8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): October 26, 2009

LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)

Maryland Pennsylvania	1-13130 1-13132	23-7768996 23-2766549
(State or other Jurisdiction of Incorporation)	(Commission File Number)	(IRS Employer Identification No.)

500 Chesterfield Parkway Malvern, PA	19355
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (610) 648-1700

(Former name or former address if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On October 26, 2009, the Registrants issued a press release announcing the Registrants’ financial results for the quarter ended September 30, 2009. As set forth below, the Registrants are furnishing the press release as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01. Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

None.

(b) Pro Forma Financial Information.

None.

(c) Shell Company Transactions.

None.

(d) Exhibits.

Exhibit Number	Exhibit Title
99.1	Press Release by the Registrants, dated October 26, 2009, furnished in accordance with Item 2.02 of this Current Report on Form 8-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

LIBERTY PROPERTY TRUST

By:      /s/ George J. Alburger, Jr.                      

Name:   George J. Alburger, Jr.
Title:   Chief Financial Officer

LIBERTY PROPERTY
LIMITED PARTNERSHIP

By:   Liberty Property Trust, its sole

General Partner

By:      /s/ George J. Alburger, Jr.                     

Name:   George J. Alburger, Jr.
Title:   Chief Financial Officer

Dated: October 27, 2009

EXHIBIT INDEX

Exhibit Number	Exhibit Title
99.1	Press Release by the Registrants, dated October 26, 2009, furnished in accordance with Item 2.02 of this Current Report on Form 8-K.

EX-99.1

Exhibit 99.1

Press Release

For Immediate Release	Inquiries:	Jeanne A. Leonard
		Liberty Property Trust 610/648-1704

LIBERTY PROPERTY TRUST ANNOUNCES
THIRD QUARTER RESULTS

Malvern, PA, October 26, 2009 — Liberty Property Trust (NYSE:LRY) reported that net income per common share (diluted) was $0.39 per share for the quarter ended September 30, 2009, compared to $0.41 per share (diluted) for the quarter ended September 30, 2008. For the nine-month period ended September 30, 2009, net income per common share (diluted) was $1.02, compared to $1.08 per share for the same period in 2008.

Funds from operations available to common shareholders (diluted) (“FFO”) for the third quarter of 2009 was $0.72 per share, compared to $0.80 per share for the third quarter of 2008. FFO per share for the nine-month period ended September 30, 2009 was $2.16, compared to $2.41 per share for the same period in 2008. A reconciliation of GAAP net income to FFO is included in the financial tables accompanying this press release. Funds from operations for the third quarter include termination fees of $6.2 million, and an impairment charge of $4.8 million.

“During the third quarter we saw Liberty’s portfolio occupancy stabilize, and while competitive market occupancies continue to erode, we may be seeing the first signs of what will, with no doubt, be a slow market recovery,” said Bill Hankowsky, chief executive officer. “The industrial sector is poised to begin recovery ahead of the office markets, which continue to await positive news on the employment front. We expect that Liberty’s outstanding financial position and customer-centric operations will continue to allow us to outperform our markets and provide us with fuel to grow when the opportunity arises in 2010 and beyond.”

Portfolio Performance

Leasing: At September 30, 2009, Liberty’s in-service portfolio of 77.4 million square feet was 89.3% occupied, compared to 89.4% at the end of the second quarter. During the quarter, Liberty completed lease transactions totaling 3.5 million square feet of space.

Same Store Performance: Property level operating income for same store properties increased by 0.4% on a cash basis and by 2.0% on a straight line basis for the third quarter of 2009 compared to the same quarter in 2008.

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Liberty Property Trust Third Quarter 2009 Earnings -2-

Capital Activities and Balance Sheet Management

Common Share Sales: During the third quarter of 2009, Liberty completed its continuous equity offering program, selling 2.8 million shares, which generated net proceeds of $69.2 million.

Senior Note Obligations: During the quarter, Liberty purchased $3.5 million of its October 2017 Senior Notes. These notes were purchased at a $0.5 million discount. This discount is included in FFO as a debt extinguishment gain.

Property Sales: Liberty sold six operating properties, which contained 982,000 square feet of leaseable space, and three acres of land, for $63.1 million.

Real Estate Investments

Development: During the third quarter, Liberty brought into service seven development properties totaling 501,000 square feet for a total investment of $89.2 million. These properties were 22.4% occupied as of September 30, 2009. The current yield on this investment is 1.1%, and the projected stabilized yield is 6.9%. Leases have been signed for an additional 29% of the space.

A joint venture in which the company holds a 50% interest brought into service a 500,000 square foot build-to-suit development property during the quarter. This property is 100% leased, and the current yield on the $24.0 million investment is 11.5%.

No development commenced during the quarter.

As of September 30, 2009, Liberty had 2.4 million square feet of wholly-owned and joint venture properties under development. This activity represents a total projected investment of $372.4 million, with an expected yield of 7.5%. The properties were 63.1% leased at September 30.

Acquisitions: Liberty acquired no properties during the quarter.

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Liberty Property Trust Third Quarter 2009 Earnings -3-

Earnings Outlook

Liberty expects to report funds from operations for 2009 in the range of $2.81 — $2.83 per share, and for 2010 in the range of $2.60 — $2.80 per share. A reconciliation of FFO to GAAP net income for both 2009 and 2010 is below:

	2009 Range						2010 Range
	Low			High			Low			High
Projected net income per share	$	1.32		$	1.37		$	1.12		$	1.33
Depreciation and amortization of unconsolidated joint ventures		0.15			0.15			0.13			0.15
Depreciation and amortization		1.59			1.59			1.50			1.52
Gain on property dispositions		(0.20	)		(0.23	)		(0.10	)		(0.15	)
Minority interest share of addbacks		(0.05	)		(0.05	)		(0.05	)		(0.05	)
Projected funds from operations per share	$	2.81		$	2.83		$	2.60		$	2.80

Commenting on this guidance, Bill Hankowsky said: “The change in Liberty’s earnings guidance from 2009 to 2010 is primarily due to a full-year’s dilution from capital activity in 2009, and, to a lesser extent, continued pressure on real estate fundamentals, principally rental rates. While we have begun to see the first signs of stabilization taking root in our portfolio, it will take time for the economy to recover enough to reverse current declines in rents.”

About the Company

Liberty Property Trust (NYSE:LRY) is a leader in commercial real estate, serving customers in the United States and United Kingdom, through the development, acquisition, ownership and management of superior office and industrial properties. Liberty’s 77 million square foot portfolio includes more than 700 properties which provide office, distribution and light manufacturing facilities to 2,100 tenants.

Additional information about the Company, including Liberty’s Quarterly Supplemental Package with detailed financial information is available in the Investors section of the Company’s web site at www.libertyproperty.com. If you are unable to access the web site, a copy of the supplemental package may be obtained by contacting Liberty by phone at 610-648-1704, or by e-mail to jleonard@libertyproperty.com.

Liberty will host a conference call during which management will discuss third quarter results, on Tuesday, October 27, 2009, at 1 p.m. eastern time. To access the conference call in the United States or Canada, please dial 1-888-870-2815. For international access, dial 706-643-7691. No password or code is needed. A replay of the call will be available by dialing 1-800-642-1687 for US/Canada participants or 706-645-9291 for international participants. A passcode is needed for the replay: 33769240. The call can also be accessed via the Internet on the Investors page of Liberty’s web site at www.libertyproperty.com for two weeks following the call.

Liberty Property Trust Third Quarter 2009 Earnings -4-

The statements contained in this press release may include forward-looking statements within the meaning of the federal securities law. Although Liberty believes that the expectations reflected in such forward-looking statements are based on reasonable assumptions, it can give no assurance that its expectations will be achieved. As forward-looking statements, these statements involve risks, uncertainties and other factors that could cause actual results to differ materially from the expected results. These factors include, without limitation, the 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, the financial condition of tenants, the uncertainties of real estate development and construction activity, the costs and availability of financing, the effects of local economic and market conditions, regulatory changes, potential liability relative to environmental matters and other risks and uncertainties detailed in the company’s filings with the Securities and Exchange Commission. The company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.

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Liberty Property Trust
Statement of Operations
September 30, 2009
(Unaudited and in thousands, except per share amounts)

	Quarter Ended						Nine Months Ended
	September 30, 2009			September 30, 2008			September 30, 2009			September 30, 2008
Operating Revenue
Rental	$	130,643		$	126,422		$	388,446		$	379,345
Operating expense reimbursement		56,850			56,009			168,699			167,694
Total operating revenue		187,493			182,431			557,145			547,039
Operating Expenses
Rental property		36,224			37,078			109,903			110,582
Real estate taxes		23,061			21,527			66,857			64,245
General and administrative		11,248			13,180			38,470			40,340
Depreciation and amortization		43,268			43,196			128,140			127,637
Total operating expenses		113,801			114,981			343,370			342,804
Operating Income		73,692			67,450			213,775			204,235
Other Income/Expense
Interest and other		2,635			3,313			8,245			9,399
Debt extinguishment gain		455			—			1,547			—
Interest		(36,735	)		(37,587	)		(111,464	)		(114,559	)
Total other income/expense		(33,645	)		(34,274	)		(101,672	)		(105,160	)
Income before property dispositions, income taxes, minority interest and equity in earnings of unconsolidated joint ventures		40,047			33,176			112,103			99,075
Gain (loss) on property dispositions		100			463			(2,244	)		1,939
Income taxes		(86	)		(308	)		(430	)		(1,372	)
Equity in earnings of unconsolidated joint ventures		515			470			2,124			1,857
Income from continuing operations		40,576			33,801			111,553			101,499
Discontinued operations (including net gain on property dispositions of $5,131 and $10,232 for the quarters ended September 30, 2009 and 2008 and $9,000 and $13,635 for the nine month periods ended September 30, 2009 and 2008)		10,168			12,152			16,245			19,228
Net Income		50,744			45,953			127,798			120,727
Less: Net income attributable to minority interest		(6,841	)		(7,399	)		(19,335	)		(20,583	)
Net Income available to common shareholders	$	43,903		$	38,554		$	108,463		$	100,144
Basic income per common share
Continuing operations	$	0.30		$	0.29		$	0.87		$	0.88
Discontinued operations	$	0.09		$	0.12		$	0.15		$	0.20
Total basic income per common share	$	0.39		$	0.41		$	1.02		$	1.08
Diluted income per common share
Continuing operations	$	0.30		$	0.29		$	0.87		$	0.88
Discontinued operations	$	0.09		$	0.12		$	0.15		$	0.20
Total diluted income per common share	$	0.39		$	0.41		$	1.02		$	1.08
Weighted average shares
Basic		111,351			92,955			105,989			92,328
Diluted		111,926			93,369			106,441			92,626
Amounts attributable to common shareholders
Income from continuing operations	$	34,085		$	26,923		$	92,808		$	81,745
Discontinued operations		9,818			11,631			15,655			18,399
Net income	$	43,903		$	38,554		$	108,463		$	100,144

Liberty Property Trust
Statement of Funds From Operations
September 30, 2009
(Unaudited and in thousands, except per share amounts)

	Quarter Ended										Nine Months Ended
	September 30, 2009					September 30, 2008					September 30, 2009					September 30, 2008
				Per					Per					Per					Per
				Weighted					Weighted					Weighted					Weighted
				Average					Average					Average					Average
	Dollars			Share		Dollars			Share		Dollars			Share		Dollars			Share
Reconciliation of net income to FFO — basic:
Basic — income available to common shareholders	$	43,903		$	0.39	$	38,554		$	0.41	$	108,463		$	1.02	$	100,144		$	1.08
Adjustments:
Depreciation and amortization of unconsolidated joint ventures		3,991					4,331					12,113					12,208
Depreciation and amortization		43,041					44,173					128,427					130,803
Gain on property dispositions		(9,442	)				(10,542	)				(14,817	)				(14,674	)
Minority interest share in addback for depreciation and amortization and gain on property dispositions		(1,293	)				(1,629	)				(4,497	)				(5,538	)
Funds from operations available to common shareholders — basic	$	80,200		$	0.72	$	74,887		$	0.81	$	229,689		$	2.17	$	222,943		$	2.41
Reconciliation of net income to FFO — diluted:
Diluted — income available to common shareholders	$	43,903		$	0.39	$	38,554		$	0.41	$	108,463		$	1.02	$	100,144		$	1.08
Adjustments:
Depreciation and amortization of unconsolidated joint ventures		3,991					4,331					12,113					12,208
Depreciation and amortizaton		43,041					44,173					128,427					130,803
Gain on property dispositions		(9,442	)				(10,542	)				(14,817	)				(14,674	)
Minority interest excluding preferred unit distributions		1,565					1,746					3,974					4,526
Funds from operations available to common shareholders — diluted	$	83,058		$	0.72	$	78,262		$	0.80	$	238,160		$	2.16	$	233,007		$	2.41
Reconciliation of weighted average shares:
Weighted average common shares — all basic calculations		111,351					92,955					105,989					92,328
Dilutive shares for long term compensation plans		575					414					452					298
Diluted shares for net income calculations		111,926					93,369					106,441					92,626
Weighted average common units		4,017					4,190					4,018					4,190
Diluted shares for funds from operations calculations		115,943					97,559					110,459					96,816

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.

Liberty Property Trust
Balance Sheet
September 30, 2009
(In thousands, except share amounts)

	September 30, 2009			December 31, 2008
	(unaudited)
Assets
Real estate:
Land and land improvements	$	835,075		$	801,763
Building and improvements		4,305,128			4,191,361
Less: accumulated depreciation		(1,060,885	)		(963,043	)
Operating real estate		4,079,318			4,030,081
Development in progress		169,926			245,463
Land held for development		219,440			209,551
Net real estate		4,468,684			4,485,095
Cash and cash equivalents		219,402			15,794
Restricted cash		34,273			39,726
Accounts receivable		7,356			12,985
Deferred rent receivable		93,046			83,033
Deferred financing and leasing costs, net of accumulated amortization (2009, $132,099; 2008, $139,078)		133,426			132,627
Investment in unconsolidated joint ventures		255,191			266,602
Assets held for sale		22,520			98,706
Prepaid expenses and other assets		91,988			82,467
Total assets	$	5,325,886		$	5,217,035
Liabilities
Mortgage loans	$	462,700		$	198,560
Unsecured notes		1,842,882			2,131,607
Credit facility		140,000			260,000
Accounts payable		47,865			32,481
Accrued interest		27,794			36,474
Dividend and distributions payable		55,394			48,858
Other liabilities		160,134			182,549
Total liabilities		2,736,769			2,890,529
Equity
Shareholders’ equity:
Common shares of beneficial interest, $.001 par value, 183,987,000 shares authorized, 113,850,578 (includes 1,249,909 in treasury) and 100,034,404 (includes 1,249,909 in treasury) shares issued and outstanding as of September 30, 2009 and December 31, 2008, respectively		114			101
Additional paid-in capital		2,452,479			2,162,820
Accumulated other comprehensive income		1,420			(5,378	)
Distributions in excess of net income		(232,323	)		(185,721	)
Common shares in treasury, at cost, 1,249,909 shares as of September 30, 2009 and December 31, 2008		(51,951	)		(51,951	)
Total shareholders’ equity		2,169,739			1,919,871
Minority interest — operating partnership		418,645			405,505
Minority interest — consolidated joint ventures		733			1,130
Total equity		2,589,117			2,326,506
Total liabilities & equity	$	5,325,886		$	5,217,035