UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
 (Mark One)
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2009
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from   to
 Commission file numbers: 1-13130 (Liberty Property Trust)
 1-13132 (Liberty Property Limited Partnership)
 
 LIBERTY PROPERTY TRUST
LIBERTY PROPERTY LIMITED PARTNERSHIP
 
 (Exact name of registrants as specified in their governing documents)
 MARYLAND(Liberty Property Trust)
    
    23-7768996PENNSYLVANIA(Liberty Property Limited Partnership)
    
    23-2766549(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer
Identification Number)500 Chesterfield ParkwayMalvern, Pennsylvania
    
    19355(Address of Principal Executive Offices)
    
    (Zip Code)
   þ o
  o o
  Large accelerated filer þ
    
    Accelerated filer o
    
    Non-accelerated filer o
(Do not check if a smaller reporting company)
    
    Smaller reporting company o
  o þ




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##### 



Liberty Property Trust/Liberty Property Limited Partnership
Form 10-Q for the period ended March 31, 2009
 Index
    
    
    
    PagePART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (Unaudited)Condensed consolidated balance sheets of Liberty Property Trust at March 31,
2009 and December 31, 2008
    
    
    4Condensed consolidated statements of operations of Liberty Property Trust for
the three months ended March 31, 2009 and March 31, 2008
    
    
    5Condensed
consolidated statement of equity of Liberty Property Trust for the
three months ended  March 31, 2009
    
    
    6Condensed consolidated statements of cash flows of Liberty Property Trust for
the three months ended March 31, 2009 and March 31, 2008
    
    
    7Notes to condensed consolidated financial statements of Liberty Property Trust
    
    
    8Condensed consolidated balance sheets of Liberty Property Limited Partnership
at March 31, 2009 and December 31, 2008
    
    
    15Condensed consolidated statements of operations of Liberty Property Limited
Partnership for the three months ended March 31, 2009 and March 31, 2008
    
    
    16Condensed consolidated
statement of equity of Liberty Property Limited Partnership for the
three months ended March 31, 2009
    
    
    17Condensed consolidated statements of cash flows of Liberty Property Limited
Partnership for the three months ended March 31, 2009 and March 31, 2008
    
    
    18Notes to condensed consolidated financial statements of Liberty Property
Limited Partnership
    
    
    19Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    27Item 3.
    
    Quantitative and Qualitative Disclosures about Market Risk
    
    
    38Item 4.
    
    Controls and Procedures
    
    
    38PART II.
    
    OTHER INFORMATION
    
    
    39Item 1.
    
    Legal Proceedings
    
    
    39Item 1A.
    
    Risk Factors
    
    
    39Item 2.
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    40Item 3.
    
    Defaults Upon Senior Securities
    
    
    40Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    40Item 5.
    
    Other Information
    
    
    40Item 6.
    
    Exhibits
    
    
    41Signatures for Liberty Property Trust
    
    
    42
  2




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##### 



Index
    
    
    
    PageSignatures for Liberty Property Limited Partnership
    
    
    43Exhibit Index
    
    
    44STATEMENT RE: COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND RATIO OF EARNINGS TO COMBINED FIXED CHARGESCERTIFICATION OF CEO OF LIBERTY PROPERTY TRUST REQUIRED BY
RULE 13A-14(A)CERTIFICATION OF CFO OF LIBERTY PROPERTY TRUST REQUIRED BY
RULE 13A-14(A)CERTIFICATION OF CEO OF LIBERTY PROPERTY TRUST, IN ITS CAPACITY AS THE GENERAL PARTNER OF LIBERTY PROPERTY
LIMITED PARTNERSHIP, REQUIRED BY RULE 13A-14(A)CERTIFICATION OF CFO OF LIBERTY PROPERTY TRUST, IN ITS CAPACITY AS THE GENERAL PARTNER OF LIBERTY PROPERTY
LIMITED PARTNERSHIP, REQUIRED BY RULE 13A-14(A)CERTIFICATION OF CEO OF LIBERTY PROPERTY TRUST REQUIRED BY RULE 13A-14(B)CERTIFICATION OF CFO OF LIBERTY PROPERTY TRUST REQUIRED BY RULE 13A-14(B)CERTIFICATION OF CEO OF LIBERTY PROPERTY TRUST, IN ITS CAPACITY AS THE GENERAL PARTNER OF LIBERTY PROPERTY
LIMITED PARTNERSHIP, REQUIRED BY RULE 13A-14(B)CERTIFICATION OF CFO OF LIBERTY PROPERTY TRUST, IN ITS CAPACITY AS THE GENERAL PARTNER OF LIBERTY PROPERTY
LIMITED PARTNERSHIP, REQUIRED BY RULE 13A-14(B)
 3




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##### 



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 CONDENSED CONSOLIDATED BALANCE SHEETS OF LIBERTY PROPERTY TRUST
 (In thousands, except share amounts)
 March 31, 2009
    
    
    December 31, 2008(Unaudited)ASSETSReal estate:Land and land improvements
    
    $
    815,353
    
    
    $
    810,486Building and improvements
    
    
    4,268,952
    
    
    
    4,245,427Less accumulated depreciation
    
    
    (1,015,130
    )
    
    
    (979,171
    )Operating real estate
    
    
    4,069,175
    
    
    
    4,076,742Development in progress
    
    
    260,520
    
    
    
    245,463Land held for development
    
    
    201,419
    
    
    
    209,551Net real estate
    
    
    4,531,114
    
    
    
    4,531,756Cash and cash equivalents
    
    
    131,009
    
    
    
    15,794Restricted cash
    
    
    33,072
    
    
    
    39,726Accounts receivable
    
    
    6,406
    
    
    
    12,985Deferred rent receivable
    
    
    87,785
    
    
    
    84,916Deferred financing and leasing costs, net of accumulated amortization
(2009, $146,617; 2008, $140,206)
    
    
    135,720
    
    
    
    133,664Investments in and advances to unconsolidated joint ventures
    
    
    253,073
    
    
    
    266,602Assets held for sale
    
    
    15,487
    
    
    
    49,125Prepaid expenses and other assets
    
    
    79,028
    
    
    
    82,467Total assets
    
    $
    5,272,694
    
    
    $
    5,217,035LIABILITIESMortgage loans
    
    $
    474,869
    
    
    $
    198,560Unsecured notes
    
    
    2,093,301
    
    
    
    2,131,607Credit facility
    
    
    
    
    
    
    260,000Accounts payable
    
    
    40,054
    
    
    
    32,481Accrued interest
    
    
    36,485
    
    
    
    36,474Dividend and distributions payable
    
    
    51,350
    
    
    
    48,858Other liabilities
    
    
    172,589
    
    
    
    182,549Total liabilities
    
    
    2,868,648
    
    
    
    2,890,529EQUITYLiberty Property Trust shareholders equityCommon shares of beneficial interest, $.001 par value, 183,987,000 shares
authorized; 105,307,649 (includes 1,249,909 in treasury) and 100,034,404
(includes 1,249,909 in treasury) shares issued and outstanding as of March
31, 2009 and
December 31, 2008, respectively
    
    
    106
    
    
    
    101Additional paid-in capital
    
    
    2,264,569
    
    
    
    2,162,820Accumulated other comprehensive loss
    
    
    (6,682
    )
    
    
    (5,378
    )Distributions in excess of net income
    
    
    (207,276
    )
    
    
    (185,721
    )Common shares in treasury, at cost, 1,249,909 shares as of March 31, 2009 and
December 31, 2008
    
    
    (51,951
    )
    
    
    (51,951
    )Total Liberty Property Trust shareholders equity
    
    
    1,998,766
    
    
    
    1,919,871Noncontrolling interest  operating partnership 
4,017,354 and 4,074,967 common units outstanding as of March 31, 2009 andDecember 31, 2008, respectively 
9,740,000 preferred units outstanding as of March 31, 2009 and December 31,
2008
    
    
    404,514
    
    
    
    405,505Noncontrolling interest  consolidated joint ventures
    
    
    766
    
    
    
    1,130Total equity
    
    
    2,404,046
    
    
    
    2,326,506Total liabilities and equity
    
    $
    5,272,694
    
    
    $
    5,217,035
  4




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##### 



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS OF LIBERTY PROPERTY TRUST
 (Unaudited and in thousands, except per share amounts)
 Three Months EndedMarch 31, 2009
    
    
    March 31, 2008OPERATING REVENUERental
    
    $
    130,780
    
    
    $
    132,899Operating expense reimbursement
    
    
    58,440
    
    
    
    56,571Total operating revenue
    
    
    189,220
    
    
    
    189,470OPERATING EXPENSERental property
    
    
    39,372
    
    
    
    38,905Real estate taxes
    
    
    22,446
    
    
    
    20,454General and administrative
    
    
    15,576
    
    
    
    14,037Depreciation and amortization
    
    
    43,553
    
    
    
    43,063Total operating expenses
    
    
    120,947
    
    
    
    116,459Operating income
    
    
    68,273
    
    
    
    73,011OTHER INCOME (EXPENSE)Interest and other income
    
    
    3,106
    
    
    
    3,091Debt extinguishment gain
    
    
    529
    
    
    
    Interest expense
    
    
    (38,429
    )
    
    
    (41,690
    )Total other income (expense)
    
    
    (34,794
    )
    
    
    (38,599
    )Income before property dispositions, income taxes
and equity in earnings of unconsolidated joint
ventures
    
    
    33,479
    
    
    
    34,412(Loss) gain on property dispositions
    
    
    (294
    )
    
    
    641Income taxes
    
    
    (217
    )
    
    
    (484
    )Equity in earnings of unconsolidated joint ventures
    
    
    417
    
    
    
    377Income from continuing operations
    
    
    33,385
    
    
    
    34,946Discontinued operations (including net gain on
property dispositions of $199 and $610 for the three
months ended March 31, 2009 and 2008, respectively)
    
    
    457
    
    
    
    1,450Net income
    
    
    33,842
    
    
    
    36,396Noncontrolling interest  operating partnership
    
    
    (6,317
    )
    
    
    (6,605
    )Noncontrolling interest  consolidated joint ventures
    
    
    364
    
    
    
    170Net income available to common shareholders
    
    $
    27,889
    
    
    $
    29,961Earnings per common shareBasic:Income from continuing operations
    
    $
    0.28
    
    
    $
    0.31Income from discontinued operations
    
    
    
    
    
    
    0.02Income per common share  basic
    
    $
    0.28
    
    
    $
    0.33Diluted:Income from continuing operations
    
    $
    0.28
    
    
    $
    0.31Income from discontinued operations
    
    
    
    
    
    
    0.02Income per common share  diluted
    
    $
    0.28
    
    
    $
    0.33Distributions per common share
    
    $
    0.475
    
    
    $
    0.625Weighted average number of common shares outstandingBasic
    
    
    100,681
    
    
    
    91,779Diluted
    
    
    100,960
    
    
    
    91,943Amounts attributable to common shareholdersIncome from continuing operations
    
    $
    27,449
    
    
    $
    28,574Discontinued operations
    
    
    440
    
    
    
    1,387Net income available to common shareholders
    
    $
    27,889
    
    
    $
    29,961
  5




---



##### 



CONDENSED CONSOLIDATED STATEMENT OF EQUITY OF LIBERTY PROPERTY TRUST
 (IN THOUSANDS)
 Common
    
    
    
    
    
    
    Accumulated
    
    
    
    
    
    
    
    
    
    
    Total Liberty
    
    
    Noncontrolling
    
    
    NoncontrollingShares of
    
    
    Additional
    
    
    Other
    
    
    Distributions
    
    
    Common
    
    
    Property Trust
    
    
    Interest 
    
    
    Interest Beneficial
    
    
    Paid-In
    
    
    Comprehensive
    
    
    in Excess of
    
    
    Shares Held
    
    
    Shareholders
    
    
    Operating
    
    
    ConsolidatedInterest
    
    
    Capital
    
    
    Loss
    
    
    Net Income
    
    
    in Treasury
    
    
    Equity
    
    
    Partnership
    
    
    Joint Ventures
    
    
    Total EquityBalance at December 31, 2008, as
previously reported
    
    $
    101
    
    
    $
    2,199,684
    
    
    $
    (5,378
    )
    
    $
    (185,721
    )
    
    $
    (51,951
    )
    
    $
    1,956,735
    
    
    $
    
    
    
    $
    
    
    
    $
    1,956,735Remeasurement  EITF Topic No.
D-98
    
    
    
    
    
    
    (36,864
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (36,864
    )
    
    
    36,864
    
    
    
    
    
    
    
    Reclassification upon the adoption
of SFAS No. 160
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    368,641
    
    
    
    1,130
    
    
    
    369,771Balance at December 31, 2008 as
presented
    
    
    101
    
    
    
    2,162,820
    
    
    
    (5,378
    )
    
    
    (185,721
    )
    
    
    (51,951
    )
    
    
    1,919,871
    
    
    
    405,505
    
    
    
    1,130
    
    
    
    2,326,506Net proceeds from the issuance of
common shares
    
    
    5
    
    
    
    96,319
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    96,324
    
    
    
    
    
    
    
    
    
    
    
    96,324Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,889
    
    
    
    
    
    
    
    27,889
    
    
    
    6,317
    
    
    
    (364
    )
    
    
    33,842Distributions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (49,444
    )
    
    
    
    
    
    
    (49,444
    )
    
    
    (7,308
    )
    
    
    
    
    
    
    (56,752
    )Noncash compensation
    
    
    
    
    
    
    5,430
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    5,430
    
    
    
    
    
    
    
    
    
    
    
    5,430Foreign currency translation
adjustment
    
    
    
    
    
    
    
    
    
    
    (1,304
    )
    
    
    
    
    
    
    
    
    
    
    (1,304
    )
    
    
    
    
    
    
    
    
    
    
    (1,304
    )Balance at March 31, 2009
    
    $
    106
    
    
    $
    2,264,569
    
    
    $
    (6,682
    )
    
    $
    (207,276
    )
    
    $
    (51,951
    )
    
    $
    1,998,766
    
    
    $
    404,514
    
    
    $
    766
    
    
    $
    2,404,046
  6




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##### 



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS OF LIBERTY PROPERTY TRUST
 (Unaudited and in thousands)
 Three Months EndedMarch 31, 2009
    
    
    March 31, 2008OPERATING ACTIVITIESNet income
    
    $
    33,842
    
    
    $
    36,396Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    43,491
    
    
    
    43,659Amortization of deferred financing costs
    
    
    1,182
    
    
    
    1,118Equity in earnings of unconsolidated joint ventures
    
    
    (416
    )
    
    
    (377
    )Gain on property dispositions
    
    
    95
    
    
    
    (1,251
    )Noncash compensation
    
    
    7,252
    
    
    
    1,994Changes in operating assets and liabilities:Restricted cash
    
    
    6,418
    
    
    
    (24,156
    )Accounts receivable
    
    
    6,357
    
    
    
    (2,932
    )Deferred rent receivable
    
    
    (2,950
    )
    
    
    (4,937
    )Prepaid expenses and other assets
    
    
    2,542
    
    
    
    (9,685
    )Accounts payable
    
    
    7,634
    
    
    
    (2,166
    )Accrued interest
    
    
    11
    
    
    
    (500
    )Other liabilities
    
    
    (5,230
    )
    
    
    2,159Net cash provided by operating activities
    
    
    100,228
    
    
    
    39,322INVESTING ACTIVITIESInvestment in properties
    
    
    (15,566
    )
    
    
    (14,670
    )Investments in and advances to unconsolidated joint ventures
    
    
    (125
    )
    
    
    (3,670
    )Distributions from unconsolidated joint ventures
    
    
    13,848
    
    
    
    1,455Net proceeds from disposition of properties/land
    
    
    44,353
    
    
    
    291,688Investment in development in progress
    
    
    (27,771
    )
    
    
    (67,067
    )Investment in land held for development
    
    
    (7,054
    )
    
    
    (6,102
    )Investment in deferred leasing costs
    
    
    (5,724
    )
    
    
    (7,385
    )Net cash provided by investing activities
    
    
    1,961
    
    
    
    194,249FINANCING ACTIVITIESNet proceeds from issuance of common shares
    
    
    94,508
    
    
    
    12,790Repayments of unsecured notes
    
    
    (38,306
    )
    
    
    Proceeds from mortgage loans
    
    
    317,424
    
    
    
    Repayments of mortgage loans
    
    
    (41,072
    )
    
    
    (7,084
    )Proceeds from credit facility
    
    
    33,500
    
    
    
    170,400Repayments on credit facility
    
    
    (293,500
    )
    
    
    (375,400
    )Increase in deferred financing costs
    
    
    (4,734
    )
    
    
    Distribution paid on common shares
    
    
    (46,923
    )
    
    
    (57,230
    )Distribution paid on units
    
    
    (7,342
    )
    
    
    (8,070
    )Net cash provided by (used in) provided by financing activities
    
    
    13,555
    
    
    
    (264,594
    )Net increase (decrease) in cash and cash equivalents
    
    
    115,744
    
    
    
    (31,023
    )Decrease in cash and cash equivalents related to foreign currency translation
    
    
    (529
    )
    
    
    (42
    )Cash and cash equivalents at beginning of period
    
    
    15,794
    
    
    
    37,989Cash and cash equivalents at end of period
    
    $
    131,009
    
    
    $
    6,924
  7




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##### 



Liberty Property Trust
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 March 31, 2009
 Note 1: Organization and Basis of Presentation
 Organization
  Basis of Presentation
  Income per Common Share
  For the Three Months Ended March 31, 2009
    
    
    For the Three Months Ended March 31, 2008Weighted

    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    AverageIncome

    
    
    Shares
    
    
    
    
    
    
    Income
    
    
    Shares(Numerator)
    
    
    (Denominator)
    
    
    Per Share
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Per ShareBasic income from continuing operationsIncome from continuing operations net of
noncontrolling interest
    
    $
    27,449
    
    
    
    100,681
    
    
    $
    0.28
    
    
    $
    28,574
    
    
    
    91,779
    
    
    $
    0.31Dilutive shares for long-term compensation plans
    
    
    
    
    
    
    279
    
    
    
    
    
    
    
    
    
    
    
    164Diluted income from continuing operationsIncome from continuing operations net of
noncontrolling interest and assumed conversions
    
    
    27,449
    
    
    
    100,960
    
    
    $
    0.28
    
    
    
    28,574
    
    
    
    91,943
    
    
    $
    0.31Basic income from discontinued operationsDiscontinued operations net of noncontrolling
interest
    
    
    440
    
    
    
    100,681
    
    
    $
    
    
    
    
    1,387
    
    
    
    91,779
    
    
    $
    0.02Dilutive shares for long-term compensation plans
    
    
    
    
    
    
    279
    
    
    
    
    
    
    
    
    
    
    
    164Diluted income from discontinued operationsDiscontinued operations net of noncontrolling
interest
    
    
    440
    
    
    
    100,960
    
    
    $
    
    
    
    
    1,387
    
    
    
    91,943
    
    
    $
    0.02
 8




---



##### 



For the Three Months Ended March 31, 2009
    
    
    For the Three Months Ended March 31, 2008Weighted

    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    AverageIncome

    
    
    Shares
    
    
    
    
    
    
    Income
    
    
    Shares(Numerator)
    
    
    (Denominator)
    
    
    Per Share
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Per ShareBasic income per common shareNet income available to common shareholders
    
    
    27,889
    
    
    
    100,681
    
    
    $
    0.28
    
    
    
    29,961
    
    
    
    91,779
    
    
    $
    0.33Dilutive shares for long-term compensation plans
    
    
    
    
    
    
    279
    
    
    
    
    
    
    
    
    
    
    
    164Diluted income per common shareNet income available to common shareholders and
assumed conversions
    
    $
    27,889
    
    
    
    100,960
    
    
    $
    0.28
    
    
    $
    29,961
    
    
    
    91,943
    
    
    $
    0.33
  Foreign Currency Translation
  SFAS No. 160
 Accounting for Noncontrolling Interests Classification and Measurement of Redeemable
Securities.
 Note 2: Segment Information
  Reportable Segments
    
    MarketsNortheast
    
    Southeastern PA; Lehigh/Central PA; New JerseyMidwest
    
    Minnesota; Milwaukee; ChicagoMid-Atlantic
    
    Maryland; Carolinas; Richmond; Virginia BeachSouth
    
    Jacksonville; Orlando; Boca Raton; Tampa; Texas; ArizonaPhiladelphia
    
    Philadelphia; Northern Virginia/Washington, D.C.United Kingdom
    
    County of Kent; West Midlands
   9




---



##### 



FOR THE THREE MONTHS ENDED MARCH 31, 2009
 NortheastLehigh/Southeastern
    
    
    Central
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Phila-
    
    
    UnitedPA
    
    
    PA
    
    
    New Jersey
    
    
    Midwest
    
    
    Mid-atlantic
    
    
    South
    
    
    delphia
    
    
    kingdom
    
    
    TotalOperating revenue
    
    $
    47,366
    
    
    $
    25,162
    
    
    $
    9,369
    
    
    $
    20,990
    
    
    $
    34,823
    
    
    $
    45,674
    
    
    $
    4,735
    
    
    $
    1,101
    
    
    $
    189,220Rental property
expenses and real
estate taxes
    
    
    15,826
    
    
    
    7,620
    
    
    
    3,692
    
    
    
    7,879
    
    
    
    10,985
    
    
    
    14,406
    
    
    
    1,180
    
    
    
    230
    
    
    
    61,818Property level
operating income
    
    $
    31,540
    
    
    $
    17,542
    
    
    $
    5,677
    
    
    $
    13,111
    
    
    $
    23,838
    
    
    $
    31,268
    
    
    $
    3,555
    
    
    $
    871
    
    
    
    127,402
 Interest and other income
    
    
    3,106Debt extinguishment gain
    
    
    529Interest expense
    
    
    (38,429
    )General and administrative
    
    
    (15,576
    )Depreciation and amortization
    
    
    (43,553
    )Income before property dispositions, income taxes and equity in earnings of unconsolidated joint ventures
    
    
    33,479Loss on property dispositions
    
    
    (294
    )Income taxes
    
    
    (217
    )Equity in earnings of unconsolidated joint ventures
    
    
    417Discontinued operations
    
    
    457Net income
    
    $
    33,842
 FOR THE THREE MONTHS ENDED MARCH 31, 2008
 NortheastLehigh/Southeastern
    
    
    Central
    
    
    New
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Phila-
    
    
    UnitedPA
    
    
    PA
    
    
    Jersey
    
    
    Midwest
    
    
    Mid-atlantic
    
    
    South
    
    
    delphia
    
    
    kingdom
    
    
    TotalOperating revenue
    
    $
    44,127
    
    
    $
    24,209
    
    
    $
    9,085
    
    
    $
    20,188
    
    
    $
    35,258
    
    
    $
    40,171
    
    
    $
    15,388
    
    
    $
    1,044
    
    
    $
    189,470Rental property
expenses and real
estate taxes
    
    
    14,348
    
    
    
    6,535
    
    
    
    3,197
    
    
    
    7,610
    
    
    
    10,133
    
    
    
    13,152
    
    
    
    4,023
    
    
    
    361
    
    
    
    59,359Property level
operating income
    
    $
    29,779
    
    
    $
    17,674
    
    
    $
    5,888
    
    
    $
    12,578
    
    
    $
    25,125
    
    
    $
    27,019
    
    
    $
    11,365
    
    
    $
    683
    
    
    
    130,111
 Interest and other income
    
    
    3,091Interest expense
    
    
    (41,690
    )General and administrative
    
    
    (14,037
    )Depreciation and amortization
    
    
    (43,063
    )Income before property dispositions, income taxes and equity in earnings of unconsolidated joint ventures
    
    
    34,412Gain on property dispositions
    
    
    641Income taxes
    
    
    (484
    )Equity in earnings of unconsolidated joint ventures
    
    
    377Discontinued operations
    
    
    1,450Net income
    
    $
    36,396
 Note 3: SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
  10




---



##### 



Three Months EndedMarch 31, 2009
    
    
    March 31, 2008Revenues
    
    $
    1,109
    
    
    $
    4,082Operating expenses
    
    
    (457
    )
    
    
    (1,516
    )Interest expense
    
    
    (254
    )
    
    
    (772
    )Depreciation and amortization
    
    
    (140
    )
    
    
    (954
    )Income before property dispositions
    
    $
    258
    
    
    $
    840
  Allocation of Interest to Discontinued Operations
 Asset Impairment
  Note 4: Joint Ventures
 
 Liberty/Commerz 1701 JFK Boulevard, LP
 Accounting for the Sales of Real Estate
    11




---



##### 



Note 5: Indebtedness
 Mortgage Loans
   Unsecured Notes
   Note 6: Noncontrolling interests
   Noncontrolling
    
    
    Noncontrollinginterest -
    
    
    Interest -Minority
    
    
    Operating
    
    
    Consolidatedinterest
    
    
    Partnership
    
    
    Joint VenturesBalance at December 31, 2008, as previously reported
    
    $
    369,771
    
    
    $
    
    
    
    $
    Remeasurement  EITF Topic No. D-98
    
    
    36,864
    
    
    
    
    
    
    
    Reclassification upon the adoption of SFAS No. 160
    
    
    (406,635
    )
    
    
    405,505
    
    
    
    1,130Balance at December 31, 2008 as presented
    
    $
    
    
    
    $
    405,505
    
    
    $
    1,130
 Common units
  12




---



##### 



Preferred units
  Date of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Liquidation
    
    Dividend
    
    RedeemableIssue
    
    Issue
    
    Amount
    
    Units
    
    Preference
    
    Rate
    
    As of
    
    Exchangeable after(in 000s)7/28/99
    
    
    Series B
    
    $
    95,000
    
    
    
    3,800
    
    
    $
    25
    
    
    
    7.45
    %
    
    
    8/31/09
    
    
    8/31/13 into Series B Cumulative Redeemable Preferred Shares of the Trust6/16/05
    
    
    Series E
    
    $
    20,000
    
    
    
    400
    
    
    $
    50
    
    
    
    7.00
    %
    
    
    6/16/10
    
    
    6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust6/30/05
    
    
    Series F
    
    $
    44,000
    
    
    
    880
    
    
    $
    50
    
    
    
    6.65
    %
    
    
    6/30/10
    
    
    12/12/15 into Series F Cumulative Redeemable Preferred Shares of the Trust8/23/05
    
    
    Series F
    
    $
    6,000
    
    
    
    120
    
    
    $
    50
    
    
    
    6.65
    %
    
    
    6/30/10
    
    
    12/12/15 into Series F Cumulative Redeemable Preferred Shares of the Trust12/15/06
    
    
    Series G
    
    $
    27,000
    
    
    
    540
    
    
    $
    50
    
    
    
    6.70
    %
    
    
    12/12/11
    
    
    12/12/16 into Series G Cumulative Redeemable Preferred Shares of the Trust8/21/07
    
    
    Series H
    
    $
    100,000
    
    
    
    4,000
    
    
    $
    25
    
    
    
    7.40
    %
    
    
    8/21/12
    
    
    8/21/17 into Series H Cumulative Redeemable Preferred Shares of the Trust
  Note 7: Continuous Equity Offering
  Note 8: Recently Issued Accounting Standards
 SFAS No. 141(R)
 Applying the Acquisition Method
 FSP EITF 03-6-1
 Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities
 13




---



##### 



Note 9: Supplemental Disclosure to Statements of Cash Flows
  Non-cash activity
    
    2009
    
    2008Write-off of fully depreciated property and deferred costs
    
    $
    881
    
    
    $
    1,264Increase in investment in unconsolidated joint ventures
    
    
    
    
    
    
    (35,172
    )Disposition of properties/development in progress
    
    
    
    
    
    
    173,624Disposition of deferred leasing/financing costs
    
    
    
    
    
    
    12,526Reduction of accounts receivable
    
    
    
    
    
    
    7,854Reduction of deferred rent receivable
    
    
    
    
    
    
    6,580Reduction of prepaid and other assets
    
    
    
    
    
    
    38,486Reduction of credit facility
    
    
    
    
    
    
    (152,960
    )Reduction of other liabilities
    
    
    
    
    
    
    (50,938
    )
 Note 10: Subsequent Events
    14




---



##### 



CONDENSED CONSOLIDATED BALANCE SHEETS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
 (In thousands)
 March 31, 2009
    
    
    December 31, 2008(Unaudited)ASSETSReal estate:Land and land improvements
    
    $
    815,353
    
    
    $
    810,486Building and improvements
    
    
    4,268,952
    
    
    
    4,245,427Less accumulated depreciation
    
    
    (1,015,130
    )
    
    
    (979,171
    )Operating real estate
    
    
    4,069,175
    
    
    
    4,076,742Development in progress
    
    
    260,520
    
    
    
    245,463Land held for development
    
    
    201,419
    
    
    
    209,551Net real estate
    
    
    4,531,114
    
    
    
    4,531,756Cash and cash equivalents
    
    
    131,009
    
    
    
    15,794Restricted cash
    
    
    33,072
    
    
    
    39,726Accounts receivable
    
    
    6,406
    
    
    
    12,985Deferred rent receivable
    
    
    87,785
    
    
    
    84,916Deferred financing and leasing costs, net of accumulated amortization
(2009, $146,617; 2008, $140,206)
    
    
    135,720
    
    
    
    133,664Investments in and advances to unconsolidated joint ventures
    
    
    253,073
    
    
    
    266,602Assets held for sale
    
    
    15,487
    
    
    
    49,125Prepaid expenses and other assets
    
    
    79,028
    
    
    
    82,467Total assets
    
    $
    5,272,694
    
    
    $
    5,217,035LIABILITIESMortgage loans
    
    $
    474,869
    
    
    $
    198,560Unsecured notes
    
    
    2,093,301
    
    
    
    2,131,607Credit facility
    
    
    
    
    
    
    260,000Accounts payable
    
    
    40,054
    
    
    
    32,481Accrued interest
    
    
    36,485
    
    
    
    36,474Distributions payable
    
    
    51,350
    
    
    
    48,858Other liabilities
    
    
    172,589
    
    
    
    182,549Total liabilities
    
    
    2,868,648
    
    
    
    2,890,529Noncontrolling interest  consolidated joint ventures
    
    
    766
    
    
    
    1,130Limited partners equity  preferred units, 9,740,000 preferred units
outstanding as of                                    March 31, 2009
and
December 31, 2008
    
    
    287,959
    
    
    
    287,959 common units, 4,017,354 and 4,074,967
common units outstanding as of
March
31, 2009 and December 31, 2008,
respectively
    
    
    116,555
    
    
    
    117,546OWNERS EQUITYGeneral partners equity  common units, 105,307,649 and
100,034,404 units outstanding as of March 31, 2009 and
December 31, 2008, respectively
    
    
    1,998,766
    
    
    
    1,919,871Total liabilities and owners equity
    
    $
    5,272,694
    
    
    $
    5,217,035
  15




---



##### 



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
 (Unaudited and in thousands, except per unit amounts)
 Three Months EndedMarch 31, 2009
    
    
    March 31, 2008OPERATING REVENUERental
    
    $
    130,780
    
    
    $
    132,899Operating expense reimbursement
    
    
    58,440
    
    
    
    56,571Total operating revenue
    
    
    189,220
    
    
    
    189,470OPERATING EXPENSERental property
    
    
    39,372
    
    
    
    38,905Real estate taxes
    
    
    22,446
    
    
    
    20,454General and administrative
    
    
    15,576
    
    
    
    14,037Depreciation and amortization
    
    
    43,553
    
    
    
    43,063Total operating expenses
    
    
    120,947
    
    
    
    116,459Operating income
    
    
    68,273
    
    
    
    73,011OTHER INCOME (EXPENSE)Interest and other income
    
    
    3,106
    
    
    
    3,091Debt extinguishment gain
    
    
    529
    
    
    
    Interest expense
    
    
    (38,429
    )
    
    
    (41,690
    )Total other income (expense)
    
    
    (34,794
    )
    
    
    (38,599
    )Income before property dispositions, income taxes
and equity in earnings of unconsolidated joint
ventures
    
    
    33,479
    
    
    
    34,412(Loss) gain on property dispositions
    
    
    (294
    )
    
    
    641Income taxes
    
    
    (217
    )
    
    
    (484
    )Equity in earnings of unconsolidated joint ventures
    
    
    417
    
    
    
    377Income from continuing operations
    
    
    33,385
    
    
    
    34,946Discontinued operations (including net gain on
property dispositions of $199 and $610 for the three
months ended March 31, 2009 and 2008, respectively)
    
    
    457
    
    
    
    1,450Net income
    
    
    33,842
    
    
    
    36,396Noncontrolling interest  consolidated joint ventures
    
    
    364
    
    
    
    170Preferred unit distributions
    
    
    (5,253
    )
    
    
    (5,253
    )Income available to common unitholders
    
    $
    28,953
    
    
    $
    31,313Earnings per common unitBasic:Income from continuing operations
    
    $
    0.28
    
    
    $
    0.31Income from discontinued operations
    
    
    
    
    
    
    0.02Income per common unit  basic
    
    $
    0.28
    
    
    $
    0.33Diluted:Income from continuing operations
    
    $
    0.28
    
    
    $
    0.31Income from discontinued operations
    
    
    
    
    
    
    0.02Income per common unit  diluted
    
    $
    0.28
    
    
    $
    0.33Distributions per common unit
    
    $
    0.475
    
    
    $
    0.625Weighted average number of common units outstandingBasic
    
    
    104,702
    
    
    
    95,969Diluted
    
    
    104,981
    
    
    
    96,133
  16




---



##### 



CONDENSED CONSOLIDATED STATEMENT OF EQUITY OF LIBERTY PROPERTY LIMITED PARTNERSHIP
 (IN THOUSANDS)
 General
    
    
    Limited
    
    
    TotalPartners
    
    
    Partners
    
    
    OwnersEquity
    
    
    Equity
    
    
    EquityBalance at December 31, 2008, as
previously reported
    
    $
    1,956,735
    
    
    $
    368,641
    
    
    $
    2,325,376Reclassification upon the adoption
of SFAS No. 160
    
    
    (36,864
    )
    
    
    (368,641
    )
    
    
    (405,505
    )Balance at December 31, 2008 as
presented
    
    
    1,919,871
    
    
    
    
    
    
    
    1,919,871Contributions from partners
    
    
    101,754
    
    
    
    
    
    
    
    101,754Distributions to partners
    
    
    (49,444
    )
    
    
    
    
    
    
    (49,444
    )Foreign currency translation
adjustment
    
    
    (1,304
    )
    
    
    
    
    
    
    (1,304
    )Net income
    
    
    27,889
    
    
    
    
    
    
    
    27,889Balance at March 31, 2009
    
    $
    1,998,766
    
    
    $
    
    
    
    $
    1,998,766
  17




---



##### 



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS OF
LIBERTY PROPERTY LIMITED PARTNERSHIP
 (Unaudited and in thousands)
 Three Months EndedMarch 31, 2009
    
    
    March 31, 2008OPERATING ACTIVITIESNet income
    
    $
    33,842
    
    
    $
    36,396Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    43,491
    
    
    
    43,659Amortization of deferred financing costs
    
    
    1,182
    
    
    
    1,118Equity in earnings of unconsolidated joint ventures
    
    
    (416
    )
    
    
    (377
    )Gain on property dispositions
    
    
    95
    
    
    
    (1,251
    )Noncash compensation
    
    
    7,252
    
    
    
    1,994Changes in operating assets and liabilities:Restricted cash
    
    
    6,418
    
    
    
    (24,156
    )Accounts receivable
    
    
    6,357
    
    
    
    (2,932
    )Deferred rent receivable
    
    
    (2,950
    )
    
    
    (4,937
    )Prepaid expenses and other assets
    
    
    2,542
    
    
    
    (9,685
    )Accounts payable
    
    
    7,634
    
    
    
    (2,166
    )Accrued interest
    
    
    11
    
    
    
    (500
    )Other liabilities
    
    
    (5,230
    )
    
    
    2,159Net cash provided by operating activities
    
    
    100,228
    
    
    
    39,322INVESTING ACTIVITIESInvestment in properties
    
    
    (15,566
    )
    
    
    (14,670
    )Investments in and advances to unconsolidated joint ventures
    
    
    (125
    )
    
    
    (3,670
    )Distributions from unconsolidated joint ventures
    
    
    13,848
    
    
    
    1,455Net proceeds from disposition of properties/land
    
    
    44,353
    
    
    
    291,688Investment in development in progress
    
    
    (27,771
    )
    
    
    (67,067
    )Investment in land held for development
    
    
    (7,054
    )
    
    
    (6,102
    )Investment in deferred leasing costs
    
    
    (5,724
    )
    
    
    (7,385
    )Net cash provided by investing activities
    
    
    1,961
    
    
    
    194,249FINANCING ACTIVITIESRepayments of unsecured notes
    
    
    (38,306
    )
    
    
    Proceeds from mortgage loans
    
    
    317,424
    
    
    
    Repayments of mortgage loans
    
    
    (41,072
    )
    
    
    (7,084
    )Proceeds from credit facility
    
    
    33,500
    
    
    
    170,400Repayments on credit facility
    
    
    (293,500
    )
    
    
    (375,400
    )Increase in deferred financing costs
    
    
    (4,734
    )
    
    
    Capital contributions
    
    
    94,508
    
    
    
    12,790Distribution to partners
    
    
    (54,265
    )
    
    
    (65,300
    )Net cash provided by (used in) financing activities
    
    
    13,555
    
    
    
    (264,594
    )Net increase (decrease) in cash and cash equivalents
    
    
    115,744
    
    
    
    (31,023
    )Decrease in cash and cash equivalents related to foreign currency translation
    
    
    (529
    )
    
    
    (42
    )Cash and cash equivalents at beginning of period
    
    
    15,794
    
    
    
    37,989Cash and cash equivalents at end of period
    
    $
    131,009
    
    
    $
    6,924
  18




---



##### 



Liberty Property Limited Partnership
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 March 31, 2009
 Note 1: Organization and Basis of Presentation
 Organization
  Basis of Presentation
  19




---



##### 



Income per Common Unit
  For the Three Months Ended March 31, 2009
    
    
    For the Three Months Ended March 31, 2008Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedIncome
    
    
    Average Units
    
    
    
    
    
    
    Income
    
    
    Average Units(Numerator)
    
    
    (Denominator)
    
    
    Per Unit
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Per UnitIncome from continuing operations
    
    $
    33,385
    
    
    
    
    
    
    
    
    
    
    $
    34,946Add: Noncontrolling interest  consolidated
joint ventures
    
    
    364
    
    
    
    
    
    
    
    
    
    
    
    170Less: Preferred unit distributions
    
    
    (5,253
    )
    
    
    
    
    
    
    
    
    
    
    (5,253
    )Basic income from continuing operationsIncome from continuing operations available to
common unitholders
    
    
    28,496
    
    
    
    104,702
    
    
    $
    0.28
    
    
    
    29,863
    
    
    
    95,969
    
    
    $
    0.31Dilutive units for long-term compensation plans
    
    
    
    
    
    
    279
    
    
    
    
    
    
    
    
    
    
    
    164Diluted income from continuing operationsIncome from continuing operations available to
common unitholders and assumed conversions
    
    
    28,496
    
    
    
    104,981
    
    
    $
    0.28
    
    
    
    29,863
    
    
    
    96,133
    
    
    $
    0.31Basic income from discontinued operationsDiscontinued operations
    
    
    457
    
    
    
    104,702
    
    
    $
    
    
    
    
    1,450
    
    
    
    95,969
    
    
    $
    0.02Dilutive units for long-term compensation plans
    
    
    
    
    
    
    279
    
    
    
    
    
    
    
    
    
    
    
    164Diluted income from discontinued operationsDiscontinued operations
    
    
    457
    
    
    
    104,981
    
    
    $
    
    
    
    
    1,450
    
    
    
    96,133
    
    
    $
    0.02Basic income per common unitIncome available to common unitholders
    
    
    28,953
    
    
    
    104,702
    
    
    $
    0.28
    
    
    
    31,313
    
    
    
    95,969
    
    
    $
    0.33Diluted units for long-term compensation plans
    
    
    
    
    
    
    279
    
    
    
    
    
    
    
    
    
    
    
    164Diluted income per common unitIncome available to common unitholders and
assumed conversions
    
    $
    28,953
    
    
    
    104,981
    
    
    $
    0.28
    
    
    $
    31,313
    
    
    
    96,133
    
    
    $
    0.33
 Foreign Currency Translation
  SFAS No. 160
 Accounting for Noncontrolling Interests Classification and Measurement of Redeemable
Securities.
  20




---



##### 



As Reported
    
    
    Adjustment
    
    
    As AdjustedNoncontrolling interest  preferred units
    
    $
    
    
    
    $
    287,959
    
    
    $
    287,959Noncontrolling interest  common units
    
    
    
    
    
    
    117,546
    
    
    
    117,546Owners EquityGeneral partners equity  common units
    
    $
    1,956,735
    
    
    $
    (36,864
    )
    
    $
    1,919,871Limited partners equity  preferred units
    
    
    287,959
    
    
    
    (287,959
    )
    
    
    Limited partners equity  common units
    
    
    80,682
    
    
    
    (80,682
    )
    
    
    Total Owners equity
    
    $
    2,325,376
    
    
    $
    (405,505
    )
    
    $
    1,919,871
 Note 2: Segment Information
  Reportable Segments
    
    MarketsNortheast
    
    Southeastern PA; Lehigh/Central PA; New JerseyMidwest
    
    Minnesota; Milwaukee; ChicagoMid-Atlantic
    
    Maryland; Carolinas; Richmond; Virginia BeachSouth
    
    Jacksonville; Orlando; Boca Raton; Tampa; Texas; ArizonaPhiladelphia
    
    Philadelphia; Northern Virginia/Washington, D.C.United Kingdom
    
    County of Kent; West Midlands
   21




---



##### 



FOR THE THREE MONTHS ENDED MARCH 31, 2009
 NortheastLehigh/Southeastern
    
    
    Central
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Phila-
    
    
    UnitedPA
    
    
    PA
    
    
    New Jersey
    
    
    Midwest
    
    
    Mid-atlantic
    
    
    South
    
    
    delphia
    
    
    kingdom
    
    
    TotalOperating revenue
    
    $
    47,366
    
    
    $
    25,162
    
    
    $
    9,369
    
    
    $
    20,990
    
    
    $
    34,823
    
    
    $
    45,674
    
    
    $
    4,735
    
    
    $
    1,101
    
    
    $
    189,220Rental property
expenses and real
estate taxes
    
    
    15,826
    
    
    
    7,620
    
    
    
    3,692
    
    
    
    7,879
    
    
    
    10,985
    
    
    
    14,406
    
    
    
    1,180
    
    
    
    230
    
    
    
    61,818Property level
operating income
    
    $
    31,540
    
    
    $
    17,542
    
    
    $
    5,677
    
    
    $
    13,111
    
    
    $
    23,838
    
    
    $
    31,268
    
    
    $
    3,555
    
    
    $
    871
    
    
    
    127,402
 Interest and other income
    
    
    3,106Debt extinguishment gain
    
    
    529Interest expense
    
    
    (38,429
    )General and administrative
    
    
    (15,576
    )Depreciation and amortization
    
    
    (43,553
    )Income before property dispositions, income taxes and equity in earnings of unconsolidated joint ventures
    
    
    33,479Loss on property dispositions
    
    
    (294
    )Income taxes
    
    
    (217
    )Equity in earnings of unconsolidated joint ventures
    
    
    417Discontinued operations
    
    
    457Net income
    
    $
    33,842
 FOR THE THREE MONTHS ENDED MARCH 31, 2008
 NortheastLehigh/Southeastern
    
    
    Central
    
    
    New
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Phila-
    
    
    UnitedPA
    
    
    PA
    
    
    Jersey
    
    
    Midwest
    
    
    Mid-atlantic
    
    
    South
    
    
    delphia
    
    
    kingdom
    
    
    TotalOperating revenue
    
    $
    44,127
    
    
    $
    24,209
    
    
    $
    9,085
    
    
    $
    20,188
    
    
    $
    35,258
    
    
    $
    40,171
    
    
    $
    15,388
    
    
    $
    1,044
    
    
    $
    189,470Rental property
expenses and real
estate taxes
    
    
    14,348
    
    
    
    6,535
    
    
    
    3,197
    
    
    
    7,610
    
    
    
    10,133
    
    
    
    13,152
    
    
    
    4,023
    
    
    
    361
    
    
    
    59,359Property level
operating income
    
    $
    29,779
    
    
    $
    17,674
    
    
    $
    5,888
    
    
    $
    12,578
    
    
    $
    25,125
    
    
    $
    27,019
    
    
    $
    11,365
    
    
    $
    683
    
    
    
    130,111
 Interest and other income
    
    
    3,091Interest expense
    
    
    (41,690
    )General and administrative
    
    
    (14,037
    )Depreciation and amortization
    
    
    (43,063
    )Income before property dispositions, income taxes and equity in earnings of unconsolidated joint ventures
    
    
    34,412Gain on property dispositions
    
    
    641Income taxes
    
    
    (484
    )Equity in earnings of unconsolidated joint ventures
    
    
    377Discontinued operations
    
    
    1,450Net income
    
    $
    36,396
 Note 3: SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
  22




---



##### 



Three Months EndedMarch 31, 2009
    
    
    March 31, 2008Revenues
    
    $
    1,109
    
    
    $
    4,082Operating expenses
    
    
    (457
    )
    
    
    (1,516
    )Interest expense
    
    
    (254
    )
    
    
    (772
    )Depreciation and amortization
    
    
    (140
    )
    
    
    (954
    )Income before property dispositions
    
    $
    258
    
    
    $
    840
  Allocation of Interest to Discontinued Operations
 Asset Impairment
  Note 4: Joint Ventures
 
 Liberty/Commerz 1701 JFK Boulevard, LP
 Accounting for the Sales of Real Estate
    23




---



##### 



Note 5: Indebtedness
 Mortgage Loans
   Unsecured Notes
   Note 6: Noncontrolling interests
   Noncontrolling
    
    
    Limited
    
    
    Limitedinterest 
    
    
    partners equity
    
    
    partners equityconsolidated
    
    
     preferred
    
    
     commonjoint ventures
    
    
    units
    
    
    unitsBalance at December 31, 2008 as presented
    
    $
    1,130
    
    
    $
    287,959
    
    
    $
    117,546Net income
    
    
    (364
    )
    
    
    5,253
    
    
    
    1,064Distributions
    
    
    
    
    
    
    (5,253
    )
    
    
    (2,055
    )Balance at March 31, 2009
    
    $
    766
    
    
    $
    287,959
    
    
    $
    116,555
 Common units
  24




---



##### 



Preferred units
  Date of
    
    
    
    
    
    
    
    
    
    
    
    
    
    Liquidation
    
    Dividend
    
    RedeemableIssue
    
    Issue
    
    Amount
    
    Units
    
    Preference
    
    Rate
    
    As of
    
    Exchangeable after(in 000s)7/28/99
    
    
    Series B
    
    $
    95,000
    
    
    
    3,800
    
    
    $
    25
    
    
    
    7.45
    %
    
    
    8/31/09
    
    
    8/31/13 into Series B Cumulative Redeemable Preferred Shares of the Trust6/16/05
    
    
    Series E
    
    $
    20,000
    
    
    
    400
    
    
    $
    50
    
    
    
    7.00
    %
    
    
    6/16/10
    
    
    6/16/15 into Series E Cumulative Redeemable Preferred Shares of the Trust6/30/05
    
    
    Series F
    
    $
    44,000
    
    
    
    880
    
    
    $
    50
    
    
    
    6.65
    %
    
    
    6/30/10
    
    
    12/12/15 into Series F Cumulative Redeemable Preferred Shares of the Trust8/23/05
    
    
    Series F
    
    $
    6,000
    
    
    
    120
    
    
    $
    50
    
    
    
    6.65
    %
    
    
    6/30/10
    
    
    12/12/15 into Series F Cumulative Redeemable Preferred Shares of the Trust12/15/06
    
    
    Series G
    
    $
    27,000
    
    
    
    540
    
    
    $
    50
    
    
    
    6.70
    %
    
    
    12/12/11
    
    
    12/12/16 into Series G Cumulative Redeemable Preferred Shares of the Trust8/21/07
    
    
    Series H
    
    $
    100,000
    
    
    
    4,000
    
    
    $
    25
    
    
    
    7.40
    %
    
    
    8/21/12
    
    
    8/21/17 into Series H Cumulative Redeemable Preferred Shares of the Trust
  Note 7: Recently Issued Accounting Standards
 SFAS No. 141(R)
 Applying the Acquisition Method
 FSP EITF 03-6-1
  Note 8: Supplemental Disclosure to Statements of Cash Flows
  2009
    
    2008Non-cash activityWrite-off of fully depreciated property and deferred costs
    
    $
    881
    
    
    $
    1,264Increase in investment in unconsolidated joint ventures
    
    
    
    
    
    
    (35,172
    )Disposition of properties/development in progress
    
    
    
    
    
    
    173,624Disposition of deferred leasing/financing costs
    
    
    
    
    
    
    12,526Reduction of accounts receivable
    
    
    
    
    
    
    7,854Reduction of deferred rent receivable
    
    
    
    
    
    
    6,580Reduction of prepaid and other assets
    
    
    
    
    
    
    38,486Reduction of credit facility
    
    
    
    
    
    
    (152,960
    )Reduction of other liabilities
    
    
    
    
    
    
    (50,938
    )
 25




---



##### 



Note 9: Subsequent Events
    26




---



##### 



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 OVERVIEW
       GUIDANCE
  27




---



##### 



Category
    
    2009 Original Guidance
    
    2009 Revised GuidanceWholly Owned Acquisitions
    
    $
    
    $Wholly Owned Dispositions
    
    $125 - $200 million
    
    $125 - $200 millionWholly Owned Development Deliveries
    
    $250 - $350 million
    
    $250 - $350 millionJoint Venture Acquisitions
    
    $50 - $100 million
    
    $50 - $100 millionJoint Venture Dispositions
    
    $
    
    $Joint Venture Development Deliveries
    
    $100 - $175 million
    
    < $50 millionAverage occupancy
    
    (1%)  1%
    
    (2%)  0%Change in straight line rental rates
    
    4%  6%
    
    (5%)  0%
 WHOLLY OWNED CAPITAL ACTIVITY
 Acquisitions
  Dispositions
  Development
   JOINT VENTURE CAPITAL ACTIVITY
  Acquisitions
  Dispositions
  Development
  28




---



##### 



PROPERTIES IN OPERATION
  Net RentPer Square Foot
    
    
    Total Square Feet
    
    
    Percent OccupiedMarch 31
    
    
    March 31
    
    
    March 312009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Wholly Owned Properties in Operation:Industrial-Distribution
    
    $
    4.52
    
    
    $
    4.45
    
    
    
    30,706
    
    
    
    28,265
    
    
    
    87.9
    %
    
    
    93.4
    %Industrial-Flex
    
    $
    9.27
    
    
    $
    9.24
    
    
    
    11,520
    
    
    
    11,584
    
    
    
    88.7
    %
    
    
    88.8
    %Office
    
    $
    14.18
    
    
    $
    14.05
    
    
    
    21,367
    
    
    
    21,497
    
    
    
    93.0
    %
    
    
    91.3
    %$
    8.74
    
    
    $
    8.67
    
    
    
    63,593
    
    
    
    61,346
    
    
    
    89.7
    %
    
    
    91.8
    %
 Net RentPer Square Foot
    
    
    Total Square Feet
    
    
    Percent OccupiedMarch 31
    
    
    March 31
    
    
    March 312009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Joint Venture Properties in Operation:Industrial-Distribution
    
    $
    4.23
    
    
    $
    4.07
    
    
    
    8,316
    
    
    
    8,020
    
    
    
    93.0
    %
    
    
    94.2
    %Industrial-Flex
    
    $
    24.70
    
    
    $
    34.02
    
    
    
    171
    
    
    
    171
    
    
    
    86.5
    %
    
    
    89.5
    %Office
    
    $
    23.86
    
    
    $
    24.99
    
    
    
    4,582
    
    
    
    4,240
    
    
    
    89.9
    %
    
    
    93.8
    %$
    11.22
    
    
    $
    11.58
    
    
    
    13,069
    
    
    
    12,431
    
    
    
    91.8
    %
    
    
    94.0
    %
 Net RentPer Square Foot
    
    
    Total Square Feet
    
    
    Percent OccupiedMarch 31
    
    
    March 31
    
    
    March 312009
    
    
    2008
    
    
    2009
    
    
    2008
    
    
    2009
    
    
    2008Properties in Operation:Industrial-Distribution
    
    $
    4.46
    
    
    $
    4.36
    
    
    
    39,022
    
    
    
    36,285
    
    
    
    88.9
    %
    
    
    93.6
    %Industrial-Flex
    
    $
    9.49
    
    
    $
    9.60
    
    
    
    11,691
    
    
    
    11,755
    
    
    
    88.7
    %
    
    
    88.8
    %Office
    
    $
    15.84
    
    
    $
    15.89
    
    
    
    25,949
    
    
    
    25,737
    
    
    
    92.5
    %
    
    
    91.7
    %$
    9.17
    
    
    $
    9.17
    
    
    
    76,662
    
    
    
    73,777
    
    
    
    90.1
    %
    
    
    92.2
    %
  Forward-Looking Statements
  Critical Accounting Policies and Estimates
  29




---



##### 



Results of Operations
   Comparison of Three Months Ended March 31, 2009 to Three Months Ended March 31, 2008
 Overview
   30




---



##### 



Segments
  Property Level Operating Income:
 Three Months EndedMarch 31,
    
    
    Percentage2009
    
    
    2008
    
    
    Increase (Decrease)Northeast- Southeastern PA
    
    $
    31,540
    
    
    $
    29,779
    
    
    
    5.9
    % (1)- Lehigh/Central PA
    
    
    17,542
    
    
    
    17,674
    
    
    
    (0.7
    %)- New Jersey
    
    
    5,677
    
    
    
    5,888
    
    
    
    (3.6
    %)Midwest
    
    
    13,111
    
    
    
    12,578
    
    
    
    4.2
    % (2)Mid-Atlantic
    
    
    23,838
    
    
    
    25,125
    
    
    
    (5.1
    %)(3)South
    
    
    31,268
    
    
    
    27,019
    
    
    
    15.7
    % (1)Philadelphia
    
    
    3,555
    
    
    
    11,365
    
    
    
    (68.7
    %)(4)United Kingdom
    
    
    871
    
    
    
    683
    
    
    
    27.5
    % (5)Total property level operating income
    
    $
    127,402
    
    
    $
    130,111
    
    
    
    (2.1
    %)
 
 (1)
    
    The increase for the three months ended March 31, 2009 versus the
three months ended March 31, 2008 was due to an increase in average gross
investment in operating real estate, an increase in occupancy, and an increase
in rental rates.(2)
    
    The increase for the three months ended March 31, 2009 versus the
three months ended March 31, 2008 was primarily due to an increase in average
gross investment in operating real estate and an increase in rental rates.
This increase was partially offset by a decrease in occupancy in 2009.(3)
    
    The decrease for the three months ended March 31, 2009 versus the
three months ended March 31, 2008 was primarily due to a decrease in occupancy.
This decrease was partially offset by an increase in average gross investment
in operating real estate and an increase in rental rates in 2009.(4)
    
    The decrease for the three months ended March 31, 2009 versus the
three months ended March 31, 2008 was due to the effect of Comcast Center
operation during the relevant periods. Comcast Center was a wholly owned 1.25
million square foot property until March 30, 2008 when it was sold into an
unconsolidated joint venture.(5)
    
    The increase for the three months ended March 31, 2009 versus the
three months ended March 31, 2008 was due to an increase in occupancy and a
decrease in operating expenses. Same Store
    31




---



##### 



Three Months EndedMarch 31, 2009
    
    
    March 31, 2008Same Store:Rental revenue
    
    $
    126,226
    
    
    $
    123,944Operating expenses:Rental property expense
    
    
    39,222
    
    
    
    37,444Real estate taxes
    
    
    21,065
    
    
    
    19,376Operating expense recovery
    
    
    (57,342
    )
    
    
    (53,824
    )Unrecovered operating expenses
    
    
    2,945
    
    
    
    2,996Property level operating income
    
    
    123,281
    
    
    
    120,948Less straight line rent
    
    
    3,399
    
    
    
    3,198Cash basis property level operating income
    
    $
    119,882
    
    
    $
    117,750Reconciliation of non-GAAP financial measure  Same Store:Cash basis property level operating income
    
    $
    119,882
    
    
    $
    117,750Straight line rent
    
    
    3,399
    
    
    
    3,198Property level operating income
    
    
    123,281
    
    
    
    120,948Property level operating income  properties purchased or developed subsequent to
January 1, 2008
    
    
    4,291
    
    
    
    8,172Less: Property level operating income  properties held for sale at March 31, 2009
    
    
    (470
    )
    
    
    (290
    )Termination fees
    
    
    300
    
    
    
    1,281General and administrative expense
    
    
    (15,576
    )
    
    
    (14,037
    )Depreciation and amortization expense
    
    
    (43,553
    )
    
    
    (43,063
    )Other income (expense)
    
    
    (34,794
    )
    
    
    (38,599
    )(Loss) gain on property dispositions
    
    
    (294
    )
    
    
    641Income taxes
    
    
    (217
    )
    
    
    (484
    )Equity in earnings of unconsolidated joint ventures
    
    
    417
    
    
    
    377Discontinued operations
    
    
    457
    
    
    
    1,450Net income
    
    $
    33,842
    
    
    $
    36,396
 General and Administrative
  Depreciation and Amortization
  Interest Expense
   Other
  32




---



##### 



Liquidity and Capital Resources
 Overview
  Activity
      33




---



##### 



MORTGAGES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    WEIGHTEDPRINCIPAL
    
    
    PRINCIPAL
    
    
    UNSECURED
    
    
    CREDIT
    
    
    
    
    
    
    AVERAGEAMORTIZATION
    
    
    MATURITIES
    
    
    NOTES
    
    
    FACILITY
    
    
    TOTAL
    
    
    INTEREST RATE2009 (9 months)
    
    $
    4,920
    
    
    $
    4,069
    
    
    $
    238,562
    
    
    $
    
    
    
    $
    247,551
    
    
    
    7.68
    %2010
    
    
    6,530
    
    
    
    4,736
    
    
    
    169,739
    
    
    
    
    
    
    
    181,005
    
    
    
    8.34
    %2011
    
    
    6,758
    
    
    
    12,179
    
    
    
    250,000
    
    
    
    
    
    
    
    268,937
    
    
    
    7.20
    %2012
    
    
    4,711
    
    
    
    180,612
    
    
    
    235,000
    
    
    
    
    
    
    
    420,323
    
    
    
    6.64
    %2013
    
    
    3,858
    
    
    
    4,510
    
    
    
    
    
    
    
    
    
    
    
    8,368
    
    
    
    6.92
    %2014
    
    
    4,352
    
    
    
    2,684
    
    
    
    200,000
    
    
    
    
    
    
    
    207,036
    
    
    
    5.66
    %2015
    
    
    3,932
    
    
    
    44,469
    
    
    
    300,000
    
    
    
    
    
    
    
    348,401
    
    
    
    5.28
    %2016
    
    
    2,461
    
    
    
    182,318
    
    
    
    300,000
    
    
    
    
    
    
    
    484,779
    
    
    
    4.65
    %2017
    
    
    1,770
    
    
    
    
    
    
    
    300,000
    
    
    
    
    
    
    
    301,770
    
    
    
    6.62
    %2018 & thereafter
    
    
    
    
    
    
    
    
    
    
    100,000
    
    
    
    
    
    
    
    100,000
    
    
    
    7.50
    %$
    39,292
    
    
    $
    435,577
    
    
    $
    2,093,301
    
    
    $
    
    
    
    $
    2,568,170
    
    
    
    6.58
    %
  General
  34




---



##### 



Industrial-
    
    
    Industrial-Distribution
    
    
    Flex
    
    
    Office
    
    
    TotalSquare
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    AnnualFeet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    RentWholly Owned Properties
in Operation:2009 (9 months)
    
    
    1,974
    
    
    $
    8,673
    
    
    
    982
    
    
    $
    8,503
    
    
    
    1,630
    
    
    $
    22,052
    
    
    
    4,586
    
    
    $
    39,2282010
    
    
    3,543
    
    
    
    16,737
    
    
    
    1,753
    
    
    
    16,445
    
    
    
    2,907
    
    
    
    41,166
    
    
    
    8,203
    
    
    
    74,3482011
    
    
    3,116
    
    
    
    14,105
    
    
    
    1,359
    
    
    
    13,757
    
    
    
    2,343
    
    
    
    36,114
    
    
    
    6,818
    
    
    
    63,9762012
    
    
    4,683
    
    
    
    23,256
    
    
    
    1,550
    
    
    
    15,281
    
    
    
    2,203
    
    
    
    37,896
    
    
    
    8,436
    
    
    
    76,4332013
    
    
    2,026
    
    
    
    10,175
    
    
    
    1,430
    
    
    
    14,705
    
    
    
    2,571
    
    
    
    43,180
    
    
    
    6,027
    
    
    
    68,0602014
    
    
    2,137
    
    
    
    11,412
    
    
    
    734
    
    
    
    8,201
    
    
    
    2,420
    
    
    
    37,622
    
    
    
    5,291
    
    
    
    57,235Thereafter
    
    
    9,498
    
    
    
    53,271
    
    
    
    2,409
    
    
    
    28,652
    
    
    
    5,801
    
    
    
    105,432
    
    
    
    17,708
    
    
    
    187,355TOTAL
    
    
    26,977
    
    
    $
    137,629
    
    
    
    10,217
    
    
    $
    105,544
    
    
    
    19,875
    
    
    $
    323,462
    
    
    
    57,069
    
    
    $
    566,635
 Industrial-
    
    
    Industrial-Distribution
    
    
    Flex
    
    
    Office
    
    
    TotalSquare
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    AnnualFeet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    RentJoint Venture Properties
in Operation:2009 (9 months)
    
    
    897
    
    
    $
    3,479
    
    
    
    11
    
    
    $
    231
    
    
    
    303
    
    
    $
    6,302
    
    
    
    1,211
    
    
    $
    10,0122010
    
    
    1,392
    
    
    
    5,560
    
    
    
    24
    
    
    
    662
    
    
    
    410
    
    
    
    8,711
    
    
    
    1,826
    
    
    
    14,9332011
    
    
    938
    
    
    
    3,950
    
    
    
    11
    
    
    
    270
    
    
    
    310
    
    
    
    7,055
    
    
    
    1,259
    
    
    
    11,2752012
    
    
    329
    
    
    
    1,598
    
    
    
    63
    
    
    
    1,533
    
    
    
    179
    
    
    
    4,223
    
    
    
    571
    
    
    
    7,3542013
    
    
    535
    
    
    
    2,316
    
    
    
    
    
    
    
    
    
    
    
    242
    
    
    
    5,634
    
    
    
    777
    
    
    
    7,9502014
    
    
    1,078
    
    
    
    4,981
    
    
    
    2
    
    
    
    63
    
    
    
    335
    
    
    
    9,333
    
    
    
    1,415
    
    
    
    14,377Thereafter
    
    
    2,562
    
    
    
    13,695
    
    
    
    37
    
    
    
    915
    
    
    
    2,339
    
    
    
    76,369
    
    
    
    4,938
    
    
    
    90,979TOTAL
    
    
    7,731
    
    
    $
    35,579
    
    
    
    148
    
    
    $
    3,674
    
    
    
    4,118
    
    
    $
    117,627
    
    
    
    11,997
    
    
    $
    156,880
 Industrial-
    
    
    Industrial-Distribution
    
    
    Flex
    
    
    Office
    
    
    TotalSquare
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    AnnualFeet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    RentProperties
in Operation:2009 (9 months)
    
    
    2,871
    
    
    $
    12,152
    
    
    
    993
    
    
    $
    8,734
    
    
    
    1,933
    
    
    $
    28,354
    
    
    
    5,797
    
    
    $
    49,2402010
    
    
    4,935
    
    
    
    22,297
    
    
    
    1,777
    
    
    
    17,107
    
    
    
    3,317
    
    
    
    49,877
    
    
    
    10,029
    
    
    
    89,2812011
    
    
    4,054
    
    
    
    18,055
    
    
    
    1,370
    
    
    
    14,027
    
    
    
    2,653
    
    
    
    43,169
    
    
    
    8,077
    
    
    
    75,2512012
    
    
    5,012
    
    
    
    24,854
    
    
    
    1,613
    
    
    
    16,814
    
    
    
    2,382
    
    
    
    42,119
    
    
    
    9,007
    
    
    
    83,7872013
    
    
    2,561
    
    
    
    12,491
    
    
    
    1,430
    
    
    
    14,705
    
    
    
    2,813
    
    
    
    48,814
    
    
    
    6,804
    
    
    
    76,0102014
    
    
    3,215
    
    
    
    16,393
    
    
    
    736
    
    
    
    8,264
    
    
    
    2,755
    
    
    
    46,955
    
    
    
    6,706
    
    
    
    71,612Thereafter
    
    
    12,060
    
    
    
    66,966
    
    
    
    2,446
    
    
    
    29,567
    
    
    
    8,140
    
    
    
    181,801
    
    
    
    22,646
    
    
    
    278,334TOTAL
    
    
    34,708
    
    
    $
    173,208
    
    
    
    10,365
    
    
    $
    109,218
    
    
    
    23,993
    
    
    $
    441,089
    
    
    
    69,066
    
    
    $
    723,515
 35




---



##### 



Square FeetScheduled
    
    Industrial-
    
    
    Industrial-
    
    
    
    
    
    
    
    
    
    
    Percent
    
    
    TotalIn-Service Date
    
    Distribution
    
    
    Flex
    
    
    Office
    
    
    Total
    
    
    Leased
    
    
    InvestmentWholly Owned Properties under Development
    
    2nd Quarter 2009
    
    
    920,400
    
    
    
    126,000
    
    
    
    78,120
    
    
    
    1,124,520
    
    
    
    54.5
    %
    
    $
    74,2533rd Quarter 2009
    
    
    100,000
    
    
    
    68,700
    
    
    
    333,006
    
    
    
    501,706
    
    
    
    13.6
    %
    
    
    88,7234th Quarter 2009
    
    
    961,100
    
    
    
    
    
    
    
    176,494
    
    
    
    1,137,594
    
    
    
    95.2
    %
    
    
    126,2122nd Quarter 2010
    
    
    
    
    
    
    
    
    
    
    95,261
    
    
    
    95,261
    
    
    
    72.3
    %
    
    
    24,4264th Quarter 2010
    
    
    
    
    
    
    
    
    
    
    211,236
    
    
    
    211,236
    
    
    
    50.8
    %
    
    
    46,245TOTAL
    
    
    1,981,500
    
    
    
    194,700
    
    
    
    894,117
    
    
    
    3,070,317
    
    
    
    63.2
    %
    
    $
    359,859Joint Venture Properties under Development
    
    4th Quarter 2009
    
    
    725,000
    
    
    
    
    
    
    
    
    
    
    
    725,000
    
    
    
    69.0
    %
    
    $
    35,8252nd Quarter 2010
    
    
    463,636
    
    
    
    
    
    
    
    176,394
    
    
    
    640,030
    
    
    
    3.2
    %
    
    
    155,220TOTAL
    
    
    1,188,636
    
    
    
    
    
    
    
    176,394
    
    
    
    1,365,030
    
    
    
    38.1
    %
    
    $
    191,045Total Properties under Development
    
    TOTAL
    
    
    3,170,136
    
    
    
    194,700
    
    
    
    1,070,511
    
    
    
    4,435,347
    
    
    
    55.5
    %
    
    $
    550,904
  Calculation of Funds from Operations
  36




---



##### 



Three Months EndedMarch 31, 2009
    
    
    March 31, 2008Reconciliation of net income to FFO  basicNet Income available to common shareholders
    
    $
    27,889
    
    
    $
    29,961Basic  Income available to common shareholders
    
    
    27,889
    
    
    
    29,961Basic  income available to common shareholders per
weighted average share
    
    $
    0.28
    
    
    $
    0.33Adjustments:Depreciation and amortization of unconsolidated joint
ventures
    
    
    3,990
    
    
    
    3,548Depreciation and amortization
    
    
    43,022
    
    
    
    43,378Gain on property dispositions
    
    
    (308
    )
    
    
    (968
    )Noncontrolling interest share in addback for depreciation
and amortization and gain on property dispositions
    
    
    (1,737
    )
    
    
    (1,995
    )Funds from operations available to common
shareholders  basic
    
    $
    72,856
    
    
    $
    73,924Basic Funds from operations available to common
shareholders per weighted average share
    
    $
    0.72
    
    
    $
    0.81Reconciliation of net income to FFO  diluted:Net Income available to common shareholders
    
    $
    27,889
    
    
    $
    29,961Diluted  income available to common shareholders
    
    
    27,889
    
    
    
    29,961Diluted  income available to common shareholders per
weighted average share
    
    $
    0.28
    
    
    $
    0.33Adjustments:Depreciation and amortization of unconsolidated joint
ventures
    
    
    3,990
    
    
    
    3,548Depreciation and amortization
    
    
    43,022
    
    
    
    43,378Gain on property dispositions
    
    
    (308
    )
    
    
    (968
    )Noncontrolling interest less preferred share distributions
    
    
    1,064
    
    
    
    1,352Funds from operations available to common shareholders -
diluted
    
    $
    75,657
    
    
    $
    77,271Diluted Funds from operations available to common
shareholders per weighted average share
    
    $
    0.72
    
    
    $
    0.80Reconciliation of weighted average shares:Weighted average common shares  all basic calculations
    
    
    100,681
    
    
    
    91,779Dilutive shares for long term compensation plans
    
    
    279
    
    
    
    164Diluted shares for net income calculations
    
    
    100,960
    
    
    
    91,943Weighted average common units
    
    
    4,021
    
    
    
    4,190Diluted shares for Funds from operations calculations
    
    
    104,981
    
    
    
    96,133
 37




---



##### 



Inflation
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
  
 Item 4. Controls and Procedures
 Evaluation of Disclosure Controls and Procedures
  Changes in Internal Controls
  38




---



##### 



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
     
 Item 1A. Risk Factors
  39




---



##### 



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
  40




---



##### 



Item 6. Exhibits
 12.1*
    
    Statement Re: Computation of Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges.31.1*
    
    Certification of the Chief Executive Officer of Liberty Property
Trust required by Rule 13a-14(a) under the Securities Exchange Act
of 1934.31.2*
    
    Certification of the Chief Financial Officer of Liberty Property
Trust required by Rule 13a-14(a) under the Securities Exchange Act
of 1934.31.3*
    
    Certification of the Chief Executive Officer of Liberty Property
Trust, in its capacity as the general partner of Liberty Property
Limited Partnership, required by Rule 13a-14(a) under the Securities
Exchange Act of 1934.31.4*
    
    Certification of the Chief Financial Officer of Liberty Property
Trust, in its capacity as the general partner of Liberty Property
Limited Partnership, required by Rule 13a-14(a) under the Securities
Exchange Act of 1934.32.1*
    
    Certification of the Chief Executive Officer of Liberty Property
Trust required under Rule 13a-14(b) of the Securities Exchange Act
of 1934, as amended. (This exhibit shall not be deemed filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liability of that section.
Further, this exhibit shall not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended.)32.2*
    
    Certification of the Chief Financial Officer of Liberty Property
Trust required by Rule 13a-14(b) under the Securities Exchange Act
of 1934, as amended. (This exhibit shall not be deemed filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liability of that section.
Further, this exhibit shall not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended.)32.3*
    
    Certification of the Chief Executive Officer of Liberty Property
Trust, in its capacity as the general partner of Liberty Property
Limited Partnership, required by Rule 13a-14(b) under the Securities
Exchange Act of 1934, as amended. (This exhibit shall not be deemed
filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be
incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)32.4*
    
    Certification of the Chief Financial Officer of Liberty Property
Trust, in its capacity as the general partner of Liberty Property
Limited Partnership, required by Rule 13a-14(b) under the Securities
Exchange Act of 1934, as amended. (This exhibit shall not be deemed
filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be
incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)
 
 *
    
    Filed herewith. 41




---



##### 



SIGNATURES
  LIBERTY PROPERTY TRUST
 /s/ WILLIAM P. HANKOWSKY

William P. Hankowsky
    
    May 11, 2009DatePresident and Chief Executive Officer/s/ GEORGE J. ALBURGER, JR.
    
    May 11, 2009George J. Alburger, Jr.
    
    DateExecutive Vice President and Chief Financial Officer
 42




---



##### 



SIGNATURES
  LIBERTY PROPERTY LIMITED PARTNERSHIP
 BY:
    
    Liberty Property TrustGeneral Partner
 /s/ WILLIAM P. HANKOWSKY

William P. Hankowsky
    
    May 11, 2009
DatePresident and Chief Executive Officer/s/ GEORGE J. ALBURGER, JR.
    
    May 11, 2009George J. Alburger, Jr.
    
    DateExecutive Vice President and Chief Financial Officer
 43




---



##### 



EXHIBIT INDEX
 EXHIBITNO.
    
    DESCRIPTION12.1
    
    Statement Re: Computation of Ratio of Earnings to Fixed Charges and Ratio of Earnings
to Combined Fixed Charges.31.1
    
    Certification of the Chief Executive Officer of Liberty Property Trust required by
Rule 13a-14(a) under the Securities Exchange Act of 1934.31.2
    
    Certification of the Chief Financial Officer of Liberty Property Trust required by
Rule 13a-14(a) under the Securities Exchange Act of 1934.31.3
    
    Certification of the Chief Executive Officer of Liberty Property Trust, in its
capacity as the general partner of Liberty Property Limited Partnership, required by
Rule 13a-14(a) under the Securities Exchange Act of 1934.31.4
    
    Certification of the Chief Financial Officer of Liberty Property Trust, in its
capacity as the general partner of Liberty Property Limited Partnership, required by
Rule 13a-14(a) under the Securities Exchange Act of 1934.32.1
    
    Certification of the Chief Executive Officer of Liberty Property Trust required under
Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall
not be deemed filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability of that section. Further, this
exhibit shall not be deemed to be incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)32.2
    
    Certification of the Chief Financial Officer of Liberty Property Trust required by
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit
shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liability of that section. Further,
this exhibit shall not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)32.3
    
    Certification of the Chief Executive Officer of Liberty Property Trust, in its
capacity as the general partner of Liberty Property Limited Partnership, required by
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit
shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liability of that section. Further,
this exhibit shall not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)32.4
    
    Certification of the Chief Financial Officer of Liberty Property Trust, in its
capacity as the general partner of Liberty Property Limited Partnership, required by
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit
shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liability of that section. Further,
this exhibit shall not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)
 44