	Troy, MI		—		1,796,869		—		4,095,318			1,938,746		3,953,441		5,892,187		1,107,377	2002	40 yrs.
2710 Bellingham Drive	Troy, MI		—		1,796,869		—		4,721,835			1,938,746		4,579,958		6,518,704		1,253,476	2002	40 yrs.
3432 Holland Road	Virginia Beach, VA		—		173,527		790,515		2,462			173,527		792,977		966,504		234,111	1989	40 yrs.
2809 South Lynnhaven Road	Virginia Beach, VA		—		953,590		6,142,742		1,100,609			953,590		7,243,352		8,196,941		1,822,981	1987	40 yrs.
200 Golden Oak Court	Virginia Beach, VA		—		1,116,693		6,770,480		1,126,390			1,116,693		7,896,870		9,013,562		2,005,654	1988	40 yrs.
208 Golden Oak Court	Virginia Beach, VA		—		965,177		6,728,717		1,129,993			965,177		7,858,710		8,823,888		2,052,497	1989	40 yrs.
484 Viking Drive	Virginia Beach, VA		—		891,753		3,607,890		553,685			891,753		4,161,575		5,053,327		1,028,787	1987	40 yrs.
629 Phoenix Drive	Virginia Beach, VA		—		371,694		2,108,097		243,169			371,694		2,351,266		2,722,960		559,043	1996	40 yrs.
5700 Cleveland Street	Virginia Beach, VA		—		700,112		9,592,721		1,917,901			700,564		11,510,169		12,210,734		3,008,461	1989	40 yrs.
1457 Miller Store Road	Virginia Beach, VA		1,587,598		473,689		2,663,045		603,352			474,746		3,265,341		3,740,086		285,752	2003	40 yrs.
11020 West Plank Court	Wauwatosa, WI		—		464,246		3,230,511		(519,943	)		464,246		2,710,568		3,174,814		533,083	1985	40 yrs.
825 Duportail Road	Wayne, PA		—		5,536,619		16,179,213		1,061,808			5,539,281		17,238,360		22,777,641		2,848,284	1979	40 yrs.
1500 Liberty Ridge	Wayne, PA		—		8,287,555		—		31,280,987			11,636,499		27,932,043		39,568,542		4,177,639	2002	40 yrs.
1200 Liberty Ridge Drive	Wayne, PA		—		6,215,667		—		8,829,577			5,223,660		9,821,584		15,045,244		2,393,281	2001	40 yrs.
11300-90 West Theodore Trecker Way	West Allis, WI		*		500,565		1,591,678		630,627			505,972		2,216,897		2,722,870		48,651	2005	40 yrs.
11548 West Theodore Trecker Way	West Allis, WI		*		660,068		4,640,578		44,656			663,766		4,681,537		5,345,302		181,960	2005	40 yrs.
11420 West Theodore Trecker Way	West Allis, WI		—		348,146		2,057,483		27,202			350,008		2,082,824		2,432,831		80,727	2005	40 yrs.
400-500 Brandywine Parkway	West Chester, PA		—		845,846		6,809,025		453,832			845,846		7,262,857		8,108,703		1,742,042	1988	40 yrs.
600 Brandywine Parkway	West Chester, PA		—		664,899		5,352,410		842,826			664,899		6,195,236		6,860,135		1,575,945	1988	40 yrs.
905 Airport Road	West Chester, PA		—		1,715,000		5,185,000		1,429,527			1,735,012		6,594,515		8,329,527		2,301,424	1988	40 yrs.
Liberty Square Retail Blocks	West Malling, UK		—		559,590		5,113,902		5,761,846			1,408,957		10,026,381		11,435,338		346,459	2006	40 yrs.
3612 La Grange Parkway	Williamsburg, VA		—		—		—		5,687,985			887,234		4,800,752		5,687,985		284,122	2003	40 yrs.
7805 Hudson Road	Woodbury, MN		—		1,279,834		—		10,337,053			1,385,739		10,231,149		11,616,887		1,940,761	2002	40 yrs.

Subtotal Operating Real Estate		$	92,401,473	$	618,631,316	$	1,812,183,416	$	2,061,697,505		$	678,074,971	$	3,814,437,267	$	4,492,512,238	$	806,308,940

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(years)
DEVELOPMENT PROPERTIES
8400 Industrial Boulevard	Allentown, PA	$	—	$	6,883,389	$	—	$	25,444,359	$	—	$	32,327,747	$	32,327,747	$	—	2005	N/A
3500 High Point Boulevard	Bethlehem, PA		—		289,529		—		2,143,128		—		2,432,657		2,432,657		—	2006	N/A
3450 High Point Boulevard	Bethlehem, PA		—		303,197		—		1,897,360		—		2,200,557		2,200,557		—	2006	N/A
5705 Old Shakopee Road	Bloomington, MN		—		2,113,223		—		1,409,514		—		3,522,737		3,522,737		—	2001	N/A
8201 Industrial Boulevard	Breinigsville, PA		—		2,138,635		—		887,619		—		3,026,254		3,026,254		—	2006	N/A
6220 Old Dobbin Lane	Columbis, MD		—		3,865,848		—		3,117,313		—		6,983,161		6,983,161		—	2006	N/A
7625 Smetana Lane	Eden Prairie, MN		—		4,500,641		—		1,416,645		—		5,917,287		5,917,287		—	2006	N/A
7351 Coca Cola Drive	Elkridge, MD		—		1,897,044		—		4,722,406		—		6,619,450		6,619,450		—	2006	N/A
1100 Virginia Drive	Fort Washington, PA		—		22,612,437		—		18,251,084		—		40,863,521		40,863,521		—	2006	N/A
7 Independence Pointe	Greenville, SC		—		932,484		—		4,353,296		—		5,285,780		5,285,780		—	2006	N/A
45 Brookfield Oaks Drive	Greenville, SC		—		818,114		—		3,151,403		—		3,969,517		3,969,517		—	2006	N/A
116 Pleasant Ridge Road	Greenville, SC		—		1,547,811		—		2,740,234		—		4,288,045		4,288,045		—	2006	N/A
1317 Executive Boulevard	Hampton, VA		—		1,650,423		—		5,221,412		—		6,871,836		6,871,836		—	2006	N/A
600 Industrial Drive	Harrisburg, PA		—		7,743,800		—		24,665,626		—		32,409,426		32,409,426		—	2005	N/A
1498 Eagle Hill Drive	High Point, NC		—		94,274		—		5,688,012		—		5,782,285		5,782,285		—	2005	N/A
4475 Premier Drive	High Point, NC		—		748,693		—		3,600,826		—		4,349,519		4,349,519		—	2006	N/A
7 Walnut Grove Drive	Horsham, PA		—		2,631,696		—		9,130,339		—		11,762,035		11,762,035		—	2006	N/A
1646 Rankin Road	Houston, TX		—		329,961		—		4,049,825		—		4,379,785		4,379,785		—	2005	N/A
330 Fellowship Road	Mount Laurel, NJ		—		3,730,570		—		3,786,447		—		7,517,017		7,517,017		—	2006	N/A
6923 Lee Vista Boulevard	Orlando, FL		—		903,701		—		2,132,401		—		3,036,102		3,036,102		—	2006	N/A
851 Gills Drive	Orlando, FL		—		267,313		—		305,523		—		572,836		572,836		—	2006	N/A
950 Gills Drive	Orlando, FL		—		356,418		—		269,750		—		626,167		626,167		—	2006	N/A
1000 Gills Drive	Orlando, FL		—		333,873		—		269,171		—		603,044		603,044		—	2006	N/A
17th & JFK Tower	Philadelphia, PA		—		22,430,038		—		236,315,665		—		258,745,703		258,745,703		—	2005	N/A
3900 Westerre Parkway	Richmond, VA		—		392,184		—		10,177,825		—		10,570,009		10,570,009		—	2005	N/A
Renaissance Blvd & Hwy 20	Sturtevant, WI		—		2,484,450		—		8,512,026		—		10,996,476		10,996,476		—	2006	N/A
Bridgeway III Land	Suffolk, VA		—		904,052		—		6,717,091		—		7,621,143		7,621,143		—	2006	N/A
910-926 Chad Lane	Tampa, FL		—		201,771		—		1,986,093		—		2,187,864		2,187,864		—	2006	N/A
150-182 Kelsey Lane	Tampa, FL		—		403,541		—		3,211,780		—		3,615,322		3,615,322		—	2006	N/A
3701 Corporate Parkway	Upper Saucon, PA		—		1,078,674		—		8,445,567		—		9,524,241		9,524,241		—	2005	N/A
42 Kings Hill Avenue	West Malling, UK		—		—		—		19,876,271		—		19,876,271		19,876,271		—	2005	N/A
1 Kings Hill Aveune	West Malling, UK		—		—		—		5,746,898		—		5,746,898		5,746,898		—	2006	N/A
777 Township Line Road	Yardley, PA		—		3,436,013		—		10,636,157		—		14,072,170		14,072,170		—	2005	N/A

Subtotal Development in Progress		$	—	$	98,023,798	$	—	$	440,279,067	$	—	$	538,302,864	$	538,302,864	$	—

LIBERTY PROPERTY TRUST
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized
								Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction	Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(years)
LAND HELD FOR DEVELOPMENT
Perryman Road Land	Aberdeen, MD	$	—	$	12,046,811	$	—	$	91,099		$	12,137,910	$	—	$	12,137,910	$	—	2005	N/A
LVCC Phase 2 Land	Bethlehem, PA		—		3,148,780		—		1,117,583			4,266,363		—		4,266,363		—	1998	N/A
Lehigh Valley Corporate Center Land	Bethlehem, PA		—		265,842		—		—			265,842		—		265,842		—	1987	N/A
Boca Colannade Yamato Road	Boca Raton, FL		—		3,649,792		—		1,103,719			4,753,511		—		4,753,511		—	1998	N/A
95 Kriner Road	Chambersburg, PA		—		8,662,788		—		7,761,134			16,423,922		—		16,423,922		—	2006	N/A
Battlefield Corp Ctr, Parcel 14	Chesapeake, VA		—		1,532,779		—		6,634			1,539,413		—		1,539,413		—	2006	N/A
Rivers’ Bend Land	Chesterfield, VA		—		1,695,415		—		3,060,359			4,755,773		—		4,755,773		—	1995	N/A
501 Hewlett Packard Way	Chesterfield, VA		—		165,042		—		484,965			650,007		—		650,007		—	1996	N/A
Pleasant Ridge Road Land	Greensboro, NC		—		828,289		—		—			828,289		—		828,289		—	2006	N/A
Southchase Business Park Land	Greenville, SC		—		1,369,712		—		688,157			2,057,869		—		2,057,869		—	1998	N/A
Hunters Green Land	Hagerstown, MD		—		8,942,141		—		246,486			9,188,627		—		9,188,627		—	2006	N/A
Lakefront Plaza II Land	Hampton, VA		157,601		132,785		—		92,936			225,721		—		225,721		—	2001	N/A
Patapsco Valley Business Center	Hanover, MD		—		2,402,322		—		1,118,795			3,521,117		—		3,521,117		—	2004	N/A
Mendenhall Land	High Point, NC		—		1,910,135		—		5,028,104			6,938,239		—		6,938,239		—	1995	N/A
Piedmond Centre Land	High Point, NC		—		866,380		—		526,614			1,392,994		—		1,392,994		—	2006	N/A
Horsham Business Center Land	Horsham, PA		—		80,800		—		455			81,255		—		81,255		—	2005	N/A
Commonwealth Corporate Center Land	Horsham, PA		—		3,047,683		—		19,263			3,066,946		—		3,066,946		—	2005	N/A
Central Green Land	Houston, TX		—		481,229		—		10,440			491,669		—		491,669		—	2001	N/A
Fallbrrok Drive Land	Houston, TX		—		1,990,270		—		15,915			2,006,186		—		2,006,186		—	2006	N/A
Windfern Drive Land	Houston, TX		—		1,222,065		—		4,317			1,226,382		—		1,226,382		—	2006	N/A
Noxell Land	Hunt Valley, MD		—		2,166,068		—		830,242			2,996,310		—		2,996,310		—	2001	N/A
Liberty Business Park Land	Jacksonville, FL		—		448,097		—		90,019			538,116		—		538,116		—	1995	N/A
7024 AC Skinner Parkway	Jacksonville, FL		—		468,643		—		356,309			824,952		—		824,952		—	1995	N/A
Belfort Road	Jacksonville, FL		—		468,643		—		109,850			578,493		—		578,493		—	1998	N/A
Butler Plaza Land	Jacksonville, FL		—		1,303,792		—		1,706,463			3,010,255		—		3,010,255		—	1998	N/A
Salisbury Road Land	Jacksonville, FL		—		880,828		—		699,651			1,580,479		—		1,580,479		—	2000	N/A
Skinner Land Parcel B	Jacksonville, FL		—		2,306,191		—		1,102,674			3,408,865		—		3,408,865		—	2005	N/A
Kent County, UK	Kent County, UK		—		—		—		7,698,943			7,698,943		—		7,698,943		—	2006	N/A
Boulders Business Center Land	Lehigh, PA		—		15,243,107		—		2,660,386			17,903,493		—		17,903,493		—	2004	N/A
Mill Run Land	Lehigh, PA		—		2,882,221		—		49,691			2,931,911		—		2,931,911		—	2005	N/A
Commodore Business Park	Logan, NJ		—		1,458,019		—		—			1,458,019		—		1,458,019		—	1995	N/A
Quarry Ridge Land	Malvern, PA		—		8,398,708		—		1,894,356			10,293,063		—		10,293,063		—	2001	N/A
Park Place South Land	Milwaukee, WI		—		2,362,904		—		1,384,531			3,747,435		—		3,747,435		—	1999	N/A
Monarch Towne Center Land	Mirarar, FL		—		12,327,714		—		—			12,327,714		—		12,327,714		—	2006	N/A
South 27th Street Land	Oak Creek, WI		—		1,594,760		—		97,911			1,692,671		—		1,692,671		—	2006	N/A
Maitland Summit Park Land	Orlando, FL		—		4,388,905		—		33,427			4,422,332		—		4,422,332		—	2005	N/A
Beachline Industrial Park Land	Orlando, FL		—		1,103,606		—		215,454			1,319,061		—		1,319,061		—	2006	N/A
JFK & Arch Parking Lots/Land (West)	Philadelphia, PA		—		4,700,222		—		2,941,184			7,641,406		—		7,641,406		—	2000	N/A
4775 League Island Boulevard	Philadelphia, PA		—		396,833		—		900,027			1,296,860		—		1,296,860		—	2006	N/A
Eastport VII	Richmond, VA		—		787,091		—		844,001			1,631,092		—		1,631,092		—	1997	N/A
Eastport VIII	Richmond, VA		—		379,836		—		6,187			386,023		—		386,023		—	1997	N/A
Eastport IX	Richmond, VA		—		209,856		—		5,096			214,952		—		214,952		—	1997	N/A
Westerre Land	Richmond, VA		—		738,090		—		902,239			1,640,329		—		1,640,329		—	2003	N/A
Romulus Land	Romulus, MI		—		788,338		—		733,216			1,521,554		—		1,521,554		—	1998	N/A
Woodlands Center Land	Sandston, VA		—		928,555		—		290,438			1,218,993		—		1,218,993		—	1996	N/A
Northsight Land (LPLP)	Scottsdale, AZ		—		7,247,107		—		1,130,879			8,377,985		—		8,377,985		—	2005	N/A
Bridgeway II Land	Suffolk, VA		—		678,039		—		1,703,485			2,381,525		—		2,381,525		—	2005	N/A
Suffolk Land	Suffolk, VA		—		2,713,494		—		79,375			2,792,869		—		2,792,869		—	2006	N/A
6119 W. Linebaugh Avenue	Tampa, FL		—		175,886		—		22,320			198,205		—		198,205		—	2000	N/A
Tampa Triangle Land	Tampa, FL		—		10,448,263		—		28,881			10,477,143		—		10,477,143		—	2006	N/A
4631 Woodland Corporate Blvd Land	Tampa, FL		—		1,752,917		—		152,856			1,905,773		—		1,905,773		—	2006	N/A
Big Beaver Airport Land	Troy, MI		—		3,176,411		—		(2,079,253	)		1,097,158		—		1,097,158		—	1999	N/A

Subtotal Land Held for Development		$	157,601	$	147,364,204	$	—	$	47,967,813		$	195,332,017	$	—	$	195,332,017	$	—



Total All Properties		$	92,559,074	$	864,019,318	$	1,812,183,416	$	2,549,944,384		$	873,406,988	$	4,352,740,132	$	5,226,147,119	$	806,308,940


*		Denotes property is collateralized under mortgages with American General, USG Annuity and Life, Metropolitan Life and LaSalle Bank totaling $93.4 million. This amount is not included in the total above.

Management’s Annual Report on Internal Control Over Financial Reporting

To the Partners of Liberty Property Limited Partnership:

The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a — 15 (f) and 15d — 15(f). The Company’s internal control system was designed to provide reasonable assurance to the Company’s management regarding the preparation and fair presentation of published financial statements.

Under the supervision and with the participation of our management, including the Chief Executive Officer and Chief Financial Officer, we assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006. In making this assessment, we used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commissions (COSO) in Internal Control — Integrated Framework. Based on our assessment we believe that, as of December 31, 2006, the Company’s internal control over financial reporting is effective based on those criteria.

February 23, 2007

Report of Independent Registered Public Accounting Firm

The Partners of Liberty Property Limited Partnership:

We have audited management’s assessment, included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting, that Liberty Property Limited Partnership (the “Operating Partnership”) maintained effective internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The Operating Partnership’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express an opinion on management’s assessment and an opinion on the effectiveness of the Operating Partnership’s internal control over financial reporting based on our audit.

In our opinion, management’s assessment that Liberty Property Limited Partnership maintained effective internal control over financial reporting as of December 31, 2006, is fairly stated, in all material respects, based on the COSO criteria. Also, in our opinion, the Operating Partnership maintained, in all material respects, effective internal control over financial reporting as of December 31, 2006, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Liberty Property Limited Partnership as of December 31, 2006 and 2005, and the related consolidated statements of operations, owners’ equity, and cash flows for the each of the three years in the period ended December 31, 2006 of the Operating Partnership and our report dated February 23, 2007 expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania
February 23, 2007

Report of Independent Registered Public Accounting Firm

The Partners of Liberty Property Limited Partnership:

We have audited the accompanying consolidated balance sheets of Liberty Property Limited Partnership (the “Operating Partnership”) as of December 31, 2006 and 2005, and the related consolidated statements of operations, owners’ equity, and cash flows for each of the three years in the period ended December 31, 2006. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and schedule are the responsibility of the Operating Partnership’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audits.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Liberty Property Limited Partnership at December 31, 2006 and 2005, and the consolidated results of its operations and its cash flows for each of the three years in the period ended December 31, 2006, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of Liberty Property Limited Partnership’s internal control over financial reporting as of December 31, 2006, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 23, 2007 expressed an unqualified opinion thereon.

/s/Ernst & Young LLP

Philadelphia, Pennsylvania
February 23, 2007

CONSOLIDATED STATEMENTS OF OPERATIONS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS, EXCEPT PER UNIT AMOUNTS)


	Year Ended December 31,
	2006			2005			2004
OPERATING REVENUE
Rental	$	464,714		$	451,608		$	421,712
Operating expense reimbursement		202,005			181,886			163,572


Total operating revenue		666,719			633,494			585,284


OPERATING EXPENSES
Rental property		139,055			130,353			115,143
Real estate taxes		71,652			64,879			58,901
General and administrative		45,991			38,099			33,724
Depreciation and amortization		144,692			135,846			119,934


Total operating expenses		401,390			369,177			327,702


Operating income		265,329			264,317			257,582

OTHER INCOME (EXPENSE)

Interest and other income		9,591			8,008			6,266
Interest expense		(119,584	)		(119,614	)		(107,027	)


Total other income(expense)		(109,993	)		(111,606	)		(100,761	)


Income before property dispositions, income taxes, minority interest and equity in earnings (loss) of unconsolidated joint ventures		155,336			152,711			156,821

Gain on property dispositions		17,628			85,593			496
Income taxes		(288	)		(14,827	)		(1,820	)
Minority interest		7			(357	)		632
Equity in earnings (loss) of unconsolidated joint ventures		1,432			2,540			(775	)

Income from continuing operations		174,115			225,660			155,354

Discontinued operations (including net gain on property dispositions of $112,620, $36,617 and $11,603 for the years ended December 31, 2006, 2005 and 2004, respectively)		117,935			46,299			24,888

Net income		292,050			271,959			180,242
Preferred unit distributions		13,691			12,095			11,844
Excess of preferred unit redemption over carrying amount		—			500			—

Income available to common unitholders	$	278,359		$	259,364		$	168,398


Earnings per common unit
Basic:
Income from continuing operations	$	1.72		$	2.36		$	1.63
Income from discontinued operations		1.26			0.51			0.28

Income per common unit — basic	$	2.98		$	2.87		$	1.91


Diluted:
Income from continuing operations	$	1.70		$	2.32		$	1.60
Income from discontinued operations		1.25			0.50			0.28

Income per common unit — diluted	$	2.95		$	2.82		$	1.88


Weighted average number of common units outstanding
Basic		93,208			90,540			88,210
Diluted		94,387			91,931			89,700

See accompanying notes.

CONSOLIDATED STATEMENTS OF CASH FLOWS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
(IN THOUSANDS)


	Year Ended December 31,
	2006			2005			2004
OPERATING ACTIVITIES
Net income	$	292,050		$	271,959		$	180,242
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		151,966			150,722			136,700
Amortization of deferred financing costs		4,244			4,758			4,315
Equity in (earnings) loss of unconsolidated joint ventures		(1,432	)		(2,540	)		775
Distributions from unconsolidated joint ventures		5,692			4,651			682
Minority interest in net income		(7	)		357			(632	)
Gain on property dispositions		(130,248	)		(122,210	)		(12,099	)
Noncash compensation		6,212			5,032			2,388
Changes in operating assets and liabilities:
Restricted cash		(21,692	)		3,849			(19,334	)
Accounts receivable		(6,879	)		1,804			(8,449	)
Deferred rent receivable		924			(6,290	)		(8,513	)
Prepaid expenses and other assets		(14,394	)		(12,488	)		(12,046	)
Accounts payable		7,648			8,894			8,859
Accrued interest		1,405			(102	)		2,166
Other liabilities		49,412			52,353			18,282

Net cash provided by operating activities		344,901			360,749			293,336


INVESTING ACTIVITIES
Investment in properties		(372,610	)		(324,340	)		(253,017	)
Investments in unconsolidated joint ventures		(6,239	)		(13,790	)		(6,198	)
Net proceeds from disposition of properties/land		492,548			415,144			54,140
Investment in development in progress		(359,959	)		(235,078	)		(105,208	)
Increase in land held for development		(79,976	)		(91,436	)		(34,132	)
Increase in deferred leasing costs		(29,034	)		(37,133	)		(29,560	)

Net cash used in investing activities		(355,270	)		(286,633	)		(373,975	)


FINANCING ACTIVITIES
Net proceeds from issuance of unsecured notes		295,393			296,424			197,517
Repayment of unsecured notes		(100,000	)		—			(100,000	)
Proceeds from mortgage loans		—			—			9,618
Repayments of mortgage loans		(56,406	)		(173,926	)		(23,592	)
Proceeds from credit facility		725,025			784,800			477,800
Repayments on credit facility		(733,515	)		(841,350	)		(332,800	)
Increase in deferred financing costs		(1,635	)		(3,465	)		(199	)
Capital contributions		113,348			135,148			86,329
Distributions to partners		(242,537	)		(237,101	)		(225,055	)

Net cash (used in) provided by financing activities		(327	)		(39,470	)		89,618

(Decrease) increase in cash and cash equivalents		(10,696	)		34,646			8,979
Increase (decrease) in cash and cash equivalents related to foreign currency translation		2,804			(6,684	)		2,879
Cash and cash equivalents at beginning of year		61,629			33,667			21,809

Cash and cash equivalents at end of year	$	53,737		$	61,629		$	33,667


SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
Write-off of fully depreciated property and deferred costs	$	87,424		$	83,794		$	27,990
Issuance of operating partnership common units		30,000			—			—
Acquisition of properties		(3,066	)		(51,716	)		(11,305	)
Assumption of mortgage loans		3,066			51,716			11,305

See accompanying notes.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP

1. ORGANIZATION

Liberty Property Trust (the “Trust”) is a self-administered and self-managed Maryland real estate investment trust (a “REIT”). Substantially all of the Trust’s assets are owned directly or indirectly, and substantially all of the Trust’s operations are conducted directly or indirectly, by its subsidiary, Liberty Property Limited Partnership, a Pennsylvania limited partnership (the “Operating Partnership” and, together with the Trust and their consolidated subsidiaries, the “Company”). The Trust is the sole general partner and also a limited partner of the Operating Partnership, owning 95.6% of the common equity of the Operating Partnership at December 31, 2006. The Company provides leasing, property management, development, acquisition, and other tenant-related services for a portfolio of industrial and office properties which are located principally within the Mid-Atlantic, Southeastern and Midwestern United States and the United Kingdom.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

Principles of Consolidation

The consolidated financial statements of the Company include the Operating Partnership and wholly owned subsidiaries and those subsidiaries in which the Company owns a majority voting interest with the ability to control operations of the subsidiaries and where no approval, veto or other important rights have been granted to the minority shareholders. All significant intercompany transactions and accounts have been eliminated.

Reclassifications

Certain amounts from prior years have been reclassified to conform to current-year presentation.

Real Estate and Depreciation

The properties are recorded at cost and are depreciated using the straight line method over their estimated useful lives. The estimated lives are as follows:


Building and Improvements		40 years (blended)
Equipment		5 — 10 years
Tenant improvements		Term of the related lease

In accordance with the Financial Accounting Standards Board (“FASB”) Statement of Financial Standards (“SFAS”) No. 141, “Business Combinations,” the Company allocates the purchase price of real estate to land, building and improvements and intangibles based on the relative fair value of each component. The value ascribed to in-place leases is based on the rental rates for the existing leases compared to market rent for leases of similar terms and present valuing the difference based on market interest rates. Origination values are also assigned to in-place leases, and, where appropriate, value is assigned to customer relationships. The Company depreciates the amounts allocated to building and improvements over 40 years and the amounts allocated to intangible assets relating to in-place leases, which are included in deferred financing and leasing costs and other liabilities in the accompanying consolidated balance sheets, over the remaining term of the related leases.

ventures is considered impaired, a loss is recognized to reduce the carrying value of the property to its estimated fair value.

Investments in Unconsolidated Joint Ventures

Cash and Cash Equivalents

Highly liquid investments with a maturity of three months or less when purchased are classified as cash equivalents.

Restricted Cash

Accounts Receivable

The allowance for doubtful accounts at December 31, 2006 and 2005 was $5.1 million and $6.7 million, respectively.

Deferred Rent Receivable

The Company’s deferred rent receivable represents the cumulative difference between rent revenue recognized on a straight line basis and contractual payments due under the terms of tenant leases.

Revenues

	a)		the termination agreement is executed,

	b)		the termination fee is determinable,

	c)		all landlord services, pursuant to the terminated lease, have been rendered, and

	d)		collectibility of the termination fee is assured.

Deferred Financing and Leasing Costs

Costs Incurred for Preferred Unit Issuance

Costs incurred in connection with the Company’s preferred unit issuances are reflected as a reduction of Limited partner’s equity — preferred units.

Income per Common Unit

The following table sets forth the computation of basic and diluted income per common unit (in thousands, except per unit amounts):


	2006							2005
				Weighted							Weighted
				Average							Average
	Income			Units		Per		Income			Units		Per
	(Numerator)			(Denominator)		Unit		(Numerator)			(Denominator)		Unit
Income from continuing operations	$	174,115						$	225,660
Less: Preferred unit distributions		(13,691	)						(12,095	)
Excess of preferred unit redemption over carrying amount		—							(500	)


Basic income from continuing operations
Income from continuing operations available to common unitholders		160,424			93,208	$	1.72		213,065			90,540	$	2.36

Dilutive units for long-term compensation plans		—			1,179				—			1,391


Diluted income from continuing operations
Income from continuing operations available to common unitholders and assumed conversions		160,424			94,387	$	1.70		213,065			91,931	$	2.32


Basic income from discontinued operations
Discontinued operations		117,935			93,208	$	1.26		46,299			90,540	$	0.51

Dilutive units for long-term compensation plans		—			1,179				—			1,391


Diluted income from discontinued operations
Discontinued operations		117,935			94,387	$	1.25		46,299			91,931	$	0.50


Basic income per common unit
Income available to common unitholders		278,359			93,208	$	2.98		259,364			90,540	$	2.87

Dilutive shares for long-term compensation plans		—			1,179				—			1,391


Diluted income per common unit
Income available to common unitholders and assumed conversions	$	278,359			94,387	$	2.95	$	259,364			91,931	$	2.82


	2004
				Weighted
				Average
	Income			Units		Per
	(Numerator)			(Denominator)		Unit
Income from continuing operations	$	155,354
Less: Preferred unit distributions		(11,844	)


Basic income from continuing operations
Income from continuing operations available to common unitholders		143,510			88,210	$	1.63

Dilutive units for long-term compensation plans		—			1,490


Diluted income from continuing operations
Income from continuing operations available to common unitholders and assumed conversions		143,510			89,700	$	1.60


Basic income from discontinued operations
Discontinued operations		24,888			88,210	$	0.28

Dilutive units for long-term compensation plans		—			1,490


Diluted income from discontinued operations
Discontinued operations		24,888			89,700	$	0.28


Basic income per common unit
Income available to common unitholders		168,398			88,210	$	1.91

Dilutive unit for long-term compensation plans		—			1,490


Diluted income per common unit
Income available to common unitholders and assumed conversions	$	168,398			89,700	$	1.88

Fair Value of Financial Instruments

The carrying value of cash and cash equivalents, restricted cash, accounts receivable, deferred rent receivable, accounts payable, accrued interest, distributions payable and other liabilities are reasonable estimates of fair values because of the short-term nature of these instruments. The fair value of the Company’s long-term debt, which is based on estimates by management and on rates quoted on December 31, 2006 for comparable loans, exceeds the aggregate carrying value by approximately $91 million at December 31, 2006.

Income Taxes

In conformity with the Internal Revenue Code and applicable state and local tax statutes, taxable income or loss of the Operating Partnership is required to be reported in the tax returns of the partners in accordance with the terms of the Partnership Agreement. However, the Company is taxed in certain states and the United Kingdom. Accordingly, the Company has recognized federal, state and local taxes in accordance with US GAAP, as applicable.

Foreign Currency Translation

Recently Issued Accounting Standards

SFAS No. 153

In December 2004, the FASB issued SFAS No. 153, “Accounting for Non-monetary Transactions” (“SFAS No. 153”). SFAS No. 153 requires non-monetary exchanges to be accounted for at fair value, recognizing any gain or loss, if the transactions meet a commercial-substance criterion and fair value is determinable. The provisions of SFAS No. 153 are effective for non-monetary asset exchanges occurring in fiscal years beginning after June 15, 2005. The Company adopted the provisions of SFAS No. 153 on January 1, 2006 and the adoption did not have a material impact on the Company’s results of operations or its financial position.

EITF Issue 04-5

SFAS No. 157

FIN 48

3. REAL ESTATE


	Land		Buildings
	And Land		And				Accumulated
	Improvements		Improvements		Total		Depreciation
2006
Industrial properties	$	309,119	$	1,652,100	$	1,961,219	$	372,444
Office properties		368,956		2,162,337		2,531,293		433,865

2006 Total	$	678,075	$	3,814,437	$	4,492,512	$	806,309


2005
Industrial properties	$	305,207	$	1,657,992	$	1,963,199	$	336,721
Office properties		315,148		2,006,044		2,321,192		395,718

2005 Total	$	620,355	$	3,664,036	$	4,284,391	$	732,439

Depreciation expense was $124.9 million in 2006, $123.3 million in 2005 and $114.2 million in 2004.

Information on the operating properties the Company sold during the years ended December 31, 2006 and 2005 is as follows:


2006 Sales
	Number of		Leaseable
Segment	Buildings		Square Feet		Proceeds
					(in thousands)
Delaware Valley
Southeastern Pennsylvania		3		1,146,940	$	101,700
Other		3		155,056		10,760
Midwest
Lehigh Valley		5		716,758		109,255
Other		16		2,519,409		134,375
Mid-Atlantic		16		1,449,464		139,300
Florida		3		147,262		7,474

Total		46		6,134,889	$	502,864


2005 Sales
	Number of		Leaseable
Segment	Buildings		Square Feet		Proceeds
					(in thousands)
Delaware Valley
Southeastern Pennsylvania		2		139,760	$	7,864
Other		3		177,733		12,333
Midwest
Lehigh Valley		2		142,204		8,676
Other		18		400,262		23,236
Mid-Atlantic		4		727,732		51,570
Florida		6		726,632		53,834
United Kingdom		16		602,175		263,343

Total		51		2,916,498	$	420,856

4. INVESTMENTS IN UNCONSOLIDATED JOINT VENTURES

Liberty Venture I, LP

The Company recognized $634,000, $934,000, and $742,000 for development, leasing and property management services during the years ended December 31, 2006, 2005 and 2004, respectively.

Kings Hill Unit Trust

Income from property management fees and interest was $1.3 million during the year ended December 31, 2006.

Liberty/Commerz 1701 JFK Boulevard, LP

Liberty Illinois, LP

The Company recognized $777,000 for development and property management services during the year ended December 31, 2006.

Other Joint Ventures

The Company’s share of each of the joint venture’s earnings is included in equity in earnings (loss) of unconsolidated joint ventures in the accompanying consolidated statements of operations.

Balance Sheets:


	December 31, 2006
	Liberty			Liberty			Kings Hill
	Venture I, LP			Illinois, LP			Unit Trust			Other		Total
Real estate assets	$	116,324		$	119,787		$	228,120		$	—	$	464,231
Accumulated depreciation		(10,183	)		(1,842	)		(4,213	)		—		(16,238	)

Real estate assets, net		106,141			117,945			223,907			—		447,993
Development in progress		—			28,420			—			24,088		52,508
Land held for development		2,733			8,246			—			31,078		42,057
Other assets		13,723			6,214			20,838			13,024		53,799

Total assets	$	122,597		$	160,825		$	244,745		$	68,190	$	596,357


Debt	$	74,063		$	86,681		$	186,010		$	10,600	$	357,354
Other liabilities		1,182			5,005			49,584			4,420		60,191
Equity		47,352			69,139			9,151			53,170		178,812

Total liabilities and equity	$	122,597		$	160,825		$	244,745		$	68,190	$	596,357


Company’s net investment in unconsolidated joint ventures (1)	$	11,293		$	11,259		$	—		$	24,644	$	47,196


	December 31, 2005
	Liberty			Liberty		Kings Hill
	Venture I, LP			Illinois, LP		Unit Trust			Other		Total
Real estate assets	$	121,092		$	—	$	202,200		$	—	$	323,292
Accumulated depreciation		(7,579	)		—		(284	)		—		(7,863	)

Real estate assets, net		113,513			—		201,916			—		315,429
Development in progress		—			—		—			—		—
Land held for development		2,750			—		—			37,812		40,562
Other assets		14,922			—		18,499			9,980		43,401

Total assets	$	131,185		$	—	$	220,415		$	47,792	$	399,392


Debt	$	77,826		$	—	$	163,448		$	—	$	241,274
Other liabilities		2,284			—		44,028			678		46,990
Equity		51,075			—		12,939			47,114		111,128

Total liabilities and equity	$	131,185		$	—	$	220,415		$	47,792	$	399,392


Company’s net investment in unconsolidated joint ventures (1)	$	12,310		$	—	$	—		$	21,212	$	33,522


(1)		Differences between the Company’s net investment is unconsolidated joint ventures and its underlying equity in the net assets of the venture is primarily a result of the deferral of gains associated with the sales of properties to joint ventures in which the Company retains an ownership interest. Deferred gains are amortized to equity in earnings (loss) of joint ventures over the average estimated useful lives of the assets sold.

Statements of Operations:


	Year Ended December 31, 2006
	Liberty			Liberty			Kings Hill
	Venture I, LP			Illinois, LP			Unit Trust			Other			Total
Total revenue	$	18,395		$	7,471		$	18,183		$	—		$	44,049
Operating expense		5,364			1,833			2,181			171			9,549

		13,031			5,638			16,002			(171	)		34,500

Interest		(4,501	)		(2,527	)		(13,455	)		—			(20,483	)
Depreciation and amortization		(4,544	)		(2,502	)		(6,267	)		—			(13,313	)
Other income/(expense)		(127	)		5			(604	)		392			(334	)
Gain on sale		2,644			—			—			138			2,782

Net income (loss)	$	6,503		$	614		$	(4,324	)	$	359		$	3,152


Company’s equity in earnings (loss) of unconsolidated joint ventures	$	1,651		$	259		$	(657	)	$	179		$	1,432


	Year Ended December 31, 2005
	Liberty			Liberty		Kings Hill
	Venture I, LP			Illinois, LP		Unit Trust			Other			Total
Total revenue	$	18,592		$	—	$	745		$	—		$	19,337
Operating expense		5,859			—		201			32			6,092

		12,733			—		544			(32	)		13,245

Interest		(4,569	)		—		(634	)		—			(5,203	)
Depreciation and amortization		(4,933	)		—		(386	)		—			(5,319	)
Other income/(expense)		(184	)		—		(33	)		3,066			2,849
Gain on sale		7,555			—		—			—			7,555

Net income (loss)	$	10,602		$	—	$	(509	)	$	3,034		$	13,127


Company’s equity in earnings (loss) of unconsolidated joint ventures	$	2,650		$	—	$	(110	)	$	—		$	2,540


	Year Ended December 31, 2004
	Liberty			Liberty		Kings Hill
	Venture I, LP			Illinois, LP		Unit Trust		Other		Total
Total revenue	$	18,746		$	—	$	—	$	—	$	18,746
Operating expense		6,736			—		—		—		6,736

		12,010			—		—		—		12,010

Interest		(4,426	)		—		—		—		(4,426	)
Depreciation and amortization		(10,683	)		—		—		—		(10,683	)

Net loss	$	(3,099	)	$	—	$	—	$	—	$	(3,099	)


Company’s equity in loss of unconsolidated joint ventures	$	(775	)	$	—	$	—	$	—	$	(775	)

5. DEFERRED FINANCING AND LEASING COSTS

Deferred financing and leasing costs at December 31, 2006 and 2005 are as follows (in thousands):


	December 31,
	2006			2005
Deferred leasing costs	$	150,179		$	154,886
Deferred financing costs		8,476			23,266
In-place lease value and related intangible asset		71,496			52,945

		230,151			231,097
Accumulated amortization		(100,406	)		(108,103	)

Total	$	129,745		$	122,994

6. INDEBTEDNESS

Indebtedness consists of mortgage loans, unsecured notes, borrowings under the credit facility and the Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement. The weighted average interest rates for the years ended December 31, 2006, 2005 and 2004, were 6.6%, 6.6% and 6.7%, respectively. Interest costs during the years ended December 31, 2006, 2005 and 2004 in the amount of $30.8 million, $17.7 million and $13.2 million, respectively, were capitalized. Cash paid for interest for the years ended December 31, 2006, 2005 and 2004, was $150.2 million, $148.8 million and $130.4 million, respectively.

Mortgage Loans, Unsecured Notes

Mortgage loans with maturities ranging from 2007 to 2021 are collateralized by and in some instances cross-collateralized by properties with a net book value of $330.0 million.

Credit Facility

$600 Million Unsecured Revolving Credit Facility

	•		total debt to total assets may not exceed 0.60:1;

	•		earnings before interest, taxes, depreciation and amortization to fixed charges may not be less than 1.50:1;

	•		unsecured debt to unencumbered asset value must equal or be less than 60%; and

	•		unencumbered net operating income to unsecured interest expense must equal or exceed 200%.

Liberty/Commerz 1701 JFK Boulevard, LP Financing Arrangement

The equity contribution from the Company’s joint venture partner in the Liberty/Commerz 1701 JFK Boulevard, LP is treated as a financing arrangement — see Note 4. This equity contribution receives a return equal to the greater of 5% or the current rate on the $600 million Credit Facility.

The scheduled principal amortization and maturities of the Company’s mortgage loans, the unsecured notes outstanding, the $600 million Credit Facility, the Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement and the related weighted average interest rates are as follows (in thousands, except percentages):


												Weighted
	Mortgages											Average
	Principal		Principal		Unsecured		Credit					Interest
	Amortization		Maturities		Notes		Facility			Total		Rate
2007	$	8,820	$	1,553	$	100,000	$	—		$	110,373		7.22	%
2008		7,975		39,753		—		152,960	(1)		200,688		6.15	%
2009		5,699		46,148		270,000		—			321,847		7.77	%
2010		4,877		4,738		200,000		94,000			303,615		7.51	%
2011		4,153		10,730		250,000		—			264,883		7.26	%
2012		3,274		32,911		235,000		—			271,185		6.47	%
2013		2,751		—		—		—			2,751		6.00	%
2014		2,894		2,681		200,000		—			205,575		5.65	%
2015		3,033		—		300,000		—			303,033		5.13	%
2016		2,220		—		300,000		—			302,220		5.50	%
2017 & thereafter		1,768		—		100,000		—			101,768		7.47	%

	$	47,464	$	138,514	$	1,955,000	$	246,960		$	2,387,938		6.55	%


(1)		Liberty/Commerz 1701 JFK Boulevard, LP financing arrangement — see above.

7. LEASING ACTIVITY

Future minimum rental payments due from tenants under noncancelable operating leases as of December 31, 2006 are as follows (in thousands):


2007	$	446,997
2008		399,549
2009		333,841
2010		269,376
2011		203,081
Thereafter		468,809

TOTAL	$	2,121,653

8. OWNERS’ EQUITY

Common Units

General and Limited partners’ equity — common units relates to limited partnership interests of the Operating Partnership issued in connection with the formation of the Company and certain subsequent acquisitions. During 2006, 684,432 common units were issued in connection with an acquisition. No common units were issued in connection with acquisitions during 2005 or 2004. The common units outstanding as of December 31, 2006 have the same economic characteristics as common shares of the Trust. The 4,189,967 common units share proportionately in the net income or loss and in any distributions of the Operating Partnership and are exchangeable into the same number of common shares of the Trust.

Preferred Units

The Company has outstanding the following Cumulative Redeemable Preferred Units of the Operating Partnership, (the “Preferred Units”):


Date of						Liquidation		Dividend			Redeemable
Issue	Issue	Amount		Units		Preference		Rate			As of	Exchangeable After
		(in 000’s)
7/28/99	Series B	$	95,000		3,800	$	25		7.45	%	8/31/09	1/1/14 into Series B Cumulative Redeemable Preferred Shares of the Trust

6/10/02	Series D	$	23,650		473	$	50		7.625	%	6/10/07	6/10/12 into Series D Cumulative Redeemable Preferred Shares of the Trust

6/16/05	Series E	$	20,000		400	$	50		7.00	%	6/16/10	6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust

6/30/05	Series F	$	44,000		880	$	50		6.65	%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust

8/23/05	Series F	$	6,000		120	$	50		6.65	%	6/30/10	6/30/15 into Series F Cumulative Redeemable Preferred Shares of the Trust

12/15/06	Series G	$	27,000		540	$	50		6.70	%	12/12/11	12/12/16 into Series G Cumulative Redeemable Preferred Shares of the Trust

Effective August 31, 2004, the distribution rate on the $95 million Series B preferred units was reduced from 9.25% to 7.45%.

During the year ended December 31, 2005, the Company redeemed for $20 million its outstanding 9.125% Series C Cumulative Redeemable Preferred Units.

The Company paid the following Preferred Unit distributions for the year ended December 31:


	2006		2005		2004
Distributions (in millions)	$	13.7	$	12.1	$	11.8
Distribution per unit:
Series B	$	1.86	$	1.86	$	2.16
Series C		—	$	1.05	$	2.28
Series D	$	3.81	$	3.81	$	3.81
Series E	$	3.50	$	1.90		—
Series F	$	3.33	$	1.61		—
Series G	$	0.16		—		—

Minority Interest

Minority interest includes third-party ownership interests in consolidated joint venture investments.

9. COMMITMENTS AND CONTINGENCIES

The Company is obligated to make additional capital contributions to unconsolidated joint ventures of $1.0 million.

The Company has letter of credit obligations of $1.6 million related to development requirements.

10. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)


	Quarter Ended
	Dec. 31,		Sept. 30,		June 30,		Mar. 31,		Dec. 31,		Sept. 30,		June 30,		Mar. 31,
	2006		2006		2006		2006		2005		2005		2005		2005
Operating revenue	$	175,702	$	167,026	$	163,799	$	160,192	$	160,517	$	157,949	$	162,754	$	152,274

Income from continuing operations		41,283		40,069		56,549		36,214		109,977		36,403		39,365		39,915

Discontinued operations		25,821		12,405		18,514		61,195		5,015		20,903		10,164		10,217

Income available to common unitholders		63,616		49,073		71,662		94,008		111,589		53,953		46,366		47,456

Income per common unit — basic (1)	$	0.67	$	0.52	$	0.77	$	1.02	$	1.22	$	0.59	$	0.51	$	0.53

Income per common unit — diluted (1)	$	0.67	$	0.52	$	0.76	$	1.01	$	1.20	$	0.58	$	0.51	$	0.52


(1)		The sum of quarterly financial data may vary from the annual data due to rounding.

11. SEGMENT INFORMATION


Reportable Segments		Markets
Delaware Valley		Southeastern Pennsylvania; New Jersey
Midwest		Lehigh Valley, Pennsylvania; Michigan; Minnesota; Milwaukee; Chicago
Mid-Atlantic		Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia Beach
Florida		Jacksonville; Orlando; Boca Raton; Tampa; Texas
United Kingdom		County of Kent

YEAR ENDED DECEMBER 31, 2006


	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	187,817	$	38,730	$	85,180	$	116,324	$	122,014	$	112,788	$	3,866	$	666,719
Rental property expenses and real estate taxes		58,545		12,718		18,747		42,839		37,566		37,428		2,864		210,707


Property level operating income	$	129,272	$	26,012	$	66,433	$	73,485	$	84,448	$	75,360	$	1,002		456,012


Interest and other income																9,591
Interest expense																(119,584	)
General and administrative																(45,991	)
Depreciation and amortization																(144,692	)


Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																155,336
Gain on property dispositions																17,628
Income taxes																(288	)
Minority interest																7
Equity in earnings of unconsolidated joint ventures																1,432
Discontinued operations																117,935
Preferred unit distributions																(13,691	)

Income available to common unitholders															$	278,359

YEAR ENDED DECEMBER 31, 2005


	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	187,212	$	37,521	$	77,219	$	110,190	$	104,794	$	96,229	$	20,329	$	633,494
Rental property expenses and real estate taxes		55,706		13,139		19,661		39,878		31,614		31,556		3,678		195,232


Property level operating income	$	131,506	$	24,382	$	57,558	$	70,312	$	73,180	$	64,673	$	16,651		438,262


Interest and other income																8,008
Interest expense																(119,614	)
General and administrative																(38,099	)
Depreciation and amortization																(135,846	)

Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures																152,711
Gain on property dispositions																85,593
Income taxes																(14,827	)
Minority interest																(357	)
Equity in earnings of unconsolidated joint ventures																2,540
Discontinued operations																46,299
Preferred unit distributions																(12,095	)
Excess of preferred unit redemption over carrying amount																(500	)

Income available to common unitholders															$	259,364

YEAR ENDED DECEMBER 31, 2004


	Delaware Valley				Midwest
	Southeastern				Lehigh				Mid-				United
	Pennsylvania		Other		Valley		Other		Atlantic		Florida		Kingdom		Total
Operating revenue	$	177,655	$	32,680	$	66,731	$	102,824	$	99,395	$	86,267	$	19,732	$	585,284
Rental property expenses and real estate taxes		51,943		11,048		17,087		37,341		26,715		26,744		3,166		174,044


Property level operating income	$	125,712	$	21,632	$	49,644	$	65,483	$	72,680	$	59,523	$	16,566		411,240


Interest and other income																6,266
Interest expense																(107,027	)
General and administrative																(33,724	)
Depreciation and amortization																(119,934	)


Income before property dispositions, income taxes, minority interest and equity in loss of unconsolidated joint ventures																156,821
Gain on property dispositions																496
Income taxes																(1,820	)
Minority interest																632
Equity in loss of unconsolidated joint ventures																(775	)
Discontinued operations																24,888
Preferred share distributions																(11,844	)

Income available to common unitholders															$	168,398


Product Type Information	Real Estate Related Revenues
	Year Ended December 31,
	2006		2005		2004
Industrial	$	284,551	$	268,958	$	247,379
Office		382,168		364,536		337,905

Total operating revenue	$	666,719	$	633,494	$	585,284

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT


	Delaware Valley						Midwest
	Southeastern						Lehigh						Mid-					United
	Pennsylvania			Other			Valley			Other			Atlantic			Florida		Kingdom		Total
January 1, 2006	$	1,060,198		$	183,020		$	637,301		$	833,618		$	913,735		$	646,681	$	9,838	$	4,284,391
Additions		74,852			36,807			15,006			37,853			104,185			275,474		1,597		545,774
Dispositions		(55,255	)		(4,422	)		(69,832	)		(91,464	)		(116,680	)		—		—		(337,653	)

December 31, 2006	$	1,079,795		$	215,405		$	582,475		$	780,007		$	901,240		$	922,155	$	11,435		4,492,512


Accumulated depreciation																					(806,309	)
Development in progress																					538,303
Land held for development																					195,332
Assets held for sale																					40,715
Other assets																					450,358

Total assets at December 31, 2006																				$	4,910,911

ROLLFORWARD OF OPERATING REAL ESTATE ASSETS BY REPORTABLE SEGMENT


	Delaware Valley						Midwest
	Southeastern						Lehigh						Mid-						United
	Pennsylvania			Other			Valley			Other			Atlantic			Florida			Kingdom			Total
January 1, 2005	$	1,020,714		$	190,116		$	558,590		$	746,207		$	828,809		$	651,123		$	169,304		$	4,164,863
Additions		44,071			14,857			84,698			114,253			115,341			37,772			10,832			421,824
Dispositions		(4,587	)		(21,953	)		(5,987	)		(26,842	)		(30,415	)		(42,214	)		(170,298	)		(302,296	)

December 31, 2006	$	1,060,198		$	183,020		$	637,301		$	833,618		$	913,735		$	646,681		$	9,838			4,284,391


Accumulated depreciation																							(732,439	)
Development in progress																							324,924
Land held for development																							158,653
Assets held for sale																							73,211
Other assets																							391,582

Total assets at December 31, 2005																						$	4,500,322

12. SFAS NO. 144 “ACCOUNTING FOR THE IMPAIRMENT OR DISPOSAL OF LONG-LIVED ASSETS”

Discontinued Operations

Below is a summary of the results of operations of the properties disposed of and held for sale through the respective disposition dates (in thousands):


	Year Ended December 31,
	2006			2005			2004
Revenues	$	28,399		$	60,202		$	70,580
Operating expenses		(11,170	)		(20,332	)		(23,244	)
Interest expense		(4,662	)		(15,814	)		(17,470	)
Depreciation and amortization		(7,252	)		(14,374	)		(16,581	)

Income before property dispositions and minority interest	$	5,315		$	9,682		$	13,285

Asset Impairment

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
				Initial Cost				Capitalized		Gross Amount Carried at End of Period							Date of
								Subsequent								Accumulated	Construction		Depreciable
								to		Land and		Building and		Total		Depreciation	or		life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06	Acquisition		(years)
OPERATING PROPERTIES
1501 Perryman Road	Aberdeen, MD	$	—	$	5,813,324	$	18,874,059	$	3,274,480	$	5,816,839	$	22,145,024	$	27,961,863	$7,560		2005	40 yrs.
2196 Avenue C	Allentown, PA		—		101,159		—		1,347,970		107,307		1,341,822		1,449,129	750,775		1980	40 yrs.
2202 Hanger Place	Allentown, PA		*		137,439		—		1,341,155		138,127		1,340,466		1,478,594	826,310		1981	40 yrs.
7437 Industrial Boulevard	Allentown, PA		—		717,488		5,022,413		2,425,462		726,651		7,438,711		8,165,362	2,459,321		1976	40 yrs.
7339 Industrial Boulevard	Allentown, PA		*		1,187,776		—		6,324,599		1,197,447		6,314,928		7,512,376	1,930,459		1996	40 yrs.
400 Nestle Way	Allentown, PA		22,630,797		8,065,500		—		27,253,022		8,184,096		27,134,426		35,318,522	7,218,734		1997	40 yrs.
7248 Industrial Boulevard	Allentown, PA		—		2,670,849		13,307,408		1,101,923		2,670,673		14,409,506		17,080,179	3,732,710		1988	40 yrs.
700 Nestle Way	Allentown, PA		—		3,473,120		—		18,116,440		4,174,970		17,414,590		21,589,560	4,014,467		1998	40 yrs.
7562 Penn Drive	Allentown, PA		—		269,614		844,069		184,443		269,614		1,028,512		1,298,126	259,319		1989	40 yrs.
7277 Williams Avenue	Allentown, PA		—		462,964		1,449,009		322,599		463,123		1,771,449		2,234,572	538,729		1989	40 yrs.
7355 Williams Avenue	Allentown, PA		—		489,749		1,658,091		304,958		489,749		1,963,049		2,452,798	465,129		1998	40 yrs.
794 Roble Road	Allentown, PA		—		1,147,541		6,088,041		1,125,815		1,147,541		7,213,857		8,361,398	1,802,850		1985	40 yrs.
6923 Schantz Spring Road	Allentown, PA		*		1,127,805		3,309,132		348,419		1,127,805		3,657,551		4,785,355	839,583		1993	40 yrs.
7132 Daniels Drive	Allentown, PA		—		1,623,326		3,464,626		4,174,016		1,695,610		7,566,357		9,261,967	1,576,367		1988	40 yrs.
8014 Industrial Boulevard	Allentown, PA		—		4,019,258		—		9,446,162		3,645,117		9,820,303		13,465,420	2,218,246		1999	40 yrs.
705 Boulder Drive	Allentown, PA		—		4,484,096		—		14,878,034		4,486,836		14,875,294		19,362,130	2,387,484		2001	40 yrs.
651 Boulder Drive	Allentown, PA		*		4,308,646		—		13,284,432		4,308,646		13,284,432		17,593,078	2,467,753		2000	40 yrs.
8150 Industrial Boulevard	Allentown, PA		—		2,564,167		—		8,906,845		2,571,466		8,899,547		11,471,013	1,421,039		2002	40 yrs.
8250 Industrial Boulevard	Allentown, PA		—		1,025,667		—		5,346,179		1,035,854		5,335,991		6,371,846	633,244		2002	40 yrs.
650 Boulder Drive	Allentown, PA		—		5,208,248		—		31,404,856		9,961,788		26,651,316		36,613,104	2,728,758		2002	40 yrs.
7165 Ambassador Drive	Allentown, PA		*		792,999		—		4,533,868		804,848		4,522,019		5,326,867	586,086		2002	40 yrs.
200 Boulder Drive	Allentown, PA		—		4,722,683		18,922,645		240,929		4,722,683		19,163,574		23,886,258	1,081,207		2004	40 yrs.
250 Boulder Drive	Allentown, PA		—		3,623,328		12,099,145		1,144,216		3,719,772		13,146,917		16,866,689	690,330		2004	40 yrs.
6560 Stonegate Drive	Allentown, PA		—		458,281		—		2,839,996		458,945		2,839,332		3,298,277	1,116,992		1989	40 yrs.
6370 Hedgewood Drive	Allentown, PA		—		540,795		—		3,608,143		541,459		3,607,479		4,148,938	1,356,701		1990	40 yrs.
6390 Hedgewood Drive	Allentown, PA		—		707,203		—		2,765,090		707,867		2,764,425		3,472,293	1,317,332		1990	40 yrs.
6350 Hedgewood Drive	Allentown, PA		*		360,027		—		3,470,090		560,691		3,269,426		3,830,117	1,390,438		1989	40 yrs.
6330 Hedgewood Drive	Allentown, PA		—		531,268		—		4,910,864		532,047		4,910,085		5,442,132	2,333,532		1988	40 yrs.
6580 Snowdrift Road	Allentown, PA		—		388,328		—		3,284,907		389,081		3,284,155		3,673,235	1,459,264		1988	40 yrs.
6540 Stonegate Drive	Allentown, PA		—		422,042		—		3,893,307		422,730		3,892,620		4,315,349	1,829,429		1988	40 yrs.
974 Marcon Boulevard	Allentown, PA		—		143,500		—		2,469,917		144,248		2,469,170		2,613,417	1,308,676		1987	40 yrs.
964 Marcon Boulevard	Allentown, PA		—		138,816		—		1,983,002		139,480		1,982,338		2,121,818	913,043		1985	40 yrs.
764 Roble Road	Allentown, PA		—		141,069		—		864,405		141,746		863,728		1,005,474	446,399		1985	40 yrs.
3174 Airport Road	Allentown, PA		—		98,986		—		1,157,004		98,986		1,157,004		1,255,990	727,271		1979	40 yrs.
2201 Hanger Place	Allentown, PA		—		128,454		—		1,906,472		129,142		1,905,783		2,034,926	1,121,868		1987	40 yrs.
954 Marcon Boulevard	Allentown, PA		—		103,665		—		1,110,937		104,453		1,110,149		1,214,602	586,982		1981	40 yrs.
754 Roble Road	Allentown, PA		—		162,115		1,731,885		279,310		163,735		2,009,575		2,173,310	677,125		1986	40 yrs.
744 Roble Road	Allentown, PA		—		159,771		1,734,229		266,454		161,371		1,999,083		2,160,454	663,735		1986	40 yrs.
944 Marcon Boulevard	Allentown, PA		—		118,521		1,435,479		464,628		119,711		1,898,917		2,018,628	633,568		1986	40 yrs.
6520 Stonegate Drive	Allentown, PA		—		453,315		—		1,787,903		484,361		1,756,857		2,241,218	593,896		1996	40 yrs.
2041 Avenue C	Allentown, PA		—		213,599		1,095,217		83,135		213,879		1,178,072		1,391,951	353,869		1990	40 yrs.
7144 Daniels Drive	Allentown, PA		—		2,390,217		2,342,761		3,721,684		1,579,169		6,875,493		8,454,662	1,849,083		1975	40 yrs.
7620 Cetronia Road	Allentown, PA		—		1,091,806		3,851,456		356,371		1,093,724		4,205,910		5,299,633	1,364,080		1990	40 yrs.
180,190 Cochrane Drive	Annapolis, MD		—		3,670,256		—		22,322,825		3,752,293		22,240,788		25,993,081	8,676,942		1988	40 yrs.
4606 Richlynn Drive	Belcamp, MD		—		299,600		1,818,861		712,787		299,600		2,531,649		2,831,249	470,711		1985	40 yrs.
41199 Van Born Road	Bellville, MI		—		1,829,396		6,765,015		509,937		1,829,396		7,274,952		9,104,347	5,269		2005	40 yrs.
41133 Van Born Road	Bellville, MI		—		1,829,560		6,454,755		463,975		1,829,560		6,918,730		8,748,290	5,877		2005	40 yrs.
1655 Valley Center Parkway	Bethlehem, PA		—		214,431		—		2,019,753		215,095		2,019,088		2,234,184	935,846		1993	40 yrs.
1455 Valley Center Parkway	Bethlehem, PA		—		670,290		—		3,743,118		545,172		3,868,235		4,413,408	1,742,880		1997	40 yrs.
1640 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,538,675		190,728		2,706,947		2,897,675	1,142,900		1996	40 yrs.
1650 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,215,932		188,896		2,386,036		2,574,932	942,344		1997	40 yrs.
1660 Valley Center Parkway	Bethlehem, PA		—		359,000		—		2,278,206		188,721		2,448,485		2,637,206	737,276		1998	40 yrs.
83 South Commerce Way	Bethlehem, PA		—		143,661		888,128		520,095		212,744		1,339,140		1,551,884	521,859		1989	40 yrs.
85 South Commerce Way	Bethlehem, PA		—		236,708		987,949		169,265		237,078		1,156,844		1,393,922	312,464		1989	40 yrs.
87 South Commerce Way	Bethlehem, PA		—		253,886		1,062,881		223,146		253,886		1,286,027		1,539,913	383,776		1989	40 yrs.
89 South Commerce Way	Bethlehem, PA		—		320,000		—		2,011,186		367,706		1,963,481		2,331,186	701,530		1998	40 yrs.
1525 Valley Center Parkway	Bethlehem, PA		—		475,686		—		7,721,312		804,104		7,392,894		8,196,998	1,900,307		1999	40 yrs.
74 West Broad Street	Bethlehem, PA		—		1,096,127		—		13,371,415		1,099,079		13,368,463		14,467,542	2,582,086		2002	40 yrs.
1605 Valley Center Parkway	Bethlehem, PA		—		729,751		—		11,065,717		1,766,196		10,029,272		11,795,468	1,779,914		2000	40 yrs.
3400 High Point Boulevard	Bethlehem, PA		—		298,227		—		3,053,506		662,809		2,688,924		3,351,733	367,073		2002	40 yrs.
1495 Valley Center Parkway	Bethlehem, PA		—		434,640		—		4,695,697		435,303		4,695,034		5,130,337	1,544,454		1990	40 yrs.
1550 Valley Center Parkway	Bethlehem, PA		—		196,954		—		3,827,587		197,700		3,826,842		4,024,541	1,470,951		1988	40 yrs.
1560 Valley Center Parkway	Bethlehem, PA		—		240,069		—		4,638,646		240,732		4,637,983		4,878,715	2,078,924		1988	40 yrs.

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
				Initial Cost				Capitalized			Gross Amount Carried at End of Period							Date of
								Subsequent									Accumulated	Construction		Depreciable
								to			Land and		Building and		Total		Depreciation	or		life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06	Acquisition		(years)
OPERATING PROPERTIES
1510 Valley Center Parkway	Bethlehem, PA		—		312,209		—		3,762,171			312,873		3,761,507		4,074,380	1,704,910		1988	40 yrs.
1530 Valley Center Parkway	Bethlehem, PA		—		211,747		—		3,008,631			212,492		3,007,886		3,220,378	1,256,732		1988	40 yrs.
57 South Commerce Way	Bethlehem, PA		—		390,839		2,701,161		764,168			395,459		3,460,709		3,856,168	1,189,140		1986	40 yrs.
1685 Valley Center Parkway	Bethlehem, PA		—		244,029		—		2,283,047			198,482		2,328,594		2,527,076	838,903		1996	40 yrs.
6601-6625 W. 78th Street	Bloomington, MN		—		2,263,060		—		38,629,236			2,310,246		38,582,050		40,892,296	7,893,682		1998	40 yrs.
4801 West 81st Street	Bloomington, MN		—		1,624,701		2,494,368		809,469			1,624,701		3,303,836		4,928,537	864,938		1984	40 yrs.
8100 Cedar Avenue	Bloomington, MN		—		501,313		3,675,416		971,824			501,313		4,647,240		5,148,553	1,214,704		1983	40 yrs.
6161 Green Valley Drive	Bloomington, MN		—		740,378		3,311,602		732,919			741,194		4,043,704		4,784,898	745,201		1992	40 yrs.
10801 Nesbitt Avenue South	Bloomington, MN		—		784,577		—		4,105,182			786,382		4,103,377		4,889,759	944,251		2001	40 yrs.
5775 West Old Shakopee Road	Bloomington, MN		—		2,052,018		3,849,649		3,311,678			2,060,644		7,152,700		9,213,345	2,366,472		2002	40 yrs.
5715 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,954,672			1,264,758		4,313,922		5,578,680	810,571		2002	40 yrs.
5735 Old Shakopee Road West	Bloomington, MN		—		1,263,226		2,360,782		1,089,640			1,264,758		3,448,890		4,713,648	447,722		2002	40 yrs.
1701 Clint Moore Boulevard	Boca Raton, FL		—		1,430,884		3,043,553		1,302,089			1,430,937		4,345,589		5,776,526	839,133		1985	40 yrs.
951 Broken Sound Parkway	Boca Raton, FL		—		1,426,251		6,098,952		1,234,056			1,426,251		7,333,008		8,759,259	2,037,449		1986	40 yrs.
777 Yamato Road	Boca Raton, FL		—		4,101,247		16,077,347		4,498,115			4,501,247		20,175,462		24,676,709	5,014,867		1987	40 yrs.
1801 Clint Moore Road	Boca Raton, FL		—		1,065,068		4,481,644		640,426			1,065,068		5,122,070		6,187,139	1,249,779		1986	40 yrs.
400 Boulder Drive	Breinigsville, PA		*		—		—		13,376,989			2,865,575		10,511,414		13,376,989	629,760		2003	40 yrs.
860 Nestle Way	Breinigsville, PA		—		8,118,881		18,885,486		1,403,042			8,118,881		20,288,528		28,407,408	671,096		2004	40 yrs.
602 Heron Drive	Bridgeport, NJ		—		524,728		2,240,478		7,650			524,728		2,248,128		2,772,856	491,389		1996	40 yrs.
245 Executive Drive	Brookfield, WI		—		577,067		5,197,903		3,816,157			577,067		9,014,060		9,591,127	1,549,221		1984	40 yrs.
16620-16650 W Bluemound Road	Brookfield, WI		—		586,665		4,289,907		828,882			586,665		5,118,789		5,705,454	984,048		1999	40 yrs.
15800 West Bluemound Road	Brookfield, WI		—		1,289,204		8,128,035		948,664			1,306,811		9,059,092		10,365,903	1,391,720		1994	40 yrs.
20700 Swenson Drive	Brookfield, WI		12,858,381		830,008		12,276,445		478,954			830,999		12,754,408		13,585,406	429,906		2005	40 yrs.
20800 Swenson Drive	Brookfield, WI		—		1,023,466		10,729,219		418,157			1,025,082		11,145,759		12,170,841	474,180		2005	40 yrs.
20935 Swenson Drive	Brookfield, WI		5,295,966		571,389		10,238,547		658,028			572,158		10,895,806		11,467,963	391,207		2005	40 yrs.
20975 Swenson Drive	Brookfield, WI		7,584,291		675,422		8,910,651		602,016			678,637		9,509,452		10,188,089	398,554		2005	40 yrs.
20825 Swenson Drive	Brookfield, WI		—		644,563		3,640,734		64,858			646,518		3,703,639		4,350,156	111,258		2006	40 yrs.
1485 W. Commerce Avenue	Carlisle, PA		—		4,249,868		13,886,039		173,427			4,253,027		14,056,308		18,309,335	699,441		2004	40 yrs.
3773 Corporate Parkway	Center Valley, PA		—		738,108		—		7,605,349			794,874		7,548,583		8,343,457	1,666,953		2001	40 yrs.
1309 Executive Boulevard	Cheaspeake, VA		—		926,125		—		5,086,632			955,374		5,057,383		6,012,757	733,464		2001	40 yrs.
7 Carnegie Plaza	Cherry Hill, NJ		*		2,000,000		3,493,983		3,217,287			2,005,475		6,705,794		8,711,270	543,140		2004	40 yrs.
1305 Executive Boulevard	Chesapeake, VA		—		861,020		—		4,878,062			1,129,850		4,609,232		5,739,082	691,749		2002	40 yrs.
1313 Executive Boulevard	Chesapeake, VA		—		1,180,036		—		4,629,615			1,708,050		4,101,602		5,809,652	554,643		2002	40 yrs.
500 Independence Parkway	Chesapeake, VA		3,588,914		864,150		4,427,285		66,501			866,609		4,491,328		5,357,937	352,536		2004	40 yrs.
700 Independence Parkway	Chesapeake, VA		6,903,981		1,950,375		8,273,910		(614,501	)		1,951,135		7,658,648		9,609,783	650,222		2004	40 yrs.
501 Independence Parkway	Chesapeake, VA		4,967,909		1,202,556		5,975,538		1,185,556			1,292,273		7,071,376		8,363,650	336,396		2005	40 yrs.
505 Independence Parkway	Chesapeake, VA		5,793,893		1,292,062		6,456,515		1,141,115			1,292,254		7,597,437		8,889,691	380,615		2005	40 yrs.
510 Independence Parkway	Chesapeake, VA		—		2,012,149		7,546,882		394,344			2,014,689		7,938,686		9,953,375	422,930		2005	40 yrs.
1301 Executive Boulevard	Chesapeake, VA		—		—		—		6,113,029			997,570		5,115,459		6,113,029	108,314		2005	40 yrs.
600 H P Way	Chester, VA		—		146,126		—		6,429,625			501,752		6,073,999		6,575,751	1,193,352		1997	40 yrs.
500 H P Way	Chester, VA		—		142,692		—		5,563,992			491,919		5,214,765		5,706,684	1,090,627		1997	40 yrs.
6230 Old Dobbin Lane	Colombia, MD		—		3,004,075		—		7,729,322			2,746,455		7,986,942		10,733,397	161,577		2004	40 yrs.
9101,9111,9115 Guilford Road	Columbia, MD		—		758,951		—		3,519,455			765,952		3,512,453		4,278,406	1,941,815		1984	40 yrs.
9125,9135,9145 Guilford Road	Columbia, MD		—		900,154		—		5,815,495			920,439		5,795,210		6,715,649	3,426,185		1983	40 yrs.
7178-80 Columbia Gateway	Columbia, MD		—		1,569,237		4,786,887		1,836,281			1,571,105		6,621,299		8,192,405	2,215,458		1987	40 yrs.
9770 Patuxent Woods Drive	Columbia, MD		—		341,663		3,033,309		907,405			341,663		3,940,714		4,282,377	791,142		1986	40 yrs.
9780 Patuxent Woods Drive	Columbia, MD		—		218,542		1,940,636		125,207			218,542		2,065,843		2,284,384	504,644		1986	40 yrs.
9790 Patuxent Woods Drive	Columbia, MD		—		243,791		2,164,094		223,402			243,791		2,387,496		2,631,287	669,572		1986	40 yrs.
9810 Patuxent Woods Drive	Columbia, MD		—		266,684		2,366,901		644,582			266,684		3,011,483		3,278,167	794,236		1986	40 yrs.
9800 Patuxent Woods Drive	Columbia, MD		—		299,099		2,654,069		531,960			299,099		3,186,029		3,485,129	815,523		1988	40 yrs.
9820 Patuxent Woods Drive	Columbia, MD		—		237,779		2,110,835		711,722			237,779		2,822,557		3,060,336	569,893		1988	40 yrs.
9830 Patuxent Woods Drive	Columbia, MD		—		296,262		2,628,933		143,928			296,262		2,772,861		3,069,124	717,517		1986	40 yrs.
9050 Red Branch Road	Columbia, MD		—		290,950		2,577,153		802,675			290,950		3,379,828		3,670,778	720,137		1972	40 yrs.
8945-8975 Guilford Road	Columbia, MD		—		2,428,795		7,493,740		873,148			2,427,065		8,368,619		10,795,684	1,959,626		1986	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,590,872			1,295,000		3,253,978		4,548,978	602,208		2002	40 yrs.
6200 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,736,325			1,295,000		3,399,431		4,694,431	532,591		2002	40 yrs.
6210 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,724,707			1,307,300		3,375,513		4,682,813	622,557		2002	40 yrs.
6250 Old Dobbin Lane	Columbia, MD		—		958,105		—		3,780,749			1,599,259		3,139,595		4,738,854	349,799		2000	40 yrs.
5950 Symphony Woods Road	Columbia, MD		—		1,462,762		11,310,187		1,368,440			1,467,623		12,673,767		14,141,389	1,845,734		1986	40 yrs.
9755 Patuxent Woods Drive	Columbia, MD		—		3,917,094		16,219,721		110,510			3,922,382		16,324,943		20,247,324	—		2006	40 yrs.
5150 International Drive	Cudahy, WI		—		739,673		5,108,025		250,327			741,858		5,356,167		6,098,024	420,347		2003	40 yrs.
1250 Hall Court	Deer Park, TX		3,063,690		829,570		4,778,327		—			829,570		4,778,327		5,607,897	8,813		2006	40 yrs.
170 Parkway West	Duncan, SC		—		598,348		3,643,756		68,364			598,918		3,711,550		4,310,468	86,944		2006	40 yrs.

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
190 Parkway West	Duncan, SC		—		551,663		3,463,858		34,737		552,211		3,498,047		4,050,258		95,141	2006	40 yrs.
265 Parkway East	Duncan, SC		—		901,444		5,751,389		18,391		902,374		5,768,850		6,671,224		174,266	2006	40 yrs.
285 Parkway East	Duncan, SC		—		975,433		6,149,465		23,682		976,393		6,172,187		7,148,580		313,732	2006	40 yrs.
3255 Neil Armstrong Boulevard	Eagan, MN		—		1,131,017		—		3,393,423		1,131,017		3,393,423		4,524,441		677,048	1998	40 yrs.
6321-6325 Bury Drive	Eden Prairie, MN		—		462,876		4,151,790		317,011		462,876		4,468,801		4,931,677		1,213,996	1988	40 yrs.
7660-7716 Golden Triangle Drive	Eden Prairie, MN		—		568,706		5,115,177		2,817,841		1,289,215		7,212,509		8,501,724		2,440,957	1988	40 yrs.
7400 Flying Cloud Drive	Eden Prairie, MN		—		195,982		1,762,027		157,281		195,982		1,919,309		2,115,290		441,713	1987	40 yrs.
10301-10305 West 70th Street	Eden Prairie, MN		—		120,622		1,085,226		121,763		118,300		1,209,311		1,327,611		304,525	1984	40 yrs.
10321 West 70th Street	Eden Prairie, MN		—		145,198		1,305,700		369,479		142,399		1,677,978		1,820,377		479,554	1984	40 yrs.
10333 West 70th Street	Eden Prairie, MN		—		110,746		995,868		90,782		108,610		1,088,786		1,197,396		257,962	1984	40 yrs.
10349-10357 West 70th Street	Eden Prairie, MN		—		275,903		2,481,666		584,392		270,584		3,071,377		3,341,961		737,188	1985	40 yrs.
10365-10375 West 70th Street	Eden Prairie, MN		—		291,077		2,618,194		506,997		285,464		3,130,804		3,416,267		756,087	1985	40 yrs.
10393-10394 West 70th Street	Eden Prairie, MN		—		269,618		2,423,318		775,855		264,419		3,204,372		3,468,791		761,414	1985	40 yrs.
7078 Shady Oak Road	Eden Prairie, MN		—		343,093		3,085,795		217,201		336,481		3,309,608		3,646,089		790,055	1985	40 yrs.
10400 Viking Drive	Eden Prairie, MN		—		2,912,391		—		22,843,159		2,938,372		22,817,178		25,755,550		5,724,688	1999	40 yrs.
7695-7699 Anagram Drive	Eden Prairie, MN		—		760,525		3,254,758		605,146		760,525		3,859,903		4,620,429		843,591	1997	40 yrs.
7800 Equitable Drive	Eden Prairie, MN		—		2,188,525		3,788,762		179,519		2,188,525		3,968,281		6,156,806		841,929	1993	40 yrs.
7905 Fuller Road	Eden Prairie, MN		—		1,229,862		4,075,167		33,365		1,230,965		4,107,430		5,338,395		833,068	1994	40 yrs.
9023 Columbine Road	Eden Prairie, MN		—		1,956,273		—		4,873,578		1,956,273		4,873,578		6,829,851		1,058,231	1999	40 yrs.
8967 Columbine Road	Eden Prairie, MN		—		1,450,000		—		3,575,107		1,450,000		3,575,107		5,025,107		717,864	2000	40 yrs.
7777 Golden Triangle Drive	Eden Prairie, MN		—		993,101		2,136,862		1,191,303		993,101		3,328,165		4,321,266		542,633	2000	40 yrs.
8937 Columbine Road	Eden Prairie, MN		—		1,325,829		—		4,287,274		1,739,966		3,873,137		5,613,103		676,755	2001	40 yrs.
7615 Smetana Lane	Eden Prairie, MN		—		1,011,517		—		8,665,025		3,000,555		6,675,988		9,676,542		1,378,155	2001	40 yrs.
8995 Columbine Road	Eden Prairie, MN		—		1,087,594		—		3,664,053		2,055,296		2,696,352		4,751,648		429,638	2001	40 yrs.
8911 Columbine Road (B2)	Eden Prairie, MN		—		916,687		—		3,608,469		1,718,407		2,806,748		4,525,156		377,488	2000	40 yrs.
8855 Columbine Road	Eden Prairie, MN		—		1,400,925		—		5,226,016		1,599,757		5,027,185		6,626,941		325,388	2000	40 yrs.
27260 Haggerty Road	Farmington Hills, MI		—		456,877		4,091,196		754,780		456,877		4,845,977		5,302,854		1,273,497	1983	40 yrs.
27200 Haggerty Road	Farmington Hills, MI		—		382,754		3,425,227		363,784		382,754		3,789,011		4,171,765		1,043,115	1983	40 yrs.
27280 Haggerty Road	Farmington Hills, MI		—		452,860		4,055,512		443,764		452,860		4,499,276		4,952,136		1,150,855	1983	40 yrs.
27220 Haggerty Road	Farmington Hills, MI		—		203,064		1,802,592		174,777		203,064		1,977,369		2,180,433		530,662	1985	40 yrs.
27240 Haggerty Road	Farmington Hills, MI		—		171,518		1,518,192		280,526		171,518		1,798,718		1,970,236		445,822	1985	40 yrs.
27300 Haggerty Road	Farmington Hills, MI		—		370,378		3,311,366		732,514		370,378		4,043,880		4,414,259		967,017	1985	40 yrs.
26442-26450 Haggerty Road	Farmington Hills, MI		—		237,687		2,143,478		152,517		237,691		2,295,991		2,533,682		534,548	1988	40 yrs.
26500 Haggerty Road	Farmington Hills, MI		—		311,093		2,791,804		433,388		311,097		3,225,188		3,536,285		737,282	1986	40 yrs.
26650 Haggerty Road	Farmington Hills, MI		—		173,166		1,562,704		143,228		173,170		1,705,928		1,879,098		378,883	1988	40 yrs.
26700 Haggerty Road	Farmington Hills, MI		—		253,338		2,290,696		104,078		253,341		2,394,770		2,648,112		542,406	1986	40 yrs.
26750 Haggerty Road	Farmington Hills, MI		—		292,717		2,638,688		250,110		292,720		2,888,795		3,181,515		750,106	1988	40 yrs.
26800 Haggerty Road	Farmington Hills, MI		—		175,489		1,583,362		243,691		175,492		1,827,050		2,002,542		500,064	1986	40 yrs.
26842-26850 Haggerty Road	Farmington Hills, MI		—		239,606		2,160,470		364,314		239,609		2,524,781		2,764,390		707,486	1988	40 yrs.
26600 Haggerty Road	Farmington Hills, MI		—		455,846		—		2,921,972		537,693		2,840,125		3,377,818		819,672	1999	40 yrs.
26550 Haggerty Road	Farmington Hills, MI		—		368,083		—		2,647,709		535,179		2,480,613		3,015,792		658,542	2000	40 yrs.
7028 Snowdrift Road	Fogelville, PA		—		520,473		959,279		262,203		524,390		1,217,565		1,741,954		292,366	1982	40 yrs.
420 Delaware Drive	Fort Washington, PA		—		2,766,931		—		8,814,580		2,823,257		8,758,255		11,581,511		49,754	2005	40 yrs.
414 Commerce Drive	Fort Washington, PA		—		1,267,194		2,217,460		177,437		1,267,937		2,394,153		3,662,091		63,339	2004	40 yrs.
275 Commerce Drive	Fort Washington, PA		—		1,775,894		2,160,855		1,870,359		1,789,302		4,017,806		5,807,108		—	2005	40 yrs.
1250 Virginia Drive	Fort Washington, PA		—		1,639,166		1,928,574		422,241		1,650,703		2,339,278		3,989,980		23,113	2005	40 yrs.
1100 Virginia Drive	Fort Washington, PA		—		13,007,509		11,480,744		53,906		13,035,013		11,507,146		24,542,159		197,270	2006	40 yrs.
106 Southchase Boulevard	Fountain Inn, SC		—		201,944		—		5,133,389		684,003		4,651,330		5,335,333		125,941	2005	40 yrs.
9601 Cosner Drive	Fredericksburg, VA		—		475,262		3,917,234		214,221		475,262		4,131,454		4,606,716		1,177,660	1995	40 yrs.
200 W Cypress Creek Road	Ft Lauderdale, FL		—		3,414,989		2,399,738		9,866,832		3,414,989		12,266,571		15,681,559		452,897	2003	40 yrs.
5410 - 5430 Northwest 33rd Avenue	Ft. Lauderdale, FL		—		603,776		4,176,238		1,101,013		625,111		5,255,916		5,881,027		1,288,523	1985	40 yrs.
6500 NW 12th Avenue	Ft. Lauderdale, FL		—		7,099		3,046,309		438,216		—		3,491,624		3,491,624		884,615	1989	40 yrs.
6600 NW 12th Avenue	Ft. Lauderdale, FL		—		7,102		3,047,462		486,427		—		3,540,992		3,540,992		912,641	1989	40 yrs.
4880 Cox Road	Glen Allen, VA		—		743,898		4,499,807		2,746,479		743,898		7,246,286		7,990,184		1,217,434	1995	40 yrs.
5000 Cox Road	Glen Allen, VA		—		770,214		3,685,248		185,433		771,029		3,869,867		4,640,895		1,080,246	1990	40 yrs.
5500 Cox Road	Glen Allen, VA		—		443,485		—		3,347,885		483,263		3,308,107		3,791,370		793,756	1999	40 yrs.
4801 Cox Road	Glen Allen, VA		—		1,072,896		—		10,197,775		1,075,620		10,195,051		11,270,671		2,394,924	1998	40 yrs.
4198 Cox Road	Glen Allen, VA		—		670,292		3,839,245		981,346		670,292		4,820,591		5,490,883		1,290,221	1984	40 yrs.
4510 Cox Road	Glen Allen, VA		—		1,010,024		7,151,729		1,751,122		1,010,044		8,902,831		9,912,875		2,447,991	1990	40 yrs.
4121 Cox Road	Glen Allen, VA		—		1,083,006		6,035,653		519,164		1,083,006		6,554,817		7,637,824		436,918	2004	40 yrs.
420 Park Avenue	Greenville, SC		*		522,548		2,730,261		977,573		522,548		3,707,834		4,230,382		1,096,196	1986	40 yrs.
One Independence Pointe	Greenville, SC		—		780,881		6,199,230		6,430,871		784,617		12,626,365		13,410,982		2,240,553	1982	40 yrs.

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
15 Brendan Way	Greenville, SC		—		614,192		3,012,019		1,767,666		614,192		4,779,684		5,393,876		1,424,079	1988	40 yrs.
4 Independence Pointe	Greenville, SC		—		—		—		3,555,776		467,438		3,088,339		3,555,776		587,548	2002	40 yrs.
5 Independence Pointe	Greenville, SC		—		—		—		3,286,804		467,438		2,819,366		3,286,804		616,674	2002	40 yrs.
200 Southchase Boulevard	Greenville, SC		—		512,911		—		6,273,615		515,542		6,270,984		6,786,525		478,893	2003	40 yrs.
6 Independence Pointe	Greenville, SC		—		—		—		3,061,966		545,698		2,516,268		3,061,966		195,504	2003	40 yrs.
2 Independence Point	Greenville, SC		—		371,600		—		3,168,228		682,881		2,856,946		3,539,828		30,935	2005	40 yrs.
1 Enterprise Parkway	Hampton, VA		—		974,675		5,579,869		1,182,175		974,675		6,762,044		7,736,719		1,737,849	1987	40 yrs.
22 Enterprise Parkway	Hampton, VA		—		1,097,368		6,760,778		856,086		1,097,368		7,616,864		8,714,232		2,061,113	1990	40 yrs.
5 Manhattan Square	Hampton, VA		—		207,368		—		1,663,695		212,694		1,658,368		1,871,063		428,848	1999	40 yrs.
21 Enterprise Parkway	Hampton, VA		383,605		263,668		8,167,118		511,240		265,719		8,676,307		8,942,026		1,386,213	1999	40 yrs.
521 Butler Farm Road	Hampton, VA		—		750,769		2,911,149		260,815		710,486		3,212,247		3,922,733		264,018	2003	40 yrs.
7317 Parkway Drive	Hanover, MD		—		1,104,359		1,959,671		79,319		1,104,359		2,038,990		3,143,349		453,669	1983	40 yrs.
500 McCarthy Drive	Harrisburg, PA		—		5,194,872		19,991,436		4,120,570		5,687,013		23,619,865		29,306,878		1,197,404	2005	40 yrs.
4170 Mendenhall Oaks Parkway	High Point , NC		—		143,699		—		2,210,943		373,502		1,981,140		2,354,642		543,603	1999	40 yrs.
4180 Mendenhall Oaks Parkway	High Point , NC		—		121,329		—		1,836,257		315,614		1,641,972		1,957,586		506,298	1999	40 yrs.
4050 Piedmont Parkway	High Point , NC		—		801,902		—		19,610,267		2,042,159		18,370,011		20,412,169		3,868,705	1998	40 yrs.
4523 Green Point Drive	High Point, NC		—		234,564		—		2,404,561		235,698		2,403,427		2,639,125		1,058,454	1988	40 yrs.
4501 Green Point Drive	High Point, NC		—		319,289		—		2,630,880		320,450		2,629,719		2,950,169		1,156,811	1989	40 yrs.
4500 Green Point Drive	High Point, NC		—		230,622		—		2,333,337		231,692		2,332,268		2,563,959		1,087,232	1989	40 yrs.
2427 Penny Road	High Point, NC		—		1,165,664		—		3,467,001		655,240		3,977,424		4,632,665		1,593,141	1990	40 yrs.
4524 Green Point Drive	High Point, NC		—		182,810		—		2,364,005		183,888		2,362,926		2,546,815		1,039,384	1989	40 yrs.
4328, 4336 Federal Drive	High Point, NC		4,545,898		521,122		—		7,238,387		825,092		6,934,416		7,759,509		3,316,305	1995	40 yrs.
4344 Federal Drive	High Point, NC		—		484,001		—		2,755,206		173,623		3,065,585		3,239,208		1,019,455	1996	40 yrs.
4000 Piedmont Parkway	High Point, NC		—		592,885		4,825,615		807,718		597,368		5,628,850		6,226,218		1,733,031	1989	40 yrs.
4380 Federal Drive	High Point, NC		—		282,996		—		2,210,549		283,368		2,210,177		2,493,545		727,018	1997	40 yrs.
4388 Federal Drive	High Point, NC		—		143,661		—		1,225,791		132,655		1,236,797		1,369,452		430,335	1997	40 yrs.
4160 Mendenhall Oaks Parkway	High Point, NC		—		285,882		—		3,351,586		545,627		3,091,841		3,637,468		725,642	1998	40 yrs.
4194 Mendenhall Oaks Parkway	High Point, NC		—		102,372		—		2,598,532		265,991		2,434,913		2,700,904		647,095	1999	40 yrs.
4196 Mendenhall Oaks Parkway	High Point, NC		—		66,731		—		2,250,342		173,889		2,143,184		2,317,073		709,040	1999	40 yrs.
4300 Federal Drive	High Point, NC		—		264,038		—		2,090,460		276,038		2,078,460		2,354,498		367,817	1998	40 yrs.
4135 Mendenall Oaks Parkway	High Point, NC		—		499,500		—		3,052,846		500,980		3,051,365		3,552,346		563,934	2000	40 yrs.
4183 Eagle Hill Drive	High Point, NC		—		122,203		—		3,748,139		526,266		3,344,076		3,870,342		1,096,678	2001	40 yrs.
4189 Eagle Hill Drive	High Point, NC		—		100,106		—		3,430,702		431,106		3,099,702		3,530,808		723,686	2001	40 yrs.
4020 Meeting Way	High Point, NC		—		94,232		—		1,682,699		378,101		1,398,830		1,776,931		313,939	2001	40 yrs.
1400 Mendenhall Oaks Parkway	High Point, NC		—		172,320		—		7,145,926		984,672		6,333,574		7,318,246		1,020,098	2002	40 yrs.
4191 Mendenhall Oaks Parkway	High Point, NC		—		217,943		—		3,119,682		611,166		2,726,459		3,337,625		422,224	2002	40 yrs.
4015 Meeting Way	High Point, NC		—		510,000		—		2,792,495		511,869		2,790,626		3,302,495		141,901	2003	40 yrs.
4195 Eagle Hill Drive	High Point, NC		—		107,586		—		3,349,592		505,700		2,951,478		3,457,178		120,322	2004	40 yrs.
400 Mendenhall Oaks Parkway	High Point, NC		—		—		—		1,860,213		665,239		1,194,974		1,860,213		14,800	2004	40 yrs.
100 Witmer Road	Horsham, PA		5,804,315		3,102,784		—		11,902,626		3,764,784		11,240,627		15,005,410		2,877,003	1996	40 yrs.
132 Welsh Road	Horsham, PA		—		1,333,642		—		4,219,965		1,408,041		4,145,566		5,553,607		1,331,664	1998	40 yrs.
300 Welsh Road — Building 3	Horsham, PA		—		180,459		1,441,473		358,107		180,459		1,799,579		1,980,038		566,487	1983	40 yrs.
300 Welsh Road — Building 4	Horsham, PA		—		282,493		2,256,508		1,347,544		282,493		3,604,051		3,886,545		1,094,113	1983	40 yrs.
2 Walnut Grove Drive	Horsham, PA		—		1,281,870		7,767,374		1,614,038		1,265,363		9,397,919		10,663,282		2,775,835	1989	40 yrs.
5 Walnut Grove Drive	Horsham, PA		—		1,065,951		—		9,658,857		1,939,712		8,785,096		10,724,809		1,749,887	2000	40 yrs.
200 Gibraltar Road	Horsham, PA		—		638,513		5,811,323		1,627,733		638,513		7,439,056		8,077,569		2,202,723	1990	40 yrs.
220 Gibraltar Road	Horsham, PA		—		629,944		5,733,228		1,201,778		629,944		6,935,006		7,564,950		2,143,096	1990	40 yrs.
240 Gibraltar Road	Horsham, PA		—		629,944		5,733,234		1,578,115		629,944		7,311,349		7,941,293		2,295,152	1990	40 yrs.
1 Walnut Grove Drive	Horsham, PA		—		1,058,901		5,343,606		1,041,557		1,058,901		6,385,163		7,444,064		2,059,580	1986	40 yrs.
181-187 Gibraltar Road	Horsham, PA		—		360,549		3,259,984		506,596		360,549		3,766,580		4,127,129		1,094,203	1982	40 yrs.
104 Rock Road	Horsham, PA		—		330,111		2,981,669		233,299		330,111		3,214,968		3,545,079		705,425	1974	40 yrs.
123-135 Rock Road	Horsham, PA		—		292,360		2,411,677		871,555		393,019		3,182,573		3,575,591		970,834	1975	40 yrs.
111-159 Gibraltar Road	Horsham, PA		—		489,032		4,126,151		613,296		489,032		4,739,447		5,228,479		1,272,980	1981	40 yrs.
161-175 Gibraltar Road	Horsham, PA		—		294,673		2,663,722		987,299		294,673		3,651,020		3,945,694		856,934	1976	40 yrs.
103-109 Gibraltar Road	Horsham, PA		—		270,906		2,448,500		795,126		270,906		3,243,625		3,514,531		1,044,383	1978	40 yrs.
261-283 Gibraltar Road	Horsham, PA		*		464,871		3,951,972		141,841		464,871		4,093,813		4,558,684		942,660	1978	40 yrs.
210-223 Witmer Road	Horsham, PA		—		270,282		2,441,276		1,761,333		270,282		4,202,609		4,472,891		959,764	1972	40 yrs.
231-237 Gibraltar Road	Horsham, PA		*		436,952		3,948,963		699,674		436,952		4,648,636		5,085,589		1,155,695	1981	40 yrs.
100 Gibraltar Road	Horsham, PA		—		38,729		349,811		9,589		38,729		359,400		398,129		81,406	1975	40 yrs.
101 Gibraltar Road	Horsham, PA		—		651,990		5,888,989		1,376,885		732,552		7,185,312		7,917,864		1,741,900	1977	40 yrs.
506 Prudential Road	Horsham, PA		—		208,140		895,470		652,633		208,140		1,548,102		1,756,243		357,080	1973	40 yrs.
113-123 Rock Road	Horsham, PA		—		351,072		3,171,001		334,495		451,731		3,404,836		3,856,568		823,288	1975	40 yrs.
101-111 Rock Road	Horsham, PA		—		350,561		3,166,389		640,212		452,251		3,704,911		4,157,162		892,449	1975	40 yrs.

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
120 Gibraltar Road	Horsham, PA		—		533,142		4,830,515		973,788		558,142		5,779,303		6,337,445		1,392,610	1980	40 yrs.
110 Gibraltar Road	Horsham, PA		—		673,041		5,776,369		2,170,108		673,041		7,946,477		8,619,518		1,938,777	1979	40 yrs.
100-107 Lakeside Drive	Horsham, PA		—		239,528		2,163,498		659,861		255,528		2,807,359		3,062,887		844,384	1982	40 yrs.
200-264 Lakeside Drive	Horsham, PA		—		502,705		4,540,597		915,265		502,705		5,455,862		5,958,567		1,609,702	1982	40 yrs.
300-309 Lakeside Drive	Horsham, PA		—		369,475		3,338,761		1,710,844		376,475		5,042,605		5,419,080		1,681,475	1982	40 yrs.
400-445 Lakeside Drive	Horsham, PA		—		543,628		4,910,226		2,760,384		583,628		7,630,610		8,214,238		2,059,164	1981	40 yrs.
104 Witmer Road	Horsham, PA		*		1,248,148		—		1,133,479		189,793		2,191,834		2,381,627		735,818	1975	40 yrs.
201 Gibraltar Road	Horsham, PA		—		380,127		3,433,433		1,997,494		380,802		5,430,252		5,811,054		1,285,924	1983	40 yrs.
719 Dresher Road	Horsham, PA		*		493,426		2,812,067		205,125		495,112		3,015,506		3,510,618		669,434	1987	40 yrs.
4 Walnut Grove	Horsham, PA		*		2,515,115		—		7,329,299		2,515,115		7,329,299		9,844,415		1,405,252	1999	40 yrs.
300 Welsh Road	Horsham, PA		—		696,061		3,339,991		547,772		696,061		3,887,762		4,583,823		866,821	1985	40 yrs.
700 Dresher Road	Horsham, PA		—		2,551,777		3,020,638		4,641,908		2,565,140		7,649,183		10,214,323		3,175,714	1987	40 yrs.
680 Blair Mill Road	Horsham, PA		—		3,527,151		—		12,039,009		4,138,577		11,427,583		15,566,160		2,583,511	2001	40 yrs.
102 Rock Road	Horsham, PA		—		1,110,209		2,301,302		1,133,191		1,114,985		3,429,717		4,544,702		474,800	1985	40 yrs.
335 Commerce Drive	Horsham, PA		—		—		—		8,736,456		182,400		8,554,056		8,736,456		470,505	2002	40 yrs.
255 Business Center Drive	Horsham, PA		—		1,086,356		2,007,214		496,797		1,078,769		2,511,597		3,590,366		206,020	2003	40 yrs.
355 Business Center Drive	Horsham, PA		—		483,045		898,798		275,266		479,200		1,177,910		1,657,110		129,780	2003	40 yrs.
455 Business Center Drive	Horsham, PA		—		1,351,011		2,503,449		1,668,600		1,343,370		4,179,690		5,523,060		548,149	2003	40 yrs.
555 Business Center Drive	Horsham, PA		—		727,420		1,353,650		213,228		723,016		1,571,283		2,294,299		212,922	2003	40 yrs.
747 Dresher Road	Horsham, PA		—		1,607,238		—		4,935,054		1,607,977		4,934,315		6,542,292		2,185,045	1988	40 yrs.
507 Prudential Road	Horsham, PA		6,268,630		644,900		5,804,100		8,784,448		1,131,380		14,102,068		15,233,448		3,726,697	1988	40 yrs.
767 Electronic Drive	Horsham, PA		*		1,229,685		—		3,319,209		1,241,970		3,306,924		4,548,893		1,461,410	1996	40 yrs.
16445 Air Center Boulevard	Houston, TX		—		363,339		2,509,186		545,867		363,339		3,055,053		3,418,392		940,458	1997	40 yrs.
16405 Air Center Boulevard	Houston, TX		—		438,853		3,030,396		404,912		438,853		3,435,307		3,874,160		822,102	1997	40 yrs.
16580 Air Center Boulevard	Houston, TX		—		289,000		3,559,857		265,899		289,000		3,825,756		4,114,756		834,181	1997	40 yrs.
1755 Trans Central Drive	Houston, TX		—		293,534		3,036,269		190,651		306,147		3,214,306		3,520,453		579,451	1999	40 yrs.
16605 Air Center Boulevard	Houston, TX		—		298,999		—		3,770,315		496,186		3,573,128		4,069,314		790,837	2002	40 yrs.
10739 West Little York Road	Houston, TX		—		797,931		5,950,894		242,625		799,560		6,191,890		6,991,450		803,207	1999	40 yrs.
10735 West Little York Road	Houston, TX		—		1,110,988		6,351,946		1,657,286		1,135,483		7,984,738		9,120,220		712,611	2000	40 yrs.
8801-19 & 8821-49 Fallbrook Drive	Houston, TX		—		2,290,001		15,297,141		1,535,943		2,290,002		16,833,084		19,123,085		1,587,024	2000	40 yrs.
16685 Air Center Boulevard	Houston, TX		—		—		—		2,935,268		414,691		2,520,577		2,935,268		184,042	2004	40 yrs.
8825-8839 N Sam Houston Pkwy	Houston, TX		—		638,453		3,258,815		567,574		638,477		3,826,364		4,464,842		194,007	2004	40 yrs.
8850-8872 Fallbrook Drive	Houston, TX		—		504,317		2,878,351		1,014,679		504,341		3,893,006		4,397,347		227,912	2004	40 yrs.
8802-8824 Fallbrook Drive	Houston, TX		—		1,114,406		6,364,767		663,613		1,114,433		7,028,353		8,142,786		542,346	2004	40 yrs.
16602 Central Green Boulevard	Houston, TX		—		284,403		—		4,496,262		503,779		4,276,886		4,780,665		149,476	2005	40 yrs.
20 Wright Avenue	Hunt Valley, MD		—		1,205,946		—		9,669,027		1,861,025		9,013,948		10,874,973		1,351,645	2001	40 yrs.
4 North Park Drive	Hunt Valley, MD		—		3,269,948		13,551,370		993,133		3,269,948		14,544,504		17,814,451		1,298,941	2003	40 yrs.
6 North Park Drive	Hunt Valley, MD		—		2,077,949		8,770,566		1,109,669		2,077,949		9,880,235		11,958,184		976,602	2003	40 yrs.
10 North Park Drive	Hunt Valley, MD		—		2,211,969		7,816,042		210,820		2,211,969		8,026,862		10,238,831		625,778	2003	40 yrs.
307 International Circle	Hunt Valley, MD		—		3,538,319		14,190,832		11,315,040		3,542,881		25,501,310		29,044,191		735,562	2004	40 yrs.
309 International Circle	Hunt Valley, MD		—		613,667		2,458,204		648,156		615,096		3,104,930		3,720,026		120,826	2004	40 yrs.
311 International Circle	Hunt Valley, MD		—		313,365		1,281,093		69,591		314,572		1,349,478		1,664,050		35,808	2004	40 yrs.
8775 Baypine Road	Jacksonville, FL		—		906,804		—		3,352,809		913,013		3,346,599		4,259,613		1,490,769	1989	40 yrs.
6255 Lake Gray Boulevard	Jacksonville, FL		—		813,067		—		3,960,328		812,634		3,960,761		4,773,395		2,061,279	1987	40 yrs.
8665,8667,8669 Baypine Road	Jacksonville, FL		—		966,552		—		5,892,549		974,959		5,884,142		6,859,101		2,590,822	1987	40 yrs.
7970 Bayberry Road	Jacksonville, FL		—		127,520		—		1,369,921		129,979		1,367,462		1,497,441		1,018,453	1978	40 yrs.
7077 Bonneval Road	Jacksonville, FL		—		768,000		5,789,000		3,066,996		774,020		8,849,976		9,623,996		3,280,922	1988	40 yrs.
4190 Belfort Road	Jacksonville, FL		—		821,000		5,866,000		3,229,138		827,420		9,088,718		9,916,138		3,843,929	1986	40 yrs.
7020 AC Skinner Parkway	Jacksonville, FL		—		398,257		—		2,780,426		749,811		2,428,873		3,178,683		1,020,424	1996	40 yrs.
7022 AC Skinner Parkway	Jacksonville, FL		—		706,934		—		3,593,671		853,981		3,446,624		4,300,605		1,319,301	1996	40 yrs.
11777 Central Highway	Jacksonville, FL		—		92,207		429,997		1,275,050		140,426		1,656,828		1,797,254		1,012,104	1985	40 yrs.
4345 Southpoint Parkway	Jacksonville, FL		—		—		—		8,791,159		418,093		8,373,065		8,791,159		2,354,624	1998	40 yrs.
7016 AC Skinner Parkway	Jacksonville, FL		—		597,181		—		2,377,385		602,633		2,371,934		2,974,566		1,042,593	1996	40 yrs.
7018 AC Skinner Parkway	Jacksonville, FL		—		840,996		—		4,643,140		846,461		4,637,675		5,484,136		1,887,918	1997	40 yrs.
7014 AC Skinner Parkway	Jacksonville, FL		—		574,198		—		3,633,593		780,486		3,427,305		4,207,791		1,137,784	1999	40 yrs.
6620 Southpoint Drive	Jacksonville, FL		—		614,602		4,267,477		984,847		614,602		5,252,323		5,866,926		1,528,012	1984	40 yrs.
7980 Bayberry Road	Jacksonville, FL		—		330,726		1,338,101		32,776		330,726		1,370,877		1,701,603		333,506	1978	40 yrs.
6600 Southpoint Parkway	Jacksonville, FL		—		998,432		4,055,727		851,752		1,002,704		4,903,207		5,905,911		1,442,391	1986	40 yrs.
6700 Southpoint Parkway	Jacksonville, FL		—		620,719		2,989,746		750,311		624,215		3,736,561		4,360,776		1,326,619	1987	40 yrs.
4801 Executive Park Court - 100	Jacksonville, FL		—		554,993		2,993,277		1,312,090		554,542		4,305,817		4,860,360		1,335,378	1990	40 yrs.
4801 Executive Park Court - 200	Jacksonville, FL		—		370,017		1,995,518		348,996		370,039		2,344,492		2,714,531		575,497	1990	40 yrs.
4810 Executive Park Court	Jacksonville, FL		—		369,694		3,045,639		370,039		941,958		3,987,251		4,357,291		884,986	1990	40 yrs.
6602 Executive Park Court - 100	Jacksonville, FL		—		388,519		2,095,293		297,873		388,541		2,393,144		2,781,685		624,753	1993	40 yrs.

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
6602 Executive Park Court - 200	Jacksonville, FL		—		296,014		1,596,347		449,559			296,032		2,045,888		2,341,920		515,311	1993	40 yrs.
6631 Executive Park Court - 100	Jacksonville, FL		—		251,613		1,356,849		482,785			251,627		1,839,620		2,091,247		609,302	1994	40 yrs.
6631 Executive Park Court - 200	Jacksonville, FL		—		406,561		2,195,070		221,980			407,043		2,416,568		2,823,611		677,090	1994	40 yrs.
4815 Executive Park Court - 100	Jacksonville, FL		—		366,317		1,975,393		340,258			366,339		2,315,629		2,681,968		712,134	1995	40 yrs.
4815 Executive Park Court - 200	Jacksonville, FL		—		462,522		2,494,397		459,048			462,549		2,953,418		3,415,967		852,379	1995	40 yrs.
4825 Executive Park Court	Jacksonville, FL		—		601,278		3,242,491		282,810			601,401		3,525,178		4,126,579		959,847	1996	40 yrs.
4820 Executive Park Court	Jacksonville, FL		—		555,173		2,693,130		768,348			555,213		3,461,439		4,016,651		909,913	1997	40 yrs.
6601 Executive Park Circle North	Jacksonville, FL		—		551,250		3,128,361		640			551,250		3,129,001		3,680,251		703,615	1992	40 yrs.
4901 Belfort Road	Jacksonville, FL		—		877,964		2,360,742		1,966,868			877,964		4,327,610		5,205,574		1,599,696	1986	40 yrs.
4899 Belfort Road	Jacksonville, FL		—		1,299,201		—		8,179,240			1,207,751		8,270,690		9,478,441		1,787,670	2000	40 yrs.
4905 Belfort Street	Jacksonville, FL		—		638,154		—		3,461,206			641,272		3,458,088		4,099,360		880,635	2000	40 yrs.
7251 Salisbury Road	Jacksonville, FL		—		—		—		3,567,820			662,559		2,905,261		3,567,820		747,221	2000	40 yrs.
10245 Centurion Parkway North	Jacksonville, FL		—		852,644		3,510,889		968,204			853,704		4,478,033		5,331,737		1,002,121	1996	40 yrs.
4887 Belfort Road	Jacksonville, FL		—		1,299,202		—		7,890,278			1,665,915		7,523,565		9,189,480		1,444,468	2002	40 yrs.
7255 Salisbury Road	Jacksonville, FL		—		392,060		—		2,982,347			680,766		2,693,641		3,374,407		481,925	2002	40 yrs.
5201 Gate Parkway	Jacksonville, FL		—		3,836,532		—		21,192,513			4,269,346		20,759,699		25,029,045		446,736	2005	40 yrs.
3200 Horizon Drive	King of Prussia, PA		—		928,637		—		7,053,358			1,210,137		6,771,857		7,981,995		2,424,253	1996	40 yrs.
440 East Swedesford Road	King of Prussia, PA		—		717,001		4,816,121		2,684,214			717,001		7,500,335		8,217,336		2,723,279	1988	40 yrs.
460 East Swedesford Road	King of Prussia, PA		—		705,317		4,737,487		3,799,506			705,317		8,536,993		9,242,310		1,888,272	1988	40 yrs.
151 South Warner Road	King of Prussia, PA		—		1,218,086		6,937,866		360,761			1,186,972		7,329,741		8,516,713		1,860,186	1980	40 yrs.
3604 Horizon Drive	King of Prussia, PA		—		397,178		—		1,628,512			350,874		1,674,816		2,025,690		688,143	1998	40 yrs.
3606 Horizon Drive	King of Prussia, PA		—		789,409		—		1,947,590			815,855		1,921,144		2,736,999		771,104	1997	40 yrs.
650 Swedesford Road	King of Prussia, PA		—		952,911		6,722,830		9,647,843			952,911 1		6,370,672		17,323,583		5,840,247	1971	40 yrs.
680 Swedesford Road	King of Prussia, PA		—		952,361		6,722,830		8,367,206			952,361 1		5,090,036		16,042,397		5,693,790	1971	40 yrs.
3600 Horizon Drive	King of Prussia, PA		—		236,432		1,856,252		610,135			236,432		2,466,387		2,702,818		487,948	1989	40 yrs.
3602 Horizon Drive	King of Prussia, PA		—		217,734		1,759,489		338,288			217,809		2,097,701		2,315,510		545,130	1989	40 yrs.
2700 Horizon Drive	King of Prussia, PA		—		764,370		—		3,682,257			867,815		3,578,812		4,446,627		1,125,765	1998	40 yrs.
2900 Horizon Drive	King of Prussia, PA		—		679,440		—		3,503,074			774,096		3,408,418		4,182,514		910,904	1998	40 yrs.
2500 Renaissance Boulevard	King of Prussia, PA		—		509,580		—		2,786,056			592,886		2,702,749		3,295,636		904,721	1999	40 yrs.
2300 Renaissance Boulevard	King of Prussia, PA		—		509,580		—		3,038,151			574,152		2,973,578		3,547,731		764,372	1999	40 yrs.
2100 Renaissance Boulevard	King of Prussia, PA		—		1,110,111		—		9,382,851			1,132,519		9,360,443		10,492,962		2,601,425	1999	40 yrs.
3400 Horizon Drive	King of Prussia, PA		—		776,496		3,139,068		976,974			776,496		4,116,042		4,892,538		1,110,392	1995	40 yrs.
2301 Renaissance Boulevard	King of Prussia, PA		—		1,645,246		—		30,063,879			4,581,649		27,127,475		31,709,124		4,096,749	2002	40 yrs.
2520 Renaissance Boulevard	King of Prussia, PA		—		1,020,000		—		5,005,045			978,402		5,046,643		6,025,045		1,852,202	1999	40 yrs.
2201 Renaissance Boulevard	King of Prussia, PA		—		—		—		15,548,161			2,413,514		13,134,647		15,548,161		3,185,717	2000	40 yrs.
2540 Renaissance Boulevard	King of Prussia, PA		—		—		—		1,625,497			274,341		1,351,156		1,625,497		346,016	2000	40 yrs.
2560 Renaissance Boulevard	King of Prussia, PA		—		—		—		3,729,254			649,792		3,079,462		3,729,254		758,039	2000	40 yrs.
170 South Warner Road	King of Prussia, PA		—		547,800		3,137,400		3,783,307			458,232		7,010,275		7,468,507		2,965,120	1980	40 yrs.
190 South Warner Road	King of Prussia, PA		—		552,200		3,162,600		1,739,928			461,909		4,992,819		5,454,728		2,170,397	1980	40 yrs.
3100 Horizon Drive	King of Prussia, PA		—		601,956		—		2,068,047			611,436		2,058,568		2,670,003		750,766	1995	40 yrs.
3500 Horizon Drive	King of Prussia, PA		—		1,204,839		—		2,630,229			1,223,875		2,611,193		3,835,068		696,574	1996	40 yrs.
3000 Horizon Drive	King of Prussia, PA		—		1,191,449		—		2,309,358			946,703		2,554,103		3,500,806		559,994	1997	40 yrs.
800 Town Center Drive	Langhorne, PA		—		1,617,150		—		10,797,563			1,619,288		10,795,425		12,414,713		5,032,511	1987	40 yrs.
11425 State Highway 225	LaPorte, TX		—		975,974		3,409,036		7,682			977,519		3,415,173		4,392,692		31,583	2006	40 yrs.
11503 State Highway 225	LaPorte, TX		—		2,561,931		9,779,023		20,165			2,565,988		9,795,132		12,361,120		72,104	2006	40 yrs.
7528 Walker Way	Lehigh Valley, PA		—		893,441		—		5,514,510			779,330		5,628,622		6,407,952		157,996	2004	40 yrs.
8301 Industrial Boulevard	Lehigh, PA		—		11,249,550		—		44,122,702			11,254,716		44,117,536		55,372,252		1,310,158	2005	40 yrs.
32853 Edward Avenue	Madison Heights, MI		—		138,121		784,426		(5,207	)		138,121		779,219		917,340		210,450	1973	40 yrs.
750 East Mandoline Avenue	Madison Heights, MI		—		151,458		741,185		(80,456	)		151,458		660,728		812,187		172,982	1969	40 yrs.
900 East Mandoline Avenue	Madison Heights, MI		—		157,729		771,872		(43,850	)		157,729		728,022		885,751		223,686	1972	40 yrs.
31700 Research Park Drive	Madison Heights, MI		—		373,202		1,824,721		(158,741	)		373,203		1,665,979		2,039,182		382,957	1988	40 yrs.
31771 Sherman Avenue	Madison Heights, MI		—		150,944		645,040		(7,564	)		150,944		637,475		788,420		203,445	1982	40 yrs.
31791 Sherman Avenue	Madison Heights, MI		—		105,606		649,891		(54,791	)		105,606		595,100		700,706		143,185	1983	40 yrs.
31811 Sherman Avenue	Madison Heights, MI		—		207,599		1,179,010		(149,901	)		207,599		1,029,110		1,236,709		254,186	1983	40 yrs.
1201 East Whitcomb Avenue	Madison Heights, MI		—		302,567		1,213,232		(175,088	)		302,567		1,038,144		1,340,711		266,116	1980	40 yrs.
1901 Summit Tower Boulevard	Maitland, FL		—		6,078,791		12,348,567		1,625,469			6,083,206		13,969,622		20,052,828		2,792,232	1998	40 yrs.
45-67 Great Valley Parkway	Malvern, PA		—		795,143		—		3,352,726			795,831		3,352,038		4,147,869		2,136,395	1974	40 yrs.
11,15 Great Valley Parkway	Malvern, PA		*		1,837,050		—		15,005,064			1,837,878		15,004,237		16,842,114		9,920,837	1986	40 yrs.
27-43 Great Valley Parkway	Malvern, PA		—		448,775		—		2,545,542			449,447		2,544,870		2,994,317		1,549,853	1977	40 yrs.
1 Country View Road	Malvern, PA		—		400,000		3,600,000		1,007,648			406,421		4,601,227		5,007,648		1,396,584	1982	40 yrs.
200 Chesterfield Parkway	Malvern, PA		—		495,893		2,739,093		558,159			544,649		3,248,496		3,793,145		1,920,292	1989	40 yrs.
50 Morehall Road	Malvern, PA		—		849,576		—		13,043,717			1,337,076		12,556,217		13,893,293		4,337,326	1997	40 yrs.
1 Great Valley Parkway	Malvern, PA		—		419,460		3,792,570		330,704			419,460		4,123,273		4,542,734		1,064,218	1982	40 yrs.

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
5 Great Valley Parkway	Malvern, PA		—		684,200		6,181,661		1,305,825		684,200		7,487,486		8,171,686		1,853,061	1983	40 yrs.
1001 Cedar Hollow Road	Malvern, PA		—		1,436,814		—		16,077,184		1,676,470		15,837,528		17,513,998		4,972,256	1998	40 yrs.
3 Country View Road	Malvern, PA		*		814,278		—		5,142,433		1,128,881		4,827,830		5,956,711		984,217	1998	40 yrs.
425 Technology Drive	Malvern, PA		—		191,114		—		2,101,323		321,473		1,970,964		2,292,437		698,708	1998	40 yrs.
375 Technology Drive	Malvern, PA		—		191,114		—		1,958,524		234,922		1,914,715		2,149,638		703,554	1998	40 yrs.
45 Liberty Boulevard	Malvern, PA		—		4,380,221		—		15,314,868		4,749,748		14,945,341		19,695,089		4,425,097	1999	40 yrs.
100 Chesterfield Parkway	Malvern, PA		—		1,320,625		—		7,019,034		1,349,954		6,989,705		8,339,659		2,255,284	1998	40 yrs.
600 Chesterfield Parkway	Malvern, PA		—		2,013,750		—		8,135,324		2,050,555		8,098,519		10,149,074		2,360,776	1999	40 yrs.
700 Chesterfield Parkway	Malvern, PA		—		2,013,750		—		8,096,150		2,037,813		8,072,087		10,109,900		2,337,776	1999	40 yrs.
18 Great Valley Parkway	Malvern, PA		—		394,036		3,976,221		99,539		397,293		4,072,504		4,469,796		823,431	1980	40 yrs.
11 Great Valley Parkway	Malvern, PA		—		496,297		—		3,226,924		708,331		3,014,890		3,723,221		672,667	2001	40 yrs.
40 Liberty Boulevard	Malvern, PA		—		4,241,137		17,737,090		2,182,842		4,241,167		19,919,901		24,161,068		5,326,655	1989	40 yrs.
2 West Liberty Boulevard	Malvern, PA		—		5,405,041		—		11,415,086		5,405,042		11,415,085		16,820,127		400,621	2003	40 yrs.
10 Great Valley Parkway	Malvern, PA		—		823,540		1,341,376		256,839		832,244		1,589,510		2,421,754		135,101	2003	40 yrs.
10, 20 Liberty Boulevard	Malvern, PA		—		724,058		—		5,767,715		724,846		5,766,927		6,491,773		2,492,462	1985	40 yrs.
420 Lapp Road	Malvern, PA		—		1,054,418		—		6,995,922		1,055,243		6,995,097		8,050,340		3,081,121	1989	40 yrs.
14 Lee Boulevard	Malvern, PA		—		664,282		—		5,855,867		643,892		5,876,257		6,520,149		2,676,923	1988	40 yrs.
500 Chesterfield Parkway	Malvern, PA		—		472,364		—		3,276,521		473,139		3,275,746		3,748,885		1,665,286	1988	40 yrs.
300-400 Chesterfield Parkway	Malvern, PA		—		937,212		—		5,616,170		937,942		5,615,440		6,553,382		2,587,331	1988	40 yrs.
40 Valley Stream Parkway	Malvern, PA		—		322,918		—		3,224,458		325,775		3,221,601		3,547,376		1,327,967	1987	40 yrs.
50 Valley Stream Parkway	Malvern, PA		—		323,971		—		2,694,447		323,792		2,694,627		3,018,418		1,147,301	1987	40 yrs.
20 Valley Stream Parkway	Malvern, PA		—		465,539		—		5,726,197		466,413		5,725,323		6,191,736		2,874,409	1987	40 yrs.
257-275 Great Valley Parkway	Malvern, PA		—		504,611		—		5,186,454		505,458		5,185,606		5,691,065		2,963,952	1983	40 yrs.
300 Technology Drive	Malvern, PA		—		368,626		—		1,344,816		374,497		1,338,945		1,713,442		706,537	1985	40 yrs.
277-293 Great Valley Parkway	Malvern, PA		—		530,729		—		2,330,242		531,534		2,329,436		2,860,971		1,322,006	1984	40 yrs.
311 Technology Drive	Malvern, PA		—		397,131		—		2,724,819		397,948		2,724,002		3,121,950		1,423,585	1984	40 yrs.
7 Great Valley Parkway	Malvern, PA		—		176,435		—		5,036,553		177,317		5,035,671		5,212,988		2,814,524	1985	40 yrs.
55 Valley Stream Parkway	Malvern, PA		—		215,005		—		4,281,663		215,818		4,280,850		4,496,668		1,915,746	1983	40 yrs.
65 Valley Stream Parkway	Malvern, PA		—		381,544		—		7,597,364		382,361		7,596,548		7,978,908		3,914,905	1983	40 yrs.
508 Lapp Road	Malvern, PA		—		331,392		—		2,033,164		332,216		2,032,340		2,364,556		1,228,001	1984	40 yrs.
10 Valley Stream Parkway	Malvern, PA		*		509,075		—		3,089,935		509,899		3,089,111		3,599,010		1,714,026	1984	40 yrs.
333 Phoenixville Pike	Malvern, PA		—		523,530		—		2,917,373		524,230		2,916,673		3,440,903		1,580,984	1985	40 yrs.
30 Great Valley Parkway	Malvern, PA		—		128,126		—		85,634		128,783		384,977		513,760		315,346	1975	40 yrs.
75 Great Valley Parkway	Malvern, PA		350,090		143,074		—		772,841		143,811		772,103		915,915		577,889	1977	40 yrs.
77-123 Great Valley Parkway	Malvern, PA		—		887,664		—		5,700,921		888,359		5,700,225		6,588,585		3,391,343	1978	40 yrs.
256 Great Valley Parkway	Malvern, PA		—		161,098		—		1,785,717		161,949		1,784,866		1,946,815		1,157,980	1980	40 yrs.
205 Great Valley Parkway	Malvern, PA		—		1,368,259		—		10,706,926		1,369,003		10,706,182		12,075,185		6,686,126	1981	40 yrs.
12,14,16 Great Valley Parkway	Malvern, PA		—		130,689		—		1,562,994		128,767		1,564,916		1,693,683		884,224	1982	40 yrs.
155 Great Valley Parkway	Malvern, PA		—		625,147		—		2,627,280		626,068		2,626,359		3,252,427		1,541,665	1981	40 yrs.
510 Lapp Road	Malvern, PA		*		356,950		—		926,587		357,751		925,786		1,283,537		572,178	1983	40 yrs.
60 Morehall Road	Malvern, PA		—		865,424		9,285,000		4,971,296		884,974		14,236,746		15,121,720		6,358,326	1989	40 yrs.
5 Country View Road	Malvern, PA		*		785,168		4,678,632		1,178,927		786,235		5,856,492		6,642,727		1,953,040	1985	40 yrs.
7550 Meridian Circle	Maple Grove, MN		—		513,250		2,901,906		222,006		513,250		3,123,911		3,637,161		721,019	1989	40 yrs.
8 Stow Road	Marlton, NJ		—		172,600		1,704,436		188,555		172,945		1,892,646		2,065,591		651,714	1988	40 yrs.
10 Stow Road	Marlton, NJ		—		147,000		1,451,536		527,956		147,318		1,979,174		2,126,492		962,254	1988	40 yrs.
12 Stow Road	Marlton, NJ		—		103,300		1,021,036		342,868		103,618		1,363,587		1,467,205		588,823	1988	40 yrs.
14 Stow Road	Marlton, NJ		—		93,100		920,336		431,684		93,418		1,351,703		1,445,120		576,452	1988	40 yrs.
701A Route 73 South	Marlton, NJ		—		264,387		3,772,000		3,501,001		271,743		7,265,645		7,537,388		3,312,275	1987	40 yrs.
701C Route 73 South	Marlton, NJ		—		84,949		1,328,000		422,106		96,161		1,738,894		1,835,055		672,972	1987	40 yrs.
400 Lippincott Drive	Marlton, NJ		—		69,402		—		3,671,296		317,799		3,422,899		3,740,699		910,493	1999	40 yrs.
406 Lippincott Drive	Marlton, NJ		—		321,455		1,539,871		888,175		327,554		2,421,947		2,749,501		975,306	1990	40 yrs.
301 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		1,469,444		1,069,838		6,249,607		7,319,444		2,078,211	1988	40 yrs.
303 Lippincott Drive	Marlton, NJ		—		1,069,837		4,780,163		2,194,896		1,069,838		6,975,059		8,044,896		2,276,639	1988	40 yrs.
901 Route 73	Marlton, NJ		—		334,411		2,733,314		894,989		334,411		3,628,303		3,962,714		1,045,261	1985	40 yrs.
404 Lippincott Drive	Marlton, NJ		—		131,896		—		1,653,262		131,896		1,653,262		1,785,158		657,060	1997	40 yrs.
402 Lippincott Drive	Marlton, NJ		—		131,896		—		1,736,907		131,896		1,736,907		1,868,803		682,815	1997	40 yrs.
9 Stow Road	Marlton, NJ		—		652,642		1,765,065		922,394		654,779		2,685,323		3,340,101		766,449	1989	40 yrs.
75 Brookfield Oaks Drive	Mauldin, SC		—		419,731		—		2,444,403		430,909		2,433,225		2,864,134		68,857	2003	40 yrs.
65 Brookfield Oaks Drive	Mauldin, SC		—		557,174		—		2,728,911		506,318		2,779,768		3,286,086		67,739	2004	40 yrs.
8301 West Parkland Court	Milwaukee, WI		—		358,442		3,233,707		532,301		358,442		3,766,008		4,124,449		971,466	1982	40 yrs.
7800 N. 113th Street	Milwaukee, WI		—		1,711,964		6,847,857		392,036		1,711,964		7,239,893		8,951,858		1,726,879	1991	40 yrs.
11950 W. Lake Park Drive	Milwaukee, WI		—		391,813		2,340,118		539,517		394,938		2,876,510		3,271,448		719,848	1986	40 yrs.
11400 W. Lake Park Drive	Milwaukee, WI		—		439,595		2,357,904		234,658		443,101		2,589,056		3,032,157		521,325	1986	40 yrs.

100

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
11425 W. Lake Park Drive	Milwaukee, WI		—		382,256		2,350,619		957,723		385,305		3,305,293		3,690,598		982,930	1987	40 yrs.
11301 W. Lake Park Drive	Milwaukee, WI		—		614,477		2,626,456		101,328		619,465		2,722,797		3,342,261		542,487	1987	40 yrs.
11900 W. Lake Park Drive	Milwaukee, WI		—		347,853		2,396,887		1,057,251		350,628		3,451,364		3,801,992		910,149	1987	40 yrs.
11414 West Park Place	Milwaukee, WI		—		234,443		—		10,202,898		491,531		9,945,810		10,437,341		2,308,691	2001	40 yrs.
11520 West Calumet Road	Milwaukee, WI		—		341,698		1,527,548		78,494		341,698		1,606,042		1,947,740		281,217	1995	40 yrs.
12100 West Park Place	Milwaukee, WI		—		534,470		3,239,389		565,184		532,370		3,806,673		4,339,043		779,371	1984	40 yrs.
10855 West Park Place	Milwaukee, WI		—		122,894		—		3,045,358		424,710		2,743,541		3,168,251		447,822	2002	40 yrs.
11100 West Liberty Drive	Milwaukee, WI		—		1,800,000		—		7,690,908		1,801,024		7,689,884		9,490,908		730,540	2003	40 yrs.
11050 West Liberty Drive	Milwaukee, WI		—		—		—		3,813,517		914,760		2,898,757		3,813,517		25,802	2005	40 yrs.
4700 Nathan Lane North	Minneapolis, MN		—		1,501,308		8,446,083		225,056		1,501,308		8,671,139		10,172,447		1,567,239	1996	40 yrs.
4600 Nathan Lane	Minneapolis, MN		—		1,063,558		—		6,683,083		1,038,197		6,708,444		7,746,641		1,363,486	2002	40 yrs.
12501 & 12701 Whitewater Drive	Minnegonka, MN		—		2,175,209		3,948,085		7,249,452		2,177,953		11,194,793		13,372,746		788,290	1986	40 yrs.
5600 & 5610 Rowland Road	Minnetonka, MN		—		828,650		7,399,409		1,595,422		829,263		8,994,217		9,823,481		2,892,234	1988	40 yrs.
5400-5500 Feltl Road	Minnetonka, MN		—		883,895		7,983,345		2,275,102		883,895		10,258,447		11,142,342		2,480,922	1985	40 yrs.
10300 Bren Road	Minnetonka, MN		—		344,614		3,110,477		894,944		344,614		4,005,421		4,350,034		857,897	1981	40 yrs.
3400 Lakeside Drive	Miramar, FL		—		2,022,153		11,345,881		1,214,422		2,022,153		12,560,302		14,582,456		3,135,197	1990	40 yrs.
3450 Lakeside Drive	Miramar, FL		—		2,022,152		11,357,143		2,078,093		2,022,152		13,435,235		15,457,387		3,478,905	1990	40 yrs.
3350 SW 148th Avenue	Miramar, FL		—		2,960,511		—		19,294,616		2,980,689		19,274,437		22,255,127		4,341,655	2000	40 yrs.
300 Fellowship Road	Mt Laurel, NJ		—		—		—		7,330,090		1,098,904		6,231,186		7,330,090		420,257	2004	40 yrs.
302 Fellowship Road	Mt Laurel, NJ		—		1,512,120		—		2,801,598		539,060		3,774,658		4,313,718		88,186	2001	40 yrs.
3001 Leadenhall Road	Mt Laurel, NJ		—		1,925,719		191,390		10,965,396		1,936,489		11,146,016		13,082,505		879,074	2003	40 yrs.
350 Fellowship Road	Mt Laurel, NJ		—		2,960,159		1,449,611		3,535,489		2,966,686		4,978,573		7,945,259		9,251	2006	40 yrs.
4001 Leadenhall Road	Mt. Laurel, NJ		—		3,207,885		391,167		18,844,592		2,784,694		19,658,950		22,443,644		2,744,761	2002	40 yrs.
3000 Atrium Way	Mt. Laurel, NJ		—		500,000		4,500,000		4,498,462		512,018		8,986,445		9,498,462		3,980,005	1987	40 yrs.
11000, 15000 Commerce Parkway	Mt. Laurel, NJ		—		310,585		4,394,900		254,820		311,950		4,648,355		4,960,305		1,942,493	1985	40 yrs.
12000, 14000 Commerce Parkway	Mt. Laurel, NJ		—		361,800		3,285,817		783,587		362,855		4,068,349		4,431,204		1,426,020	1985	40 yrs.
16000, 18000 Commerce Parkway	Mt. Laurel, NJ		—		289,700		2,512,683		573,915		290,545		3,085,753		3,376,298		1,126,581	1985	40 yrs.
1300 Route 73 North	Mt. Laurel, NJ		—		449,400		3,074,850		1,704,275		450,558		4,777,967		5,228,525		1,530,369	1988	40 yrs.
6000 Commerce Parkway	Mt. Laurel, NJ		—		234,151		2,022,683		925,491		234,151		2,948,174		3,182,325		811,584	1985	40 yrs.
7000 Commerce Parkway	Mt. Laurel, NJ		—		260,014		2,236,684		427,949		260,014		2,664,633		2,924,647		746,489	1984	40 yrs.
8000 Commerce Parkway	Mt. Laurel, NJ		—		234,814		1,995,098		317,849		234,814		2,312,947		2,547,761		604,374	1983	40 yrs.
9000 Commerce Parkway	Mt. Laurel, NJ		—		286,587		2,474,820		595,749		286,587		3,070,569		3,357,156		1,010,672	1983	40 yrs.
1000 Briggs Road	Mt. Laurel, NJ		—		288,577		2,546,537		1,450,255		288,577		3,996,792		4,285,369		1,422,723	1986	40 yrs.
1025 Briggs Road	Mt. Laurel, NJ		773,515		430,990		3,714,828		1,320,195		430,990		5,035,023		5,466,013		1,496,665	1987	40 yrs.
1020 Briggs Road	Mt. Laurel, NJ		—		494,334		—		3,162,455		569,184		3,087,606		3,656,789		825,078	1999	40 yrs.
2000 Crawford Place	Mt. Laurel, NJ		—		310,831		2,797,744		2,814,041		310,831		5,611,785		5,922,616		2,067,243	1986	40 yrs.
5000 Dearborn Court	Mt. Laurel, NJ		—		1,057,763		4,191,827		531,794		1,057,763		4,723,621		5,781,384		1,129,274	1988	40 yrs.
1001 Briggs Road	Mt. Laurel, NJ		—		701,705		3,505,652		2,115,996		701,705		5,621,649		6,323,354		1,805,100	1986	40 yrs.
1015 Briggs Road	Mt. Laurel, NJ		—		356,987		—		3,666,093		470,659		3,552,421		4,023,080		792,151	2000	40 yrs.
17000 Commerce Parkway	Mt. Laurel, NJ		—		144,515		—		3,010,679		144,515		3,010,679		3,155,194		691,482	2001	40 yrs.
9401-9443 Science Center Drive	New Hope, MN		—		431,295		3,888,684		480,123		510,064		4,290,038		4,800,102		1,115,258	1989	40 yrs.
6 Terry Drive	Newtown, PA		—		622,029		2,228,851		828,769		622,205		3,057,443		3,679,648		824,454	1981	40 yrs.
550-590 Hale Avenue	Oakdale, MN		—		765,535		3,488,754		510,819		766,390		3,998,718		4,765,107		847,827	1996	40 yrs.
1879 Lamont Avenue	Odenton, MD		—		1,976,000		8,099,579		3,032,136		2,011,030		11,096,685		13,107,715		524,714	2004	40 yrs.
350 Winmeyer Avenue	Odenton, MD		—		1,778,400		7,289,165		1,924,628		1,809,927		9,182,266		10,992,193		388,054	2004	40 yrs.
9600 Satellite Boulevard	Orlando, FL		—		252,850		1,297,923		62,116		252,850		1,360,039		1,612,889		336,709	1989	40 yrs.
9700 Satellite Boulevard	Orlando, FL		—		405,362		1,146,546		350,999		405,362		1,497,545		1,902,907		387,847	1989	40 yrs.
1902 Cypress Lake Drive	Orlando, FL		—		523,512		3,191,790		880,341		538,512		4,057,131		4,595,643		1,116,154	1989	40 yrs.
9550 Satellite Boulevard	Orlando, FL		—		574,831		—		2,330,526		587,319		2,318,038		2,905,357		594,480	1999	40 yrs.
10511 & 10611 Satellite Boulevard	Orlando, FL		—		517,554		2,568,186		405,635		522,991		2,968,384		3,491,375		848,378	1985	40 yrs.
1400-1440 Central Florida Parkway	Orlando, FL		—		518,043		2,561,938		337,852		518,043		2,899,790		3,417,833		713,673	1962	40 yrs.
2216 Directors Row	Orlando, FL		—		453,918		2,572,202		27,479		453,918		2,599,681		3,053,599		555,992	1998	40 yrs.
3701-3727 Vineland Road	Orlando, FL		—		767,929		2,096,504		430,124		767,929		2,526,628		3,294,557		549,972	1985	40 yrs.
2400 South Lake Orange Drive	Orlando, FL		—		385,964		—		2,461,057		642,427		2,204,594		2,847,021		355,814	2001	40 yrs.
6501 Lee Vista Boulevard	Orlando, FL		—		903,701		—		5,560,142		925,671		5,538,172		6,463,843		746,789	2001	40 yrs.
2416 Lake Orange Drive	Orlando, FL		—		535,964		—		3,166,980		704,800		2,998,143		3,702,944		741,196	2002	40 yrs.
10771 Palm Bay Drive	Orlando, FL		—		664,605		—		2,362,814		685,383		2,342,035		3,027,419		299,543	2001	40 yrs.
10003 Satellite Boulevard	Orlando, FL		—		680,312		2,120,754		1,498,831		680,312		3,619,585		4,299,897		366,260	2003	40 yrs.
1090 Gills Drive	Orlando, FL		—		878,320		2,558,833		1,872,262		878,320		4,431,096		5,309,415		310,566	2003	40 yrs.
2202 Taft-Vineland Road	Orlando, FL		—		—		—		6,630,654		1,283,713		5,346,941		6,630,654		565,267	2004	40 yrs.
South Center Land-Phase II	Orlando, FL		—		838,853		—		4,047,910		767,953		4,118,811		4,886,763		36,846	2006	40 yrs.
7315 Kingspointe Parkway	Orlando, FL		—		1,931,697		6,388,203		2,479,134		1,932,004		8,867,030		10,799,034		589,186	2004	40 yrs.
2351 Investors Row	Orlando, FL		—		2,261,924		7,496,249		124,169		2,263,211		7,619,131		9,882,342		376,159	2004	40 yrs.

101

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										Date of
								Subsequent		Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
2256 Taft-Vineland Road	Orlando, FL		—		467,296		—		2,462,307		825,673		2,103,930		2,929,603		104,125	2005	40 yrs.
1950 Summit Park Drive	Orlando, FL		—		2,573,700		17,478,646		531,233		2,583,667		17,999,912		20,583,579		791,297	2005	40 yrs.
1958 Summit Park Drive	Orlando, FL		—		2,573,961		11,206,937		8,761,919		2,583,216		19,959,601		22,542,817		892,725	2005	40 yrs.
6200 Lee Vista Boulevard	Orlando, FL		—		1,423,584		6,399,510		84,494		1,435,301		6,472,287		7,907,588		67,921	2006	40 yrs.
7022 TPC Drive	Orlando, FL		—		1,443,510		6,845,559		357,904		1,457,286		7,189,688		8,646,973		—	2006	40 yrs.
7100 TPC Drive	Orlando, FL		—		1,431,489		7,948,341		203,122		1,445,807		8,137,144		9,582,951		—	2006	40 yrs.
7101 TPC Drive	Orlando, FL		—		1,553,537		5,301,499		225,850		1,570,863		5,510,023		7,080,886		—	2006	40 yrs.
N26 W23445 Paul Road	Pewaukee, WI		—		561,904		1,928,064		113,241		561,904		2,041,305		2,603,209		357,110	1985	40 yrs.
8801 Tinicum Boulevard	Philadelphia, PA		—		2,474,031		—		43,598,952		125,087		45,947,896		46,072,983		12,300,012	1997	40 yrs.
3 Franklin Plaza	Philadelphia, PA		—		2,483,144		—		32,150,134		2,514,519		32,118,759		34,633,278		6,127,052	1999	40 yrs.
4751 League Island Boulevard	Philadelphia, PA		—		992,965		331,924		6,753,197		1,022,081		7,056,006		8,078,087		573,955	2003	40 yrs.
1 Crescent Drive	Philadelphia, PA		—		567,280		—		12,752,342		347,892		12,971,730		13,319,622		57,493	2004	40 yrs.
9801 80th Avenue	Pleasant Prairie, WI		—		1,692,077		7,934,794		62,495		1,689,726		7,999,640		9,689,366		1,617,933	1994	40 yrs.
2250 Hickory Road	Plymouth Meeting, PA		—		1,015,851		9,175,555		2,338,832		1,032,507		11,497,732		12,530,239		2,838,418	1985	40 yrs.
2905 Northwest Boulevard	Plymouth, MN		—		516,920		4,646,342		1,702,547		516,920		6,348,890		6,865,809		1,853,696	1983	40 yrs.
2800 Campus Drive	Plymouth, MN		—		395,366		3,554,512		1,008,452		395,366		4,562,964		4,958,330		1,357,056	1985	40 yrs.
2955 Xenium Lane	Plymouth, MN		—		151,238		1,370,140		401,075		151,238		1,771,215		1,922,453		605,963	1985	40 yrs.
2920 Northwest Boulevard	Plymouth, MN		—		392,026		3,433,678		655,417		384,235		4,096,886		4,481,121		1,151,892	1997	40 yrs.
14630-14650 28th Avenue North	Plymouth, MN		—		198,205		1,793,422		644,591		198,205		2,438,013		2,636,218		669,648	1978	40 yrs.
2800 Northwest Boulevard	Plymouth, MN		—		1,934,438		10,952,503		484,440		1,934,438		11,436,943		13,371,380		2,695,022	1995	40 yrs.
9600 54th Avenue	Plymouth, MN		—		332,317		3,077,820		1,075,534		332,317		4,153,354		4,485,671		931,060	1998	40 yrs.
1500 SW 5th Court	Pompano Beach, FL		—		972,232		3,892,085		245,724		972,232		4,137,810		5,110,041		987,730	1957	40 yrs.
1651 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		126,108		203,247		937,202		1,140,449		283,351	1990	40 yrs.
1601 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		403,403		203,247		1,214,496		1,417,743		301,897	1990	40 yrs.
1501 SW 5th Court	Pompano Beach, FL		—		203,247		811,093		40,396		203,247		851,489		1,054,737		204,419	1990	40 yrs.
1400 SW 6th Court	Pompano Beach, FL		—		1,157,049		4,620,956		308,055		1,157,049		4,929,010		6,086,060		1,155,658	1986	40 yrs.
1405 SW 6th Court	Pompano Beach, FL		—		392,138		1,565,787		126,972		392,138		1,692,759		2,084,897		403,837	1985	40 yrs.
595 SW 13th Terrace	Pompano Beach, FL		—		359,933		1,437,116		95,541		359,933		1,532,657		1,892,590		356,011	1984	40 yrs.
601 SW 13th Terrace	Pompano Beach, FL		—		164,413		655,933		151,781		164,413		807,714		972,127		184,683	1984	40 yrs.
605 SW 16th Terrace	Pompano Beach, FL		—		310,778		1,238,324		307,582		310,178		1,546,507		1,856,684		319,660	1965	40 yrs.
4300 Carolina Avenue	Richmond, VA		—		2,007,717		14,927,608		555,417		2,009,136		15,481,606		17,490,742		4,505,494	1985	40 yrs.
301 Hill Carter Parkway	Richmond, VA		—		659,456		4,836,010		625		659,456		4,836,635		5,496,091		1,430,892	1989	40 yrs.
4001 Carolina Avenue	Richmond, VA		—		29,443		215,914		305,691		29,443		521,605		551,048		122,714	1935	40 yrs.
5600-5626 Eastport Boulevard	Richmond, VA		—		489,941		3,592,900		389,883		489,941		3,982,783		4,472,724		1,217,321	1989	40 yrs.
5650-5674 Eastport Boulevard	Richmond, VA		—		644,384		4,025,480		235,079		644,384		4,260,559		4,904,943		1,393,734	1990	40 yrs.
5700 Eastport Boulevard	Richmond, VA		—		408,729		2,697,348		803,670		408,729		3,501,018		3,909,747		984,143	1990	40 yrs.
4101-4127 Carolina Avenue	Richmond, VA		—		310,854		2,279,597		567,636		310,854		2,847,233		3,158,087		768,190	1973	40 yrs.
4201-4261 Carolina Avenue	Richmond, VA		—		693,203		5,083,493		1,305,385		693,203		6,388,878		7,082,081		1,911,966	1975	40 yrs.
4263-4299 Carolina Avenue	Richmond, VA		—		256,203		2,549,649		1,647,276		256,203		4,196,925		4,453,128		1,163,759	1976	40 yrs.
4301-4335 Carolina Avenue	Richmond, VA		—		223,696		1,640,435		1,920,216		223,696		3,560,651		3,784,347		546,076	1978	40 yrs.
4337-4379 Carolina Avenue	Richmond, VA		—		325,303		2,385,557		880,278		325,303		3,265,835		3,591,138		1,282,851	1979	40 yrs.
4501-4549 Carolina Avenue	Richmond, VA		—		486,166		3,565,211		471,129		486,166		4,036,340		4,522,506		1,177,796	1981	40 yrs.
4551-4593 Carolina Avenue	Richmond, VA		—		474,360		3,478,646		272,695		474,360		3,751,341		4,225,701		1,087,264	1982	40 yrs.
4601-4643 Carolina Avenue	Richmond, VA		—		652,455		4,784,675		507,154		652,455		5,291,829		5,944,284		1,738,991	1985	40 yrs.
4645-4683 Carolina Avenue	Richmond, VA		—		404,616		2,967,187		1,079,890		404,616		4,047,077		4,451,693		1,760,935	1985	40 yrs.
4447-4491 Carolina Avenue	Richmond, VA		—		454,056		2,729,742		293,897		454,056		3,023,639		3,477,695		958,366	1987	40 yrs.
4401-4445 Carolina Avenue	Richmond, VA		—		615,038		4,510,272		397,983		615,038		4,908,255		5,523,293		1,459,049	1988	40 yrs.
2300 East Parham Road	Richmond, VA		—		221,947		1,011,088		2,443		221,947		1,013,531		1,235,478		325,610	1988	40 yrs.
5601-5659 Eastport Boulevard	Richmond, VA		*		705,660		—		4,718,370		720,100		4,703,930		5,424,030		1,653,017	1996	40 yrs.
5900 Eastport Boulevard	Richmond, VA		—		676,661		—		4,818,232		687,898		4,806,995		5,494,893		1,265,045	1997	40 yrs.
4717-4729 Eubank Road	Richmond, VA		*		449,447		3,294,697		546,131		452,263		3,838,011		4,290,274		1,127,629	1978	40 yrs.
4263F-N. Carolina Avenue	Richmond, VA		—		91,476		—		1,643,294		91,599		1,643,171		1,734,770		446,236	1975	40 yrs.
510 Eastpark Court	Richmond, VA		—		261,961		2,110,874		316,688		262,210		2,427,312		2,689,523		800,917	1989	40 yrs.
520 Eastpark Court	Richmond, VA		—		486,118		4,083,582		336,701		486,598		4,419,803		4,906,401		1,203,497	1989	40 yrs.
5701-5799 Eastport Boulevard	Richmond, VA		—		694,644		—		5,651,198		700,503		5,645,340		6,345,842		1,630,865	1998	40 yrs.
530 Eastpark Court	Richmond, VA		—		266,883		—		3,068,901		334,772		3,001,012		3,335,784		1,026,669	1999	40 yrs.
3829-3855 Gaskins Road	Richmond, VA		—		364,165		3,264,114		39,764		364,165		3,303,879		3,668,044		728,169	1988	40 yrs.
10800 Nuckols Boulevard	Richmond, VA		—		1,432,462		—		14,420,839		1,794,162		14,059,139		15,853,301		2,428,731	2000	40 yrs.
100 Westgate Parkway	Richmond, VA		—		1,140,648		101,824		8,408,649		1,456,084		8,195,037		9,651,121		1,230,590	2001	40 yrs.
200 Westgate Parkway	Richmond, VA		—		1,623,612		—		5,900,380		1,072,797		6,451,195		7,523,992		923,936	2002	40 yrs.
1001 Boulders Parkway	Richmond, VA		—		2,073,739		5,634,796		892,592		2,079,643		6,521,484		8,601,127		257,425	2005	40 yrs.
7400 Beaufont Springs Drive	Richmond, VA		—		808,581		7,273,850		837,566		810,743		8,109,253		8,919,996		304,103	2005	40 yrs.
1100 Boulders Parkway	Richmond, VA		—		1,276,936		12,052,192		709,835		1,280,662		12,758,301		14,038,963		181,763	2005	40 yrs.

102

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
12 S. Third Street	Richmond, VA		—		40,539		184,682		14,061			40,539		198,743		239,282		57,182	1900	40 yrs.
2020 US Highway 301 South	Riverview, FL		—		1,233,639		13,608,485		1,144			1,233,800		13,609,469		14,843,268		158,254	2006	40 yrs.
6532 Judge Adams Road	Rock Creek, NC		—		354,903		—		3,740,561			399,988		3,695,477		4,095,464		996,239	1997	40 yrs.
6530 Judge Adams Road	Rock Creek, NC		—		305,821		—		4,458,256			335,061		4,429,015		4,764,076		903,045	1999	40 yrs.
6509 Franz Warner Parkway	Rock Creek, NC		—		360,494		—		2,829,679			372,494		2,817,679		3,190,173		506,475	2001	40 yrs.
38100 Ecorse Road	Romulus, MI		—		955,063		—		8,900,259			853,063		9,002,259		9,855,322		1,360,828	2000	40 yrs.
38000 Ecourse Road	Romulus, MI		—		807,660		—		12,732,352			1,053,337		12,486,675		13,540,012		2,529,890	2001	40 yrs.
6505 Cogswell Road	Romulus, MI		—		594,523		—		17,282,074			4,195,047		13,681,551		17,876,598		2,078	2005	40 yrs.
38100 Ecorse Road Expansion	Romulus, MI		—		—		—		1,538,262			—		1,538,262		1,538,262		28,999	2005	40 yrs.
8501 East Raintree Drive	Scottsdale, AZ		—		4,076,412		—		27,576,974			4,115,137		27,538,249		31,653,386		459,720	2005	40 yrs.
26911-26957 Northwestern Highway	Southfield, MI		—		7,799,515		66,268,817		8,771,128			7,799,515		75,039,945		82,839,460		18,643,965	1985	40 yrs.
6950 Harbor View Blvd	Suffolk, VA		—		929,844		—		6,197,285			794,848		6,332,282		7,127,129		96,284	2004	40 yrs.
13650 NW 8th Street	Sunrise, FL		—		558,223		2,171,930		99,234			558,251		2,271,136		2,829,387		624,170	1991	40 yrs.
13630 NW 8th Street	Sunrise, FL		—		659,797		2,596,275		772,671			659,825		3,368,917		4,028,742		883,443	1991	40 yrs.
1301 International Parkway	Sunrise, FL		—		5,100,162		24,219,956		1,264,535			5,100,791		25,483,861		30,584,653		—	2006	40 yrs.
5501-5519 Pioneer Park Boulevard	Tampa, FL		—		162,000		1,613,000		637,115			262,416		2,149,700		2,412,115		605,615	1981	40 yrs.
5690-5694 Crenshaw Street	Tampa, FL		—		181,923		1,812,496		217,470			181,923		2,029,967		2,211,890		598,290	1979	40 yrs.
3102,3104,3110 Cherry Palm Drive	Tampa, FL		—		503,767		2,787,585		1,948,416			982,207		4,257,561		5,239,768		1,234,238	1986	40 yrs.
8401-8408 Benjamin Road	Tampa, FL		—		789,651		4,454,648		1,974,397			769,789		6,448,907		7,218,696		2,203,217	1986	40 yrs.
3501 Riga Boulevard	Tampa, FL		—		617,289		3,048,379		454,271			617,289		3,502,650		4,119,939		1,026,027	1987	40 yrs.
111 Kelsey Lane	Tampa, FL		—		359,540		1,461,850		934,298			359,540		2,396,148		2,755,688		729,735	1990	40 yrs.
7930, 8010-20 Woodland Center Boulevard	Tampa, FL		*		1,408,478		5,247,246		911,481			1,408,478		6,158,727		7,567,205		1,671,637	1990	40 yrs.
7920 Woodland Center Boulevard	Tampa, FL		*		1,382,648		2,445,444		(276,436	)		1,082,648		2,469,008		3,551,656		607,836	1997	40 yrs.
8154-8198 Woodland Center Boulevard	Tampa, FL		*		399,088		2,868,834		441,572			399,088		3,310,406		3,709,494		967,807	1988	40 yrs.
8112-42 Woodland Center Boulevard	Tampa, FL		*		513,263		3,230,239		662,940			513,263		3,893,180		4,406,442		889,518	1995	40 yrs.
8212 Woodland Center Boulevard	Tampa, FL		*		820,882		2,322,720		14,210			820,882		2,336,931		3,157,813		563,816	1996	40 yrs.
131 Kelsey Lane	Tampa, FL		—		511,463		—		4,455,291			559,527		4,407,227		4,966,754		1,699,463	1985	40 yrs.
7724 Woodland Center Boulevard	Tampa, FL		—		235,893		—		2,285,235			235,894		2,285,234		2,521,128		611,383	1998	40 yrs.
7802-50 Woodland Center Boulevard	Tampa, FL		—		357,364		—		2,711,761			506,949		2,562,177		3,069,125		1,019,925	1999	40 yrs.
7852-98 Woodland Center Boulevard	Tampa, FL		—		357,364		—		2,708,532			506,949		2,558,947		3,065,896		965,711	1999	40 yrs.
8921 Brittany Way	Tampa, FL		—		224,369		1,063,882		965,576			254,493		1,999,334		2,253,827		446,634	1998	40 yrs.
5250 Eagle Trail Drive	Tampa, FL		—		952,860		—		3,581,057			952,860		3,581,057		4,533,916		739,406	1998	40 yrs.
7725 Woodland Center Boulevard	Tampa, FL		—		553,335		—		3,351,584			771,501		3,133,418		3,904,919		637,170	1999	40 yrs.
8001 Woodland Center Boulevard	Tampa, FL		—		350,406		—		2,488,771			438,061		2,401,117		2,839,178		517,144	1999	40 yrs.
4630 Woodland Corporate Boulevard	Tampa, FL		—		943,169		—		12,592,708			1,560,099		11,975,778		13,535,877		2,279,782	2000	40 yrs.
701-725 South US Hwy 301	Tampa, FL		—		419,683		—		3,817,508			661,680		3,575,511		4,237,191		1,130,146	2000	40 yrs.
4502 Woodland Corporate Boulevard	Tampa, FL		—		—		—		4,005,900			1,071,535		2,934,365		4,005,900		528,300	1999	40 yrs.
9001-9015 Brittany Way	Tampa, FL		—		209,841		—		1,575,906			364,514		1,421,234		1,785,748		334,370	2000	40 yrs.
4508 Woodland Corporate Boulevard	Tampa, FL		—		498,598		—		3,057,752			556,887		2,999,463		3,556,350		573,747	2000	40 yrs.
7622 Bald Cypress Place	Tampa, FL		—		—		—		1,305,584			300,000		1,005,584		1,305,584		171,340	2000	40 yrs.
901-933 US Highway 301 South	Tampa, FL		—		500,391		—		4,032,028			840,314		3,692,105		4,532,419		978,648	2001	40 yrs.
4503 Woodland Corporate Boulevard	Tampa, FL		—		—		—		3,454,328			619,913		2,834,415		3,454,328		414,660	2002	40 yrs.
4505 Woodland Corporate Boulevard	Tampa, FL		—		—		—		3,110,391			716,594		2,393,797		3,110,391		528,279	2002	40 yrs.
4511 Woodland Corporate Boulevard	Tampa, FL		—		—		—		2,840,466			686,594		2,153,872		2,840,466		386,162	2002	40 yrs.
7621 Bald Cypress Place (Bldg N)	Tampa, FL		—		—		—		1,482,613			447,498		1,035,115		1,482,613		121,194	2001	40 yrs.
4520 Seedling Circle	Tampa, FL		—		854,797		42,131		2,721,233			854,797		2,763,364		3,618,161		185,881	2003	40 yrs.
501 US Highway 301 South	Tampa, FL		—		898,884		—		3,499,853			900,508		3,498,229		4,398,737		261,909	2004	40 yrs.
9002-9036 Brittany Way	Tampa, FL		—		492,320		—		3,964,055			899,284		3,557,092		4,456,375		343,327	2004	40 yrs.
8900-34 Brittany Was	Tampa, FL		—		537,194		—		4,248,195			978,019		3,807,371		4,785,389		14,913	2005	40 yrs.
200-34 Kelsey Lane	Tampa, FL		—		330,097		—		3,623,009			933,362		3,019,744		3,953,106		90,303	2005	40 yrs.
8725 Henderson Road	Tampa, FL		—		3,171,906		19,126,156		(3,957	)		3,167,787		19,126,318		22,294,105		162,502	2006	40 yrs.
8735 Henderson Road	Tampa, FL		—		3,170,247		18,749,873		(18,416	)		3,166,130		18,735,573		21,901,703		160,241	2006	40 yrs.
8705 Henderson Road	Tampa, FL		—		4,309,467		23,688,189		21,765			4,303,870		23,715,550		28,019,421		299,401	2006	40 yrs.
8715 Henderson Road	Tampa, FL		—		3,348,258		18,325,427		(4,177	)		3,343,910		18,325,599		21,669,509		133,957	2006	40 yrs.
8745 Henderson Road	Tampa, FL		—		2,053,105		11,158,441		11,901			2,050,439		11,173,008		13,223,447		95,859	2006	40 yrs.
7851-7861 Woodland Center Blvd	Tampa, FL		—		549,043		2,242,204		95,559			548,905		2,337,901		2,886,806		17,050	2006	40 yrs.
1650 Research Drive	Troy, MI		—		763,067		7,201,677		1,328,964			763,067		8,530,641		9,293,708		1,885,343	1985	40 yrs.
1775 Research Drive	Troy, MI		—		331,422		2,788,073		648,020			331,422		3,436,093		3,767,515		789,861	1985	40 yrs.
1875 Research Drive	Troy, MI		—		329,863		2,774,006		378,366			329,863		3,152,372		3,482,235		747,631	1986	40 yrs.
1850 Research Drive	Troy, MI		—		781,054		7,364,300		2,083,387			781,054		9,447,687		10,228,741		2,340,733	1986	40 yrs.
1965 Research Drive	Troy, MI		—		419,090		3,578,928		346,058			419,090		3,924,986		4,344,077		1,054,465	1987	40 yrs.
1960 Research Drive	Troy, MI		—		419,146		3,579,166		635,418			419,146		4,214,584		4,633,730		1,115,137	1987	40 yrs.
1101 Allen Drive	Troy, MI		—		98,144		887,935		326,837			98,148		1,214,768		1,312,916		450,766	1974	40 yrs.

103

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized											Date of
								Subsequent			Gross Amount Carried at End Period						Accumulated		Construction	Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(Years)
OPERATING PROPERTIES
1151 Allen Drive	Troy, MI		—		164,483		1,486,220		438,250			164,486		1,924,467		2,088,953		529,177	1974	40 yrs.
1300 Rankin Street	Troy, MI		—		134,090		1,212,752		498,931			134,094		1,711,679		1,845,773		632,783	1979	40 yrs.
1350 Rankin Street	Troy, MI		—		111,776		1,011,497		168,477			111,779		1,179,971		1,291,750		298,176	1979	40 yrs.
1376-1400 Rankin Street	Troy, MI		—		134,292		1,213,626		313,374			134,296		1,526,996		1,661,292		384,503	1979	40 yrs.
1352-1374 Rankin Street	Troy, MI		—		153,275		1,385,098		336,226			153,279		1,721,321		1,874,599		463,034	1979	40 yrs.
1324-1346 Rankin Street	Troy, MI		—		134,090		1,212,214		161,394			134,094		1,373,604		1,507,698		313,707	1979	40 yrs.
1301-1307 Rankin Street	Troy, MI		—		111,776		1,011,121		183,667			111,779		1,194,785		1,306,564		284,538	1978	40 yrs.
1409 Allen Drive	Troy, MI		—		142,370		1,286,048		430,773			142,374		1,716,818		1,859,191		479,131	1978	40 yrs.
1334 Maplelawn Road	Troy, MI		—		124,296		1,122,802		54,070			124,300		1,176,868		1,301,168		275,534	1983	40 yrs.
1290 Maplelawn Road	Troy, MI		—		85,321		771,621		223,628			85,325		995,245		1,080,570		231,123	1984	40 yrs.
1070 Maplelawn Road	Troy, MI		—		68,560		620,595		106,856			68,563		727,447		796,011		189,305	1982	40 yrs.
950 Maplelawn Road	Troy, MI		—		252,429		2,265,259		181,631			252,433		2,446,886		2,699,319		596,700	1982	40 yrs.
894 Maplelawn Road	Troy, MI		—		181,749		1,632,243		763,375			181,753		2,395,615		2,577,367		698,188	1986	40 yrs.
1311-1331 Maplelawn Road	Troy, MI		—		125,407		1,132,810		204,037			125,410		1,336,843		1,462,254		421,557	1986	40 yrs.
2354 Bellingham Street	Troy, MI		—		87,340		789,817		19,928			87,344		809,741		897,085		191,097	1990	40 yrs.
2360 Bellingham Street	Troy, MI		—		87,340		789,817		58,250			87,344		848,063		935,407		194,192	1985	40 yrs.
1600-1630 East Big Beaver Road	Troy, MI		—		1,454,406		2,952,884		53,694			1,458,737		3,002,247		4,460,984		537,518	1982	40 yrs.
2600 Bellingham Drive	Troy, MI		—		1,796,869		—		4,095,318			1,938,746		3,953,441		5,892,187		1,107,377	2002	40 yrs.
2710 Bellingham Drive	Troy, MI		—		1,796,869		—		4,721,835			1,938,746		4,579,958		6,518,704		1,253,476	2002	40 yrs.
3432 Holland Road	Virginia Beach, VA		—		173,527		790,515		2,462			173,527		792,977		966,504		234,111	1989	40 yrs.
2809 South Lynnhaven Road	Virginia Beach, VA		—		953,590		6,142,742		1,100,609			953,590		7,243,352		8,196,941		1,822,981	1987	40 yrs.
200 Golden Oak Court	Virginia Beach, VA		—		1,116,693		6,770,480		1,126,390			1,116,693		7,896,870		9,013,562		2,005,654	1988	40 yrs.
208 Golden Oak Court	Virginia Beach, VA		—		965,177		6,728,717		1,129,993			965,177		7,858,710		8,823,888		2,052,497	1989	40 yrs.
484 Viking Drive	Virginia Beach, VA		—		891,753		3,607,890		553,685			891,753		4,161,575		5,053,327		1,028,787	1987	40 yrs.
629 Phoenix Drive	Virginia Beach, VA		—		371,694		2,108,097		243,169			371,694		2,351,266		2,722,960		559,043	1996	40 yrs.
5700 Cleveland Street	Virginia Beach, VA		—		700,112		9,592,721		1,917,901			700,564		11,510,169		12,210,734		3,008,461	1989	40 yrs.
1457 Miller Store Road	Virginia Beach, VA		1,587,598		473,689		2,663,045		603,352			474,746		3,265,341		3,740,086		285,752	2003	40 yrs.
11020 West Plank Court	Wauwatosa, WI		—		464,246		3,230,511		(519,943	)		464,246		2,710,568		3,174,814		533,083	1985	40 yrs.
825 Duportail Road	Wayne, PA		—		5,536,619		16,179,213		1,061,808			5,539,281		17,238,360		22,777,641		2,848,284	1979	40 yrs.
1500 Liberty Ridge	Wayne, PA		—		8,287,555		—		31,280,987			11,636,499		27,932,043		39,568,542		4,177,639	2002	40 yrs.
1200 Liberty Ridge Drive	Wayne, PA		—		6,215,667		—		8,829,577			5,223,660		9,821,584		15,045,244		2,393,281	2001	40 yrs.
11300-90 West Theodore Trecker Way	West Allis, WI		*		500,565		1,591,678		630,627			505,972		2,216,897		2,722,870		48,651	2005	40 yrs.
11548 West Theodore Trecker Way	West Allis, WI		*		660,068		4,640,578		44,656			663,766		4,681,537		5,345,302		181,960	2005	40 yrs.
11420 West Theodore Trecker Way	West Allis, WI		—		348,146		2,057,483		27,202			350,008		2,082,824		2,432,831		80,727	2005	40 yrs.
400-500 Brandywine Parkway	West Chester, PA		—		845,846		6,809,025		453,832			845,846		7,262,857		8,108,703		1,742,042	1988	40 yrs.
600 Brandywine Parkway	West Chester, PA		—		664,899		5,352,410		842,826			664,899		6,195,236		6,860,135		1,575,945	1988	40 yrs.
905 Airport Road	West Chester, PA		—		1,715,000		5,185,000		1,429,527			1,735,012		6,594,515		8,329,527		2,301,424	1988	40 yrs.
Liberty Square Retail Blocks	West Malling, UK		—		559,590		5,113,902		5,761,846			1,408,957		10,026,381		11,435,338		346,459	2006	40 yrs.
3612 La Grange Parkway	Williamsburg, VA		—		—		—		5,687,985			887,234		4,800,752		5,687,985		284,122	2003	40 yrs.
7805 Hudson Road	Woodbury, MN		—		1,279,834		—		10,337,053			1,385,739		10,231,149		11,616,887		1,940,761	2002	40 yrs.

Subtotal Operating Real Estate		$	92,401,473	$	618,631,316	$	1,812,183,416	$	2,061,697,505		$	678,074,971	$	3,814,437,267	$	4,492,512,238	$	806,308,940

104

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized										date of
								Subsequent		Gross Amount Carried at End of Period						Accumulated		Construction	Depreciable
				Initial Cost				to		Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition		Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(years)
DEVELOPMENT PROPERTIES
8400 Industrial Boulevard	Allentown, PA	$	—	$	6,883,389	$	—	$	25,444,359	$	—	$	32,327,747	$	32,327,747	$	—	2005	N/A
3500 High Point Boulevard	Bethlehem, PA		—		289,529		—		2,143,128		—		2,432,657		2,432,657		—	2006	N/A
3450 High Point Boulevard	Bethlehem, PA		—		303,197		—		1,897,360		—		2,200,557		2,200,557		—	2006	N/A
5705 Old Shakopee Road	Bloomington, MN		—		2,113,223		—		1,409,514		—		3,522,737		3,522,737		—	2001	N/A
8201 Industrial Boulevard	Breinigsville, PA		—		2,138,635		—		887,619		—		3,026,254		3,026,254		—	2006	N/A
6220 Old Dobbin Lane	Columbis, MD		—		3,865,848		—		3,117,313		—		6,983,161		6,983,161		—	2006	N/A
7625 Smetana Lane	Eden Prairie, MN		—		4,500,641		—		1,416,645		—		5,917,287		5,917,287		—	2006	N/A
7351 Coca Cola Drive	Elkridge, MD		—		1,897,044		—		4,722,406		—		6,619,450		6,619,450		—	2006	N/A
1100 Virginia Drive	Fort Washington, PA		—		22,612,437		—		18,251,084		—		40,863,521		40,863,521		—	2006	N/A
7 Independence Pointe	Greenville, SC		—		932,484		—		4,353,296		—		5,285,780		5,285,780		—	2006	N/A
45 Brookfield Oaks Drive	Greenville, SC		—		818,114		—		3,151,403		—		3,969,517		3,969,517		—	2006	N/A
116 Pleasant Ridge Road	Greenville, SC		—		1,547,811		—		2,740,234		—		4,288,045		4,288,045		—	2006	N/A
1317 Executive Boulevard	Hampton, VA		—		1,650,423		—		5,221,412		—		6,871,836		6,871,836		—	2006	N/A
600 Industrial Drive	Harrisburg, PA		—		7,743,800		—		24,665,626		—		32,409,426		32,409,426		—	2005	N/A
1498 Eagle Hill Drive	High Point, NC		—		94,274		—		5,688,012		—		5,782,285		5,782,285		—	2005	N/A
4475 Premier Drive	High Point, NC		—		748,693		—		3,600,826		—		4,349,519		4,349,519		—	2006	N/A
7 Walnut Grove Drive	Horsham, PA		—		2,631,696		—		9,130,339		—		11,762,035		11,762,035		—	2006	N/A
1646 Rankin Road	Houston, TX		—		329,961		—		4,049,825		—		4,379,785		4,379,785		—	2005	N/A
330 Fellowship Road	Mount Laurel, NJ		—		3,730,570		—		3,786,447		—		7,517,017		7,517,017		—	2006	N/A
6923 Lee Vista Boulevard	Orlando, FL		—		903,701		—		2,132,401		—		3,036,102		3,036,102		—	2006	N/A
851 Gills Drive	Orlando, FL		—		267,313		—		305,523		—		572,836		572,836		—	2006	N/A
950 Gills Drive	Orlando, FL		—		356,418		—		269,750		—		626,167		626,167		—	2006	N/A
1000 Gills Drive	Orlando, FL		—		333,873		—		269,171		—		603,044		603,044		—	2006	N/A
17th & JFK Tower	Philadelphia, PA		—		22,430,038		—		236,315,665		—		258,745,703		258,745,703		—	2005	N/A
3900 Westerre Parkway	Richmond, VA		—		392,184		—		10,177,825		—		10,570,009		10,570,009		—	2005	N/A
Renaissance Blvd & Hwy 20	Sturtevant, WI		—		2,484,450		—		8,512,026		—		10,996,476		10,996,476		—	2006	N/A
Bridgeway III Land	Suffolk, VA		—		904,052		—		6,717,091		—		7,621,143		7,621,143		—	2006	N/A
910-926 Chad Lane	Tampa, FL		—		201,771		—		1,986,093		—		2,187,864		2,187,864		—	2006	N/A
150-182 Kelsey Lane	Tampa, FL		—		403,541		—		3,211,780		—		3,615,322		3,615,322		—	2006	N/A
3701 Corporate Parkway	Upper Saucon, PA		—		1,078,674		—		8,445,567		—		9,524,241		9,524,241		—	2005	N/A
42 Kings Hill Avenue	West Malling, UK		—		—		—		19,876,271		—		19,876,271		19,876,271		—	2005	N/A
1 Kings Hill Aveune	West Malling, UK		—		—		—		5,746,898		—		5,746,898		5,746,898		—	2006	N/A
777 Township Line Road	Yardley, PA		—		3,436,013		—		10,636,157		—		14,072,170		14,072,170		—	2005	N/A

Subtotal Development in Progress		$	—	$	98,023,798	$	—	$	440,279,067	$	—	$	538,302,864	$	538,302,864	$	—

105

LIBERTY PROPERTY LIMITED PARTNERSHIP
REAL ESTATE AND ACCUMULATED DEPRECIATION
AS OF DECEMBER 31, 2006


								Costs
								Capitalized											date of
								Subsequent			Gross Amount Carried at End of Period						Accumulated		Construction	Depreciable
				Initial Cost				to			Land and		Building and		Total		Depreciation		or	life
Project	Location	Encumbrances		Land		Building		Acquisition			Improvements		Improvements		12/31/2006		12/31/06		Acquisition	(years)
LAND HELD FOR DEVELOPMENT
Perryman Road Land	Aberdeen, MD	$	—	$	12,046,811	$	—	$	91,099		$	12,137,910	$	—	$	12,137,910	$	—	2005	N/A
LVCC Phase 2 Land	Bethlehem, PA		—		3,148,780		—		1,117,583			4,266,363		—		4,266,363		—	1998	N/A
Lehigh Valley Corporate Center Land	Bethlehem, PA		—		265,842		—		—			265,842		—		265,842		—	1987	N/A
Boca Colannade Yamato Road	Boca Raton, FL		—		3,649,792		—		1,103,719			4,753,511		—		4,753,511		—	1998	N/A
95 Kriner Road	Chambersburg, PA		—		8,662,788		—		7,761,134			16,423,922		—		16,423,922		—	2006	N/A
Battlefield Corp Ctr, Parcel 14	Chesapeake, VA		—		1,532,779		—		6,634			1,539,413		—		1,539,413		—	2006	N/A
Rivers’ Bend Land	Chesterfield, VA		—		1,695,415		—		3,060,359			4,755,773		—		4,755,773		—	1995	N/A
501 Hewlett Packard Way	Chesterfield, VA		—		165,042		—		484,965			650,007		—		650,007		—	1996	N/A
Pleasant Ridge Road Land	Greensboro, NC		—		828,289		—		—			828,289		—		828,289		—	2006	N/A
Southchase Business Park Land	Greenville, SC		—		1,369,712		—		688,157			2,057,869		—		2,057,869		—	1998	N/A
Hunters Green Land	Hagerstown, MD		—		8,942,141		—		246,486			9,188,627		—		9,188,627		—	2006	N/A
Lakefront Plaza II Land	Hampton, VA		157,601		132,785		—		92,936			225,721		—		225,721		—	2001	N/A
Patapsco Valley Business Center	Hanover, MD		—		2,402,322		—		1,118,795			3,521,117		—		3,521,117		—	2004	N/A
Mendenhall Land	High Point, NC		—		1,910,135		—		5,028,104			6,938,239		—		6,938,239		—	1995	N/A
Piedmond Centre Land	High Point, NC		—		866,380		—		526,614			1,392,994		—		1,392,994		—	2006	N/A
Horsham Business Center Land	Horsham, PA		—		80,800		—		455			81,255		—		81,255		—	2005	N/A
Commonwealth Corporate Center Land	Horsham, PA		—		3,047,683		—		19,263			3,066,946		—		3,066,946		—	2005	N/A
Central Green Land	Houston, TX		—		481,229		—		10,440			491,669		—		491,669		—	2001	N/A
Fallbrrok Drive Land	Houston, TX		—		1,990,270		—		15,915			2,006,186		—		2,006,186		—	2006	N/A
Windfern Drive Land	Houston, TX		—		1,222,065		—		4,317			1,226,382		—		1,226,382		—	2006	N/A
Noxell Land	Hunt Valley, MD		—		2,166,068		—		830,242			2,996,310		—		2,996,310		—	2001	N/A
Liberty Business Park Land	Jacksonville, FL		—		448,097		—		90,019			538,116		—		538,116		—	1995	N/A
7024 AC Skinner Parkway	Jacksonville, FL		—		468,643		—		356,309			824,952		—		824,952		—	1995	N/A
Belfort Road	Jacksonville, FL		—		468,643		—		109,850			578,493		—		578,493		—	1998	N/A
Butler Plaza Land	Jacksonville, FL		—		1,303,792		—		1,706,463			3,010,255		—		3,010,255		—	1998	N/A
Salisbury Road Land	Jacksonville, FL		—		880,828		—		699,651			1,580,479		—		1,580,479		—	2000	N/A
Skinner Land Parcel B	Jacksonville, FL		—		2,306,191		—		1,102,674			3,408,865		—		3,408,865		—	2005	N/A
Kent County, UK	Kent County, UK		—		—		—		7,698,943			7,698,943		—		7,698,943		—	2006	N/A
Boulders Business Center Land	Lehigh, PA		—		15,243,107		—		2,660,386			17,903,493		—		17,903,493		—	2004	N/A
Mill Run Land	Lehigh, PA		—		2,882,221		—		49,691			2,931,911		—		2,931,911		—	2005	N/A
Commodore Business Park	Logan, NJ		—		1,458,019		—		—			1,458,019		—		1,458,019		—	1995	N/A
Quarry Ridge Land	Malvern, PA		—		8,398,708		—		1,894,356			10,293,063		—		10,293,063		—	2001	N/A
Park Place South Land	Milwaukee, WI		—		2,362,904		—		1,384,531			3,747,435		—		3,747,435		—	1999	N/A
Monarch Towne Center Land	Mirarar, FL		—		12,327,714		—		—			12,327,714		—		12,327,714		—	2006	N/A
South 27th Street Land	Oak Creek, WI		—		1,594,760		—		97,911			1,692,671		—		1,692,671		—	2006	N/A
Maitland Summit Park Land	Orlando, FL		—		4,388,905		—		33,427			4,422,332		—		4,422,332		—	2005	N/A
Beachline Industrial Park Land	Orlando, FL		—		1,103,606		—		215,454			1,319,061		—		1,319,061		—	2006	N/A
JFK & Arch Parking Lots/Land (West)	Philadelphia, PA		—		4,700,222		—		2,941,184			7,641,406		—		7,641,406		—	2000	N/A
4775 League Island Boulevard	Philadelphia, PA		—		396,833		—		900,027			1,296,860		—		1,296,860		—	2006	N/A
Eastport VII	Richmond, VA		—		787,091		—		844,001			1,631,092		—		1,631,092		—	1997	N/A
Eastport VIII	Richmond, VA		—		379,836		—		6,187			386,023		—		386,023		—	1997	N/A
Eastport IX	Richmond, VA		—		209,856		—		5,096			214,952		—		214,952		—	1997	N/A
Westerre Land	Richmond, VA		—		738,090		—		902,239			1,640,329		—		1,640,329		—	2003	N/A
Romulus Land	Romulus, MI		—		788,338		—		733,216			1,521,554		—		1,521,554		—	1998	N/A
Woodlands Center Land	Sandston, VA		—		928,555		—		290,438			1,218,993		—		1,218,993		—	1996	N/A
Northsight Land (LPLP)	Scottsdale, AZ		—		7,247,107		—		1,130,879			8,377,985		—		8,377,985		—	2005	N/A
Bridgeway II Land	Suffolk, VA		—		678,039		—		1,703,485			2,381,525		—		2,381,525		—	2005	N/A
Suffolk Land	Suffolk, VA		—		2,713,494		—		79,375			2,792,869		—		2,792,869		—	2006	N/A
6119 W. Linebaugh Avenue	Tampa, FL		—		175,886		—		22,320			198,205		—		198,205		—	2000	N/A
Tampa Triangle Land	Tampa, FL		—		10,448,263		—		28,881			10,477,143		—		10,477,143		—	2006	N/A
4631 Woodland Corporate Blvd Land	Tampa, FL		—		1,752,917		—		152,856			1,905,773		—		1,905,773		—	2006	N/A
Big Beaver Airport Land	Troy, MI		—		3,176,411		—		(2,079,253	)		1,097,158		—		1,097,158		—	1999	N/A

Subtotal Land Held for Development		$	157,601	$	147,364,204	$	—	$	47,967,813		$	195,332,017	$	—	$	195,332,017	$	—



Total All Properties		$	92,559,074	$	864,019,318	$	1,812,183,416	$	2,549,944,384		$	873,406,988	$	4,352,740,132	$	5,226,147,119	$	806,308,940


*		Denotes property is collateralized under mortgages with American General, USG Annuity and Life, Metropolitan Life and LaSalle Bank totaling $93.4 million. This amount is not included in the total above.

106

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company’s management, with the participation of its Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on this evaluation, the Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this report, were functioning effectively to provide reasonable assurance that information required to be disclosed by the Company in its reports filed or submitted under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar function, as appropriate to allow timely decisions regarding required disclosure.

Management’s Annual Reports on Internal Control Over Financial Reporting

Management’s Annual Reports on Internal Control Over Financial Reporting, which appear on pages 33 and 72, are incorporated by reference herein.

Attestation Reports of the Registered Public Accounting Firm

The Attestation Reports of the Registered Public Accounting Firm, which appear on pages 34, 35, 73, and 74, are incorporated by reference herein.

Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2006 that have materially affected or are reasonable likely to materially affect the Company’s internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

108

PART III

ITEM 10. TRUSTEES, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

The information required by Item 10 shall be included in the Proxy Statement to be filed relating to the Company’s 2007 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 11. EXECUTIVE COMPENSATION

The information required by Item 11 shall be included in the Proxy Statement to be filed relating to the Company’s 2007 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENTAND RELATED SHAREHOLDER MATTERS

The information required by Item 12 shall be included in the Proxy Statement to be filed relating to the Company’s 2007 Annual Meeting of Shareholders and is incorporated herein by reference.

Securities Authorized for Issuance Under Equity Compensation Plans

The information required by Item 12 shall be included in the Proxy Statement to be filed relating to the Company’s 2007 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND TRUSTEE INDEPENDENCE

The information required by Item 13 shall be included in the Proxy Statement to be filed relating to the Company’s 2007 Annual Meeting of Shareholders and is incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required by Item 14 shall be included in the Proxy Statement to be filed relating to the Company’s 2007 Annual Meeting of Shareholders and is incorporated herein by reference.

109

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

The following consolidated financial statements of Liberty Property Trust and Liberty Property Limited Partnership are included in Item 8.

1. REPORTS OF ERNST & YOUNG LLP, INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM AND CONSOLIDATED FINANCIAL STATEMENTS

Management’s Annual Report on Internal Control Over Financial Reporting — Liberty Property Trust

Reports of Independent Registered Public Accounting Firm — Liberty Property Trust

Financial Statements — Liberty Property Trust

Balance Sheets:
Liberty Property Trust Consolidated as of December 31, 2006 and 2005

Statements of Operations:
Liberty Property Trust Consolidated for the years ended December 31, 2006, 2005, and 2004

Statements of Shareholders’ Equity:
Liberty Property Trust Consolidated for the years ended December 31, 2006, 2005, and 2004

Statements of Cash Flows:
Liberty Property Trust Consolidated for the years ended December 31, 2006, 2005, and 2004

Notes to Consolidated Financial Statements — Liberty Property Trust

Management’s Annual Report on Internal Control Over Financial Reporting — Liberty Property Limited Partnership

Reports of Independent Registered Public Accounting Firm — Liberty Property Limited Partnership

Financial Statements — Liberty Property Limited Partnership

Balance Sheets:
Liberty Property Limited Partnership Consolidated as of December 31, 2006 and 2005

Statements of Operations:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2006, 2005, and 2004

Statements of Owners’ Equity:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2006, 2005, and 2004

Statements of Cash Flows:
Liberty Property Limited Partnership Consolidated for the years ended December 31, 2006, 2005, and 2004

Notes to Consolidated Financial Statements — Liberty Property Limited Partnership

2. FINANCIAL STATEMENT SCHEDULES:

Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2006 for Liberty Property Trust

All other schedules are omitted because they are either not required or the required information is shown in the financial statements or notes thereto.

Schedule III — Real Estate and Accumulated Depreciation as of December 31, 2006 for Liberty Property Limited Partnership

All other schedules are omitted because they are either not required or the required information is shown in the financial statements or notes thereto.

110

3. EXHIBITS

The following exhibits are filed herewith or are incorporated by reference to exhibits previously filed.


Exhibit No.		Description
3.1.1		Amended and Restated Declaration of Trust of the Trust (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Current Report on Form 8-K filed with the Commission on June 25, 1997 (the “June 1997 Form 8-K”)).

3.1.2		Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust Establishing and Fixing the Rights and Preferences of a Series of Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 1 filed with the Trust’s Registration Statement on Form 8-A filed with the Commission on August 8, 1997 (the “August 1997 Form 8-A”)).

3.1.3		Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust Relating to Designation, Preferences, and Rights of Series A Junior Participating Preferred Shares of the Trust. (Incorporated by reference to Exhibit 3.1.3 filed with the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 3l, 1997).

3.1.4		Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 9.25% Series B Cumulative Redeemable Preferred Shares of Beneficial Interest (Incorporated by reference to Exhibit 3.1.2 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1999 (the “Second Quarter 1999 Form 10-Q”)).

3.1.5		Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 9.125% Series C Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2000 (the “First Quarter 2000 Form 10-Q”)).

3.1.6		Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.625% Series D Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2002 (the “Second Quarter 2002 Form 10-Q”)).

3.1.7		Articles of Amendment to Amended and Restated Declaration of Trust of the Trust, filed with the State Department of Assessments and Taxation of Maryland on June 21, 2004. (Incorporated by reference to Exhibit 3.1 with Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2004 (the “Second Quarter 2004 Form 10-Q”)).

3.1.8		Restatement of Amended Restated Declaration of Trust of the Trust, filed with the State Department of Assessments and Taxation of Maryland on June 21, 2004. (Incorporated by reference to Exhibit 3.2 to the Second Quarter 2004 Form 10-Q).

3.1.9		Articles Supplementary, as filed with the State Department of Assessments and Taxation of Maryland on September 1, 2004 (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Commission on September 2, 2004 (the “September 2, 2004 Form 8-K”))

3.1.10		Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 7.00% Series E Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on June 17, 2005 (the “June 17, 2005 Form 8-K”)).

3.1.11		Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 6.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on June 30, 2005 (the “June 30, 2005 Form 8-K”)).

111


Exhibit No.		Description
3.1.12		Articles Supplementary to the Amended and Restated Declaration of Trust of the Trust relating to the 6.65% Series F Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on August 24, 2005.)

3.1.13		Articles Supplementary to the amended and Restated Declaration of Trust of the Trust relating to the 6.70% Series G Cumulative Redeemable Preferred Shares of Beneficial Interest. (Incorporated by reference to Exhibit 3(i) to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on December 18, 2006 (the “December 18, 2006 Form 8-K”)).

3.1.14		Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership, dated as of October 22, 1997 (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 1997 (the “Third Quarter 1997 Form 10-Q”)).

3.1.15		First Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership. (Incorporated by reference to Exhibit 3.1.1 to the Second Quarter 1999 Form 10-Q).

3.1.16		Second Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership. (Incorporated by reference to Exhibit 3.1.2 to the First Quarter 2000 Form 10-Q).

3.1.17		Third Amendment to Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 3.1.2 to the Second Quarter Form 2002 10-Q).

3.1.18		Fourth Amendment to the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership (Incorporated by reference to Exhibit 10 to the September 2, 2004 Form 8-K).

3.1.19		Fifth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the June 17, 2005 8-K).

3.1.20		Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the June 30, 2005 8-K).

3.1.21		Amendment No. 1 to the Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on August 24, 2005.)

3.1.22		Amendment No. 2 to the Sixth Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the Current Report on Form 8-K of the Registrants, filed with the Securities and Exchange Commission on December 23, 2005.)

3.1.23		Seventh Amendment to the Second Amended and Restated Agreement of Limited Partnership of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 10 to the December 18, 2006 Form 8-K).

3.1.24*		Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership.

112


Exhibit No.		Description
3.1.25		Liberty Property Trust First Amended and Restated By-Laws of the Trust, as Amended on April 5, 2006 (Incorporated by reference to Exhibit 3.1 filed with the Commission on April 10, 2006) to the Registrants’ Current Report on Form 8-K.

4.1		Rights Agreement, dated as of December 17, 1997, by and between the Trust and the Rights Agent (Incorporated by reference to Exhibit 1 filed with the Trust’s Registration Statement on Form 8-A filed with the Commission on December 23, 1997).

4.1.1		Amendment, dated April 27, 2006, to the First Amended and Restated Rights Agreement, dated as of September 14, 2004 (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registrant filed with the Commission on May 1, 2006).

4.2		Indenture (the “First Indenture”), dated as of August 14, 1997, between the Operating Partnership, as Obligor, and The First National Bank of Chicago (“First Chicago”), as Trustee (Incorporated by reference to Exhibit 10.1 filed with the Third Quarter 1997 Form 10-Q).

4.3		First Supplemental Indenture, dated as of August 14, 1997, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the First Indenture and relating to $100,000,000 principal amount of the 7.10% Senior Notes due 2004 and $100,000,000 principal amount of the 7.25% Senior Notes due 2007 of the Operating Partnership (Incorporated by reference to Exhibit 10.2 filed with the Third Quarter 1997 Form 10-Q).

4.4		Senior Indenture (the “Second Indenture”), dated as of October 24, 1997, between the Operating Partnership, as Obligor, and First Chicago, as Trustee (Incorporated by reference to Exhibit 10.3 filed with the Third Quarter 1997 Form 10-Q).

4.5		First Supplemental Indenture, dated as of October 24, 1997, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the Second Indenture and relating to the Fixed Rate and Floating Rate Medium-Term Notes due Nine Months or More from Date of Issue of the Operating Partnership (Incorporated by reference to Exhibit 10.4 filed with the Third Quarter 1997 Form 10-Q).

4.6		Second Supplemental Indenture, dated as of January 12, 1998, between the Operating Partnership, as Issuer, and First Chicago, as Trustee, supplementing the Second Indenture, and relating to the Fixed Rate and Floating Rate Medium-Term Notes due Nine Months or more from Date of Issue of the Operating Partnership (Incorporated by reference to Exhibit 4.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1998 (the “First Quarter 1998 Form 10-Q”)).

4.7		Third Supplemental Indenture, dated as of April 20, 1999, between the Operating Partnership, as Issuer, and the First National Bank of Chicago, as Trustee, supplementing the Second Indenture and relating to the $250,000,000 principal amount of 7.75% Senior Notes, due 2009 of the Operating Partnership (Incorporated by reference to Exhibit 4 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 1999 (the “First Quarter 1999 Form 10-Q”)).

4.8		Fourth Supplemental Indenture, dated as of July 26, 2000, between the Operating Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between the Operating Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $200,000,000 principal amount of 8.5% Senior Notes due 2010 of the Operating Partnership. (Incorporated by reference to Exhibit 4 to the Second Quarter 2000 Form 10-Q).

4.9		Fifth Supplemental Indenture, dated as of March 14, 2001, between the Operating Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between the Operating Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $250,000,000 principal amount of 7.25% Senior Notes due 2011 of the Operating Partnership. (Incorporated by reference to Exhibit 4.10 filed with the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 31, 2000).

113


Exhibit No.		Description
4.10		Sixth Supplemental Indenture, dated as of August 22, 2002, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, N.A. (as successor to the First National Bank of Chicago), as Trustee, and relating to $150,000,000 principal amount of 6.375% Senior Notes due 2012 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 3.1.1 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2002 (the “Third Quarter 2002 Form 10-Q”)).

4.11		Seventh Supplemental Indenture, dated as of August 10, 2004, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, National Association. (as successor to the First National Bank of Chicago), as Trustee, and relating to $200,000,000 principal amount of 5.65% Senior Notes due 2012 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.1.2 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2004 (the “Third Quarter 2004 Form 10-Q”)).

4.12		Eighth Supplemental Indenture, dated as of March 1, 2005, between Liberty Property Limited Partnership, as Issuer, and Bank One Trust Company, as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and Bank One Trust Company, National Association (as successor to the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 5.125% Senior Notes due 2015 of Liberty Property Limited Partnership. (Incorporated by reference to Exhibit 4.2 filed with the Registrants’ Current Report on Form 8-K/A filed with the Commission on March 1, 2005 (the “March 2005 Form 8-K”)).

4.13*		Ninth Supplemental Indenture, dated as of December 18, 2006, between Liberty Property Limited Partnership, as Issuer, and The Bank of New York Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and The Bank of New York Trust Company, N.A., (as successor to J.P. Morgan Trust Company, National Association and the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 5.50% Senior Notes due 2016 of Liberty Property Limited Partnership.

4.14		Note, Relating to the Issuance by the Operating Partnership, on January 22, 1998, of $75 Million Principal Amount of its 6.375% Medium-Term Notes due 2013, Putable/Callable 2003 (Incorporated by reference to Exhibit 4.2 filed with the First Quarter 1998 Form 10-Q).

4.15		Note, Relating to the Issuance by the Operating Partnership, on January 23, 1998, of $100 Million Principal Amount of its 7.50% Medium-Term Notes due 2018 (Incorporated by reference to Exhibit 4.3 filed with the First Quarter 1998 Form 10-Q).

4.16		Note, Relating to the Issuance by the Operating Partnership, on June 5, 1998, of $100 Million Principal Amount of its 6.60% Medium-Term Notes due 2002. (Incorporated by reference to Exhibit 4 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 1998 (the “Second Quarter 1998 Form 10-Q”)).

4.17		Note, Relating to the Issuance by the Operating Partnership on November 24, 1998, of $20 Million Principal Amount of its 8.125% Medium-Term Notes due January 15, 2009 (Incorporated by reference to Exhibit 4.11 filed with the Registrants’ Annual Report on Form 10-K for the fiscal year ended December 31, 1998).

10.1		Liberty Property Trust Amended and Restated Share Incentive Plan as amended effective May 18, 2006 (Incorporated by reference to the Registrants Definitive Proxy Statement for the Annual Meeting of Shareholders held on May 18, 2006, filed with the Securities and Exchange Commission on April 18, 2006).

10.2		Contribution Agreement (Incorporated by reference to Exhibit 10.5 filed with the Form S-11).

114


Exhibit No.		Description
10.3		Amended and Restated Limited Partnership Agreements of Pre-existing Pennsylvania Partnerships (Incorporated by reference to Exhibit 10.6 filed with the Form S-11).

10.4		Agreement of Sale for the Acquisition Properties (Incorporated by reference to Exhibit 10.7 filed with the Form S-11).

10.5		Option Agreement and Right of First Offer (Incorporated by reference to Exhibit 10.8 filed with the Form S-11).

10.6		Form of Indemnity Agreement (Incorporated by reference to Exhibit 10.9 filed with the Form S-11).

10.7		Contribution Agreement among the Trust, the Operating Partnership and the Contributing Owners described therein, related to the Lingerfelt Properties (Incorporated by reference to Exhibit 10.1 filed with the Registrants’ Current Report on Form 8-K filed with the Commission on March 3, 1995).

10.8		Amended and Restated Credit Agreement, dated as of December 22, 2005, by and among the Operating Partnership, the Trust, certain affiliated co-borrowers, with Bank of America, N.A. as Administrative Agent, JPMorgan Chase Bank, N.A., as Syndication Agent, Wachovia Bank, National Association, SunTrust Bank and Citizens Bank of Pennsylvania, as Documentation Agents, PNC Bank, National Association and Wells Fargo Bank, National Association, as Managing Agents, Banc of America Securities LLC and J.P. Morgan Securities Inc., as Joint Lead Arrangers and Joint Bookrunners, and the lenders a party thereto. (Incorporated by reference to Exhibit 10.8 filed with Registrants’ Annual Report on Form 10-K for the year ended December 31, 2006.

10.9		Liberty Property Trust — Amended Management Severance Plan. (Incorporated by reference to Exhibit 10.9 filed with Registrants’ Annual Report on Form 10-K for the year ended December 31, 2001).

10.10		Liberty Property Trust — Employee Stock Purchase Plan. (Incorporated by reference to Exhibit 10.14 filed with the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2000).

10.11		Description of Compensation of Non-Employee Trustees. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registrants filed with the Commission on February 23, 2005.)

10.12		Form of Restricted Share Grant under the Liberty Property Trust Amended and Restated Share Incentive Plan. (Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K of the Registrants filed with the Commission on February 24, 2005 (the “February 24, 2005 8-K”)).

10.13		Form of Option Grant under the Liberty Property Trust Amended and Restated Share Incentive Plan. (Incorporated by reference to Exhibit 10.2 to the February 24, 2005 8-K).

10.14		Certain Elements of the Liberty Property Trust Executive Compensation Program. (Incorporated by reference to Exhibit 10.1 to the filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2006).

10.15		Amended and Restated Limited Partnership of Liberty/Commerz 1701 JFK Boulevard Limited Partnership, dated as of April 11, 2006, by and among Liberty Property Philadelphia Corporation IV East, as general partner, and the Operating Partnership and 1701 JFK Boulevard Philadelphia, L.P. as limited partners. (Incorporated by reference to Exhibit 10.3 filed with the Registrants’ Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2006 (the “Second Quarter 2006 Form 10-Q)).

115


Exhibit No.		Description
10.16		NOI Support Agreement, dated as of April 11, 2006, by Liberty Property Limited Partnership in favor of Liberty/Commerz 1701 JFK Boulevard, L.P. and 1701 JFK Boulevard Philadelphia, L.P. (Incorporated by reference to Exhibit 10.4 filed with the Registrants’ Second Quarter 2006 Form 10-Q).

10.17		Completion and Payment Agreement and Guaranty, dated as of April 11, 2006, by the Operating Partnership for the benefit of 1701 JFK Boulevard Philadelphia, L.P. and Liberty/Commerz 1701 JFK Boulevard L.P. (Incorporated by reference to Exhibit 10.5 filed with the Registrants’ Second Quarter 2006 Form 10-Q).

12*		Statement re: Computation of Ratios.

21*		Subsidiaries.

23.1*		Consent of Ernst & Young LLP relating to the Trust.

23.2*		Consent of Ernst & Young LLP relating to the Operating Partnership.

31.1*		Certifications of the Chief Executive Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2*		Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.3*		Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.4*		Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1*		Certifications of the Chief Executive Officer of Liberty Property Trust required under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

32.2*		Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

32.3*		Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

116

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	LIBERTY PROPERTY LIMITED PARTNERSHIP

	BY: Liberty Property Trust General Partner

Date: February 28, 2007	By:	/s/ WILLIAM P. HANKOWSKY

	WILLIAM P. HANKOWSKY
	CHAIRMAN, PRESIDENT AND
	CHIEF EXECUTIVE OFFICER

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.


/s/ WILLIAM P. HANKOWSKY	Chairman of the Board of Trustees, President and Chief Executive Officer (Trustee of the General Partner)	February 28, 2007

William P. Hankowsky

/s/ GEORGE J. ALBURGER, JR.	Executive Vice President and Chief Financial Officer (Trustee of the General Partner)	February 28, 2007

George J. Alburger, Jr.

/s/ M. LEANNE LACHMAN	Trustee of the General Partner	February 28, 2007

M. Leanne Lachman

/s/ FREDERICK F. BUCHHOLZ	Trustee of the General Partner	February 28, 2007

Frederick F. Buchholz

/s/ J. ANTHONY HAYDEN	Trustee of the General Partner	February 28, 2007

J. Anthony Hayden

/s/ DAVID L. LINGERFELT	Trustee of the General Partner	February 28, 2007

David L. Lingerfelt

/s/ JOHN A. MILLER, CLU	Trustee of the General Partner	February 28, 2007

John A. Miller, CLU

/s/ STEPHEN B. SIEGEL	Trustee of the General Partner	February 28, 2007

Stephen B. Siegel

/s/ THOMAS C. DELOACH, JR.	Trustee of the General Partner	February 28, 2007

Thomas C. DeLoach, Jr.

/s/ DANIEL P. GARTON	Trustee of the General Partner	February 28, 2007

Daniel P. Garton

/s/ JOSE A. MEJIA	Trustee of the General Partner	February 28, 2007

Jose A. Mejia

119

EXHIBIT INDEX


Exhibit No.		Description
3.1.24		Amended and Restated Schedule A to the Second Restated and Amended Agreement of Limited Partnership of the Operating Partnership.

4.13		Ninth Supplemental Indenture, dated as of December 18, 2006 between Liberty Property Limited Partnership, as Issuer, and The Bank of New York Trust Company, N.A., as Trustee, supplementing the Senior Indenture, dated as of October 24, 1997, between Liberty Property Limited Partnership, as Obligor, and The Bank of New York Trust Company, N.A., (as successor to J.P. Morgan Trust Company, National Association and the First National Bank of Chicago), as Trustee, and relating to $300,000,000 principal amount of 5.50% Senior Notes due 2016 of Liberty Property Limited Partnership.

12		Statement re: Computation of Ratios.

21		Subsidiaries.

23.1		Consent of Ernst & Young LLP relating to the Trust.

23.2		Consent of Ernst & Young LLP relating to the Operating Partnership.

31.1		Certifications of the Chief Executive Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2		Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.3		Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.4		Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(a) under the Securities Exchange Act of 1934.

32.1		Certifications of the Chief Executive Officer of Liberty Property Trust required under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

32.2		Certifications of the Chief Financial Officer of Liberty Property Trust required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

32.3		Certifications of the Chief Executive Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)

120


	Page
Part I
Item 1. Business		4
Item 1A. Risk Factors		9
Item 1B. Unresolved Staff Comments		17
Item 2. Properties		17
Item 3. Legal Proceedings		19
Item 4. Submission of Matters to a Vote of Security Holders		19

Part II
Item 5. Market for Registrants’ Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities		19
Item 6. Selected Financial Data		20
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		21
Item 7A. Quantitative and Qualitative Disclosures About Market Risk		32
Item 8. Financial Statements and Supplementary Data		32
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		108
Item 9A. Controls and Procedures		108
Item 9B. Other Information		108

Part III
Item 10. Trustees, Executive Officers and Corporate Governance		109
Item 11. Executive Compensation		109
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters		109
Item 13. Certain Relationships and Related Transactions, and Trustee Independence		109
Item 14. Principal Accountant Fees and Services		109

Part IV
Item 15. Exhibits and Financial Statement Schedules		110
Signatures for Liberty Property Trust		118
Signatures for Liberty Property Limited Partnership		119
Exhibit Index		120
Amended and Restated Schedule A
Ninth Supplemental Indenture
Statement re: Computation of Ratios
Subsidiaries
Consent of Independent Registered Public Accounting Firm
Consent of Independent Registered Public Accounting Firm
Certifications of the Chief Executive Officer
Certifications of the Chief Financial Officer
Certifications of the Chief Executive Officer
Certifications of the Chief Financial Officer
Certifications of the Chief Executive Officer
Cerifications of the Chief Financial Officer
Certifications of the Chief Executive Officer
Certifications of the Chief Financial Officer


	General			Limited			Total
	Partner’s			Partners’			Owners’
	Equity			Equity			Equity
Balance at January 1, 2004	$	1,544,897		$	204,212		$	1,749,109
Contributions from partners		85,967			1,593			87,560
Distributions to partners		(206,443	)		(20,718	)		(227,161	)
Issuance of operating partnership units		—			—			—
Foreign currency translation adjustment		10,395			—			10,395
Net income		161,443			18,799			180,242


Balance at December 31, 2004		1,596,259			203,886			1,800,145
Contributions from partners		93,157			(1,664	)		91,493
Distributions to partners		(214,386	)		(21,290	)		(235,676	)
Issuance of operating partnership units		—			49,186			49,186
Foreign currency translation adjustment		(15,199	)		—			(15,199	)
Net income		249,351			22,608			271,959


Balance at December 31, 2005		1,709,182			252,726			1,961,908
Contributions from partners		107,338			(14,067	)		93,271
Distributions to partners		(221,907	)		(23,129	)		(245,036	)
Issuance of operating partnership units		—			56,302			56,302
Foreign currency translation adjustment		10,417			—			10,417
Net income		266,574			25,476			292,050


Balance at December 31, 2006	$	1,871,604		$	297,308		$	2,168,912


Exhibit No.		Description
32.4*		Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.)


	LIBERTY PROPERTY TRUST

Date: February 28, 2007	By:	/s/ WILLIAM P. HANKOWSKY

	WILLIAM P. HANKOWSKY
	CHAIRMAN, PRESIDENT AND
	CHIEF EXECUTIVE OFFICER


Exhibit No.		Description
32.4		Certifications of the Chief Financial Officer of Liberty Property Trust, in its capacity as the general partner of Liberty Property Limited Partnership, required by Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liability of that section. Further, this exhibit shall not be deemed to be incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.