UNITED STATES 
                        SECURITIES AND EXCHANGE COMMISSION 
                             Washington, D.C.  20549 
 
                                    FORM 10-K 
 
(Mark One) 
X   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
    EXCHANGE ACT OF 1934  
 
For the fiscal year ended December 31, 1996 
 
                                       OR 
__  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES   
    EXCHANGE ACT OF 1934 
 
For the transition period from _______________  to  __________________ 
 
        Commission file number:  1-13130 (Liberty Property Trust) 
                                 1-13132 (Liberty Property Limited Partnership)
 
                             LIBERTY PROPERTY TRUST 
                      LIBERTY PROPERTY LIMITED PARTNERSHIP 
     (Exact name 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)
 
 
65 Valley Stream Parkway, Suite 100,  
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 ON EACH EXCHANGE 
TITLE OF EACH CLASS                                      ON WHICH REGISTERED 
-------------------                                    ----------------------- 
 
Common Shares of Beneficial Interest,                  New York Stock Exchange 
  $0.001 par value 
  (Liberty Property Trust) 
Exchangeable Subordinated Debentures due 2001          New York Stock Exchange 
  (Liberty Property Limited Partnership) 
 
Securities registered pursuant to Section 12(g) of the Act:	None 
 
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 X    NO  
 
 
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.    
 
As of February 25, 1997, the aggregate market value of the 31,681,606 Common  
Shares of Beneficial Interest held by non-affiliates of  Liberty Property 
Trust was approximately $784.1 million, based upon the closing price of 
$24.75 on the New York Stock Exchange composite tape on such date.  
Non-affiliate ownership is calculated by excluding all shares that may be 
deemed to be beneficially owned by executive officers and trustees, without 
conceding that all such persons are "affiliates" for purposes of the federal 
securities laws. 
 
Number of Shares of Beneficial Interest outstanding as of February 25, 1997:  
31,868,006  
 
 
                        Documents Incorporated by Reference  
 
Portions of the proxy statement for the annual shareholders meeting of Liberty  
Property Trust to be held in 1997 are incorporated by reference into Part III. 
 
 
 
<PAGE> 
INDEX 
 
 
												 
                                                                    Page 
PART I 
Item 1.  Business...............................................     5
Item 2.  Properties.............................................    11
Item 3.  Legal Proceedings......................................    18
Item 4.  Submission of Matters to a Vote of Security Holders....    18
 
PART II 
Item 5.  Market for the Registrants' Shares and Related Share- 
         holders' Matters.......................................    20 
Item 6.  Selected Financial Data................................    21
Item 7.  Management's Discussion and Analysis of Financial    
         Condition and Results of Operations....................    23 
Item 8.  Financial Statements and Supplementary Data............    29
Item 9.  Changes in and Disagreements with Accountants on  
         Accounting and Financial Disclosure....................    90
 
PART III 
Item 10. Directors and Executive Officers of the Registrant.....    90
Item 11. Executive Compensation.................................    90
Item 12. Security Ownership of Certain Beneficial Owners and  
         Management.............................................    90
Item 13. Certain Relationships and Related Transactions.........    90
 
PART IV 
Item 14. Exhibits, Financial Statement Schedules and Reports  
         on Form 8-K............................................    90
 
Signatures......................................................    95
  
_________________________________ 
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 with the Securities and Exchange Commission (as well as  
information included in oral statements or other written statements made  
or to be made by the Company) contains statements that are or will be  
forward-looking, such as statements relating to acquisitions and other  
business development activities, future capital expenditures, financing  
sources and availability and the effects of regulation (including  
environmental regulation) and competition.  Such forward-looking  
information involves important risks and uncertainties that could  
significantly affect anticipated results in the future and, accordingly,  
such results may differ from those expressed in any forward-looking  
statements made by, or on behalf of, the Company. These risks and  
uncertainties include, but are not limited to, uncertainties affecting  
real estate businesses generally (such as entry into new leases,  
renewals of leases and dependence on tenants' business operations),  

                             -3-
<PAGE>

risks relating to acquisition, construction and development activities,  
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 to fluctuations in  
interest rates), the potential for the use of borrowings to make  
distributions necessary to qualify as a REIT, 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. 
 
                                -4-

<PAGE> 

PART I 
 
ITEM 1. BUSINESS 
 
THE COMPANY 
 
Liberty Property Trust (the "Trust") is one of the largest owners and  
operators of suburban industrial and office real estate in the United  
States.  The Trust is a self-administered and self-managed Maryland real  
estate investment trust (a "REIT").  The Trust and its subsidiary,  
Liberty Property Limited Partnership, a Pennsylvania limited partnership  
(the "Operating Partnership") and, together with the Trust, the  
"Company"), were formed to continue and expand the commercial real  
estate business of Rouse & Associates, a Pennsylvania general  
partnership, and certain affiliated entities (collectively, the  
"Predecessor").  Founded in 1972, the Predecessor developed and managed  
commercial real estate in the Southeastern and Mid-Atlantic United  
States.  Substantially all of the Trust's assets are owned directly or  
indirectly by, and substantially all of the Trust's operations are  
conducted directly or indirectly by, the Operating Partnership. 
 
The Company provides leasing, property management, acquisition,  
development, construction management, design management and other  
related services for a portfolio which, as of December 31, 1996,  
consisted of 259 industrial and office properties (the "Properties in  
Operation") totaling approximately 20.6 million leasable square feet.   
As of December 31, 1996, the Company also had 22 properties under  
development (the "Properties Under Development") and, together with the  
Properties in Operation, the "Properties").   The Properties Under  
Development are expected to generate approximately 3.0 million leasable  
square feet.  The land, which is all zoned for commercial use, is  
believed to be capable of supporting, as and when developed, 9.3 million  
leaseable square feet. The Properties are located principally within the  
Southeastern and Mid-Atlantic United States.  As of December 31, 1996,  
the Properties in Operation were approximately 92.8% leased to over 800  
tenants. 
 
During the year ended December 31, 1996, through Total Investments (as  
defined below) aggregating $232.2 million, the Company has increased its  
total leasable square footage of industrial and office space by  
approximately 23.5% by acquiring 33 properties totaling approximately  
2.4 million leasable square feet and by developing 19 properties  
totaling approximately 1.5 million leasable square feet.  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 required to reach rent  
commencement.  During 1996, the Company has also increased its holdings  
of land for future development by 98 acres (net of acreage utilized in  
1996 for development projects and sold), all zoned for commercial use. 

                                 -5- 
<PAGE>

As of December 31, 1996, the Properties in Operation consisted of 173  
industrial and 86 office properties.  The Company's industrial  
properties are located principally in suburban mixed-use developments or  
business parks and include warehouse/distribution facilities, as well as  
flex facilities which accommodate both industrial and office use. The  
industrial activities in the Company's flex facilities typically include  
service, assembly, light manufacturing and research and development.   
The Company's office properties are mid-rise and single story office  
buildings, located principally in suburban mixed-use developments or  
office parks. 
 
The Trust is the sole general partner and also a limited partner of the  
Operating Partnership, with a combined equity interest in the Operating  
Partnership of 90.05% at December 31, 1996.  The units of limited  
partnership interest (the "Units") in the Operating Partnership are  
exchangeable on a one for one basis (subject to antidilution  
protections) for Common Shares of Beneficial Interest $.001 par value  
per share (the "Common Shares"), of the Trust typically after the first  
anniversary of the issuance of any such Units.  The only limited  
partners of the Operating Partnership other than the Trust are persons  
or entities that contributed assets to the Operating Partnership,  
principally senior executives of the Trust and their affiliates.  The  
Units held by the limited partners other than the Trust (that is, the  
minority interest reflected in the Trust's financial statements) were  
exchangeable for approximately 3.5 million Common Shares on December 31,  
1996. 
 
The Company's executive offices are located at 65 Valley Stream Parkway,  
Malvern, Pennsylvania 19355.  The telephone number is (610) 648-1700.   
The Company maintains offices in each of its primary markets. 
 
MANAGEMENT AND EMPLOYEES 
 
The Company's 199 employees (as of February 18, 1997) are under the  
direction of 17 senior executives, who have developed and managed over  
35 million square feet of commercial real estate during the past 25  
years and who, on average, have been affiliated with the Company and/or  
the Predecessor for 14 years. The Company's in-house leasing, marketing  
and property management staff operates in 8 full-service local offices  
in the United States.  This structure enables the Company to better  
understand the particular characteristics of the local markets in which  
it operates, to respond quickly and directly to tenant needs and to  
better identify local acquisition and development opportunities.  The  
Company considers its relations with its employees to be good. 
 
BUSINESS OBJECTIVES AND STRATEGIES FOR GROWTH 
 
The Company's primary objective is to increase funds from operations.   
See Item 6, "Selected Financial Data", for the definition of this term.   
The operating strategies for achieving this goal are to deliver  
outstanding tenant service, emphasize marketing to attract new tenants  
and enhance the Company's portfolio through the acquisition and  
development of high quality properties in markets affording  
opportunities for attractive investments.  In pursuing these strategies,  

                                -6-
<PAGE>

the Company seeks to manage its capital structure to fund growth while  
maintaining financial liquidity and stability. 
 
INTERNAL GROWTH STRATEGIES 
 
Management believes that the Properties offer significant opportunities  
for the Company to increase its rental revenues and cash flow.  The  
Company seeks to increase cash flow by continuing its practice of  
negotiating for contractual rental increases that take effect during the  
terms of its leases.  In addition, the Company seeks to increase rental  
revenues through the renewal or replacement of expiring leases at higher  
rental rates and by improving the occupancy rates of its portfolio.  
 
New Leases and Lease Renewals. In the early 1990s, rental rates in the  
markets in which the Properties are located were flat or decreased as a  
result of recessionary market conditions and an oversupply of commercial  
real estate in such markets. As these leases expire, the Company  
expects, although no assurance can be given, that replacement leases  
will reflect higher rental rates as economic conditions continue to  
improve and the oversupply of commercial real estate is mitigated by the  
decreased commercial construction starts in recent years. 
 
Contractual Increases.  The Company seeks to generate increased cash  
flow from the Properties in Operation through contractual increases in  
rental rates under its leases.  The leases in effect with respect to the  
Properties in Operation as of December 31, 1996 provide for contractual  
rental increases that are expected to contribute an additional $1.2   
million to the Company's cash flow for the year ending December 31,  
1997.  The Company intends to continue seeking to negotiate contractual  
rent increases that take effect during the terms of its leases. 
 
Improving Occupancies.  The Company believes that the quality and  
diversity of its tenant base has contributed, and will continue to  
contribute, to the success of its strategy for increasing rental and  
occupancy rates.  The Company targets financially stable tenants in an  
effort to minimize uncertainty relating to the ability of its tenants to  
meet their lease obligations.  The Company's success in maintaining its  
occupancy rates and attracting and retaining tenants is demonstrated in  
part by its renewal rate which was approximately 59.0% for the year  
ended December 31, 1996. 
 
Cost Controls.  The Company seeks to monitor and control its operating  
and administrative costs by performing many functions in-house rather  
than by engaging outside parties.  For example, the Company relies  
primarily on its locally based leasing and marketing staff, thereby  
reducing commissions to third parties.  Similarly, although construction  
and design services typically are provided by third parties (including,  
in certain instances, an entity affiliated with one or more of the  
Company's senior executives), the Company's in-house construction and  
design management staff closely supervises construction and design  
activities in an effort to control costs, minimize cost overruns, ensure  
timely delivery of tenant space and maximize productivity and  
efficiencies.  The Company also employs an annual capital improvement  

                             -7-

<PAGE>

and preventive maintenance program designed to reduce the operating  
costs of the Properties and maintain their long-term value. 
 
ACQUISITIONS 
 
STRATEGY.  The Company seeks to acquire properties consistent with its  
business objectives and strategies for growth.  The Company has  
identified the following categories of acquisitions: 
 
SINGLE-ASSET ACQUISITIONS: 
 
STABILIZED ACQUISITIONS:  Stabilized Acquisitions consist of individual  
properties generally located within the Company's existing markets,  
which are typically at high occupancy levels upon acquisition. During  
the year ended December 31, 1996, the Company acquired 27 properties  
which can be characterized as Stabilized Acquisitions containing  
approximately 1.6 million leasable square feet of industrial and office  
space for a Total Investment of approximately $96.3 million.  These  
properties were 96.7% leased as of December 31, 1996. 
 
ENTREPRENEURIAL ACQUISITIONS:  Entrepreneurial Acquisitions consist of  
individual properties generally located within the Company's existing  
markets, which are typically either vacant or at low occupancy levels  
and can be purchased substantially below replacement cost, thereby  
offering the opportunity for above average return when fully leased.   
During the year ended December 31, 1996, the Company acquired 6  
properties which can be characterized as Entrepreneurial Acquisitions  
containing approximately 783,000 leasable square feet of industrial and  
office space which was either vacant or partially leased at the time of  
acquisition,  for a Total Investment of approximately $36.6 million.   
Approximately 45,000 square feet of space was acquired vacant for a  
Total Investment of approximately $1.5 million, and was 100.0% leased as  
of December 31, 1996.  The remaining 738,000 square feet of this space  
was acquired partially leased for a Total Investment of approximately  
$35.1 million and was 68.1% leased as of December 31, 1996.  
 
PORTFOLIO ACQUISITIONS:   
 
Groups of properties or existing real estate companies that in either  
case offer an immediate return which can be enhanced by the Company's  
management expertise and financial strength. 
 
DEVELOPMENT 
 
STRATEGY.  The Company pursues selective development opportunities  
focusing primarily on high quality suburban industrial and office  
properties within its existing markets.  The Company's development  
activities fall into two categories: build-to-suit projects and projects  
built for inventory.  The Company develops build-to-suit projects for  
existing and new tenants.  The buildings in these projects are  
substantially pre-leased to one or more tenants prior to construction.   
The Company also builds properties for inventory in high-occupancy  
markets in which the Company has identified sufficient demand at market  
rental rates justifying such construction. 
 
                             -8-

<PAGE> 

COMPLETED DEVELOPMENTS: During the year ended December 31, 1996, the  
Company completed 4 build-to-suit and 15 inventory  
projects, approximately 1.5 million square feet of leasable space  
representing a Total Investment of approximately $99.3 million.  As of  
December 31, 1996, the completed development properties were 91.7%  
leased. 
 
PROPERTIES UNDER DEVELOPMENT: As of December 31, 1996,  the Company  was  
developing 22 development properties which, upon completion, are  
expected to generate approximately 3.0 million square feet of leasable  
space representing a Total Investment of approximately $153.8 million.   
Approximately 68.8% of such leaseable space was pre-leased as of  
December 31, 1996. Five of these properties are 100% pre-leased under net  
leases as build-to-suit projects. There can be no assurance that any of  
these Properties Under Development will be completed, or that the  
Company's budgets or estimates of construction costs or time periods  
necessary to complete construction, will be realized.  The Company  
expects to complete development of 12 properties (totalling 2.2 million  
square feet of leasable space) in the year ended December 31, 1997. 
 
LAND:  As of December 31, 1995, the Company owned 914 acres of land for  
development, all zoned for commercial use. During the year ended  
December 31, 1996 the Company purchased an additional 315 acres of land  
for development, and utilized 177 acres in development projects and sold  
40 acres.  Substantially all of the remaining 1,012 acres is located  
adjacent to or within existing industrial or business parks with site  
improvements, such as public sewers, water and utilities, available for  
service and the Company anticipates that the land would support 9.3  
million leasable square feet.  The Company believes that, because it is  
a fully integrated real estate firm, its base of commercially zoned land  
in existing industrial and business parks provides a competitive  
advantage for future development activities, particularly as the  
availability of land within the Company's geographic markets continues  
to diminish. 
 
INTERNATIONAL OPERATION:  The Company earns an annual fee of $600,000  
(subject to adjustment for additional services undertaken by the  
Company) for its management services provided with respect to a joint  
venture between Rouse Kent Limited, which is owned by certain senior  
executives of the Company, and the County of Kent, England to develop a  
650-acre, mixed-use park approximately 25 miles southeast of London.   
The Company has an option to purchase Rouse Kent for nominal  
consideration and an option to purchase future buildings and land within  
the park.  The Company's international operations also include 4  
Properties in Operation in the County of Kent. 
 
SUBSEQUENT ACTIVITIES 
 
Since December 31, 1996, the date as of which tabular data presented  
herein is reflected, the Company has purchased three office buildings  
containing approximately 267,134 leasable square feet for a Total  
Investment of $26.6 million. In addition, the Company has completed  

                             -9-

<PAGE>

development on three industrial distribution properties containing  
approximately 1.4 million leasable square feet for a Total Investment of  
$42.1 million. 
 
The Company intends to pursue its acquisition and development  
strategies.  The Company is currently in various stages of discussions  
and negotiations with respect to acquisition and build-to-suit projects  
totalling over $200.0 million. The consummation of these or any other  
future acquisitions or developments, if any, and the pace at which  
acquisitions may be made and developments completed, cannot be assured. 
 
COMPETITION 
 
The Company faces competition as a buyer, developer and lessor of  
properties and will likely face competition as an eventual seller of  
properties to the extent that properties are sold.  The Company may be  
competing with other owners and developers with greater resources and  
whose management may have more experience than the Company's officers  
and trustees.  There are numerous other entities, including but not  
limited to other REITs, that compete with the Company in seeking to  
acquire the limited number of properties available for sale that meet  
the Company's acquisition strategy.  Like the Company, many of the  
potentially competing purchasers can use their own securities in making  
acquisitions.  Additionally, the number of competitive properties in any  
particular market in which the Company's Properties are located could  
have a material adverse effect on both the Company's ability to lease  
space at the Properties or any newly-acquired property and on the rents  
charged at the Properties in Operation.  However, the Company believes  
that its capital base, its existing sources of credit and its access as  
a public entity to the capital markets to raise funds during periods  
when conventional sources of financing may be unavailable or  
prohibitively expensive will provide the Company with competitive  
advantages.  Further, the Company believes that the number of real  
estate developers has decreased as a result of the recessionary market  
conditions and tight credit markets during the early 1990s as well as  
the reluctance on the part of more conventional financing sources to  
fund development and acquisition projects.  Moreover, the Company  
believes that its responsiveness to tenant needs will enable it to  
attract and maintain high quality tenants in the markets in which the  
Properties in Operation are located. 
 
ENVIRONMENTAL REGULATIONS 
 
Under various federal, state and local laws, ordinances and regulations  
relating to the protection of the environment (collectively,  
"Environmental Laws"), a current or previous owner or operator of real  
estate may be liable for the cost of removal or remediation of certain  
hazardous or toxic substances disposed, stored, released, generated,  
manufactured or discharged from, on, at, onto, under or in such  
property.  Environmental Laws often impose such liability without regard  
to whether the owner or operator knew of, or was responsible for, the  
presence or release of such hazardous or toxic substances.  In addition,  
the presence of any such substances or the failure to properly remediate  
such substances when present, released or discharged may adversely  

                                -10-

<PAGE>

affect the owner's ability to sell or rent such property or to borrow  
using such property as collateral.  The cost of any required remediation  
and the liability of the owner or operator therefor as to any property  
is generally not limited under such Environmental Laws and could exceed  
the value of the property and/or the aggregate assets of the owner or  
operator.  Persons who arrange for disposal of hazardous or toxic  
substances may also be liable for the costs of removal or remediation of  
such substances at a disposal or treatment facility, whether or not such  
facility is owned or operated by such persons.  In addition to any  
action required by federal, state or local authorities, the presence of  
hazardous or toxic substances on any of the Properties, or on any  
properties acquired hereafter, could result in private plaintiffs  
bringing claims for personal injury or other causes of action.  In  
connection with the ownership and operation of the Properties, and on  
any properties acquired hereafter, the Company may be potentially liable  
for remediation, release or injury.  Further, various Environmental Laws  
impose on owners or operators the requirement of ongoing compliance with  
rules and regulations regarding business-related activities that may  
affect the environment.  Failure to comply with such requirements could  
result in difficulty in the lease or sale of any affected Property or  
the imposition of monetary penalties and fines in addition to the costs  
required to attain compliance. 
 
All of the Properties in Operation have been subject to Phase I  
Environmental Assessments ("Phase I Assessments").  The Phase I  
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 certain environmental  
issues have been identified with respect to certain of the Properties,  
the Company does not believe that any of these issues is likely to  
materially adversely affect the results of the Company's operations.  No  
assurance can be given that the Phase I Assessments revealed all  
potential environmental liabilities, that no prior owner or operator  
created any material adverse environmental condition not known to the  
Company, that no environmental liabilities have developed since such  
Phase I Assessments were prepared, that future laws, ordinances or  
regulations will not impose any material environmental requirement or  
liability, or that a material adverse environmental condition does not  
otherwise exist.  
 
ITEM 2.  PROPERTIES 
 
The Properties in Operation, as of December 31, 1996, consisted of 173  
industrial and 86 office properties. 
 
Single tenants occupy 94 Properties in Operation. The Company provides a  
reduced level of service in connection with the operation or maintenance  
of these properties. The remaining 165 of the Company's Properties in  
Operation are occupied by multiple tenants for which the Company renders  
a range of building, operating and maintenance services. 
 
The Company's industrial properties consist of a variety of warehouse,  
assembly, light manufacturing, distribution, and research and  

                                -11-

<PAGE>

development facilities.  Substantially all of the Company's industrial  
properties are located in suburban, mixed-use developments or business  
parks and all are well-maintained 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 to increase re-leasing opportunities and control re-leasing costs.   
They range in size from 11,600 square feet to 497,000 square feet, with  
an average building size of 90,652 square feet.  As of December 31,  
1996, the Company's industrial properties were 93.5% leased.   Major  
tenants, based upon annual base rent, include the United States of  
America, SKF USA, Inc. and, Vistakon Division of Johnson & Johnson  
Vision Products, Inc., General Electric Company, and Biospherics, Inc. 
 
The Company's office properties are mid-rise and single story office  
buildings principally located in suburban, mixed-use developments or  
office parks.  All of the Company's office properties are well- 
maintained facilities. Substantially all are located in prime business  
locations within established business communities offering excellent  
access to interstate highway systems.  As of December 31, 1996, the  
office properties were approximately 90.2% leased.  The office  
properties range in size from 4,900 to 220,000 square feet, with an  
average building size of 57,379 square feet.  Major tenants, based upon  
annual base rent, include AT&T Resource Management Corp., Sanofi  
Winthrop, Inc. (a division of Elf Aquitaine) and Prudential Insurance  
Company of America.   
 
The table on the following pages gives information on the Company's  
Properties in Operation as of December 31, 1996. 

                                -12-

<PAGE> 
<TABLE> 
                   LIBERTY PROPERTY TRUST/LIBERTY PROPERTY LIMITED PARTNERSHIP
                                             PROPERTY LIST 

<CAPTION>
                                                                    PERCENT 
                                                                   LEASED AT 
                                     BUILDING    YEAR   LEASABLE    DEC. 31,  NO. OF  
PROJECT NAME                           TYPE      DEVE.  SQ.FT.(1)   1996 (2)  LEASES    MAJOR TENANT 
---------------------------------    ---------   -----  ---------  ---------  ------   ------------------------------- 
<S>                                  <C>         <C>    <C>        <C>        <C>      <C> 
SOUTHEASTERN PENNSYLVANIA 
10, 20 Liberty Boulevard               Ofc.      1988      62,237      90.3%      24   Great Valley Health Club, Inc. 
420 Lapp Road                        Ind.-Flex   1989      92,250      85.8%       8   Akzo Coatings, Inc. 
1 Chelsea Parkway                    Ind.-Flex   1988      43,267      99.0%       6   Valtek Incorporated 
3 Chelsea Parkway                    Ind.-Flex   1988      43,240      55.5%       3   United Engineers & Constructors 
747 Dresher Road                       Ofc.      1988      53,200     100.0%       2   Axon Communications, Inc. 
45-67 Great Valley Parkway           Ind.-Dist.  1974     128,001     100.0%       8   Taylor Publishing Co. 
1180 Church Road                     Ind.-Dist.  1986     452,323      56.3%       3   Safeguard Business Systems, Inc. 
40 Valley Stream Parkway               Ofc.      1987      31,092     100.0%       1   Sanchez Computer Associates 
50 Valley Stream Parkway               Ofc.      1987      31,000     100.0%       3   Fisher Scientific Company 
20 Valley Stream Parkway               Ofc.      1987      58,834     100.0%      12   Shared Medical Systems 
800 Town Center Drive                Ind.-Flex   1987     141,714     100.0%      18   ICT Group, Inc. 
1610 Medical Drive                     Ofc.      1986      38,100      54.4%       5   Employers Mutual Casualty Co. 
11, 15 Great Valley Parkway            Ofc.      1986     156,800     100.0%       2   Sanofi Winthrop, Inc. 
257-275 Great Valley Parkway         Ind.-Flex   1983      71,285     100.0%       7   Business Mail Express, Inc. 
300 Technology Drive                 Ind.-Dist.  1985      22,500     100.0%       1   Nilfisk of America, Inc. 
277-293 Great Valley Parkway         Ind.-Flex   1984      28,800     100.0%       7   Alpha Scientific Corporation 
311 Technology Drive                   Ofc.      1984      29,350     100.0%       3   Sherwin-Williams Co. 
325 Technology Drive                   Ofc.      1984      25,000     100.0%       1   Premier Solutions Ltd. 
7 Great Valley Parkway                 Ofc.      1985      59,021     100.0%      14   Rabbit Software Corporation 
55 Valley Stream Parkway               Ofc.      1983      40,057     100.0%       5   Meridian Properties, Inc. 
65 Valley Stream Parkway               Ofc.      1983      58,219     100.0%       7   Liberty Property Limited Ptsp. 
508 Lapp Road                        Ind.-Dist.  1984      50,200     100.0%       1   Numar Corporation 
10 Valley Stream Parkway               Ofc.      1984      33,027     100.0%       8   West Chester Administrative 
333 Phoenixville Pike                Ind.-Dist.  1985      84,000     100.0%       1   Veterans Life Insurance Co. 
1566 Medical Drive                     Ofc.      1985      28,540      88.1%       5   General Physics Corporation 
30 Great Valley Parkway              Ind.-Dist.  1975      12,000     100.0%       1   Sanofi Winthrop, Inc. 
75 Great Valley Parkway              Ind.-Dist.  1977      11,600     100.0%       1   York International Corp. 
27-43 Great Valley Parkway           Ind.-Flex   1977      60,623     100.0%       5   Sanofi Winthrop, Inc. 
77-123 Great Valley Parkway          Ind.-Flex   1978     104,095      99.3%      20   Durant Medical, Inc. 
260 Great Valley Parkway             Ind.-Dist.  1979      50,000     100.0%       1   American Parts Systems 
256 Great Valley Parkway             Ind.-Dist.  1980      56,160     100.0%       1   Centocor, Inc. 
205 Great Valley Parkway             Ind.-Dist.  1981     184,500      92.3%       3   General Electric Company 
12,14,16 Great Valley Parkway          Ofc.      1982      20,546     100.0%       3   Sanofi Winthrop, Inc. 
155 Great Valley Parkway             Ind.-Dist.  1981      71,200     100.0%       1   Ensoniq Corporation 
333 Technology Drive                   Ofc.      1987      39,769     100.0%       1   Premier Solutions, Ltd. 
510 Lapp Road                        Ind.-Dist.  1983      27,167     100.0%       1   Trugreen 
181 Wheeler Court                    Ind.-Dist.  1979     100,000     100.0%       3   Executive Warehouse, Inc. 
1100 Wheeler Way                     Ind.-Dist.  1979      40,915     100.0%       1   National Business Services, Inc. 
60 Morehall Road                       Ofc.      1989     114,430     100.0%       3   Vanguard Group 
905 Airport Road                     Ind.-Dist.  1988     128,588     100.0%       6   Arco Chemical Company 
16 Cabot Boulevard                   Ind.-Dist.  1972     299,192     100.0%       1   White Consolidated Industries 
1 Country View Road                    Ofc.      1982      48,900     100.0%       1   Systems & Computer Technology 
2151 Cabot Boulevard                 Ind.-Dist.  1982     114,760     100.0%       1   Schwarz Paper Company 
170 S Warner Road                      Ofc.      1980      87,685      93.8%       5   AT&T Resource Management Corp. 
190 S Warner Road                      Ofc.      1980      87,500     100.0%       1   Electronic Data Systems Corp. 
507 Prudential Road                  Ind.-Flex   1988     105,500     100.0%       1   Prudential Insurance Company 
100 Witmer Road                        Ofc.      1995     139,546     100.0%       1   GMAC Mortgage Corporation 
3100 Horizon Boulevard               Ind.-Flex   1995      41,000     100.0%       1   Vtel Corporation 
3300 Horizon Boulevard               Ind.-Dist.  1996      92,000     100.0%       1   Central National-Gottesman, Inc. 
3500 Horizon Boulevard               Ind.-Flex   1996      65,579     100.0%       1   SmithKline Beecham Clinical 
200 Chester Field Parkway              Ofc.      1989      28,919     100.0%       3   Waverly, Inc. 
767 Electronic Drive                 Ind.-Flex   1996      45,000     100.0%       1   Diversified Pharmaceutical Svc. 
5 Country View Road                    Ofc.      1985      63,170     100.0%       2   HBO & Company of Georgia 
3200 Horizon Boulevard               Ind.-Flex   1996      60,000     100.0%       1   Fund/Plan Services, Inc.
111-195 Witmer Road                    Ofc.      1996      55,354      98.2%      15   Kulicke & Soffa Industries, Inc. 
2460 General Armistead Avenue        Ind.-Flex   1985      36,831      93.0%       8   Midlantic Distribution Co. 
2490 General Armistead Avenue        Ind.-Flex   1985      20,811      82.7%       6   Barefoot Grass Lawn Service 
300 Welsh Road                         Ofc.      1983      23,461     100.0%       4   Delta Information Systems, Inc. 
400 Welsh Road                         Ofc.      1983      36,723      96.7%       5   National Fraud Investigations 
440 E. Swedesford Road                 Ofc.      1988      71,368      58.1%      11   Affiliated Distributors 
460 E. Swedesford Road                 Ofc.      1988      70,205      97.6%       7   Johnson-Matthey Investments 
2 Walnut Grove Drive                   Ofc.      1989      81,846      74.6%      11   Toyota Motor Credit Corp. 
200 Gibralter Road                     Ofc.      1990      64,452      93.7%      10   Great West Life Assurance 
220 Gibralter Road                     Ofc.      1990      63,587     100.0%       1   Prudential Insurance Company 
240 Gibralter Road                     Ofc.      1990      63,587     100.0%       1   Prudential Insurance Company 
151 S Warner Road                      Ofc.      1980      84,066      98.4%      11   Paging Network of Philadelphia 
931 South Matlack Street             Ind.-Dist.  1985     139,500     100.0%       1   Electronics Boutique, Inc. 
14 Lee Boulevard                     Ind.-Flex   1988      89,026      86.9%       5   Vanguard Group 
500 Chester Field Parkway              Ofc.      1988      30,815     100.0%       2   Becket, Watkins and Associates 
300-400 Chester Field Parkway          Ofc.      1988      50,383     100.0%       3   Amerisource Corporation 
                                                        ---------     ------ 
Total Southeastern Pennsylvania                         5,144,416      93.1%       
                                                        =========     ======      
</TABLE>
                                   -13-

<PAGE>
 
<TABLE>
            LIBERTY PROPERTY TRUST/LIBERTY PROPERTY LIMITED PARTNERSHIP
                                   PROPERTY LIST 
 
<CAPTION> 
                                                                    PERCENT 
                                                                   LEASED AT 
                                     BUILDING    YEAR   LEASABLE    DEC. 31,  NO. OF  
PROJECT NAME                           TYPE      DEVE.  SQ.FT.(1)   1996 (2)  LEASES    MAJOR TENANT 
---------------------------------    ---------   -----  ---------  ---------  ------   -------------------------------
<S>                                  <C>         <C>    <C>        <C>        <C>      <C>    
NEW JERSEY/DELAWARE 
1805 Underwood Boulevard             Ind.-Dist.  1973      14,383     100.0%       1   Uniscore, Inc. 
150 Mid-Atlantic Parkway             Ind.-Dist.  1973      30,873     100.0%       1   Reynolds Metals Company 
18 Boulden Circle                    Ind.-Flex   1989      76,000      76.8%      10   Custom Computer Services, Inc. 
501 Delran Parkway                   Ind.-Dist.  1988      49,500      68.1%       2   Gandalf Systems Corporation 
600 Delran Parkway                   Ind.-Dist.  1988     119,290     100.0%       2   Computer & Comm Info  
1607 Imperial Way                    Ind.-Dist.  1973      80,000     100.0%       1   Dunkin' Donuts 
1 Boulden Circle                     Ind.-Dist.  1986      43,200     100.0%       1   Norel Paper Corporation 
31-55 Read's Way                     Ind.-Flex   1986      78,009     100.0%       3   Cigna Corporation  
3 Boulden Circle                     Ind.-Dist.  1987      60,812     100.0%       1   Livingston Healthcare Services 
5 Boulden Circle                     Ind.-Dist.  1987     119,653     100.0%       1   Brundage Distribution Corp. 
601 Delran Parkway                   Ind.-Dist.  1988      57,930     100.0%       1   Keymar Warehouse, Inc. 
51 Haddonfield Road                    Ofc.      1986      93,000      89.0%      19   Lehigh Press, Inc. 
57 Read's Way                        Ind.-Flex   1985      53,600     100.0%       2   Wachovia Bank of Georgia 
1370 Imperial Way                    Ind.-Dist.  1978     179,785     100.0%       1   National Distribution Centers 
8 Stow Road                          Ind.-Flex   1988      34,911      84.1%       4   AT&T Resource Management Corp. 
10 Stow Road                         Ind.-Flex   1988      29,722      68.5%       1   Trans World Airlines, Inc. 
12 Stow Road                         Ind.-Flex   1988      21,200     100.0%       5   Future Electronics Corp. 
14 Stow Road                         Ind.-Flex   1988      18,821     100.0%       2   Wiltel Communications Sys, Inc. 
1300 Metropolitan Avenue             Ind.-Dist.  1972      76,196     100.0%       1   Phoenix Display & Packaging 
701A Route 73 South                    Ofc.      1987      97,200      81.2%       8   Ohio Casualty Insurance 
701C Route 73 South                    Ofc.      1987      27,813      80.9%       4   Prudential Property & Casualty 
1008 Astoria Boulevard               Ind.-Flex   1973      37,400      87.6%       6   ACSIS, Inc. 
1475 Imperial Way                    Ind.-Dist.  1976      60,000     100.0%       1   Knauf Fiberglass, Inc. 
3000 Atrium Way                        Ofc.      1987     110,115      68.3%      11   Atrium Executive Center, Inc. 
750 Cardinal Drive                   Ind.-Dist.  1989      81,348     100.0%       1   Leslie's Poolmart 
11000,15000,17000 Commerce Parkway   Ind.-Flex   1985     100,170      97.8%       8   PHH Mortgage Services Corp. 
12000,14000 Commerce Parkway         Ind.-Flex   1985      68,000      87.8%       6   Simirex, Inc. 
16000,18000 Commerce Parkway         Ind.-Flex   1985      52,000      93.8%       7   CSX Intermodal, Inc. 
406 Lippincott Drive                   Ofc.      1990      40,000     100.0%       5   Travelers Insurance Co 
234 High Hill Road                   Ind.-Dist.  1987      60,000     100.0%       1   Skyway Freight Systems, Inc. 
101 Arlington Boulevard              Ind.-Dist.  1996     154,675     100.0%       2   Heinz Bakery Products 
100 Berkeley Drive                   Ind.-Dist.  1990      67,000     100.0%       1   MCR Direct Mail, Inc. 
301 Lippincott Drive                   Ofc.      1988      82,482     100.0%       4   Fluor Daniel, Inc. 
303 Lippincott Drive                   Ofc.      1988      82,541      99.8%       4   Fluor Daniel, Inc. 
510 Sharptown Road                   Ind.-Dist.  1984      40,156     100.0%       1   Day Products, Inc. 
901 Route 73                           Ofc.      1985      39,434      96.9%       4   Teknion, Inc. 
1500 Route 73 North                    Ofc.      1988      62,069      65.6%       9   Prudential Securities, Inc. 
512 Sharptown Road                   Ind.-Dist.  1984      58,000     100.0%       1   Trek Bicycle Corporation 
263 Quigley Boulevard                Ind.-Dist.  1987      43,525      98.5%       8   Small Systems Management Corp. 
34 Blevins Drive                     Ind.-Flex   1987      50,022     100.0%       7   Panelmatic 
104 Gaither Drive                    Ind.-Dist.  1975      45,390     100.0%       1   Eptech Corporation 
2 Lukens Drive                       Ind.-Flex   1988      43,175     100.0%       3   Ameristar Technologies 
                                                        ---------     ------ 
Total New Jersey/Delaware                               2,739,400      94.2%       
                                                        =========     ======      
</TABLE>

                                   -14-

<PAGE>

<TABLE>
      LIBERTY PROPERTY TRUST/LIBERTY PROPERTY LIMITED PARTNERSHIP
                              PROPERTY LIST 
 
<CAPTION> 
                                                                    PERCENT 
                                                                   LEASED AT 
                                     BUILDING    YEAR   LEASABLE    DEC. 31,  NO. OF  
PROJECT NAME                           TYPE      DEVE.  SQ.FT.(1)   1996 (2)  LEASES     MAJOR TENANT 
---------------------------------    ---------   -----  ---------  ---------  ------   -------------------------------
<S>                                  <C>         <C>    <C>        <C>        <C>      <C>
LEHIGH VALLEY 
1655 Valley Center Parkway             Ofc.       1993     28,300      62.3%       1   Allstate Insurance Company 
6560 Stonegate Drive                 Ind.-Dist.   1989     80,000     100.0%       2   Vitra Seating, Inc. 
6370 Hedgewood Drive                 Ind.-Dist.   1990    110,000      69.1%       2   ODL, Inc. 
6390 Hedgewood Drive                 Ind.-Dist.   1990     69,000     100.0%       2   Behr Processing Corporation 
1495 Valley Center Parkway             Ofc.       1990     43,770     100.0%       2   Ingersoll-Rand Company 
6350 Hedgewood Drive                 Ind.-Dist.   1989    121,000     100.0%       2   Organon, Inc. 
6330 Hedgewood Drive                 Ind.-Flex    1988     89,700     100.0%       7   Submicron Systems, Inc. 
1550 Valley Center Parkway           Ind.-Flex    1988     43,400     100.0%       7   Employee Benefit Plans, Inc. 
1560 Valley Center Parkway           Ind.-Flex    1988     51,400     100.0%       1   TIG Insurance Company 
6580 Snowdrift Road                  Ind.-Dist.   1988    104,000     100.0%       1   Dana Corporation 
1510 Valley Center Parkway           Ind.-Flex    1988     48,208      90.9%       6   Visiting Nurses Association 
1530 Valley Center Parkway           Ind.-Flex    1988     46,400     100.0%       1   SKF USA, Inc. 
6540 Stonegate Drive                 Ind.-Dist.   1988    120,000     100.0%       1   SKF USA, Inc. 
974 Marcon Boulevard                 Ind.-Flex    1987     39,200      29.3%       3   Norwood Industrial Construction 
964 Marcon Boulevard                 Ind.-Flex    1985     39,200     100.0%       6   Health Spectrum Medical 
764 Roble Road                       Ind.-Flex    1985     21,860     100.0%       1   ChemLawn Corp Center 
3174 Airport Road                    Ind.-Flex    1979     42,000      64.3%       1   Allentech, Inc. 
2196 Avenue C                        Ind.-Flex    1980     31,140     100.0%       1   Lehigh University 
2202 Hangar Place                    Ind.-Flex    1981     66,495     100.0%       4   Lofts Seed, Inc. 
2201 Hangar Place                    Ind.-Flex    1981     52,300     100.0%       6   Pacesetter Enterprises, Inc. 
954 Marcon Boulevard                 Ind.-Dist.   1981     24,000     100.0%       1   Merck & Co., Inc. 
57 South Commerce Way                Ind.-Flex    1986     76,400     100.0%       7   SKF USA, Inc. 
754 Roble Road                       Ind.-Flex    1986     46,800      79.5%       5   Computer Designs, Inc. 
894 Marcon Boulevard                 Ind.-Flex    1986     28,800     100.0%      10   Spalding Company, Inc. 
744 Roble Road                       Ind.-Flex    1986     46,800      97.7%       8   Fluoro-Seal 
944 Marcon Boulevard                 Ind.-Flex    1986     38,400     100.0%      13   Integrated Solutions, Inc. 
1685 Valley Center Parkway             Ofc.       1996     27,200     100.0%       2   General Accident Insurance Co. 
6520 Stonegate Drive                 Ind.-Flex    1996     43,200     100.0%       5   Submicron Systems Inc. 
7437 Industrial Boulevard            Ind.-Dist.   1976    191,330     100.0%       2   Stuart Medical, Inc. 
2041 Avenue C                        Ind.-Flex    1990     30,400     100.0%       3   Dorst America, Inc. 
2124 Avenue C                        Ind.-Dist.   1990     36,000     100.0%       1   Graybar Electric Co., Inc. 
7339 Industrial Boulevard            Ind.-Dist.   1996    215,000      47.9%       1   DSC Logistics, Inc. 
7384 Penn Drive                      Ind.-Dist.   1988    112,000     100.0%       1   Osram Sylvania, Inc. 
7144 Daniels Drive                   Ind.-Dist.   1975    300,312     100.0%       2   Simpson Paper Company 
7620 Cetronia Road                   Ind.-Dist.   1990    155,060     100.0%       3   Lehigh Group 
939 Marcon Boulevard                 Ind.-Dist.   1980    315,000     100.0%       1   Fieldcrest Cannon Sure Fit, Inc. 
100 Brodhead Road                      Ofc.       1990     47,056      77.1%       6   First Valley Bank 
1640 Valley Center Parkway             Ofc.       1996     30,850     100.0%       1   Pennsylvania Cellular 
83 South Commerce Way                  Ofc.       1989     18,983      72.5%       3   Nationwide Insurance 
85 South Commerce Way                  Ofc.       1989     21,119     100.0%       2   Penn Del Directory Co. 
87 South Commerce Way                  Ofc.       1989     22,653     100.0%       4   Versyss, Inc. 
7248 Industrial Boulevard            Ind.-Dist.   1988    497,000      67.5%       3   S.D. Warren Company 
                                                        ---------     ------ 
Total Lehigh Valley                                     3,571,736      89.0%       
                                                        =========     ======      

MARYLAND 
180 Admiral Cochrane Drive             Ofc.      1989     128,236      96.0%       9   Columbia Medical Plan, Inc. 
12000,001,040 Indian Creek Court     Ind.-Flex   1986     185,776     100.0%       7   Biospherics, Inc. 
190 Admiral Cochrane Drive             Ofc.      1988      72,085      95.5%      12   Telespectrum 
8280 Patuxent Range Drive            Ind.-Dist.  1978      60,079     100.0%       2   Alcore, Inc. 
8300 Professional Place                Ofc.      1978      60,058      97.7%       9   TRW, Inc. 
8100 Professional Place                Ofc.      1987      54,613      62.9%      11   Ben Dyer Associates, Inc. 
8100,8200,8300 Corporate Drive         Ofc.      1981     119,227      69.9%      14   Kaiser Georgetown Community
7178 - 7180 Columbia Gateway         Ind.-Flex   1987      88,895      92.4%       4   Nationsbank, N.A. 
8200 - 8240 Professional Place         Ofc.      1979      56,464      56.8%      11   F.M.E. Corporation 
8400 Corporate Drive                   Ofc.      1984     147,800      23.2%       5   Digital Equipment Corp. 
8730 Bollman Place                   Ind.-Dist.  1984      98,745     100.0%       1   Kraft Foodservice, Inc. 
9101,9111,9115 Guilford Road         Ind.-Flex   1984      51,751      81.1%       4   Sienna Biotech, Inc. 
9125,9135,9145 Guilford Road         Ind.-Flex   1983      85,804      63.6%       5   Federal Express Corporation 
                                                        ---------     ------ 
Total Maryland                                          1,209,533      79.2%       
                                                        =========     ====== 
</TABLE>

                                 -15-

<PAGE>
<TABLE>
     LIBERTY PROPERTY TRUST/LIBERTY PROPERTY LIMITED PARTNERSHIP
                            PROPERTY LIST 
 
<CAPTION>
                                                                    PERCENT 
                                                                   LEASED AT 
                                     BUILDING    YEAR   LEASABLE    DEC. 31,  NO. OF  
PROJECT NAME                           TYPE      DEVE.  SQ.FT.(1)   1996 (2)  LEASES    MAJOR TENANT 
---------------------------------    ---------   -----  ---------  ---------  ------   -------------------------------
<S>                                  <C>         <C>    <C>        <C>        <C>      <C> 
VIRGINIA 
10 South Third Street                  Ofc.      1930       4,900     100.0%       1   Scribner, Messer, Brady & Wade 
1751 Bluehills Drive                 Ind.-Dist.  1991     265,082     100.0%       1   Conopco, Inc. 
4300 Carolina Avenue                 Ind.-Dist.  1985     218,554     100.0%       1   United States of America 
301 Hill Carter Parkway              Ind.-Dist.  1989      80,000     100.0%       1   Philip Morris Incorporated 
4001 Carolina Avenue                 Ind.-Dist.  1935      35,200      91.8%       6   Charles H. Snead, Jr. 
5600-5626 Eastport Boulevard         Ind.-Flex   1989      71,227      93.2%       5   American Honda Motor Co., Inc. 
5650-5674 Eastport Boulevard         Ind.-Dist.  1990     150,867     100.0%       4   Sterilization Services of VA 
5700 Eastport Boulevard              Ind.-Dist.  1990     100,336     100.0%       1   Merisel, Inc. 
11020 Hull Street Road                 Ofc.      1987       5,172     100.0%       1   Patient First Corporation 
3432 Holland Road                      Ofc.      1989       5,688     100.0%       1   Patient First Corporation 
3001 Hungary Springs Road              Ofc.      1984      11,235     100.0%       2   Broughton Systems, Inc. 
7760 Shrader Road                      Ofc.      1987      18,247     100.0%       2   Signet Bank 
7740 Shrader Road                      Ofc.      1989      10,167      71.5%       3   Rector & Visitors of UVA 
4880 Cox Road                          Ofc.      1995      59,948      93.7%       2   Saxon Mortgage, Inc. 
5162 Valleypointe Parkway              Ofc.      1993      25,000     100.0%       1   United States of America 
4101-4127 Carolina Avenue           Ind.-Dist.  1973     126,000     100.0%       1   Hamilton Hybar, Inc. 
4201-4261 Carolina Avenue            Ind.-Dist.  1975     288,000      99.8%       8   Crestar Bank 
4263-4299 Carolina Avenue            Ind.-Dist.  1976     180,000     100.0%       1   Open Plan Systems, Inc. 
4301-4335 Carolina Avenue            Ind.-Dist.  1978     162,000     100.0%       1   Stone Container Corporation 
4337-4379 Carolina Avenue            Ind.-Dist.  1979     198,000     100.0%       2   The Goldberg Company, Inc. 
4501-4549 Carolina Avenue            Ind.-Dist.  1981     150,000     100.0%       2   Foxmeyer Drug Company 
4551-4593 Carolina Avenue            Ind.-Dist.  1982     151,800     100.0%       3   A.H. Robins Company, Inc. 
4601-4643 Carolina Avenue            Ind.-Dist.  1985     151,800     100.0%       2   T.E.U. Incorporated 
4545-4583 Carolina Avenue            Ind.-Dist.  1985     120,000     100.0%       1   Owens & Minor Medical, Inc. 
4447-4491 Carolina Avenue            Ind.-Dist.  1987     158,700     100.0%       1   Shelcore, Inc. 
4401-4445 Carolina Avenue            Ind.-Dist.  1988     158,700     100.0%       2   Media Post Marketing 
12 S. Third Street                     Ofc.      1900       5,735     100.0%       1   Liberty Property Limited Ptnsp. 
9601 Cosner Drive                    Ind.-Dist.  1995     128,500     100.0%       1   Simmons Company 
315 Cardiff Valley Road              Ind.-Dist.  1994     151,200     100.0%       1   Caterpillar Inc. 
2300 East Parham Road                  Ofc.      1988       5,172     100.0%       1   Patient First Corporation 
1347 Diamond Springs Road            Ind.-Dist.  1980      99,260     100.0%       2   Nu-Home TV & Furniture, Inc. 
5221 Valleypark Drive-Bldg A         Ind.-Flex   1988      17,007     100.0%       1   RBX Holdings, Inc. 
5228 Valleypointe Parkway-Bldg B     Ind.-Flex   1988      14,477      61.4%       3   Allen-Bradley Company 
5238 Valleypark Drive-Bldg C         Ind.-Flex   1989      17,062      98.5%       6   MCI Telecommunications 
5601-5609 Eastport Boulevard         Ind.-Dist.  1996     150,000     100.0%       2   General Medical Corporation 
4717-4729 Eubank Road                Ind.-Dist.  1978     141,313     100.0%       3   Whithall-Robins 
4263F Carolina Avenue                Ind.-Dist.  1975      57,600     100.0%       3   Heflebower Transfer & Storage 
4200 Oakleys Court                   Ind.-Dist.  1990      80,000     100.0%       1   Multiton Mic Corp.  
1821 Battery Dantzler Road           Ind.-Dist.  1990     129,600     100.0%       3   Richmond Cold Storage Co. 
5000 Cox Road                        Ind.-Flex   1990      58,367     100.0%       6   Patient First Corporation 
510 Eastpark Court                   Ind.-Flex   1989      51,874     100.0%       5   Power Distribution, Inc. 
520 Eastpark Court                   Ind.-Dist.  1989     144,228     100.0%       5   Bunzl-Richmond, Inc. 
                                                        ---------     ------ 
Total Virginia                                          4,158,018      99.5% 
                                                        =========     ====== 
 
NORTH CAROLINA  
4523 Green Point Drive               Ind.-Dist.  1988      85,830     100.0%       1   Dry Storage Corporation 
4501 Green Point Drive               Ind.-Dist.  1989      90,049     100.0%       4   New Breed Leasing Corporation 
4500 Green Point Drive               Ind.-Dist.  1989      71,040     100.0%       6   Corporate Express 
2427 Penny Road                      Ind.-Dist.  1990     270,000     100.0%       1   Masco Corporation 
4524 Green Point Drive               Ind.-Dist.  1988      74,587      84.4%       3   Standard Register Co. 
4328,4336 Federal Drive              Ind.-Dist.  1995     177,600     100.0%       2   United Parcel Service, Inc. 
200 Centreport Drive                   Ofc.      1986      47,190     100.0%      18   MCI Telecommunications Corp. 
4344 Federal Drive                   Ind.-Dist.  1996      92,425     100.0%       4   MAC Papers, Inc. 
202 Centreport Drive                   Ofc.      1990      62,664      95.0%       5   Key Risk Management Services 
4000 Piedmont Parkway                  Ofc.      1989      60,383      92.9%      20   New Breed Leasing Corporation 
                                                        ---------     ------ 
Total North Carolina                                    1,031,768      98.2% 
                                                        =========     ====== 
</TABLE>
                                       -16-

<PAGE>

<TABLE>
       LIBERTY PROPERTY TRUST/LIBERTY PROPERTY LIMITED PARTNERSHIP
                            PROPERTY LIST 
 
<CAPTION>
                                                                    PERCENT 
                                                                   LEASED AT 
                                     BUILDING    YEAR   LEASABLE    DEC. 31,  NO. OF  
PROJECT NAME                           TYPE      DEVE.  SQ.FT.(1)   1996 (2)  LEASES     MAJOR TENANT 
---------------------------------    ---------   -----  ---------  ---------  ------   ------------------------------
<S>                                  <C>         <C>    <C>        <C>        <C>      <C>
FLORIDA 
1730 Stebbins Drive                  Ind.-Dist.  1973      40,000     100.0%       1   Atlas Bag, Inc. 
5911-5925 Richard Street             Ind.-Flex   1977      40,000     100.0%       1   Vistakon Div.- Johnson & Johnson 
8383-8385 Baycenter Road             Ind.-Dist.  1973      40,000     100.0%       1   Parts House, Inc. 
8775 Baypine Road                      Ofc.      1989      50,000     100.0%       1   AT&T Resource Management Corp.
8539 Western Way                     Ind.-Flex   1987      72,030       0.0%       -  
6255 Lake Grey Boulevard             Ind.-Flex   1987      94,174     100.0%       7   U.S. Telecom, Inc. - Sprint Serv. 
6600-6660 Suemac Place               Ind.-Dist.  1973     103,404     100.0%       5   American Flat Glass 
6800-6850 Suemac Place               Ind.-Dist.  1973      60,000     100.0%       1   R&G Sloane Manufacturing Co. 
8665, 8667, 8669 Baypine Road          Ofc.      1987      63,118     100.0%       5   Blue Cross and Blue Shield 
8540 Baycenter Road                  Ind.-Flex   1984      30,028     100.0%       1   Reichhold Chemicals 
1200 Gulf Life Drive                   Ofc.      1984     179,274      92.9%      20   Stein Mart, Inc. 
8400 Baymeadows Way                  Ind.-Flex   1987      43,547     100.0%       8   Productivity Solutions, Inc. 
8614 Baymeadows Way                    Ofc.      1986      16,000     100.0%       1   Allstate Insurance Company 
5941-5975 Richard Street             Ind.-Flex   1978      86,660     100.0%       1   Vistakon Div. - Johnson & Johnson 
7970 Bayberry Road                   Ind.-Flex   1978      55,000       0.0%       -  
6000-6030 Bowdendale Avenue          Ind.-Flex   1979      83,330      88.0%       4   Vistakon Div. - Johnson & Johnson 
7898 Baymeadows Way                    Ofc.      1979      42,149     100.0%       2   American Transtech, Inc. (AT&T) 
5977-6607 Richard Street             Ind.-Flex   1980      73,333     100.0%       1   Vistakon Div. - Johnson & Johnson 
7910 & 7948 Baymeadows Way             Ofc.      1980      52,505     100.0%       3   American Transtech, Inc. (AT&T) 
7954 & 7960 Baymeadows Way             Ofc.      1982      52,608     100.0%       2   American Transtech, Inc. (AT&T) 
8787 Baypine Road                      Ofc.      1990     220,000     100.0%       1   AT&T Resource Management Corp. 
7077 Bonneval Road                     Ofc.      1988     102,942      95.1%      26   Florida Windstorm Underwriting 
4190 Belfort Road                      Ofc.      1986     105,664      94.6%      24   Enterprise National Bank 
8011, 8021, 8031 Phillips Highway      Ofc.      1987      81,962      71.2%       9   Southwest Signal Engineering 
7020 AC Skinner Parkway              Ind.-Flex   1996      42,184     100.0%       6   Intermedia Communications, Inc. 
7022 AC Skinner Parkway              Ind.-Dist.  1996      88,200     100.0%       2   Microtek Medical, Inc. 
11777 Central Highway                Ind.-Dist.  1985      50,000       0.0%       -  
7016 AC Skinner Parkway              Ind.-Flex   1996      39,350     100.0%       1   Georgia-Pacific Corporation 
                                                        ---------     ------ 
Total Florida                                           2,007,462      88.3% 
                                                        =========     ====== 
 
FLORIDA WEST 
4001, 4051, 4101 Fowler Avenue       Ind.-Flex   1987     101,198      90.5%      20   Musculoskeletal Institute 
5501 Pioneer Park Boulevard          Ind.-Dist.  1981      61,416     100.0%       5   Premdor Corporation 
5502 Pioneer Park Boulevard          Ind.-Dist.  1981      48,375     100.0%       3   Premdor Corporation 
5690-5694 Crenshaw Street            Ind.-Dist.  1979      87,095     100.0%       3   Florida Flooring Products, Inc. 
3102,3104,3110 Cherry Palm Drive     Ind.-Flex   1986      74,339     100.0%      12   Groundwater Technology, Inc. 
8401-8408 Benjamin Road              Ind.-Flex   1986     127,566      95.4%      18   National RX Services, Inc. 
3501 Riga Boulevard                  Ind.-Flex   1987      57,220     100.0%       2   Customer Communications Center 
111 Kelsey Lane                      Ind.-Flex   1990      60,200      50.0%       1   Westinghouse Electric Corp. 
                                                        ---------     ------ 
Total Florida West                                        617,409      92.6% 
                                                        =========     ====== 
 
UNITED KINGDOM 
50 Gibson Drive                        Ofc.      1940      18,000     100.0%       1   Genzyme Biochemicals 
25 Kings Hill Avenue                   Ofc.      1996      35,000      82.7%       2   Charities Aid Foundation 
2 Kings Hill Avenue                  Ind.-Flex   1996      34,600      67.2%       2   Broadcast Surveillance Systems 
50 Kings Hill Avenue                   Ofc.      1996      50,000     100.0%       1   Rhone-Polenc Rorer 
                                                       ----------     ------ 
Total United Kingdom                                      137,600      87.4% 
                                                       ==========     ====== 
 
TOTAL COMPANY                                          20,617,342      92.8% 
                                                       ==========     ====== 
 
(1)  Based on current net leasable building area.  Some buildings have  
     been expanded since their original acquisition or development. 
(2)  Based on rent commencement date. 
</TABLE>
                                 -17-

<PAGE>
 
ITEM 3.   LEGAL PROCEEDINGS 
 
The Trust is not a party to any material legal proceedings.  In the  
ordinary course of business, the Operating Partnership is party to  
ordinary routine litigation incidental to its business, including  
routine actions for negligence, personal injury or other claims, many of  
which are expected to be covered by liability insurance and in the  
aggregate are not expected to have a material effect on the business or  
financial condition of the Company. 
 
On June 27, 1995, the Environmental Protection Agency ("EPA") notified  
Willard G. Rouse III, George F. Congdon and David C. Hammers, together  
with six other companies or individuals, that they may be potentially  
responsible for a portion of the response costs for remediation of  
ground water in part of the North Penn Service Area for certain  
properties located in Upper Gwynedd Township, Pennsylvania, (the "Church  
Road Properties"), as former owners.  The Company acquired the Church  
Road Properties from the Predecessor upon formation.  The Company has  
not been similarly notified by the EPA; however, as the present owner of  
the Church Road Properties, the potential exists for the Company to be  
named a potentially responsible party if there has been a release from  
the Church Road Properties of hazardous substances, including  
trichloroethylene, that requires remediation.  In such circumstances,  
the Company believes it would have claims against other financially  
responsible parties (including previous owners of the Church Road  
Properties, such as Zenith and the other parties identified by EPA as  
potentially liable) and, consequently, the Company does not believe that  
its liability with respect to this matter, if any, is likely to be  
material.  In addition, Mr. Rouse, Mr. Congdon, Mr. Hammers and Joseph  
P. Denny, have agreed to indemnify the Company for a period of ten years  
commencing in June 1994 with respect to material environmental  
liabilities associated with the Church Road Properties. 
 
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 fiscal year ended December 31, 1996. 
 
EXECUTIVE OFFICERS 
 
The following persons are the executive officers of the Trust, which is  
the sole general partner of the Operating Partnership: 
 
                           AGE AT 
        NAME              FEBRUARY               POSITION 
                          27, 1997 
-----------------------   --------   ---------------------------------- 
 
Willard G. Rouse III       54        Chairman of the Board of Trustees  
                                     and Chief Executive Officer (1) 
 
Joseph P. Denny            50        President, Chief Operating Officer  
                                     and Trustee (1) 
 
George J. Alburger, Jr.    49        Chief Financial Officer and  
                                     Treasurer 

                             -18-

<PAGE>

George F. Congdon          54        Executive Vice President of  
                                     Development and Trustee (1) 
 
Robert E. Fenza            39        Executive Vice President 
 
David C. Hammers           59        Executive Vice President 
 
James J. Bowes             43        Corporate Secretary and General 
                                     Counsel 
 
-------------- 
(1)   Serving under a three-year employment agreement beginning June 23,  
1994. 
 
Each officer was elected as such in July 1994 with the exception of Mr.  
Alburger who was elected Chief Financial Officer and Treasurer in May  
1995, and Mr. Bowes who was elected as Corporate Secretary in December  
1996.  Each officer will serve until the first meeting of the Board of  
Trustees after the next annual meeting of shareholders or until the  
officer resigns or is removed from office by the Board of Trustees. 
 
Willard G. Rouse III has served as Chairman of the Board of Trustees and  
Chief Executive Officer of the Company since March 1994.  Mr. Rouse had  
been a General Partner of the Predecessor since its founding in 1972.   
He serves as a Trustee of the Urban Land Institute.  Mr. Rouse has  
served as Chairman of each of the Pennsylvania Convention Center  
Authority, Foundation for Architecture, We the People 200 and the  
Philadelphia Childrens Network and as President of the Fellowship  
Commission. 
 
Joseph P. Denny has served as President, Chief Operating Officer and a  
trustee of the Company since March 1994.  Mr. Denny joined the  
Predecessor in 1979 and served as a Regional Managing General Partner,  
and, later as President.  In these capacities, he was responsible for  
developing approximately one billion dollars of projects, primarily  
large urban projects.  Mr. Denny is a member of the Board of Directors  
of Lawrence Holdings Co.  Mr. Denny is also a Vice Chairman of the  
Industrial and Office Park Council of the Urban Land Institute and  
serves on the Advisory Board of the Wharton Business School's Real  
Estate Center and the NAREIT Legislative Advisory Council. 
 
George J. Alburger, Jr. became Chief Financial Officer and Treasurer of  
the Company in May 1995.  For more than five years prior to joining the  
Company, Mr. Alburger served as Executive Vice President of EBL&S  
Property Management, Inc., an owner and manager of approximately 200  
shopping centers aggregating 30 million square feet of retail space.   
Mr. Alburger is a certified public accountant and was formerly a Senior  
Manager with Price Waterhouse LLP. 
 
George F. Congdon has served as a trustee of the Trust since March 1994,  
and as Executive Vice President of Development since April, 1995.   Mr.  
Congdon previously served as Chief Financial Officer and Treasurer of  
the Company.  Mr. Congdon had been a General Partner of the Predecessor  

                              -19-
<PAGE>

since its founding in 1972.  He is a member of the Board of Directors of  
the People's Light and Theater Company and Historic Yellow Springs, Inc. 
 
Robert E. Fenza has served as an Executive Vice President of the Company  
since March 1994, with principal responsibility for operations, property  
management and asset management.  Mr. Fenza joined the Predecessor in  
1984 and advanced to Regional Manager in 1987 and to Northern Division  
Manager in 1991. 
 
David C. Hammers has served as an Executive Vice President since March  
1994.  Mr. Hammers had been a General Partner of the Predecessor since  
its founding in 1972. 
 
James J. Bowes has served as General Counsel and Secretary of the  
Company since December, 1996.  Prior to joining the Company, Mr. Bowes  
was a partner in the law firm of Blank Rome Comisky & McCauley. 
 
PART II 
 
ITEM 5.  MARKET FOR THE REGISTRANTS' SHARES AND RELATED SHAREHOLDERS MATTERS 
 
The Common Shares have been traded on the New York Stock Exchange under  
the symbol "LRY" since June 16, 1994.  There is no established public  
trading market for the Units.  The following table sets forth, for the  
calendar quarters indicated, the high and low closing prices of the  
Common Shares as reported on the New York Stock Exchange Composite Tape  
and the dividends declared by the Company per Common Share for such  
calendar quarter. 
 
                                                           DIVIDENDS PER 
                                  HIGH        LOW          COMMON SHARE 
                                  ----        ---          ------------- 
1996 
First Quarter                    22 1/8      20 1/4             0.40 
Second Quarter                   21          19 1/2             0.40 
Third Quarter                    21 3/4      19 3/8             0.41 
Fourth Quarter                   25 7/8      21 1/8             0.41 
 
1995 
First Quarter                    20 3/4      18 3/4             0.40 
Second Quarter                   20 1/8      18 3/8             0.40 
Third Quarter                    21 3/4      19 1/2             0.40 
Fourth Quarter                   21 3/8      19                 0.40 
 
1994 
Second Quarter (from 6/16/94)    20 3/8      19 5/8             0.03 
Third Quarter                    20 1/8      19                 0.40 
Fourth Quarter                   20 1/8      17 3/8             0.40 
 
As of February 24, 1997, the Common Shares were held by 406 holders of  
record.  Since its initial public offering, the Company has paid regular  
and uninterrupted dividends. 

                                -20-
<PAGE>

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, 1996 and 1995 and for the period from June  
23, 1994 to December 31, 1994, for Liberty Property Trust, Liberty  
Property Limited Partnership and the Predecessor combined as of and for  
the year ended December 31, 1994, and for the Predecessor for the period  
from January 1, 1994 to June 22, 1994, and for the years ended 1993 and  
1992.  See "Management's Discussion and Analysis of Financial Condition  
and Results of Operations" for further description of the Predecessor.   
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 periods have been  
restated to conform to current year presentation. 
 
<TABLE>
   LIBERTY PROPERTY TRUST/LIBERTY PROPERTY LIMITED PARTNERSHIP 
                       AND PREDECESSOR (COMBINED) 
<CAPTION>
                                                                                 LIBERTY 
                                                                                PROPERTY 
                                                                                  TRUST/  
                                                                                 LIBERTY 
                                                                                PROPERTY 
                                                                                 LIMITED 
                                LIBERTY PROPERTY                                PARTNERSHIP/ 
                             TRUST/LIBERTY PROPERTY                             PREDECESSOR 
                               LIMITED PARTNERSHIP                PREDECESSOR    COMBINED          PREDECESSOR 
                           ---------------------------------      -----------   -----------  ------------------    
                             YEAR        YEAR       JUNE 23,      JANUARY 1,                       YEAR ENDED 
                             ENDED       ENDED      1994 TO        1994 to      YEAR ENDED          DECEMBER 31, 
                            DECEMBER    DECEMBER    DECEMBER         JUNE        DECEMBER    ------------------ 
                            31, 1996    31, 1995    31, 1994       22, 1994      31, 1994      1993      1992 
                           ----------  ----------   ----------    -----------   ----------   --------  -------- 
                                                       (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 
<S>                        <C>         <C>          <C>           <C>           <C>          <C>       <C>
OPERATING DATA 
Total Revenue              $  154,265  $ 117,041    $  46,638     $ 36,384      $  83,022    $75,440   $ 77,078 
Rental and real estate 
  tax expense                  40,853     29,314       11,377       10,373         21,750     19,319     19,146     
General and administra- 
  tive expenses                 8,023      5,212        2,273        2,439          4,712      5,135      8,120     
Depreciation and 
  amortization                 28,203     22,518        8,294        6,438         14,732     13,375     13,474     
                           ----------  ---------    ---------     --------      ---------    -------   -------- 
 
Operating income               77,186     59,997       24,694       17,134         41,828     37,611     36,338 
Premium on debenture 
  conversions                   1,027          -            -            -              -          -          - 
Interest expense               38,528     37,688       13,826       20,417         34,243     45,231     46,504 
                           ----------  ---------    ---------     --------      ---------    -------   -------- 

                                      -21-
<PAGE>
 
Income (loss) before 
  minority interest and 
  extraordinary item <F1>      37,631     22,309       10,868       (3,283)         7,585     (7,620)  (10,166) 
Minority interest <F1>          3,891      2,843        7,664            -          7,664          -         -           
Extraordinary item-gain 
  on extinguishment of  
  debt                              -          -       52,667        3,084         55,761          -         -           
                           ----------  ---------    ---------     --------      ---------    -------  -------- 
 
Net income (loss) <F1>     $   33,740  $  19,466    $  55,881     $   (199)     $  55,682    $(7,620) $(10,166) 
                           ==========  =========    =========     ========      =========    =======  ======== 
 
Dividends paid             $   52,569  $  38,683    $  10,219            -              -          -         -           
                           ==========  =========    ========= 
 
PER SHARE DATA 
Net income per share be- 
  fore extraordinary item  $     1.14  $    0.89    $    0.46            -              -          -         -           
Net income per share       $     1.14  $    0.89    $    2.67            -              -          -         - 
Dividends paid per share   $     1.61  $    1.60    $    0.43 
Weighted average number 
  of shares outstanding 
  <F2>                         29,678     21,838       20,965            -              -          -         -           
 
OTHER DATA 
Cash provided by opera- 
  ting activities          $   59,817  $  50,452    $  31,782     $  7,050      $  38,832    $ 9,655  $  5,766 
Cash used by investing  
  activities                 (265,427)  (281,862)    (154,273)      (2,009)      (156,282)    (5,850)   (5,805) 
Cash provided (used) 
  by financing activities     214,593    216,870      136,855        5,526        142,381     (3,213)   (2,159) 
Funds from operations <F3>     65,944     44,606       19,082        3,075         22,517      5,595     3,148 
</TABLE>
 
<TABLE> 
<CAPTION> 
                                         LIBERTY PROPERTY TRUST/                      PREDECESSOR 
                                   LIBERTY PROPERTY LIMITED PARTNERSHIP         ----------------------- 
                                ------------------------------------------            DECEMBER 31, 
                                DECEMBER 31,   DECEMBER 31,   DECEMBER 31,      ----------------------- 
                                   1996           1995           1994              1993         1992          
                                ------------   ------------   ------------      ----------   ----------    
                                                                (DOLLARS IN THOUSANDS) 
<S>                             <C>            <C>            <C>               <C>          <C> 
BALANCE SHEET DATA 
Net real estate                 $ 1,059,562    $    826,047   $    512,281      $ 370,438    $ 377,640 
Total assets                      1,152,612         898,102        602,981        413,629      417,815 
Total long term indebtedness        678,709         473,909        320,857        523,576      524,711 
Shareholders' and owners' 
  equity (deficit)                  375,532         335,521        229,667       (150,987)    (143,079) 
 
OTHER DATA 
Total leaseable square foot- 
  age of properties at end 
  of period (in thousands)           20,617          16,693         11,090          8,054        8,026 
Number of properties at 
  the end of period                     259             208            151            113          112 
Percentage leased at end 
  of period                              93%            92%            88%            93%          90% 
</TABLE>
 
<F1>  Minority interest reflects the portion of net income attributable  
to the equity interest in the Operating Partnership not owned by the  
Trust.  Net income and amounts based on net income provided for the  
Trust are net of minority interest.  Shareholder's equity of the Trust  
excludes minority interest. 
 
<F2>  Weighted average number of shares outstanding excludes shares  
issuable upon conversion of the 8% Exchangeable Subordinated Debentures  
due 2001 (the "Debentures") issued by the Operating Partnership and upon  

                               -22-

conversion of the Units and includes the dilutive effect of outstanding  
options. 
 
<F3>  Industry analysts generally consider funds from operations to be  
an appropriate measure of the performance of an equity REIT.  Funds from  
operations is defined as net income or loss (computed in accordance with  
generally accepted accounting principles), excluding gains (or losses)  
from debt restructuring and sales of property, plus real estate related  
depreciation and amortization excluding the amortization of deferred  
financing costs and depreciation of non-real estate assets.  Funds from  
operations does not represent cash generated from operating activities  
in accordance with generally accepted accounting principals and is not  
necessarily indicative of cash available to fund cash needs.  The  
Company believes that to facilitate a clear understanding of the  
Company's operating results, funds from operations should be examined in  
conjunction with net income, although it should not be considered as an  
alternative to net income as an indicator of the Company's operating  
performance or as an alternative to cash flow as a measure of liquidity.   
Funds from operations computed by the Company may not be comparable to  
other similarly titled measures of other REITs. 
 
ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND  
RESULTS OF OPERATIONS 
 
OVERVIEW 
 
The following discussion is based on the consolidated financial  
statements of the Company and the combined financial statements of the  
Predecessor.  The combined financial statements of the Predecessor  
reflect the combination of data from the balance sheets and the  
statements of operations of the partnerships that owned the properties,  
and the management, development and leasing operations of the  
Predecessor that were contributed to the Company in connection with its  
formation, which was consummated concurrently with its initial public  
offering.  The combined financial statements of the Predecessor are  
presented for comparative purposes only. 
 
The following discussion compares the results of operations of the  
Company for the year ended December 31, 1996 with the results of  
operations of the Company for the year ended December 31, 1995, and the  
results of operations of the Company for the year ended December 31,  
1995 with the results of operations of the Company and Predecessor, on a  
combined basis, for the year ended December 31, 1994.  As used herein,  
the term "Company" includes the Trust, the Operating Partnership and  
their subsidiaries (and, where the context indicates, the Predecessor). 
 
RESULTS OF OPERATIONS 
 
Comparison of year ended December 31, 1996 to year ended December 31,  
1995.  Total revenues (principally rental revenues and operating expense  
reimbursement) increased from $117.0 million for the year ended December  
31, 1995 to $154.3 million for the year ended December 31, 1996.  This  
increase was primarily due to the increase in the number of properties  
owned during the respective periods. As of January 1, 1995, the Company  

                             -23-
<PAGE>

owned 151 properties and, through December 31, 1995, acquired 52  
additional properties (net of two properties exchanged in connection  
with such acquisitions) and completed development of five properties for  
a Total Investment of $223.1 million.  As of January 1, 1996, the  
Company owned 208 properties, and, through December 31, 1996, acquired  
33 additional properties and completed the development on 19 properties  
for a Total Investment of $232.2 million. 
 
Rental property and real estate tax expenses increased from $29.3  
million for the year ended December 31, 1995 to $40.9 million for the  
year ended December 31, 1996.  This increase is due to the increase in  
the number of properties owned, and because of significant snow removal  
and other seasonal operating costs incurred as a result of the severe  
1996 winter. 
 
Property level operating income for the "Same Store" properties  
(properties owned since January 1, 1995) increased from $68.0 million  
for the year ended December 31, 1995 to $71.5 million for the year ended  
December 31, 1996.  This increase of 5.1% is due to increases in rental  
rates and increases in occupancy. 
 
Set forth below is a schedule comparing the operating results for the  
Same Store properties for the years ended December 31, 1996 and 1995. 
 
                                           1996           1995 
                                         --------       -------- 
                                             (IN THOUSANDS) 
                                         ----------------------- 
 
Rental revenue                           $ 75,823       $ 72,808 
Operating expense reimbursement            24,553         21,463 
                                         --------       -------- 
                                          100,376         94,271 
 
Rental property expenses                   21,023         18,191 
Real estate taxes                           7,878          8,086 
                                         --------       -------- 
Property level operating income          $ 71,475       $ 67,994 
                                         ========       ======== 
 
General and administrative expenses increased from $5.2 million for the  
year ended December 31, 1995 to $8.0 million for the year ended December  
31, 1996.  This $2.8 million increase is due to the increase in  
personnel and other related overhead costs necessitated by the increase  
in the number of properties owned during the respective periods.   
Included in the general and administrative expenses for the year ended  
December 31, 1996 is a $704,000 non-cash charge resulting from the  
amortization of a stock award over its vesting period.  There is no  
corresponding charge for the year ended December 31, 1995. 
 
Depreciation and amortization expenses increased from $22.5 million in  
1995 to $28.2 million in 1996.  This increase is due to the increase in  
the number of properties owned during the respective periods. 

                               -24-

<PAGE> 
Interest expense increased from $37.7 million for the year ended  
December 31, 1995 to $38.5 million for the year ended December 31,   
1996.  This increase is due to an increase in the average debt  
outstanding for the respective periods which was $397.4 million in 1995  
and $576.3 million in 1996.  This increase is partly offset by the lower  
interest rate on the outstanding debt because of the 1% reduction in the  
interest rate on the Line of Credit borrowings which became effective on  
May 1, 1995, and because of a decrease in the outstanding Subordinated  
Debentures due to the conversion of $58.7 million Debentures in 1996. 
 
As a result of the foregoing, the Company's operating income increased  
from $60.0 million for the year ended December 31, 1995 to $77.2 million  
for the year ended December 31, 1996.  In addition, income before  
minority interest increased from $22.3 million for the year ended  
December 31, 1995 to $37.6 million for the year ended December 31, 1996. 
 
Comparison of year ended December 31, 1995 to year ended December 31,  
1994.  Total revenues (principally rental revenues and operating expense  
reimbursement) increased from $83.0 million for the year ended December  
31, 1994 to $117.0 million for the year ended December 31, 1995.  This  
increase was primarily due to the increase in the number of properties   
owned during the respective periods. From January 1, 1994 through June  
22, 1994, the Predecessor owned 113 properties.  Concurrent with the  
initial public offering, the Company purchased 18 properties for a Total  
Investment of $57.0 million.  From the consummation of its initial  
public offering through December 31, 1994, the Company purchased 20  
additional properties for $79.5 million.  As of January 1, 1995, the  
Company owned 151 properties and, through December 31, 1995, acquired 52  
additional properties (net of two properties exchanged in connection  
with such acquisitions) and completed the development of five properties  
for a Total Investment of $223.1 million. 
 
Rental property and real estate tax expenses increased from $21.8  
million for the year ended December 31, 1994 to $29.3 million for the  
year ended December 31, 1995.  This increase is due to the increase in  
the number of properties owned. 
 
Property level operating income for the "Same Store" properties  
(properties owned since January 1, 1994) increased from $52.4 million  
for the year ended December 31, 1994 to $53.3 million for the year ended  
December 31, 1995.  This increase of 1.7% was attributable primarily to  
an increase in the occupancy in the industrial distribution and office  
properties. 
 
Set forth below is a schedule comparing the property level operating  
income for the Same Store properties for the years ended December 31,  
1995 and 1994. 
 
                                                1995          1994 
                                              --------      -------- 
                                                  (IN THOUSANDS) 
                                              ---------------------- 
 
Rental revenue                                $ 57,054      $ 57,323 
Operating expense reimbursement                 14,993        15,543 
                                              --------      -------- 
                                                72,047        72,866 
 
                                   -25-
<PAGE>

Rental property expense                         13,040        14,605 
Real estate taxes                                5,661         5,844 
                                              --------      -------- 
Property level operating income               $ 53,346      $ 52,417 
                                              ========      ========      
 
General and administrative expenses increased from $4.7 million for the  
year ended December 31, 1994 to $5.2 million for the year ended December  
31, 1995.  This $500,000 increase is due to an increase in the number of  
properties owned during the respective periods and as a result of costs  
incurred to operate as a publicly owned company during the entire period  
of 1995.  The Predecessor did not incur similar costs from January 1,  
1994 through June 22, 1994. 
 
Depreciation and amortization expenses increased from $14.7 million for  
the year ended December 31, 1994 to $22.5 million for the year ended  
December 31, 1995.  This increase is due to the increase in the number  
of properties owned during the respective periods. 
 
Interest expense increased from $34.2 million for the year ended  
December 31, 1994 to $37.7 million for the year ended December 31, 1995.   
Interest expense for 1994 reflects, 1) interest on $525.0 million of  
mortgage loans for the Rouse Group, which loans were satisfied from the  
proceeds of the initial public offerings, and 2) interest on the  
Debentures for the period from issuance at June 23, 1994 through  
December 31, 1994.  Interest expense for 1995 reflects, 1) interest on  
the Line of Credit borrowings and mortgage loans incurred to fund  
property acquisitions and development, and 2) interest on the Debentures  
for the full 1995 year. 
 
During the year ended December 31, 1994, the Company recognized $55.8  
million in extraordinary income from the extinguishment of debt. There  
was no similar item in 1995. 
 
As a result of the foregoing, income before the effect of minority  
interest and extraordinary items increased from $7.6 million in 1994 to  
$22.3 million in 1995.  In addition, the Company's operating income  
increased from $41.8 million in 1994 to $60.0 million in 1995. 
 
LIQUIDITY AND CAPITAL RESOURCES 
 
As of December 31, 1996, the Company had cash and cash equivalents of  
$19.6 million.  Working capital at December 31, 1996 was $14.6 million. 
 
Net cash flow provided by operating activities increased from $50.5  
million for the year ended December 31, 1995 to $59.8 million for the  
year ended December 31, 1996.  This $9.3 million increase was primarily  
due to the additional cash flow generated by the greater number of  
properties in service during the latter period. 

                                -26-

<PAGE>

Net cash used in investing activities decreased from $281.9 million for  
the year ended December 31, 1995 to $265.4 million for the year ended  
December 31, 1996.  This decrease was a result of the $125.9 million  
investment made in March 1995 in connection with the acquisition of the  
Lingerfelt portfolio, while there was no similar portfolio acquisition  
made in 1996.  This decrease was partly offset by the increase in  
acquisition, development and property investment from $156.9 for the  
year ended December 31, 1995 to $265.4 million for the year ended  
December 31, 1996. 
 
Net cash provided by financing activities decreased from $216.9 million  
for the year ended December 31, 1995 to $214.6 million for the year  
ended December 31, 1996.  This decrease is consistent with the decrease  
in investing activities. 
 
The Company believes that its undistributed cash flow from operations  
are adequate to fund its short-term liquidity requirements. 
 
The Company has funded its long-term liquidity requirements such as  
property acquisition and development activities primarily through its  
$250 million Line of Credit. This Line matures on June 15, 1998, subject  
to the Company's option to extend the maturity of the loan as described  
below.  As of December 31, 1996, $241.7 million was outstanding under  
the Line of Credit.  The Line of Credit is recourse to the Company only  
with respect to 50% of the outstanding principal amount thereof.  Funds  
borrowed under the Line of Credit bear interest at an annual rate of 175  
basis points over LIBOR.  Subject to certain conditions and the payment  
of a fee equal to 0.5% of the then outstanding loan balance, the Company  
may exercise a one-time option to convert the loan balance into a two- 
year term loan upon the maturity of the Line of Credit.  Following such  
conversion, the interest rate on the term loan would be LIBOR plus 4%. 
 
In December 1996, the Company closed on an $80 million secured Line of  
Credit.  The Line matures on December 13, 1998, however, at any time  
prior to December 13, 1998, maturity may be extended for one year  
subject to certain conditions and the payment of an extension fee equal  
to 1/4% of the total commitment (as defined).  As of December 31, 1996  
collateral had been approved to enable the Company to borrow up to $56.0  
million, of which $25.0 million was outstanding.  The interest rate on  
the Line of Credit is 1.60% over LIBOR. 
 
Periodically, the Company pays down borrowings on its Line of Credit  
facilities with funds from long term capital sources.  During 1996, the  
Company utilized the funds from $77.6 million of mortgage loans it  
placed in 1996 to paydown the line of credit.  The Company has entered  
into a swap agreement, with a notional amount of $114.5 million, to  
hedge against possible fluctuations in interest rates in anticipation of  
a debt issuance in 1997 for a five to seven year term. 
 
As of December 31, 1996, $240.8 million in mortgage loans were  
outstanding with maturities ranging from 1997 to 2013.  The interest  
rates on $230.4 million of mortgage loans are fixed and range from 6% to  
10%.  Interest rates on $10.4 million of mortgage loans float with LIBOR  
or prime and are subject to certain caps.  The weighted average interest  

                               -27-

<PAGE>

rate for the mortgage loans is 7.7% and the weighted average life is 8  
years. 
 
General 
 
The Company expects to incur variable rate debt, including borrowings  
under the Lines of Credit, from time to time.  The Company believes that  
its existing sources of capital will provide sufficient funds to finance  
its continued acquisition and development activities.  In this regard,  
the Company continues to evaluate its long term capital sources which  
generally include the availability of debt financing and access to  
equity. 
 
In July 1995, the Company filed a shelf registration with the Securities  
and Exchange Commission that enabled the Company to offer up to an  
aggregate of $350.0 million of securities, including common stock,  
preferred stock and debt.  On November 27, 1995, the Company completed a  
follow-on public offering of 7,200,000 common shares resulting in  
proceeds of $140.4 million. The remaining $209.6 million shelf  
registration is available for future offerings.   
 
On February 8, 1996, Moody's Investors Service assigned a prospective  
rating of Ba2 for senior unsecured debt issued by Liberty Property  
Limited Partnership under the shelf registration. 
 
On October 15, 1996, the Company filed a Registration Statement of  
1,000,000 shares to be issued through a Dividend Reinvestment and Stock  
Purchase Plan. 
 
On February 21, 1997, the Company filed a shelf registration with the  
Securities and Exchange Commission that enable the Company to offer up  
to an aggregate of $850.0 million of securities, including common stock,  
preferred stock and debt. 
 
CALCULATION OF FUNDS FROM OPERATIONS 
 
Management considers funds from operations an appropriate measure of the  
performance of an equity REIT.  Funds from operations is defined by  
NAREIT as net income or loss (computed in accordance with generally  
accepted accounting principles), excluding gains or losses from debt  
restructuring and sales of property plus depreciation and amortization  
excluding the amortization of deferred financing costs and depreciation  
of non-real estate assets.  Funds from operations should not be  
considered as an alternative to net income or as an alternative to cash  
flow or as a measure of liquidity.  Funds from operations for the years  
ended December 31, 1996 and 1995 are as follows: 

                                 -28-

<PAGE> 
                                         1996                1995 
                                      ----------          ---------- 
                                              (IN THOUSANDS) 
 
Net income                             $ 33,740            $ 19,466     
Addback: 
  Minority interest                       3,891               2,843 
  Depreciation and amortization          27,863              22,297 
  Premium on debenture conversion         1,027                   - 
  Gain on sale                             (577)                  - 
                                       ----------          -------- 
 
Funds from operations                  $ 65,944            $ 44,606 
                                       ==========          ======== 
 
INFLATION 
 
Inflation has remained relatively low during the last three years, and  
as a result, has not had a significant impact on the Predecessor or the  
Company during this period. The Lines of Credit bear interest at a  
variable rate; therefore, the amount of interest payable under the Lines  
of Credit will be 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 or utilities, substantially all of the  
tenant's 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 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 
----------------------------------------------------- 
		 
FINANCIAL STATEMENTS AND REPORTS OF ERNST & YOUNG LLP, INDEPENDENT  
AUDITORS 
 
Report of Independent Auditors - Liberty Property Trust 
------------------------------------------------------- 
 
Financial Statements - Liberty Property Trust: 
---------------------------------------------- 
Balance Sheets: 
Liberty Property Trust Consolidated as of December 31, 1996 and 
   1995 
 
Statements of Operations: 
Liberty Property Trust Consolidated for the years ended December 31,  
   1996 and 1995 and for the period from June 23, 1994 to December 31,  
   1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994 
 
Statements of Shareholders' Equity and Owners' Deficit: 
Liberty Property Trust Consolidated for the years ended December 31, 
  1996 and 1995 and for the period from June 23, 1994 to December 31,  
  1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
  1994 
 
Statements of Cash Flows: 
Liberty Property Trust Consolidated for the years ended December 31, 
   1996 and 1995 and for the period from June 23, 1994 to December 31, 
   1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994 
                                   -29-

<PAGE>
 
Notes to Financial Statements - Liberty Property Trust  
 
Financial Statement Schedule - Liberty Property Trust:  
Schedule III - Real Estate and Accumulated Depreciation as of December 
  31, 1996 
 
Report of Independent Auditors - Liberty Property Limited Partnership 
--------------------------------------------------------------------- 
 
Financial Statements - Liberty Property Limited Partnership: 
------------------------------------------------------------ 
Balance Sheets: 
Liberty Property Limited Partnership Consolidated as of December 31, 
   1996 and 1995 
 
Statements of Operations: 
Liberty Property Limited Partnership Consolidated for the years ended 
   December 31, 1996 and 1995 and for the period from June 23, 1994 to 
   December 31, 1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994 
 
Statements of Owners' Equity and Owners' Deficit: 
Liberty Property Limited Partnership Consolidated for the years ended  
December 31, 1996 and 1995 and for the period from June 23, 1994 to  
   December 31, 1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994  
 
Statements of Cash Flows: 
Liberty Property Limited Partnership Consolidated for the years ended  
December 31, 1996 and 1995 and for the period from June 23, 1994 to  
   December 31, 1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994  
 
Notes to Financial Statements - Liberty Property Limited Partnership  
 
Financial Statement Schedule - Liberty Property Limited Partnership:  
Schedule III - Real Estate and Accumulated Depreciation as of  
   December 31, 1996 
 
                                 -30-

<PAGE> 
REPORT OF INDEPENDENT AUDITORS 
 
 
 
 
To The Board of Trustees and Shareholders 
Liberty Property Trust 
 
 
 
We have audited the accompanying consolidated balance sheets of Liberty  
Property Trust (the "Trust") as of December 31, 1996 and 1995, and the  
related consolidated statements of operations, shareholders' equity, and  
cash flows for each of the two years in the period ended December 31,  
1996, and the period June 23, 1994 through December 31, 1994.  We have  
also audited the combined statements of operations, owners' deficit and  
cash flows of the Rouse Group for the period January 1, 1994 through  
June 22, 1994.  Our audits also included the financial statement  
schedule listed in the Index at Item 14(a).  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 generally accepted auditing  
standards.  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 financial statements referred to above present  
fairly, in all material respects, the consolidated financial position of  
Liberty Property Trust at December 31, 1996 and 1995, the consolidated  
results of Liberty Property Trust's operations and cash flows for each  
of the two years in the period ended December 31, 1996 and for the  
period June 23, 1994 through December 31, 1994, and the combined results  
of the Rouse Group's operations and cash flows for the period January 1,  
1994 through June 22, 1994, in conformity with 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. 
 
 
 
 
Philadelphia, Pennsylvania                         ERNST & YOUNG LLP 
February 17, 1997 
                                   -31-

<PAGE> 
 
              CONSOLIDATED BALANCE SHEETS OF LIBERTY PROPERTY TRUST 
                                (IN THOUSANDS) 
                                                      DECEMBER 31, 
                                               ------------------------- 
                                                  1996            1995 
ASSETS                                         ----------     ---------- 
Real estate: 
 Land and land improvements                    $  140,196     $ 108,723 
 Buildings and improvements                       908,835       715,908 
 Less accumulated depreciation                   (119,151)      (94,183) 
                                               ----------     --------- 
Operating real estate                             929,880       730,448 
 
 Development in progress                           85,628        67,021 
 Land held for development                         44,054        28,578 
                                               ----------     --------- 
Net real estate                                 1,059,562       826,047 
 
Cash and cash equivalents                          19,612        10,629 
Accounts receivable                                 8,707         5,608 
Deferred financing and leasing costs, 
 net of accumulated amortization 
 (1996 $30,985; 1995 $24,007)                      27,013        26,363 
Prepaid expenses and other assets                  37,718        29,455 
                                               ----------     --------- 
Total assets                                   $1,152,612     $ 898,102 
                                               ==========     ========= 
LIABILITIES 
Mortgage loans                                 $  240,803     $ 172,115 
Subordinated debentures                           171,214       229,900 
Lines of credit                                   266,692        71,894 
Accounts payable                                    6,294         4,577 
Accrued interest                                    7,411         9,439 
Dividend payable                                   14,248        12,668 
Other liabilities                                  28,923        20,835 
                                               ----------     --------- 
Total liabilities                                 735,585       521,428 
 
Minority interest                                  41,495        41,153 
 
SHAREHOLDERS' EQUITY 
Common shares of beneficial interest, 
 $.001 par value, 200,000,000 shares 
 authorized, 31,400,361 and 28,348,048 
 shares issued and outstanding as of 
 December 31, 1996 and 1995, respectively              31            28 
Additional paid-in capital                        370,813       314,407 
Unearned compensation                              (1,408)            - 
Retained earnings                                   6,096        21,086 
                                               ----------     --------- 
Total shareholders' equity                        375,532       335,521 
                                               ----------     --------- 
Total liabilities and shareholders' equity     $1,152,612     $ 898,102 
                                               ==========     ========= 
See accompanying notes. 
 
                                 -32-

<PAGE>
<TABLE> 
             CONSOLIDATED STATEMENTS OF OPERATIONS OF LIBERTY PROPERTY TRUST 
                 AND COMBINED STATEMENTS OF OPERATIONS OF THE ROUSE GROUP 
                        (IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 
 
<CAPTION> 
                                            LIBERTY PROPERTY TRUST             ROUSE GROUP 
                                  ------------------------------------------   ----------- 
                                                                               JANUARY 1, 
                                   YEAR ENDED    YEAR ENDED     JUNE 23, TO     1994 TO    
                                  DECEMBER 31,   DECEMBER 31,   DECEMBER 31,    JUNE 22,     
                                      1996          1995          1994            1994 
                                  ------------   ------------   ------------   ---------- 
<S>                               <C>            <C>            <C>            <C>
REVENUE 
Rental                            $   112,841    $    89,163    $  34,698      $  26,416 
Operating expense reimbursement        35,886         24,604        9,057          8,148 
Management fees                         1,340            734          536            688 
Interest and other                      4,198          2,540        2,347          1,132 
                                  -----------    -----------    ---------    ----------- 
Total revenue                         154,265        117,041       46,638         36,384 
 
OPERATING EXPENSES 
Rental property                        29,624         20,010        7,577          7,606 
Real estate taxes                      11,229          9,304        3,800          2,767 
General and administrative              8,023          5,212        2,273          2,439 
Depreciation and amortization          28,203         22,518        8,294          6,438 
                                  -----------    -----------    ---------    ----------- 
 
Total operating expenses               77,079         57,044       21,944         19,250 
                                  -----------    -----------    ---------    ----------- 
 
Operating income                       77,186         59,997       24,694         17,134 
 
Premium on debenture conversions        1,027             --           --             -- 
Interest expense                       38,528         37,688       13,826         20,417 
                                  -----------    -----------    ---------    ----------- 
 
Income (loss) before extra- 
 ordinary item and minority 
 interest                              37,631         22,309       10,868         (3,283) 
 
Extraordinary item - Gain on 
 extinguishment of debt                    --             --       52,677          3,084 
                                  -----------    -----------    ---------    ----------- 
 
Income (loss) before minority 
 interest                              37,631         22,309       63,545           (199) 
 
Minority interest                       3,891          2,843        7,664             -- 
                                  -----------    -----------    ---------    ----------- 
 
Net income (loss)                 $    33,740    $    19,466    $  55,881    $      (199) 
                                  ===========    ===========    =========    =========== 
 
Net income per common share 
 before extraordinary item        $      1.14    $      0.89    $    0.46 
Extraordinary item per  
 common share                              --             --         2.21 
                                  -----------    -----------    --------- 
Net income per common share       $      1.14    $      0.89    $    2.67 
                                  ===========    ===========    ========= 
Weighted average number of 
 common shares outstanding             29,678         21,838       20,965  
                                  ===========    ===========    ========= 
 
See accompanying notes. 
</TABLE>
                                  -33-

<PAGE>
<TABLE>
        CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY OF LIBERTY PROPERTY 
        TRUST AND COMBINED STATEMENTS OF OWNERS' DEFICIT OF THE ROUSE GROUP 
                                   (IN THOUSANDS) 
 
<CAPTION>                                                                                            TOTAL 
                                    COMMON                                               SHAREHOLDERS' 
                                   SHARES OF   ADDITIONAL                ACCUMULATED      AND OWNERS' 
                                   BENEFICIAL   PAID-IN      UNEARNED      EQUITY           EQUITY 
                                    INTEREST    CAPITAL    COMPENSATION   (DEFICIT)       (DEFICIT) 
                                   ----------  ----------  ------------  ------------   ------------ 
<S>                                <C>         <C>         <C>           <C>           
Owners' deficit at January 1, 
 1994                                                                     $  (150,987)   $  (150,987) 
 
Distribution to partners                                                       (4,941)        (4,941) 
Net income from the period 
 January 1, 1994 through 
 June 22, 1994                                                                   (199)          (199) 
                                                                          ------------   ------------ 
Owners' deficit contributed 
 at June 23, 1994                                                            (156,127)      (156,127) 
 
Contributions from partners                     $(156,127)                    156,127              - 
Distribution to partners                          (23,154)                                   (23,154) 
Net proceeds from the issuance 
 common shares                     $       21     362,137                                    362,158 
Net income                                                                     55,881         55,881 
Dividends paid                                                                 (9,091)        (9,091) 
                                   ----------   ----------                ------------   ------------ 
Balance at December 31, 1994               21     182,856                      46,790        229,667 
 
Net proceeds from the issuance 
 common shares                              7     131,451                                    131,458 
Conversion of debentures                              100                                        100 
Net income                                                                     19,466         19,466 
Dividends paid and accrued                                                    (45,170)       (45,170) 
                                   ----------   ----------                ------------   ------------ 
 
Balance at December 31, 1995               28     314,407                      21,086        335,521 
 
Conversion of debentures                    3      55,802                                     55,805 
Uearned compensation                                2,112   $   (1,408)                          704 
Net income                                                                     33,740         33,740 
Dividends paid and accrued                                                    (48,730)       (48,730) 
Noncash compensation                                  370                                        370 
Minority interest reclassifcation                  (1,878)                                    (1,878) 
                                   ----------   ----------  -----------   -----------    ----------- 
 
Balance at December 31, 1996       $       31   $ 370,813   $   (1,408)   $     6,096    $   375,532 
                                   ==========   ==========  ==========    ===========    =========== 
</TABLE>
 
See accompanying notes. 

                                   -34-

<PAGE>
<TABLE>
             CONSOLIDATED STATEMENTS OF CASH FLOWS OF LIBERTY PROPERTY TRUST 
                 AND COMBINED STATEMENTS OF CASH FLOWS OF THE ROUSE GROUP 
                                      (IN THOUSANDS) 
<CAPTION>
                                           LIBERTY PROPERTY TRUST            ROUSE GROUP 
                                  ----------------------------------------   ----------- 
                                          YEAR ENDED            JUNE 23,     JANUARY 1, 
                                  --------------------------    1994 TO       1994 TO 
                                  DECEMBER 31,  DECEMBER 31,  DECEMBER 31,    JUNE 22, 
                                     1996          1995          1994          1994 
                                  ------------  ------------  ------------   ----------- 
<S>                               <C>           <C>           <C>            <C>
OPERATING ACTIVITIES 
Net income (loss)                 $    33,740   $    19,466   $    55,881    $     (199) 
Adjustments to reconcile net 
 income (loss) to net cash pro- 
 vided by operating activities: 
  Gain on extinguishment 
   of debt                                  -             -       (52,677)       (3,084) 
  Depreciation and amorti- 
   zation                              28,203        22,518         9,544         6,438 
  Minority interest in net 
   income                               3,891         2,843         7,664             - 
  Gain on sale                           (577)            -             -             - 
  Noncash compensation                    704             -             -             - 
  Changes in operating assets 
   and liabilities: 
   Accounts receivable                 (3,099)       (1,006)          (62)         (277) 
   Prepaid expense and other 
    assets                            (11,197)       (5,595)          463         4,287 
   Accounts payable                     1,717         2,871        (6,060)          586 
   Accrued interest on exist- 
    ing debt                           (2,028)         (286)        9,725            55 
   Other liabilities                    8,463         9,641         7,304          (756) 
                                  ------------  ------------  ------------   ----------- 
Net cash provided by opera- 
 ting activities                       59,817        50,452        31,782         7,050 
                                  ------------  ------------  ------------   ----------- 
 
INVESTING ACTIVITIES 
Investment in properties             (223,756)     (193,219)     (145,144)       (4,827) 
Investment in development  
 in progress                          (18,607)      (64,122)       (2,899)            -  
Investment in land held for 
 development                          (15,476)      (20,367)       (1,226)            - 
(Increase) decrease in  
 deferred leasing costs                (7,588)       (4,154)       (5,004)        2,818 
                                  ------------  ------------  ------------   ----------- 
 
Net cash used in investing 
 activities                          (265,427)     (281,862)     (154,273)       (2,009) 
                                  ------------  ------------  ------------   ----------- 
 
FINANCING ACTIVITIES 
Net proceeds from issuance of 
 common stock                               -       131,458       385,454             - 
Proceeds from issuance of 
 debentures                                 -             -       230,000             - 
Decrease in restricted cash                 -             -         5,967         6,108 
Proceeds from mortgage loans           77,605        91,800             -        16,198 
Repayments of mortgage loans           (8,917)       (7,659)     (396,980)      (17,078) 
Repayments of accrued interest 
 at formation                               -             -       (29,269)            - 
Proceeds from lines of credit          237,191       167,925        69,000            - 
Repayments on line of credit          (42,393)     (140,031)      (25,000)            - 
Proceeds from notes payable                 -             -             -         2,421 
Repayment of notes payable                  -             -       (25,519)            - 

                                       -35-

<PAGE>
Deposits on pending acquisi- 
 tions                                  2,593        12,865       (22,700)            - 
Decrease (increase) in deferred 
 financing costs                        1,092          (707)      (20,695)        2,818 
Dividends                             (47,190)      (33,830)       (9,091)            - 
Distribution to partners               (5,388)       (4,951)      (24,282)       (4,941) 
                                  ------------  ------------  ------------   ----------- 
Net cash  
provided by 
 financing activities                 214,593       216,870       136,885         5,526 
 
Increase (decrease) in cash and 
 cash equivalents                       8,983       (14,540)       14,394        10,567 
 
Cash and cash equivalents at 
 beginning of period                   10,629        25,169        10,775           208 
                                  ------------  ------------  ------------   ----------- 
 
Cash and cash equivalents at 
 end of period                    $    19,612   $    10,629   $    25,169    $   10,775 
                                  ============  ============  ===========    ========== 
 
SUPPLEMENTAL DISCLOSURE OF 
NONCASH TRANSACTIONS 
Write-off of fully depreciated 
 property and deferred costs      $       487   $     2,617   $     6,699    $        - 
Acquisition of properties                   -       (55,874)            -             - 
Assumption of mortgage loans                -        41,117             -             - 
Issuance of operating partner- 
 ship units                                 -        14,757             -             - 
Noncash compensation                      370             -             -             - 
Conversion of subordinated 
 debentures                            55,802           100             -             - 
                                  ============  ============  ============   =========== 
</TABLE>

See accompanying notes.

                                     -36-
<PAGE>
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF LIBERTY PROPERTY TRUST 
AND COMBINED FINANCIAL STATEMENTS OF THE ROUSE GROUP 
 
 
1.   ORGANIZATION 
 
Liberty Property Trust (the "Trust") a self-administered and self- 
managed real estate investment trust (a "REIT"), was formed in the State  
of Maryland on March 28, 1994 and commenced operations on June 23, 1994  
upon completion of its initial public offering of  20,987,500 Common  
Shares of Beneficial Interest (the "Share Offering").  The Trust  
conducts all of its operations, including leasing, property management  
and other services through Liberty Property Limited Partnership (the  
"Operating Partnership" and together with the Trust referred to as the  
"Company"). Simultaneous with the closing of the Share Offering, the  
Company succeeded to substantially all of the interests of Rouse &  
Associates, a general partnership, and certain other entities affiliated  
with Rouse & Associates (collectively the "Rouse Group"). At December  
31, 1996, the Trust owns an 90.02% interest in the Operating Partnership  
as the sole general partner and a .03% interest as a limited partner.   
Concurrent with the Share Offering, the Operating Partnership completed  
a public offering of $230 million of Exchangeable Subordinated  
Debentures (the "Debenture Offering", and, together with the Share  
Offering, the "Offerings") due 2001.  The Debentures are guaranteed by  
the Trust.  After June 23, 1995, the Debentures are exchangeable at any  
time prior to maturity into Common Shares of Beneficial Interest at a  
rate of one share for each $20 outstanding principal amount of  
Debentures, subject to certain adjustments. The Company completed a  
follow-on offering (the "Follow-on Offering") on November 27, 1995,  
which resulted in net proceeds of $131.5 million.  The Company provides  
leasing, property management, acquisition, development, construction  
management, and design management for a portfolio of industrial and  
office properties which are located principally within the Southeastern  
and Mid-Atlantic United States. 
 
The Rouse Group combined financial statements include accounts of the  
properties and entities acquired by the Operating Partnership which are  
considered to be entities under common ownership and management. 
 
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
Use of Estimates 
 
The preparation of financial statements in conformity with generally  
accepted accounting principles 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  
accounts of the Trust, the Operating Partnership and the Operating  
Partnership's direct and indirect subsidiaries including Liberty  
Property Development Corporation.  The acquisition of the Rouse Group  

                               -37-

<PAGE>
interest by the Operating Partnership was accounted for as a  
reorganization of entities under common control which is similar to the  
accounting for a pooling of interests.  As a result, the operations of  
the Rouse Group are included in these Financial Statements. All  
significant intercompany transactions and accounts have been eliminated. 
 
Certain amounts from prior periods have been restated to conform to  
current year presentation. 
 
Real Estate and Depreciation 
 
The Properties are recorded at the lower of cost or net realizable value  
and are depreciated using the straight-line method over their estimated  
useful lives.  The estimated lives are as follows: 
 
        Building and improvements          40 years 
        Equipment                          10 years 
        Tenant improvements                Term of the related lease 
 
Cash Equivalents 
 
Highly liquid investments with a maturity of three months or less when  
purchased are classified as cash equivalents.  The carrying amount of  
these assets approximates their fair market value.  
 
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. 
 
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. Amortization  
of deferred financing costs is reported as interest expense. 
 
Earnings per Share 
 
Earnings per share is computed using the weighted average common shares  
and common stock equivalents outstanding during the years ended December  
31, 1996 and December 31, 1995 and for the period from June 23, 1994  
through December 31, 1994.  Fully diluted earnings per share is not  
disclosed because such information is not meaningful.  Earnings per  
share is $1.16 calculated as if the debenture conversions which occurred  
in 1996 had occurred on January 1, 1996. 
 
Income Taxes 
 
The Trust has made an election to be taxed as a Real Estate Investment  
Trust ("REIT") under Sections 856 through 860 of the Internal Revenue  
Code.  As a REIT, the Trust generally will not be subject to Federal  
income tax to the extent that it distributes at least 95% of its REIT  

                                 -38-
<PAGE>
taxable income to its shareholders.  If the Trust fails to qualify as a  
REIT in any taxable year, the Trust will be subject to Federal income  
tax (including any applicable Alternative Minimum Tax) at regular  
corporate rates on its taxable income. Even if the Trust qualifies for  
taxation as a REIT, the Trust may be subject to certain state and local  
taxes on its income and property and to Federal income and excise taxes  
on its undistributed income. 
 
The Company paid dividends of $52.6 million, $38.7 million, and $10.2  
million during the years ended December 31, 1996 and 1995 and for the  
period from June 23, 1994 to December 31, 1994.  On a per share basis,  
the Company paid dividends of $1.61, $1.60 and $0.43 during the years  
ended December 31, 1996 and 1995 and for the period from June 23, 1994  
to December 31, 1994.  The portions of the 1996 dividend relating to  
return of capital and earnings and profits are 29.9% and 70.1%,  
respectively. 
 
The Federal tax cost basis of the real estate at December 31, 1996 was  
approximately $1.1 billion. 
 
3.   REAL ESTATE 
 
At December 31, 1996 and 1995, the Company owned and operated industrial  
and office properties within suburban mixed use developments or business  
parks.  The carrying value of these properties by type is as follows (in  
thousands): 
<TABLE>
<CAPTION> 
                                  LAND        BUILDINGS 
                                AND LAND         AND                   ACCUMULATED 
                              IMPROVEMENTS   IMPROVEMENTS    TOTAL     DEPRECIATION 
                              ------------   ------------  ---------   ------------ 
<S>                           <C>            <C>           <C>         <C>
1996: 
Industrial properties          $  85,459       $ 517,272    $  602,731     $ 62,557 
Office Properties                 54,737         391,563       446,300       56,594 
                               ---------       ---------    ----------     -------- 
 
1996 Total                     $ 140,196       $ 908,835    $1,049,031     $119,151 
                               =========       =========    ==========     ======== 
 
1995: 
Industrial properties          $  67,373       $ 427,369    $  494,742     $ 50,907 
Office properties                 41,350         288,539       329,889       43,276 
                                ---------      ---------    ----------     -------- 
 
1995 Total                      $ 108,723      $ 715,908    $  824,631     $ 94,183 
                                =========      =========    ==========     ======== 
</TABLE>
Depreciation expense was $24,968 in 1996, $19,675 in 1995, and $11,976  
in 1994. 
 
The Company has commenced development on 22 properties, which upon  
completion are expected to comprise approximately 3.0 million square  
feet of leasable space.  As of December 31, 1996 approximately $85.6  
million has been expended for the development of these projects and an  
additional $68.2 million is required for completion. 
 
                               -39-
<PAGE> 
 
4.   RELATED PARTY TRANSACTIONS 
 
An affiliated company provides construction services to the Company.   
Amounts paid to this affiliate were $29,717,000 in 1996, $6,245,000 in  
1995, and $2,583,000 in 1994. 
 
During 1995, three properties were purchased from partnerships  
affiliated with Rouse & Associates not included in the Rouse Group.  The  
Rouse principals received no financial consideration for the purchase. 
 
Pursuant to agreements, the Company has been retained by an affiliate  
(Rouse Kent Limited) to provide development, management and other  
services. For the years ended December 31, 1996 and December 31, 1995  
and the period from June 23, 1994 to December 31, 1994 the fees for  
these services were $600,000, $600,000 and $453,000 respectively. At  
December 31, 1995, the Company had a $250,000 receivable from Rouse Kent  
Limited for these management and other services.  Additionally, the  
Company committed to loans in 1996 to two affiliates (Rouse Kent  
Development Limited and 1 Tower View Limited) for development projects.   
As of December 31, 1996, the balance of these notes receivable was $7.4  
million. 
 
5.   MORTGAGE LOANS, SUBORDINATED DEBENTURES AND LINES OF CREDIT  
 
Long term indebtedness consists generally of mortgage loans,  
subordinated debentures and Lines of Credit.  The average annualized  
interest rates for the years ended December 31, 1996, 1995, and 1994,  
were approximately 7.6%, 7.8%, and 8.0%  respectively.  Interest expense   
for the years ended December 31, 1996, 1995, and 1994, aggregated  
$38,528,000,  $37,688,000, and $34,243,000, respectively.  Interest  
costs during these periods of $7,708,000, $3,475,000, and $190,000 were  
capitalized.  Cash paid for interest for the years ended December 31,  
1996, 1995, and 1994 was $35,995,000, $33,202,000, and $51,232,000,  
respectively. 
 
Mortgage loans with maturities ranging from 1997 to 2013 are  
collateralized by and in some instances cross collateralized by  
properties with a book value of $314.0 million.  The interest rates on  
$230.4 million of mortgage loans are fixed and range from 6% to 10%.   
Interest rates on $10.4 million of mortgage loans float with LIBOR or  
prime and are subject to certain caps.  The weighted average interest  
rate on the mortgage loans is 7.7% and the weighted average life is 8  
years. 
 
                                 -40-

<PAGE> 
 
The aggregate maturities of the mortgages loans outstanding are as  
follows (in thousands):  
 
        1997                 $  7,065 
        1998                   10,936 
        1999                   19,031 
        2000                   29,717  
        2001                   12,555 
        Thereafter            161,499 
                             -------- 
        TOTAL                $240,803 
                             ======== 
 
The Debentures are due on June 23, 2001 and are exchangeable for shares  
of the Trust at a rate of one share for each $20 outstanding principal  
amount of Debentures, subject to certain adjustments.  The initial  
interest rate on the Debentures was 8% and increases with increases in  
the dividend payment on the Company's Common Shares of Beneficial  
Interest.  At the current $.41 per share per quarter dividend payment  
rate, the effective interest rate on the Debentures is 8.2%.  During the  
year ended December 31, 1996, the Company paid sums aggregating $1.0  
million to facilitate the conversion of $58.7 million of Debentures into  
2,934,300 common shares. During the year ended December 31, 1996, $2.9  
million of related deferred financing costs were written off through  
additional paid-in capital. 
 
The Lines of Credit are composed of two secured lines of credit (the  
"$250 million Line of Credit" and the "$80 million Line of Credit").   
The $250 million Line of Credit is secured and is due on June 15, 1998  
at which time it may be converted into a two year term loan with the  
payment of a conversion fee equal to 1/2% of the then outstanding  
balance.  As of December 31, 1996, the $250.0 million Line of Credit was  
fully collateralized and $241.7 million was outstanding.  The interest  
rate on the $250 million Line of Credit is 30-day LIBOR plus 1.75%  
(7.13% and 7.75% at December 31, 1996 and 1995, respectively). Other  
normal and customary fees apply including an unused line fee. The $250  
million Line of Credit is recourse to the Company only with respect to  
50% of the outstanding principal thereof and is otherwise non-recourse  
subject to certain conditions.  At December 31, 1996, 109  properties  
with a book value of $387.6 million collateralized the $250 million Line  
of Credit. During 1996, the Company closed on an $80 million Line of  
Credit.  The $80 million Line of Credit is secured and is due on  
December 13, 1998.  At any time prior to December 13, 1998, maturity may  
be extended for one year subject to certain conditions and the payment  
of an extension fee equal to 1/4% of the total commitment.  As of  
December 31, 1996, collateral had been approved to enable the company to  
borrow up to $56.0 million, of which $25.0 million was outstanding.  The  
interest rate on the $80 million Line of Credit is 90-day LIBOR plus  
1.60% (7.13% at December 31, 1996).  At December 31, 1996, 23 properties  
with a book value of $64.5 million, and 2 development properties with a  
book value of $3.9 million collateralized the $80 million Line of  
Credit. 
 
                                 -41-

<PAGE>

In 1994, the Company recognized a gain on extinguishment of debt which  
resulted primarily from the payment of mortgage notes and notes payable  
including penalties and accrued interest at a discount with $451.8  
million in proceeds obtained from the issuance of shares and the  
Debentures. 
 
The fair value of the Debentures at December 31, 1996 was $220.4 million  
based on the closing bid price of the security on the New York Stock  
Exchange.  The fair values of the mortgages and Lines of Credit were  
estimated using discounted cash flow analysis, based on the Company's  
estimated incremental borrowing rate at December 31, 1996, for similar  
types of borrowing arrangements.  The carrying values of the mortgages  
and the Lines of Credit approximate their fair values. 
 
6.	LEASING ACTIVITY 
 
Future minimum rental payments due from tenants under non-cancellable  
operating leases as of December 31, 1996 are as follows (in thousands): 
 
        1997                 $119,777  
        1998                  107,177  
        1999                   91,805 
        2000                   68,264 
        2001                   40,441  
        Thereafter            126,211  
                             -------- 
        TOTAL                $553,675 
                             ======== 
 
In addition to minimum rental payments, tenants pay for their pro rata  
share of specified operating expenses.  These amounts are included as  
operating expense reimbursement in the accompanying statements of  
operations.  
 
7.	MINORITY INTEREST 
 
In conjunction with the formation of the Company, persons contributing  
interest in properties to the Operating Partnership have received  
limited partnership interests in the Operating Partnership.  The  
aggregate outstanding limited partnership interests have the same  
economic characteristics as would 3,470,961 common shares of the Trust,  
inasmuch as they share proportionately in the net income or loss and in  
any distributions of the Operating Partnership and such interests are  
exchangeable into the same number of shares of the Trust. 
 
Minority interest in the accompanying consolidated financial statements  
relates to such limited partnership interests. 
  
8.	SHARE OPTIONS 
 
The Company has elected to follow Accounting Principles Board Opinion  
No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related  
Interpretations in accounting for its employee stock options because, as  
discussed below, the alternative fair value accounting provided for  

                              -42-

<PAGE>

under FASB Statement No. 123, "Accounting for Stock-Based Compensation,"  
requires use of option valuation models that were not developed for use  
in valuing employee stock options.  Under APB 25, because the exercise  
price  of the Company's employee stock options equals the market price  
of the underlying stock on the date of grant, no compensation expense is  
recognized. 
 
The Company's 1995 Share Incentive Plan has authorized the grant of  
options to executive officers, other key employees, non-employee  
trustees and consultants for up to 2,100,000 shares of the Company's  
common shares of beneficial interest.  All options granted have 10 year  
terms and 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. 
 
Pro forma information regarding net income and earnings per share is  
required by Statement 123, and has been determined as if the Company had  
accounted for its employee stock options under the fair value method of  
that Statement.  The fair value for these options was estimated at the  
date of grant using a Black-Scholes option pricing model with the  
following weighted-average assumptions: risk-free interest rate of 6.2%;  
dividend yield of 7.0%; volatility factor of the expected market price  
of the Company's common stock of .164; and a weighted-average expected  
life of the option of 3 years. 
 
The Black-Scholes option valuation model was developed for use in  
estimating the fair value of traded options which have no vesting  
restrictions and are fully transferable.  In addition, option valuation  
models require the input of highly subjective assumptions including the  
expected stock price volatility.  Because the Company's employee stock  
options have characteristics significantly different from those of  
traded options, and because changes in the subjective input assumptions  
can materially affect the fair value estimate, in management's opinion,  
the existing models do not necessarily provide a reliable single measure  
of the fair value of its employee stock options. 
 
For purposes of pro forma disclosures, the estimated fair value of the  
options is amortized to expense over the options' vesting period.  The  
Company's pro forma information follows (in thousands, except for per  
share amounts): 
                                         1996             1995 
                                      ----------       ----------- 
                                             (IN THOUSANDS) 
                                      ---------------------------- 
 
Pro forma net income                   $ 33,359         $ 19,392 
 
Pro forma earnings per share: 
 
    Primary                            $   1.12         $   0.89 
 
                                -43-

<PAGE>

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. 
 
A summary of the Company's stock option activity, and related  
information for the years ended December 31, 1996, 1995 and the period  
from June 23, 1994 through December 31, 1994 follows: 
<TABLE>
<CAPTION>
                                      1996                1995                1994 
                               -----------------   -----------------   -----------------  
                                        WEIGHTED            WEIGHTED            WEIGHTED 
                                        AVERAGE             AVERAGE             AVERAGE 
                               OPTIONS  EXERCISE   OPTIONS  EXERCISE   OPTIONS  EXERCISE 
                               (000s)    PRICE     (000s)    PRICE     (000s)    PRICE 
                               -------  --------   -------  --------   -------  -------- 
<S>                            <C>      <C>        <C>      <C>        <C>      <C>   
Outstanding-beginning of year   1,468   $ 20.26      765    $ 20.00    765 (1)  $ 20.00 
Granted                           166     20.77      703      20.54      -            -  
Exercised                        (118)    20.77        -          -      -            -  
Forfeited                         (46)    20.00        -          -      -            -  
                               -------  -------    -------  -------    -------  ------- 
Outstanding-end of year         1,470   $ 20.28    1,468    $ 20.26    765      $ 20.00 
                               =======  =======    =======  =======    =======  ======= 
 
Exercisable at end of year        501   $ 20.15      153    $ 20.00      -            -  
 
Weighted-average fair 
 value of options granted 
 during the year               $ 1.56 
 
(1) Outstanding 6/23/94 
</TABLE>
 
Exercise prices for options outstanding as of December 31, 1996 ranged  
from $19.75 to $20.875.  The weighted-average remaining contractual life  
of those options is 8.2 years.  
 
An additional 511,887, 632,400 and 1,335,000 shares were reserved for  
issuance for future grants from the option plan at December 31, 1996,  
1995 and 1994, respectively. 
 
9.   COMMITMENTS AND CONTINGENCIES 
 
All of the Properties have been subject to Phase I Environmental  
Assessments ("Phase I Assessments") performed and obtained in  
contemplation of the formation or acquisitions.  The Phase I Assessments  
consisted of, among other activities, a visual inspection of each  
Property and its neighborhood and a check of pertinent public records.   
The Phase I 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. 
 
The Trust is not a party to any material legal proceedings.  In the  
ordinary course of business, the Operating Partnership is party to  
ordinary routine litigation incidental to its business and in addition  
it is covered by insurance. 

                                -44-

<PAGE>
 
The Company has entered into an interest rate swap agreement to hedge  
against possible fluctuations in interest rates in anticipation of a  
$120 million debt issuance in 1997 for a five to seven year term.  The  
securities underlying the interest rate swap agreement, with a notional  
amount of $114.5 million, are 5.875% US Treasury Securities maturing on  
February 15, 2004.  Gain or loss on this hedging transaction is being  
deferred and will be amortized as adjustments to interest expense  
commencing on the date of issuance of the debt and over the term of the  
debt.  At December 31, 1996, the Company had one swap transaction  
outstanding, and approximately $645,000 in unrealized gain has been  
deferred. 
 
10.   QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) 
 
The following is a summary of quarterly results of operations for the  
two years ended December 31, 1996 and 1995 (in thousands, except per  
share amounts): 

<TABLE>
<CAPTION>
                                                                QUARTER ENDED 
                                ---------------------------------------------------------------------------------- 
                                DEC. 31,  SEPT. 30,  JUNE 30,  MARCH 31,  DEC. 31,  SEPT. 30,  JUNE 30,  MARCH 31, 
                                  1996      1996       1996      1996       1995       1995      1995       1995 
                                --------  ---------  --------  ---------  --------  ---------  --------  --------- 
<S>                             <C>       <C>        <C>       <C>        <C>       <C>        <C>       <C>
Rental revenue                  $ 30,822  $ 28,921   $ 27,146  $ 25,952   $ 24,203  $  23,206  $ 22,261  $  19,493 
                                ========  ========   ========  ========   ========  =========  ========  ========= 
 
Operating income                  20,884    19,657     18,557    18,088     16,760     15,637    14,441     13,159 
                                ========  ========   ========  ========   ========  =========  ========  ========= 
 
Income before extra- 
 ordinary item and 
 minority interest                10,630     9,313      8,734     8,954      6,525      5,591     5,428      4,765 
                                ========  ========   ========  ========   ========  =========  ========  ========= 
 
Net income                         9,572     8,370      7,809     7,989      5,814      4,808     4,668      4,176 
                                ========  ========   ========  ========   ========  =========  ========  ========= 
 
Net income per 
 common share before 
 extraordinary item             $   0.31  $   0.28   $   0.27  $   0.28   $   0.24  $    0.23  $   0.22  $    0.20 
                                ========  ========   ========  ========   ========  =========  ========  ========= 
Net income per 
 common share                   $   0.31  $   0.28   $   0.27  $   0.28   $   0.24  $    0.23  $   0.22  $    0.20 
                                ========  ========   ========  ========   ========  =========  ========  ========= 
</TABLE>

11.   PRO FORMA INFORMATION (UNAUDITED) 
 
The following unaudited pro forma information has been prepared assuming  
the Secondary Offering described in Note 1 and the acquisitions of 54  
properties acquired in 1995 and 33 properties acquired in 1996 had  
occurred at January 1, 1995.  The 1995 acquisitions were acquired for a  
total investment of $202.3 million and the 1996 acquisitions were  
acquired for a total investment of $132.9 million. 
 
                                        YEAR ENDED DECEMBER 31, 
                                        ----------------------- 
                                          1996            1995 
                                        --------        -------- 
                                            (IN THOUSANDS, 
                                        EXCEPT PER SHARE AMOUNTS) 
                                        ------------------------ 
 
Total revenues                          $172,503        $155,537 
Net income                                34,229          28,619 
Net income per share (1)                    1.15            1.01 
 
                              -45-

<PAGE>

(1) Net income in the per share calculation has been computed after a  
deduction for minority interest. 
 
This pro forma information is not necessarily indicative of what actual  
results of operations of the Company would have been, assuming the  
Company had completed the Secondary Offering as of January 1, 1995, nor  
do they purport to represent the results of operations of the Company  
for future periods. 
 
          
                              -46-

<PAGE> 
<TABLE>
                                                  LIBERTY PROPERTY TRUST 
                                        REAL ESTATE AND ACCUMULATED DEPRECIATION 
                                                 AS OF DECEMBER 31, 1996 
<CAPTION>
                                                                                                              Cost 
                                                                                                           Capitalized 
                                                                                       Initial Cost        Subsequent 
                                                                               -------------------------        to 
              Project                           City          Encumbrances       Land         Building     Acquisition 
--------------------------------------  -------------------   ------------   ------------   ------------   ------------ 
<S>                                     <C>                   <C>            <C>            <C>            <C>
OPERATING REAL ESTATE  
10,20 Liberty Boulevard                 Malvern, PA           $          -   $    724,058   $          -   $  4,704,961  
420 Lapp Road                           Malvern, PA                 **          1,054,418              -      6,204,241  
1 Chelsea Parkway                       Boothwyn, PA                *             245,082              -      2,613,641  
3 Chelsea Parkway                       Boothwyn, PA                *             288,654              -      2,693,647  
747 Dresher Road                        Horsham, PA                 *           1,607,238              -      3,939,268  
45-67 Great Valley Parkway              Malvern, PA                 **            795,143              -      2,744,403  
1180 Church Road                        Lansdale, PA                     -      2,357,045     10,041,340      4,388,188  
40 Valley Stream Parkway                Malvern, PA                 **            322,918              -      2,185,822  
50 Valley Stream Parkway                Malvern, PA                ***            323,971              -      2,375,079  
20 Valley Stream Parkway                Malvern, PA                 **            465,539              -      4,989,163  
800 Town Center Drive                   Langhorne, PA               *           1,617,150              -      8,766,575  
1610 Medical Drive                      Pottstown, PA               *             211,639              -      2,492,497  
9, 15 Great Valley Parkway              Malvern, PA                 **          1,837,050              -     14,959,932  
257-275 Great Valley Parkway            Malvern, PA                 **            504,611              -      4,319,860  
300 Technology Drive                    Malvern, PA                ***            368,626              -      1,259,207  
277-293 Great Valley Parkway            Malvern, PA                ***            530,729              -      1,888,752  
311 Technology Drive                    Malvern, PA                ***            397,131              -      2,186,606  
325 Technology Drive                    Malvern, PA                 **            376,444              -      1,851,241  
7 Great Valley Parkway                  Malvern, PA                 **            176,435              -      4,109,751  
55 Valley Stream Parkway                Malvern, PA                ***            215,005              -      2,835,622  
65 Valley Stream Parkway                Malvern, PA                 **            381,544              -      4,478,264  
508 Lapp Road                           Malvern, PA                 **            331,392              -      1,700,134  
10 Valley Stream Parkway                Malvern, PA                 **            509,075              -      2,624,471  
333 Phoenixville Pike                   Malvern, PA              2,191,808        523,530              -      3,053,475  
1566 Medical Drive                      Pottstown, PA                *            203,083              -      1,828,288  
30 Great Valley Parkway                 Malvern, PA                ***            128,126              -        355,565  
75 Great Valley Parkway                 Malvern, PA                ***            143,074              -        419,401  
27-43 Great Valley Parkway              Malvern, PA                 **            448,775              -      2,070,060  
77-123 Great Valley Parkway             Malvern, PA                 **            887,664              -      4,228,300  
260 Great Valley Parkway                Malvern, PA                 **            203,916              -        849,426  
256 Great Valley Parkway                Malvern, PA                 **            161,098              -      1,888,761  
205 Great Valley Parkway                Malvern, PA                 **          1,368,259              -      9,422,329  
12,14,16 Great Valley Parkway           Malvern, PA                      -        130,689              -      1,162,378  
155 Great Valley Parkway                Malvern, PA                 **            625,147              -      2,197,599  
333 Technology Drive                    Malvern, PA                 **            157,249              -      2,310,848  
510 Lapp Road                           Malvern, PA                 **            356,950              -        862,790  
181 Wheeler Court                       Langhorne, PA                *            260,000      1,940,000         61,328  
1100 Wheeler Way                        Langhorne, PA                *            150,000      1,100,000         83,716  
60 Morehall Road                        Malvern, PA                  *            865,424      9,285,000        165,540  
905 Airport Road                        West Chester, PA             *          1,715,000      5,185,000        207,858  
16 Cabot Boulevard                      Langhorne, PA               **            648,889      5,851,112         74,975  
1 Country View Road                     Malvern, PA              2,869,709        400,000      3,600,000        391,538  
2151 Cabot Boulevard                    Langhorne, PA               **            384,100      3,456,900        262,768  
170 South Warner Road                   King of Prussia, PA          *            547,800      3,137,400      2,040,734  
190 South Warner Road                   King of Prussia, PA          *            552,200      3,162,600      1,146,805  
507 Prudential Road                     Horsham, PA                 **            644,900      5,804,100        230,380  
100 Witmer Road                         Horsham, PA             10,000,000      3,102,784              -      9,671,115  
3100 Horizon Blvd                       King of Prussia, PA          *            601,956              -      1,984,766  
3300 Horizon Blvd                       King of Prussia, PA          *            566,403              -      3,251,926  
3500 Horizon Blvd                       King of Prussia, PA          *          1,204,839              -      2,498,090  
200 Chester Field Parkway               Malvern, PA                ***            495,893      2,739,093         36,670  
767 Electronic Drive                    Horsham, PA                  *          1,229,685              -      2,928,020  
5 Country View Road                     Malvern, PA                 **            785,168      4,678,632        129,524  
3200 Horizon Blvd                       King of Prussia, PA        ***            928,637              -      4,261,364  
111-195 Witmer Road                     Horsham, PA                  *            407,005      3,129,058         95,268  
2460 General Armistead Ave              Norristown, PA                   -        117,316      1,064,442         23,605  
2490 General Armistead Ave              Norristown, PA                   -         66,288        601,433         20,900  
300 Welsh Road                          Horsham, PA                  *            180,459      1,441,473         44,054  
400 Welsh Road                          Horsham, PA                  *            282,493      2,256,508        540,786  
440 East Swedesford Road                Wayne, PA                    *            717,001      4,816,121        861,041  
460 East Swedesford Road                Wayne, PA                    *            705,317      4,737,487        264,645  
2 Walnut Grove Drive                    Horsham, PA                ***          1,281,870      7,767,374            429  
200 Gibralter Road                      Horsham, PA                      -        638,513      5,811,323              -  
220 Gibralter Road                      Horsham, PA                      -        629,944      5,733,228              -  
240 Gibralter Road                      Horsham, PA                      -        629,944      5,733,234              -  
151 S. Warner Road                      Wayne, PA                        -      1,218,086      6,937,866              -  
931 South Matlack Street                West Chester, PA             *            855,865      5,284,065        738,185  
14 Lee Boulevard                        Malvern, PA                 **            664,282              -      6,895,903  
500 Chester Field Parkway               Malvern, PA                 **            472,364              -      2,777,020  
300-400 Chester Field Parkway           Malvern, PA                 **            937,212              -      4,335,779  
1805 Underwood Boulevard                Delran, NJ                   *            188,610        612,736         17,699  
150 Mid-Atlantic Parkway                West Deptford, NJ            *             86,968        304,672        131,758  
18 Boulden Circle                       New Castle, DE               *            188,144              -      3,735,480  
501 Delran Parkway                      Delran, NJ                   *            182,192              -      2,410,505  
600 Delran Parkway                      Delran, NJ                   *            368,843              -      5,945,538  
1607 Imperial Way                       West Deptford, NJ            *            286,413              -      2,751,965  
1 Boulden Circle                        New Castle, DE               *             88,397              -      1,337,860  
 
                                     -47-
<PAGE>
                                                                                                              Cost 
                                                                                                           Capitalized 
                                                                                       Initial Cost        Subsequent 
                                                                               -------------------------        to 
              Project                           City          Encumbrances       Land         Building     Acquisition 
--------------------------------------  -------------------   ------------   ------------   ------------   ------------ 
31-55 Read's Way                        New Castle, DE               *            901,391              -      5,549,247  
3 Boulden Circle                        New Castle, DE               *            119,802              -      2,110,440  
5 Boulden Circle                        New Castle, DE               *            219,641              -      3,509,612  
601 Delran Parkway                      Delran, NJ                   *            193,794              -      1,635,208  
51 Haddonfield Road                     Cherry Hill, NJ              *            251,443              -      9,015,059  
57 Read's Way                           New Castle, DE           2,452,040        253,119              -      2,781,118  
1370 Imperial Way                       West Deptford, NJ            *            297,000      4,373,155         19,539  
8 Stow Road                             Marlton, NJ                  *            172,600      1,704,436         77,520  
10 Stow Road                            Marlton, NJ                  *            147,000      1,451,536          9,799  
12 Stow Road                            Marlton, NJ                  *            103,300      1,021,036        139,288  
14 Stow Road                            Marlton, NJ                  *             93,100        920,336        130,753  
1300 Metropolitan Avenue                West Deptford, NJ            *            220,000      1,980,000         36,101  
701A Route 73 South                     Marlton, NJ                  *            264,387      3,772,000      1,322,487  
701C Route 73 South                     Marlton, NJ                  *             84,949      1,328,000        194,171  
1008 Astoria Boulevard                  Cherry Hill, NJ              *             27,120        424,880        290,548  
1475 Imperial Way                       West Deptford, NJ            *             54,000        846,000        181,048  
3000 Atrium Way                         Mt. Laurel, NJ                   -        500,000      4,500,000      2,143,849  
750 Cardinal Drive                      Pureland, NJ                 *            230,000      2,070,000        459,439  
11000, 15000, 17000 Commerce Parkway    Mt. Laurel, NJ               *            455,100      4,394,900        487,002  
12000, 14000 Commerce Parkway           Mt. Laurel, NJ               *            361,800      3,285,817        131,515  
16000, 18000 Commerce Parkway           Mt. Laurel, NJ               *            289,700      2,512,683        137,303  
406 Lippincott Drive                    Marlton, NJ                  *            321,455      1,539,871        517,017  
234 High Hill Road                      Bridgeport, NJ                   -        249,472      1,477,515        229,224  
100 Arlington Boulevard                 Bridgeport, NJ              ***             6,368              -      4,503,477  
100 Berkeley Drive                      Swedesboro, NJ                   -        395,160      1,915,215        159,830  
301 Lippincott Drive                    Marlton, NJ                  *          1,069,837      4,780,163        337,732  
303 Lippincott Drive                    Marlton, NJ                  *          1,069,837      4,780,163        270,954  
510 Sharptown Road                      Bridgeport, NJ                   -        125,410      1,072,683         32,615  
901 Route 73 (901 Building)             Marlton, NJ                  *            334,411      2,733,314         76,607  
Four Greentree Center                   Marlton, NJ                      -        449,400      3,074,850        206,375  
512 Sharptown Road                      Bridgeport, NJ                   -        180,468      1,543,617         42,013  
263 Quigley Blvd                        New Castle, DE              ***           170,386      1,302,739         35,812 
34 Blevins Drive                        New Castle, DE              ***           195,932      1,498,061         35,472  
104 Gaither Drive                       Mt Laurel, NJ               ***           132,075      1,151,988         33,827  
2 Lukens Drive                          New Castle, DE                   -        169,050      1,290,150         11,627  
1655 Valley Center Parkway              Bethlehem, PA            1,821,799        214,431              -      1,687,501  
6560 Stonegate Drive                    Allentown, PA            1,756,160        458,281              -      2,310,959  
6370 Hedgewood Drive                    Allentown, PA            2,482,280        540,795              -      2,944,004  
6390 Hedgewood Drive                    Allentown, PA            1,784,480        707,203              -      2,496,381  
1495 Valley Center Parkway              Bethlehem, PA            4,166,495        434,640              -      3,586,015  
6350 Hedgewood Drive                    Allentown, PA            2,619,840        360,027              -      3,098,286  
6330 Hedgewood Drive                    Allentown, PA                *            531,268              -      4,175,469  
1550 Valley Center Parkway              Bethlehem, PA                *            196,954              -      3,152,216  
1560 Valley Center Parkway              Bethlehem, PA                *            240,069              -      3,778,113  
6580 Snowdrift Road                     Allentown, PA                *            388,328              -      2,432,638  
1510 Valley Center Parkway              Bethlehem, PA            3,379,289        312,209              -      3,230,687  
1530 Valley Center Parkway              Bethlehem, PA                *            211,747              -      2,567,189  
6540 Stonegate Drive                    Allentown, PA                *            422,042              -      3,559,873  
974 Marcon Boulevard                    Allentown, PA                *            143,500              -      2,051,264  
964 Marcon Boulevard                    Allentown, PA            1,089,933        138,816              -      1,549,509  
764 Roble Road                          Allentown, PA              792,660        141,069              -        794,167  
3174 Airport Road                       Allentown, PA                *             98,986              -      1,073,621  
2196 Avenue C                           Allentown, PA                *            101,159              -      1,181,487  
2202 Hanger Place                       Allentown, PA                *            137,439              -      1,286,863  
2201 Hanger Place                       Allentown, PA                *            128,454              -      1,395,959  
954 Marcon Boulevard                    Allentown, PA                *            103,665              -        896,843  
57 South Commerce Way                   Allentown, PA                *            390,839      2,701,161        159,033  
754 Roble Road                          Allentown, PA                *            162,115      1,731,885         52,615  
894 Marcon Boulevard                    Allentown, PA                *            117,134      1,048,866         20,997  
744 Roble Road                          Allentown, PA                *            159,771      1,734,229         55,874  
944 Marcon Boulevard                    Allentown, PA                *            118,521      1,435,479         72,756  
1685 Valley Center Parkway              Allentown, PA                *            244,029              -      2,050,791  
6520 Stonegate Drive                    Allentown, PA               ***           453,315              -      1,769,467  
7437 Industrial Boulevard               Allentown, PA                *            717,488      5,022,413      1,330,295  
2041 Avenue C                           Allentown, PA                **           213,599      1,095,217         48,607  
2124 Avenue C                           Allentown, PA                **           289,197      1,039,835         44,709  
7339 Industrial Boulevard               Allentown, PA                    -      1,187,776              -      5,351,535  
7384 Penn Drive                         Allentown, PA                **           651,696      2,286,518        250,188  
7144 Daniels Drive                      Allentown, PA                *          2,390,217      2,342,761      3,398,953  
7620 Cetronia Road                      Allentown, PA                *          1,091,806      3,851,456         78,222  
939 Marcon Blvd                         Allentown, PA                **         2,220,414      4,524,393        732,775  
100 Brodhead Road                       Allentown, PA                **           429,416      2,919,588         92,431  
1640 Valley Center Parkway              Bethlehem, PA               ***           359,000              -       2,355,682  
83 South Commerce Way                   Bethlehem, PA               ***           143,661        888,128        145,914  
85 South Commerce Way                   Bethlehem, PA               ***           236,708        987,949         77,106  
87 South Commerce Way                   Bethlehem, PA               ***           253,886      1,062,881         74,250  
7339 Industrial Blvd                    Allentown, PA                    -      2,670,849     13,307,408        173,209  
12000,001,040 Indian Creek Court        Beltsville, MD           6,572,600      2,659,431              -     10,031,986  
180,190 Cochrane Drive                  Annapolis, MD                *          3,670,256              -     16,077,835  
8280 Patuxent Range Drive               Columbia, MD                 *            181,601              -      1,270,967  
8300 Professional Place                 Landover, MD                 *            650,621              -      4,232,306  
8100 Professional Place                 Landover, MD                 *            543,948              -      3,468,575  
8100,8200,8300 Corporate Drive          Landover, MD                 *          1,771,135              -      5,162,964  

                                    -48-

<PAGE>
                                                                                                               Cost 
                                                                                                           Capitalized 
                                                                                       Initial Cost        Subsequent 
                                                                               -------------------------        to 
              Project                           City          Encumbrances       Land         Building     Acquisition 
--------------------------------------  -------------------   ------------   ------------   ------------   ------------ 
7178-80 Columbia Gateway                Columbia, MD                 *          1,569,237      4,786,887        155,245  
8200-40 Professional Place              Landover, MD                     -        588,946      1,796,152        278,515  
8400 Corporate Drive                    Landover, MD                     -      2,502,485      7,622,698      2,081,802  
8730 Bollman Place                      Columbia, MD                 **           624,131      4,576,964         77,839  
9101,9111,9115 Guilford Road            Columbia, MD                 *            758,951              -      2,966,933  
9125,9135,9145 Guilford Road            Columbia, MD                 *            900,154              -      5,009,493  
10 South Third Street                   Richmond, VA                     -         27,970        127,419         45,962  
1751 Bluehills Drive                    Roanoke, VA                  *          1,063,728      8,500,677        101,951  
4300 Carolina Avenue                    Richmond, VA                ***         2,007,717     14,927,608        257,556  
301 Hill Carter Parkway                 Richmond, VA                 **           659,456      4,836,010         63,204  
4001 Carolina Avenue                    Richmond, VA                     -         29,443        215,914          7,861  
5600-5626 Eastport Boulevard            Richmond, VA                 **           489,941      3,592,900        117,655  
5650-5674 Eastport Boulevard            Richmond, VA                 **           644,384      4,025,480         66,204  
5700 Eastport Boulevard                 Richmond, VA                 **           408,729      2,697,348         43,619  
11020 Hull Street Road                  Richmond, VA                     -        139,887        637,261          8,938  
3432 Holland Road                       Virginia Beach, VA               -        173,527        790,515         11,088  
3001 Hungary Springs Road               Richmond, VA                 **           136,270        620,785        (33,852) 
7760 Shrader Road                       Richmond, VA                 **           187,971        756,313         13,906  
7740 Shrader Road                       Richmond, VA                 **            81,200        369,911         21,346  
4880 Cox Road                           Richmond, VA                 **           743,898      4,499,807      1,142,066  
5162 Valleypointe Parkway               Roanoke, VA                  **           551,483      2,612,312         35,237  
4101-4127 Carolina Avenue               Richmond, VA             1,350,645        310,854      2,279,597         29,793  
4201-4261 Carolina Avenue               Richmond, VA             3,087,188        693,203      5,083,493         84,633  
4263-4299 Carolina Avenue               Richmond, VA             1,929,492        256,203      2,549,649         21,570  
4301-4335 Carolina Avenue               Richmond, VA                     -        223,696      1,640,435         87,487  
4337-4379 Carolina Avenue               Richmond, VA             2,122,441        325,303      2,385,557        185,032  
4501-4549 Carolina Avenue               Richmond, VA             2,738,913        486,166      3,565,211         49,013  
4551-4593 Carolina Avenue               Richmond, VA             2,771,780        474,360      3,478,646         74,254  
4601-4643 Carolina Avenue               Richmond, VA             2,771,780        652,455      4,784,675        253,442  
4545-4583 Carolina Avenue               Richmond, VA             2,191,131        404,616      2,967,187        785,810  
4447-4491 Carolina Avenue               Richmond, VA             2,897,770        454,056      2,729,742         45,935  
4401-4445 Carolina Avenue               Richmond, VA                 **           615,038      4,510,272         61,364  
12 S. Third Street                      Richmond, VA                     -         40,539        184,682          6,125  
9601 Cosner Drive                       Fredericksburg, VA           **           475,262      3,917,234        148,902  
315 Cardiff Valley Road                 Knoxville, TN                *            443,305      2,950,903         42,487  
2300 East Parham Road                   Richmond, VA                     -        221,947      1,011,088         14,181  
1347 Diamond Springs Road               Virginia Beach, VA           **           436,898      3,203,919         46,194  
5221 Valleypark Drive                   Roanoke, VA              1,308,683        285,008        998,370        223,829  
5228 Valleypointe Parkway               Roanoke, VA              1,125,067        218,663        796,133         21,685  
5238 Valleypark Drive                   Roanoke, VA              1,311,913        416,375      1,896,832         77,099  
5601-5659 Eastport Boulevard            Richmond, VA                 **           705,660              -      4,708,044  
4717-4729 Eubank Road                   Richmond, VA                 **           449,447      3,294,697        103,705  
4263F-N. Carolina Ave                   Richmond, VA                     -         91,476              -      1,573,730  
4200 Oakleys Court                      Richmond, VA                     -        459,090      2,468,454         25,824  
1821 Battery Dantzler Road              Chester, VA                      -        394,212      3,035,113          8,120  
5000 Cox Road                           Glen Allen, VA                   -        770,214      3,685,248         10,217  
510 Eastpark Court                      Sandston, VA                     -        261,961      2,110,874         28,047  
520 Eastpark Court                      Sandston, VA                     -        486,118      4,083,582         28,111  
4523 Green Point Drive                  High Point, NC             900,000        234,564              -      1,904,487  
4501 Green Point Drive                  High Point, NC           1,153,942        319,289              -      2,195,589  
4500 Green Point Drive                  High Point, NC             946,057        230,622              -      1,983,226  
2427 Penny Road                         High Point, NC           6,989,672      1,165,664              -      6,187,028  
4524 Green Point Drive                  High Point, NC               **           182,810              -      2,002,336  
4328, 4336 Federal Drive                High Point, NC           6,382,465        521,122              -      7,243,516  
200 Centreport Drive                    Greensboro, NC               **           331,400      3,768,600        189,762  
4344 Federal Drive                      High Point, NC               **           484,001              -      2,324,644  
202 Centreport Drive                    Greensboro, NC               **           549,948      5,360,462        144,251  
4000 Piedmont Parkway                   High Point, NC               **           592,885      4,825,615         96,960  
1730 Stebbins Drive                     Houston, TX                  *            143,258              -        412,792  
5911-5925 Richard Street                Jacksonville, FL             *            275,582              -        508,059  
8383-8385 Baycenter Road                Jacksonville, FL             *             63,703              -        527,320  
8775 Baypine Road                       Jacksonville, FL             *            906,804              -      2,892,795  
8539 Western Way                        Jacksonville, FL             *            328,133              -      3,108,958  
6255 Lake Gray Boulevard                Jacksonville, FL             *            813,067              -      3,292,174  
6600-6660 Suemac Place                  Jacksonville, FL             *            210,804              -      1,656,841  
6800-6850 Suemac Place                  Jacksonville, FL             *            121,077              -        963,417  
8665,8667,8669 Baypine Road             Jacksonville, FL             *            966,552              -      3,910,492  
8540 Baycenter Road                     Jacksonville, FL         2,232,541        445,603              -      1,371,536  
1200 Gulf Life Drive                    Jacksonville, FL             *          1,028,864              -     16,465,604  
8400 Baymeadows Way                     Jacksonville, FL             *            557,682              -      2,325,708  
8614 Baymeadows Way                     Jacksonville, FL             *            290,291              -      1,114,160  
5941-5975 Richard Street                Jacksonville, FL             *            583,622              -      1,113,225  
7970 Bayberry Road                      Jacksonville, FL             *            127,520              -        830,100  
6000-6030 Bowdendale Avenue             Jacksonville, FL             *            275,475              -      1,511,461  
7898 Baymeadows Way                     Jacksonville, FL             *            561,802              -      1,971,967  
5977-6607 Richard Street                Jacksonville, FL             *            180,033              -      1,565,681  
7910 & 7948 Baymeadows Way              Jacksonville, FL             *            210,299              -      2,678,714  
7954 & 7960 Baymeadows Way              Jacksonville, FL                 -        291,312              -      2,933,358  
8787 Baypine Road                       Jacksonville, FL             *          2,076,306              -     34,505,962  
7077 Bonneval Road                      Jacksonville, FL             *            768,000      5,789,000        634,571  
4190 Belfort Road                       Jacksonville, FL             *            821,000      5,866,000        783,106  
8011, 8021, 8031 Phillips Highway       Jacksonville, FL             *            626,250      3,548,750        207,290  
7020 AC Skinner Parkway                 Jacksonville, FL             **           398,257              -      2,425,290  

                                -49-
<PAGE>
                                                                                                               Cost 
                                                                                                           Capitalized 
                                                                                       Initial Cost        Subsequent 
                                                                               -------------------------        to 
              Project                           City          Encumbrances       Land         Building     Acquisition 
--------------------------------------  -------------------   ------------   ------------   ------------   ------------ 
7040 AC Skinner Parkway                 Jacksonville, FL             **           706,934              -      3,068,915  
11777 Central Highway                   Jacksonville, FL                 -         92,207        429,997        765,464  
7016 AC Skinner Parkway                 Jacksonville, FL                 -        597,181              -      2,082,723  
4001,4051,4101 Fowler Avenue            Tampa, FL                    *          1,299,310              -      4,614,336  
5501-5502 Pioneer Park Boulevard        Tampa, FL                   ***           162,000      1,613,000         62,622  
5690-5694 Crenshaw Street               Tampa, FL                   ***           181,923      1,812,496         30,171  
3102,3104,3110 Cherry Palm Drive        Tampa, FL                    *            503,767      2,787,585         39,332  
8401-8408 Benjamin Road                 Tampa, FL                    *            789,651      4,454,648        148,808  
3501 Riga Blvd                          Tampa, FL                        -        617,289      3,048,379              -  
111 Kelsey Lane                         Tampa, FL                        -        359,540      1,461,850        (12,644) 
2 Kings Hill Avenue                     West Malling, UK                 -        785,565              -      4,769,535  
50 Gibson Drive                         West Malling, UK                 -          ****               -      3,938,732  
50 Kings Hill Avenue                    West Malling, UK                 -      1,215,608              -     12,847,475  
25 Kings Hill Avenue                    West Malling, UK         5,955,250      1,105,380              -      5,373,958  
                                                               -----------   ------------   ------------   ------------ 
Subtotal Operating Real Estate                                 $94,145,823   $138,795,268   $409,308,408   $500,927,804 
  
DEVELOPMENT PROPERTIES 
3000 Horizon Blvd                       King of Prussia, PA              -      1,191,449              -        165,446  
8801 Tinicum Boulevard                  Philadelphia, PA                 -      2,474,031              -      9,978,814  
50 Morehall Road                        Malvern, PA                      -        849,576              -      2,394,626  
231 Lake Drive                          New Castle, DE                   -        623,043              -      3,389,970  
15 Boulden Circle                       New Castle, DE                   -        406,064              -      1,591,996  
404 Lippincott Drive                    Marlton, NJ                      -        131,896              -        113,901  
402 Lippincott Drive                    Marlton, NJ                      -        131,896              -        116,587  
1455 Valley Center Parkway              Bethlehem, PA                    -        670,290              -      3,203,693  
1650 Valley Center Parkway              Bethlehem, PA               ***           359,000              -      1,934,036  
1660 Valley Center Parkway              Bethlehem, PA               ***           359,000              -      1,298,082 
Nestle Way                              Allentown, PA                    -      8,065,500              -     22,358,668  
Southpoint Pkwy                         Jacksonville, FL                 -              -              -      4,998,930  
7018 AC Skinner Parkway                 Jacksonville, FL                 -        840,996              -      2,177,968  
5900 Eastport Boulevard                 Richmond, VA                     -        676,661              -      4,080,611  
5251 Concourse Drive                    Roanoke, VA                      -          2,813              -      1,623,331  
501 Liberty Way                         Chester, VA                      -        400,664              -        238,629  
13033 Kingston Ave                      Chester, VA                      -        376,584              -        182,745  
5701-5799 Eastport Blvd                 Richmond, VA                     -        694,644              -         70,946  
Centreport III                          Greensboro, NC                   -        826,237              -        358,302  
Federal Ridge III - Distr Bldg          Greensboro, NC                   -        282,996              -      1,863,556  
Federal Ridge III - Flex Bldg           Greensboro, NC                   -        143,661              -        711,676  
6532 Judge Adams Road                   Whitsette, NC                    -        354,903              -      2,913,681  
                                                              ------------   ------------   ------------   ------------ 
Subtotal Development in Progress                              $          -   $ 19,861,904   $          -   $ 65,766,194 
                                                              ============   ============   ============   ============ 
 
LAND HELD FOR DEVELOPMENT 
Chelsea Business Park Land              Boothwyn, PA                     -      1,236,146              -         68,331 
132 Welsh Road                          Horsham, PA                      -      1,333,642              -        461,892  
Three Country View Road                 Malvern, PA                      -        912,890              -        127,247  
550 Lapp Road                           Malvern, PA                      -        380,891              -        124,888  
South Commerce Way Land                 Bethlehem, PA                    -        320,000              -         20,268  
Cedar Hollow Road Land                  Malvern, PA                      -      1,429,473              -         60,723  
Walnut Grove Land                       Horsham, PA                      -      3,435,695              -        171,005  
3604 Horizon Blvd                       King of Prussia, PA              -        763,885              -       (364,523) 
3606 Horizon Blvd                       King of Prussia, PA              -        390,091              -        402,550  
Swedes Run Business Park Land           Delran, NJ                       -      1,057,204              -         47,413  
Marlton Executive Park Land             Marlton, NJ                      -         69,402              -        142,777  
Commodore 295                           Logan Twp., NJ                   -      3,850,613              -      1,736,551  
Marlton Executive Park Land             Marlton, NJ                      -        550,664              -         99,808  
200 Exeter Court                        Bridgeport, NJ                   -        270,880              -         66,093  
17 Boulden Circle                       New Castle, DE                   -        374,982              -         16,657  
Lehigh Valley Corporate Center Land     Bethlehem, PA                    -      2,729,998              -       (678,998) 
Lehigh Valley West Lots 13,14,15        Allentown, PA                    -      3,473,120              -        723,883  
Valleypointe Land                       Richmond, VA                     -        326,654              -        581,190  
Fairgrounds IRS Land                    Richmond, VA                     -        100,000              -         18,591  
Rivers' Bend Land                       Chesterfield, VA                 -      1,068,507              -      1,468,222  
Oakleys Center Land                     Richmond, VA                     -        228,757              -         11,176  
Technology Pointe Land                  Glen Allen, VA                   -        443,485              -         11,639  
Woodlands Center Land                   Sandston, VA                     -      1,390,058              -         34,188  
Mendenhall Land                         High Point, NC                   -      2,927,363              -        737,276  
6532 Judge Adams Road                   Whitsette, NC                    -        242,386              -        183,908  
Southpoint Business Park Land           Jacksonville, FL                 -        756,000              -       (355,016) 
Liberty Business Park Land              Jacksonville, FL                 -      1,379,053              -        467,107  
7024 AC Skinner Parkway                 Jacksonville, FL                 -        839,554              -       (271,775) 
7014 AC Skinner Pkwy                    Jacksonville, FL                 -        574,198              -        129,749  
Crenshaw Street                         Tampa, FL                        -         67,510              -         16,597  
Silo Bend Land                          Tampa, FL                        -      4,359,613              -             84  
Silo Bend Land                          Tampa, FL                        -        511,463              -             10  
                                                               -----------   ------------   ------------   ------------ 
Subtotal Land Held for Development                             $         -   $ 37,794,177   $          -   $  6,259,511 
                                                               ===========   ============   ============   ============ 
 
Total All Properties                                           $94,145,823   $196,451,349   $409,308,408   $572,953,509 
                                                               ===========   ============   ============   ============ 
                                    -50-

<PAGE>
 
*     Denotes property is collateralized under the Line of Credit with G.E. Capital 
**    Denotes property is collateralized under mortgages with Nationwide, Principal Mutual and American General  
        totalling $146.7 million 
***   Denotes property is collateralized under Line of Credit with Bank of Boston with a capacity of $80.0 million. 
        Properties currently collateralized allow the Company to borrow up to $25.0 million. 
****  Rouse leases land from Kent County Council. 
</TABLE>
                                     -51-
<PAGE>
<TABLE>  
                                                  LIBERTY PROPERTY TRUST 
                                        REAL ESTATE AND ACCUMULATED DEPRECIATION 
                                                 AS OF DECEMBER 31, 1996 
<CAPTION>
                                                                           Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
<S>                                       <C>                   <C>             <C>            <C> 

10,20 Liberty Boulevard                   Malvern, PA           $    645,318    $  4,783,701   $  5,429,019  
420 Lapp Road                             Malvern, PA              1,049,243       6,209,416      7,258,659  
1 Chelsea Parkway                         Boothwyn, PA               245,735       2,612,988      2,858,723  
3 Chelsea Parkway                         Boothwyn, PA               209,177       2,773,124      2,982,301  
747 Dresher Road                          Horsham, PA              1,611,977       3,934,529      5,546,506  
45-67 Great Valley Parkway                Malvern, PA                795,831       2,743,715      3,539,546  
1180 Church Road                          Lansdale, PA             2,387,191      14,399,383     16,786,573  
40 Valley Stream Parkway                  Malvern, PA                323,792       2,184,948      2,508,740  
50 Valley Stream Parkway                  Malvern, PA                371,068       2,327,982      2,699,050  
20 Valley Stream Parkway                  Malvern, PA                466,413       4,988,289      5,454,702  
800 Town Center Drive                     Langhorne, PA            1,617,803       8,765,922     10,383,725  
1610 Medical Drive                        Pottstown, PA              212,413       2,491,723      2,704,136  
9, 15 Great Valley Parkway                Malvern, PA              1,837,878      14,959,104     16,796,982  
257-275 Great Valley Parkway              Malvern, PA                505,458       4,319,013      4,824,471  
300 Technology Drive                      Malvern, PA                374,497       1,253,336      1,627,833  
277-293 Great Valley Parkway              Malvern, PA                531,534       1,887,947      2,419,481  
311 Technology Drive                      Malvern, PA                348,099       2,235,638      2,583,737  
325 Technology Drive                      Malvern, PA                385,693       1,841,992      2,227,685  
7 Great Valley Parkway                    Malvern, PA                177,317       4,108,869      4,286,186  
55 Valley Stream Parkway                  Malvern, PA                215,818       2,834,809      3,050,627  
65 Valley Stream Parkway                  Malvern, PA                382,361       4,477,447      4,859,808  
508 Lapp Road                             Malvern, PA                263,116       1,768,410      2,031,526  
10 Valley Stream Parkway                  Malvern, PA                465,135       2,668,411      3,133,546  
333 Phoenixville Pike                     Malvern, PA                524,229       3,052,776      3,577,005  
1566 Medical Drive                        Pottstown, PA              203,827       1,827,544      2,031,371  
30 Great Valley Parkway                   Malvern, PA                128,783         354,908        483,691  
75 Great Valley Parkway                   Malvern, PA                143,811         418,664        562,475  
27-43 Great Valley Parkway                Malvern, PA                449,447       2,069,388      2,518,835  
77-123 Great Valley Parkway               Malvern, PA                888,359       4,227,605      5,115,964  
260 Great Valley Parkway                  Malvern, PA                212,768         840,574      1,053,342  
256 Great Valley Parkway                  Malvern, PA                161,949       1,887,910      2,049,859  
205 Great Valley Parkway                  Malvern, PA              1,369,003       9,421,585     10,790,588  
12,14,16 Great Valley Parkway             Malvern, PA                131,517       1,161,550      1,293,067  
155 Great Valley Parkway                  Malvern, PA                626,068       2,196,678      2,822,746  
333 Technology Drive                      Malvern, PA                 90,952       2,377,145      2,468,097  
510 Lapp Road                             Malvern, PA                325,415         894,325      1,219,740  
181 Wheeler Court                         Langhorne, PA              263,490       1,997,838      2,261,328  
1100 Wheeler Way                          Langhorne, PA              151,500       1,182,216      1,333,716  
60 Morehall Road                          Malvern, PA                884,974       9,430,990     10,315,964  
905 Airport Road                          West Chester, PA         1,735,012       5,372,846      7,107,858  
16 Cabot Boulevard                        Langhorne, PA              649,743       5,925,232      6,574,975  
1 Country View Road                       Malvern, PA                406,421       3,985,117      4,391,538  
2151 Cabot Boulevard                      Langhorne, PA              389,990       3,713,778      4,103,768  
170 South Warner Road                     King of Prussia, PA        555,911       5,170,024      5,725,935  
190 South Warner Road                     King of Prussia, PA        560,373       4,301,232      4,861,605  
507 Prudential Road                       Horsham, PA                652,919       6,026,461      6,679,380  
100 Witmer Road                           Horsham, PA              3,133,783       9,640,116     12,773,899  
3100 Horizon Blvd                         King of Prussia, PA        611,435       1,975,287      2,586,722  
3300 Horizon Blvd                         King of Prussia, PA        687,878       3,130,450      3,818,328  
3500 Horizon Blvd                         King of Prussia, PA      1,223,875       2,479,054      3,702,929  
200 Chester Field Parkway                 Malvern, PA                495,893       2,775,763      3,271,656  
767 Electronic Drive                      Horsham, PA              1,241,970       2,915,735      4,157,705  
5 Country View Road                       Malvern, PA                786,235       4,807,089      5,593,324  
3200 Horizon Blvd                         King of Prussia, PA      1,209,009       3,980,991      5,190,001  
111-195 Witmer Road                       Horsham, PA                407,205       3,224,126      3,631,331  
2460 General Armistead Ave                Norristown, PA             117,316       1,088,047      1,205,363  
2490 General Armistead Ave                Norristown, PA              66,288         622,333        688,621  
300 Welsh Road                            Horsham, PA                180,459       1,485,527      1,665,986 
400  Welsh Road                           Horsham, PA                282,493       2,797,293      3,079,786  
440 East Swedesford Road                  Wayne, PA                  717,001       5,677,163      6,394,164  
460 East Swedesford Road                  Wayne, PA                  705,317       5,002,133      5,707,450  
2 Walnut Grove Drive                      Horsham, PA              1,266,546       7,783,127      9,049,673  
200 Gibralter Road                        Horsham, PA                638,513       5,811,323      6,449,836  
220 Gibralter Road                        Horsham, PA                629,944       5,733,228      6,363,172  
240 Gibralter Road                        Horsham, PA                629,944       5,733,234      6,363,178  
151 S. Warner Road                        Wayne, PA                1,218,086       6,937,866      8,155,952  
931 South Matlack Street                  West Chester, PA           815,015       6,063,100      6,878,115  
14 Lee Boulevard                          Malvern, PA                665,053       6,895,132      7,560,185  
500 Chester Field Parkway                 Malvern, PA                473,139       2,776,245      3,249,384  
300-400 Chester Field Parkway             Malvern, PA                931,212       4,341,779      5,272,991  
1805 Underwood Boulevard                  Delran, NJ                 196,901         622,144        819,045  
150 Mid-Atlantic Parkway                  West Deptford, NJ           88,153         435,245        523,398  
18 Boulden Circle                         New Castle, DE             198,062       3,725,562      3,923,624  
501 Delran Parkway                        Delran, NJ                 184,162       2,408,535      2,592,697  
600 Delran Parkway                        Delran, NJ                 372,719       5,941,662      6,314,381  
1607 Imperial Way                         West Deptford, NJ          288,280       2,750,098      3,038,378  
1 Boulden Circle                          New Castle, DE              93,309       1,332,948      1,426,257  

                                   -52-
<PAGE> 
                                                                          Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
31-55 Read's Way                          New Castle, DE             972,159       5,478,479      6,450,638  
3 Boulden Circle                          New Castle, DE             126,701       2,103,541      2,230,242  
5 Boulden Circle                          New Castle, DE             232,274       3,496,979      3,729,253  
601 Delran Parkway                        Delran, NJ                 193,336       1,635,666      1,829,002  
51 Haddonfield Road                       Cherry Hill, NJ            248,326       9,018,176      9,266,502  
57 Read's Way                             New Castle, DE             352,736       2,681,501      3,034,237  
1370 Imperial Way                         West Deptford, NJ          298,010       4,391,684      4,689,694  
8 Stow Road                               Marlton, NJ                172,945       1,781,611      1,954,556  
10 Stow Road                              Marlton, NJ                147,318       1,461,017      1,608,335  
12 Stow Road                              Marlton, NJ                103,618       1,160,006      1,263,624  
14 Stow Road                              Marlton, NJ                 93,418       1,050,772      1,144,190  
1300 Metropolitan Avenue                  West Deptford, NJ          221,218       2,014,883      2,236,101  
701A Route 73 South                       Marlton, NJ                271,743       5,087,131      5,358,874  
701C Route 73 South                       Marlton, NJ                 96,161       1,510,959      1,607,120  
1008 Astoria Boulevard                    Cherry Hill, NJ             32,698         709,850        742,548  
1475 Imperial Way                         West Deptford, NJ           58,606       1,022,442      1,081,048  
3000 Atrium Way                           Mt. Laurel, NJ             512,018       6,631,831      7,143,849  
750 Cardinal Drive                        Pureland, NJ               236,190       2,523,249      2,759,439  
11000, 15000, 17000 Commerce Parkway      Mt. Laurel, NJ             456,465       4,880,537      5,337,002  
12000, 14000 Commerce Parkway             Mt. Laurel, NJ             362,855       3,416,277      3,779,132  
16000, 18000 Commerce Parkway             Mt. Laurel, NJ             290,545       2,649,141      2,939,686  
406 Lippincott Drive                      Marlton, NJ                327,554       2,050,789      2,378,343  
234 High Hill Road                        Bridgeport, NJ             250,445       1,705,766      1,956,211  
100 Arlington Boulevard                   Bridgeport, NJ             374,836       4,135,009      4,509,845  
100 Berkeley Drive                        Swedesboro, NJ             401,254       2,068,951      2,470,205  
301 Lippincott Drive                      Marlton, NJ              1,069,837       5,117,895      6,187,732  
303 Lippincott Drive                      Marlton, NJ              1,069,837       5,051,117      6,120,954  
510 Sharptown Road                        Bridgeport, NJ             125,410       1,105,298      1,230,708  
901 Route 73 (901 Building)               Marlton, NJ                334,411       2,809,921      3,144,332  
Four Greentree Center                     Marlton, NJ                450,558       3,280,067      3,730,625  
512 Sharptown Road                        Bridgeport, NJ             180,468       1,585,630      1,766,098  
263 Quigley Blvd                          New Castle, DE             170,727       1,338,210      1,508,937  
34 Blevins Drive                          New Castle, DE             196,273       1,533,192      1,729,465  
104 Gaither Drive                         Mt Laurel, NJ              134,461       1,183,429      1,317,890  
2 Lukens Drive                            New Castle, DE             169,118       1,301,709      1,470,827  
1655 Valley Center Parkway                Bethlehem, PA              215,095       1,686,837      1,901,932  
6560 Stonegate Drive                      Allentown, PA              437,122       2,332,118      2,769,240  
6370 Hedgewood Drive                      Allentown, PA              515,707       2,969,092      3,484,799  
6390 Hedgewood Drive                      Allentown, PA              670,819       2,532,765      3,203,584  
1495 Valley Center Parkway                Bethlehem, PA              258,014       3,762,641      4,020,655  
6350 Hedgewood Drive                      Allentown, PA              360,691       3,097,622      3,458,313  
6330 Hedgewood Drive                      Allentown, PA              499,720       4,207,017      4,706,737  
1550 Valley Center Parkway                Bethlehem, PA              188,320       3,160,851      3,349,171
1560 Valley Center Parkway                Bethlehem, PA              229,301       3,788,881      4,018,182  
6580 Snowdrift Road                       Allentown, PA              367,377       2,453,589      2,820,966  
1510 Valley Center Parkway                Bethlehem, PA              312,873       3,230,023      3,542,896  
1530 Valley Center Parkway                Bethlehem, PA              212,491       2,566,445      2,778,936  
6540 Stonegate Drive                      Allentown, PA              422,730       3,559,185      3,981,915  
974 Marcon Boulevard                      Allentown, PA              144,248       2,050,516      2,194,764  
964 Marcon Boulevard                      Allentown, PA              139,480       1,548,845      1,688,325  
764 Roble Road                            Allentown, PA              141,746         793,490        935,236  
3174 Airport Road                         Allentown, PA               98,986       1,073,621      1,172,607  
2196 Avenue C                             Allentown, PA              107,307       1,175,339      1,282,646  
2202 Hanger Place                         Allentown, PA              138,127       1,286,175      1,424,302  
2201 Hanger Place                         Allentown, PA              129,142       1,395,271      1,524,413  
954 Marcon Boulevard                      Allentown, PA              104,452         896,056      1,000,508  
57 South Commerce Way                     Allentown, PA              395,459       2,855,574      3,251,033  
754 Roble Road                            Allentown, PA              163,735       1,782,880      1,946,615  
894 Marcon Boulevard                      Allentown, PA              118,304       1,068,693      1,186,997  
744 Roble Road                            Allentown, PA              161,371       1,788,503      1,949,874  
944 Marcon Boulevard                      Allentown, PA              119,711       1,507,045      1,626,756  
1685 Valley Center Parkway                Allentown, PA              198,482       2,096,338      2,294,820  
6520 Stonegate Drive                      Allentown, PA              948,395       1,274,387      2,222,782  
7437 Industrial Boulevard                 Allentown, PA              726,651       6,343,544      7,070,195  
2041 Avenue C                             Allentown, PA              213,879       1,143,544      1,357,423  
2124 Avenue C                             Allentown, PA              289,529       1,084,212      1,373,741  
7339 Industrial Boulevard                 Allentown, PA            1,197,121       5,342,190      6,539,311  
7384 Penn Drive                           Allentown, PA              652,118       2,536,284      3,188,402  
7144 Daniels Drive                        Allentown, PA            1,579,169       6,552,762      8,131,931  
7620 Cetronia Road                        Allentown, PA            1,093,724       3,927,761      5,021,485  
939 Marcon Blvd                           Allentown, PA            2,220,548       5,257,034      7,477,582  
100 Brodhead Road                         Allentown, PA              429,456       3,011,979      3,441,435  
1640 Valley Center Parkway                Bethlehem, PA              190,728       2,523,954      2,714,682  
83 South Commerce Way                     Bethlehem, PA              212,744         964,959      1,177,703  
85 South Commerce Way                     Bethlehem, PA              237,078       1,064,685      1,301,763  
87 South Commerce Way                     Bethlehem, PA              253,886       1,137,131      1,391,017  
7339 Industrial Blvd                      Allentown, PA            2,670,673      13,480,792     16,151,465  
12000,001,040 Indian Creek Court          Beltsville, MD           2,698,195       9,993,222     12,691,417  
180,190 Cochrane Drive                    Annapolis, MD            3,752,293      15,995,798     19,748,091  
8280 Patuxent Range Drive                 Columbia, MD               181,601       1,270,967      1,452,568  
8300 Professional Place                   Landover, MD               670,450       4,212,477      4,882,927  
8100 Professional Place                   Landover, MD               543,948       3,468,575      4,012,523  

                                   -53-
<PAGE> 
                                                                          Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
8100,8200,8300 Corporate Drive            Landover, MD             1,771,135       5,162,964      6,934,099  
7178-80 Columbia Gateway                  Columbia, MD             1,571,105       4,940,264      6,511,369  
8200-40 Professional Place                Landover, MD               589,932       2,073,681      2,663,613  
8400 Corporate Drive                      Landover, MD             2,505,184       9,701,801     12,206,985  
8730 Bollman Place                        Columbia, MD               626,269       4,652,665      5,278,934  
9101,9111,9115 Guilford Road              Columbia, MD               765,953       2,959,931      3,725,884  
9125,9135,9145 Guilford Road              Columbia, MD               920,439       4,989,208      5,909,647  
10 South Third Street                     Richmond, VA                27,970         173,381        201,351  
1751 Bluehills Drive                      Roanoke, VA              1,063,728       8,602,628      9,666,356  
4300 Carolina Avenue                      Richmond, VA             2,009,136      15,183,745     17,192,881  
301 Hill Carter Parkway                   Richmond, VA               659,456       4,899,214      5,558,670  
4001 Carolina Avenue                      Richmond, VA                29,443         223,775        253,218  
5600-5626 Eastport Boulevard              Richmond, VA               489,941       3,710,555      4,200,496  
5650-5674 Eastport Boulevard              Richmond, VA               644,384       4,091,684      4,736,068  
5700 Eastport Boulevard                   Richmond, VA               408,729       2,740,967      3,149,696  
11020 Hull Street Road                    Richmond, VA               139,887         646,199        786,086  
3432 Holland Road                         Virginia Beach, VA         173,527         801,603        975,130  
3001 Hungary Springs Road                 Richmond, VA               136,270         586,933        723,203  
7760 Shrader Road                         Richmond, VA               187,971         770,219        958,190  
7740 Shrader Road                         Richmond, VA                81,200         391,257        472,457  
4880 Cox Road                             Richmond, VA               743,898       5,641,873      6,385,771  
5162 Valleypointe Parkway                 Roanoke, VA                551,483       2,647,549      3,199,032  
4101- 4127 Carolina Avenue                Richmond, VA               310,854       2,309,390      2,620,244  
4201-4261 Carolina Avenue                 Richmond, VA               693,203       5,168,126      5,861,329  
4263-4299 Carolina Avenue                 Richmond, VA               256,203       2,571,219      2,827,422  
4301-4335 Carolina Avenue                 Richmond, VA               223,696       1,727,922      1,951,618  
4337-4379 Carolina Avenue                 Richmond, VA               325,203       2,570,689      2,895,892  
4501-4549 Carolina Avenue                 Richmond, VA               486,166       3,614,224      4,100,390  
4551-4593 Carolina Avenue                 Richmond, VA               474,360       3,552,900      4,027,260  
4601-4643 Carolina Avenue                 Richmond, VA               652,455       5,038,117      5,690,572  
4545-4583 Carolina Avenue                 Richmond, VA               404,616       3,752,997      4,157,613  
4447-4491 Carolina Avenue                 Richmond, VA               454,056       2,775,677      3,229,733  
4401-4445 Carolina Avenue                 Richmond, VA               615,038       4,571,636      5,186,674  
12 S. Third Street                        Richmond, VA                40,539         190,807        231,346  
9601 Cosner Drive                         Fredericksburg, VA         476,262       4,065,136      4,541,398  
315 Cardiff Valley Road                   Knoxville, TN              443,305       2,993,390      3,436,695  
2300 East Parham Road                     Richmond, VA               221,947       1,025,269      1,247,216  
1347 Diamond Springs Road                 Virginia Beach, VA         436,898       3,250,113      3,687,011  
5221 Valleypark Drive                     Roanoke, VA                285,008       1,222,199      1,507,207  
5228 Valleypointe Parkway                 Roanoke, VA                218,663         817,818      1,036,481  
5238 Valleypark Drive                     Roanoke, VA                416,375       1,973,931      2,390,306  
5601-5659 Eastport Boulevard              Richmond, VA               720,100       4,693,605      5,413,705  
4717-4729 Eubank Road                     Richmond, VA               452,263       3,395,586      3,847,849  
4263F-N. Carolina Ave                     Richmond, VA                91,599       1,573,607      1,665,206  
4200 Oakleys Court                        Richmond, VA               459,653       2,493,715      2,953,368  
1821 Battery Dantzler Road                Chester, VA                392,332       3,045,113      3,437,445  
5000 Cox Road                             Glen Allen, VA             771,029       3,694,650      4,465,679  
510 Eastpark Court                        Sandston, VA               262,210       2,138,672      2,400,882  
520 Eastpark Court                        Sandston, VA               486,598       4,111,213      4,597,811  
4523 Green Point Drive                    High Point, NC             223,614       1,915,437      2,139,051  
4501 Green Point Drive                    High Point, NC             320,450       2,194,428      2,514,878  
4500 Green Point Drive                    High Point, NC             231,692       1,982,156      2,213,848  
2427 Penny Road                           High Point, NC           1,168,074       6,184,618      7,352,692  
4524 Green Point Drive                    High Point, NC             183,888       2,001,258      2,185,146  
4328, 4336 Federal Drive                  High Point, NC             825,092       6,939,546      7,764,638  
200 Centreport Drive                      Greensboro, NC             332,017       3,957,745      4,289,762  
4344 Federal Drive                        High Point, NC             173,623       2,635,023      2,808,646  
202 Centreport Drive                      Greensboro, NC             549,679       5,504,982      6,054,661  
4000 Piedmont Parkway                     High Point, NC             592,885       4,922,575      5,515,460  
1730 Stebbins Drive                       Houston, TX                144,016         412,034        556,050  
5911-5925 Richard Street                  Jacksonville, FL           286,335         497,306        783,641  
8383-8385 Baycenter Road                  Jacksonville, FL            65,329         525,694        591,023  
8775 Baypine Road                         Jacksonville, FL           913,264       2,886,335      3,799,599  
8539 Western Way                          Jacksonville, FL           631,558       2,805,533      3,437,091  
6255 Lake Gray Boulevard                  Jacksonville, FL           811,963       3,293,278      4,105,241  
6600-6660 Suemac Place                    Jacksonville, FL           216,014       1,651,631      1,867,645  
6800-6850 Suemac Place                    Jacksonville, FL           125,576         958,918      1,084,494  
8665,8667,8669 Baypine Road               Jacksonville, FL         1,023,514       3,853,530      4,877,044  
8540 Baycenter Road                       Jacksonville, FL           450,431       1,366,708      1,817,139  
1200 Gulf Life Drive                      Jacksonville, FL         1,035,091      16,459,377     17,494,468  
8400 Baymeadows Way                       Jacksonville, FL           566,370       2,317,020      2,883,390  
8614 Baymeadows Way                       Jacksonville, FL           312,761       1,091,690      1,404,451  
5941-5975 Richard Street                  Jacksonville, FL           585,280       1,111,567      1,696,847  
7970 Bayberry Road                        Jacksonville, FL           129,979         827,641        957,620  
6000-6030 Bowdendale Avenue               Jacksonville, FL           275,475       1,511,461      1,786,936  
7898 Baymeadows Way                       Jacksonville, FL           568,005       1,965,764      2,533,769  
5977-6607 Richard Street                  Jacksonville, FL           182,747       1,562,967      1,745,714  
7910 & 7948 Baymeadows Way                Jacksonville, FL           211,449       2,677,564      2,889,013  
7954 & 7960 Baymeadows Way                Jacksonville, FL           292,667       2,932,003      3,224,670  
8787 Baypine Road                         Jacksonville, FL         2,045,574      34,536,694     36,582,268  
7077 Bonneval Road                        Jacksonville, FL           774,020       6,417,551      7,191,571  
4190 Belfort Road                         Jacksonville, FL           827,420       6,642,686      7,470,106  
                                  -54-
<PAGE>
                                                                          Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
8011, 8021, 8031 Phillips Highway         Jacksonville, FL           628,437       3,753,853      4,382,290  
7020 AC Skinner Parkway                   Jacksonville, FL           749,811       2,073,736      2,823,547  
7040 AC Skinner Parkway                   Jacksonville, FL           853,981       2,921,869      3,775,850  
11777 Central Highway                     Jacksonville, FL           143,785       1,143,883      1,287,668  
7016 AC Skinner Parkway                   Jacksonville, FL           602,619       2,077,285      2,679,904  
4001,4051,4101 Fowler Avenue              Tampa, FL                1,293,206       4,620,440      5,913,646  
5501-5502 Pioneer Park Boulevard          Tampa, FL                  187,884       1,649,738      1,837,622  
5690-5694 Crenshaw Street                 Tampa, FL                  181,923       1,842,667      2,024,590  
3102,3104,3110 Cherry Palm Drive          Tampa, FL                  503,767       2,826,917      3,330,684  
8401-8408 Benjamin Road                   Tampa, FL                  789,652       4,603,455      5,393,107  
3501 Riga Blvd                            Tampa, FL                  617,289       3,048,379      3,665,668  
111 Kelsey Lane                           Tampa, FL                  359,540       1,449,206      1,808,746  
2 Kings Hill Avenue                       West Malling, UK           785,565       4,769,535      5,555,100  
50 Gibson Drive                           West Malling, UK           192,270       3,746,462      3,938,732  
50 Kings Hill Avenue                      West Malling, UK         1,216,608      12,846,475     14,063,083  
25 Kings Hill Avenue                      West Malling, UK         1,014,011       5,465,327      6,479,338 
                                                                ------------    ------------ -------------- 
Subtotal Operating Real Estate                                  $140,195,919    $908,835,565 $1,049,031,484  
                                                                ============    ============ ============== 
 
DEVELOPMENT PROPERTIES 
3000 Horizon Blvd                         King of Prussia, PA   $    943,697    $    413,198 $    1,356,895  
8801 Tinicum Boulevard                    Philadelphia, PA           124,062      12,328,783     12,452,845  
50 Morehall Road                          Malvern, PA              1,037,076       2,207,126      3,244,202  
231 Lake Drive                            New Castle, DE             623,043       3,389,969      4,013,012  
15 Boulden Circle                         New Castle, DE             447,065       1,550,995      1,998,060 
404 Lippincott Drive                      Marlton, NJ                131,896         113,901        245,797  
402 Lippincott Drive                      Marlton, NJ                131,896         116,587        248,483  
1455 Valley Center Parkway                Bethlehem, PA              545,013       3,328,970      3,873,983  
1650 Valley Center Parkway                Bethlehem, PA              188,896       2,104,140      2,293,036  
1660 Valley Center Parkway                Bethlehem, PA              188,721       1,468,360      1,657,081  
Nestle Way                                Allentown, PA            8,074,926      22,349,242     30,424,168  
Southpoint Pkwy                           Jacksonville, FL           418,093       4,580,837      4,998,930  
7018 AC Skinner Parkway                   Jacksonville, FL           846,433       2,172,531      3,018,964  
5900 Eastport Boulevard                   Richmond, VA               687,855       4,069,417      4,757,272  
5251 Concourse Drive                      Roanoke, VA                217,247       1,408,897      1,626,144  
501 Liberty Way                           Chester, VA                400,689         238,604        639,293  
13033 Kingston Ave                        Chester, VA                376,584         182,745        559,329  
5701-5799 Eastport Blvd                   Richmond, VA               694,644          70,946        765,590  
Centreport III                            Greensboro, NC             826,237         358,302      1,184,539  
Federal Ridge III - Distr Bldg            Greensboro, NC             283,368       1,863,183      2,146,551  
Federal Ridge III - Flex Bldg             Greensboro, NC             132,655         722,682        855,337  
6532 Judge Adams Road                     Whitsette, NC              358,116       2,910,468      3,268,584
                                                                ------------    ------------  ------------- 
Subtotal Development in Progress                                $ 17,678,212    $ 67,949,883  $  85,628,095  
                                                                ============    ============  ============= 
 
LAND HELD FOR DEVELOPMENT 
Chelsea Business Park Land                Boothwyn, PA          $  1,298,240    $      6,237  $   1,304,477  
132 Welsh Road                            Horsham, PA              1,393,613         401,921      1,795,534  
Three Country View Road                   Malvern, PA                914,278         125,859      1,040,137  
550 Lapp Road                             Malvern, PA                388,066         117,713        505,780  
South Commerce Way Land                   Bethlehem, PA              321,502          18,766        340,268  
Cedar Hollow Road Land                    Malvern, PA              1,447,902          42,294      1,490,196  
Walnut Grove Land                         Horsham, PA              3,569,526          37,174      3,606,700  
3604 Horizon Blvd                         King of Prussia, PA        397,178           2,184        399,363  
3606 Horizon Blvd                         King of Prussia, PA        777,764          14,877        792,641  
Swedes Run Business Park Land             Delran, NJ               1,104,617               -      1,104,617  
Marlton Executive Park Land               Marlton, NJ                109,687         102,492        212,179  
Commodore 295                             Logan Twp., NJ           3,766,142       1,821,023      5,587,165  
Marlton Executive Park Land               Marlton, NJ                550,664          99,808        650,472  
200 Exeter Court                          Bridgeport, NJ             291,902          45,070        336,973  
17 Boulden Circle                         New Castle, DE             385,818           5,821        391,638  
Lehigh Valley Corporate Center Land       Bethlehem, PA            2,047,058           3,942      2,051,000  
Lehigh Valley West Lots 13,14,15          Allentown, PA            3,473,128         723,875      4,197,003  
Valleypointe Land                         Richmond, VA               671,817         236,028        907,844  
Fairgrounds IRS Land                      Richmond, VA               101,539          17,052        118,591  
Rivers' Bend Land                         Chesterfield, VA         1,266,942       1,269,787      2,536,729  
Oakleys Center Land                       Richmond, VA               235,221           4,712        239,933  
Technology Pointe Land                    Glen Allen, VA             445,978           9,146        455,124  
Woodlands Center Land                     Sandston, VA             1,395,665          28,581      1,424,246  
Mendenhall Land                           High Point, NC           3,065,859         598,780      3,664,639  
6532 Judge Adams Road                     Whitsette, NC              242,386         183,908        426,293  
Southpoint Business Park Land             Jacksonville, FL           353,264          47,720        400,984  
Liberty Business Park Land                Jacksonville, FL           928,753         917,408      1,846,160  
7024 AC Skinner Parkway                   Jacksonville, FL           539,554          28,224        567,779  
7014 AC Skinner Pkwy                      Jacksonville, FL           579,800         124,147        703,947  

                                      -55-
<PAGE>
                                                                          Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
Crenshaw Street                           Tampa, FL                   74,532           9,575         84,107  
Silo Bend Land                            Tampa, FL                4,359,613              84      4,359,697  
Silo Bend Land                            Tampa, FL                  511,463              10        511,473  
                                                                ------------    ------------   ------------ 
Subtotal Land Held for Development                              $ 37,009,471    $  7,044,218 $   44,053,689 
                                                                ============    ============ ============== 
 
TOTAL ALL PROPERTIES                                            $194,883,602    $983,829,666 $1,178,713,268 
                                                                ============    ============ ============== 
 
*     Denotes property is collateralized under the Line of Credit with G.E. Capital 
**    Denotes property is collateralized under mortgages with Nationwide, Principal Mutual and American General  
        totalling $146.7 million 
***   Denotes property is collateralized under Line of Credit with Bank of Boston with a capacity of $80.0 million. 
        Properties currently collateralized allow the Company to borrow up to $25.0 million. 
****  Rouse leases land from Kent County Council. 
</TABLE>
                                  -56-
<PAGE> 
<TABLE> 
                                                  LIBERTY PROPERTY TRUST 
                                        REAL ESTATE AND ACCUMULATED DEPRECIATION 
                                                 AS OF DECEMBER 31, 1996 
 
<CAPTION>
                                                                Accumulated 
                                                                Depreciation      Date of      Depreciable 
              Project                           City             @ 12/31/95     Construction   Life (years) 
--------------------------------------    -------------------   ------------    ------------   ------------    
<S>                                       <C>                   <C>             <C> 

10,20 Liberty Boulevard                   Malvern, PA            $   788,624        1988           40 yrs.  
420 Lapp Road                             Malvern, PA                924,756        1989           40 yrs.  
1 Chelsea Parkway                         Boothwyn, PA               548,134        1988           40 yrs.  
3 Chelsea Parkway                         Boothwyn, PA               481,248        1988           40 yrs.  
747 Dresher Road                          Horsham, PA                691,486        1988           40 yrs.  
45-67 Great Valley Parkway                Malvern, PA              1,330,691        1974           40 yrs. 
1180 Church Road                          Lansdale, PA             3,244,011        1986           40 yrs.  
40 Valley Stream Parkway                  Malvern, PA                501,252        1987           40 yrs.  
50 Valley Stream Parkway                  Malvern, PA                552,172        1987           40 yrs.  
20 Valley Stream Parkway                  Malvern, PA              1,061,207        1987           40 yrs.  
800 Town Center Drive                     Langhorne, PA            1,862,658        1987           40 yrs.  
1610 Medical Drive                        Pottstown, PA              566,014        1986           40 yrs.  
9, 15 Great Valley Parkway                Malvern, PA              7,354,674        1986           40 yrs.  
257-275 Great Valley Parkway              Malvern, PA              1,249,908        1983           40 yrs.  
300 Technology Drive                      Malvern, PA                311,313        1985           40 yrs.  
277-293 Great Valley Parkway              Malvern, PA                532,345        1984           40 yrs.  
311 Technology Drive                      Malvern, PA                597,650        1984           40 yrs.  
325 Technology Drive                      Malvern, PA                482,887        1984           40 yrs.  
7 Great Valley Parkway                    Malvern, PA              1,062,434        1985           40 yrs.  
55 Valley Stream Parkway                  Malvern, PA                813,199        1983           40 yrs.  
65 Valley Stream Parkway                  Malvern, PA              1,260,290        1983           40 yrs.  
508 Lapp Road                             Malvern, PA                491,766        1984           40 yrs.  
10 Valley Stream Parkway                  Malvern, PA                725,789        1984           40 yrs.  
333 Phoenixville Pike                     Malvern, PA                796,975        1985           40 yrs.  
1566 Medical Drive                        Pottstown, PA              469,589        1985           40 yrs.  
30 Great Valley Parkway                   Malvern, PA                194,877        1975           40 yrs.  
75 Great Valley Parkway                   Malvern, PA                164,208        1977           40 yrs.  
27-43 Great Valley Parkway                Malvern, PA                863,247        1977           40 yrs.  
77-123 Great Valley Parkway               Malvern, PA              1,665,852        1978           40 yrs.  
260 Great Valley Parkway                  Malvern, PA                280,697        1979           40 yrs.  
256 Great Valley Parkway                  Malvern, PA                681,544        1980           40 yrs.  
205 Great Valley Parkway                  Malvern, PA              3,066,132        1981           40 yrs.  
12,14,16 Great Valley Parkway             Malvern, PA                438,530        1982           40 yrs.  
155 Great Valley Parkway                  Malvern, PA                742,491        1981           40 yrs.  
333 Technology Drive                      Malvern, PA                823,514        1987           40 yrs.  
510 Lapp Road                             Malvern, PA                301,181        1983           40 yrs.  
181 Wheeler Court                         Langhorne, PA              124,049        1979           40 yrs.  
1100 Wheeler Way                          Langhorne, PA               72,280        1979           40 yrs.  
60 Morehall Road                          Malvern, PA                594,470        1989           40 yrs.  
905 Airport Road                          West Chester, PA           338,879        1988           40 yrs.  
16 Cabot Boulevard                        Langhorne, PA              345,430        1972           40 yrs.  
1 Country View Road                       Malvern, PA                216,723        1982           40 yrs.  
2151 Cabot Boulevard                      Langhorne, PA              198,591        1982           40 yrs.  
170 South Warner Road                     King of Prussia, PA        452,724        1980           40 yrs.  
190 South Warner Road                     King of Prussia, PA        251,887        1980           40 yrs.  
507 Prudential Road                       Horsham, PA                299,655        1988           40 yrs.  
100 Witmer Road                           Horsham, PA                156,076        1995           40 yrs.  
3100 Horizon Blvd                         King of Prussia, PA         35,831        1995           40 yrs.  
3300 Horizon Blvd                         King of Prussia, PA         92,713        1996           40 yrs.  
3500 Horizon Blvd                         King of Prussia, PA         46,928        1996           40 yrs.  
200 Chester Field Parkway                 Malvern, PA              1,131,622        1989           40 yrs.  
767 Electronic Drive                      Horsham, PA                 94,656        1996           40 yrs.  
5 Country View Road                       Malvern, PA                149,756        1985           40 yrs.  
3200 Horizon Blvd                         King of Prussia, PA         22,703        1996           40 yrs.  
111-195 Witmer Road                       Horsham, PA                 48,545        1996           40 yrs.  
2460 General Armistead Ave                Norristown, PA              13,622        1985           40 yrs.  
2490 General Armistead Ave                Norristown, PA               7,752        1985           40 yrs.  
300 Welsh Road                            Horsham, PA                 18,189        1983           40 yrs.  
400 Welsh Road                            Horsham, PA                 28,873        1983           40 yrs.  
440 East Swedesford Road                  Wayne, PA                   64,162        1988           40 yrs.  
460 East Swedesford Road                  Wayne, PA                   65,023        1988           40 yrs.  
2 Walnut Grove Drive                      Horsham, PA                 16,427        1989           40 yrs.  
200 Gibralter Road                        Horsham, PA                      -        1990           40 yrs.  
220 Gibralter Road                        Horsham, PA                      -        1990           40 yrs.  
240 Gibralter Road                        Horsham, PA                      -        1990           40 yrs.  
151 S. Warner Road                        Wayne, PA                        -        1980           40 yrs.  
931 South Matlack Street                  West Chester, PA         1,170,708        1985           40 yrs.  
14 Lee Boulevard                          Malvern, PA                866,089        1988           40 yrs.  
500 Chester Field Parkway                 Malvern, PA                510,986        1988           40 yrs.  
300-400 Chester Field Parkway             Malvern, PA                795,480        1988           40 yrs.  
1805 Underwood Boulevard                  Delran, NJ                 110,301        1973           40 yrs.  
150 Mid-Atlantic Parkway                  West Deptford, NJ          199,579        1973           40 yrs.  
18 Boulden Circle                         New Castle, DE             601,300        1989           40 yrs.  
501 Delran Parkway                        Delran, NJ                 467,365        1988           40 yrs.  
600 Delran Parkway                        Delran, NJ               1,059,777        1988           40 yrs.  
1607 Imperial Way                         West Deptford, NJ          927,568        1973           40 yrs.  
1 Boulden Circle                          New Castle, DE             306,780        1986           40 yrs.  
31-55 Read's Way                          New Castle, DE           1,149,943        1986           40 yrs.  
3 Boulden Circle                          New Castle, DE             428,976        1987           40 yrs.  
5 Boulden Circle                          New Castle, DE             651,394        1987           40 yrs.  

                                  -57-
<PAGE> 
                                                                Accumulated 
                                                                Depreciation      Date of      Depreciable 
              Project                           City             @ 12/31/95     Construction   Life (years) 
--------------------------------------    -------------------   ------------    ------------   ------------    
601 Delran Parkway                        Delran, NJ                 348,123        1988           40 yrs.  
51 Haddonfield Road                       Cherry Hill, NJ          2,003,738        1986           40 yrs.  
57 Read's Way                             New Castle, DE             686,487        1985           40 yrs.  
1370 Imperial Way                         West Deptford, NJ          274,863        1978           40 yrs.  
8 Stow Road                               Marlton, NJ                130,494        1988           40 yrs.  
10 Stow Road                              Marlton, NJ                 91,085        1988           40 yrs.  
12 Stow Road                              Marlton, NJ                 91,056        1988           40 yrs.  
14 Stow Road                              Marlton, NJ                105,765        1988           40 yrs.  
1300 Metropolitan Avenue                  West Deptford, NJ          113,275        1972           40 yrs.  
701A Route 73 South                       Marlton, NJ                314,011        1987           40 yrs.  
701C Route 73 South                       Marlton, NJ                 83,807        1987           40 yrs.  
1008 Astoria Boulevard                    Cherry Hill, NJ             39,635        1973           40 yrs.  
1475 Imperial Way                         West Deptford, NJ           52,150        1976           40 yrs.  
3000 Atrium Way                           Mt. Laurel, NJ             434,433        1987           40 yrs.  
750 Cardinal Drive                        Pureland, NJ               175,604        1989           40 yrs.  
11000, 15000, 17000 Commerce Parkway      Mt. Laurel, NJ             253,675        1985           40 yrs.  
12000, 14000 Commerce Parkway             Mt. Laurel, NJ             172,747        1985           40 yrs.  
16000, 18000 Commerce Parkway             Mt. Laurel, NJ             136,636        1985           40 yrs. 
406 Lippincott Drive                      Marlton, NJ                106,224        1990           40 yrs.  
234 High Hill Road                        Bridgeport, NJ              47,012        1987           40 yrs.  
100 Arlington Boulevard                   Bridgeport, NJ              69,025        1996           40 yrs.  
100 Berkeley Drive                        Swedesboro, NJ              51,932        1990           40 yrs.  
301 Lippincott Drive                      Marlton, NJ                133,557        1988           40 yrs.  
303 Lippincott Drive                      Marlton, NJ                119,831        1988           40 yrs.  
510 Sharptown Road                        Bridgeport, NJ              23,878        1984           40 yrs.  
901 Route 73 (901 Building)               Marlton, NJ                 52,777        1985           40 yrs.  
Four Greentree Center                     Marlton, NJ                 48,562        1988           40 yrs.  
512 Sharptown Road                        Bridgeport, NJ              26,449        1984           40 yrs.  
263 Quigley Blvd                          New Castle, DE               8,430        1987           40 yrs.  
34 Blevins Drive                          New Castle, DE               9,684        1987           40 yrs.  
104 Gaither Drive                         Mt Laurel, NJ                2,485        1975           40 yrs.  
2 Lukens Drive                            New Castle, DE                   -        1988           40 yrs.  
1655 Valley Center Parkway                Bethlehem, PA              113,247        1993           40 yrs.  
6560 Stonegate Drive                      Allentown, PA              412,465        1989           40 yrs.  
6370 Hedgewood Drive                      Allentown, PA              381,336        1990           40 yrs.  
6390 Hedgewood Drive                      Allentown, PA              474,228        1990           40 yrs.  
1495 Valley Center Parkway                Bethlehem, PA              526,353        1990           40 yrs.  
6350 Hedgewood Drive                      Allentown, PA              541,080        1989           40 yrs.  
6330 Hedgewood Drive                      Allentown, PA              982,842        1988           40 yrs.  
1550 Valley Center Parkway                Bethlehem, PA              509,861        1988           40 yrs.  
1560 Valley Center Parkway                Bethlehem, PA              653,025        1988           40 yrs.  
6580 Snowdrift Road                       Allentown, PA              510,011        1988           40 yrs.  
1510 Valley Center Parkway                Bethlehem, PA              596,623        1988           40 yrs.  
1530 Valley Center Parkway                Bethlehem, PA              487,892        1988           40 yrs.  
6540 Stonegate Drive                      Allentown, PA              704,737        1988           40 yrs.  
974 Marcon Boulevard                      Allentown, PA              456,203        1987           40 yrs.  
964 Marcon Boulevard                      Allentown, PA              405,927        1985           40 yrs.  
764 Roble Road                            Allentown, PA              208,658        1985           40 yrs.  
3174 Airport Road                         Allentown, PA              381,045        1979           40 yrs.  
2196 Avenue C                             Allentown, PA              378,173        1980           40 yrs.  
2202 Hanger Place                         Allentown, PA              443,767        1981           40 yrs.  
2201 Hanger Place                         Allentown, PA              470,974        1981           40 yrs.  
954 Marcon Boulevard                      Allentown, PA              301,340        1981           40 yrs.  
57 South Commerce Way                     Allentown, PA              178,075        1986           40 yrs.  
754 Roble Road                            Allentown, PA              110,527        1986           40 yrs.  
894 Marcon Boulevard                      Allentown, PA               67,724        1986           40 yrs.  
744 Roble Road                            Allentown, PA              126,142        1986           40 yrs.  
944 Marcon Boulevard                      Allentown, PA              101,670        1986           40 yrs.  
1685 Valley Center Parkway                Allentown, PA               62,824        1996           40 yrs.  
6520 Stonegate Drive                      Allentown, PA               23,295        1976           40 yrs.  
7437 Industrial Boulevard                 Allentown, PA              372,593        1990           40 yrs.  
2041 Avenue C                             Allentown, PA               49,615        1990           40 yrs.  
2124 Avenue C                             Allentown, PA               47,098        1996           40 yrs.  
7339 Industrial Boulevard                 Allentown, PA                    -        1988           40 yrs.  
7384 Penn Drive                           Allentown, PA              108,782        1975           40 yrs.  
7144 Daniels Drive                        Allentown, PA              153,270        1990           40 yrs.  
7620 Cetronia Road                        Allentown, PA              146,045        1980           40 yrs.  
939 Marcon Blvd                           Allentown, PA              200,244        1990           40 yrs.  
100 Brodhead Road                         Allentown, PA               92,025        1996           40 yrs.  
1640 Valley Center Parkway                Bethlehem, PA               27,932        1988           40 yrs.  
83 South Commerce Way                     Bethlehem, PA               14,737        1996           40 yrs.  
85 South Commerce Way                     Bethlehem, PA               13,122        1989           40 yrs.  
87 South Commerce Way                     Bethlehem, PA               13,391        1989           40 yrs.  
7339 Industrial Blvd                      Allentown, PA               28,399        1989           40 yrs.  
12000,001,040 Indian Creek Court          Beltsville, MD           2,133,170        1986           40 yrs.  
180,190 Cochrane Drive                    Annapolis, MD            2,765,357        1988           40 yrs.  
8280 Patuxent Range Drive                 Columbia, MD               506,481        1978           40 yrs.  
8300 Professional Place                   Landover, MD             1,264,179        1978           40 yrs.  
8100 Professional Place                   Landover, MD             1,001,037        1987           40 yrs.  
8100,8200,8300 Corporate Drive            Landover, MD             1,613,036        1981           40 yrs.  
7178-80 Columbia Gateway                  Columbia, MD               248,853        1987           40 yrs.  
8200-40 Professional Place                Landover, MD               101,075        1979           40 yrs.  
8400 Corporate Drive                      Landover, MD               422,988        1984           40 yrs.  
8730 Bollman Place                        Columbia, MD               210,365        1984           40 yrs.  
9101,9111,9115 Guilford Road              Columbia, MD               785,006        1984           40 yrs.  

                                         -58-
<PAGE>
                                                                Accumulated 
                                                                Depreciation      Date of      Depreciable 
              Project                           City             @ 12/31/95     Construction   Life (years) 
--------------------------------------    -------------------   ------------    ------------   ------------    
9125,9135,9145 Guilford Road              Columbia, MD             1,406,750        1983           40 yrs.  
10 South Third Street                     Richmond, VA                 6,481        1930           40 yrs.  
1751 Bluehills Drive                      Roanoke, VA                373,351        1991           40 yrs.  
4300 Carolina Avenue                      Richmond, VA               681,394        1985           40 yrs.  
301 Hill Carter Parkway                   Richmond, VA               221,513        1989           40 yrs.  
4001 Carolina Avenue                      Richmond, VA                 9,890        1935           40 yrs.  
5600-5626 Eastport Boulevard              Richmond, VA               175,218        1989           40 yrs.  
5650-5674 Eastport Boulevard              Richmond, VA               200,418        1990           40 yrs.  
5700 Eastport Boulevard                   Richmond, VA               130,427        1990           40 yrs.  
11020 Hull Street Road                    Richmond, VA                29,190        1987           40 yrs.  
3432 Holland Road                         Virginia Beach, VA          36,210        1989           40 yrs.  
3001 Hungary Springs Road                 Richmond, VA                27,797        1984           40 yrs.  
7760 Shrader Road                         Richmond, VA                36,939        1987           40 yrs.  
7740 Shrader Road                         Richmond, VA                24,121        1989           40 yrs.  
4880 Cox Road                             Richmond, VA                89,194        1995           40 yrs.  
5162 Valleypointe Parkway                 Roanoke, VA                117,367        1993           40 yrs.  
4101-4127 Carolina Avenue                 Richmond, VA               104,417        1973           40 yrs.  
4201-4261 Carolina Avenue                 Richmond, VA               234,576        1975           40 yrs.  
4263-4299 Carolina Avenue                 Richmond, VA               119,370        1976           40 yrs.  
4301-4335 Carolina Avenue                 Richmond, VA                75,572        1978           40 yrs.  
4337-4379 Carolina Avenue                 Richmond, VA               110,714        1979           40 yrs.  
4501-4549 Carolina Avenue                 Richmond, VA               163,304        1981           40 yrs.  
4551-4593 Carolina Avenue                 Richmond, VA               164,352        1982           40 yrs.  
4601-4643 Carolina Avenue                 Richmond, VA               246,050        1985           40 yrs.  
4545-4583 Carolina Avenue                 Richmond, VA               359,442        1985           40 yrs.  
4447-4491 Carolina Avenue                 Richmond, VA               138,769        1987           40 yrs.  
4401-4445 Carolina Avenue                 Richmond, VA               206,593        1988           40 yrs.  
12 S. Third Street                        Richmond, VA                 8,492        1900           40 yrs.  
9601 Cosner Drive                         Fredericksburg, VA         165,687        1995           40 yrs.  
315 Cardiff Valley Road                   Knoxville, TN              142,033        1994           40 yrs.  
2300 East Parham Road                     Richmond, VA                46,313        1988           40 yrs.  
1347 Diamond Springs Road                 Virginia Beach, VA         146,845        1980           40 yrs.  
5221 Valleypark Drive                     Roanoke, VA                 89,229        1988           40 yrs.  
5228 Valleypointe Parkway                 Roanoke, VA                 41,119        1988           40 yrs.  
5238 Valleypark Drive                     Roanoke, VA                 89,339        1989           40 yrs.  
5601-5659 Eastport Boulevard              Richmond, VA               114,394        1996           40 yrs.  
4717-4729 Eubank Road                     Richmond, VA               104,067        1978           40 yrs.  
4263F-N. Carolina Ave                     Richmond, VA                19,090        1975           40 yrs.  
4200 Oakleys Court                        Richmond, VA                15,722        1990           40 yrs.  
1821 Battery Dantzler Road                Chester, VA                 18,795        1990           40 yrs.  
5000 Cox Road                             Glen Allen, VA              23,388        1990           40 yrs.  
510 Eastpark Court                        Sandston, VA                13,425        1989           40 yrs.  
520 Eastpark Court                        Sandston, VA                25,898        1989           40 yrs.  
4523 Green Point Drive                    High Point, NC             356,751        1988           40 yrs.  
4501 Green Point Drive                    High Point, NC             337,209        1989           40 yrs.  
4500 Green Point Drive                    High Point, NC             327,333        1989           40 yrs.  
2427 Penny Road                           High Point, NC             911,816        1990           40 yrs.  
4524 Green Point Drive                    High Point, NC             344,111        1988           40 yrs.  
4328, 4336 Federal Drive                  High Point, NC             354,418        1995           40 yrs.  
200 Centreport Drive                      Greensboro, NC             192,570        1986           40 yrs.  
4344 Federal Drive                        High Point, NC              21,403        1996           40 yrs.  
202 Centreport Drive                      Greensboro, NC             169,548        1990           40 yrs.  
4000 Piedmont Parkway                     High Point, NC             122,232        1988           40 yrs.  
1730 Stebbins Drive                       Houston, TX                217,699        1973           40 yrs.  
5911-5925 Richard Street                  Jacksonville, FL           206,188        1977           40 yrs.  
8383-8385 Baycenter Road                  Jacksonville, FL           229,451        1973           40 yrs.  
8775 Baypine Road                         Jacksonville, FL           466,088        1989           40 yrs.  
8539 Western Way                          Jacksonville, FL           673,736        1987           40 yrs.  
6255 Lake Gray Boulevard                  Jacksonville, FL           679,901        1987           40 yrs.  
6600-6660 Suemac Place                    Jacksonville, FL           722,196        1973           40 yrs.  
6800-6850 Suemac Place                    Jacksonville, FL           428,359        1973           40 yrs.  
8665,8667,8669 Baypine Road               Jacksonville, FL           852,564        1987           40 yrs.  
8540 Baycenter Road                       Jacksonville, FL           402,468        1984           40 yrs.  
1200 Gulf Life Drive                      Jacksonville, FL         4,378,882        1984           40 yrs.  
8400 Baymeadows Way                       Jacksonville, FL           477,358        1987           40 yrs.  
8614 Baymeadows Way                       Jacksonville, FL           240,238        1986           40 yrs.  
5941-5975 Richard Street                  Jacksonville, FL           486,171        1978           40 yrs.  
7970 Bayberry Road                        Jacksonville, FL           343,613        1978           40 yrs.  
6000-6030 Bowdendale Avenue               Jacksonville, FL           595,909        1979           40 yrs.  
7898 Baymeadows Way                       Jacksonville, FL           669,970        1979           40 yrs.  
5977-6607 Richard Street                  Jacksonville, FL           758,810        1980           40 yrs.  
7910 & 7948 Baymeadows Way                Jacksonville, FL           861,007        1980           40 yrs.  
7954 & 7960 Baymeadows Way                Jacksonville, FL           877,689        1982           40 yrs.  
8787 Baypine Road                         Jacksonville, FL        10,219,370        1990           40 yrs.  
7077 Bonneval Road                        Jacksonville, FL           530,100        1988           40 yrs.  
4190 Belfort Road                         Jacksonville, FL           556,333        1986           40 yrs.  
8011, 8021, 8031 Phillips Highway         Jacksonville, FL           198,751        1987           40 yrs.  
7020 AC Skinner Parkway                   Jacksonville, FL            38,045        1996           40 yrs.  
7040 AC Skinner Parkway                   Jacksonville, FL            92,338        1996           40 yrs.  
11777 Central Highway                     Jacksonville, FL           283,406        1985           40 yrs.  
7016 AC Skinner Parkway                   Jacksonville, FL             5,139        1996           40 yrs.  
4001,4051,4101 Fowler Avenue              Tampa, FL                  898,330        1987           40 yrs.  
5501-5502 Pioneer Park Boulevard          Tampa, FL                  106,279        1981           40 yrs.  
5690-5694 Crenshaw Street                 Tampa, FL                   88,086        1979           40 yrs.  
3102,3104,3110 Cherry Palm Drive          Tampa, FL                  111,647        1986           40 yrs.  

                                     -59-
<PAGE> 
                                                                Accumulated 
                                                                Depreciation      Date of      Depreciable 
              Project                           City             @ 12/31/95     Construction   Life (years) 
--------------------------------------    -------------------   ------------    ------------   ------------    
8401-8408 Benjamin Road                   Tampa, FL                  112,282        1986           40 yrs.  
3501 Riga Blvd                            Tampa, FL                   31,891        1987           40 yrs.  
111 Kelsey Lane                           Tampa, FL                    6,094        1990           40 yrs.  
2 Kings Hill Avenue                       West Malling, UK             9,864        1940           40 yrs.  
50 Gibson Drive                           West Malling, UK           392,960        1996           40 yrs.  
50 Kings Hill Avenue                      West Malling, UK                 -        1996           40 yrs.  
25 Kings Hill Avenue                      West Malling, UK            17,900        1996           40 yrs.  
                                                               ------------- 
Subtotal Operating Real Estate                                 $ 119,151,189 
                                                               ============= 
 
DEVELOPMENT PROPERTIES 
3000 Horizon Blvd                         King of Prussia, PA  $           -        1996        N/A  
8801 Tinicum Boulevard                    Philadelphia, PA                 -        1996        N/A  
50 Morehall Road                          Malvern, PA                      -        1996        N/A  
231 Lake Drive                            New Castle, DE                   -        1995        N/A  
15 Boulden Circle                         New Castle, DE                   -        1996        N/A  
404 Lippincott Drive                      Marlton, NJ                      -        1996        N/A  
402 Lippincott Drive                      Marlton, NJ                      -        1996        N/A  
1455 Valley Center Parkway                Bethlehem, PA                    -        1995        N/A  
1650 Valley Center Parkway                Bethlehem, PA                    -        1996        N/A  
1660 Valley Center Parkway                Bethlehem, PA                    -        1996        N/A  
Nestle Way                                Allentown, PA                    -        1996        N/A  
Southpoint Pkwy                           Jacksonville, FL                 -        1996        N/A  
7018 AC Skinner Parkway                   Jacksonville, FL                 -        1996        N/A  
5900 Eastport Boulevard                   Richmond, VA                     -        1995        N/A  
5251 Concourse Drive                      Roanoke, VA                      -        1995        N/A  
501 Liberty Way                           Chester, VA                      -        1996        N/A  
13033 Kingston Ave                        Chester, VA                      -        1996        N/A  
5701-5799 Eastport Blvd                   Richmond, VA                     -        1996        N/A  
Centreport III                            Greensboro, NC                   -        1995        N/A  
Federal Ridge III - Distr Bldg            Greensboro, NC                   -        1996        N/A  
Federal Ridge III - Flex Bldg             Greensboro, NC                   -        1996        N/A  
6532 Judge Adams Road                     Whitsette, NC                    -        1996        N/A  
                                                                  ---------- 
Subtotal Development in Progress                                  $        - 
                                                                  ========== 
             
LAND HELD FOR DEVELOPMENT             
Chelsea Business Park Land                 Boothwyn, PA                    -        1988        N/A  
132 Welsh Road                             Horsham, PA                     -        1995        N/A  
Three Country View Road                    Malvern, PA                     -        1995        N/A  
550 Lapp Road                              Malvern, PA                     -        1995        N/A  
South Commerce Way Land                    Bethlehem, PA                   -        1996        N/A  
Cedar Hollow Road Land                     Malvern, PA                     -        1996        N/A  
Walnut Grove Land                          Horsham, PA                     -        1996        N/A  
3604 Horizon Blvd                          King of Prussia, PA             -        1996        N/A  
3606 Horizon Blvd                          King of Prussia, PA             -        1996        N/A  
Swedes Run Business Park Land              Delran, NJ                      -        1992        N/A  
Marlton Executive Park Land                Marlton, NJ                     -        1994        N/A  
Commodore 295                              Logan Twp., NJ                  -        1995        N/A  
Marlton Executive Park Land                Marlton, NJ                     -        1996        N/A  
200 Exeter Court                           Bridgeport, NJ                  -        1996        N/A  
17 Boulden Circle                          New Castle, DE                  -        1987        N/A  
Lehigh Valley Corporate Center Land        Bethlehem, PA                   -        1987        N/A 
Lehigh Valley West Lots 13,14,15           Allentown, PA                   -        1995        N/A  
Valleypointe Land                          Richmond, VA                    -        1995        N/A  
Fairgrounds IRS Land                       Richmond, VA                    -        1995        N/A  
Rivers' Bend Land                          Chesterfield, VA                -        1995        N/A  
Oakleys Center Land                        Richmond, VA                    -        1996        N/A  
Technology Pointe Land                     Glen Allen, VA                  -        1996        N/A  
Woodlands Center Land                      Sandston, VA                    -        1996        N/A  
Mendenhall Land                            High Point, NC                  -        1995        N/A  
6532 Judge Adams Road                      Whitsette, NC                   -        1996        N/A  
Southpoint Business Park Land              Jacksonville, FL                -        1994        N/A  
Liberty Business Park Land                 Jacksonville, FL                -        1995        N/A  
7024 AC Skinner Parkway                    Jacksonville, FL                -        1996        N/A  
7014 AC Skinner Parkway                    Jacksonville, FL                -        1996        N/A 
Crenshaw Street                            Tampa, FL                       -        1995        N/A  
Silo Bend Land                             Tampa, FL                       -        1996        N/A  
Silo Bend Land                             Tampa, FL                       -        1996        N/A  
                                                                ------------ 
Subtotal Land Held for Development                              $          - 
                                                                ============        
                         
TOTAL ALL PROPERTIES                                            $119,151,189 
                                                                ============ 
 
 
*     Denotes property is collateralized under the Line of Credit with G.E. Capital 
**    Denotes property is collateralized under mortgages with Nationwide, Principal Mutual and American 
        General totalling $146.7 million 
***   Denotes property is collateralized under Line of Credit with Bank of Boston with a capacity of  
        $80.0 million. Properties currently collateralized allow the Company to borrow up to $25.0 million. 
****  Rouse leases land from Kent County Council. 
</TABLE>
                                     -60-
<PAGE> 
                                                          SCHEDULE III 
 
                                LIBERTY PROPERTY TRUST  
                       REAL ESTATE AND ACCUMULATED DEPRECIATION 
                                    (In thousands) 
 
A summary of activity for real estate and accumulated depreciation is as  
follows: 
 
                                    FOR THE YEARS ENDED DECEMBER 31, 
                                    -------------------------------- 
                                    1996 <F1>   1995 <F1>  1994 <F2> 
                                    ---------   ---------  --------- 
 
REAL ESTATE: 
 Balance at beginning of year       $  920,230  $ 586,789  $ 432,970 
   Additions                           268,066    333,441    153,819 
   Disposition of property              (9,583)        --         -- 
                                    ----------  ---------  --------- 
 Balance at end of year             $1,178,713  $ 920,230  $ 586,789 
                                    ==========  =========  ========= 
 
ACCUMULATED DEPRECIATION: 
 Balance at beginning of year       $   94,183  $  74,508  $  62,532 
   Depreciation expense                 24,968     19,675     11,976 
                                    ----------  ---------  --------- 
 
 Balance at end of year             $  119,151  $  94,183  $  74,508 
                                    ==========  =========  ========= 
 
<F1>  Liberty Property Trust 
<F2>  Liberty Property Trust and Rouse Group Combined 

                                 -61-
<PAGE> 
 
                        REPORT OF INDEPENDENT AUDITORS 
 
 
 
To The Partners  
Liberty Property Limited Partnership  
 
 
 
We have audited the accompanying consolidated balance sheets of Liberty  
Property Limited Partnership ("the Operating Partnership") as of  
December 31, 1996 and 1995, and the related consolidated statements of  
operations, owners' equity, and cash flows for each of the two years in  
the period ended December 31, 1996, and the period June 23, 1994 through  
December 31, 1994.  We have also audited the combined statements of  
operations, owners' deficit and cash flows of the Rouse Group for the  
period January 1, 1994 through June 22, 1994.  Our audits also included  
the financial statement schedule listed in the Index at Item 14(a).   
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. 
 
We conducted our audits in accordance with generally accepted auditing  
standards.  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 financial statements referred to above present  
fairly, in all material respects, the consolidated financial position of  
Liberty Property Limited Partnership at December 31, 1996 and 1995, the  
consolidated results of Liberty Property Limited Partnership's  
operations and cash flows for each of the two years in the period ended   
December 31, 1996 and for the period June 23, 1994 through December 31,  
1994, and the combined results of the Rouse Group's operations and cash  
flows for the period January 1, 1994 through June 22, 1994, in  
conformity with 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. 
 
 
 
 
 
Philadelphia, Pennsylvania                             ERNST & YOUNG LLP 
February 17, 1997 
 
                             -62-
<PAGE> 
 
     CONSOLIDATED BALANCE SHEETS OF LIBERTY PROPERTY LIMITED PARTNERSHIP 
                                (IN THOUSANDS) 
                                                      DECEMBER 31, 
                                               ------------------------- 
                                                 1996            1995 
                                               ----------     ---------- 
ASSETS 
Real estate: 
 Land and land improvements                    $  140,196     $ 108,723 
 Buildings and improvements                       908,835       715,908 
 Less accumulated depreciation                   (119,151)      (94,183) 
                                               ----------     --------- 
Operating real estate                             929,880       730,448 
 
 Development in progress                           85,628        67,021 
 Land held for development                         44,054        28,578 
                                               ----------     --------- 
Net real estate                                 1,059,562       826,047 
 
Cash and cash equivalents                          19,612        10,629 
Accounts receivable                                 8,707         5,608 
Deferred financing and leasing costs, 
 net of accumulated amortization 
 (1995, $30,985; 1994, $24,007)                    27,013        26,363 
Prepaid expenses and other assets                  37,718        29,455 
                                               ----------     --------- 
Total assets                                   $1,152,612     $ 898,102 
                                               ==========     ========= 
LIABILITIES 
Mortgage loans                                 $  240,803     $ 172,115 
Subordinated debentures                           171,214       229,900 
Line of credit                                    266,692        71,894 
Accounts payable                                    6,294         4,577 
Accrued interest                                    7,411         9,439 
Dividend payable                                   14,248        12,668 
Other liabilities                                  28,923        20,835 
                                               ----------     --------- 
Total liabilities                                 735,585       521,428 
 
OWNERS' EQUITY 
General partner's equity                          375,532       335,521 
Limited partners' equity                           41,495        41,153 
                                               ----------     --------- 
Total owners' equity                              417,027       376,674 
                                               ----------     --------- 
Total liabilities and owners' equity           $1,152,612     $ 898,102 
                                               ==========     ========= 
See accompanying notes. 

                               -63-
<PAGE> 
<TABLE>
       CONSOLIDATED STATEMENTS OF OPERATIONS OF LIBERTY PROPERTY LIMITED PARTNERSHIP 
                    AND COMBINED STATEMENTS OF OPERATIONS OF THE ROUSE GROUP 
                                       (IN THOUSANDS) 
<CAPTION>
                                      LIBERTY PROPERTY LIMITED PARTNERSHIP      ROUSE GROUP 
                                  ------------------------------------------   ----------- 
                                                                               JANUARY 1, 
                                   YEAR ENDED    YEAR ENDED     JUNE 23, TO     1994 TO    
                                  DECEMBER 31,   DECEMBER 31,   DECEMBER 31,    JUNE 22,     
                                      1996          1995          1994            1994 
                                  ------------   ------------   ------------   ---------- 
<S>                               <C>            <C>            <C>            <C>
REVENUE 
Rental                            $   112,841    $    89,163    $  34,698      $  26,416 
Operating expense reimbursement        35,886         24,604        9,057          8,148 
Management fees                         1,340            734          536            688 
Interest and other                      4,198          2,540        2,347          1,132 
                                  ------------   -----------    ---------    ----------- 
Total revenue                         154,265        117,041       46,638         36,384 
 
OPERATING EXPENSES 
Rental property                        29,624         20,010        7,577          7,606 
Real estate taxes                      11,229          9,304        3,800          2,767 
General and administrative              8,023          5,212        2,273          2,439 
Depreciation and amortization          28,203         22,518        8,294          6,438 
                                  ------------   -----------    ---------    ----------- 
 
Total operating expenses               77,079         57,044       21,944         19,250 
                                  ------------   -----------    ---------    ----------- 
 
Operating income                       77,186         59,997       24,694         17,134 
 
Premium on debenture conversions        1,027              -            -              - 
Interest expense                       38,528         37,688       13,826         20,417 
                                  ------------   -----------    ---------    ----------- 
 
Income (loss) before extra- 
 ordinary item                         37,631         22,309       10,868         (3,283) 
 
Extraordinary item - Gain on 
 extinguishment of debt                     -             -        52,677          3,084 
                                  ------------   -----------    ---------    ----------- 
 
Net income (loss)                 $    37,631    $    22,309    $  63,545    $      (199) 
                                  ============   ===========    =========    =========== 
 
Net income allocated 
 to general partner               $    33,740    $    19,466    $    55,881  $      (199) 
Net income allocated 
 to limited partners                    3,891          2,843          7,664            - 
                                  ============   ===========    ===========  ===========  
</TABLE>

See accompanying notes. 

                                   -64-
<PAGE>
<TABLE>
                    CONSOLIDATED STATEMENTS OF OWNERS' EQUITY OF  
                      LIBERTY PROPERTY LIMITED PARTNERSHIP AND  
                COMBINED STATEMENTS OF OWNERS' DEFICIT OF THE ROUSE GROUP 
                                      (IN THOUSANDS) 
<CAPTION> 
                                                GENERAL      LIMITED      TOTAL OWNERS' 
                                                PARTNER'S    PARTNERS'       EQUITY 
                                                 EQUITY       EQUITY        (DEFICIT) 
                                               ----------   ----------    ------------- 
<S>                                            <C>          <C>           <C> 
Owners' deficit at January 1, 1994                                        $  (150,987) 
 
Distribution to partners                                                       (4,941) 
Net income from the period January 1, 1994 
 through June 22, 1994                                                           (199) 
                                                                          ------------ 
Owners' deficit contributed at June 23, 1994                 $(156,127)      (156,127) 
 
Contributions from partners                    $ 182,877       202,577        385,454 
Distribution to partners                          (9,091)      (24,282)       (33,373) 
Net income                                        55,881         7,664         63,545 
                                               ----------    ----------   ------------  
Balance at December 31, 1994                     229,667        29,832        259,499 
 
Contribution from partners                       131,558             -        131,558 
Distribution to partners                         (45,170)       (6,279)       (51,449) 
Issuance of Operating Partnership Units                -        14,757         14,757 
Net income                                        19,466         2,843         22,309 
                                               ----------   -----------   ------------ 
 
Balance at December 31, 1995                     335,521        41,153        376,674 
 
Contribution from partners                        55,001         1,879         56,880 
Distribution to partners                         (48,730)       (5,428)       (54,158) 
Net income                                        33,740         3,891         37,631 
                                               ----------   -----------   ------------ 
 
Balance at December 31, 1996                   $ 375,532    $   41,495    $   417,027 
                                               =========    ==========    =========== 
</TABLE>
 
 
See accompanying notes. 
 
                                  -65-
<PAGE>
<TABLE>
        CONSOLIDATED STATEMENTS OF CASH FLOWS OF LIBERTY PROPERTY LIMITED PARTNERSHIP 
                   AND COMBINED STATEMENTS OF CASH FLOWS OF THE ROUSE GROUP 
                                        (IN THOUSANDS) 
<CAPTION>
                                    LIBERTY PROPERTY LIMITED PARTNERSHIP     ROUSE GROUP 
                                  ----------------------------------------   ----------- 
                                          YEAR ENDED            JUNE 23,     JANUARY 1, 
                                  --------------------------    1994 TO       1994 TO 
                                  DECEMBER 31,  DECEMBER 31,  DECEMBER 31,    JUNE 22, 
                                     1996          1995          1994          1994 
                                  ------------  ------------  ------------   ----------- 
<S>                               <C>           <C>           <C>            <C> 
OPERATING ACTIVITIES 
Net income (loss)                 $    37,631   $    22,309   $    63,545    $     (199) 
Adjustments to reconcile net 
 income (loss) to net cash pro- 
 vided by operating activities: 
Gain on extinguishment 
   of debt                                  -             -       (52,677)       (3,084) 
  Depreciation and amorti- 
   zation                              28,203        22,518         9,544         6,438 
  Gain on sale                           (577)            -             -             - 
  Noncash compensation                    704             -             -             - 
  Changes in operating assets 
   and liabilities: 
   Accounts receivable                 (3,099)       (1,006)          (62)         (277) 
   Prepaid expense and other 
    assets                            (11,197)       (5,595)          463         4,287 
   Accounts payable                     1,717         2,871        (6,060)          586 
   Accrued interest on exist- 
    ing debt                           (2,028)         (286)        9,725            55 
   Other liabilities                    8,463         9,641         7,304          (756) 
                                  ------------  ------------  ------------   ----------- 
Net cash provided by opera- 
 ting activities                       59,817        50,452        31,782         7,050 
                                  ------------  ------------  ------------   ----------- 
 
INVESTING ACTIVITIES 
Investment in properties             (223,756)     (193,219)     (145,144)       (4,827) 
Investment in development 
 in progress                          (18,607)      (64,122)       (2,899)            - 
Increase in land held for 
 development                          (15,476)      (20,367)       (1,226)            - 
(Increase) decrease in de- 
 ferred leasing costs                  (7,588)       (4,154)       (5,004)        2,818 
                                  ------------  ------------  ------------   ----------- 
 
Net cash used in investing 
 activities                          (265,427)     (281,862)     (154,273)       (2,009) 
                                  ------------  ------------  ------------   ----------- 
 
FINANCING ACTIVITIES 
Proceeds from issuance of 
 debentures                                 -              -       230,000             - 
Decrease in restricted cash                 -              -         5,967         6,108 
Proceeds from mortgage loans           77,605         91,800             -        16,198 
Repayments of mortgage loans           (8,917)       (7,659)     (396,980)      (17,078) 
Repayments of accrued interest 
 at formation                               -             -       (29,269)            - 
Proceeds from lines of credit         237,191       167,925        69,000             - 
Repayments on line of credit          (42,393)     (140,031)      (25,000)            - 
Proceeds from notes payable                 -             -             -         2,421 
Repayment of notes payable                  -             -       (25,519)            - 
Deposits on pending acquisitions        2,593        12,865       (22,700)            - 
Decrease (increase) in deferred 
 financing costs                        1,092          (707)      (20,695)        2,818 
Capital contributions                       -       131,458       385,454             - 
                                   -66-
<PAGE>

Distribution to partners              (52,578)      (38,781)      (33,373)       (4,941) 
                                  ------------  ------------  ------------   ----------- 
Net cash provided by 
 financing activities                 214,593       216,870       136,885         5,526 
 
Increase (decrease) in cash and 
 cash equivalents                       8,983       (14,540)       14,394        10,567 
 
Cash and cash equivalents at 
 beginning of period                   10,629        25,169        10,775           208 
                                  ------------  ------------  ------------   ----------- 
 
Cash and cash equivalents at 
 end of period                    $    19,612   $    10,629   $    25,169    $   10,775 
                                  ============  ===========   ===========    ========== 
 
SUPPLEMENTAL DISCLOSURE OF 
NONCASH TRANSACTIONS 
Write-off of fully depreciated 
 property and deferred costs      $       487   $     2,617   $     6,699    $        - 
Acquisition of properties                   -       (55,874)            -             - 
Assumption of mortgage loans                -        41,117             -             - 
Issuance of operating partner- 
 ship units                                 -        14,757             -             - 
Noncash compensation                      370             -             -             - 
Conversion of subordinated 
 debentures                            55,802           100             -             - 
                                  ============  ============  ============   =========== 
</TABLE>
See accompanying notes. 
                                       -67-
<PAGE> 
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS OF LIBERTY PROPERTY LIMITED     
    PARTNERSHIP AND COMBINED FINANCIAL STATEMENTS OF THE ROUSE GROUP 
 
 
1.   ORGANIZATION 
 
Liberty Property Trust (the "Trust") a self-administered and self- 
managed real estate investment trust (a "REIT"), was formed in the State  
of Maryland on March 28, 1994 and commenced operations on June 23, 1994  
upon completion of its initial public offering of 20,987,500 Common  
Shares of Beneficial Interest (the "Share Offering").  The Trust  
conducts all of its operations, including leasing, property management  
and other services through Liberty Property Limited Partnership (the  
"Operating Partnership" and together with the Trust referred to as the  
"Company"). Simultaneous with the closing of the Share Offering, the  
Company succeeded to substantially all of the interests of Rouse &  
Associates, a general partnership, and certain other entities affiliated  
with Rouse & Associates (collectively the "Rouse Group"). At December  
31, 1996, the Trust owns an 90.02% interest in the Operating Partnership  
as the sole general partner and a .03% interest as a limited partner.   
Concurrent with the Share Offering, the Operating Partnership completed  
a public offering of $230 million of Exchangeable Subordinated  
Debentures (the "Debenture Offering", and, together with the Share  
Offering, the "Offerings") due 2001.  The Debentures are guaranteed by  
the Trust.  After June 23, 1995, the Debentures are exchangeable at any  
time prior to maturity into Common Shares of Beneficial Interest at a  
rate of one share for each $20 outstanding principal amount of  
Debentures, subject to certain adjustments. The Company completed a  
follow-on offering (the "Follow-on Offering") on November 27, 1995,  
which resulted in net proceeds of $131.5 million. The Company provides  
leasing, property management, acquisition, development, construction  
management, and design management for a portfolio of industrial and  
office properties which are located principally within the Southeastern  
and Mid-Atlantic United States. 
 
The Rouse Group combined financial statements include accounts of the  
properties and entities acquired by the Operating Partnership which are  
considered to be entities under common ownership and management. 
 
2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
Use of Estimates 
 
The preparation of financial statements in conformity with generally  
accepted accounting principles 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  
accounts of the Operating Partnership and the Operating Partnership's  
direct and indirect subsidiaries including Liberty Property Development  
Corporation.  The acquisition of the Rouse Group interest by the  

                               -68-
<PAGE>

Operating Partnership was accounted for as a reorganization of entities  
under common control which is similar to the accounting for a pooling of  
interests.  As a result, the operations of the Rouse Group are included  
in these Financial Statements. All significant intercompany transactions  
and accounts have been eliminated. 
 
Certain amounts from prior periods have been restated to conform to  
current year presentation. 
 
Real Estate and Depreciation 
 
The Properties are recorded at the lower of cost or net realizable value  
and are depreciated using the straight-line method over their estimated  
useful lives.  The estimated lives are as follows: 
 
        Building and improvements              40 years 
        Equipment                              10 years 
        Tenant improvements                    Term of the related lease 
 
Cash Equivalents 
 
Highly liquid investments with a maturity of three months or less when  
purchased are classified as cash equivalents.  The carrying amount of  
these assets approximates their fair market value.  
 
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. 
 
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. Amortization  
of deferred financing costs is reported as interest expense. 
 
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 and, accordingly,  
no provision has been made in the accompanying financial statements for  
any federal, state, or local income taxes. 
 
3.   REAL ESTATE 
 
At December 31, 1996 and 1995, the Company owned and operated industrial  
and office properties within suburban mixed use developments or business  
parks.  The carrying value of these properties by type is as follows (in  
thousands): 

                                 -69-
<PAGE>
<TABLE>
<CAPTION> 
                                   LAND        BUILDINGS 
                                 AND LAND         AND                   ACCUMULATED 
                               IMPROVEMENTS   IMPROVEMENTS    TOTAL     DEPRECIATION 
                               ------------   ------------  ---------   ------------ 
<S>                            <C>            <C>           <C>         <C>    
1996: 
Industrial properties          $  85,459       $ 517,272    $  602,731     $ 62,557 
Office Properties                 54,737         391,563       446,300       56,594 
                               ---------       ---------    ----------     -------- 
 
1996 Total                     $ 140,196       $ 908,835    $1,049,031     $119,151 
                               =========       =========    ==========     ======== 
 
1995: 
Industrial properties          $  67,373       $ 427,369    $  494,742     $ 50,907 
Office properties                 41,350         288,539       329,889       43,276 
                                ---------      ---------    ----------     -------- 
 
1995 Total                      $ 108,723      $ 715,908    $  824,631     $ 94,183 
                                =========      =========    ==========     ======== 
</TABLE>
 
Depreciation expense was $24,968 in 1996, $19,675 in 1995, and $11,976  
in 1994. 
 
The Company has commenced development on 22 properties, which upon  
completion are expected to comprise approximately 3.0 million square  
feet of leasable space.  As of December 31, 1996 approximately $85.6  
million has been expended for the development of these projects and an  
additional $68.2 million is required for completion. 
 
4.   RELATED PARTY TRANSACTIONS 
 
An affiliated company provides construction services to the  Company.   
Amounts paid to this affiliate were $29,717,000 in 1996, $6,245,000 in  
1995, and $2,583,000 in 1994. 
 
During 1995, three properties were purchased from partnerships  
affiliated with Rouse & Associates not included in the Rouse Group.  The  
Rouse principals received no financial consideration for the purchase. 
 
Pursuant to agreements, the Company has been retained by an affiliate  
(Rouse Kent Limited) to provide development, management and other  
services. For the years ended December 31, 1996 and December 31, 1995,  
and the period from June 23, 1994 to December 31, 1994, the fees for  
these services were $600,000, $600,000 and $453,000, respectively.  At  
December 31, 1995, the Company had a $250,000 receivable from Rouse Kent  
Limited for these management and other services.  Additionally, the  
Company committed to loans in 1996 to two affiliates (Rouse Kent  
Development Limited and 1 Tower View Limited) for development projects.   
At December 31, 1996, the balance of these notes receivable was $7.4  
million. 
 
5.   MORTGAGE LOANS, SUBORDINATED DEBENTURES AND LINES OF CREDIT  
 
Long term indebtedness consists generally of mortgage loans,  
subordinated debentures and Lines of Credit.  The average annualized  
interest rates for the years ended December 31, 1996, 1995, and 1994,  
were approximately 7.6%, 7.8%, and 8.0%, respectively.  Interest expense  

                              -70-

<PAGE>

for the years ended December 31, 1996, 1995, and 1994, aggregated  
$38,528,000, $37,688,000, and $34,243,000, respectively.  Interest costs  
during these periods of $7,708,000, $3,475,000, and $190,000 were  
capitalized.  Cash paid for interest for the years ended December 31,  
1996, 1995, and 1994 was $35,995,000, $33,202,000, and $51,232,000,  
respectively. 
 
Mortgage loans with maturities ranging from 1997 to 2013 (weighted  
average life 8 years) are collateralized by and in some instances cross  
collateralized by  properties with a book value of $314.0 million.  The  
interest rates on $230.4 million of mortgage loans are fixed and range  
from 6% to 10%.  Interest rates on $10.4 million of mortgage loans float  
with LIBOR or prime and are subject to certain caps.  The weighted  
average interest rate on the mortgage loans is 7.7% and the weighted  
average life is 8 years. 
 
The aggregate maturities of the mortgage loans outstanding are as  
follows (in thousands): 
 
        1997                 $  7,065 
        1998                   10,936  
        1999                   19,031 
        2000                   29,717  
        2001                   12,555 
        Thereafter            161,499 
                             -------- 
        TOTAL                $240,803 
                             ======== 
 
The Debentures are due on June 23, 2001 and are exchangeable for shares  
of the Trust at a rate of one share for each $20 outstanding principal  
amount of Debentures, subject to certain adjustments.  The initial  
interest rate on the Debentures was 8% and increases with increases in  
the dividend payment on the Company's Common Shares of Beneficial  
Interest.  At the current $.41 per share per quarter dividend payment  
rate, the effective interest rate on the Debentures is 8.2%.  During the  
year ended December 31, 1996, the Company paid sums aggregating $1.0  
million to facilitate the conversion of $58.7 million of Debentures into  
2,934,300 common shares.  During the year ended December 31, 1996, $2.9  
million of related deferred financing costs were written off through  
additional paid-in capital. 
 
The Lines of Credit are composed of two secured lines of credit (the  
"$250 million Line of Credit" and the "$80 million Line of Credit").   
The $250 million Line of Credit is secured and is due on June 15, 1998  
at which time it may be converted into a two year term loan with the  
payment of a conversion fee equal to 1/2% of the then outstanding  
balance.  As of December 31, 1996, the $250 million Line of Credit was  
fully collateralized and $241.7 million was outstanding. The interest  
rate on the $250 million Line of Credit is 30-day LIBOR plus 1.75%  
(7.13% and 7.75% at December 31, 1996 and 1995, respectively). Other  
normal and customary fees apply including an unused line fee. The $250  
million Line of Credit is recourse to the Company only with respect to  
50% of the outstanding principal thereof and is otherwise non-recourse  

                               -71-

<PAGE>

subject to certain conditions.  At December 31, 1996, 109 properties  
with a book value of $387.6 million collateralized the $250 million Line  
of Credit.  During 1996, the Company closed on an $80 million Line of  
Credit.  The $80 million Line of Credit is secured and is due on  
December 13, 1998.  At any time prior to December 13, 1998, maturity may  
be extended for one year subject to certain conditions and the payment  
of an extension fee equal to 1/4% of the total commitment.  As of  
December 31, 1996, collateral had been approved to enable the Company to  
borrow up to $56.0 million, of which $25.0 million was outstanding.  The  
interest rate on the $80 million Line of Credit is 90-day LIBOR plus  
1.60% (7.13% at December 31, 1996).  At December 31, 1996, 23 properties  
with a book value of $64.5 million, and 2 development properties with a  
book value of $3.9   million collateralized the $80 million Line of  
Credit. 
 
In 1994, the Company recognized a gain on extinguishment of debt which  
resulted primarily from the payment of mortgage notes and notes payable  
including penalties and accrued interest at a discount with $451.8  
million in proceeds obtained from the issuance of shares and the close  
of the Debenture offering. 
 
The fair value of the Debentures at December 31, 1996 was $220.4 million  
based on the closing bid price of the security on the New York Stock  
Exchange.  The fair values of the mortgages and Lines of Credit were  
estimated using discounted cash flow analysis, based on the Company's  
estimated incremental borrowing rate at December 31, 1996, for similar  
types of borrowing arrangements.  The carrying values of the mortgages  
and the Lines of Credit approximate their fair values. 
 
6.   LEASING ACTIVITY 
 
Future minimum rental payments due from tenants under non-cancellable  
operating leases as of December 31, 1996 are as follows (in thousands): 
 
         
        1997                 $119,777  
        1998                  107,177  
        1999                   91,805 
        2000                   68,264 
        2001                   40,441 
        Thereafter            126,211  
                             -------- 
        TOTAL                $553,675 
                             ======== 
 
In addition to minimum rental payments, tenants pay for their pro rata  
share of specified operating expenses.  These amounts are included as  
operating expense reimbursement in the accompanying statements of  
operations.  
 
7.   COMMITMENTS AND CONTINGENCIES 
 
All of the Properties have been subject to Phase I Environmental  
Assessments ("Phase I Assessments") performed and obtained in  

                                -72-

<PAGE>

contemplation of the formation or acquisitions.  The Phase I Assessments  
consisted of, among other activities, a visual inspection of each  
Property and its neighborhood and a check of pertinent public records.   
The Phase I 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. 
 
The Trust is not a party to any material legal proceedings.  In the  
ordinary course of business, the Operating Partnership is party to  
ordinary routine litigation incidental to its business and in addition  
it is covered by insurance. 
 
The Company has entered into an interest rate swap agreement to hedge  
against possible fluctuations in interest rates in anticipation of a  
$120 million debt issuance in 1997 for a five to seven year term.  The  
securities underlying the interest rate swap agreement, with a notional  
amount of $114.5 million, are 5.875% US Treasury securities maturing on  
February 15, 2004.  Gain or loss on this hedging transaction is being  
deferred and will be amortized as adjustments to interest expense  
commencing on the date of issuance of the debt and over the term of the  
debt.  At December 31, 1996, the Company had one swap transaction  
outstanding, and approximately $645,000 in unrealized gain has been  
deferred. 
 
8.   QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) 
 
The following is a summary of quarterly results of operations for the  
two years ended December 31, 1996 and 1995 (in thousands): 

<TABLE>
<CAPTION>
                                                                         QUARTER ENDED 
                                      ---------------------------------------------------------------------------------- 
                                      DEC. 31,  SEPT. 30,  JUNE 30,  MARCH 31,  DEC. 31,  SEPT. 30,  JUNE 30,  MARCH 31, 
                                        1996      1996      1996      1996        1995      1995       1995       1995    
                                      --------  ---------  --------  ---------  --------  ---------  --------  ---------  
<S>                                   <C>       <C>        <C>       <C>        <C>       <C>        <C>       <C>
Rental revenue                        $ 30,822  $ 28,921   $ 27,146  $ 25,952   $ 24,203  $  23,206  $ 22,261  $  19,493  
                                      ========  ========   ========  ========   ========  =========  ========  =========  
 
Operating income                        20,884    19,657     18,557    18,088     16,760     15,637    14,441     13,159  
                                      ========  ========   ========  ========   ========  =========  ========  =========  
 
Income before extraordinary item        10,630     9,313      8,734     8,954      6,525      5,591     5,428      4,765      
                                      ========  ========   ========  ========   ========  =========  ========  =========   
 
Net income                              10,630     9,313      8,734     8,954      6,525      5,591     5,428      4,765   
                                      ========  ========   ========  ========   ========  =========  ========  =========   
</TABLE>
 
 
9.   PRO FORMA INFORMATION (UNAUDITED) 
 
The following unaudited pro forma information has been prepared assuming  
the Secondary Offering described in Note 1 and the acquisitions of 54  
properties acquired in 1995 and 33 properties acquired in 1996 had  
occurred at January 1, 1995.  The 1995 acquisitions were acquired for a  
total investment of $202.3 million and the 1996 acquisitions were  
acquired for a total investment of $132.9 million. 
 
                              -73-
<PAGE> 
 
                                        YEAR ENDED DECEMBER 31, 
                                        ----------------------- 
                                          1996            1995 
                                        --------        -------- 
                                            (IN THOUSANDS) 
                                        ------------------------ 
 
Total revenues                          $172,503        $155,537 
Net income                                34,229          28,619 
 
This pro forma information is not necessarily indicative of what actual  
results of operations of the Company would have been, assuming the  
Company had completed the Secondary Offering as of January 1, 1995, nor  
do they purport to represent the results of operations of the Company  
for future periods. 
 
                                 -74-
<PAGE> 
<TABLE>
                                      LIBERTY PROPERTY LIMITED PARTNERSHIP 
                                    REAL ESTATE AND ACCUMULATED DEPRECIATION 
                                               AS OF DECEMBER 31, 1996 
<CAPTION>
                                                                                                               Cost 
                                                                                                           Capitalized 
                                                                                       Initial Cost        Subsequent 
                                                                               -------------------------        to 
              Project                           City          Encumbrances       Land         Building     Acquisition 
--------------------------------------  -------------------   ------------   ------------   ------------   ------------ 
<S>                                     <C>                   <C>            <C>            <C>            <C>
OPERATING REAL ESTATE  
10,20 Liberty Boulevard                 Malvern, PA           $          -   $    724,058   $          -   $  4,704,961  
420 Lapp Road                           Malvern, PA                 **          1,054,418              -      6,204,241 
1 Chelsea Parkway                       Boothwyn, PA                *             245,082              -      2,613,641  
3 Chelsea Parkway                       Boothwyn, PA                *             288,654              -      2,693,647  
747 Dresher Road                        Horsham, PA                 *           1,607,238              -      3,939,268  
45-67 Great Valley Parkway              Malvern, PA                 **            795,143              -      2,744,403  
1180 Church Road                        Lansdale, PA                     -      2,357,045     10,041,340      4,388,188  
40 Valley Stream Parkway                Malvern, PA                 **            322,918              -      2,185,822  
50 Valley Stream Parkway                Malvern, PA                ***            323,971              -      2,375,079  
20 Valley Stream Parkway                Malvern, PA                 **            465,539              -      4,989,163  
800 Town Center Drive                   Langhorne, PA               *           1,617,150              -      8,766,575  
1610 Medical Drive                      Pottstown, PA               *             211,639              -      2,492,497  
9, 15 Great Valley Parkway              Malvern, PA                 **          1,837,050              -     14,959,932  
257-275 Great Valley Parkway            Malvern, PA                 **            504,611              -      4,319,860  
300 Technology Drive                    Malvern, PA                ***            368,626              -      1,259,207  
277-293 Great Valley Parkway            Malvern, PA                ***            530,729              -      1,888,752  
311 Technology Drive                    Malvern, PA                ***            397,131              -      2,186,606  
325 Technology Drive                    Malvern, PA                 **            376,444              -      1,851,241  
7 Great Valley Parkway                  Malvern, PA                 **            176,435              -      4,109,751  
55 Valley Stream Parkway                Malvern, PA                ***            215,005              -      2,835,622  
65 Valley Stream Parkway                Malvern, PA                 **            381,544              -      4,478,264  
508 Lapp Road                           Malvern, PA                 **            331,392              -      1,700,134  
10 Valley Stream Parkway                Malvern, PA                 **            509,075              -      2,624,471  
333 Phoenixville Pike                   Malvern, PA              2,191,808        523,530              -      3,053,475  
1566 Medical Drive                      Pottstown, PA                *            203,083              -      1,828,288  
30 Great Valley Parkway                 Malvern, PA                ***            128,126              -        355,565  
75 Great Valley Parkway                 Malvern, PA                ***            143,074              -        419,401  
27-43 Great Valley Parkway              Malvern, PA                 **            448,775              -      2,070,060  
77-123 Great Valley Parkway             Malvern, PA                 **            887,664              -      4,228,300  
260 Great Valley Parkway                Malvern, PA                 **            203,916              -        849,426  
256 Great Valley Parkway                Malvern, PA                 **            161,098              -      1,888,761  
205 Great Valley Parkway                Malvern, PA                 **          1,368,259              -      9,422,329  
12,14,16 Great Valley Parkway           Malvern, PA                      -        130,689              -      1,162,378  
155 Great Valley Parkway                Malvern, PA                 **            625,147              -      2,197,599  
333 Technology Drive                    Malvern, PA                 **            157,249              -      2,310,848  
510 Lapp Road                           Malvern, PA                 **            356,950              -        862,790  
181 Wheeler Court                       Langhorne, PA                *            260,000      1,940,000         61,328  
1100 Wheeler Way                        Langhorne, PA                *            150,000      1,100,000         83,716  
60 Morehall Road                        Malvern, PA                  *            865,424      9,285,000        165,540  
905 Airport Road                        West Chester, PA             *          1,715,000      5,185,000        207,858  
16 Cabot Boulevard                      Langhorne, PA               **            648,889      5,851,112         74,975  
1 Country View Road                     Malvern, PA              2,869,709        400,000      3,600,000        391,538  
2151 Cabot Boulevard                    Langhorne, PA               **            384,100      3,456,900        262,768  
170 South Warner Road                   King of Prussia, PA          *            547,800      3,137,400      2,040,734  
190 South Warner Road                   King of Prussia, PA          *            552,200      3,162,600      1,146,805  
507 Prudential Road                     Horsham, PA                 **            644,900      5,804,100        230,380  
100 Witmer Road                         Horsham, PA             10,000,000      3,102,784              -      9,671,115  
3100 Horizon Blvd                       King of Prussia, PA          *            601,956              -      1,984,766  
3300 Horizon Blvd                       King of Prussia, PA          *            566,403              -      3,251,926  
3500 Horizon Blvd                       King of Prussia, PA          *          1,204,839              -      2,498,090  
200 Chester Field Parkway               Malvern, PA                ***            495,893      2,739,093         36,670  
767 Electronic Drive                    Horsham, PA                  *          1,229,685              -      2,928,020  
5 Country View Road                     Malvern, PA                 **            785,168      4,678,632        129,524  
3200 Horizon Blvd                       King of Prussia, PA        ***            928,637              -      4,261,364  
111-195 Witmer Road                     Horsham, PA                  *            407,005      3,129,058         95,268  
2460 General Armistead Ave              Norristown, PA                   -        117,316      1,064,442         23,605  
2490 General Armistead Ave              Norristown, PA                   -         66,288        601,433         20,900  
300 Welsh Road                          Horsham, PA                  *            180,459      1,441,473         44,054  
400 Welsh Road                          Horsham, PA                  *            282,493      2,256,508        540,786  
440 East Swedesford Road                Wayne, PA                    *            717,001      4,816,121        861,041  
460 East Swedesford Road                Wayne, PA                    *            705,317      4,737,487        264,645  
2 Walnut Grove Drive                    Horsham, PA                ***          1,281,870      7,767,374            429  
200 Gibralter Road                      Horsham, PA                      -        638,513      5,811,323              -  
220 Gibralter Road                      Horsham, PA                      -        629,944      5,733,228              -  
240 Gibralter Road                      Horsham, PA                      -        629,944      5,733,234              -  
151 S. Warner Road                      Wayne, PA                        -      1,218,086      6,937,866              -  
931 South Matlack Street                West Chester, PA             *            855,865      5,284,065        738,185  
14 Lee Boulevard                        Malvern, PA                 **            664,282              -      6,895,903  
500 Chester Field Parkway               Malvern, PA                 **            472,364              -      2,777,020  
300-400 Chester Field Parkway           Malvern, PA                 **            937,212              -      4,335,779  
1805 Underwood Boulevard                Delran, NJ                   *            188,610        612,736         17,699  
150 Mid-Atlantic Parkway                West Deptford, NJ            *             86,968        304,672        131,758  
18 Boulden Circle                       New Castle, DE               *            188,144              -      3,735,480  
501 Delran Parkway                      Delran, NJ                   *            182,192              -      2,410,505  
600 Delran Parkway                      Delran, NJ                   *            368,843              -      5,945,538  
1607 Imperial Way                       West Deptford, NJ            *            286,413              -      2,751,965  
1 Boulden Circle                        New Castle, DE               *             88,397              -      1,337,860  
31-55 Read's Way                        New Castle, DE               *            901,391              -      5,549,247  
3 Boulden Circle                        New Castle, DE               *            119,802              -      2,110,440  

                                         -75-
<PAGE> 
                                                                                                              Cost 
                                                                                                           Capitalized 
                                                                                       Initial Cost        Subsequent 
                                                                               -------------------------        to 
              Project                           City          Encumbrances       Land         Building     Acquisition 
--------------------------------------  -------------------   ------------   ------------   ------------   ------------ 
5 Boulden Circle                        New Castle, DE               *            219,641              -      3,509,612  
601 Delran Parkway                      Delran, NJ                   *            193,794              -      1,635,208  
51 Haddonfield Road                     Cherry Hill, NJ              *            251,443              -      9,015,059  
57 Read's Way                           New Castle, DE           2,452,040        253,119              -      2,781,118  
1370 Imperial Way                       West Deptford, NJ            *            297,000      4,373,155         19,539  
8 Stow Road                             Marlton, NJ                  *            172,600      1,704,436         77,520  
10 Stow Road                            Marlton, NJ                  *            147,000      1,451,536          9,799  
12 Stow Road                            Marlton, NJ                  *            103,300      1,021,036        139,288  
14 Stow Road                            Marlton, NJ                  *             93,100        920,336        130,753  
1300 Metropolitan Avenue                West Deptford, NJ            *            220,000      1,980,000         36,101  
701A Route 73 South                     Marlton, NJ                  *            264,387      3,772,000      1,322,487  
701C Route 73 South                     Marlton, NJ                  *             84,949      1,328,000        194,171  
1008 Astoria Boulevard                  Cherry Hill, NJ              *             27,120        424,880        290,548  
1475 Imperial Way                       West Deptford, NJ            *             54,000        846,000        181,048  
3000 Atrium Way                         Mt. Laurel, NJ                   -        500,000      4,500,000      2,143,849  
750 Cardinal Drive                      Pureland, NJ                 *            230,000      2,070,000        459,439  
11000, 15000, 17000 Commerce Parkway    Mt. Laurel, NJ               *            455,100      4,394,900        487,002  
12000, 14000 Commerce Parkway           Mt. Laurel, NJ               *            361,800      3,285,817        131,515  
16000, 18000 Commerce Parkway           Mt. Laurel, NJ               *            289,700      2,512,683        137,303  
406 Lippincott Drive                    Marlton, NJ                  *            321,455      1,539,871        517,017  
234 High Hill Road                      Bridgeport, NJ                   -        249,472      1,477,515        229,224  
100 Arlington Boulevard                 Bridgeport, NJ              ***             6,368              -      4,503,477  
100 Berkeley Drive                      Swedesboro, NJ                   -        395,160      1,915,215        159,830  
301 Lippincott Drive                    Marlton, NJ                  *          1,069,837      4,780,163        337,732  
303 Lippincott Drive                    Marlton, NJ                  *          1,069,837      4,780,163        270,954  
510 Sharptown Road                      Bridgeport, NJ                   -        125,410      1,072,683         32,615  
901 Route 73 (901 Building)             Marlton, NJ                  *            334,411      2,733,314         76,607  
Four Greentree Center                   Marlton, NJ                      -        449,400      3,074,850        206,375  
512 Sharptown Road                      Bridgeport, NJ                   -        180,468      1,543,617         42,013  
263 Quigley Blvd                        New Castle, DE              ***           170,386      1,302,739         35,812  
34 Blevins Drive                        New Castle, DE              ***           195,932      1,498,061         35,472  
104 Gaither Drive                       Mt Laurel, NJ               ***           132,075      1,151,988         33,827  
2 Lukens Drive                          New Castle, DE                   -        169,050      1,290,150         11,627  
1655 Valley Center Parkway              Bethlehem, PA            1,821,799        214,431              -      1,687,501  
6560 Stonegate Drive                    Allentown, PA            1,756,160        458,281              -      2,310,959  
6370 Hedgewood Drive                    Allentown, PA            2,482,280        540,795              -      2,944,004  
6390 Hedgewood Drive                    Allentown, PA            1,784,480        707,203              -      2,496,381  
1495 Valley Center Parkway              Bethlehem, PA            4,166,495        434,640              -      3,586,015  
6350 Hedgewood Drive                    Allentown, PA            2,619,840        360,027              -      3,098,286  
6330 Hedgewood Drive                    Allentown, PA                *            531,268              -      4,175,469  
1550 Valley Center Parkway              Bethlehem, PA                *            196,954              -      3,152,216  
1560 Valley Center Parkway              Bethlehem, PA                *            240,069              -      3,778,113  
6580 Snowdrift Road                     Allentown, PA                *            388,328              -      2,432,638  
1510 Valley Center Parkway              Bethlehem, PA            3,379,289        312,209              -      3,230,687  
1530 Valley Center Parkway              Bethlehem, PA                *            211,747              -      2,567,189  
6540 Stonegate Drive                    Allentown, PA                *            422,042              -      3,559,873  
974 Marcon Boulevard                    Allentown, PA                *            143,500              -      2,051,264  
964 Marcon Boulevard                    Allentown, PA            1,089,933        138,816              -      1,549,509  
764 Roble Road                          Allentown, PA              792,660        141,069              -        794,167  
3174 Airport Road                       Allentown, PA                *             98,986              -      1,073,621  
2196 Avenue C                           Allentown, PA                *            101,159              -      1,181,487  
2202 Hanger Place                       Allentown, PA                *            137,439              -      1,286,863  
2201 Hanger Place                       Allentown, PA                *            128,454              -      1,395,959  
954 Marcon Boulevard                    Allentown, PA                *            103,665              -        896,843  
57 South Commerce Way                   Allentown, PA                *            390,839      2,701,161        159,033  
754 Roble Road                          Allentown, PA                *            162,115      1,731,885         52,615  
894 Marcon Boulevard                    Allentown, PA                *            117,134      1,048,866         20,997  
744 Roble Road                          Allentown, PA                *            159,771      1,734,229         55,874  
944 Marcon Boulevard                    Allentown, PA                *            118,521      1,435,479         72,756  
1685 Valley Center Parkway              Allentown, PA                *            244,029              -      2,050,791  
6520 Stonegate Drive                    Allentown, PA               ***           453,315              -      1,769,467  
7437 Industrial Boulevard               Allentown, PA                *            717,488      5,022,413      1,330,295  
2041 Avenue C                           Allentown, PA                **           213,599      1,095,217         48,607  
2124 Avenue C                           Allentown, PA                **           289,197      1,039,835         44,709  
7339 Industrial Boulevard               Allentown, PA                    -      1,187,776              -      5,351,535  
7384 Penn Drive                         Allentown, PA                **           651,696      2,286,518        250,188  
7144 Daniels Drive                      Allentown, PA                *          2,390,217      2,342,761      3,398,953  
7620 Cetronia Road                      Allentown, PA                *          1,091,806      3,851,456         78,222  
939 Marcon Blvd                         Allentown, PA                **         2,220,414      4,524,393        732,775  
100 Brodhead Road                       Allentown, PA                **           429,416      2,919,588         92,431  
1640 Valley Center Parkway              Bethlehem, PA               ***           359,000              -       2,355,682  
83 South Commerce Way                   Bethlehem, PA               ***           143,661        888,128        145,914  
85 South Commerce Way                   Bethlehem, PA               ***           236,708        987,949         77,106  
87 South Commerce Way                   Bethlehem, PA               ***           253,886      1,062,881         74,250  
7339 Industrial Blvd                    Allentown, PA                    -      2,670,849     13,307,408        173,209  
12000,001,040 Indian Creek Court        Beltsville, MD           6,572,600      2,659,431              -     10,031,986  
180,190 Cochrane Drive                  Annapolis, MD                *          3,670,256              -     16,077,835  
8280 Patuxent Range Drive               Columbia, MD                 *            181,601              -      1,270,967  
8300 Professional Place                 Landover, MD                 *            650,621              -      4,232,306  
8100 Professional Place                 Landover, MD                 *            543,948              -      3,468,575  
8100,8200,8300 Corporate Drive          Landover, MD                 *          1,771,135              -      5,162,964  
7178-80 Columbia Gateway                Columbia, MD                 *          1,569,237      4,786,887        155,245  
8200-40 Professional Place              Landover, MD                     -        588,946      1,796,152        278,515  

                                    -76-

<PAGE>
                                                                                                               Cost 
                                                                                                           Capitalized 
                                                                                       Initial Cost        Subsequent 
                                                                               -------------------------        to 
              Project                           City          Encumbrances       Land         Building     Acquisition 
--------------------------------------  -------------------   ------------   ------------   ------------   ------------ 
8400 Corporate Drive                    Landover, MD                     -      2,502,485      7,622,698      2,081,802  
8730 Bollman Place                      Columbia, MD                 **           624,131      4,576,964         77,839  
9101,9111,9115 Guilford Road            Columbia, MD                 *            758,951              -      2,966,933  
9125,9135,9145 Guilford Road            Columbia, MD                 *            900,154              -      5,009,493  
10 South Third Street                   Richmond, VA                     -         27,970        127,419         45,962  
1751 Bluehills Drive                    Roanoke, VA                  *          1,063,728      8,500,677        101,951  
4300 Carolina Avenue                    Richmond, VA                ***         2,007,717     14,927,608        257,556  
301 Hill Carter Parkway                 Richmond, VA                 **           659,456      4,836,010         63,204  
4001 Carolina Avenue                    Richmond, VA                     -         29,443        215,914          7,861  
5600-5626 Eastport Boulevard            Richmond, VA                 **           489,941      3,592,900        117,655  
5650-5674 Eastport Boulevard            Richmond, VA                 **           644,384      4,025,480         66,204  
5700 Eastport Boulevard                 Richmond, VA                 **           408,729      2,697,348         43,619  
11020 Hull Street Road                  Richmond, VA                     -        139,887        637,261          8,938  
3432 Holland Road                       Virginia Beach, VA               -        173,527        790,515         11,088  
3001 Hungary Springs Road               Richmond, VA                 **           136,270        620,785        (33,852) 
7760 Shrader Road                       Richmond, VA                 **           187,971        756,313         13,906  
7740 Shrader Road                       Richmond, VA                 **            81,200        369,911         21,346  
4880 Cox Road                           Richmond, VA                 **           743,898      4,499,807      1,142,066  
5162 Valleypointe Parkway               Roanoke, VA                  **           551,483      2,612,312         35,237  
4101-4127 Carolina Avenue               Richmond, VA             1,350,645        310,854      2,279,597         29,793  
4201-4261 Carolina Avenue               Richmond, VA             3,087,188        693,203      5,083,493         84,633  
4263-4299 Carolina Avenue               Richmond, VA             1,929,492        256,203      2,549,649         21,570  
4301-4335 Carolina Avenue               Richmond, VA                     -        223,696      1,640,435         87,487  
4337-4379 Carolina Avenue               Richmond, VA             2,122,441        325,303      2,385,557        185,032  
4501-4549 Carolina Avenue               Richmond, VA             2,738,913        486,166      3,565,211         49,013  
4551-4593 Carolina Avenue               Richmond, VA             2,771,780        474,360      3,478,646         74,254  
4601-4643 Carolina Avenue               Richmond, VA             2,771,780        652,455      4,784,675        253,442  
4545-4583 Carolina Avenue               Richmond, VA             2,191,131        404,616      2,967,187        785,810  
4447-4491 Carolina Avenue               Richmond, VA             2,897,770        454,056      2,729,742         45,935  
4401-4445 Carolina Avenue               Richmond, VA                 **           615,038      4,510,272         61,364  
12 S. Third Street                      Richmond, VA                     -         40,539        184,682          6,125  
9601 Cosner Drive                       Fredericksburg, VA           **           475,262      3,917,234        148,902  
315 Cardiff Valley Road                 Knoxville, TN                *            443,305      2,950,903         42,487  
2300 East Parham Road                   Richmond, VA                     -        221,947      1,011,088         14,181  
1347 Diamond Springs Road               Virginia Beach, VA           **           436,898      3,203,919         46,194  
5221 Valleypark Drive                   Roanoke, VA              1,308,683        285,008        998,370        223,829  
5228 Valleypointe Parkway               Roanoke, VA              1,125,067        218,663        796,133         21,685  
5238 Valleypark Drive                   Roanoke, VA              1,311,913        416,375      1,896,832         77,099  
5601-5659 Eastport Boulevard            Richmond, VA                 **           705,660              -      4,708,044  
4717-4729 Eubank Road                   Richmond, VA                 **           449,447      3,294,697        103,705  
4263F-N. Carolina Ave                   Richmond, VA                     -         91,476              -      1,573,730  
4200 Oakleys Court                      Richmond, VA                     -        459,090      2,468,454         25,824  
1821 Battery Dantzler Road              Chester, VA                      -        394,212      3,035,113          8,120  
5000 Cox Road                           Glen Allen, VA                   -        770,214      3,685,248         10,217  
510 Eastpark Court                      Sandston, VA                     -        261,961      2,110,874         28,047  
520 Eastpark Court                      Sandston, VA                     -        486,118      4,083,582         28,111  
4523 Green Point Drive                  High Point, NC             900,000        234,564              -      1,904,487  
4501 Green Point Drive                  High Point, NC           1,153,942        319,289              -      2,195,589  
4500 Green Point Drive                  High Point, NC             946,057        230,622              -      1,983,226  
2427 Penny Road                         High Point, NC           6,989,672      1,165,664              -      6,187,028  
4524 Green Point Drive                  High Point, NC               **           182,810              -      2,002,336  
4328, 4336 Federal Drive                High Point, NC           6,382,465        521,122              -      7,243,516  
200 Centreport Drive                    Greensboro, NC               **           331,400      3,768,600        189,762  
4344 Federal Drive                      High Point, NC               **           484,001              -      2,324,644  
202 Centreport Drive                    Greensboro, NC               **           549,948      5,360,462        144,251  
4000 Piedmont Parkway                   High Point, NC               **           592,885      4,825,615         96,960  
1730 Stebbins Drive                     Houston, TX                  *            143,258              -        412,792  
5911-5925 Richard Street                Jacksonville, FL             *            275,582              -        508,059  
8383-8385 Baycenter Road                Jacksonville, FL             *             63,703              -        527,320  
8775 Baypine Road                       Jacksonville, FL             *            906,804              -      2,892,795  
8539 Western Way                        Jacksonville, FL             *            328,133              -      3,108,958  
6255 Lake Gray Boulevard                Jacksonville, FL             *            813,067              -      3,292,174  
6600-6660 Suemac Place                  Jacksonville, FL             *            210,804              -      1,656,841  
6800-6850 Suemac Place                  Jacksonville, FL             *            121,077              -        963,417  
8665,8667,8669 Baypine Road             Jacksonville, FL             *            966,552              -      3,910,492  
8540 Baycenter Road                     Jacksonville, FL         2,232,541        445,603              -      1,371,536  
1200 Gulf Life Drive                    Jacksonville, FL             *          1,028,864              -     16,465,604  
8400 Baymeadows Way                     Jacksonville, FL             *            557,682              -      2,325,708  
8614 Baymeadows Way                     Jacksonville, FL             *            290,291              -      1,114,160  
5941-5975 Richard Street                Jacksonville, FL             *            583,622              -      1,113,225  
7970 Bayberry Road                      Jacksonville, FL             *            127,520              -        830,100  
6000-6030 Bowdendale Avenue             Jacksonville, FL             *            275,475              -      1,511,461  
7898 Baymeadows Way                     Jacksonville, FL             *            561,802              -      1,971,967  
5977-6607 Richard Street                Jacksonville, FL             *            180,033              -      1,565,681  
7910 & 7948 Baymeadows Way              Jacksonville, FL             *            210,299              -      2,678,714  
7954 & 7960 Baymeadows Way              Jacksonville, FL                 -        291,312              -      2,933,358  
8787 Baypine Road                       Jacksonville, FL             *          2,076,306              -     34,505,962  
7077 Bonneval Road                      Jacksonville, FL             *            768,000      5,789,000        634,571  
4190 Belfort Road                       Jacksonville, FL             *            821,000      5,866,000        783,106  
8011, 8021, 8031 Phillips Highway       Jacksonville, FL             *            626,250      3,548,750        207,290  
7020 AC Skinner Parkway                 Jacksonville, FL             **           398,257              -      2,425,290  
7040 AC Skinner Parkway                 Jacksonville, FL             **           706,934              -      3,068,915  
11777 Central Highway                   Jacksonville, FL                 -         92,207        429,997        765,464  

                                -77-
<PAGE> 
                                                                                                              Cost 
                                                                                                           Capitalized 
                                                                                       Initial Cost        Subsequent 
                                                                               -------------------------        to 
              Project                           City          Encumbrances       Land         Building     Acquisition 
--------------------------------------  -------------------   ------------   ------------   ------------   ------------ 
7016 AC Skinner Parkway                 Jacksonville, FL                 -        597,181              -      2,082,723  
4001,4051,4101 Fowler Avenue            Tampa, FL                    *          1,299,310              -      4,614,336  
5501-5502 Pioneer Park Boulevard        Tampa, FL                   ***           162,000      1,613,000         62,622  
5690-5694 Crenshaw Street               Tampa, FL                   ***           181,923      1,812,496         30,171  
3102,3104,3110 Cherry Palm Drive        Tampa, FL                    *            503,767      2,787,585         39,332  
8401-8408 Benjamin Road                 Tampa, FL                    *            789,651      4,454,648        148,808  
3501 Riga Blvd                          Tampa, FL                        -        617,289      3,048,379              -  
111 Kelsey Lane                         Tampa, FL                        -        359,540      1,461,850        (12,644) 
2 Kings Hill Avenue                     West Malling, UK                 -        785,565              -      4,769,535  
50 Gibson Drive                         West Malling, UK                 -          ****               -      3,938,732  
50 Kings Hill Avenue                    West Malling, UK                 -      1,215,608              -     12,847,475  
25 Kings Hill Avenue                    West Malling, UK         5,955,250      1,105,380              -      5,373,958  
                                                               -----------   ------------   ------------   ------------ 
Subtotal Operating Real Estate                                 $94,145,823   $138,795,268   $409,308,408   $500,927,804 
  
DEVELOPMENT PROPERTIES 
3000 Horizon Blvd                       King of Prussia, PA              -      1,191,449              -        165,446  
8801 Tinicum Boulevard                  Philadelphia, PA                 -      2,474,031              -      9,978,814  
50 Morehall Road                        Malvern, PA                      -        849,576              -      2,394,626  
231 Lake Drive                          New Castle, DE                   -        623,043              -      3,389,970  
15 Boulden Circle                       New Castle, DE                   -        406,064              -      1,591,996  
404 Lippincott Drive                    Marlton, NJ                      -        131,896              -        113,901  
402 Lippincott Drive                    Marlton, NJ                      -        131,896              -        116,587  
1455 Valley Center Parkway              Bethlehem, PA                    -        670,290              -      3,203,693  
1650 Valley Center Parkway              Bethlehem, PA               ***           359,000              -      1,934,036  
1660 Valley Center Parkway              Bethlehem, PA               ***           359,000              -      1,298,082 
Nestle Way                              Allentown, PA                    -      8,065,500              -     22,358,668  
Southpoint Pkwy                         Jacksonville, FL                 -              -              -      4,998,930  
7018 AC Skinner Parkway                 Jacksonville, FL                 -        840,996              -      2,177,968  
5900 Eastport Boulevard                 Richmond, VA                     -        676,661              -      4,080,611  
5251 Concourse Drive                    Roanoke, VA                      -          2,813              -      1,623,331  
501 Liberty Way                         Chester, VA                      -        400,664              -        238,629  
13033 Kingston Ave                      Chester, VA                      -        376,584              -        182,745  
5701-5799 Eastport Blvd                 Richmond, VA                     -        694,644              -         70,946  
Centreport III                          Greensboro, NC                   -        826,237              -        358,302  
Federal Ridge III - Distr Bldg          Greensboro, NC                   -        282,996              -      1,863,556  
Federal Ridge III - Flex Bldg           Greensboro, NC                   -        143,661              -        711,676  
6532 Judge Adams Road                   Whitsette, NC                    -        354,903              -      2,913,681  
                                                              ------------   ------------   ------------   ------------ 
Subtotal Development in Progress                              $          -   $ 19,861,904   $          -   $ 65,766,194 
                                                              ============   ============   ============   ============ 
 
LAND HELD FOR DEVELOPMENT 
Chelsea Business Park Land              Boothwyn, PA                     -      1,236,146              -         68,331 
132 Welsh Road                          Horsham, PA                      -      1,333,642              -        461,892  
Three Country View Road                 Malvern, PA                      -        912,890              -        127,247  
550 Lapp Road                           Malvern, PA                      -        380,891              -        124,888  
South Commerce Way Land                 Bethlehem, PA                    -        320,000              -         20,268  
Cedar Hollow Road Land                  Malvern, PA                      -      1,429,473              -         60,723  
Walnut Grove Land                       Horsham, PA                      -      3,435,695              -        171,005  
3604 Horizon Blvd                       King of Prussia, PA              -        763,885              -       (364,523) 
3606 Horizon Blvd                       King of Prussia, PA              -        390,091              -        402,550  
Swedes Run Business Park Land           Delran, NJ                       -      1,057,204              -         47,413  
Marlton Executive Park Land             Marlton, NJ                      -         69,402              -        142,777  
Commodore 295                           Logan Twp., NJ                   -      3,850,613              -      1,736,551  
Marlton Executive Park Land             Marlton, NJ                      -        550,664              -         99,808  
200 Exeter Court                        Bridgeport, NJ                   -        270,880              -         66,093  
17 Boulden Circle                       New Castle, DE                   -        374,982              -         16,657  
Lehigh Valley Corporate Center Land     Bethlehem, PA                    -      2,729,998              -       (678,998) 
Lehigh Valley West Lots 13,14,15        Allentown, PA                    -      3,473,120              -        723,883  
Valleypointe Land                       Richmond, VA                     -        326,654              -        581,190  
Fairgrounds IRS Land                    Richmond, VA                     -        100,000              -         18,591  
Rivers' Bend Land                       Chesterfield, VA                 -      1,068,507              -      1,468,222  
Oakleys Center Land                     Richmond, VA                     -        228,757              -         11,176  
Technology Pointe Land                  Glen Allen, VA                   -        443,485              -         11,639  
Woodlands Center Land                   Sandston, VA                     -      1,390,058              -         34,188  
Mendenhall Land                         High Point, NC                   -      2,927,363              -        737,276  
6532 Judge Adams Road                   Whitsette, NC                    -        242,386              -        183,908  
Southpoint Business Park Land           Jacksonville, FL                 -        756,000              -       (355,016) 
Liberty Business Park Land              Jacksonville, FL                 -      1,379,053              -        467,107  
7024 AC Skinner Parkway                 Jacksonville, FL                 -        839,554              -       (271,775) 
7014 AC Skinner Pkwy                    Jacksonville, FL                 -        574,198              -        129,749  
Crenshaw Street                         Tampa, FL                        -         67,510              -         16,597  
Silo Bend Land                          Tampa, FL                        -      4,359,613              -             84  
Silo Bend Land                          Tampa, FL                        -        511,463              -             10  
                                                               -----------   ------------   ------------   ------------ 
 
Subtotal Land Held for Development                             $         -   $ 37,794,177   $          -   $  6,259,511 
                                                               ===========   ============   ============   ============ 
 
Total All Properties                                           $94,145,823   $196,451,349   $409,308,408   $572,953,509 
                                                               ===========   ============   ============   ============ 
                                    -78-
<PAGE>

 
*     Denotes property is collateralized under the Line of Credit with G.E. Capital 
**    Denotes property is collateralized under mortgages with Nationwide, Principal Mutual and American General  
        totalling $146.7 million 
***   Denotes property is collateralized under Line of Credit with Bank of Boston with a capacity of $80.0 million. 
        Properties currently collateralized allow the Company to borrow up to $25.0 million. 
****  Rouse leases land from Kent County Council. 
</TABLE>
                                    -79-

<PAGE>
<TABLE>  
                                          LIBERTY PROPERTY LIMITED PARTNERSHIP 
                                        REAL ESTATE AND ACCUMULATED DEPRECIATION 
                                                 AS OF DECEMBER 31, 1996 
<CAPTION>
                                                                          Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
<S>                                       <C>                   <C>             <C>            <C> 
10,20 Liberty Boulevard                   Malvern, PA           $    645,318    $  4,783,701   $  5,429,019  
420 Lapp Road                             Malvern, PA              1,049,243       6,209,416      7,258,659  
1 Chelsea Parkway                         Boothwyn, PA               245,735       2,612,988      2,858,723  
3 Chelsea Parkway                         Boothwyn, PA               209,177       2,773,124      2,982,301  
747 Dresher Road                          Horsham, PA              1,611,977       3,934,529      5,546,506  
45-67 Great Valley Parkway                Malvern, PA                795,831       2,743,715      3,539,546  
1180 Church Road                          Lansdale, PA             2,387,191      14,399,383     16,786,573  
40 Valley Stream Parkway                  Malvern, PA                323,792       2,184,948      2,508,740  
50 Valley Stream Parkway                  Malvern, PA                371,068       2,327,982      2,699,050  
20 Valley Stream Parkway                  Malvern, PA                466,413       4,988,289      5,454,702  
800 Town Center Drive                     Langhorne, PA            1,617,803       8,765,922     10,383,725  
1610 Medical Drive                        Pottstown, PA              212,413       2,491,723      2,704,136  
9, 15 Great Valley Parkway                Malvern, PA              1,837,878      14,959,104     16,796,982  
257-275 Great Valley Parkway              Malvern, PA                505,458       4,319,013      4,824,471  
300 Technology Drive                      Malvern, PA                374,497       1,253,336      1,627,833  
277-293 Great Valley Parkway              Malvern, PA                531,534       1,887,947      2,419,481  
311 Technology Drive                      Malvern, PA                348,099       2,235,638      2,583,737  
325 Technology Drive                      Malvern, PA                385,693       1,841,992      2,227,685  
7 Great Valley Parkway                    Malvern, PA                177,317       4,108,869      4,286,186  
55 Valley Stream Parkway                  Malvern, PA                215,818       2,834,809      3,050,627  
65 Valley Stream Parkway                  Malvern, PA                382,361       4,477,447      4,859,808  
508 Lapp Road                             Malvern, PA                263,116       1,768,410      2,031,526  
10 Valley Stream Parkway                  Malvern, PA                465,135       2,668,411      3,133,546  
333 Phoenixville Pike                     Malvern, PA                524,229       3,052,776      3,577,005  
1566 Medical Drive                        Pottstown, PA              203,827       1,827,544      2,031,371  
30 Great Valley Parkway                   Malvern, PA                128,783         354,908        483,691  
75 Great Valley Parkway                   Malvern, PA                143,811         418,664        562,475  
27-43 Great Valley Parkway                Malvern, PA                449,447       2,069,388      2,518,835  
77-123 Great Valley Parkway               Malvern, PA                888,359       4,227,605      5,115,964  
260 Great Valley Parkway                  Malvern, PA                212,768         840,574      1,053,342  
256 Great Valley Parkway                  Malvern, PA                161,949       1,887,910      2,049,859  
205 Great Valley Parkway                  Malvern, PA              1,369,003       9,421,585     10,790,588  
12,14,16 Great Valley Parkway             Malvern, PA                131,517       1,161,550      1,293,067  
155 Great Valley Parkway                  Malvern, PA                626,068       2,196,678      2,822,746  
333 Technology Drive                      Malvern, PA                 90,952       2,377,145      2,468,097  
510 Lapp Road                             Malvern, PA                325,415         894,325      1,219,740  
181 Wheeler Court                         Langhorne, PA              263,490       1,997,838      2,261,328  
1100 Wheeler Way                          Langhorne, PA              151,500       1,182,216      1,333,716  
60 Morehall Road                          Malvern, PA                884,974       9,430,990     10,315,964  
905 Airport Road                          West Chester, PA         1,735,012       5,372,846      7,107,858  
16 Cabot Boulevard                        Langhorne, PA              649,743       5,925,232      6,574,975  
1 Country View Road                       Malvern, PA                406,421       3,985,117      4,391,538  
2151 Cabot Boulevard                      Langhorne, PA              389,990       3,713,778      4,103,768  
170 South Warner Road                     King of Prussia, PA        555,911       5,170,024      5,725,935  
190 South Warner Road                     King of Prussia, PA        560,373       4,301,232      4,861,605  
507 Prudential Road                       Horsham, PA                652,919       6,026,461      6,679,380  
100 Witmer Road                           Horsham, PA              3,133,783       9,640,116     12,773,899  
3100 Horizon Blvd                         King of Prussia, PA        611,435       1,975,287      2,586,722  
3300 Horizon Blvd                         King of Prussia, PA        687,878       3,130,450      3,818,328  
3500 Horizon Blvd                         King of Prussia, PA      1,223,875       2,479,054      3,702,929  
200 Chester Field Parkway                 Malvern, PA                495,893       2,775,763      3,271,656  
767 Electronic Drive                      Horsham, PA              1,241,970       2,915,735      4,157,705
5 Country View Road                       Malvern, PA                786,235       4,807,089      5,593,324  
3200 Horizon Blvd                         King of Prussia, PA      1,209,009       3,980,991      5,190,001  
111-195 Witmer Road                       Horsham, PA                407,205       3,224,126      3,631,331  
2460 General Armistead Ave                Norristown, PA             117,316       1,088,047      1,205,363  
2490 General Armistead Ave                Norristown, PA              66,288         622,333        688,621  
300 Welsh Road                            Horsham, PA                180,459       1,485,527      1,665,986
400  Welsh Road                           Horsham, PA                282,493       2,797,293      3,079,786  
440 East Swedesford Road                  Wayne, PA                  717,001       5,677,163      6,394,164  
460 East Swedesford Road                  Wayne, PA                  705,317       5,002,133      5,707,450  
2 Walnut Grove Drive                      Horsham, PA              1,266,546       7,783,127      9,049,673  
200 Gibralter Road                        Horsham, PA                638,513       5,811,323      6,449,836  
220 Gibralter Road                        Horsham, PA                629,944       5,733,228      6,363,172  
240 Gibralter Road                        Horsham, PA                629,944       5,733,234      6,363,178  
151 S. Warner Road                        Wayne, PA                1,218,086       6,937,866      8,155,952  
931 South Matlack Street                  West Chester, PA           815,015       6,063,100      6,878,115  
14 Lee Boulevard                          Malvern, PA                665,053       6,895,132      7,560,185  
500 Chester Field Parkway                 Malvern, PA                473,139       2,776,245      3,249,384  
300-400 Chester Field Parkway             Malvern, PA                931,212       4,341,779      5,272,991  
1805 Underwood Boulevard                  Delran, NJ                 196,901         622,144        819,045  
150 Mid-Atlantic Parkway                  West Deptford, NJ           88,153         435,245        523,398  
18 Boulden Circle                         New Castle, DE             198,062       3,725,562      3,923,624  
501 Delran Parkway                        Delran, NJ                 184,162       2,408,535      2,592,697  
600 Delran Parkway                        Delran, NJ                 372,719       5,941,662      6,314,381  
1607 Imperial Way                         West Deptford, NJ          288,280       2,750,098      3,038,378  

                                    -80-
<PAGE>

                                                                          Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
1 Boulden Circle                          New Castle, DE              93,309       1,332,948      1,426,257  
31-55 Read's Way                          New Castle, DE             972,159       5,478,479      6,450,638  
3 Boulden Circle                          New Castle, DE             126,701       2,103,541      2,230,242  
5 Boulden Circle                          New Castle, DE             232,274       3,496,979      3,729,253  
601 Delran Parkway                        Delran, NJ                 193,336       1,635,666      1,829,002  
51 Haddonfield Road                       Cherry Hill, NJ            248,326       9,018,176      9,266,502  
57 Read's Way                             New Castle, DE             352,736       2,681,501      3,034,237  
1370 Imperial Way                         West Deptford, NJ          298,010       4,391,684      4,689,694  
8 Stow Road                               Marlton, NJ                172,945       1,781,611      1,954,556  
10 Stow Road                              Marlton, NJ                147,318       1,461,017      1,608,335  
12 Stow Road                              Marlton, NJ                103,618       1,160,006      1,263,624  
14 Stow Road                              Marlton, NJ                 93,418       1,050,772      1,144,190  
1300 Metropolitan Avenue                  West Deptford, NJ          221,218       2,014,883      2,236,101  
701A Route 73 South                       Marlton, NJ                271,743       5,087,131      5,358,874  
701C Route 73 South                       Marlton, NJ                 96,161       1,510,959      1,607,120  
1008 Astoria Boulevard                    Cherry Hill, NJ             32,698         709,850        742,548  
1475 Imperial Way                         West Deptford, NJ           58,606       1,022,442      1,081,048  
3000 Atrium Way                           Mt. Laurel, NJ             512,018       6,631,831      7,143,849  
750 Cardinal Drive                        Pureland, NJ               236,190       2,523,249      2,759,439  
11000, 15000, 17000 Commerce Parkway      Mt. Laurel, NJ             456,465       4,880,537      5,337,002  
12000, 14000 Commerce Parkway             Mt. Laurel, NJ             362,855       3,416,277      3,779,132  
16000, 18000 Commerce Parkway             Mt. Laurel, NJ             290,545       2,649,141      2,939,686  
406 Lippincott Drive                      Marlton, NJ                327,554       2,050,789      2,378,343  
234 High Hill Road                        Bridgeport, NJ             250,445       1,705,766      1,956,211  
100 Arlington Boulevard                   Bridgeport, NJ             374,836       4,135,009      4,509,845  
100 Berkeley Drive                        Swedesboro, NJ             401,254       2,068,951      2,470,205  
301 Lippincott Drive                      Marlton, NJ              1,069,837       5,117,895      6,187,732  
303 Lippincott Drive                      Marlton, NJ              1,069,837       5,051,117      6,120,954  
510 Sharptown Road                        Bridgeport, NJ             125,410       1,105,298      1,230,708  
901 Route 73 (901 Building)               Marlton, NJ                334,411       2,809,921      3,144,332  
Four Greentree Center                     Marlton, NJ                450,558       3,280,067      3,730,625  
512 Sharptown Road                        Bridgeport, NJ             180,468       1,585,630      1,766,098  
263 Quigley Blvd                          New Castle, DE             170,727       1,338,210      1,508,937  
34 Blevins Drive                          New Castle, DE             196,273       1,533,192      1,729,465  
104 Gaither Drive                         Mt Laurel, NJ              134,461       1,183,429      1,317,890  
2 Lukens Drive                            New Castle, DE             169,118       1,301,709      1,470,827  
1655 Valley Center Parkway                Bethlehem, PA              215,095       1,686,837      1,901,932  
6560 Stonegate Drive                      Allentown, PA              437,122       2,332,118      2,769,240  
6370 Hedgewood Drive                      Allentown, PA              515,707       2,969,092      3,484,799  
6390 Hedgewood Drive                      Allentown, PA              670,819       2,532,765      3,203,584  
1495 Valley Center Parkway                Bethlehem, PA              258,014       3,762,641      4,020,655  
6350 Hedgewood Drive                      Allentown, PA              360,691       3,097,622      3,458,313  
6330 Hedgewood Drive                      Allentown, PA              499,720       4,207,017      4,706,737  
1550 Valley Center Parkway                Bethlehem, PA              188,320       3,160,851      3,349,171
1560 Valley Center Parkway                Bethlehem, PA              229,301       3,788,881      4,018,182  
6580 Snowdrift Road                       Allentown, PA              367,377       2,453,589      2,820,966  
1510 Valley Center Parkway                Bethlehem, PA              312,873       3,230,023      3,542,896  
1530 Valley Center Parkway                Bethlehem, PA              212,491       2,566,445      2,778,936  
6540 Stonegate Drive                      Allentown, PA              422,730       3,559,185      3,981,915  
974 Marcon Boulevard                      Allentown, PA              144,248       2,050,516      2,194,764  
964 Marcon Boulevard                      Allentown, PA              139,480       1,548,845      1,688,325  
764 Roble Road                            Allentown, PA              141,746         793,490        935,236  
3174 Airport Road                         Allentown, PA               98,986       1,073,621      1,172,607  
2196 Avenue C                             Allentown, PA              107,307       1,175,339      1,282,646  
2202 Hanger Place                         Allentown, PA              138,127       1,286,175      1,424,302  
2201 Hanger Place                         Allentown, PA              129,142       1,395,271      1,524,413  
954 Marcon Boulevard                      Allentown, PA              104,452         896,056      1,000,508  
57 South Commerce Way                     Allentown, PA              395,459       2,855,574      3,251,033  
754 Roble Road                            Allentown, PA              163,735       1,782,880      1,946,615  
894 Marcon Boulevard                      Allentown, PA              118,304       1,068,693      1,186,997  
744 Roble Road                            Allentown, PA              161,371       1,788,503      1,949,874  
944 Marcon Boulevard                      Allentown, PA              119,711       1,507,045      1,626,756  
1685 Valley Center Parkway                Allentown, PA              198,482       2,096,338      2,294,820  
6520 Stonegate Drive                      Allentown, PA              948,395       1,274,387      2,222,782  
7437 Industrial Boulevard                 Allentown, PA              726,651       6,343,544      7,070,195  
2041 Avenue C                             Allentown, PA              213,879       1,143,544      1,357,423  
2124 Avenue C                             Allentown, PA              289,529       1,084,212      1,373,741  
7339 Industrial Boulevard                 Allentown, PA            1,197,121       5,342,190      6,539,311  
7384 Penn Drive                           Allentown, PA              652,118       2,536,284      3,188,402  
7144 Daniels Drive                        Allentown, PA            1,579,169       6,552,762      8,131,931  
7620 Cetronia Road                        Allentown, PA            1,093,724       3,927,761      5,021,485  
939 Marcon Blvd                           Allentown, PA            2,220,548       5,257,034      7,477,582  
100 Brodhead Road                         Allentown, PA              429,456       3,011,979      3,441,435  
1640 Valley Center Parkway                Bethlehem, PA              190,728       2,523,954      2,714,682  
83 South Commerce Way                     Bethlehem, PA              212,744         964,959      1,177,703  
85 South Commerce Way                     Bethlehem, PA              237,078       1,064,685      1,301,763  
87 South Commerce Way                     Bethlehem, PA              253,886       1,137,131      1,391,017
7339 Industrial Blvd                      Allentown, PA            2,670,673      13,480,792     16,151,465  
12000,001,040 Indian Creek Court          Beltsville, MD           2,698,195       9,993,222     12,691,417  
180,190 Cochrane Drive                    Annapolis, MD            3,752,293      15,995,798     19,748,091  
8280 Patuxent Range Drive                 Columbia, MD               181,601       1,270,967      1,452,568  
8300 Professional Place                   Landover, MD               670,450       4,212,477      4,882,927  

                                  -81-
<PAGE>
                                                                          Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
8100 Professional Place                   Landover, MD               543,948       3,468,575      4,012,523  
8100,8200,8300 Corporate Drive            Landover, MD             1,771,135       5,162,964      6,934,099  
7178-80 Columbia Gateway                  Columbia, MD             1,571,105       4,940,264      6,511,369  
8200-40 Professional Place                Landover, MD               589,932       2,073,681      2,663,613  
8400 Corporate Drive                      Landover, MD             2,505,184       9,701,801     12,206,985  
8730 Bollman Place                        Columbia, MD               626,269       4,652,665      5,278,934  
9101,9111,9115 Guilford Road              Columbia, MD               765,953       2,959,931      3,725,884  
9125,9135,9145 Guilford Road              Columbia, MD               920,439       4,989,208      5,909,647  
10 South Third Street                     Richmond, VA                27,970         173,381        201,351  
1751 Bluehills Drive                      Roanoke, VA              1,063,728       8,602,628      9,666,356  
4300 Carolina Avenue                      Richmond, VA             2,009,136      15,183,745     17,192,881  
301 Hill Carter Parkway                   Richmond, VA               659,456       4,899,214      5,558,670  
4001 Carolina Avenue                      Richmond, VA                29,443         223,775        253,218  
5600-5626 Eastport Boulevard              Richmond, VA               489,941       3,710,555      4,200,496  
5650-5674 Eastport Boulevard              Richmond, VA               644,384       4,091,684      4,736,068  
5700 Eastport Boulevard                   Richmond, VA               408,729       2,740,967      3,149,696  
11020 Hull Street Road                    Richmond, VA               139,887         646,199        786,086  
3432 Holland Road                         Virginia Beach, VA         173,527         801,603        975,130  
3001 Hungary Springs Road                 Richmond, VA               136,270         586,933        723,203  
7760 Shrader Road                         Richmond, VA               187,971         770,219        958,190  
7740 Shrader Road                         Richmond, VA                81,200         391,257        472,457  
4880 Cox Road                             Richmond, VA               743,898       5,641,873      6,385,771  
5162 Valleypointe Parkway                 Roanoke, VA                551,483       2,647,549      3,199,032  
4101- 4127 Carolina Avenue                Richmond, VA               310,854       2,309,390      2,620,244  
4201-4261 Carolina Avenue                 Richmond, VA               693,203       5,168,126      5,861,329  
4263-4299 Carolina Avenue                 Richmond, VA               256,203       2,571,219      2,827,422  
4301-4335 Carolina Avenue                 Richmond, VA               223,696       1,727,922      1,951,618  
4337-4379 Carolina Avenue                 Richmond, VA               325,203       2,570,689      2,895,892  
4501-4549 Carolina Avenue                 Richmond, VA               486,166       3,614,224      4,100,390  
4551-4593 Carolina Avenue                 Richmond, VA               474,360       3,552,900      4,027,260  
4601-4643 Carolina Avenue                 Richmond, VA               652,455       5,038,117      5,690,572  
4545-4583 Carolina Avenue                 Richmond, VA               404,616       3,752,997      4,157,613  
4447-4491 Carolina Avenue                 Richmond, VA               454,056       2,775,677      3,229,733  
4401-4445 Carolina Avenue                 Richmond, VA               615,038       4,571,636      5,186,674  
12 S. Third Street                        Richmond, VA                40,539         190,807        231,346  
9601 Cosner Drive                         Fredericksburg, VA         476,262       4,065,136      4,541,398  
315 Cardiff Valley Road                   Knoxville, TN              443,305       2,993,390      3,436,695  
2300 East Parham Road                     Richmond, VA               221,947       1,025,269      1,247,216  
1347 Diamond Springs Road                 Virginia Beach, VA         436,898       3,250,113      3,687,011  
5221 Valleypark Drive                     Roanoke, VA                285,008       1,222,199      1,507,207  
5228 Valleypointe Parkway                 Roanoke, VA                218,663         817,818      1,036,481  
5238 Valleypark Drive                     Roanoke, VA                416,375       1,973,931      2,390,306  
5601-5659 Eastport Boulevard              Richmond, VA               720,100       4,693,605      5,413,705  
4717-4729 Eubank Road                     Richmond, VA               452,263       3,395,586      3,847,849  
4263F-N. Carolina Ave                     Richmond, VA                91,599       1,573,607      1,665,206  
4200 Oakleys Court                        Richmond, VA               459,653       2,493,715      2,953,368  
1821 Battery Dantzler Road                Chester, VA                392,332       3,045,113      3,437,445  
5000 Cox Road                             Glen Allen, VA             771,029       3,694,650      4,465,679  
510 Eastpark Court                        Sandston, VA               262,210       2,138,672      2,400,882  
520 Eastpark Court                        Sandston, VA               486,598       4,111,213      4,597,811  
4523 Green Point Drive                    High Point, NC             223,614       1,915,437      2,139,051  
4501 Green Point Drive                    High Point, NC             320,450       2,194,428      2,514,878  
4500 Green Point Drive                    High Point, NC             231,692       1,982,156      2,213,848  
2427 Penny Road                           High Point, NC           1,168,074       6,184,618      7,352,692  
4524 Green Point Drive                    High Point, NC             183,888       2,001,258      2,185,146  
4328, 4336 Federal Drive                  High Point, NC             825,092       6,939,546      7,764,638  
200 Centreport Drive                      Greensboro, NC             332,017       3,957,745      4,289,762  
4344 Federal Drive                        High Point, NC             173,623       2,635,023      2,808,646  
202 Centreport Drive                      Greensboro, NC             549,679       5,504,982      6,054,661  
4000 Piedmont Parkway                     High Point, NC             592,885       4,922,575      5,515,460  
1730 Stebbins Drive                       Houston, TX                144,016         412,034        556,050  
5911-5925 Richard Street                  Jacksonville, FL           286,335         497,306        783,641  
8383-8385 Baycenter Road                  Jacksonville, FL            65,329         525,694        591,023  
8775 Baypine Road                         Jacksonville, FL           913,264       2,886,335      3,799,599  
8539 Western Way                          Jacksonville, FL           631,558       2,805,533      3,437,091  
6255 Lake Gray Boulevard                  Jacksonville, FL           811,963       3,293,278      4,105,241  
6600-6660 Suemac Place                    Jacksonville, FL           216,014       1,651,631      1,867,645  
6800-6850 Suemac Place                    Jacksonville, FL           125,576         958,918      1,084,494  
8665,8667,8669 Baypine Road               Jacksonville, FL         1,023,514       3,853,530      4,877,044  
8540 Baycenter Road                       Jacksonville, FL           450,431       1,366,708      1,817,139  
1200 Gulf Life Drive                      Jacksonville, FL         1,035,091      16,459,377     17,494,468  
8400 Baymeadows Way                       Jacksonville, FL           566,370       2,317,020      2,883,390  
8614 Baymeadows Way                       Jacksonville, FL           312,761       1,091,690      1,404,451  
5941-5975 Richard Street                  Jacksonville, FL           585,280       1,111,567      1,696,847  
7970 Bayberry Road                        Jacksonville, FL           129,979         827,641        957,620  
6000-6030 Bowdendale Avenue               Jacksonville, FL           275,475       1,511,461      1,786,936  
7898 Baymeadows Way                       Jacksonville, FL           568,005       1,965,764      2,533,769  
5977-6607 Richard Street                  Jacksonville, FL           182,747       1,562,967      1,745,714  
7910 & 7948 Baymeadows Way                Jacksonville, FL           211,449       2,677,564      2,889,013  
7954 & 7960 Baymeadows Way                Jacksonville, FL           292,667       2,932,003      3,224,670  
8787 Baypine Road                         Jacksonville, FL         2,045,574      34,536,694     36,582,268  
7077 Bonneval Road                        Jacksonville, FL           774,020       6,417,551      7,191,571  

                                   -82-
<PAGE>
                                                                          Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
4190 Belfort Road                         Jacksonville, FL           827,420       6,642,686      7,470,106  
8011, 8021, 8031 Phillips Highway         Jacksonville, FL           628,437       3,753,853      4,382,290  
7020 AC Skinner Parkway                   Jacksonville, FL           749,811       2,073,736      2,823,547  
7040 AC Skinner Parkway                   Jacksonville, FL           853,981       2,921,869      3,775,850
11777 Central Highway                     Jacksonville, FL           143,785       1,143,883      1,287,668  
7016 AC Skinner Parkway                   Jacksonville, FL           602,619       2,077,285      2,679,904  
4001,4051,4101 Fowler Avenue              Tampa, FL                1,293,206       4,620,440      5,913,646  
5501-5502 Pioneer Park Boulevard          Tampa, FL                  187,884       1,649,738      1,837,622  
5690-5694 Crenshaw Street                 Tampa, FL                  181,923       1,842,667      2,024,590  
3102,3104,3110 Cherry Palm Drive          Tampa, FL                  503,767       2,826,917      3,330,684  
8401-8408 Benjamin Road                   Tampa, FL                  789,652       4,603,455      5,393,107  
3501 Riga Blvd                            Tampa, FL                  617,289       3,048,379      3,665,668  
111 Kelsey Lane                           Tampa, FL                  359,540       1,449,206      1,808,746  
2 Kings Hill Avenue                       West Malling, UK           785,565       4,769,535      5,555,100  
50 Gibson Drive                           West Malling, UK           192,270       3,746,462      3,938,732  
50 Kings Hill Avenue                      West Malling, UK         1,216,608      12,846,475     14,063,083  
25 Kings Hill Avenue                      West Malling, UK         1,014,011       5,465,327      6,479,338
                                                                ------------    ------------ -------------- 
Subtotal Operating Real Estate                                  $140,195,919    $908,835,565 $1,049,031,484  
                                                                ============    ============ ============== 
 
DEVELOPMENT PROPERTIES 
3000 Horizon Blvd                         King of Prussia, PA   $    943,697    $    413,198 $    1,356,895  
8801 Tinicum Boulevard                    Philadelphia, PA           124,062      12,328,783     12,452,845  
50 Morehall Road                          Malvern, PA              1,037,076       2,207,126      3,244,202  
231 Lake Drive                            New Castle, DE             623,043       3,389,969      4,013,012  
15 Boulden Circle                         New Castle, DE             447,065       1,550,995      1,998,060 
404 Lippincott Drive                      Marlton, NJ                131,896         113,901        245,797  
402 Lippincott Drive                      Marlton, NJ                131,896         116,587        248,483  
1455 Valley Center Parkway                Bethlehem, PA              545,013       3,328,970      3,873,983  
1650 Valley Center Parkway                Bethlehem, PA              188,896       2,104,140      2,293,036  
1660 Valley Center Parkway                Bethlehem, PA              188,721       1,468,360      1,657,081
Nestle Way                                Allentown, PA            8,074,926      22,349,242     30,424,168  
Southpoint Pkwy                           Jacksonville, FL           418,093       4,580,837      4,998,930  
7018 AC Skinner Parkway                   Jacksonville, FL           846,433       2,172,531      3,018,964  
5900 Eastport Boulevard                   Richmond, VA               687,855       4,069,417      4,757,272  
5251 Concourse Drive                      Roanoke, VA                217,247       1,408,897      1,626,144  
501 Liberty Way                           Chester, VA                400,689         238,604        639,293  
13033 Kingston Ave                        Chester, VA                376,584         182,745        559,329  
5701-5799 Eastport Blvd                   Richmond, VA               694,644          70,946        765,590  
Centreport III                            Greensboro, NC             826,237         358,302      1,184,539  
Federal Ridge III - Distr Bldg            Greensboro, NC             283,368       1,863,183      2,146,551
Federal Ridge III - Flex Bldg             Greensboro, NC             132,655         722,682        855,337  
6532 Judge Adams Road                     Whitsette, NC              358,116       2,910,468      3,268,584
                                                                ------------    ------------  ------------- 
Subtotal Development in Progress                                $ 17,678,212    $ 67,949,883  $  85,628,095  
                                                                ============    ============  ============= 
 
LAND HELD FOR DEVELOPMENT 
Chelsea Business Park Land                Boothwyn, PA          $  1,298,240    $      6,237  $   1,304,477  
132 Welsh Road                            Horsham, PA              1,393,613         401,921      1,795,534  
Three Country View Road                   Malvern, PA                914,278         125,859      1,040,137  
550 Lapp Road                             Malvern, PA                388,066         117,713        505,780  
South Commerce Way Land                   Bethlehem, PA              321,502          18,766        340,268  
Cedar Hollow Road Land                    Malvern, PA              1,447,902          42,294      1,490,196  
Walnut Grove Land                         Horsham, PA              3,569,526          37,174      3,606,700  
3604 Horizon Blvd                         King of Prussia, PA        397,178           2,184        399,363  
3606 Horizon Blvd                         King of Prussia, PA        777,764          14,877        792,641  
Swedes Run Business Park Land             Delran, NJ               1,104,617               -      1,104,617  
Marlton Executive Park Land               Marlton, NJ                109,687         102,492        212,179  
Commodore 295                             Logan Twp., NJ           3,766,142       1,821,023      5,587,165  
Marlton Executive Park Land               Marlton, NJ                550,664          99,808        650,472  
200 Exeter Court                          Bridgeport, NJ             291,902          45,070        336,973  
17 Boulden Circle                         New Castle, DE             385,818           5,821        391,638  
Lehigh Valley Corporate Center Land       Bethlehem, PA            2,047,058           3,942      2,051,000  
Lehigh Valley West Lots 13,14,15          Allentown, PA            3,473,128         723,875      4,197,003  
Valleypointe Land                         Richmond, VA               671,817         236,028        907,844  
Fairgrounds IRS Land                      Richmond, VA               101,539          17,052        118,591  
Rivers' Bend Land                         Chesterfield, VA         1,266,942       1,269,787      2,536,729  
Oakleys Center Land                       Richmond, VA               235,221           4,712        239,933  
Technology Pointe Land                    Glen Allen, VA             445,978           9,146        455,124  
Woodlands Center Land                     Sandston, VA             1,395,665          28,581      1,424,246  
Mendenhall Land                           High Point, NC           3,065,859         598,780      3,664,639  
6532 Judge Adams Road                     Whitsette, NC              242,386         183,908        426,293  
Southpoint Business Park Land             Jacksonville, FL           353,264          47,720        400,984  
Liberty Business Park Land                Jacksonville, FL           928,753         917,408      1,846,160  
7024 AC Skinner Parkway                   Jacksonville, FL           539,554          28,224        567,779  
7014 AC Skinner Pkwy                      Jacksonville, FL           579,800         124,147        703,947  

                                  -83-
<PAGE> 
                                                                          Gross Amount Carried 
                                                                           At Close of Period 
                                                                ------------------------------------------- 
                                                                  Land and      Building and       Total 
              Project                           City            Improvements    Improvements    @ 12/31/96  
--------------------------------------    -------------------   ------------    ------------   ------------    
Crenshaw Street                           Tampa, FL                   74,532           9,575         84,107  
Silo Bend Land                            Tampa, FL                4,359,613              84      4,359,697  
Silo Bend Land                            Tampa, FL                  511,463              10        511,473  
                                                                ------------    ------------   ------------ 
Subtotal Land Held for Development                              $ 37,009,471    $  7,044,218 $   44,053,689 
                                                                ============    ============ ============== 
 
TOTAL ALL PROPERTIES                                            $194,883,602    $983,829,666 $1,178,713,268 
                                                                ============    ============ ============== 
 
*     Denotes property is collateralized under the Line of Credit with G.E. Capital 
**    Denotes property is collateralized under mortgages with Nationwide, Principal Mutual and American General  
        totalling $146.7 million 
***   Denotes property is collateralized under Line of Credit with Bank of Boston with a capacity of $80.0 million. 
        Properties currently collateralized allow the Company to borrow up to $25.0 million. 
****  Rouse leases land from Kent County Council. 
</TABLE>

                                    -84-

<PAGE>
<TABLE>
                                          LIBERTY PROPERTY LIMITED PARTNERSHIP 
                                        REAL ESTATE AND ACCUMULATED DEPRECIATION 
                                                 AS OF DECEMBER 31, 1996 
 
<CAPTION> 
                                                                Accumulated 
                                                                Depreciation      Date of      Depreciable 
              Project                           City             @ 12/31/95     Construction   Life (years) 
--------------------------------------    -------------------   ------------    ------------   ------------    
<S>                                       <C>                   <C>             <C>            <C>
10,20 Liberty Boulevard                   Malvern, PA            $   788,624        1988           40 yrs.  
420 Lapp Road                             Malvern, PA                924,756        1989           40 yrs.  
1 Chelsea Parkway                         Boothwyn, PA               548,134        1988           40 yrs.  
3 Chelsea Parkway                         Boothwyn, PA               481,248        1988           40 yrs.  
747 Dresher Road                          Horsham, PA                691,486        1988           40 yrs.  
45-67 Great Valley Parkway                Malvern, PA              1,330,691        1974           40 yrs. 
1180 Church Road                          Lansdale, PA             3,244,011        1986           40 yrs.  
40 Valley Stream Parkway                  Malvern, PA                501,252        1987           40 yrs.  
50 Valley Stream Parkway                  Malvern, PA                552,172        1987           40 yrs.  
20 Valley Stream Parkway                  Malvern, PA              1,061,207        1987           40 yrs.  
800 Town Center Drive                     Langhorne, PA            1,862,658        1987           40 yrs.  
1610 Medical Drive                        Pottstown, PA              566,014        1986           40 yrs.  
9, 15 Great Valley Parkway                Malvern, PA              7,354,674        1986           40 yrs.  
257-275 Great Valley Parkway              Malvern, PA              1,249,908        1983           40 yrs.  
300 Technology Drive                      Malvern, PA                311,313        1985           40 yrs.  
277-293 Great Valley Parkway              Malvern, PA                532,345        1984           40 yrs.  
311 Technology Drive                      Malvern, PA                597,650        1984           40 yrs.  
325 Technology Drive                      Malvern, PA                482,887        1984           40 yrs.  
7 Great Valley Parkway                    Malvern, PA              1,062,434        1985           40 yrs.  
55 Valley Stream Parkway                  Malvern, PA                813,199        1983           40 yrs.  
65 Valley Stream Parkway                  Malvern, PA              1,260,290        1983           40 yrs.  
508 Lapp Road                             Malvern, PA                491,766        1984           40 yrs.  
10 Valley Stream Parkway                  Malvern, PA                725,789        1984           40 yrs.  
333 Phoenixville Pike                     Malvern, PA                796,975        1985           40 yrs.  
1566 Medical Drive                        Pottstown, PA              469,589        1985           40 yrs.  
30 Great Valley Parkway                   Malvern, PA                194,877        1975           40 yrs.  
75 Great Valley Parkway                   Malvern, PA                164,208        1977           40 yrs.  
27-43 Great Valley Parkway                Malvern, PA                863,247        1977           40 yrs.  
77-123 Great Valley Parkway               Malvern, PA              1,665,852        1978           40 yrs.  
260 Great Valley Parkway                  Malvern, PA                280,697        1979           40 yrs.  
256 Great Valley Parkway                  Malvern, PA                681,544        1980           40 yrs.  
205 Great Valley Parkway                  Malvern, PA              3,066,132        1981           40 yrs.  
12,14,16 Great Valley Parkway             Malvern, PA                438,530        1982           40 yrs.  
155 Great Valley Parkway                  Malvern, PA                742,491        1981           40 yrs.  
333 Technology Drive                      Malvern, PA                823,514        1987           40 yrs.  
510 Lapp Road                             Malvern, PA                301,181        1983           40 yrs.  
181 Wheeler Court                         Langhorne, PA              124,049        1979           40 yrs.  
1100 Wheeler Way                          Langhorne, PA               72,280        1979           40 yrs.  
60 Morehall Road                          Malvern, PA                594,470        1989           40 yrs.  
905 Airport Road                          West Chester, PA           338,879        1988           40 yrs.  
16 Cabot Boulevard                        Langhorne, PA              345,430        1972           40 yrs.  
1 Country View Road                       Malvern, PA                216,723        1982           40 yrs.  
2151 Cabot Boulevard                      Langhorne, PA              198,591        1982           40 yrs.  
170 South Warner Road                     King of Prussia, PA        452,724        1980           40 yrs.  
190 South Warner Road                     King of Prussia, PA        251,887        1980           40 yrs.  
507 Prudential Road                       Horsham, PA                299,655        1988           40 yrs.  
100 Witmer Road                           Horsham, PA                156,076        1995           40 yrs.  
3100 Horizon Blvd                         King of Prussia, PA         35,831        1995           40 yrs.  
3300 Horizon Blvd                         King of Prussia, PA         92,713        1996           40 yrs.  
3500 Horizon Blvd                         King of Prussia, PA         46,928        1996           40 yrs.  
200 Chester Field Parkway                 Malvern, PA              1,131,622        1989           40 yrs.  
767 Electronic Drive                      Horsham, PA                 94,656        1996           40 yrs.  
5 Country View Road                       Malvern, PA                149,756        1985           40 yrs.  
3200 Horizon Blvd                         King of Prussia, PA         22,703        1996           40 yrs.  
111-195 Witmer Road                       Horsham, PA                 48,545        1996           40 yrs.  
2460 General Armistead Ave                Norristown, PA              13,622        1985           40 yrs.  
2490 General Armistead Ave                Norristown, PA               7,752        1985           40 yrs.  
300 Welsh Road                            Horsham, PA                 18,189        1983           40 yrs.  
400 Welsh Road                            Horsham, PA                 28,873        1983           40 yrs.  
440 East Swedesford Road                  Wayne, PA                   64,162        1988           40 yrs.  
460 East Swedesford Road                  Wayne, PA                   65,023        1988           40 yrs.  
2 Walnut Grove Drive                      Horsham, PA                 16,427        1989           40 yrs.  
200 Gibralter Road                        Horsham, PA                      -        1990           40 yrs.  
220 Gibralter Road                        Horsham, PA                      -        1990           40 yrs.  
240 Gibralter Road                        Horsham, PA                      -        1990           40 yrs.  
151 S. Warner Road                        Wayne, PA                        -        1980           40 yrs.  
931 South Matlack Street                  West Chester, PA         1,170,708        1985           40 yrs.  
14 Lee Boulevard                          Malvern, PA                866,089        1988           40 yrs.  
500 Chester Field Parkway                 Malvern, PA                510,986        1988           40 yrs.  
300-400 Chester Field Parkway             Malvern, PA                795,480        1988           40 yrs.  
1805 Underwood Boulevard                  Delran, NJ                 110,301        1973           40 yrs.  
150 Mid-Atlantic Parkway                  West Deptford, NJ          199,579        1973           40 yrs.  
18 Boulden Circle                         New Castle, DE             601,300        1989           40 yrs.  
501 Delran Parkway                        Delran, NJ                 467,365        1988           40 yrs.  
600 Delran Parkway                        Delran, NJ               1,059,777        1988           40 yrs.  
1607 Imperial Way                         West Deptford, NJ          927,568        1973           40 yrs.  
1 Boulden Circle                          New Castle, DE             306,780        1986           40 yrs.  
31-55 Read's Way                          New Castle, DE           1,149,943        1986           40 yrs.  
3 Boulden Circle                          New Castle, DE             428,976        1987           40 yrs.  
5 Boulden Circle                          New Castle, DE             651,394        1987           40 yrs.  

                                          -85-
<PAGE>
                                                                Accumulated 
                                                                Depreciation      Date of      Depreciable 
              Project                           City             @ 12/31/95     Construction   Life (years) 
--------------------------------------    -------------------   ------------    ------------   ------------    
601 Delran Parkway                        Delran, NJ                 348,123        1988           40 yrs.  
51 Haddonfield Road                       Cherry Hill, NJ          2,003,738        1986           40 yrs.  
57 Read's Way                             New Castle, DE             686,487        1985           40 yrs.  
1370 Imperial Way                         West Deptford, NJ          274,863        1978           40 yrs.  
8 Stow Road                               Marlton, NJ                130,494        1988           40 yrs.  
10 Stow Road                              Marlton, NJ                 91,085        1988           40 yrs.  
12 Stow Road                              Marlton, NJ                 91,056        1988           40 yrs.  
14 Stow Road                              Marlton, NJ                105,765        1988           40 yrs.  
1300 Metropolitan Avenue                  West Deptford, NJ          113,275        1972           40 yrs.  
701A Route 73 South                       Marlton, NJ                314,011        1987           40 yrs.  
701C Route 73 South                       Marlton, NJ                 83,807        1987           40 yrs.  
1008 Astoria Boulevard                    Cherry Hill, NJ             39,635        1973           40 yrs.  
1475 Imperial Way                         West Deptford, NJ           52,150        1976           40 yrs.  
3000 Atrium Way                           Mt. Laurel, NJ             434,433        1987           40 yrs.  
750 Cardinal Drive                        Pureland, NJ               175,604        1989           40 yrs.  
11000, 15000, 17000 Commerce Parkway      Mt. Laurel, NJ             253,675        1985           40 yrs.  
12000, 14000 Commerce Parkway             Mt. Laurel, NJ             172,747        1985           40 yrs.  
16000, 18000 Commerce Parkway             Mt. Laurel, NJ             136,636        1985           40 yrs. 
406 Lippincott Drive                      Marlton, NJ                106,224        1990           40 yrs.  
234 High Hill Road                        Bridgeport, NJ              47,012        1987           40 yrs.  
100 Arlington Boulevard                   Bridgeport, NJ              69,025        1996           40 yrs.  
100 Berkeley Drive                        Swedesboro, NJ              51,932        1990           40 yrs.  
301 Lippincott Drive                      Marlton, NJ                133,557        1988           40 yrs.  
303 Lippincott Drive                      Marlton, NJ                119,831        1988           40 yrs.  
510 Sharptown Road                        Bridgeport, NJ              23,878        1984           40 yrs.  
901 Route 73 (901 Building)               Marlton, NJ                 52,777        1985           40 yrs.  
Four Greentree Center                     Marlton, NJ                 48,562        1988           40 yrs.  
512 Sharptown Road                        Bridgeport, NJ              26,449        1984           40 yrs.  
263 Quigley Blvd                          New Castle, DE               8,430        1987           40 yrs.  
34 Blevins Drive                          New Castle, DE               9,684        1987           40 yrs.  
104 Gaither Drive                         Mt Laurel, NJ                2,485        1975           40 yrs.  
2 Lukens Drive                            New Castle, DE                   -        1988           40 yrs.  
1655 Valley Center Parkway                Bethlehem, PA              113,247        1993           40 yrs.  
6560 Stonegate Drive                      Allentown, PA              412,465        1989           40 yrs.  
6370 Hedgewood Drive                      Allentown, PA              381,336        1990           40 yrs.  
6390 Hedgewood Drive                      Allentown, PA              474,228        1990           40 yrs.  
1495 Valley Center Parkway                Bethlehem, PA              526,353        1990           40 yrs.  
6350 Hedgewood Drive                      Allentown, PA              541,080        1989           40 yrs.  
6330 Hedgewood Drive                      Allentown, PA              982,842        1988           40 yrs.  
1550 Valley Center Parkway                Bethlehem, PA              509,861        1988           40 yrs.  
1560 Valley Center Parkway                Bethlehem, PA              653,025        1988           40 yrs.  
6580 Snowdrift Road                       Allentown, PA              510,011        1988           40 yrs.  
1510 Valley Center Parkway                Bethlehem, PA              596,623        1988           40 yrs.  
1530 Valley Center Parkway                Bethlehem, PA              487,892        1988           40 yrs.  
6540 Stonegate Drive                      Allentown, PA              704,737        1988           40 yrs.  
974 Marcon Boulevard                      Allentown, PA              456,203        1987           40 yrs.  
964 Marcon Boulevard                      Allentown, PA              405,927        1985           40 yrs.  
764 Roble Road                            Allentown, PA              208,658        1985           40 yrs.  
3174 Airport Road                         Allentown, PA              381,045        1979           40 yrs.  
2196 Avenue C                             Allentown, PA              378,173        1980           40 yrs.  
2202 Hanger Place                         Allentown, PA              443,767        1981           40 yrs.  
2201 Hanger Place                         Allentown, PA              470,974        1981           40 yrs.  
954 Marcon Boulevard                      Allentown, PA              301,340        1981           40 yrs.  
57 South Commerce Way                     Allentown, PA              178,075        1986           40 yrs.  
754 Roble Road                            Allentown, PA              110,527        1986           40 yrs.  
894 Marcon Boulevard                      Allentown, PA               67,724        1986           40 yrs.  
744 Roble Road                            Allentown, PA              126,142        1986           40 yrs.  
944 Marcon Boulevard                      Allentown, PA              101,670        1986           40 yrs.  
1685 Valley Center Parkway                Allentown, PA               62,824        1996           40 yrs.  
6520 Stonegate Drive                      Allentown, PA               23,295        1976           40 yrs.  
7437 Industrial Boulevard                 Allentown, PA              372,593        1990           40 yrs.  
2041 Avenue C                             Allentown, PA               49,615        1990           40 yrs.  
2124 Avenue C                             Allentown, PA               47,098        1996           40 yrs.  
7339 Industrial Boulevard                 Allentown, PA                    -        1988           40 yrs.  
7384 Penn Drive                           Allentown, PA              108,782        1975           40 yrs.  
7144 Daniels Drive                        Allentown, PA              153,270        1990           40 yrs.  
7620 Cetronia Road                        Allentown, PA              146,045        1980           40 yrs.  
939 Marcon Blvd                           Allentown, PA              200,244        1990           40 yrs.  
100 Brodhead Road                         Allentown, PA               92,025        1996           40 yrs.  
1640 Valley Center Parkway                Bethlehem, PA               27,932        1988           40 yrs.  
83 South Commerce Way                     Bethlehem, PA               14,737        1996           40 yrs.  
85 South Commerce Way                     Bethlehem, PA               13,122        1989           40 yrs.  
87 South Commerce Way                     Bethlehem, PA               13,391        1989           40 yrs.  
7339 Industrial Blvd                      Allentown, PA               28,399        1989           40 yrs.  
12000,001,040 Indian Creek Court          Beltsville, MD           2,133,170        1986           40 yrs.  
180,190 Cochrane Drive                    Annapolis, MD            2,765,357        1988           40 yrs.  
8280 Patuxent Range Drive                 Columbia, MD               506,481        1978           40 yrs.  
8300 Professional Place                   Landover, MD             1,264,179        1978           40 yrs.  
8100 Professional Place                   Landover, MD             1,001,037        1987           40 yrs.  
8100,8200,8300 Corporate Drive            Landover, MD             1,613,036        1981           40 yrs.  
7178-80 Columbia Gateway                  Columbia, MD               248,853        1987           40 yrs.  
8200-40 Professional Place                Landover, MD               101,075        1979           40 yrs.  
8400 Corporate Drive                      Landover, MD               422,988        1984           40 yrs.  
8730 Bollman Place                        Columbia, MD               210,365        1984           40 yrs.  
9101,9111,9115 Guilford Road              Columbia, MD               785,006        1984           40 yrs.  
 
                                   -86-
<PAGE>
                                                                Accumulated 
                                                                Depreciation      Date of      Depreciable 
              Project                           City             @ 12/31/95     Construction   Life (years) 
--------------------------------------    -------------------   ------------    ------------   ------------    
9125,9135,9145 Guilford Road              Columbia, MD             1,406,750        1983           40 yrs.  
10 South Third Street                     Richmond, VA                 6,481        1930           40 yrs.  
1751 Bluehills Drive                      Roanoke, VA                373,351        1991           40 yrs.  
4300 Carolina Avenue                      Richmond, VA               681,394        1985           40 yrs.  
301 Hill Carter Parkway                   Richmond, VA               221,513        1989           40 yrs.  
4001 Carolina Avenue                      Richmond, VA                 9,890        1935           40 yrs.  
5600-5626 Eastport Boulevard              Richmond, VA               175,218        1989           40 yrs.  
5650-5674 Eastport Boulevard              Richmond, VA               200,418        1990           40 yrs.  
5700 Eastport Boulevard                   Richmond, VA               130,427        1990           40 yrs.  
11020 Hull Street Road                    Richmond, VA                29,190        1987           40 yrs.  
3432 Holland Road                         Virginia Beach, VA          36,210        1989           40 yrs.  
3001 Hungary Springs Road                 Richmond, VA                27,797        1984           40 yrs.  
7760 Shrader Road                         Richmond, VA                36,939        1987           40 yrs.  
7740 Shrader Road                         Richmond, VA                24,121        1989           40 yrs.  
4880 Cox Road                             Richmond, VA                89,194        1995           40 yrs.  
5162 Valleypointe Parkway                 Roanoke, VA                117,367        1993           40 yrs.  
4101-4127 Carolina Avenue                 Richmond, VA               104,417        1973           40 yrs.  
4201-4261 Carolina Avenue                 Richmond, VA               234,576        1975           40 yrs.  
4263-4299 Carolina Avenue                 Richmond, VA               119,370        1976           40 yrs.  
4301-4335 Carolina Avenue                 Richmond, VA                75,572        1978           40 yrs.  
4337-4379 Carolina Avenue                 Richmond, VA               110,714        1979           40 yrs.  
4501-4549 Carolina Avenue                 Richmond, VA               163,304        1981           40 yrs.  
4551-4593 Carolina Avenue                 Richmond, VA               164,352        1982           40 yrs.  
4601-4643 Carolina Avenue                 Richmond, VA               246,050        1985           40 yrs.  
4545-4583 Carolina Avenue                 Richmond, VA               359,442        1985           40 yrs.  
4447-4491 Carolina Avenue                 Richmond, VA               138,769        1987           40 yrs.  
4401-4445 Carolina Avenue                 Richmond, VA               206,593        1988           40 yrs.  
12 S. Third Street                        Richmond, VA                 8,492        1900           40 yrs.  
9601 Cosner Drive                         Fredericksburg, VA         165,687        1995           40 yrs.  
315 Cardiff Valley Road                   Knoxville, TN              142,033        1994           40 yrs.  
2300 East Parham Road                     Richmond, VA                46,313        1988           40 yrs.  
1347 Diamond Springs Road                 Virginia Beach, VA         146,845        1980           40 yrs.  
5221 Valleypark Drive                     Roanoke, VA                 89,229        1988           40 yrs.  
5228 Valleypointe Parkway                 Roanoke, VA                 41,119        1988           40 yrs.  
5238 Valleypark Drive                     Roanoke, VA                 89,339        1989           40 yrs.  
5601-5659 Eastport Boulevard              Richmond, VA               114,394        1996           40 yrs.  
4717-4729 Eubank Road                     Richmond, VA               104,067        1978           40 yrs.  
4263F-N. Carolina Ave                     Richmond, VA                19,090        1975           40 yrs.  
4200 Oakleys Court                        Richmond, VA                15,722        1990           40 yrs.  
1821 Battery Dantzler Road                Chester, VA                 18,795        1990           40 yrs.  
5000 Cox Road                             Glen Allen, VA              23,388        1990           40 yrs.  
510 Eastpark Court                        Sandston, VA                13,425        1989           40 yrs.  
520 Eastpark Court                        Sandston, VA                25,898        1989           40 yrs.  
4523 Green Point Drive                    High Point, NC             356,751        1988           40 yrs.  
4501 Green Point Drive                    High Point, NC             337,209        1989           40 yrs.  
4500 Green Point Drive                    High Point, NC             327,333        1989           40 yrs.  
2427 Penny Road                           High Point, NC             911,816        1990           40 yrs.  
4524 Green Point Drive                    High Point, NC             344,111        1988           40 yrs.  
4328, 4336 Federal Drive                  High Point, NC             354,418        1995           40 yrs.  
200 Centreport Drive                      Greensboro, NC             192,570        1986           40 yrs.  
4344 Federal Drive                        High Point, NC              21,403        1996           40 yrs.  
202 Centreport Drive                      Greensboro, NC             169,548        1990           40 yrs.  
4000 Piedmont Parkway                     High Point, NC             122,232        1988           40 yrs.  
1730 Stebbins Drive                       Houston, TX                217,699        1973           40 yrs.  
5911-5925 Richard Street                  Jacksonville, FL           206,188        1977           40 yrs.  
8383-8385 Baycenter Road                  Jacksonville, FL           229,451        1973           40 yrs.  
8775 Baypine Road                         Jacksonville, FL           466,088        1989           40 yrs.  
8539 Western Way                          Jacksonville, FL           673,736        1987           40 yrs.  
6255 Lake Gray Boulevard                  Jacksonville, FL           679,901        1987           40 yrs.  
6600-6660 Suemac Place                    Jacksonville, FL           722,196        1973           40 yrs.  
6800-6850 Suemac Place                    Jacksonville, FL           428,359        1973           40 yrs.  
8665,8667,8669 Baypine Road               Jacksonville, FL           852,564        1987           40 yrs.  
8540 Baycenter Road                       Jacksonville, FL           402,468        1984           40 yrs.  
1200 Gulf Life Drive                      Jacksonville, FL         4,378,882        1984           40 yrs.  
8400 Baymeadows Way                       Jacksonville, FL           477,358        1987           40 yrs.  
8614 Baymeadows Way                       Jacksonville, FL           240,238        1986           40 yrs.  
5941-5975 Richard Street                  Jacksonville, FL           486,171        1978           40 yrs.  
7970 Bayberry Road                        Jacksonville, FL           343,613        1978           40 yrs.  
6000-6030 Bowdendale Avenue               Jacksonville, FL           595,909        1979           40 yrs.  
7898 Baymeadows Way                       Jacksonville, FL           669,970        1979           40 yrs.  
5977-6607 Richard Street                  Jacksonville, FL           758,810        1980           40 yrs.  
7910 & 7948 Baymeadows Way                Jacksonville, FL           861,007        1980           40 yrs.  
7954 & 7960 Baymeadows Way                Jacksonville, FL           877,689        1982           40 yrs.  
8787 Baypine Road                         Jacksonville, FL        10,219,370        1990           40 yrs.  
7077 Bonneval Road                        Jacksonville, FL           530,100        1988           40 yrs.  
4190 Belfort Road                         Jacksonville, FL           556,333        1986           40 yrs.  
8011, 8021, 8031 Phillips Highway         Jacksonville, FL           198,751        1987           40 yrs.  
7020 AC Skinner Parkway                   Jacksonville, FL            38,045        1996           40 yrs.  
7040 AC Skinner Parkway                   Jacksonville, FL            92,338        1996           40 yrs.  
11777 Central Highway                     Jacksonville, FL           283,406        1985           40 yrs.  
7016 AC Skinner Parkway                   Jacksonville, FL             5,139        1996           40 yrs.  
4001,4051,4101 Fowler Avenue              Tampa, FL                  898,330        1987           40 yrs.  
5501-5502 Pioneer Park Boulevard          Tampa, FL                  106,279        1981           40 yrs.  
5690-5694 Crenshaw Street                 Tampa, FL                   88,086        1979           40 yrs.  
3102,3104,3110 Cherry Palm Drive          Tampa, FL                  111,647        1986           40 yrs.  

                                  -87-
<PAGE>
                                                                Accumulated 
                                                                Depreciation      Date of      Depreciable 
              Project                           City             @ 12/31/95     Construction   Life (years) 
--------------------------------------    -------------------   ------------    ------------   ------------    
8401-8408 Benjamin Road                   Tampa, FL                  112,282        1986           40 yrs.  
3501 Riga Blvd                            Tampa, FL                   31,891        1987           40 yrs.  
111 Kelsey Lane                           Tampa, FL                    6,094        1990           40 yrs.  
2 Kings Hill Avenue                       West Malling, UK             9,864        1940           40 yrs.  
50 Gibson Drive                           West Malling, UK           392,960        1996           40 yrs.  
50 Kings Hill Avenue                      West Malling, UK                 -        1996           40 yrs.  
25 Kings Hill Avenue                      West Malling, UK            17,900        1996           40 yrs.  
                                                               ------------- 
Subtotal Operating Real Estate                                 $ 119,151,189 
                                                               ============= 
 
DEVELOPMENT PROPERTIES 
3000 Horizon Blvd                         King of Prussia, PA  $           -        1996        N/A  
8801 Tinicum Boulevard                    Philadelphia, PA                 -        1996        N/A  
50 Morehall Road                          Malvern, PA                      -        1996        N/A  
231 Lake Drive                            New Castle, DE                   -        1995        N/A  
15 Boulden Circle                         New Castle, DE                   -        1996        N/A  
404 Lippincott Drive                      Marlton, NJ                      -        1996        N/A  
402 Lippincott Drive                      Marlton, NJ                      -        1996        N/A  
1455 Valley Center Parkway                Bethlehem, PA                    -        1995        N/A  
1650 Valley Center Parkway                Bethlehem, PA                    -        1996        N/A  
1660 Valley Center Parkway                Bethlehem, PA                    -        1996        N/A  
Nestle Way                                Allentown, PA                    -        1996        N/A  
Southpoint Pkwy                           Jacksonville, FL                 -        1996        N/A  
7018 AC Skinner Parkway                   Jacksonville, FL                 -        1996        N/A  
5900 Eastport Boulevard                   Richmond, VA                     -        1995        N/A  
5251 Concourse Drive                      Roanoke, VA                      -        1995        N/A  
501 Liberty Way                           Chester, VA                      -        1996        N/A  
13033 Kingston Ave                        Chester, VA                      -        1996        N/A  
5701-5799 Eastport Blvd                   Richmond, VA                     -        1996        N/A  
Centreport III                            Greensboro, NC                   -        1995        N/A  
Federal Ridge III - Distr Bldg            Greensboro, NC                   -        1996        N/A  
Federal Ridge III - Flex Bldg             Greensboro, NC                   -        1996        N/A  
6532 Judge Adams Road                     Whitsette, NC                    -        1996        N/A  
                                                                  ---------- 
Subtotal Development in Progress                                  $        - 
                                                                  ========== 
             
LAND HELD FOR DEVELOPMENT             
Chelsea Business Park Land                 Boothwyn, PA                    -        1988        N/A  
132 Welsh Road                             Horsham, PA                     -        1995        N/A  
Three Country View Road                    Malvern, PA                     -        1995        N/A  
550 Lapp Road                              Malvern, PA                     -        1995        N/A  
South Commerce Way Land                    Bethlehem, PA                   -        1996        N/A  
Cedar Hollow Road Land                     Malvern, PA                     -        1996        N/A  
Walnut Grove Land                          Horsham, PA                     -        1996        N/A  
3604 Horizon Blvd                          King of Prussia, PA             -        1996        N/A  
3606 Horizon Blvd                          King of Prussia, PA             -        1996        N/A  
Swedes Run Business Park Land              Delran, NJ                      -        1992        N/A  
Marlton Executive Park Land                Marlton, NJ                     -        1994        N/A  
Commodore 295                              Logan Twp., NJ                  -        1995        N/A  
Marlton Executive Park Land                Marlton, NJ                     -        1996        N/A  
200 Exeter Court                           Bridgeport, NJ                  -        1996        N/A  
17 Boulden Circle                          New Castle, DE                  -        1987        N/A  
Lehigh Valley Corporate Center Land        Bethlehem, PA                   -        1987        N/A 
Lehigh Valley West Lots 13,14,15           Allentown, PA                   -        1995        N/A  
Valleypointe Land                          Richmond, VA                    -        1995        N/A  
Fairgrounds IRS Land                       Richmond, VA                    -        1995        N/A  
Rivers' Bend Land                          Chesterfield, VA                -        1995        N/A  
Oakleys Center Land                        Richmond, VA                    -        1996        N/A  
Technology Pointe Land                     Glen Allen, VA                  -        1996        N/A  
Woodlands Center Land                      Sandston, VA                    -        1996        N/A  
Mendenhall Land                            High Point, NC                  -        1995        N/A  
6532 Judge Adams Road                      Whitsette, NC                   -        1996        N/A  
Southpoint Business Park Land              Jacksonville, FL                -        1994        N/A  
Liberty Business Park Land                 Jacksonville, FL                -        1995        N/A  
7024 AC Skinner Parkway                    Jacksonville, FL                -        1996        N/A  
7014 AC Skinner Parkway                    Jacksonville, FL                -        1996        N/A 
Crenshaw Street                            Tampa, FL                       -        1995        N/A  
Silo Bend Land                             Tampa, FL                       -        1996        N/A  
Silo Bend Land                             Tampa, FL                       -        1996        N/A  
                                                                ------------ 
Subtotal Land Held for Development                              $          - 
                                                                ============        
             
TOTAL ALL PROPERTIES                                            $119,151,189 
                                                                ============ 
 
 
*     Denotes property is collateralized under the Line of Credit with G.E. Capital 
**    Denotes property is collateralized under mortgages with Nationwide, Principal Mutual and American 
        General totalling $146.7 million 
***   Denotes property is collateralized under Line of Credit with Bank of Boston with a capacity of  
        $80.0 million. Properties currently collateralized allow the Company to borrow up to $25.0 million. 
****  Rouse leases land from Kent County Council. 
</TABLE>
                                    -88-

<PAGE>
 
                                                            SCHEDULE III 
 
                      LIBERTY PROPERTY LIMITED PARTNERSHIP   
                    REAL ESTATE AND ACCUMULATED DEPRECIATION 
                                 (In thousands) 
 
A summary of activity for real estate and accumulated depreciation is as  
follows: 
 
                                        FOR THE YEARS ENDED DECEMBER 31, 
                                        -------------------------------- 
 
                                        1996 <F1>   1995 <F1>  1994 <F2> 
                                        ----------  ---------  --------- 
 
REAL ESTATE: 
 Balance at beginning of year           $  920,230  $ 586,789  $ 432,970 
   Additions                               268,066    333,441    153,819 
   Disposition of property                  (9,583)        --         -- 
                                        ----------  ---------  --------- 
 
 Balance at end of year                 $1,178,713  $ 920,230  $ 586,789 
                                        ==========  =========  ========= 
 
ACCUMULATED DEPRECIATION: 
 Balance at beginning of year           $   94,183  $  74,508  $  62,532 
   Depreciation expense                     24,968     19,675     11,976 
                                        ----------  ---------  --------- 
 
 Balance at end of year                 $  119,151  $  94,183  $  74,508 
                                        ==========  =========  ========= 
 
<F1>  Liberty Property Trust 
<F2>  Liberty Property Trust and Rouse Group Combined 
 
                                 -89-
<PAGE>
 
ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND 
------------------------------------------------------------------------  
FINANCIAL DISCLOSURE 
--------------------  
 
None. 
 
PART III 
 
ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 
------------------------------------------------------------- 
ITEM 11.   EXECUTIVE COMPENSATION 
--------------------------------- 
ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  
-------------------------------------------------------------- 
MANAGEMENT 
----------  
ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 
---------------------------------------------------------  
 
Except as set forth under the caption "Executive Officers" in Part I,  
the information required by Part III, Items 10, 11, 12 and 13, is hereby  
incorporated by reference to the Trust's definitive proxy statement for  
its Annual Meeting of Shareholders (other than the information called  
for by Item 402(i), (k) and (l) of Regulation S-K, which is not  
incorporated herein by reference) presently scheduled for May 21, 1997,  
which proxy statement will be filed pursuant to Regulation 14A not later  
than April 30, 1997, in accordance with General Instruction G(3) to Form  
10-K. 
 
PART IV 
 
ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON 
FORM 
----------------------------------------------------------------------  
8-K 
--- 
 
The following consolidated Financial Statements of Liberty Property  
Trust, Liberty Property Limited Partnership  and Rouse Group (The  
Predecessor) are included in Item 8. 
 
(A)   1.  FINANCIAL STATEMENTS AND REPORT OF ERNST & YOUNG LLP, 
INDEPENDENT AUDITORS 
Report of Independent Auditors - Liberty Property Trust  
------------------------------------------------------- 
 
Financial Statements - Liberty Property Trust  
---------------------------------------------  
Balance Sheet: 
Liberty Property Trust Consolidated as of December 31, 1996 and 1995 
 
                               -90-
<PAGE> 
 
Statement of Operations: 
Liberty Property Trust Consolidated for the years ended December 31,  
1996 and 1995 and for the period from June 23, 1994 to  
   December 31, 1994   
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994 
 
Statements of Shareholders' Equity and Owners' Deficit: 
Liberty Property Trust Consolidated for the years ended December 31,  
1996 and 1995 and for the period from June 23, 1994  
   to December 31, 1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994 
 
Statements of Cash Flows: 
Liberty Property Trust Consolidated for the years ended December 31,  
1996 and 1995 and for the period from June 23, 1994 to 
   December 31, 1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994 
 
Notes to Financial Statements 
 
Report of Independent Auditors - Liberty Property Limited Partnership  
---------------------------------------------------------------------  
 
Financial Statements - Liberty Property Limited Partnership  
-----------------------------------------------------------  
Balance Sheet: 
Liberty Property Limited Partnership Consolidated as of December 31, 
  1996 and 1995 
 
Statement of Operations: 
Liberty Property Limited Partnership Consolidated for the years ended  
December 31, 1996 and 1995 and for the period from June 23, 1994 to  
   December 31, 1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994 
 
Statements of Owners' Equity and Owners' Deficit: 
Liberty Property Limited Partnership Consolidated for the years ended  
December 31, 1996 and 1995 and for the period from June 23, 1994 to  
   December 31, 1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994 
 
Statements of Cash Flows: 
Liberty Property Limited Partnership Consolidated for the years ended  
December 31, 1996 and 1995 and for the period from June 23, 1994 to  
   December 31, 1994 
Rouse Group Combined for the period from January 1, 1994 to June 22, 
   1994 
 
Notes to Financial Statements 

                                  -91-
<PAGE>
 
2.   FINANCIAL STATEMENT SCHEDULES: 
Schedule III -- Real Estate and Accumulated Depreciation as of December  
   31, 1996 for Liberty Property Trust  
All other schedules are omitted because they are 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, 1996 for Liberty Property Limited Partnership  
All other schedules are omitted because they are not required or the  
   required information is shown in the financial statements or notes  
   thereto. 
 
3.   EXHIBITS 
 
The following exhibits are filed herewith or are incorporated by  
reference to exhibits previously filed. 
 
 EXHIBIT NO.                             DESCRIPTION 
-------------   -------------------------------------------------------- 
 
     * 3.1      First Restated and Amended Agreement of Limited Partner- 
                ship Limited Partnership, dated June 19, 1995, as 
                amended. 
 
    ** 3.1.1    Second Amendment to Agreement of Limited Partnership. 
 
  **** 3.2.1    Third Amendment to Agreement of Limited Partnership, 
                dated December 30, 1996. 
 
  **** 3.2      Declaration of Trust, as amended of the Trust. 
 
  **** 3.3      By-laws of Trust. 
 
  **** 4.1      Indenture between the Operating Partnership and Bank of 
                Boston, as Trustee, including Guaranty Provisions and 
                Form of Debenture. 
 
+    * 10.1     Liberty Property Trust Share Incentive Plan. 
 
  **** 10.2     Employment Agreement between the Company and Willard G. 
                Rouse III. 
 
  **** 10.3     Employment Agreement between the Company and George F. 
                Congdon. 
 
  **** 10.4     Employment Agreement between the Company and Joseph P. 
                Denny. 
 
  **** 10.5     Contribution Agreement. 
 
  **** 10.6     Amended and Restated Limited Partnership Agreements of 
                Pre-existing Pennsylvania Partnerships. 
 
                                -92-
<PAGE> 

  **** 10.7     Agreement of Sale for the Acquisition Properties. 
 
  **** 10.8     Option Agreement and Right of First Offer. 
 
  **** 10.9     Form of Indemnity Agreement. 
 
 ***** 10.10    Contribution Agreement among the Trust, the Operating 
                Partnership and the Contributing Owners described 
                therein, related to the Lingerfelt Properties. 
 
 ***** 10.11    Employment Agreement between the Company and Alan 
                Lingerfelt. 
 
****** 10.12    Amendment and Restated Revolving Loan Agreement and 
                Note Modification, dated as of May 1, 1995, between 
                General Electric Capital Corporation, as Dollar 
                Lender, G.E. Capital Corporation (Funding) Limited, 
                as Pound Lender, and Liberty Property Limited 
                Partnership, as Borrower (including exhibits thereto). 
 
    ** 10.13    Amended Exhibit A, dated as of February 29, 1996 of the 
                Liberty Property Limited Partnership Agreement. 
 
       10.14    Loan Agreement between Liberty Property Limited 
                Partnership and Liberty Property Trust and the 
                The First National Bank of Boston, dated December 13, 
                1996. 
 
     * 21.1     Subsidiaries of the Registrants. 
 
       23.1     Consent of Ernst & Young, LLP on Liberty Property Trust.  
 
       23.2     Consent of Ernst & Young, LLP on Liberty Property 
                Limited Partnership. 
 
       27.1     Financial Data Schedule. (EDGAR Version Only) 
 
     * 99.2     Waiver of Agreement. 
 
---------------- 
 
     *          Incorporated by Reference to exhibit of the same number 
                filed with the Registrants' Quarterly Report on Form 
                10-Q dated August 14, 1995. 
 
    **          Incorporated by reference to exhibit of the same number 
                filed with the Registrants' Annual Report on Form 10-K 
                for the fiscal year ended December 31, 1995. 
 
   ***          Incorporated by reference to exhibit of the same number 
                filed with the Trusts' Registration Statement on Form 
                S-11, Reg. No. 333-2221l. 
 
                                  -93-
<PAGE>
  ****          Incorporated by reference to exhibit of the same number 
                filed with the Trusts' Registration Statement on Form 
                S-11, Reg. No. 33-77084. 
 
 *****          Incorporated by reference to exhibit 10.1 filed with the 
                Registrants' Current Report on Form 8-K, dated March 3, 
                1995. 
 
 *****          Incorporated by reference to exhibit 10.2 filed with the 
                Registrants' Current Report on Form 8-K, dated March 3, 
                1995. 
 
******          Incorporated by reference to exhibit 10.1 to the  
                Registrants' Registration Statement on Form S-3, 
                Reg. No. 33-94782. 
 
    +           Indicates a management employment contract or compensa- 
                tion agreement. 
 
(B)  REPORTS ON FORM 8-K 
 
     REPORTS ON FORM 8-K 
     ------------------- 
 
     Report on Form 8-K dated December 10, 1996 filed under Item 5  
relating to the acquisition of eighteen properties during the period  
from January 1, 1996 to December 10, 1996.  The report included a  
Combined Statement of Operating Revenue and Certain Operating Expenses  
for a majority of the properties, Pro Forma Condensed Consolidated  
Balance Sheets for Liberty Property Trust and Liberty Property Limited  
Partnership, and Pro Forma Consolidated Statements of Operations for  
Liberty Property Trust and Liberty Property Limited Partnership.  
 
                                -94-

<PAGE> 
 
SIGNATURES 
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities  
and 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 TRUST 
 
 
 
Date:  Februrary 26, 1997        By: /s/ WILLARD G. ROUSE III 
                                -------------------------------------- 
                                WILLARD G. ROUSE III 
                                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 in the capacities and on the dates indicated. 
 
 
                              Chairman of the Board 
                              of Trustees and Chief 
                              Executive Officer 
                              (Principal Executive 
/s/ Willard G. Rouse III      Officer)                 February 26, 1997 
--------------------------- 
Willard G. Rouse III 
 
 
                              Chief Financial Officer 
                              and Treasurer (Principal 
                              Financial and Accounting 
/s/ George J. Alburger, Jr.   Officer)                 February 26, 1997 
--------------------------- 
George J. Alburger, Jr. 
 
 
 
/s/ Joseph P. Denny           Trustee                  February 26, 1997 
--------------------------- 
Joseph P. Denny 
 
 
 
/s/ George F. Congdon         Trustee                  February 26, 1997 
--------------------------- 
George F. Congdon 
 
 
/s/ M. Leanne Lachman         Trustee                  February 26, 1997 
--------------------------- 
M. Leanne Lachman 

                                -95-

<PAGE>
 
 
/s/ Frederick F. Buchholz     Trustee                  February 26, 1997 
--------------------------- 
Frederick F. Buchholz 
 
 
/s/ J. Anthony Hayden         Trustee                  February 26, 1997 
--------------------------- 
J. Anthony Hayden 
 
 
/s/ David L. Lingerfelt       Trustee                  February 26, 1997 
--------------------------- 
David L. Lingerfelt 
 
 
/s/ John A. Miller            Trustee                  February 26, 1997 
--------------------------- 
John A. Miller, CLU 
 
 
/s/ Stephen B. Siegel         Trustee                  February 26, 1997 
--------------------------- 
Stephen B. Siegel 
 
                              -96-

<PAGE> 
 
SIGNATURES 
 
Pursuant to the requirements of Section 13 or 15(d) of the Securities  
and 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 26, 1997       By: /s/ WILLARD G. ROUSE III 
                                -------------------------------------- 
                                WILLARD G. ROUSE III 
                                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 in the capacities and on the dates indicated. 
 
 
                              Trustee of the 
/s/ Joseph P. Denny           General Partner          February 26, 1997 
--------------------------- 
Joseph P. Denny 
 
 
                              Trustee of the 
/s/ George F. Congdon         General Partner          February 26, 1997 
--------------------------- 
George F. Congdon 
 
 
                              Trustee of the 
/s/ M. Leanne Lachman         General Partner          February 26, 1997 
--------------------------- 
M. Leanne Lachman 
 
 
                              Trustee of the 
/s/ Frederick F. Buchholz     General Partner          February 26, 1997 
--------------------------- 
Frederick F. Buchholz 
 
 
                              Trustee of the 
/s/ J. Anthony Hayden         General Partner          February 26, 1997 
--------------------------- 
J. Anthony Hayden 

                               -97-
<PAGE> 
 
 
                              Trustee of the 
/s/ David L. Lingerfelt       General Partner          February 26, 1997 
--------------------------- 
David L. Lingerfelt 
 
 
                              Trustee of the 
/s/ John A. Miller            General Partner          February 26, 1997 
--------------------------- 
John A. Miller, CLU 
 
 
                              Trustee of the 
/s/ Stephen B. Siegel         General Partner          February 26, 1997 
--------------------------- 
Stephen B. Siegel 
 
                               -98-

<PAGE>
 
                                EXHIBIT INDEX 
                                ------------- 
 
EXHIBIT NO.                             DESCRIPTION 
-------------   -------------------------------------------------------- 
 
     * 3.1      First Restated and Amended Agreement of Limited Partner- 
                ship Limited Partnership, dated June 19, 1995, as 
                amended. 
 
    ** 3.1.1    Second Amendment to Agreement of Limited Partnership. 
 
  **** 3.2.1    Third Amendment to Agreement of Limited Partnership, 
                dated December 30, 1996. 
 
  **** 3.2      Declaration of Trust, as amended of the Trust. 
 
  **** 3.3      By-laws of Trust. 
 
  **** 4.1      Indenture between the Operating Partnership and Bank of 
                Boston, as Trustee, including Guaranty Provisions and 
                Form of Debenture. 
 
+    * 10.1     Liberty Property Trust Share Incentive Plan. 
 
  **** 10.2     Employment Agreement between the Company and Willard G. 
                Rouse III. 
 
  **** 10.3     Employment Agreement between the Company and George F. 
                Congdon. 
 
  **** 10.4     Employment Agreement between the Company and Joseph P. 
                Denny. 
 
  **** 10.5     Contribution Agreement. 
 
  **** 10.6     Amended and Restated Limited Partnership Agreements of 
                Pre-existing Pennsylvania Partnerships. 
 
  **** 10.7     Agreement of Sale for the Acquisition Properties. 
 
  **** 10.8     Option Agreement and Right of First Offer. 
 
  **** 10.9     Form of Indemnity Agreement. 
 
 ***** 10.10    Contribution Agreement among the Trust, the Operating 
                Partnership and the Contributing Owners described 
                therein, related to the Lingerfelt Properties. 
 
 ***** 10.11    Employment Agreement between the Company and Alan 
                Lingerfelt. 

                             -99-

<PAGE>
 
****** 10.12    Amendment and Restated Revolving Loan Agreement and 
                Note Modification, dated as of May 1, 1995, between 
                General Electric Capital Corporation, as Dollar 
                Lender, G.E. Capital Corporation (Funding) Limited, 
                as Pound Lender, and Liberty Property Limited 
                Partnership, as Borrower (including exhibits thereto). 
 
    ** 10.13    Amended Exhibit A, dated as of February 29, 1996 of the 
                Liberty Property Limited Partnership Agreement. 
 
       10.14    Loan Agreement between Liberty Property Limited 
                Partnership and Liberty Property Trust and the 
                The First National Bank of Boston, dated December 13, 
                1996. 
 
     * 21.1     Subsidiaries of the Registrants. 
 
       23.1     Consent of Ernst & Young, LLP on Liberty Property Trust.  
 
       23.2     Consent of Ernst & Young, LLP on Liberty Property 
                Limited Partnership. 
 
       27.1     Financial Data Schedule. (EDGAR Version Only) 
 
     * 99.2     Waiver of Agreement. 
 
---------------- 
 
     *          Incorporated by Reference to exhibit of the same number 
                filed with the Registrants' Quarterly Report on Form 
                10-Q dated August 14, 1995. 
 
    **          Incorporated by reference to exhibit of the same number 
                filed with the Registrants' Annual Report on Form 10-K 
                for the fiscal year ended December 31, 1995. 
 
   ***          Incorporated by reference to exhibit of the same number 
                filed with the Trusts' Registration Statement on Form 
                S-11, Reg. No. 333-2221l. 
 
  ****          Incorporated by reference to exhibit of the same number 
                filed with the Trusts' Registration Statement on Form 
                S-11, Reg. No. 33-77084. 
 
 *****          Incorporated by reference to exhibit 10.1 filed with the 
                Registrants' Current Report on Form 8-K, dated March 3, 
                1995. 
 
 *****          Incorporated by reference to exhibit 10.2 filed with the 
                Registrants' Current Report on Form 8-K, dated March 3, 
                1995. 
 
******          Incorporated by reference to exhibit 10.1 to the  
                Registrants' Registration Statement on Form S-3, 
                Reg. No. 33-94782. 
 
                               -100-

<PAGE>
 
    +           Indicates a management employment contract or compensa- 
                tion agreement. 
 

 
                                -101-