##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended June 30, 2007
 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)PENNSYLVANIA(Liberty Property Limited Partnership)
    
    23-7768996
23-2766549(State or other jurisdiction of incorporation or organization)
    
    (I.R.S. Employer Identification
Number)500 Chesterfield Parkway 
Malvern, Pennsylvania
    
    19355(Address of Principal Executive Offices)
    
    (Zip Code)
  þ o
  þ o o
 o þ




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##### 



Liberty Property Trust/Liberty Property Limited Partnership
Form 10-Q for the period ended June 30, 2007
 Index
    
    
    
    PagePART I.
    
    FINANCIAL INFORMATIONItem 1.
    
    Financial Statements (Unaudited)Condensed consolidated balance sheets of Liberty Property Trust at June 30, 2007 and December 31, 2006
    
    
    3Condensed consolidated statements of operations of Liberty Property Trust for the three months ended June 30, 2007 and June 30, 2006
    
    
    4Condensed consolidated statements of operations of Liberty Property Trust for the six months ended June 30, 2007 and June 30, 2006
    
    
    5Condensed consolidated statements of cash flows of Liberty Property Trust for the six months ended June 30, 2007 and June 30, 2006
    
    
    6Notes to condensed consolidated financial statements of Liberty Property Trust
    
    
    7Condensed consolidated balance sheets of Liberty Property Limited Partnership at June 30, 2007 and December 31, 2006
    
    
    14Condensed consolidated statements of operations of Liberty Property Limited Partnership for the three months ended June 30, 2007 and June 30, 2006
    
    
    15Condensed consolidated statements of operations of Liberty Property Limited Partnership for the six months ended June 30, 2007 and June 30, 2006
    
    
    16Condensed consolidated statements of cash flows of Liberty Property Limited Partnership for the six months ended June 30, 2007 and June 30, 2006
    
    
    17Notes to condensed consolidated financial statements of Liberty Property Limited Partnership
    
    
    18Item 2.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    26Item 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
    
    
    39Item 3.
    
    Defaults Upon Senior Securities
    
    
    39Item 4.
    
    Submission of Matters to a Vote of Security Holders
    
    
    39Item 5.
    
    Other Information
    
    
    40Item 6.
    
    Exhibits
    
    
    41Signatures for Liberty Property Trust
    
    
    42Signatures for Liberty Property Limited Partnership
    
    
    43Exhibit Index
    
    
    
    
    44Statement Re: Computation of Ratio of Earnings to Fixed ChargesCertification of the Chief Executive OfficerCertification of the Chief Financial OfficerCertification of the Chief Executive Officer, in its capacity as the general partnerCertification of the Chief Financial Officer, in its capacity as the general partnerCertification of the Chief Executive Officer required under Rule 13a-14(b)Certification of the Chief Financial Officer required under Rule 13a-14(b)Certification of the Chief Executive Officer, in its capacity as the general partner, required by Rule 13a-14(b)Certification of the Chief Financial Officer, in its capacity as the general partner, required by Rule 13a-14(b)
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements (Unaudited)
 
 CONDENSED CONSOLIDATED BALANCE SHEETS OF LIBERTY PROPERTY TRUST
 (In thousands, except share amounts)
 June 30, 2007
    
    
    December 31, 2006(Unaudited)ASSETSReal estate:Land and land improvements
    
    $
    740,003
    
    
    $
    677,041Building and improvements
    
    
    4,008,403
    
    
    
    3,802,949Less accumulated depreciation
    
    
    (849,996
    )
    
    
    (803,968
    )Operating real estate
    
    
    3,898,410
    
    
    
    3,676,022Development in progress
    
    
    651,283
    
    
    
    538,521Land held for development
    
    
    255,361
    
    
    
    195,332Net real estate
    
    
    4,805,054
    
    
    
    4,409,875Cash and cash equivalents
    
    
    12,741
    
    
    
    53,737Restricted cash
    
    
    34,764
    
    
    
    55,671Accounts receivable
    
    
    24,216
    
    
    
    23,809Deferred rent receivable
    
    
    72,522
    
    
    
    71,894Deferred financing and leasing costs, net of accumulated
amortization
(2007,$111,914; 2006, $100,406)
    
    
    134,681
    
    
    
    129,157Investments in and advances to unconsolidated joint ventures
    
    
    72,570
    
    
    
    54,723Assets held for sale
    
    
    180
    
    
    
    51,266Prepaid expenses and other assets
    
    
    45,513
    
    
    
    60,779Total assets
    
    $
    5,202,241
    
    
    $
    4,910,911LIABILITIESMortgage loans
    
    $
    185,814
    
    
    $
    185,978Unsecured notes
    
    
    1,955,000
    
    
    
    1,955,000Credit facility
    
    
    542,960
    
    
    
    246,960Accounts payable
    
    
    57,346
    
    
    
    40,633Accrued interest
    
    
    36,339
    
    
    
    36,297Dividend and distributions payable
    
    
    59,163
    
    
    
    58,961Other liabilities
    
    
    245,133
    
    
    
    217,751Total liabilities
    
    
    3,081,755
    
    
    
    2,741,580Minority interest
    
    
    273,365
    
    
    
    297,727SHAREHOLDERS EQUITYCommon shares of beneficial interest, $.001 par value,
187,987,000 shares authorized; 92,069,183 (includes 835,377
in treasury) and 90,972,979 (includes 59,100 in treasury)
shares issued and outstanding as of June 30, 2007 and
December 31, 2006, respectively
    
    
    92
    
    
    
    91Additional paid-in capital
    
    
    1,951,554
    
    
    
    1,906,403Accumulated other comprehensive income
    
    
    22,525
    
    
    
    20,323Distributions in excess of net income
    
    
    (75,145
    )
    
    
    (53,886
    )Common shares in treasury, at cost, 835,377 and 59,100
shares as of June 30, 2007 and December 31, 2006,
respectively
    
    
    (51,905
    )
    
    
    (1,327
    )Total shareholders equity
    
    
    1,847,121
    
    
    
    1,871,604Total liabilities and shareholders equity
    
    $
    5,202,241
    
    
    $
    4,910,911
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS OF LIBERTY PROPERTY TRUST
 (Unaudited and in thousands, except per share amounts)
 Three Months EndedJune 30, 2007
    
    
    June 30, 2006OPERATING REVENUERental
    
    $
    121,843
    
    
    $
    113,322Operating expense reimbursement
    
    
    54,495
    
    
    
    46,455Total operating revenue
    
    
    176,338
    
    
    
    159,777OPERATING EXPENSERental property
    
    
    37,886
    
    
    
    32,014Real estate taxes
    
    
    19,490
    
    
    
    17,296General and administrative
    
    
    12,799
    
    
    
    11,558Depreciation and amortization
    
    
    39,266
    
    
    
    35,299Total operating expenses
    
    
    109,441
    
    
    
    96,167Operating income
    
    
    66,897
    
    
    
    63,610OTHER INCOME (EXPENSE)Interest and other income
    
    
    3,298
    
    
    
    2,064Interest expense
    
    
    (30,137
    )
    
    
    (28,045
    )Total other income (expense)
    
    
    (26,839
    )
    
    
    (25,981
    )Income before property dispositions, income taxes,
minority interest and equity in earnings of
unconsolidated joint ventures
    
    
    40,058
    
    
    
    37,629Gain on property dispositions
    
    
    1,299
    
    
    
    17,438Income taxes
    
    
    (213
    )
    
    
    (235
    )Minority interest
    
    
    (6,113
    )
    
    
    (5,738
    )Equity in earnings of unconsolidated joint ventures
    
    
    326
    
    
    
    741Income from continuing operations
    
    
    35,357
    
    
    
    49,835Discontinued operations, net of minority interest
(including net gain on property dispositions of
$17,430 and $16,550 for the three months ended June
30, 2007 and 2006, respectively)
    
    
    17,070
    
    
    
    18,615Net income
    
    $
    52,427
    
    
    $
    68,450Earnings per common shareBasic:Income from continuing operations
    
    $
    0.38
    
    
    $
    0.56Income from discontinued operations
    
    
    0.19
    
    
    
    0.21Income per common share  basic
    
    $
    0.57
    
    
    $
    0.77Diluted:Income from continuing operations
    
    $
    0.38
    
    
    $
    0.55Income from discontinued operations
    
    
    0.19
    
    
    
    0.21Income per common share  diluted
    
    $
    0.57
    
    
    $
    0.76Distributions per common share
    
    $
    0.62
    
    
    $
    0.615Weighted average number of common shares outstandingBasic
    
    
    91,597
    
    
    
    88,934Diluted
    
    
    92,328
    
    
    
    90,324
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS OF LIBERTY PROPERTY TRUST
 (Unaudited and in thousands, except per share amounts)
 Six Months EndedJune 30, 2007
    
    
    June 30, 2006OPERATING REVENUERental
    
    $
    241,306
    
    
    $
    223,069Operating expense reimbursement
    
    
    107,658
    
    
    
    93,194Total operating revenue
    
    
    348,964
    
    
    
    316,263OPERATING EXPENSERental property
    
    
    76,030
    
    
    
    64,951Real estate taxes
    
    
    36,637
    
    
    
    33,722General and administrative
    
    
    26,138
    
    
    
    21,588Depreciation and amortization
    
    
    76,982
    
    
    
    69,102Total operating expenses
    
    
    215,787
    
    
    
    189,363Operating income
    
    
    133,177
    
    
    
    126,900OTHER INCOME (EXPENSE)Interest and other income
    
    
    6,304
    
    
    
    3,815Interest expense
    
    
    (58,315
    )
    
    
    (57,350
    )Total other income (expense)
    
    
    (52,011
    )
    
    
    (53,535
    )Income before property dispositions, income taxes,
minority interest and equity in earnings of
unconsolidated joint ventures
    
    
    81,166
    
    
    
    73,365Gain on property dispositions
    
    
    1,451
    
    
    
    17,483Income taxes
    
    
    (514
    )
    
    
    (610
    )Minority interest
    
    
    (11,657
    )
    
    
    (10,223
    )Equity in earnings of unconsolidated joint ventures
    
    
    1,055
    
    
    
    916Income from continuing operations
    
    
    71,501
    
    
    
    80,931Discontinued operations, net of minority interest
(including net gain on property dispositions of
$20,231 and $76,080 for the six months ended June
30, 2007 and 2006, respectively)
    
    
    20,624
    
    
    
    77,946Net income
    
    $
    92,125
    
    
    $
    158,877Earnings per common shareBasic:Income from continuing operations
    
    $
    0.78
    
    
    $
    0.91Income from discontinued operations
    
    
    0.23
    
    
    
    0.88Income per common share  basic
    
    $
    1.01
    
    
    $
    1.79Diluted:Income from continuing operations
    
    $
    0.78
    
    
    $
    0.89Income from discontinued operations
    
    
    0.22
    
    
    
    0.87Income per common share  diluted
    
    $
    1.00
    
    
    $
    1.76Distributions per common share
    
    $
    1.24
    
    
    $
    1.23Weighted average number of common shares outstandingBasic
    
    
    91,318
    
    
    
    88,587Diluted
    
    
    92,168
    
    
    
    90,101
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW OF LIBERTY PROPERTY TRUST
 (Unaudited and in thousands)
 Six Months EndedJune 30, 2007
    
    
    June 30, 2006OPERATING ACTIVITIESNet income
    
    $
    92,125
    
    
    $
    158,877Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    77,483
    
    
    
    75,928Amortization of deferred financing costs
    
    
    1,989
    
    
    
    2,134Equity in earnings of unconsolidated joint ventures
    
    
    (1,055
    )
    
    
    (916
    )Distributions from unconsolidated joint ventures
    
    
    1,050
    
    
    
    2,937Minority interest in net income
    
    
    12,602
    
    
    
    13,594Gain on property dispositions
    
    
    (21,682
    )
    
    
    (93,563
    )Noncash compensation
    
    
    5,433
    
    
    
    4,085Changes in operating assets and liabilities:Restricted cash
    
    
    21,712
    
    
    
    13,967Accounts receivable
    
    
    (241
    )
    
    
    (13,308
    )Deferred rent receivable
    
    
    (2,113
    )
    
    
    3,031Prepaid expenses and other assets
    
    
    14,037
    
    
    
    (91,558
    )Accounts payable
    
    
    16,772
    
    
    
    4,401Accrued interest
    
    
    42
    
    
    
    420Other liabilities
    
    
    27,194
    
    
    
    (9,581
    )Net cash provided by operating activities
    
    
    245,348
    
    
    
    70,448INVESTING ACTIVITIESInvestment in properties
    
    
    (207,617
    )
    
    
    (79,454
    )Investments
in and advances to unconsolidated joint ventures
    
    
    (17,282
    )
    
    
    (1,939
    )Net proceeds from disposition of properties/land
    
    
    191,595
    
    
    
    352,658Investment in development in progress
    
    
    (265,483
    )
    
    
    (176,263
    )Investment in land held for development
    
    
    (95,590
    )
    
    
    (27,817
    )Investment in deferred leasing costs
    
    
    (21,984
    )
    
    
    (11,311
    )Net cash (used in) provided by investing activities
    
    
    (416,361
    )
    
    
    55,874FINANCING ACTIVITIESNet proceeds from issuance of common shares
    
    
    39,453
    
    
    
    39,841Purchase of treasury shares
    
    
    (50,578
    )
    
    
    Redemption of preferred units
    
    
    (23,650
    )
    
    
    Repayment of mortgage loans
    
    
    (5,798
    )
    
    
    (29,185
    )Proceeds from credit facility
    
    
    552,200
    
    
    
    234,445Repayments on credit facility
    
    
    (256,200
    )
    
    
    (275,415
    )Increase in deferred financing costs
    
    
    (126
    )
    
    
    (1,813
    )Distribution paid on common shares
    
    
    (113,180
    )
    
    
    (108,935
    )Distribution paid on units
    
    
    (13,048
    )
    
    
    (11,369
    )Net cash provided by (used in) financing activities
    
    
    129,073
    
    
    
    (152,431
    )Decrease in cash and cash equivalents
    
    
    (41,940
    )
    
    
    (26,109
    )Increase in cash and cash equivalents related to foreign currency translation
    
    
    944
    
    
    
    2,242Cash and cash equivalents at the beginning of period
    
    
    53,737
    
    
    
    61,629Cash and cash equivalents at end of period
    
    $
    12,741
    
    
    $
    37,762SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONSWrite-off of fully depreciated property and deferred costs
    
    $
    35,626
    
    
    $
    42,691Assumption of mortgage loans
    
    $
    5,634
    
    
    $
    Issuance of operating partnership units
    
    $
    
    
    
    $
    30,000
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Liberty Property Trust
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 June 30, 2007
 Note 1: Organization and Basis of Presentation
 Organization
  Basis of Presentation
  Income per Common Share
  For the Three Months Ended June 30, 2007
    
    
    For the Three Months Ended June 30, 2006Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    AverageIncome
    
    
    Shares
    
    
    
    
    
    
    Income
    
    
    Shares(Numerator)
    
    
    (Denominator)
    
    
    Per Share
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Per ShareBasic income from continuing operationsIncome from continuing operations
    
    $
    35,357
    
    
    
    91,597
    
    
    $
    0.38
    
    
    $
    49,835
    
    
    
    88,934
    
    
    $
    0.56Diluted shares for long-term compensation plans
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    
    
    
    
    1,390Diluted income from continuing operationsIncome from continuing operations and assumed
conversions
    
    
    35,357
    
    
    
    92,328
    
    
    $
    0.38
    
    
    
    49,835
    
    
    
    90,324
    
    
    $
    0.55Basic income from discontinued operationsDiscontinued operations net of minority interest
    
    
    17,070
    
    
    
    91,597
    
    
    $
    0.19
    
    
    
    18,615
    
    
    
    88,934
    
    
    $
    0.21Dilutive shares for long-term compensation plans
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    
    
    
    
    1,390Diluted income from discontinued operationsDiscontinued operations net of minority interest
    
    
    17,070
    
    
    
    92,328
    
    
    $
    0.19
    
    
    
    18,615
    
    
    
    90,324
    
    
    $
    0.21Basic income per common shareNet income
    
    
    52,427
    
    
    
    91,597
    
    
    $
    0.57
    
    
    
    68,450
    
    
    
    88,934
    
    
    $
    0.77Dilutive shares for long-term compensation plans
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    
    
    
    
    1,390Diluted income per common shareNet income and assumed conversions
    
    $
    52,427
    
    
    
    92,328
    
    
    $
    0.57
    
    
    $
    68,450
    
    
    
    90,324
    
    
    $
    0.76
 7




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For the Six Months Ended June 30, 2007
    
    
    For the Six Months Ended June 30, 2006Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    
    
    
    
    AverageIncome
    
    
    Shares
    
    
    
    
    
    
    Income
    
    
    Shares(Numerator)
    
    
    (Denominator)
    
    
    Per Share
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    Per ShareBasic income from continuing operationsIncome from continuing operations
    
    $
    71,501
    
    
    
    91,318
    
    
    $
    0.78
    
    
    $
    80,931
    
    
    
    88,587
    
    
    $
    0.91Diluted shares for long-term compensation plans
    
    
    
    
    
    
    850
    
    
    
    
    
    
    
    
    
    
    
    1,514Diluted income from continuing operationsIncome from continuing operations and assumed
conversions
    
    
    71,501
    
    
    
    92,168
    
    
    $
    0.78
    
    
    
    80,931
    
    
    
    90,101
    
    
    $
    0.89Basic income from discontinued operationsDiscontinued operations net of minority interest
    
    
    20,624
    
    
    
    91,318
    
    
    $
    0.23
    
    
    
    77,946
    
    
    
    88,587
    
    
    $
    0.88Dilutive shares for long-term compensation plans
    
    
    
    
    
    
    850
    
    
    
    
    
    
    
    
    
    
    
    1,514Diluted income from discontinued operationsDiscontinued operations net of minority interest
    
    
    20,624
    
    
    
    92,168
    
    
    $
    0.22
    
    
    
    77,946
    
    
    
    90,101
    
    
    $
    0.87Basic income per common shareNet income
    
    
    92,125
    
    
    
    91,318
    
    
    $
    1.01
    
    
    
    158,877
    
    
    
    88,587
    
    
    $
    1.79Dilutive shares for long-term compensation plans
    
    
    
    
    
    
    850
    
    
    
    
    
    
    
    
    
    
    
    1,514Diluted income per common shareNet income and assumed conversions
    
    $
    92,125
    
    
    
    92,168
    
    
    $
    1.00
    
    
    $
    158,877
    
    
    
    90,101
    
    
    $
    1.76
 Share-Based Compensation
 Share-Based Payment
    Foreign Currency Translation
  8




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Note 2: Segment Information
  Reportable Segments
    
    MarketsDelaware Valley
    
    Southeastern Pennsylvania; New JerseyMidwest
    
    Lehigh Valley, Pennsylvania; Michigan; Minnesota; Milwaukee; ChicagoMid-Atlantic
    
    Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia BeachFlorida
    
    Jacksonville; Orlando; Boca Raton; Tampa; TexasArizona
    
    PhoenixUnited Kingdom
    
    County of Kent
 Disclosures about Segments of an Enterprise and Related Information,
   For the Three Months Ended June 30, 2007
 Delaware Valley
    
    
    MidwestSoutheastern
    
    
    
    
    
    
    Lehigh
    
    
    
    
    
    
    Mid-
    
    
    
    
    
    
    
    
    
    UnitedPennsylvania
    
    
    Other
    
    
    Valley
    
    
    Other
    
    
    Atlantic
    
    
    Florida
    
    
    Arizona
    
    
    Kingdom
    
    
    TotalOperating revenue
    
    $
    43,107
    
    
    $
    13,444
    
    
    $
    23,350
    
    
    $
    26,213
    
    
    $
    32,769
    
    
    $
    35,809
    
    
    $
    1,061
    
    
    $
    585
    
    
    $
    176,338Rental property expenses and
real estate taxes
    
    
    14,382
    
    
    
    4,504
    
    
    
    6,541
    
    
    
    9,637
    
    
    
    10,004
    
    
    
    11,850
    
    
    
    271
    
    
    
    187
    
    
    
    57,376Property level operating
income
    
    $
    28,725
    
    
    $
    8,940
    
    
    $
    16,809
    
    
    $
    16,576
    
    
    $
    22,765
    
    
    $
    23,959
    
    
    $
    790
    
    
    $
    398
    
    
    
    118,962Interest and other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,298Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,137
    )General and administrative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,799
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39,266
    )Income before property
dispositions, income taxes,
minority
interest and equity in
earnings of unconsolidated
joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,058Gain on property dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,299Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (213
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,113
    )Equity in earnings of
unconsolidated joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    326Discontinued operations,
net of minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,070Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    52,427
 9




---



##### Table of Contents



For the Three Months Ended June 30, 2006
 Delaware Valley
    
    
    MidwestSoutheastern
    
    
    
    
    
    
    Lehigh
    
    
    
    
    
    
    Mid-
    
    
    
    
    
    
    
    
    
    
    UnitedPennsylvania
    
    
    Other
    
    
    Valley
    
    
    Other
    
    
    Atlantic
    
    
    Florida
    
    
    Arizona
    
    
    Kingdom
    
    
    TotalOperating revenue
    
    $
    43,517
    
    
    $
    13,187
    
    
    $
    21,104
    
    
    $
    25,643
    
    
    $
    29,385
    
    
    $
    26,124
    
    
    $
    547
    
    
    $
    270
    
    
    $
    159,777Rental property expenses
and real estate taxes
    
    
    13,138
    
    
    
    3,687
    
    
    
    5,634
    
    
    
    9,509
    
    
    
    8,414
    
    
    
    8,800
    
    
    
    39
    
    
    
    89
    
    
    
    49,310Property level operating
income
    
    $
    30,379
    
    
    $
    9,500
    
    
    $
    15,470
    
    
    $
    16,134
    
    
    $
    20,971
    
    
    $
    17,324
    
    
    $
    508
    
    
    $
    181
    
    
    
    110,467Interest and other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,064Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,045
    )General and administrative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,558
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,299
    )Income before property
dispositions, income taxes,
minority interest and
equity in earnings of
unconsolidated joint
ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,629Gain on property
dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,438Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (235
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (5,738
    )Equity in earnings of
unconsolidated joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    741Discontinued operations,
net of minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    18,615Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    68,450
 For the Six Months Ended June 30, 2007
 Delaware Valley
    
    
    MidwestSoutheastern
    
    
    
    
    
    
    Lehigh
    
    
    
    
    
    
    Mid-
    
    
    
    
    
    
    
    
    
    
    UnitedPennsylvania
    
    
    Other
    
    
    Valley
    
    
    Other
    
    
    Atlantic
    
    
    Florida
    
    
    Arizona
    
    
    Kingdom
    
    
    TotalOperating revenue
    
    $
    86,885
    
    
    $
    27,358
    
    
    $
    44,427
    
    
    $
    51,810
    
    
    $
    65,077
    
    
    $
    70,344
    
    
    $
    2,076
    
    
    $
    987
    
    
    $
    348,964Rental property expenses
and real estate taxes
    
    
    29,386
    
    
    
    8,846
    
    
    
    11,425
    
    
    
    19,651
    
    
    
    20,157
    
    
    
    22,428
    
    
    
    448
    
    
    
    326
    
    
    
    112,667Property level operating
income
    
    $
    57,499
    
    
    $
    18,512
    
    
    $
    33,002
    
    
    $
    32,159
    
    
    $
    44,920
    
    
    $
    47,916
    
    
    $
    1,628
    
    
    $
    661
    
    
    
    236,297Interest and other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,304Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (58,315
    )General and administrative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,138
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76,982
    )Income before property
dispositions, income taxes,
minority interest and
equity in earnings of
unconsolidated joint
ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,166Gain on property
dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,451Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (514
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,657
    )Equity in earnings of
unconsolidated joint
ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,055Discontinued operations,
net of minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    20,624Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    92,125
 10




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##### Table of Contents



For the Six Months Ended June 30, 2006
 Delaware Valley
    
    
    MidwestSoutheastern
    
    
    
    
    
    
    Lehigh
    
    
    
    
    
    
    Mid-
    
    
    
    
    
    
    
    
    
    
    UnitedPennsylvania
    
    
    Other
    
    
    Valley
    
    
    Other
    
    
    Atlantic
    
    
    Florida
    
    
    Arizona
    
    
    Kingdom
    
    
    TotalOperating revenue
    
    $
    85,163
    
    
    $
    26,083
    
    
    $
    42,906
    
    
    $
    52,642
    
    
    $
    57,236
    
    
    $
    51,194
    
    
    $
    547
    
    
    $
    492
    
    
    $
    316,263Rental property expenses
and real estate taxes
    
    
    26,637
    
    
    
    7,543
    
    
    
    10,860
    
    
    
    19,578
    
    
    
    17,044
    
    
    
    16,843
    
    
    
    39
    
    
    
    129
    
    
    
    98,673Property level operating
income
    
    $
    58,526
    
    
    $
    18,540
    
    
    $
    32,046
    
    
    $
    33,064
    
    
    $
    40,192
    
    
    $
    34,351
    
    
    $
    508
    
    
    $
    363
    
    
    
    217,590Interest and other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,815Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,350
    )General and administrative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,588
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (69,102
    )Income before property
dispositions, income taxes,
minority interest and
equity in earnings of
unconsolidated joint
ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73,365Gain on property
dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,483Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (610
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,223
    )Equity in earnings of
unconsolidated joint
ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    916Discontinued operations,
net of minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    77,946Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    158,877
 Note 3: SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets
   Three Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006
    
    
    June 30, 2007
    
    
    June 30, 2006Revenues
    
    $
    1,301
    
    
    $
    12,083
    
    
    $
    4,912
    
    
    $
    25,587Operating expenses
    
    
    (219
    )
    
    
    (4,117
    )
    
    
    (1,348
    )
    
    
    (8,836
    )Interest expense
    
    
    (250
    )
    
    
    (1,942
    )
    
    
    (999
    )
    
    
    (5,052
    )Depreciation and amortization
    
    
    (408
    )
    
    
    (3,086
    )
    
    
    (1,227
    )
    
    
    (6,462
    )Income before property dispositions and minority interest
    
    $
    424
    
    
    $
    2,938
    
    
    $
    1,338
    
    
    $
    5,237
  Allocation of Interest to Discontinued Operations
 11




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##### Table of Contents



Note 4: Joint Ventures
 Liberty/Commerz 1701 JFK Boulevard, LP
  Accounting for the Sale of Real Estate
 Liberty Illinois, LP
  Note 5: Preferred Units
  Note 6: Accelerated Share Repurchase
  Note 7: Recently Issued Accounting Standards
 SFAS No. 157
 Fair Value Measurements
 SFAS No. 159
 The Fair Value Option for Financial Assets and
Financial Liabilities
 12




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##### Table of Contents



FIN 48
 Accounting for Uncertainty in Income
Taxes Accounting for Income Taxes
   Note 8: Commitments and Contingencies
  Note 9: Subsequent Events
   13




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##### Table of Contents



CONDENSED CONSOLIDATED BALANCE SHEETS OF
 LIBERTY PROPERTY LIMITED PARTNERSHIP
 (In thousands)
 June 30, 2007
    
    
    December 31, 2006(Unaudited)ASSETSReal estate:Land and land improvements
    
    $
    740,003
    
    
    $
    677,041Building and improvements
    
    
    4,008,403
    
    
    
    3,802,949Less accumulated depreciation
    
    
    (849,996
    )
    
    
    (803,968
    )Operating real estate
    
    
    3,898,410
    
    
    
    3,676,022Development in progress
    
    
    651,283
    
    
    
    538,521Land held for development
    
    
    255,361
    
    
    
    195,332Net real estate
    
    
    4,805,054
    
    
    
    4,409,875Cash and cash equivalents
    
    
    12,741
    
    
    
    53,737Restricted cash
    
    
    34,764
    
    
    
    55,671Accounts receivable
    
    
    24,216
    
    
    
    23,809Deferred rent receivable
    
    
    72,522
    
    
    
    71,894Deferred financing and leasing costs, net of accumulated
amortization (2007, $111,914; 2006 $100,406)
    
    
    134,681
    
    
    
    129,157Investments in and advances to unconsolidated joint ventures
    
    
    72,570
    
    
    
    54,723Assets held for sale
    
    
    180
    
    
    
    51,266Prepaid expenses and other assets
    
    
    45,513
    
    
    
    60,779Total assets
    
    $
    5,202,241
    
    
    $
    4,910,911LIABILITIESMortgage loans
    
    $
    185,814
    
    
    $
    185,978Unsecured notes
    
    
    1,955,000
    
    
    
    1,955,000Credit facility
    
    
    542,960
    
    
    
    246,960Accounts payable
    
    
    57,346
    
    
    
    40,633Accrued interest
    
    
    36,339
    
    
    
    36,297Dividend and distributions payable
    
    
    59,163
    
    
    
    58,961Other liabilities
    
    
    245,133
    
    
    
    217,751Total liabilities
    
    
    3,081,755
    
    
    
    2,741,580Minority interest
    
    
    477
    
    
    
    419OWNERS EQUITYGeneral partners equity  common units
    
    
    1,847,121
    
    
    
    1,871,604Limited partners equity  preferred units
    
    
    188,003
    
    
    
    210,960 common units
    
    
    84,885
    
    
    
    86,348Total owners equity
    
    
    2,120,009
    
    
    
    2,168,912Total liabilities and owners equity
    
    $
    5,202,241
    
    
    $
    4,910,911
  14




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS OF
 LIBERTY PROPERTY LIMITED PARTNERSHIP
 (Unaudited and in thousands, except per unit amounts)
 Three Months EndedJune 30, 2007
    
    
    June 30, 2006OPERATING REVENUERental
    
    $
    121,843
    
    
    $
    113,322Operating expense reimbursement
    
    
    54,495
    
    
    
    46,455Total operating revenue
    
    
    176,338
    
    
    
    159,777OPERATING EXPENSERental property
    
    
    37,886
    
    
    
    32,014Real estate taxes
    
    
    19,490
    
    
    
    17,296General and administrative
    
    
    12,799
    
    
    
    11,558Depreciation and amortization
    
    
    39,266
    
    
    
    35,299Total operating expenses
    
    
    109,441
    
    
    
    96,167Operating income
    
    
    66,897
    
    
    
    63,610OTHER INCOME (EXPENSE)Interest and other income
    
    
    3,298
    
    
    
    2,064Interest expense
    
    
    (30,137
    )
    
    
    (28,045
    )Total other income (expense)
    
    
    (26,839
    )
    
    
    (25,981
    )Income before property dispositions, income taxes,
minority interest and equity in earnings of
unconsolidated joint ventures
    
    
    40,058
    
    
    
    37,629Gain on property dispositions
    
    
    1,299
    
    
    
    17,438Income taxes
    
    
    (213
    )
    
    
    (235
    )Minority interest
    
    
    (20
    )
    
    
    Equity in earnings of unconsolidated joint ventures
    
    
    326
    
    
    
    741Income from continuing operations
    
    
    41,450
    
    
    
    55,573Discontinued operations (including net gain on property
dispositions of $17,430 and $16,550 for the three
months ended June 30, 2007 and 2006, respectively)
    
    
    17,854
    
    
    
    19,488Net income
    
    
    59,304
    
    
    
    75,061Preferred unit distributions
    
    
    (3,774
    )
    
    
    (3,401
    )Excess of preferred unit redemption over carrying amount
    
    
    (696
    )
    
    
    Income available to common unitholders
    
    $
    54,834
    
    
    $
    71,660Earnings per common unitBasic:Income from continuing operations
    
    $
    0.38
    
    
    $
    0.56Income from discontinued operations
    
    
    0.19
    
    
    
    0.21Income per common unit  basic
    
    $
    0.57
    
    
    $
    0.77Diluted:Income from continuing operations
    
    $
    0.38
    
    
    $
    0.55Income from discontinued operations
    
    
    0.19
    
    
    
    0.21Income per common unit  diluted
    
    $
    0.57
    
    
    $
    0.76Distributions per common unit
    
    $
    0.62
    
    
    $
    0.615Weighted average number of common units outstandingBasic
    
    
    95,787
    
    
    
    92,587Diluted
    
    
    96,518
    
    
    
    93,977
  15




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS OF
 LIBERTY PROPERTY LIMITED PARTNERSHIP
 (Unaudited and in thousands, except per unit amounts)
 Six Months EndedJune 30, 2007
    
    
    June 30, 2006OPERATING REVENUERental
    
    $
    241,306
    
    
    $
    223,069Operating expense reimbursement
    
    
    107,658
    
    
    
    93,194Total operating revenue
    
    
    348,964
    
    
    
    316,263OPERATING EXPENSERental property
    
    
    76,030
    
    
    
    64,951Real estate taxes
    
    
    36,637
    
    
    
    33,722General and administrative
    
    
    26,138
    
    
    
    21,588Depreciation and amortization
    
    
    76,982
    
    
    
    69,102Total operating expenses
    
    
    215,787
    
    
    
    189,363Operating income
    
    
    133,177
    
    
    
    126,900OTHER INCOME (EXPENSE)Interest and other income
    
    
    6,304
    
    
    
    3,815Interest expense
    
    
    (58,315
    )
    
    
    (57,350
    )Total other income (expense)
    
    
    (52,011
    )
    
    
    (53,535
    )Income before property dispositions, income taxes,
minority interest and equity in earnings of
unconsolidated joint ventures
    
    
    81,166
    
    
    
    73,365Gain on property dispositions
    
    
    1,451
    
    
    
    17,483Income taxes
    
    
    (514
    )
    
    
    (610
    )Minority interest
    
    
    (56
    )
    
    
    Equity in earnings of unconsolidated joint ventures
    
    
    1,055
    
    
    
    916Income from continuing operations
    
    
    83,102
    
    
    
    91,154Discontinued operations (including net gain on property
dispositions of $20,231 and $76,080 for the six months
ended June 30, 2007 and 2006, respectively)
    
    
    21,569
    
    
    
    81,317Net income
    
    
    104,671
    
    
    
    172,471Preferred unit distributions
    
    
    (7,628
    )
    
    
    (6,802
    )Excess of preferred unit redemption over carrying amount
    
    
    (696
    )
    
    
    Income available to common unitholders
    
    $
    96,347
    
    
    $
    165,669Earnings per common unitBasic:Income from continuing operations
    
    $
    0.78
    
    
    $
    0.91Income from discontinued operations
    
    
    0.23
    
    
    
    0.88Income per common unit  basic
    
    $
    1.01
    
    
    $
    1.79Diluted:Income from continuing operations
    
    $
    0.78
    
    
    $
    0.89Income from discontinued operations
    
    
    0.22
    
    
    
    0.87Income per common unit  diluted
    
    $
    1.00
    
    
    $
    1.76Distributions per common unit
    
    $
    1.24
    
    
    $
    1.23Weighted average number of common units outstandingBasic
    
    
    95,508
    
    
    
    92,173Diluted
    
    
    96,358
    
    
    
    93,687
  16




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##### Table of Contents



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW OF
 LIBERTY PROPERTY LIMITED PARTNERSHIP
 (Unaudited and in thousands)
 Six Months EndedJune 30, 2007
    
    
    June 30, 2006OPERATING ACTIVITIESNet income
    
    $
    104,671
    
    
    $
    172,471Adjustments to reconcile net income to net cash provided by operating activities:Depreciation and amortization
    
    
    77,483
    
    
    
    75,928Amortization of deferred financing costs
    
    
    1,989
    
    
    
    2,134Equity in earnings of unconsolidated joint ventures
    
    
    (1,055
    )
    
    
    (916
    )Distributions from unconsolidated joint ventures
    
    
    1,050
    
    
    
    2,937Minority interest in net income
    
    
    56
    
    
    
    Gain on property dispositions
    
    
    (21,682
    )
    
    
    (93,563
    )Noncash compensation
    
    
    5,433
    
    
    
    4,085Changes in operating assets and liabilities:Restricted cash
    
    
    21,712
    
    
    
    13,967Accounts receivable
    
    
    (241
    )
    
    
    (13,308
    )Deferred rent receivable
    
    
    (2,113
    )
    
    
    3,031Prepaid expenses and other assets
    
    
    14,037
    
    
    
    (91,558
    )Accounts payable
    
    
    16,772
    
    
    
    4,401Accrued interest
    
    
    42
    
    
    
    420Other liabilities
    
    
    27,194
    
    
    
    (9,581
    )Net cash provided by operating activities
    
    
    245,348
    
    
    
    70,448INVESTING ACTIVITIESInvestment in properties
    
    
    (207,617
    )
    
    
    (79,454
    )Investments
in and advances to unconsolidated joint ventures
    
    
    (17,282
    )
    
    
    (1,939
    )Net proceeds from disposition of properties/land
    
    
    191,595
    
    
    
    352,658Investment in development in progress
    
    
    (265,483
    )
    
    
    (176,263
    )Investment in land held for development
    
    
    (95,590
    )
    
    
    (27,817
    )Investment in deferred leasing costs
    
    
    (21,984
    )
    
    
    (11,311
    )Net cash (used in) provided by investing activities
    
    
    (416,361
    )
    
    
    55,874FINANCING ACTIVITIESRedemption of preferred units
    
    
    (23,650
    )
    
    
    Repayments of mortgage loans
    
    
    (5,798
    )
    
    
    (29,185
    )Proceeds from credit facility
    
    
    552,200
    
    
    
    234,445Repayments on credit facility
    
    
    (256,200
    )
    
    
    (275,415
    )Increase in deferred financing costs
    
    
    (126
    )
    
    
    (1,813
    )Capital contributions
    
    
    39,453
    
    
    
    39,841Distributions to partners
    
    
    (176,806
    )
    
    
    (120,304
    )Net cash provided by (used in) financing activities
    
    
    129,073
    
    
    
    (152,431
    )Decrease in cash and cash equivalents
    
    
    (41,940
    )
    
    
    (26,109
    )Increase in cash and cash equivalents related to foreign currency translation
    
    
    944
    
    
    
    2,242Cash and cash equivalents at beginning of period
    
    
    53,737
    
    
    
    61,629Cash and cash equivalents at end of period
    
    $
    12,741
    
    
    $
    37,762SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONSWrite-off of fully depreciated property and deferred costs
    
    $
    35,626
    
    
    $
    42,691Assumption of mortgage loans
    
    $
    5,634
    
    
    $
    Issuance of operating partnership units
    
    $
    
    
    
    $
    30,000
  17




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##### Table of Contents



Liberty Property Limited Partnership
 
 Notes to Condensed Consolidated Financial Statements (Unaudited)
 June 30, 2007
 Note 1: Organization and Basis of Presentation
 Organization
  Basis of Presentation
  18




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##### Table of Contents



Income per Common Unit
  For the Three Months Ended June 30, 2007
    
    
    For the Three Months Ended June 30, 2006Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedIncome
    
    
    Average Units
    
    
    Per
    
    
    Income
    
    
    Average Units
    
    
    Per(Numerator)
    
    
    (Denominator)
    
    
    Unit
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    UnitIncome from continuing operations
    
    $
    41,450
    
    
    
    
    
    
    
    
    
    
    $
    55,573Less: Preferred unit distributions
    
    
    (3,774
    )
    
    
    
    
    
    
    
    
    
    
    (3,401
    )Less: Excess of preferred unit redemption over
carrying amount
    
    
    (696
    )
    
    
    
    
    
    
    
    
    
    
    Basic income from continuing operationsIncome from continuing operations available to
common unitholders
    
    
    36,980
    
    
    
    95,787
    
    
    $
    0.38
    
    
    
    52,172
    
    
    
    92,587
    
    
    $
    0.56Dilutive units for long-term compensation plans
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    
    
    
    
    1,390Diluted income from continuing operationsIncome from continuing operations available to
common unitholders and assumed conversions
    
    
    36,980
    
    
    
    96,518
    
    
    $
    0.38
    
    
    
    52,172
    
    
    
    93,977
    
    
    $
    0.55Basic income from discontinued operationsDiscontinued operations
    
    
    17,854
    
    
    
    95,787
    
    
    $
    0.19
    
    
    
    19,488
    
    
    
    92,587
    
    
    $
    0.21Dilutive units for long-term compensation plans
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    
    
    
    
    1,390Diluted income from discontinued operationsDiscontinued operations
    
    
    17,854
    
    
    
    96,518
    
    
    $
    0.19
    
    
    
    19,488
    
    
    
    93,977
    
    
    $
    0.21Basic income per common unitIncome available to common unitholders
    
    
    54,834
    
    
    
    95,787
    
    
    $
    0.57
    
    
    
    71,660
    
    
    
    92,587
    
    
    $
    0.77Diluted units for long-term compensation plans
    
    
    
    
    
    
    731
    
    
    
    
    
    
    
    
    
    
    
    1,390Diluted income per common unitIncome available to common unitholders and
assumed conversions
    
    $
    54,834
    
    
    
    96,518
    
    
    $
    0.57
    
    
    $
    71,660
    
    
    
    93,977
    
    
    $
    0.76
 19




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##### Table of Contents



For the Six Months Ended June 30, 2007
    
    
    For the Six Months Ended June 30, 2006Weighted
    
    
    
    
    
    
    
    
    
    WeightedIncome
    
    
    Average Units
    
    
    Per

    
    
    Income
    
    
    Average Units
    
    
    Per(Numerator)
    
    
    (Denominator)
    
    
    Unit
    
    
    (Numerator)
    
    
    (Denominator)
    
    
    UnitIncome from continuing operations
    
    $
    83,102
    
    
    
    
    
    
    
    
    
    
    $
    91,154Less: Preferred unit distributions
    
    
    (7,628
    )
    
    
    
    
    
    
    
    
    
    
    (6,802
    )Less: Excess of preferred unit redemption over
carrying amount
    
    
    (696
    )
    
    
    
    
    
    
    
    
    
    
    Basic income from continuing operationsIncome from continuing operations available to
common unitholders
    
    
    74,778
    
    
    
    95,508
    
    
    $
    0.78
    
    
    
    84,352
    
    
    
    92,173
    
    
    $
    0.91Dilutive units for long-term compensation plans
    
    
    
    
    
    
    850
    
    
    
    
    
    
    
    
    
    
    
    1,514Diluted income from continuing operationsIncome from continuing operations available to
common unitholders and assumed conversions
    
    
    74,778
    
    
    
    96,358
    
    
    $
    0.78
    
    
    
    84,352
    
    
    
    93,687
    
    
    $
    0.89Basic income from discontinued operationsDiscontinued operations
    
    
    21,569
    
    
    
    95,508
    
    
    $
    0.23
    
    
    
    81,317
    
    
    
    92,173
    
    
    $
    0.88Dilutive units for long-term compensation plans
    
    
    
    
    
    
    850
    
    
    
    
    
    
    
    
    
    
    
    1,514Diluted income from discontinued operationsDiscontinued operations
    
    
    21,569
    
    
    
    96,358
    
    
    $
    0.22
    
    
    
    81,317
    
    
    
    93,687
    
    
    $
    0.87Basic income per common unitIncome available to common unitholders
    
    
    96,347
    
    
    
    95,508
    
    
    $
    1.01
    
    
    
    165,669
    
    
    
    92,173
    
    
    $
    1.79Diluted units for long-term compensation plans
    
    
    
    
    
    
    850
    
    
    
    
    
    
    
    
    
    
    
    1,514Diluted income per common unitIncome available to common unitholders and
assumed conversions
    
    $
    96,347
    
    
    
    96,358
    
    
    $
    1.00
    
    
    $
    165,669
    
    
    
    93,687
    
    
    $
    1.76
 Foreign Currency Translation
  Note 2: Segment Information
  Reportable Segments
    
    MarketsDelaware Valley
    
    Southeastern Pennsylvania; New JerseyMidwest
    
    Lehigh Valley, Pennsylvania; Michigan; Minnesota; Milwaukee; ChicagoMid-Atlantic
    
    Maryland; Piedmont Triad, NC; Greenville, SC; Richmond; Virginia BeachFlorida
    
    Jacksonville; Orlando; Boca Raton; Tampa; TexasArizona
    
    PhoenixUnited Kingdom
    
    County of Kent
 20




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##### Table of Contents



Disclosures about Segments of an Enterprise and Related Information,
   For the Three Months Ended June 30, 2007
 Delaware Valley
    
    
    MidwestSoutheastern
    
    
    
    
    
    
    Lehigh
    
    
    
    
    
    
    Mid-
    
    
    
    
    
    
    
    
    
    
    UnitedPennsylvania
    
    
    Other
    
    
    Valley
    
    
    Other
    
    
    Atlantic
    
    
    Florida
    
    
    Arizona
    
    
    Kingdom
    
    
    TotalOperating revenue
    
    $
    43,107
    
    
    $
    13,444
    
    
    $
    23,350
    
    
    $
    26,213
    
    
    $
    32,769
    
    
    $
    35,809
    
    
    $
    1,061
    
    
    $
    585
    
    
    $
    176,338Rental property expenses and
real estate taxes
    
    
    14,382
    
    
    
    4,504
    
    
    
    6,541
    
    
    
    9,637
    
    
    
    10,004
    
    
    
    11,850
    
    
    
    271
    
    
    
    187
    
    
    
    57,376Property level operating income
    
    $
    28,725
    
    
    $
    8,940
    
    
    $
    16,809
    
    
    $
    16,576
    
    
    $
    22,765
    
    
    $
    23,959
    
    
    $
    790
    
    
    $
    398
    
    
    
    118,962Interest and other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,298Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,137
    )General and administrative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,799
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (39,266
    )Income before property
dispositions, income
taxes, minority
interest and equity in
earnings of unconsolidated
joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    40,058Gain on property dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,299Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (213
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (20
    )Equity in earnings of
unconsolidated joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    326Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,854Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    59,304
 21




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##### Table of Contents



For the Three Months Ended June 30, 2006
 Delaware Valley
    
    
    MidwestSoutheastern
    
    
    
    
    
    
    Lehigh
    
    
    
    
    
    
    Mid-
    
    
    
    
    
    
    
    
    
    
    UnitedPennsylvania
    
    
    Other
    
    
    Valley
    
    
    Other
    
    
    Atlantic
    
    
    Florida
    
    
    Arizona
    
    
    Kingdom
    
    
    TotalOperating revenue
    
    $
    43,517
    
    
    $
    13,187
    
    
    $
    21,104
    
    
    $
    25,643
    
    
    $
    29,385
    
    
    $
    26,124
    
    
    $
    547
    
    
    $
    270
    
    
    $
    159,777Rental property expenses and
real estate taxes
    
    
    13,138
    
    
    
    3,687
    
    
    
    5,634
    
    
    
    9,509
    
    
    
    8,414
    
    
    
    8,800
    
    
    
    39
    
    
    
    89
    
    
    
    49,310Property level operating income
    
    $
    30,379
    
    
    $
    9,500
    
    
    $
    15,470
    
    
    $
    16,134
    
    
    $
    20,971
    
    
    $
    17,324
    
    
    $
    508
    
    
    $
    181
    
    
    
    110,467Interest and other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,064Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (28,045
    )General and administrative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (11,558
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (35,299
    )Income before property
dispositions, income
taxes, minority
interest and equity in
earnings of unconsolidated
joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    37,629Gain on property dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,438Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (235
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity in earnings of
unconsolidated joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    741Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    19,488Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    75,061
 For the Six Months Ended June 30, 2007
 Delaware Valley
    
    
    MidwestSoutheastern
    
    
    
    
    
    
    Lehigh
    
    
    
    
    
    
    Mid-
    
    
    
    
    
    
    
    
    
    
    UnitedPennsylvania
    
    
    Other
    
    
    Valley
    
    
    Other
    
    
    Atlantic
    
    
    Florida
    
    
    Arizona
    
    
    Kingdom
    
    
    TotalOperating revenue
    
    $
    86,885
    
    
    $
    27,358
    
    
    $
    44,427
    
    
    $
    51,810
    
    
    $
    65,077
    
    
    $
    70,344
    
    
    $
    2,076
    
    
    $
    987
    
    
    $
    348,964Rental property expenses and
real estate taxes
    
    
    29,386
    
    
    
    8,846
    
    
    
    11,425
    
    
    
    19,651
    
    
    
    20,157
    
    
    
    22,428
    
    
    
    448
    
    
    
    326
    
    
    
    112,667Property level operating income
    
    $
    57,499
    
    
    $
    18,512
    
    
    $
    33,002
    
    
    $
    32,159
    
    
    $
    44,920
    
    
    $
    47,916
    
    
    $
    1,628
    
    
    $
    661
    
    
    
    236,297Interest and other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,304Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (58,315
    )General and administrative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (26,138
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (76,982
    )Income before property
dispositions, income taxes,
minority
interest and equity in
earnings of unconsolidated joint
ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,166Gain on property dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,451Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (514
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (56
    )Equity in earnings of
unconsolidated joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,055Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,569Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    104,671
 22




---



##### Table of Contents



For the Six Months Ended June 30, 2006
 Delaware Valley
    
    
    MidwestSoutheastern
    
    
    
    
    
    
    Lehigh
    
    
    
    
    
    
    Mid-
    
    
    
    
    
    
    
    
    
    
    UnitedPennsylvania
    
    
    Other
    
    
    Valley
    
    
    Other
    
    
    Atlantic
    
    
    Florida
    
    
    Arizona
    
    
    Kingdom
    
    
    TotalOperating revenue
    
    $
    85,163
    
    
    $
    26,083
    
    
    $
    42,906
    
    
    $
    52,642
    
    
    $
    57,236
    
    
    $
    51,194
    
    
    $
    547
    
    
    $
    492
    
    
    $
    316,263Rental property expenses and
real estate taxes
    
    
    26,637
    
    
    
    7,543
    
    
    
    10,860
    
    
    
    19,578
    
    
    
    17,044
    
    
    
    16,843
    
    
    
    39
    
    
    
    129
    
    
    
    98,673Property level operating income
    
    $
    58,526
    
    
    $
    18,540
    
    
    $
    32,046
    
    
    $
    33,064
    
    
    $
    40,192
    
    
    $
    34,351
    
    
    $
    508
    
    
    $
    363
    
    
    
    217,590Interest and other income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,815Interest expense
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (57,350
    )General and administrative
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (21,588
    )Depreciation and amortization
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (69,102
    )Income before property
dispositions, income taxes,
minority
interest and equity in
earnings of unconsolidated joint
ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    73,365Gain on property dispositions
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    17,483Income taxes
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (610
    )Minority interest
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Equity in earnings of
unconsolidated joint ventures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    916Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    81,317Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    172,471
 Note 3: SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived
Assets
   Three Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006
    
    
    June 30, 2007
    
    
    June 30, 2006Revenues
    
    $
    1,301
    
    
    $
    12,083
    
    
    $
    4,912
    
    
    $
    25,587Operating expenses
    
    
    (219
    )
    
    
    (4,117
    )
    
    
    (1,348
    )
    
    
    (8,836
    )Interest expense
    
    
    (250
    )
    
    
    (1,942
    )
    
    
    (999
    )
    
    
    (5,052
    )Depreciation and amortization
    
    
    (408
    )
    
    
    (3,086
    )
    
    
    (1,227
    )
    
    
    (6,462
    )Income before property
dispositions and minority
interest
    
    $
    424
    
    
    $
    2,938
    
    
    $
    1,338
    
    
    $
    5,237
  Allocation of Interest to Discontinued Operations
 23




---



##### Table of Contents



Note 4: Joint Ventures
 Liberty/Commerz 1701 JFK Boulevard, LP
   Liberty Illinois, LP
  Note 5: Preferred Units
  Note 6: Recently Issued Accounting Standards
 SFAS No. 157
 Fair Value Measurements
 SFAS No. 159
 The Fair Value Option for Financial Assets and
Financial Liabilities
 FIN 48
 Accounting for Uncertainty in Income
Taxes Accounting for Income Taxes
  24




---



##### Table of Contents



Note 7: Commitments and Contingencies
  Note 8: Subsequent Events
   25




---



##### Table of Contents



Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Overview
     WHOLLY OWNED CAPITAL ACTIVITY
  26




---



##### Table of Contents



JOINT VENTURE CAPITAL ACTIVITY
  ACQUISITION OF REPUBLIC PROPERTY TRUST
  27




---



##### Table of Contents



Net RentPer Square Foot
    
    
    Total Square Feet
    
    
    Percent OccupiedJune 30
    
    
    June 30
    
    
    June 302007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Wholly Owned Properties in Operation:Industrial-Distribution
    
    $
    4.34
    
    
    $
    4.25
    
    
    
    27,296
    
    
    
    25,623
    
    
    
    90.2
    %
    
    
    93.5
    %Industrial-Flex
    
    $
    8.81
    
    
    $
    8.71
    
    
    
    12,405
    
    
    
    12,333
    
    
    
    92.3
    %
    
    
    93.5
    %Office
    
    $
    13.82
    
    
    $
    13.78
    
    
    
    21,215
    
    
    
    19,870
    
    
    
    90.9
    %
    
    
    90.4
    %$
    8.56
    
    
    $
    8.42
    
    
    
    60,916
    
    
    
    57,826
    
    
    
    90.9
    %
    
    
    92.5
    %
 Net RentPer Square Foot
    
    
    Total Square Feet
    
    
    Percent OccupiedJune 30
    
    
    June 30
    
    
    June 302007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Joint Venture Properties in Operation:Industrial-Distribution
    
    $
    3.60
    
    
    $
    4.11
    
    
    
    6,934
    
    
    
    5,229
    
    
    
    92.2
    %
    
    
    95.9
    %Industrial-Flex
    
    $
    28.64
    
    
    $
    29.67
    
    
    
    171
    
    
    
    170
    
    
    
    100.0
    %
    
    
    100.0
    %Office
    
    $
    36.56
    
    
    $
    33.13
    
    
    
    364
    
    
    
    364
    
    
    
    94.7
    %
    
    
    98.1
    %$
    5.86
    
    
    $
    6.76
    
    
    
    7,469
    
    
    
    5,763
    
    
    
    92.5
    %
    
    
    96.1
    %
 Net RentPer Square Foot
    
    
    Total Square Feet
    
    
    Percent OccupiedJune 30
    
    
    June 30
    
    
    June 302007
    
    
    2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2006Properties in Operation:Industrial-Distribution
    
    $
    4.19
    
    
    $
    4.23
    
    
    
    34,230
    
    
    
    30,852
    
    
    
    90.6
    %
    
    
    93.9
    %Industrial-Flex
    
    $
    9.10
    
    
    $
    9.02
    
    
    
    12,576
    
    
    
    12,503
    
    
    
    92.4
    %
    
    
    93.6
    %Office
    
    $
    14.22
    
    
    $
    14.16
    
    
    
    21,579
    
    
    
    20,234
    
    
    
    91.0
    %
    
    
    90.6
    %$
    8.27
    
    
    $
    8.26
    
    
    
    68,385
    
    
    
    63,589
    
    
    
    91.1
    %
    
    
    92.8
    %
  Forward-Looking Statements
  Critical Accounting Policies and Estimates
  28




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##### Table of Contents



Results of Operations
   Comparison of Three and Six Months Ended June 30, 2007 to Three and Six Months Ended June
30, 2006
 Overview
  Segments
 Property Level Operating Income:
 Three Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006
    
    
    % inc (dec)
    
    
    June 30, 2007
    
    
    June 30, 2006
    
    
    % inc (dec)Delaware Valley SE Pennsylvania
    
    $
    28,725
    
    
    $
    30,379
    
    
    
    (5.4
    %)
    
    $
    57,499
    
    
    $
    58,526
    
    
    
    (1.8
    %) Other
    
    
    8,940
    
    
    
    9,500
    
    
    
    (5.9
    %)
    
    
    18,512
    
    
    
    18,540
    
    
    
    (0.2
    %)Midwest Lehigh Valley
    
    
    16,809
    
    
    
    15,470
    
    
    
    8.7
    %
    
    
    33,002
    
    
    
    32,046
    
    
    
    3.0
    % Other
    
    
    16,576
    
    
    
    16,134
    
    
    
    2.7
    %
    
    
    32,159
    
    
    
    33,064
    
    
    
    (2.7
    %)Mid-Atlantic
    
    
    22,765
    
    
    
    20,971
    
    
    
    8.6
    %
    
    
    44,920
    
    
    
    40,192
    
    
    
    11.8
    %(2)Florida
    
    
    23,959
    
    
    
    17,324
    
    
    
    38.3
    %(2)
    
    
    47,916
    
    
    
    34,351
    
    
    
    39.4
    %(2)Arizona
    
    
    790
    
    
    
    508
    
    
    
    55.5
    %(1)
    
    
    1,628
    
    
    
    508
    
    
    
    220.5
    %(1)United Kingdom
    
    
    398
    
    
    
    181
    
    
    
    119.9
    %(2)
    
    
    661
    
    
    
    363
    
    
    
    82.1
    %(2)Totals
    
    $
    118,962
    
    
    $
    110,467
    
    
    
    7.7
    %
    
    $
    236,297
    
    
    $
    217,590
    
    
    
    8.6
    %
 29




---



##### Table of Contents



(1)
    
    The increases for the three and six months ended June 30, 2007 versus
the three and six months ended June 30, 2006 are primarily due to an increase in
average gross investment in operating real estate.(2)
    
    The increases for the three and six months ended June 30, 2007 versus
the three and six months ended June 30, 2006 are due to an increase in average
gross investment in operating real estate and increased occupancy during 2007. Same Store
     30




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##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006
    
    
    June 30, 2007
    
    
    June 30, 2006Same Store:Rental revenue
    
    $
    107,822
    
    
    $
    105,927
    
    
    $
    216,175
    
    
    $
    211,364Operating expenses:Rental property expense
    
    
    34,711
    
    
    
    31,577
    
    
    
    69,961
    
    
    
    64,135Real estate taxes
    
    
    17,012
    
    
    
    16,526
    
    
    
    32,781
    
    
    
    31,963Operating expense recovery
    
    
    (49,649
    )
    
    
    (45,670
    )
    
    
    (99,167
    )
    
    
    (91,468
    )Unrecovered operating expenses
    
    
    2,074
    
    
    
    2,433
    
    
    
    3,575
    
    
    
    4,630Property level operating income
    
    
    105,748
    
    
    
    103,494
    
    
    
    212,600
    
    
    
    206,734Less straight line rent
    
    
    425
    
    
    
    1,336
    
    
    
    1,165
    
    
    
    2,921Cash basis property level operating income
    
    $
    105,323
    
    
    $
    102,158
    
    
    $
    211,435
    
    
    $
    203,813Reconciliation of non-GAAP financial measure:Property level operating income  Same Store
    
    $
    105,748
    
    
    $
    103,494
    
    
    $
    212,600
    
    
    $
    206,734Property level operating income  properties
purchased or developed subsequent to January 1,
2006
    
    
    12,648
    
    
    
    3,206
    
    
    
    22,411
    
    
    
    6,001Termination fees
    
    
    566
    
    
    
    3,767
    
    
    
    1,286
    
    
    
    4,855General and administrative expense
    
    
    (12,799
    )
    
    
    (11,558
    )
    
    
    (26,138
    )
    
    
    (21,588
    )Depreciation and amortization expense
    
    
    (39,266
    )
    
    
    (35,299
    )
    
    
    (76,982
    )
    
    
    (69,102
    )Other income (expense)
    
    
    (26,839
    )
    
    
    (25,981
    )
    
    
    (52,011
    )
    
    
    (53,535
    )Gain on property dispositions
    
    
    1,299
    
    
    
    17,438
    
    
    
    1,451
    
    
    
    17,483Income taxes
    
    
    (213
    )
    
    
    (235
    )
    
    
    (514
    )
    
    
    (610
    )Minority interest
    
    
    (6,113
    )
    
    
    (5,738
    )
    
    
    (11,657
    )
    
    
    (10,223
    )Equity in earnings of unconsolidated joint ventures
    
    
    326
    
    
    
    741
    
    
    
    1,055
    
    
    
    916Discontinued operations, net of minority interest
    
    
    17,070
    
    
    
    18,615
    
    
    
    20,624
    
    
    
    77,946Net income
    
    $
    52,427
    
    
    $
    68,450
    
    
    $
    92,125
    
    
    $
    158,877
 General and Administrative
  Depreciation and Amortization
  31




---



##### Table of Contents



Interest Expense
  Other
     Liquidity and Capital Resources
   32




---



##### Table of Contents



33




---



##### Table of Contents



MORTGAGES
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    WEIGHTEDPRINCIPAL
    
    
    PRINCIPAL
    
    
    UNSECURED
    
    
    CREDIT
    
    
    
    
    
    
    AVERAGEAMORTIZATION
    
    
    MATURITIES
    
    
    NOTES
    
    
    FACILITY
    
    
    TOTAL
    
    
    INTEREST RATE2007 (6 months)
    
    $
    4,661
    
    
    $
    
    
    
    $
    100,000
    
    
    $
    
    
    
    $
    104,661
    
    
    
    7.24
    %2008
    
    
    8,128
    
    
    
    39,753
    
    
    
    
    
    
    
    152,960
    (1)
    
    
    200,841
    
    
    
    5.96
    %2009
    
    
    5,860
    
    
    
    46,148
    
    
    
    270,000
    
    
    
    
    
    
    
    322,008
    
    
    
    7.77
    %2010
    
    
    5,048
    
    
    
    4,738
    
    
    
    200,000
    
    
    
    390,000
    
    
    
    599,786
    
    
    
    6.61
    %2011
    
    
    4,334
    
    
    
    10,730
    
    
    
    250,000
    
    
    
    
    
    
    
    265,064
    
    
    
    7.26
    %2012
    
    
    3,466
    
    
    
    32,911
    
    
    
    235,000
    
    
    
    
    
    
    
    271,377
    
    
    
    6.47
    %2013
    
    
    2,923
    
    
    
    4,518
    
    
    
    -
    
    
    
    
    
    
    
    7,441
    
    
    
    6.38
    %2014
    
    
    2,894
    
    
    
    2,681
    
    
    
    200,000
    
    
    
    
    
    
    
    205,575
    
    
    
    5.65
    %2015
    
    
    3,033
    
    
    
    
    
    
    
    300,000
    
    
    
    
    
    
    
    303,033
    
    
    
    5.13
    %2016
    
    
    2,220
    
    
    
    
    
    
    
    300,000
    
    
    
    
    
    
    
    302,220
    
    
    
    5.50
    %2017 & thereafter
    
    
    1,768
    
    
    
    
    
    
    
    100,000
    
    
    
    
    
    
    
    101,768
    
    
    
    7.47
    %$
    44,335
    
    
    $
    141,479
    
    
    $
    1,955,000
    
    
    $
    542,960
    
    
    $
    2,683,774
    
    
    
    6.44
    %
 
 (1)
    
    Represents a deposit by the joint venture partner in the Comcast Center (see
Note 4 to the Companys financial statements) which bears interest at the greater of
5% or the current rate on the $600 million Credit Facility until development of the
Comcast Center building is completed.  General
   Wholly Owned Properties
    
    Industrial-
    
    
    Industrial-in Operation:
    
    Distribution
    
    
    Flex
    
    
    Office
    
    
    TotalSquare
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    AnnualFeet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    Rent2007 (6 months)
    
    
    647
    
    
    $
    2,515
    
    
    
    563
    
    
    $
    4,710
    
    
    
    1,146
    
    
    $
    14,357
    
    
    
    2,356
    
    
    $
    21,5822008
    
    
    3,515
    
    
    
    14,209
    
    
    
    2,265
    
    
    
    20,885
    
    
    
    2,069
    
    
    
    30,557
    
    
    
    7,849
    
    
    
    65,6512009
    
    
    3,804
    
    
    
    17,757
    
    
    
    1,921
    
    
    
    17,962
    
    
    
    2,821
    
    
    
    42,150
    
    
    
    8,546
    
    
    
    77,8692010
    
    
    2,620
    
    
    
    12,756
    
    
    
    1,794
    
    
    
    16,624
    
    
    
    2,711
    
    
    
    38,629
    
    
    
    7,125
    
    
    
    68,0092011
    
    
    2,858
    
    
    
    13,236
    
    
    
    1,254
    
    
    
    12,682
    
    
    
    2,500
    
    
    
    38,934
    
    
    
    6,612
    
    
    
    64,8522012
    
    
    4,446
    
    
    
    22,013
    
    
    
    1,426
    
    
    
    14,435
    
    
    
    2,163
    
    
    
    34,533
    
    
    
    8,035
    
    
    
    70,981Thereafter
    
    
    6,735
    
    
    
    36,318
    
    
    
    2,229
    
    
    
    24,963
    
    
    
    5,882
    
    
    
    98,227
    
    
    
    14,846
    
    
    
    159,508TOTAL
    
    
    24,625
    
    
    $
    118,804
    
    
    
    11,452
    
    
    $
    112,261
    
    
    
    19,292
    
    
    $
    297,387
    
    
    
    55,369
    
    
    $
    528,452
 Joint Venture Properties
    
    Industrial-
    
    
    Industrial-in Operation:
    
    Distribution
    
    
    Flex
    
    
    Office
    
    
    TotalSquare
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    AnnualFeet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    Rent2007 (6 months)
    
    
    594
    
    
    $
    2,255
    
    
    
    62
    
    
    $
    1,861
    
    
    
    5
    
    
    $
    196
    
    
    
    661
    
    
    $
    4,3122008
    
    
    980
    
    
    
    4,123
    
    
    
    9
    
    
    
    304
    
    
    
    30
    
    
    
    1,077
    
    
    
    1,019
    
    
    
    5,5042009
    
    
    361
    
    
    
    1,401
    
    
    
    11
    
    
    
    324
    
    
    
    61
    
    
    
    2,288
    
    
    
    433
    
    
    
    4,0132010
    
    
    991
    
    
    
    4,107
    
    
    
    20
    
    
    
    742
    
    
    
    65
    
    
    
    2,556
    
    
    
    1,076
    
    
    
    7,4052011
    
    
    362
    
    
    
    1,524
    
    
    
    11
    
    
    
    378
    
    
    
    86
    
    
    
    3,123
    
    
    
    459
    
    
    
    5,0252012
    
    
    452
    
    
    
    2,121
    
    
    
    19
    
    
    
    643
    
    
    
    97
    
    
    
    3,603
    
    
    
    568
    
    
    
    6,367Thereafter
    
    
    2,651
    
    
    
    12,869
    
    
    
    39
    
    
    
    1,369
    
    
    
    
    
    
    
    
    
    
    
    2,690
    
    
    
    14,238TOTAL
    
    
    6,391
    
    
    $
    28,400
    
    
    
    171
    
    
    $
    5,621
    
    
    
    344
    
    
    $
    12,843
    
    
    
    6,906
    
    
    $
    46,864
 34




---



##### Table of Contents



Properties
    
    Industrial-
    
    
    Industrial-in Operation:
    
    Distribution
    
    
    Flex
    
    
    Office
    
    
    TotalSquare
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    Annual
    
    
    Square
    
    
    AnnualFeet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    Rent
    
    
    Feet
    
    
    Rent2007 (6 months)
    
    
    1,241
    
    
    $
    4,770
    
    
    
    625
    
    
    $
    6,571
    
    
    
    1,151
    
    
    $
    14,553
    
    
    
    3,017
    
    
    $
    25,8942008
    
    
    4,495
    
    
    
    18,332
    
    
    
    2,274
    
    
    
    21,189
    
    
    
    2,099
    
    
    
    31,634
    
    
    
    8,868
    
    
    
    71,1552009
    
    
    4,165
    
    
    
    19,158
    
    
    
    1,932
    
    
    
    18,286
    
    
    
    2,882
    
    
    
    44,438
    
    
    
    8,979
    
    
    
    81,8822010
    
    
    3,611
    
    
    
    16,863
    
    
    
    1,814
    
    
    
    17,366
    
    
    
    2,776
    
    
    
    41,185
    
    
    
    8,201
    
    
    
    75,4142011
    
    
    3,220
    
    
    
    14,760
    
    
    
    1,265
    
    
    
    13,060
    
    
    
    2,586
    
    
    
    42,057
    
    
    
    7,071
    
    
    
    69,8772012
    
    
    4,898
    
    
    
    24,134
    
    
    
    1,445
    
    
    
    15,078
    
    
    
    2,260
    
    
    
    38,136
    
    
    
    8,603
    
    
    
    77,348Thereafter
    
    
    9,386
    
    
    
    49,187
    
    
    
    2,268
    
    
    
    26,332
    
    
    
    5,882
    
    
    
    98,227
    
    
    
    17,536
    
    
    
    173,746TOTAL
    
    
    31,016
    
    
    $
    147,204
    
    
    
    11,623
    
    
    $
    117,882
    
    
    
    19,636
    
    
    $
    310,230
    
    
    
    62,275
    
    
    $
    575,316
  Square FeetScheduled
    
    Industrial-
    
    
    Industrial
    
    
    
    
    
    
    
    
    
    
    Percent
    
    
    TotalIn-Service Date
    
    Distribution
    
    
    Flex
    
    
    Office
    
    
    Total
    
    
    Leased
    
    
    InvestmentWholly Owned
Properties under
Development
    
    3rd Quarter 2007
    
    
    551,759
    
    
    
    96,000
    
    
    
    230,000
    
    
    
    877,759
    
    
    
    86.9
    %
    
    $
    71,9954th Quarter 2007
    
    
    168,000
    
    
    
    
    
    
    
    450,000
    
    
    
    618,000
    
    
    
    76.2
    %
    
    
    90,0021st Quarter 2008
    
    
    120,000
    
    
    
    
    
    
    
    73,583
    
    
    
    193,583
    
    
    
    26.0
    %
    
    
    16,3002nd Quarter 2008
    
    
    
    
    
    
    208,177
    
    
    
    1,400,263
    
    
    
    1,608,440
    
    
    
    82.4
    %
    
    
    542,6393rd Quarter 2008
    
    
    341,000
    
    
    
    115,600
    
    
    
    129,418
    
    
    
    586,018
    
    
    
    4.4
    %
    
    
    52,9704th Quarter 2008
    
    
    963,540
    
    
    
    
    
    
    
    36,000
    
    
    
    999,540
    
    
    
    
    
    
    
    51,0491st Quarter 2009
    
    
    
    
    
    
    
    
    
    
    185,964
    
    
    
    185,964
    
    
    
    
    
    
    
    42,9472nd Quarter 2009
    
    
    
    
    
    
    
    
    
    
    81,000
    
    
    
    81,000
    
    
    
    
    
    
    
    15,936TOTAL
    
    
    2,144,299
    
    
    
    419,777
    
    
    
    2,586,228
    
    
    
    5,150,304
    
    
    
    51.1
    %
    
    $
    883,838Joint Venture
Properties under
Development
    
    4th Quarter 2007
    
    
    340,000
    
    
    
    
    
    
    
    
    
    
    
    340,000
    
    
    
    100.0
    %
    
    $
    16,3912nd Quarter 2008
    
    
    
    
    
    
    
    
    
    
    54,230
    
    
    
    54,230
    
    
    
    
    
    
    
    25,6903rd Quarter 2008
    
    
    296,100
    
    
    
    
    
    
    
    
    
    
    
    296,100
    
    
    
    
    
    
    
    18,061TOTAL
    
    
    636,100
    
    
    
    
    
    
    
    54,230
    
    
    
    690,330
    
    
    
    49.3
    %
    
    $
    60,142Total Properties
under Development
    
    TOTAL
    
    
    2,780,399
    
    
    
    419,777
    
    
    
    2,640,458
    
    
    
    5,840,634
    
    
    
    50.9
    %
    
    $
    943,980
   35




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##### Table of Contents



Calculation of Funds from Operations
  36




---



##### Table of Contents



Three Months Ended
    
    
    Six Months EndedJune 30, 2007
    
    
    June 30, 2006
    
    
    June 30, 2007
    
    
    June 30, 2006Reconciliation of net income to FFO  basicNet Income
    
    $
    52,427
    
    
    $
    68,450
    
    
    $
    92,125
    
    
    $
    158,877Basic  Income available to common shareholders
    
    
    52,427
    
    
    
    68,450
    
    
    
    92,125
    
    
    
    158,877Basic  income available to common shareholders per weighted
average share
    
    $
    0.57
    
    
    $
    0.77
    
    
    $
    1.01
    
    
    $
    1.79Adjustments:Depreciation and amortization of unconsolidated joint ventures
    
    
    844
    
    
    
    763
    
    
    
    1,685
    
    
    
    1,316Depreciation and amortization
    
    
    39,062
    
    
    
    37,809
    
    
    
    76,989
    
    
    
    74,400Gain on property dispositions
    
    
    (18,549
    )
    
    
    (34,649
    )
    
    
    (21,936
    )
    
    
    (94,295
    )Minority interest share in addback for depreciation and
amortization and gain on property dispositions
    
    
    (938
    )
    
    
    (176
    )
    
    
    (2,484
    )
    
    
    681Funds
from operations available to common shareholders  basic
    
    $
    72,846
    
    
    $
    72,197
    
    
    $
    146,379
    
    
    $
    140,979Basic Funds from operations available to common shareholders
per weighted average share
    
    $
    0.80
    
    
    $
    0.81
    
    
    $
    1.60
    
    
    $
    1.59Reconciliation of net income to FFO  diluted:Net Income
    
    $
    52,427
    
    
    $
    68,450
    
    
    $
    92,125
    
    
    $
    158,877Diluted  income available to common shareholders
    
    
    52,427
    
    
    
    68,450
    
    
    
    92,125
    
    
    
    158,877Diluted  income available to common shareholders per
weighted average share
    
    $
    0.57
    
    
    $
    0.76
    
    
    $
    1.00
    
    
    $
    1.76Adjustments:Depreciation and amortization of unconsolidated joint ventures
    
    
    844
    
    
    
    763
    
    
    
    1,685
    
    
    
    1,316Depreciation and amortization
    
    
    39,062
    
    
    
    37,809
    
    
    
    76,989
    
    
    
    74,400Gain on property dispositions
    
    
    (18,549
    )
    
    
    (34,649
    )
    
    
    (21,936
    )
    
    
    (94,295
    )Minority interest less preferred share distributions and excess
of preferred unit redemption over carrying amount
    
    
    2,407
    
    
    
    3,210
    
    
    
    4,222
    
    
    
    6,792Funds from operations available to common shareholders  diluted
    
    $
    76,191
    
    
    $
    75,583
    
    
    $
    153,085
    
    
    $
    147,090Diluted Funds from operations available to common
shareholders per weighted average share
    
    $
    0.79
    
    
    $
    0.80
    
    
    $
    1.59
    
    
    $
    1.57Reconciliation of weighted average shares:Weighted average common shares  all basic calculations
    
    
    91,597
    
    
    
    88,934
    
    
    
    91,318
    
    
    
    88,587Dilutive shares for long term compensation plans
    
    
    731
    
    
    
    1,390
    
    
    
    850
    
    
    
    1,514Diluted shares for net income calculations
    
    
    92,328
    
    
    
    90,324
    
    
    
    92,168
    
    
    
    90,101Weighted average common units
    
    
    4,190
    
    
    
    3,653
    
    
    
    4,190
    
    
    
    3,586Diluted shares for Funds from operations calculations
    
    
    96,518
    
    
    
    93,977
    
    
    
    96,358
    
    
    
    93,687
 37




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##### Table of Contents



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




---



##### Table of Contents



PART II. OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  ApproximateTotal Number of
    
    
    Dollar Value ofShares Purchased
    
    
    Shares that MayTotal Number
    
    
    Average
    
    
    as Part of Publicly
    
    
    Yet Be Purchasedof Shares
    
    
    Price Paid
    
    
    Announced
    
    
    Under thePeriod
    
    Purchased
    
    
    per Share
    
    
    Program
    
    
    Program(1)June 1  June 30
    
    
    776,277
    
    
    $
    46.408
    (2)
    
    
    776,277
    
    
    $
    50,000,000
    (3)Total
    
    
    776,277
    (4)
    
    $
    46.408
    
    
    
    776,277
    (4)
    
    $
    50,000,000
    (4)
 
 (1)
    
    On June 25, 2007, the Company announced that the Board of
Trustees had approved a $50 million accelerated share repurchase program
(ASR) as part of an approval of an overall program to repurchase up to
$100 million of the Trusts common shares of beneficial interest over the
period beginning on the date of the authorization and ending on March 13,
2012. The Company further announced that, upon completion of the ASR, the
Company will consider repurchasing the balance of the $100 million overall
share repurchase authorization in open market transactions, in privately
negotiated transactions or through the use of derivatives. The specific
timing and amount of repurchases will vary based on market conditions,
securities law limitations and other factors. The repurchases will be
made using the Companys cash resources, and the program may be suspended
or discontinued at any time without prior notice. The Trust does not
expect the accelerated share repurchase agreements settlement periods to
conclude until October 10, 2007. This table does not include shares
tendered to satisfy the exercise price in connection with cashless
exercises of employee stock options or shares tendered to satisfy tax
withholding obligations in connection with employee equity awards.(2)
    
    Represents the initial purchase price paid for shares
repurchased under the accelerated share repurchase agreements and is
subject to adjustment.(3)
    
    The remaining authorization may be used for the settlement
of the accelerated share repurchase agreements or additional common share
repurchases after the final settlement under the accelerated share
repurchase agreements.(4)
    
    On July 12, 2007, the Company repurchased an additional
301,122 common shares at an average price of $46.408, which represents
the initial purchase price paid for shares repurchased under the
accelerated share repurchase agreements and is subject to adjustment. 
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  1.
    
    Managements nominees, J. Anthony Hayden and M. Leanne
Lachman, were elected to fill the two available positions as Class I
trustees. Voting (expressed in number of shares) was as follows: Mr.
Hayden; 75,665,904 for, 5,703,602 against or withheld and no abstentions
or broker non-votes; and Ms. Lachman; 80,742,230 for, 627,276 against or
withheld and no abstentions or broker non-votes.
 39




---



##### Table of Contents



2.
    
    The shareholders approved a proposal to ratify the selection
of Ernst & Young LLP as the Trusts independent registered public
accounting firm for 2007. Voting (expressed in number of shares) was as
follows: 81,084,303 for, 250,402 against and 34,801 abstentions or broker
non-votes.3.
    
    The shareholders approved a proposal to amend and restate
the Liberty Property Trust Amended and Restated Share Incentive Plan,
without increasing the number of shares available for grant thereunder,
including among other things to add to the types of awards available for
grant under the Plan. Voting (expressed in number of shares) was as
follows: 72,520,820 for, 1,033,379 against and 133,477 abstentions or
broker non-votes.
 
 Item 5. Other Information
  40




---



##### Table of Contents



Item 6. Exhibits
 10.1
    
    Liberty Property Trust Amended and Restated Share Incentive Plan, as
amended effective May 17, 2007. (Incorporated by reference to
Appendix A to the Registrants Definitive Proxy Statement for the
Annual Meeting of Shareholders held on May 17, 2007, filed with the
Securities Exchange Commission on April 17, 2007.)12.1*
    
    Statement Re: Computation of Ratio of Earnings to Fixed Charges and
Ratio of Earnings to Combined Fixed Charges.31.1*
    
    Certifications of the Chief Executive Officer of Liberty Property
Trust required by Rule 13a-14(a) under the Securities Exchange Act
of 1934.31.2*
    
    Certifications of the Chief Financial Officer of Liberty Property
Trust required by Rule 13a-14(a) under the Securities Exchange Act
of 1934.31.3*
    
    Certifications of the Chief Executive Officer of Liberty Property
Trust, in its capacity as the general partner of Liberty Property
Limited Partnership, required by Rule 13a-14(a) under the Securities
Exchange Act of 1934.31.4*
    
    Certifications of the Chief Financial Officer of Liberty Property
Trust, in its capacity as the general partner of Liberty Property
Limited Partnership, required by Rule 13a-14(a) under the Securities
Exchange Act of 1934.32.1*
    
    Certifications of the Chief Executive Officer of Liberty Property
Trust required under Rule 13a-14(b) of the Securities Exchange Act
of 1934, as amended. (This exhibit shall not be deemed filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liability of that section.
Further, this exhibit shall not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended.)32.2*
    
    Certifications of the Chief Financial Officer of Liberty Property
Trust required by Rule 13a-14(b) under the Securities Exchange Act
of 1934, as amended. (This exhibit shall not be deemed filed for
purposes of Section 18 of the Securities Exchange Act of 1934, as
amended, or otherwise subject to the liability of that section.
Further, this exhibit shall not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933, as
amended, or the Securities Exchange Act of 1934, as amended.)32.3*
    
    Certifications of the Chief Executive Officer of Liberty Property
Trust, in its capacity as the general partner of Liberty Property
Limited Partnership, required by Rule 13a-14(b) under the Securities
Exchange Act of 1934, as amended. (This exhibit shall not be deemed
filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be
incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)32.4*
    
    Certifications of the Chief Financial Officer of Liberty Property
Trust, in its capacity as the general partner of Liberty Property
Limited Partnership, required by Rule 13a-14(b) under the Securities
Exchange Act of 1934, as amended. (This exhibit shall not be deemed
filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability of that
section. Further, this exhibit shall not be deemed to be
incorporated by reference into any filing under the Securities Act
of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)
 
 *
    
    Filed herewith. 41




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##### Table of Contents



SIGNATURES
  LIBERTY PROPERTY TRUST
 /s/ WILLIAM P. HANKOWSKY

William P. Hankowsky
    
    
    
    August 7, 2007

DatePresident and Chief Executive Officer/s/ GEORGE J. ALBURGER, JR.

George J. Alburger, Jr.
    
    
    
    August 7, 2007

DateExecutive Vice President and Chief Financial Officer
 42




---



##### Table of Contents



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

William P. Hankowsky
    
    
    
    August 7, 2007

DatePresident and Chief Executive Officer/s/ GEORGE J. ALBURGER, JR.

George J. Alburger, Jr.
    
    
    
    August 7, 2007

DateExecutive Vice President and Chief Financial Officer
 43




---



##### Table of Contents



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
    
    Certifications of the Chief Executive Officer of Liberty Property Trust required by
Rule 13a-14(a) under the Securities Exchange Act of 1934.31.2
    
    Certifications of the Chief Financial Officer of Liberty Property Trust required by
Rule 13a-14(a) under the Securities Exchange Act of 1934.31.3
    
    Certifications of the Chief Executive Officer of Liberty Property Trust, in its
capacity as the general partner of Liberty Property Limited Partnership, required by
Rule 13a-14(a) under the Securities Exchange Act of 1934.31.4
    
    Certifications of the Chief Financial Officer of Liberty Property Trust, in its
capacity as the general partner of Liberty Property Limited Partnership, required by
Rule 13a-14(a) under the Securities Exchange Act of 1934.32.1
    
    Certifications of the Chief Executive Officer of Liberty Property Trust required under
Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended. (This exhibit shall
not be deemed filed for purposes of Section 18 of the Securities Exchange Act of
1934, as amended, or otherwise subject to the liability of that section. Further, this
exhibit shall not be deemed to be incorporated by reference into any filing under the
Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)32.2
    
    Certifications of the Chief Financial Officer of Liberty Property Trust required by
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit
shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liability of that section. Further,
this exhibit shall not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)32.3
    
    Certifications of the Chief Executive Officer of Liberty Property Trust, in its
capacity as the general partner of Liberty Property Limited Partnership, required by
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit
shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liability of that section. Further,
this exhibit shall not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)32.4
    
    Certifications of the Chief Financial Officer of Liberty Property Trust, in its
capacity as the general partner of Liberty Property Limited Partnership, required by
Rule 13a-14(b) under the Securities Exchange Act of 1934, as amended. (This exhibit
shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act
of 1934, as amended, or otherwise subject to the liability of that section. Further,
this exhibit shall not be deemed to be incorporated by reference into any filing under
the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as
amended.)
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