##### 









UNITED STATES SECURITIES AND EXCHANGE
COMMISSION

Washington, D.C. 20549


Form 10-Q

|           |  |                                                                                                 
|---------- |  | ------------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                                 
|þ          |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934 
|          
|           |  | For the quarterly period ended March 31,
    2003                                               
|          
|or        
|          
|o          |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR
    15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934
|          
|           |  | For the transition period
    from           to                                                 

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

Liberty Property Trust

Liberty Property Limited Partnership


(Exact name of registrants as specified in
their governing documents)


|                                                                   |  |                                            
|------------------------------------------------------------------ |  | -------------------------------------------
|Maryland (Liberty Property Trust)                                  |  | 23-7768996                                 
|Pennsylvania (Liberty Property Limited
    Partnership)            |  | 23-2766549                                 
|(State or other jurisdiction
    of incorporation or organization) |  | (I.R.S. Employer
    Identification Number)
|                                                                  
|65 Valley Stream Parkway, Suite 100,
    Malvern, Pennsylvania     |  | 19355                                      
|(Address of Principal Executive
    Offices)                       |  | (Zip Code)                                 

Registrants telephone number, including
area code

(610) 648-1700


Indicate by check mark whether the registrants
(1) have filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding twelve (12) months (or for such
shorter period that the registrants were required to file such
reports) and (2) have been subject to such filing
requirements for the past ninety
(90) days.     Yes þ          No o

Indicate by check mark whether the registrant is
an accelerated filer (as defined in Rule 12b-2 of the
Exchange
Act).     Yes þ          No o

On May 7, 2003, 78,388,170 Common Shares of
Beneficial Interest, par value $.001 per share, of Liberty
Property Trust were outstanding.



---






---



##### 



LIBERTY PROPERTY TRUST/LIBERTY PROPERTY
LIMITED PARTNERSHIP

FORM 10-Q FOR THE THREE MONTHS ENDED
MARCH 31, 2003

|                                                            |  |                                                                                                                                                    |    |      |    | 
|----------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------- | -- | ---- | -- | 
|Index                                                       |  |                                                                                                                                                    |    | Page
|                                                            |  |                                                                                                                                                    |    |     
|Part I.                                                     |  | Financial Information                                                                                                                              |    |      |    | 
|Item 1.                                                     |  | Financial Statements (unaudited)                                                                                                                   |    |      |    | 
|                                                            |  | Consolidated balance sheets of Liberty Property
    Trust at March 31, 2003 and December 31, 2002                                                  |    |      | 2  | 
|                                                            |  | Consolidated statements of operations of Liberty
    Property Trust for the three months ended March 31, 2003
    and March 31, 2002               |    |      | 3  | 
|                                                            |  | Consolidated statements of cash flows of Liberty
    Property Trust for the three months ended March 31, 2003
    and March 31, 2002               |    |      | 4  | 
|                                                            |  | Notes to Consolidated Financial Statements for
    Liberty Property Trust                                                                          |    |      | 5  | 
|                                                            |  | Consolidated balance sheets of Liberty Property
    Limited Partnership at March 31, 2003 and December 31,
    2002                                |    |      | 9  | 
|                                                            |  | Consolidated statements of operations of Liberty
    Property Limited Partnership for the three months ended
    March 31, 2003 and March 31, 2002 |    |      | 10 | 
|                                                            |  | Consolidated statements of cash flows of Liberty
    Property Limited Partnership for the three months ended
    March 31, 2003 and March 31, 2002 |    |      | 11 | 
|                                                            |  | Notes to Consolidated Financial Statements for
    Liberty Property Limited Partnership                                                            |    |      | 12 | 
|Item 2.                                                     |  | Managements Discussion and Analysis of
    Financial Condition and Results of Operations                                                          |    |      | 16 | 
|Item 3.                                                     |  | Quantitative and Qualitative Disclosures about
    Market Risks                                                                                    |    |      | 22 | 
|Item 4.                                                     |  | Controls and Procedures                                                                                                                            |    |      | 22 | 
|Part II.                                                    |  | Other Information                                                                                                                                  |    |      | 23 | 
|Signatures for Liberty Property Trust                       |  |                                                                                                                                                    | 25 |     
|Certifications for Liberty Property Trust                   |  |                                                                                                                                                    | 26 |     
|Signatures for Liberty Property Limited
    Partnership     |  |                                                                                                                                                    | 28 |     
|Certifications for Liberty Property Limited
    Partnership |  |                                                                                                                                                    | 29 |     
|Exhibit Index                                               |  |                                                                                                                                                    | 31 |     

1



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##### 



CONSOLIDATED BALANCE SHEETS OF LIBERTY
PROPERTY TRUST

(In thousands, except share amounts)


|                                                                                                                                                                                                                                                                                   |                               |             |           |              |   |   |           |           |  
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------- | ----------- | --------- | ------------ | - | - | --------- | --------- | -
|                                                                                                                                                                                                                                                                                   |                               | March 31,   |           | December 31,
|                                                                                                                                                                                                                                                                                   |                               | 2003        |           | 2002        
|                                                                                                                                                                                                                                                                                   |                               |             |           |             
|                                                                                                                                                                                                                                                                                   |                               | (Unaudited) |           |             
|ASSETS                                                                                                                                                                                                                                                                             |                               |             |           |              |   |   |           |          
|Real estate:                                                                                                                                                                                                                                                                       |                               |             |           |              |   |   |           |          
|                                                                                                                                                                                                                                                                                   | Land and land improvements    |             | $         | 525,896      |   |   | $         | 504,808   |  
|                                                                                                                                                                                                                                                                                   | Buildings and improvements    |             |           | 3,129,640    |   |   |           | 3,048,676 |  
|                                                                                                                                                                                                                                                                                   | Less accumulated depreciation |             |           | (509,438     | ) |   |           | (485,206  | )
|                                                                                                                                                                                                                                                                                   |                               |             |           |              |   |   |           |          
|Operating real estate                                                                                                                                                                                                                                                              |                               |             | 3,146,098 |              |   |   | 3,068,278 |          
|Development in progress                                                                                                                                                                                                                                                            |                               |             | 90,100    |              |   |   | 163,379   |          
|Land held for development                                                                                                                                                                                                                                                          |                               |             | 164,661   |              |   |   | 163,142   |          
|                                                                                                                                                                                                                                                                                   |                               |             |           |              |   |   |           |          
|Net real estate                                                                                                                                                                                                                                                                    |                               |             | 3,400,859 |              |   |   | 3,394,799 |          
|Cash and cash equivalents                                                                                                                                                                                                                                                          |                               |             | 29,840    |              |   |   | 11,071    |          
|Accounts receivable                                                                                                                                                                                                                                                                |                               |             | 14,479    |              |   |   | 14,349    |          
|Deferred financing and leasing costs, net of
    accumulated amortization (2003, $77,659; 2002, $75,833)                                                                                                                                                                           |                               |             | 80,196    |              |   |   | 71,544    |          
|Investment in unconsolidated joint ventures                                                                                                                                                                                                                                        |                               |             | 16,163    |              |   |   | 14,963    |          
|Prepaid expenses and other assets                                                                                                                                                                                                                                                  |                               |             | 124,303   |              |   |   | 120,335   |          
|                                                                                                                                                                                                                                                                                   |                               |             |           |              |   |   |           |          
|Total assets                                                                                                                                                                                                                                                                       |                               | $           | 3,665,840 |              |   | $ | 3,627,061 |          
|                                                                                                                                                                                                                                                                                   |                               |             |           |              |   |   |           |          
|                                                                                                                                                                                                                                                                                  
|LIABILITIES                                                                                                                                                                                                                                                                        |                               |             |           |              |   |   |           |          
|Mortgage loans                                                                                                                                                                                                                                                                     |                               | $           | 314,341   |              |   | $ | 315,263   |          
|Unsecured notes                                                                                                                                                                                                                                                                    |                               |             | 1,428,739 |              |   |   | 1,418,924 |          
|Credit facility                                                                                                                                                                                                                                                                    |                               |             | 158,000   |              |   |   | 132,000   |          
|Accounts payable                                                                                                                                                                                                                                                                   |                               |             | 27,520    |              |   |   | 24,116    |          
|Accrued interest                                                                                                                                                                                                                                                                   |                               |             | 19,958    |              |   |   | 32,571    |          
|Dividend payable                                                                                                                                                                                                                                                                   |                               |             | 48,488    |              |   |   | 48,040    |          
|Other liabilities                                                                                                                                                                                                                                                                  |                               |             | 93,746    |              |   |   | 96,119    |          
|                                                                                                                                                                                                                                                                                   |                               |             |           |              |   |   |           |          
|Total liabilities                                                                                                                                                                                                                                                                  |                               |             | 2,090,792 |              |   |   | 2,067,033 |          
|                                                                                                                                                                                                                                                                                  
|Minority interest                                                                                                                                                                                                                                                                  |                               |             | 206,992   |              |   |   | 208,439   |          
|                                                                                                                                                                                                                                                                                  
|SHAREHOLDERS EQUITY                                                                                                                                                                                                                                                               |                               |             |           |              |   |   |           |          
|Common shares of beneficial interest, $.001 par
    value, 191,200,000 shares authorized, 77,384,198 (includes
    59,100 in treasury) and 76,484,612 (includes 59,100 in treasury)
    shares issued and outstanding as of March 31, 2003 and
    December 31, 2002, respectively |                               |             | 77        |              |   |   | 76        |          
|Additional paid-in capital                                                                                                                                                                                                                                                         |                               |             | 1,436,023 |              |   |   | 1,410,900 |          
|Unearned compensation                                                                                                                                                                                                                                                              |                               |             | (5,708    | )            |   |   | (1,750    | )        
|Distributions in excess of net income                                                                                                                                                                                                                                              |                               |             | (61,009   | )            |   |   | (56,310   | )        
|Common shares in treasury, at cost, 59,100 shares
    as of March 31, 2003 and December 31, 2002                                                                                                                                                                                   |                               |             | (1,327    | )            |   |   | (1,327    | )        
|                                                                                                                                                                                                                                                                                   |                               |             |           |              |   |   |           |          
|Total shareholders equity                                                                                                                                                                                                                                                         |                               |             | 1,368,056 |              |   |   | 1,351,589 |          
|                                                                                                                                                                                                                                                                                   |                               |             |           |              |   |   |           |          
|Total liabilities and shareholders equity                                                                                                                                                                                                                                         |                               | $           | 3,665,840 |              |   | $ | 3,627,061 |          
|                                                                                                                                                                                                                                                                                   |                               |             |           |              |   |   |           |          

See accompanying notes.

2



---



##### 



CONSOLIDATED STATEMENTS OF OPERATIONS OF
LIBERTY PROPERTY TRUST

(Unaudited and in thousands, except per share
amounts)


|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |        | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------------------- | ------------------ | ------- | --------- |  | - | ------- | ------ | 
|                                                                                                                                                                                                        |                                     |                   
|                                                                                                                                                                                                        |                                     | Three Months Ended
|                                                                                                                                                                                                        |                                     |                   
|                                                                                                                                                                                                        |                                     | March 31,          |         | March 31,
|                                                                                                                                                                                                        |                                     | 2003               |         | 2002     
|                                                                                                                                                                                                        |                                     |                    |         |          
|REVENUE                                                                                                                                                                                                 |                                     |                    |         |           |  |   |         |       
|Rental                                                                                                                                                                                                  |                                     | $                  | 113,391 |           |  | $ | 105,821 |       
|Operating expense reimbursement                                                                                                                                                                         |                                     |                    | 44,075  |           |  |   | 40,104  |       
|Equity in earnings of unconsolidated joint
    ventures                                                                                                                                                 |                                     |                    | 442     |           |  |   |        |       
|Interest and other                                                                                                                                                                                      |                                     |                    | 1,847   |           |  |   | 1,550   |       
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|Total revenue                                                                                                                                                                                           |                                     |                    | 159,755 |           |  |   | 147,475 |       
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|EXPENSES                                                                                                                                                                                                |                                     |                    |         |           |  |   |         |       
|Rental property                                                                                                                                                                                         |                                     |                    | 32,420  |           |  |   | 27,506  |       
|Real estate taxes                                                                                                                                                                                       |                                     |                    | 14,854  |           |  |   | 14,342  |       
|Interest                                                                                                                                                                                                |                                     |                    | 30,607  |           |  |   | 27,862  |       
|General and administrative                                                                                                                                                                              |                                     |                    | 6,433   |           |  |   | 5,961   |       
|Depreciation and amortization                                                                                                                                                                           |                                     |                    | 29,020  |           |  |   | 26,273  |       
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|Total expenses                                                                                                                                                                                          |                                     |                    | 113,334 |           |  |   | 101,944 |       
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|Income before property dispositions and minority
    interest                                                                                                                                           |                                     |                    | 46,421  |           |  |   | 45,531  |       
|Gain (loss) on property dispositions                                                                                                                                                                    |                                     |                    | 598     |           |  |   | (518    | )     
|Minority interest                                                                                                                                                                                       |                                     |                    | (5,607  | )         |  |   | (4,642  | )     
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|Income from continuing operations                                                                                                                                                                       |                                     |                    | 41,412  |           |  |   | 40,371  |       
|Discontinued operations net of minority interest
    (including net gain on property dispositions of $163 for the
    quarter ended March 31, 2003 and $1,389 for the quarter
    ended March 31, 2002) |                                     |                    | 175     |           |  |   | 1,829   |       
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|Net income                                                                                                                                                                                              |                                     |                    | 41,587  |           |  |   | 42,200  |       
|Preferred share distributions                                                                                                                                                                           |                                     |                    |        |           |  |   | 2,750   |       
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|Income available to common shareholders                                                                                                                                                                 |                                     | $                  | 41,587  |           |  | $ | 39,450  |       
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|Earnings per share                                                                                                                                                                                      |                                     |                    |         |           |  |   |         |       
|                                                                                                                                                                                                        | Basic:                              |                    |         |           |  |   |         |        | 
|                                                                                                                                                                                                        | Income from continuing operations   |                    | $       | .54       |  |   | $       | .51    | 
|                                                                                                                                                                                                        | Income from discontinued operations |                    |         | .00       |  |   |         | .02    | 
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|                                                                                                                                                                                                        | Income per common share  basic     |                    | $       | .54       |  |   | $       | .53    | 
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|                                                                                                                                                                                                        | Diluted:                            |                    |         |           |  |   |         |        | 
|                                                                                                                                                                                                        | Income from continuing operations   |                    | $       | .53       |  |   | $       | .51    | 
|                                                                                                                                                                                                        | Income from discontinued operations |                    |         | .00       |  |   |         | .02    | 
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|                                                                                                                                                                                                        | Income per common share  diluted   |                    | $       | .53       |  |   | $       | .53    | 
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|Distributions per common share                                                                                                                                                                          |                                     | $                  | .60     |           |  | $ | .59     |       
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       
|Weighted average number of common shares
    outstanding                                                                                                                                                |                                     |                    |         |           |  |   |         |       
|                                                                                                                                                                                                        | Basic                               |                    |         | 76,814    |  |   |         | 73,899 | 
|                                                                                                                                                                                                        | Diluted                             |                    |         | 77,851    |  |   |         | 75,103 | 
|                                                                                                                                                                                                        |                                     |                    |         |           |  |   |         |       

See accompanying notes.

3



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##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS OF
LIBERTY PROPERTY TRUST

(Unaudited and in thousands)


|                                                                                      |                                                         |                    |          |           |   |   |         |         |  
|------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------ | -------- | --------- | - | - | ------- | ------- | -
|                                                                                      |                                                         |                   
|                                                                                      |                                                         | Three Months Ended
|                                                                                      |                                                         |                   
|                                                                                      |                                                         | March 31,          |          | March 31,
|                                                                                      |                                                         | 2003               |          | 2002     
|                                                                                      |                                                         |                    |          |          
|OPERATING ACTIVITIES                                                                  |                                                         |                    |          |           |   |   |         |        
|Net income                                                                            |                                                         | $                  | 41,587   |           |   | $ | 42,200  |        
|Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                         |                    |          |           |   |   |         |        
|                                                                                      | Depreciation and amortization                           |                    |          | 29,029    |   |   |         | 26,506  |  
|                                                                                      | Amortization of deferred financing costs                |                    |          | 913       |   |   |         | 908     |  
|                                                                                      | Equity in earnings of unconsolidated joint
    ventures |                    |          | (442      | ) |   |         |        |  
|                                                                                      | Minority interest in net income                         |                    |          | 5,615     |   |   |         | 4,734   |  
|                                                                                      | Gain on property dispositions                           |                    |          | (761      | ) |   |         | (871    | )
|                                                                                      | Noncash compensation                                    |                    |          | 419       |   |   |         | 1,188   |  
|Changes in operating assets and liabilities:                                          |                                                         |                    |          |           |   |   |         |        
|                                                                                      | Accounts receivable                                     |                    |          | (130      | ) |   |         | (6,273  | )
|                                                                                      | Prepaid expenses and other assets                       |                    |          | (4,362    | ) |   |         | (4,362  | )
|                                                                                      | Accounts payable                                        |                    |          | 3,404     |   |   |         | (742    | )
|                                                                                      | Accrued interest                                        |                    |          | (12,613   | ) |   |         | (12,117 | )
|                                                                                      | Other liabilities                                       |                    |          | (2,373    | ) |   |         | 1,646   |  
|                                                                                      |                                                         |                    |          |           |   |   |         |        
|Net cash provided by operating activities                                             |                                                         |                    | 60,286   |           |   |   | 52,817  |        
|                                                                                      |                                                         |                    |          |           |   |   |         |        
|INVESTING ACTIVITIES                                                                  |                                                         |                    |          |           |   |   |         |        
|Investment in properties                                                              |                                                         |                    | (21,588  | )         |   |   | (18,987 | )      
|Investment in unconsolidated joint ventures, net                                      |                                                         |                    | (758     | )         |   |   |        |        
|Proceeds from disposition of properties/land                                          |                                                         |                    | 5,040    |           |   |   | 14,924  |        
|Investment in development in progress                                                 |                                                         |                    | (11,409  | )         |   |   | (33,490 | )      
|Investment in land held for development                                               |                                                         |                    | (925     | )         |   |   | (9,796  | )      
|Increase in deferred leasing costs                                                    |                                                         |                    | (5,122   | )         |   |   | (4,562  | )      
|                                                                                      |                                                         |                    |          |           |   |   |         |        
|Net cash used in investing activities                                                 |                                                         |                    | (34,762  | )         |   |   | (51,911 | )      
|                                                                                      |                                                         |                    |          |           |   |   |         |        
|FINANCING ACTIVITIES                                                                  |                                                         |                    |          |           |   |   |         |        
|Net proceeds from issuance of common shares                                           |                                                         |                    | 19,841   |           |   |   | 15,317  |        
|Proceeds from issuance of unsecured notes                                             |                                                         |                    | 3,683    |           |   |   |        |        
|Proceeds from mortgage loans                                                          |                                                         |                    | 100      |           |   |   | 9,695   |        
|Repayments of mortgage loans                                                          |                                                         |                    | (1,892   | )         |   |   | (1,896  | )      
|Proceeds from credit facility                                                         |                                                         |                    | 202,000  |           |   |   | 40,000  |        
|Repayments on credit facility                                                         |                                                         |                    | (176,000 | )         |   |   | (10,000 | )      
|Increase in deferred financing costs                                                  |                                                         |                    | (2,492   | )         |   |   |        |        
|Distributions paid on common shares                                                   |                                                         |                    | (45,806  | )         |   |   | (43,430 | )      
|Distributions paid on preferred shares                                                |                                                         |                    |         |           |   |   | (2,750  | )      
|Distributions paid on units                                                           |                                                         |                    | (6,189   | )         |   |   | (5,032  | )      
|                                                                                      |                                                         |                    |          |           |   |   |         |        
|Net cash (used in) provided by financing
    activities                               |                                                         |                    | (6,755   | )         |   |   | 1,904   |        
|                                                                                      |                                                         |                    |          |           |   |   |         |        
|Increase in cash and cash equivalents                                                 |                                                         |                    | 18,769   |           |   |   | 2,810   |        
|Cash and cash equivalents at beginning of year                                        |                                                         |                    | 11,071   |           |   |   | 19,390  |        
|                                                                                      |                                                         |                    |          |           |   |   |         |        
|Cash and cash equivalents at end of year                                              |                                                         | $                  | 29,840   |           |   | $ | 22,200  |        
|                                                                                      |                                                         |                    |          |           |   |   |         |        
|SUPPLEMENTAL DISCLOSURE OF NONCASH
    TRANSACTIONS                                   |                                                         |                    |          |           |   |   |         |        
|Write-off of fully depreciated property and
    deferred costs                        |                                                         | $                  | 3,962    |           |   | $ | 649     |        
|Acquisition of properties                                                             |                                                         |                    | (870     | )         |   |   |        |        
|Assumption of mortgage loans                                                          |                                                         |                    | 870      |           |   |   |        |        
|                                                                                      |                                                         |                    |          |           |   |   |         |        

See accompanying notes.

4



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##### 



LIBERTY PROPERTY TRUST



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS


(Unaudited)


March 31, 2003




|        |                      
|------- | ---------------------
|Note 1: | Basis of Presentation

The accompanying unaudited consolidated financial
statements of Liberty Property Trust (the Trust) and
its subsidiaries, including Liberty Property Limited Partnership
(the Operating Partnership) (the Trust, Operating
Partnership and their respective subsidiaries referred to
collectively as the Company), have been prepared in
accordance with accounting principles generally accepted in the
United States (US GAAP) for interim financial
information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by US GAAP
for complete financial statements and should be read in
conjunction with the consolidated financial statements and notes
thereto included in the Annual Report on Form 10-K of the
Trust and the Operating Partnership for the year ended
December 31, 2002. In the opinion of management, all
adjustments (consisting solely of normal recurring adjustments)
necessary for a fair presentation of the financial statements
for these interim periods have been included. The results of
interim periods are not necessarily indicative of the results to
be obtained for a full fiscal year. Certain amounts from prior
periods have been reclassified to conform to current period
presentation.

Income Per Share

The following table sets forth the computation of
basic and diluted income per common share for the three months
ended March 31, 2003 and 2002 (in thousands except per
share amounts):


|                                                                    |  |                                           |        |                                           |  |           |        |             |  |                |     |        |  |   |        |   |  |  |        |  |  |   |     | 
|------------------------------------------------------------------- |  | ----------------------------------------- | ------ | ----------------------------------------- |  | --------- | ------ | ----------- |  | -------------- | --- | ------ |  | - | ------ | - |  |  | ------ |  |  | - | --- | 
|                                                                    |  |                                           |        |                                          
|                                                                    |  | For the Three Months Ended March 31, 2003 |        | For the Three Months Ended March 31, 2002
|                                                                    |  |                                           |        |                                          
|                                                                    |  |                                           |        | Weighted                                  |  |           |        |             |  | Weighted       |     | Per   
|                                                                    |  | Income                                    |        | Average Shares                            |  | Per Share |        | Income      |  | Average Shares |     | Share 
|                                                                    |  | (Numerator)                               |        | (Denominator)                             |  | Amount    |        | (Numerator) |  | (Denominator)  |     | Amount
|                                                                    |  |                                           |        |                                           |  |           |        |             |  |                |     |       
|Net income                                                          |  | $                                         | 41,587 |                                           |  |           |        |             |  |                |     |        |  | $ | 42,200 |   |  |  |        |  |  |   |     | 
|Less: Preferred share distributions                                 |  |                                           |       |                                           |  |           |        |             |  |                |     |        |  |   | (2,750 | ) |  |  |        |  |  |   |     | 
|                                                                    |  |                                           |        |                                           |  |           |        |             |  |                |     |        |  |   |        |   |  |  |        |  |  |   |     | 
|Basic income per common share                                       |  |                                           |        |                                           |  |           |        |             |  |                |     |        |  |   |        |   |  |  |        |  |  |   |     | 
|Income available to common shareholders                             |  |                                           | 41,587 |                                           |  |           | 76,814 |             |  | $              | .54 |        |  |   | 39,450 |   |  |  | 73,899 |  |  | $ | .53 | 
|                                                                    |  |                                           |        |                                           |  |           |        |             |  |                |     |        |  |   |        |   |  |  |        |  |  |   |     | 
|Dilutive shares for long-term compensation plans                    |  |                                           |       |                                           |  |           | 1,037  |             |  |                |     |        |  |   |       |   |  |  | 1,204  |  |  |   |     | 
|                                                                    |  |                                           |        |                                           |  |           |        |             |  |                |     |        |  |   |        |   |  |  |        |  |  |   |     | 
|Diluted income per common share                                     |  |                                           |        |                                           |  |           |        |             |  |                |     |        |  |   |        |   |  |  |        |  |  |   |     | 
|Income available to common shareholders and
    assumed conversions |  | $                                         | 41,587 |                                           |  |           | 77,851 |             |  | $              | .53 |        |  | $ | 39,450 |   |  |  | 75,103 |  |  | $ | .53 | 
|                                                                    |  |                                           |        |                                           |  |           |        |             |  |                |     |        |  |   |        |   |  |  |        |  |  |   |     | 

Stock Based Compensation

At March 31, 2003, the Company had a
share-based employee compensation plan. Prior to 2003, the
Company accounted for the plan under the recognition and
measurement provisions of APB Opinion No. 25, Accounting
for Stock Issued to Employees, and related Interpretations.
No share-based employee compensation cost is reflected in 2002
net income, as all options granted under this plan had an
exercise price equal to the market value of the underlying
common share on the date of grant. Effective January 1,
2003, the Company adopted the fair value recognition provisions
of FASB Statement No. 123, Accounting for Stock-Based
Compensation, prospectively to all employee awards granted,
modified, or settled after January 1, 2003. Option awards
under the Companys plan vest over three years. Therefore,
the cost related to share-based employee compensation included
in the determination of net income for 2002 and 2003 is less
than that which would have been recognized if the fair value
based method had been applied to all awards since the original


5



---



##### 



LIBERTY PROPERTY TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

effective date of Statement 123. The
following table illustrates the effect on net income and
earnings per share if the fair value based method had been
applied to all outstanding and unvested awards in each period.



|                                                                                                                        |                       |                    |        |      |  |   |        |     | 
|----------------------------------------------------------------------------------------------------------------------- | --------------------- | ------------------ | ------ | ---- |  | - | ------ | --- | 
|                                                                                                                        |                       |                   
|                                                                                                                        |                       | Three Months Ended
|                                                                                                                        |                       | March 31,         
|                                                                                                                        |                       |                   
|                                                                                                                        |                       | 2003               |        | 2002
|                                                                                                                        |                       |                    |        |     
|                                                                                                                        |                       |                   
|                                                                                                                        |                       | (In thousands)    
|Income available to common shareholders                                                                                 |                       | $                  | 41,587 |      |  | $ | 39,450 |    
|Add: Share-based employee compensation
    expense included in reported net income                                      |                       |                    | 9      |      |  |   |       |    
|Deduct: Total share-based employee
    compensation expense determined under fair value based method
    for all awards |                       |                    | (500   | )    |  |   | (462   | )  
|                                                                                                                        |                       |                    |        |      |  |   |        |    
|Pro forma net income                                                                                                    |                       | $                  | 41,096 |      |  | $ | 38,988 |    
|                                                                                                                        |                       |                    |        |      |  |   |        |    
|Earnings per share:                                                                                                     |                       |                    |        |      |  |   |        |    
|                                                                                                                        | Basic  as reported   |                    | $      | .54  |  |   | $      | .53 | 
|                                                                                                                        | Basic  pro forma     |                    | $      | .54  |  |   | $      | .53 | 
|                                                                                                                        | Diluted  as reported |                    | $      | .53  |  |   | $      | .53 | 
|                                                                                                                        | Diluted  pro forma   |                    | $      | .53  |  |   | $      | .52 | 



|        |             
|------- | ------------
|Note 2: | Organization

The Trust is a self-administered and self-managed
Maryland real estate investment trust (a REIT).
Substantially all of the Trusts assets are owned directly
or indirectly, and substantially all of the Trusts
operations are conducted directly or indirectly, by the
Operating Partnership. The Trust is the sole general partner and
also a limited partner of the Operating Partnership, owning
95.5% of the common equity of the Operating Partnership at
March 31, 2003. The Company provides leasing, property
management, development, acquisition, and other tenant-related
services for a portfolio of industrial and office properties
which are located principally within the Southeastern,
Mid-Atlantic and Midwestern United States.

Note 3:     Segment
Information

The Company reviews the performance of the
portfolio on a geographical basis. The following regions are
considered the Companys reportable segments: Southeastern
Pennsylvania; New Jersey; Lehigh Valley, Pennsylvania; Virginia;
the Carolinas; Jacksonville, Florida; Minneapolis, Minnesota;
Detroit, Michigan; and all others combined (including Maryland;
Tampa, Florida; South Florida; and the United Kingdom). The
Companys reportable segments are distinct business units
which are each managed separately in order to concentrate market
knowledge within a geographical area. Within these reportable
segments, the Company derives its revenues from its two product
types: industrial properties and office properties.

The Company evaluates the performance of the
reportable segments based on property level operating income,
which is calculated as rental revenue and operating expense
reimbursement less rental property

6



---



##### 



LIBERTY PROPERTY TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

expenses and real estate taxes. The accounting
policies of the reportable segments are the same as those for
the Company on a consolidated basis. The operating information
by segment is as follows (in thousands):

|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|------------------------------------------------------------- |  | ----------------------------------------- | ------ | ---------- |  | ------------- | ----- | -------- |  | ------------- | ------ | ------------ |  | --------- | ------ | -------- |  | ---------- | ----- | ----- |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------- | -
|                                                              |  |                                          
|                                                              |  | For the Three Months Ended March 31, 2003
|                                                              |  |                                          
|                                                              |  | SE Pennsyl.                               |        | New Jersey |  | Lehigh Valley |       | Virginia |  | The Carolinas |        | Jacksonville |  | Minnesota |        | Michigan |  | All Others |       | Total
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |      
|Real estate related revenues                                  |  | $                                         | 54,126 |            |  | $             | 8,722 |          |  | $             | 15,094 |              |  | $         | 12,640 |          |  | $          | 8,873 |       |  | $ | 12,092 |  |  | $ | 12,536 |  |  | $ | 16,021 |  |  | $ | 17,362 |  |  | $ | 157,466 |  
|Rental property expenses and real estate taxes                |  |                                           | 15,509 |            |  |               | 3,325 |          |  |               | 4,390  |              |  |           | 3,440  |          |  |            | 2,521 |       |  |   | 3,284  |  |  |   | 4,675  |  |  |   | 5,017  |  |  |   | 5,113  |  |  |   | 47,274  |  
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Property level operating income                               |  | $                                         | 38,617 |            |  | $             | 5,397 |          |  | $             | 10,704 |              |  | $         | 9,200  |          |  | $          | 6,352 |       |  | $ | 8,808  |  |  | $ | 7,861  |  |  | $ | 11,004 |  |  | $ | 12,249 |  |  |   | 110,192 |  
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Other income/expenses, net                                    |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 63,771  |  
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Income before property dispositions and minority
    interest |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 46,421  |  
|Gain on disposition of properties                             |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 598     |  
|Minority interest                                             |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | (5,607  | )
|Discontinued operations net of minority interest              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 175     |  
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Income available to common shareholders                       |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  | $ | 41,587  |  
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  

|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|------------------------------------------------------------- |  | ----------------------------------------- | ------ | ---------- |  | ------------- | ------ | -------- |  | ------------- | ------ | ------------ |  | --------- | ------ | -------- |  | ---------- | ----- | ----- |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------- | -
|                                                              |  |                                          
|                                                              |  | For the Three Months Ended March 31, 2002
|                                                              |  |                                          
|                                                              |  | SE Pennsyl.                               |        | New Jersey |  | Lehigh Valley |        | Virginia |  | The Carolinas |        | Jacksonville |  | Minnesota |        | Michigan |  | All Others |       | Total
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |      
|Real estate related revenues                                  |  | $                                         | 44,965 |            |  | $             | 11,539 |          |  | $             | 14,637 |              |  | $         | 12,430 |          |  | $          | 9,029 |       |  | $ | 11,308 |  |  | $ | 12,354 |  |  | $ | 15,030 |  |  | $ | 14,633 |  |  | $ | 145,925 |  
|Rental property expenses and real estate taxes                |  |                                           | 12,788 |            |  |               | 3,690  |          |  |               | 3,248  |              |  |           | 3,165  |          |  |            | 2,717 |       |  |   | 2,615  |  |  |   | 4,527  |  |  |   | 4,852  |  |  |   | 4,246  |  |  |   | 41,848  |  
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Property level operating income                               |  | $                                         | 32,177 |            |  | $             | 7,849  |          |  | $             | 11,389 |              |  | $         | 9,265  |          |  | $          | 6,312 |       |  | $ | 8,693  |  |  | $ | 7,827  |  |  | $ | 10,178 |  |  | $ | 10,387 |  |  |   | 104,077 |  
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Other income/expenses, net                                    |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 58,546  |  
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Income before property dispositions and minority
    interest |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 45,531  |  
|Loss on disposition of properties                             |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | (518    | )
|Minority interest                                             |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | (4,642  | )
|Discontinued operations net of minority interest              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 1,829   |  
|Preferred share distributions                                 |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | (2,750  | )
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Income available to common shareholders                       |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  | $ | 39,450  |  
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  



|        |                                                                                   
|------- | ----------------------------------------------------------------------------------
|Note 4: | SFAS No. 144, Accounting For
    The Impairment Or Disposal Of Long-Lived Assets

In accordance with SFAS No. 144 which
the Company adopted on January 1, 2002, net income and
gain/(loss) on the disposition of real estate for properties
sold subsequent to December 31, 2001 are reflected in the
consolidated statements of operations as discontinued
operations. The proceeds from the disposition of properties for
the quarters ended March 31, 2003 and 2002 were
$3.7 million and $12.8 million, respectively.

7



---



##### 



LIBERTY PROPERTY TRUST


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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

|                              |  |                    |     |           |  |   |       |  
|----------------------------- |  | ------------------ | --- | --------- |  | - | ----- | -
|                              |  |                   
|                              |  | Three Months Ended
|                              |  |                   
|                              |  | March 31,          |     | March 31,
|                              |  | 2003               |     | 2002     
|                              |  |                    |     |          
|Revenues                      |  | $                  | 48  |           |  | $ | 1,104 |  
|Operating expenses            |  |                    | (4  | )         |  |   | (144  | )
|Interest expense              |  |                    | (15 | )         |  |   | (195  | )
|Depreciation and amortization |  |                    | (9  | )         |  |   | (233  | )
|                              |  |                    |     |           |  |   |       |  
|Income from operations        |  | $                  | 20  |           |  | $ | 532   |  
|                              |  |                    |     |           |  |   |       |  

Gain or loss on disposition on sales of land and
development properties continue to be reflected as a component
of income from continuing operations.

Note 5:     Credit
Facility

During the three months ended March 31,
2003, the Company replaced its unsecured revolving credit
facility with a new facility which matures in January 2006.
Capacity under the facility was reduced from $450 million
to $350 million. Based on the Companys present
ratings, borrowings under the facility are priced at LIBOR plus
70 basis points reduced from LIBOR plus 105 basis points for the
facility prior to its renewal.



|        |                                                   
|------- | --------------------------------------------------
|Note 6: | Impact of Recently Issued Accounting
    Standards

In January 2003, the FASB issued Financial
Interpretation No. 46 (FIN No. 46),
Consolidation of Variable Interest Entities. The
consolidation requirements of FIN No. 46 apply immediately
to variable interest entities created after January 31,
2003 and applies to existing variable interest entities in the
first fiscal year or interim period beginning after
June 15, 2003. FIN No. 46 requires that a
variable interest entity be consolidated by a company if that
company is subject to a majority of the risk of loss from the
variable interest entitys activities or is entitled to
receive a majority of the entitys residual returns or
both. It is likely that Rouse Kent Limited (RKL)
will be consolidated into the Companys financial
statements either through the exercise of the Companys
option to buy, or through the adoption of the provisions of
FIN No. 46. RKL is a full service real estate
development company which, together with its affiliates, owns
six properties comprising 210,000 leasable square feet. The
Company does not expect its financial position or results of
operations to be materially affected by this potential
consolidation.

8



---



##### 



CONSOLIDATED BALANCE SHEETS OF

LIBERTY PROPERTY LIMITED PARTNERSHIP

(In thousands)


|                                                                                                         |                               |                    |           |              |   |   |           |           |  
|-------------------------------------------------------------------------------------------------------- | ----------------------------- | ------------------ | --------- | ------------ | - | - | --------- | --------- | -
|                                                                                                         |                               |                   
|                                                                                                         |                               | Three Months Ended
|                                                                                                         |                               |                   
|                                                                                                         |                               | March 31,          |           | December 31,
|                                                                                                         |                               | 2003               |           | 2002        
|                                                                                                         |                               |                    |           |             
|                                                                                                         |                               | (Unaudited)        |           |             
|ASSETS                                                                                                  
|Real estate:                                                                                             |                               |                    |           |              |   |   |           |          
|                                                                                                         | Land and land improvements    |                    | $         | 525,896      |   |   | $         | 504,808   |  
|                                                                                                         | Buildings and improvements    |                    |           | 3,129,640    |   |   |           | 3,048,676 |  
|                                                                                                         | Less accumulated depreciation |                    |           | (509,438     | ) |   |           | (485,206  | )
|                                                                                                         |                               |                    |           |              |   |   |           |          
|Operating real estate                                                                                    |                               |                    | 3,146,098 |              |   |   | 3,068,278 |          
|Development in progress                                                                                  |                               |                    | 90,100    |              |   |   | 163,379   |          
|Land held for development                                                                                |                               |                    | 164,661   |              |   |   | 163,142   |          
|                                                                                                         |                               |                    |           |              |   |   |           |          
|Net real estate                                                                                          |                               |                    | 3,400,859 |              |   |   | 3,394,799 |          
|Cash and cash equivalents                                                                                |                               |                    | 29,840    |              |   |   | 11,071    |          
|Accounts receivable                                                                                      |                               |                    | 14,479    |              |   |   | 14,349    |          
|Deferred financing and leasing costs, net of
    accumulated amortization (2003, $77,659; 2002, $75,833) |                               |                    | 80,196    |              |   |   | 71,544    |          
|Investment in unconsolidated joint ventures                                                              |                               |                    | 16,163    |              |   |   | 14,963    |          
|Prepaid expenses and other assets                                                                        |                               |                    | 124,303   |              |   |   | 120,335   |          
|                                                                                                         |                               |                    |           |              |   |   |           |          
|Total assets                                                                                             |                               | $                  | 3,665,840 |              |   | $ | 3,627,061 |          
|                                                                                                         |                               |                    |           |              |   |   |           |          
|LIABILITIES                                                                                             
|Mortgage loans                                                                                           |                               | $                  | 314,341   |              |   | $ | 315,263   |          
|Unsecured notes                                                                                          |                               |                    | 1,428,739 |              |   |   | 1,418,924 |          
|Credit facility                                                                                          |                               |                    | 158,000   |              |   |   | 132,000   |          
|Accounts payable                                                                                         |                               |                    | 27,520    |              |   |   | 24,116    |          
|Accrued interest                                                                                         |                               |                    | 19,958    |              |   |   | 32,571    |          
|Distribution payable                                                                                     |                               |                    | 48,488    |              |   |   | 48,040    |          
|Other liabilities                                                                                        |                               |                    | 93,746    |              |   |   | 96,119    |          
|                                                                                                         |                               |                    |           |              |   |   |           |          
|Total liabilities                                                                                        |                               |                    | 2,090,792 |              |   |   | 2,067,033 |          
|Minority interest                                                                                        |                               |                    | 6,758     |              |   |   | 7,054     |          
|OWNERS EQUITY                                                                                          
|General partners
    equity  common units                                                              |                               |                    | 1,368,056 |              |   |   | 1,351,589 |          
|Limited partners
    equity  preferred units                                                           |                               |                    | 135,471   |              |   |   | 135,471   |          
| common
    units                                                                                       |                               |                    | 64,763    |              |   |   | 65,914    |          
|                                                                                                         |                               |                    |           |              |   |   |           |          
|Total owners equity                                                                                     |                               |                    | 1,568,290 |              |   |   | 1,552,974 |          
|                                                                                                         |                               |                    |           |              |   |   |           |          
|Total liabilities and owners equity                                                                     |                               | $                  | 3,665,840 |              |   | $ | 3,627,061 |          
|                                                                                                         |                               |                    |           |              |   |   |           |          

See accompanying notes.

9



---



##### 



CONSOLIDATED STATEMENTS OF OPERATIONS
OF

LIBERTY PROPERTY LIMITED PARTNERSHIP

(Unaudited and in thousands)


|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |        | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ----------------------------------- | ------------------ | ------- | -------------- |  | - | ------- | ------ | 
|                                                                                                                                                                               |                                     |                   
|                                                                                                                                                                               |                                     | Three Months Ended
|                                                                                                                                                                               |                                     |                   
|                                                                                                                                                                               |                                     | March 31, 2003     |         | March 31, 2002
|                                                                                                                                                                               |                                     |                    |         |               
|REVENUE                                                                                                                                                                        |                                     |                    |         |                |  |   |         |       
|Rental                                                                                                                                                                         |                                     | $                  | 113,391 |                |  | $ | 105,821 |       
|Operating expense reimbursement                                                                                                                                                |                                     |                    | 44,075  |                |  |   | 40,104  |       
|Equity in earnings of unconsolidated joint
    ventures                                                                                                                        |                                     |                    | 442     |                |  |   |        |       
|Interest and other                                                                                                                                                             |                                     |                    | 1,847   |                |  |   | 1,550   |       
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|Total revenue                                                                                                                                                                  |                                     |                    | 159,755 |                |  |   | 147,475 |       
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|EXPENSES                                                                                                                                                                       |                                     |                    |         |                |  |   |         |       
|Rental property                                                                                                                                                                |                                     |                    | 32,420  |                |  |   | 27,506  |       
|Real estate taxes                                                                                                                                                              |                                     |                    | 14,854  |                |  |   | 14,342  |       
|Interest expense                                                                                                                                                               |                                     |                    | 30,607  |                |  |   | 27,862  |       
|General and administrative                                                                                                                                                     |                                     |                    | 6,433   |                |  |   | 5,961   |       
|Depreciation and amortization                                                                                                                                                  |                                     |                    | 29,020  |                |  |   | 26,273  |       
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|Total expenses                                                                                                                                                                 |                                     |                    | 113,334 |                |  |   | 101,944 |       
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|Income before property dispositions and minority
    interest                                                                                                                  |                                     |                    | 46,421  |                |  |   | 45,531  |       
|Gain (loss) on property dispositions                                                                                                                                           |                                     |                    | 598     |                |  |   | (518    | )     
|Minority interest                                                                                                                                                              |                                     |                    | (518    | )              |  |   |        |       
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|Income from continuing operations                                                                                                                                              |                                     |                    | 46,501  |                |  |   | 45,013  |       
|Discontinued operations (including net gain on
    property dispositions of $163 for the quarter ended
    March 31, 2003 and $1,389 for the quarter ended
    March 31, 2002) |                                     |                    | 183     |                |  |   | 1,921   |       
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|Net income                                                                                                                                                                     |                                     |                    | 46,684  |                |  |   | 46,934  |       
|Preferred unit distributions                                                                                                                                                   |                                     |                    | (3,104  | )              |  |   | (5,403  | )     
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|Income available to common unitholders                                                                                                                                         |                                     | $                  | 43,580  |                |  | $ | 41,531  |       
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|Earnings per common unit:                                                                                                                                                      |                                     |                    |         |                |  |   |         |       
|                                                                                                                                                                               | Basic:                              |                    |         |                |  |   |         |        | 
|                                                                                                                                                                               | Income from continuing operations   |                    | $       | .54            |  |   | $       | .51    | 
|                                                                                                                                                                               | Income from discontinued operations |                    |         | .00            |  |   |         | .02    | 
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|                                                                                                                                                                               | Income per common unit  basic      |                    | $       | .54            |  |   | $       | .53    | 
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|                                                                                                                                                                               | Diluted:                            |                    |         |                |  |   |         |        | 
|                                                                                                                                                                               | Income from continuing operations   |                    | $       | .53            |  |   | $       | .51    | 
|                                                                                                                                                                               | Income from discontinued operations |                    |         | .00            |  |   |         | .02    | 
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|                                                                                                                                                                               | Income per common unit  diluted    |                    | $       | .53            |  |   | $       | .53    | 
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       
|Weighted average number of common units
    outstanding                                                                                                                        |                                     |                    |         |                |  |   |         |       
|                                                                                                                                                                               | Basic                               |                    |         | 80,525         |  |   |         | 77,819 | 
|                                                                                                                                                                               | Diluted                             |                    |         | 81,562         |  |   |         | 79,023 | 
|                                                                                                                                                                               |                                     |                    |         |                |  |   |         |       

See accompanying notes.

10



---



##### 



CONSOLIDATED STATEMENTS OF CASH FLOWS
OF

LIBERTY PROPERTY LIMITED PARTNERSHIP

(Unaudited and in thousands)


|                                                                                      |                                                         |                    |          |                |   |   |         |         |  
|------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------------------ | -------- | -------------- | - | - | ------- | ------- | -
|                                                                                      |                                                         |                   
|                                                                                      |                                                         | Three Months Ended
|                                                                                      |                                                         |                   
|                                                                                      |                                                         | March 31, 2003     |          | March 31, 2002
|                                                                                      |                                                         |                    |          |               
|OPERATING ACTIVITIES                                                                  |                                                         |                    |          |                |   |   |         |        
|Net income                                                                            |                                                         | $                  | 46,684   |                |   | $ | 46,934  |        
|Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                         |                    |          |                |   |   |         |        
|                                                                                      | Depreciation and amortization                           |                    |          | 29,029         |   |   |         | 26,506  |  
|                                                                                      | Amortization of deferred financing costs                |                    |          | 913            |   |   |         | 908     |  
|                                                                                      | Equity in earnings of unconsolidated joint
    ventures |                    |          | (442           | ) |   |         |        |  
|                                                                                      | Minority interest in net income                         |                    |          | 518            |   |   |         |        |  
|                                                                                      | Gain on property dispositions                           |                    |          | (761           | ) |   |         | (871    | )
|                                                                                      | Noncash compensation                                    |                    |          | 419            |   |   |         | 1,188   |  
|Changes in operating assets and liabilities:                                          |                                                         |                    |          |                |   |   |         |        
|                                                                                      | Accounts receivable                                     |                    |          | (130           | ) |   |         | (6,273  | )
|                                                                                      | Prepaid expenses and other assets                       |                    |          | (4,362         | ) |   |         | (4,362  | )
|                                                                                      | Accounts payable                                        |                    |          | 3,404          |   |   |         | (742    | )
|                                                                                      | Accrued interest                                        |                    |          | (12,613        | ) |   |         | (12,117 | )
|                                                                                      | Other liabilities                                       |                    |          | (2,373         | ) |   |         | 1,646   |  
|                                                                                      |                                                         |                    |          |                |   |   |         |        
|Net cash provided by operating activities                                             |                                                         |                    | 60,286   |                |   |   | 52,817  |        
|                                                                                      |                                                         |                    |          |                |   |   |         |        
|INVESTING ACTIVITIES                                                                  |                                                         |                    |          |                |   |   |         |        
|Investment in properties                                                              |                                                         |                    | (21,588  | )              |   |   | (18,987 | )      
|Investment in unconsolidated joint ventures, net                                      |                                                         |                    | (758     | )              |   |   |        |        
|Proceeds from disposition of properties/land                                          |                                                         |                    | 5,040    |                |   |   | 14,924  |        
|Investment in development in progress                                                 |                                                         |                    | (11,409  | )              |   |   | (33,490 | )      
|Increase in land held for development                                                 |                                                         |                    | (925     | )              |   |   | (9,796  | )      
|Increase in deferred leasing costs                                                    |                                                         |                    | (5,122   | )              |   |   | (4,562  | )      
|                                                                                      |                                                         |                    |          |                |   |   |         |        
|Net cash used in investing activities                                                 |                                                         |                    | (34,762  | )              |   |   | (51,911 | )      
|                                                                                      |                                                         |                    |          |                |   |   |         |        
|FINANCING ACTIVITIES                                                                  |                                                         |                    |          |                |   |   |         |        
|Proceeds from issuance of unsecured notes                                             |                                                         |                    | 3,683    |                |   |   |        |        
|Proceeds from mortgage loans                                                          |                                                         |                    | 100      |                |   |   | 9,695   |        
|Repayments of mortgage loans                                                          |                                                         |                    | (1,892   | )              |   |   | (1,896  | )      
|Proceeds from credit facility                                                         |                                                         |                    | 202,000  |                |   |   | 40,000  |        
|Repayments on credit facility                                                         |                                                         |                    | (176,000 | )              |   |   | (10,000 | )      
|Increase in deferred financing costs                                                  |                                                         |                    | (2,492   | )              |   |   |        |        
|Capital contributions                                                                 |                                                         |                    | 19,841   |                |   |   | 15,317  |        
|Distributions to partners                                                             |                                                         |                    | (51,995  | )              |   |   | (51,212 | )      
|                                                                                      |                                                         |                    |          |                |   |   |         |        
|Net cash (used in) provided by financing
    activities                               |                                                         |                    | (6,755   | )              |   |   | 1,904   |        
|                                                                                      |                                                         |                    |          |                |   |   |         |        
|Increase in cash and cash equivalents                                                 |                                                         |                    | 18,769   |                |   |   | 2,810   |        
|Cash and cash equivalents at beginning of year                                        |                                                         |                    | 11,071   |                |   |   | 19,390  |        
|                                                                                      |                                                         |                    |          |                |   |   |         |        
|Cash and cash equivalents at end of year                                              |                                                         | $                  | 29,840   |                |   | $ | 22,200  |        
|                                                                                      |                                                         |                    |          |                |   |   |         |        
|SUPPLEMENTAL DISCLOSURE OF NONCASH
    TRANSACTIONS                                   |                                                         |                    |          |                |   |   |         |        
|Write-off of fully depreciated property and
    deferred costs                        |                                                         | $                  | 3,962    |                |   | $ | 649     |        
|Acquisition of properties                                                             |                                                         |                    | (870     | )              |   |   |        |        
|Assumption of mortgage loans                                                          |                                                         |                    | 870      |                |   |   |        |        
|                                                                                      |                                                         |                    |          |                |   |   |         |        

See accompanying notes.

11



---



##### 



LIBERTY PROPERTY LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS

(Unaudited)


March 31, 2003




|        |                      
|------- | ---------------------
|Note 1: | Basis of Presentation

The accompanying unaudited consolidated financial
statements of Liberty Property Limited Partnership (the
Operating Partnership) and its direct and indirect
subsidiaries, have been prepared in accordance with accounting
principles generally accepted in the United States (US
GAAP) for interim financial information and with the
instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by US GAAP for complete
financial statements and should be read in conjunction with the
consolidated financial statements and notes thereto included in
the Annual Report on Form 10-K of the Trust and the
Operating Partnership for the year ended December 31, 2002.
In the opinion of management, all adjustments (consisting solely
of normal recurring adjustments) necessary for a fair
presentation of the financial statements for these interim
periods have been included. The results of interim periods are
not necessarily indicative of the results to be obtained for a
full fiscal year. Certain amounts from prior periods have been
reclassified to conform to current period presentation.

Income Per Unit

The following table sets forth the computation of
basic and diluted income per common unitholder for the three
months ended March 31, 2003 and 2002 (in thousands except
per unit amounts):


|                                                 |  |                                           |        |                                           |  |          |        |             |  |               |     |          |  |   |        |   |  |  |        |  |  |   |     | 
|------------------------------------------------ |  | ----------------------------------------- | ------ | ----------------------------------------- |  | -------- | ------ | ----------- |  | ------------- | --- | -------- |  | - | ------ | - |  |  | ------ |  |  | - | --- | 
|                                                 |  |                                           |        |                                          
|                                                 |  | For the Three Months Ended March 31, 2003 |        | For the Three Months Ended March 31, 2002
|                                                 |  |                                           |        |                                          
|                                                 |  |                                           |        | Weighted                                  |  |          |        |             |  | Weighted      |     |         
|                                                 |  |                                           |        | Average                                   |  |          |        |             |  | Average       |     |         
|                                                 |  | Income                                    |        | Units                                     |  | Per Unit |        | Income      |  | Units         |     | Per Unit
|                                                 |  | (Numerator)                               |        | (Denominator)                             |  | Amount   |        | (Numerator) |  | (Denominator) |     | Amount  
|                                                 |  |                                           |        |                                           |  |          |        |             |  |               |     |         
|Net income                                       |  | $                                         | 46,684 |                                           |  |          |        |             |  |               |     |          |  | $ | 46,934 |   |  |  |        |  |  |   |     | 
|Less: Preferred unit distributions               |  |                                           | (3,104 | )                                         |  |          |        |             |  |               |     |          |  |   | (5,403 | ) |  |  |        |  |  |   |     | 
|                                                 |  |                                           |        |                                           |  |          |        |             |  |               |     |          |  |   |        |   |  |  |        |  |  |   |     | 
|Basic income per common unit                     |  |                                           |        |                                           |  |          |        |             |  |               |     |          |  |   |        |   |  |  |        |  |  |   |     | 
|Income available to common unitholders           |  |                                           | 43,580 |                                           |  |          | 80,525 |             |  | $             | .54 |          |  |   | 41,531 |   |  |  | 77,819 |  |  | $ | .53 | 
|                                                 |  |                                           |        |                                           |  |          |        |             |  |               |     |          |  |   |        |   |  |  |        |  |  |   |     | 
|Dilutive shares for long-term compensation plans |  |                                           |       |                                           |  |          | 1,037  |             |  |               |     |          |  |   |       |   |  |  | 1,204  |  |  |   |     | 
|                                                 |  |                                           |        |                                           |  |          |        |             |  |               |     |          |  |   |        |   |  |  |        |  |  |   |     | 
|Diluted income per common unit                   |  |                                           |        |                                           |  |          |        |             |  |               |     |          |  |   |        |   |  |  |        |  |  |   |     | 
|Income available to common unitholders           |  | $                                         | 43,580 |                                           |  |          | 81,562 |             |  | $             | .53 |          |  | $ | 41,531 |   |  |  | 79,023 |  |  | $ | .53 | 
|                                                 |  |                                           |        |                                           |  |          |        |             |  |               |     |          |  |   |        |   |  |  |        |  |  |   |     | 



|        |             
|------- | ------------
|Note 2: | Organization

Liberty Property Trust (the Trust),
the general partner of Liberty Property Limited Partnership, is
a self-administered and self-managed Maryland real estate
investment trust (a REIT). Substantially all of the
Trusts assets are owned directly or indirectly, and
substantially all of the Trusts operations are conducted
directly or indirectly, by the Operating Partnership (the Trust,
Operating Partnership and their respective subsidiaries,
referred to collectively as, the Company). The Trust
is the sole general partner and also a limited partner of the
Operating Partnership, owning 95.5% of the common equity of the
Operating Partnership at March 31, 2003. The Company
provides leasing, property management, development, acquisition,
and other tenant-related services for a portfolio of industrial
and office properties which are located principally within the
Southeastern, Mid-Atlantic and Midwestern United States.

12



---



##### 



LIBERTY PROPERTY LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|        |                    
|------- | -------------------
|Note 3: | Segment Information

The Company reviews the performance of the
portfolio on a geographical basis. The following regions are
considered the Companys reportable segments: Southeastern
Pennsylvania; New Jersey; Lehigh Valley, Pennsylvania; Virginia;
the Carolinas; Jacksonville, Florida; Minneapolis, Minnesota;
Detroit, Michigan; and all others combined (including Maryland;
Tampa, Florida; South Florida; and the United Kingdom). The
Companys reportable segments are distinct business units
which are each managed separately in order to concentrate market
knowledge within a geographical area. Within these reportable
segments, the Company derives its revenues from its two product
types: industrial properties and office properties.

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

|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|------------------------------------------------------------- |  | ----------------------------------------- | ------ | ---------- |  | ------------- | ----- | -------- |  | ------------- | ------ | ------------ |  | --------- | ------ | -------- |  | ---------- | ----- | ----- |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------- | -
|                                                              |  |                                          
|                                                              |  | For the Three Months Ended March 31, 2003
|                                                              |  |                                          
|                                                              |  | SE Pennsyl.                               |        | New Jersey |  | Lehigh Valley |       | Virginia |  | The Carolinas |        | Jacksonville |  | Minnesota |        | Michigan |  | All Others |       | Total
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |      
|Real estate related revenues                                  |  | $                                         | 54,126 |            |  | $             | 8,722 |          |  | $             | 15,094 |              |  | $         | 12,640 |          |  | $          | 8,873 |       |  | $ | 12,092 |  |  | $ | 12,536 |  |  | $ | 16,021 |  |  | $ | 17,362 |  |  | $ | 157,466 |  
|Rental property expenses and real estate taxes                |  |                                           | 15,509 |            |  |               | 3,325 |          |  |               | 4,390  |              |  |           | 3,440  |          |  |            | 2,521 |       |  |   | 3,284  |  |  |   | 4,675  |  |  |   | 5,017  |  |  |   | 5,113  |  |  |   | 47,274  |  
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Property level operating income                               |  | $                                         | 38,617 |            |  | $             | 5,397 |          |  | $             | 10,704 |              |  | $         | 9,200  |          |  | $          | 6,352 |       |  | $ | 8,808  |  |  | $ | 7,861  |  |  | $ | 11,004 |  |  | $ | 12,249 |  |  |   | 110,192 |  
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Other income/expenses, net                                    |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 63,771  |  
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Income before property dispositions and minority
    interest |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 46,421  |  
|Gain on disposition of properties                             |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 598     |  
|Minority interest                                             |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | (518    | )
|Discontinued operations                                       |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 183     |  
|Preferred unit distributions                                  |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | (3,104  | )
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Net income available to common unitholders                    |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  | $ | 43,580  |  
|                                                              |  |                                           |        |            |  |               |       |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  

13



---



##### 



LIBERTY PROPERTY LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|------------------------------------------------------------- |  | ----------------------------------------- | ------ | ---------- |  | ------------- | ------ | -------- |  | ------------- | ------ | ------------ |  | --------- | ------ | -------- |  | ---------- | ----- | ----- |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------ |  |  | - | ------- | -
|                                                              |  |                                          
|                                                              |  | For the Three Months Ended March 31, 2002
|                                                              |  |                                          
|                                                              |  | SE Pennsyl.                               |        | New Jersey |  | Lehigh Valley |        | Virginia |  | The Carolinas |        | Jacksonville |  | Minnesota |        | Michigan |  | All Others |       | Total
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |      
|Real estate related revenues                                  |  | $                                         | 44,965 |            |  | $             | 11,539 |          |  | $             | 14,637 |              |  | $         | 12,430 |          |  | $          | 9,029 |       |  | $ | 11,308 |  |  | $ | 12,354 |  |  | $ | 15,030 |  |  | $ | 14,633 |  |  | $ | 145,925 |  
|Rental property expenses and real estate taxes                |  |                                           | 12,788 |            |  |               | 3,690  |          |  |               | 3,248  |              |  |           | 3,165  |          |  |            | 2,717 |       |  |   | 2,615  |  |  |   | 4,527  |  |  |   | 4,852  |  |  |   | 4,246  |  |  |   | 41,848  |  
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Property level operating income                               |  | $                                         | 32,177 |            |  | $             | 7,849  |          |  | $             | 11,389 |              |  | $         | 9,265  |          |  | $          | 6,312 |       |  | $ | 8,693  |  |  | $ | 7,827  |  |  | $ | 10,178 |  |  | $ | 10,387 |  |  |   | 104,077 |  
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Other income/expenses, net                                    |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 58,546  |  
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Income before property dispositions and minority
    interest |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 45,531  |  
|Loss on disposition of properties                             |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | (518    | )
|Minority interest                                             |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  
|Discontinued operations net of minority interest              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | 1,921   |  
|Preferred unit distributions                                  |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   | (5,403  | )
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  
|Net Income available to common unitholders                    |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  | $ | 41,531  |  
|                                                              |  |                                           |        |            |  |               |        |          |  |               |        |              |  |           |        |          |  |            |       |       |  |   |        |  |  |   |        |  |  |   |        |  |  |   |        |  |  |   |         |  



|        |                                                                                   
|------- | ----------------------------------------------------------------------------------
|Note 4: | SFAS No. 144, Accounting For
    The Impairment Or Disposal Of Long-Lived Assets

In accordance with SFAS No. 144 which
the Company adopted on January 1, 2002, net income and
gain/(loss) on the disposition of real estate for properties
sold subsequent to December 31, 2001 are reflected in the
consolidated statements of operations as discontinued
operations. The proceeds from the disposition of properties for
the quarter ended March 31, 2003 and 2002 were
$3.7 million, and $12.8 million, respectively. Below
is a summary of the results of operations of the properties
disposed of through the respective disposition dates (in
thousands):

|                              |  |                    |     |           |  |   |       |  
|----------------------------- |  | ------------------ | --- | --------- |  | - | ----- | -
|                              |  |                   
|                              |  | Three Months Ended
|                              |  |                   
|                              |  | March 31,          |     | March 31,
|                              |  | 2003               |     | 2002     
|                              |  |                    |     |          
|Revenues                      |  | $                  | 48  |           |  | $ | 1,104 |  
|Operating expenses            |  |                    | (4  | )         |  |   | (144  | )
|Interest expense              |  |                    | (15 | )         |  |   | (195  | )
|Depreciation and amortization |  |                    | (9  | )         |  |   | (233  | )
|                              |  |                    |     |           |  |   |       |  
|Income from operations        |  | $                  | 20  |           |  | $ | 532   |  
|                              |  |                    |     |           |  |   |       |  

Gain or loss on disposition on sales of land and
development properties continues to be reflected as a component
of income from continuing operations.

14



---



##### 



LIBERTY PROPERTY LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)



|        |                
|------- | ---------------
|Note 5: | Credit Facility

During the three months ended March 31,
2003, the Company replaced its unsecured revolving credit
facility with a new facility which matures in January 2006.
Capacity under the facility was reduced from $450 million
to $350 million. Based on the Companys present
ratings, borrowings under the facility are priced at LIBOR plus
70 basis points reduced from LIBOR plus 105 basis
points for the facility prior to its renewal.



|        |                                                   
|------- | --------------------------------------------------
|Note 6: | Impact of Recently Issued Accounting
    Standards

In January 2003, the FASB issued Financial
Interpretation No. 46 (FIN No. 46),
Consolidation of Variable Interest Entities. The
consolidation requirements of FIN No. 46 apply
immediately to variable interest entities created after
January 31, 2003 and applies to existing variable interest
entities in the first fiscal year or interim period beginning
after June 15, 2003. FIN No. 46 requires that a
variable interest entity be consolidated by a company if that
company is subject to a majority of the risk of loss from the
variable interest entitys activities or is entitled to
receive a majority of the entitys residual returns or
both. It is likely that Rouse Kent Limited (RKL)
will be consolidated into the Companys financial
statements either through the exercise of the Companys
option to buy, or through the adoption of the provisions of
FIN No. 46. RKL is a full service real estate
development company which, together with its affiliates, owns
six properties comprising 210,000 leaseable square feet. The
Company does not expect its financial position or results of
operations to be materially affected by this potential
consolidation.

15



---



##### 





|        |                                                                                          
|------- | -----------------------------------------------------------------------------------------
|Item 2: | Managements Discussion and Analysis
    of Financial Condition and Results of Operations

Overview

The Company owns and operates office and
industrial real estate. As of March 31, 2003, the
Companys portfolio consisted of 659 industrial and
office properties (the Properties in Operation)
totaling approximately 51.8 million square feet. In
addition, the Company had six properties under development (the
Properties under Development and, together with the
Properties in Operation, the Properties) and owned
980 acres of land, substantially all of which is zoned for
commercial use.

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

In 2002 and the first quarter of 2003, the
continued general slowdown in the economy negatively affected
occupancy rates. Additionally, the imbalance between supply of
and demand for rental properties resulted in a decline in market
rental rates. Although the Company has realized increases on
some renewal and replacement leases, the negative occupancy and
rental rate trend has been continuing for several quarters and
as a result, property level operating income from the Same
Store group of properties, exclusive of termination fees,
has decreased. Additionally, tenant improvement and lease
transaction costs on renewal and replacement leases have
increased.

The continued economic slowdown has also limited
the Companys ability to achieve growth in operating income
from its development activity. The decline in demand for real
estate has reduced the amount of development the Company is
undertaking. The size of the development pipeline has continued
to decrease as speculative development has been significantly
reduced and build-to-suit activity has declined.

As noted above, the Company also seeks to acquire
and dispose of Properties in appropriate circumstances. The
Company anticipates that it will continue to pursue select
acquisition and disposition opportunities during 2003.

The composition of the Companys Properties
in Operation as of March 31, 2003 and 2002 is as follows
(in thousands, except dollars and percentages):

|                          |  |                 |       |                   |  |                  |       |           |  |      |        |      |  |      |        |      |  |  |       |   |  |  |       |   |  |  |      |   |  |  |      |  
|------------------------- |  | --------------- | ----- | ----------------- |  | ---------------- | ----- | --------- |  | ---- | ------ | ---- |  | ---- | ------ | ---- |  |  | ----- | - |  |  | ----- | - |  |  | ---- | - |  |  | ---- | -
|                          |  |                 |       |                   |  |                  |       |           |  |     
|                          |  | Net Rent        |       |                   |  | Percent of Total |       | Percent  
|                          |  | Per Square Foot |       | Total Square Feet |  | Square Feet      |       | Occupied 
|                          |  | March 31,       |       | March 31,         |  | March 31,        |       | March 31,
|                          |  |                 |       |                   |  |                  |       |          
|Type                      |  | 2003            |       | 2002              |  | 2003             |       | 2002      |  | 2003 |        | 2002 |  | 2003 |        | 2002
|                          |  |                 |       |                   |  |                  |       |           |  |      |        |      |  |      |        |     
|Industrial  Distribution |  | $               | 4.52  |                   |  | $                | 4.52  |           |  |      | 20,619 |      |  |      | 21,206 |      |  |  | 39.8  | % |  |  | 42.3  | % |  |  | 88.0 | % |  |  | 97.7 | %
|Industrial  Flex         |  | $               | 8.82  |                   |  | $                | 8.79  |           |  |      | 13,469 |      |  |      | 12,866 |      |  |  | 26.0  | % |  |  | 25.7  | % |  |  | 90.4 | % |  |  | 90.4 | %
|Office                    |  | $               | 14.23 |                   |  | $                | 13.95 |           |  |      | 17,674 |      |  |      | 16,084 |      |  |  | 34.2  | % |  |  | 32.0  | % |  |  | 89.0 | % |  |  | 91.6 | %
|                          |  |                 |       |                   |  |                  |       |           |  |      |        |      |  |      |        |      |  |  |       |   |  |  |       |   |  |  |      |   |  |  |      |  
|                          |  | $               | 8.98  |                   |  | $                | 8.53  |           |  |      | 51,762 |      |  |      | 50,156 |      |  |  | 100.0 | % |  |  | 100.0 | % |  |  | 89.0 | % |  |  | 93.9 | %
|                          |  |                 |       |                   |  |                  |       |           |  |      |        |      |  |      |        |      |  |  |       |   |  |  |       |   |  |  |      |   |  |  |      |  

Geographic segment data for the three months
ended March 31, 2003 is included in Note 3 to the
Liberty Property Trust and Liberty Property Limited Partnership
financial statements.

Forward-Looking Statements

When used throughout this report, the words
believes, anticipates, and
expects and similar expressions are intended to
identify forward-looking statements. Such statements indicate
that assumptions have been used that are subject to a number of
risks and uncertainties which could cause actual financial
results or management plans and objectives to differ materially
from those projected or expressed herein, including: the effect
of national and regional economic conditions; rental demand; the
Companys ability to

16



---



##### 



identify and secure additional properties and
sites that meet its criteria for acquisition or development; the
availability and cost of capital; and the effect of prevailing
market interest rates; and other risks described from time to
time in the Companys filings with the Securities and
Exchange Commission. Given these uncertainties, readers are
cautioned not to place undue reliance on such statements.


Critical Accounting Policies

Refer to the Companys 2002 Annual Report on
Form 10-K for a discussion of critical account policies
which include capitalized costs, allowances for doubtful
accounts and impairment of real estate. During the three months
ended March 31, 2003, there were no material changes to
these policies.

Results of Operations

The following discussion is based on the
consolidated financial statements of the Company. It compares
the results of operations of the Company for the three months
ended March 31, 2003 with the results of operations of the
Company for the three months ended March 31, 2002. As a
result of the varying level of development, acquisition and
disposition activities by the Company in 2003 and 2002, the
overall operating results of the Company during such periods are
not directly comparable. However, certain data, including the
Same Store comparison, do lend themselves to direct
comparison.

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



| |                                                                                                 
| | ------------------------------------------------------------------------------------------------
| | Comparison of Three Months Ended
    March 31, 2003 to the Three Months Ended March 31,
    2002

Total revenue (principally rental revenue and
operating expense reimbursement) increased to
$159.8 million for the three months ended March 31,
2003 from $147.5 million for the three months ended
March 31, 2002. This increase was primarily due to an
increase in lease termination fees of approximately
$6.1 million. The remaining increase resulted from the net
increased investment in properties developed or acquired, net of
dispositions during the years 2002 and 2003. The average gross
investment in operating real estate owned for the three months
ended March 31, 2003 was $3,604.5 million as compared
to $3,370.9 million for the three months ended
March 31, 2002.

The operating expense recovery percentage (the
ratio of operating expense reimbursement to rental property
expenses and real estate taxes) decreased to 93.2% for the three
months ended March 31, 2003 from 95.8% for the three months
ended March 31, 2002, due to the decrease in average
occupancy from period to period. Average occupancy for the three
months ended March 31, 2003 was 89.8% as compared to 94.0%
for the three months ended March 31, 2002.

Rental property and real estate tax expenses
increased to $47.3 million for the three months ended
March 31, 2003 from $41.8 million for the three months
ended March 31, 2002. This increase is due to the increase
in the investment in Properties owned during the respective
periods and because of the increased snow removal and utility
costs relating to 2003s severe winter.

Property level operating income, exclusive of
lease termination fees, for the Same Store
properties (properties owned since January 1, 2002)
decreased to $94.3 million for the three months ended
March 31, 2003 from $99.1 million for the three months
ended March 31, 2002, on a straight line basis (which
recognizes rental revenue evenly over the life of the lease),
and decreased to $92.3 million for the three months ended
March 31, 2003 from $96.7 million for the three months
ended March 31, 2002, on a cash basis. These decreases of
4.8% and 4.6%, respectively, are primarily due to decreases in
occupancy. At March 31, 2003, the occupancy of the Same
Store portfolio was 90.3% as compared to 94.1% at March 31,
2002.

17



---



##### 



Set forth below is a schedule comparing the
property level operating income, on a straight line basis and on
a cash basis, for the Same Store properties for the three months
ended March 31, 2003 and 2002 (in thousands):

|                                |                            |                     |        |                    |   |           |         |           |   |   |        |         |   |   |        |         |  
|------------------------------- | -------------------------- | ------------------- | ------ | ------------------ | - | --------- | ------- | --------- | - | - | ------ | ------- | - | - | ------ | ------- | -
|                                |                            |                     |        |                   
|                                |                            | Straight Line Basis |        | Cash Basis        
|                                |                            |                     |        |                   
|                                |                            |                     |        |                   
|                                |                            | Three Months Ended  |        | Three Months Ended
|                                |                            |                     |        |                   
|                                |                            | March 31,           |        | March 31,          |   | March 31, |         | March 31,
|                                |                            | 2003                |        | 2002               |   | 2003      |         | 2002     
|                                |                            |                     |        |                    |   |           |         |          
|Rental revenue                  |                            | $                   | 97,611 |                    |   | $         | 100,328 |           |   | $ | 95,590 |         |   | $ | 97,974 |        
|Operating expenses:             |                            |                     |        |                    |   |           |         |           |   |   |        |         |   |   |        |        
|                                | Rental property expense    |                     |        | 31,059             |   |           |         | 26,407    |   |   |        | 31,059  |   |   |        | 26,407  |  
|                                | Real estate taxes          |                     |        | 13,303             |   |           |         | 13,033    |   |   |        | 13,303  |   |   |        | 13,033  |  
|                                | Operating expense recovery |                     |        | (41,070            | ) |           |         | (38,186   | ) |   |        | (41,070 | ) |   |        | (38,186 | )
|                                |                            |                     |        |                    |   |           |         |           |   |   |        |         |   |   |        |        
|Unrecovered operating expenses  |                            |                     | 3,292  |                    |   |           | 1,254   |           |   |   | 3,292  |         |   |   | 1,254  |        
|                                |                            |                     |        |                    |   |           |         |           |   |   |        |         |   |   |        |        
|Property level operating income |                            | $                   | 94,319 |                    |   | $         | 99,074  |           |   | $ | 92,298 |         |   | $ | 96,720 |        
|                                |                            |                     |        |                    |   |           |         |           |   |   |        |         |   |   |        |        

General and administrative expenses increased to
$6.4 million for the three months ended March 31, 2003
from $6.0 million for the three months ended March 31,
2002. These increases are primarily due to an increase in costs
related to the United Kingdom operations.

Depreciation and amortization expenses increased
to $29.0 million for the three months ended March 31,
2003 from $26.3 million for the three months ended
March 31, 2002. This increase is due to the increase in the
investment in Properties owned during the respective periods.

Interest expense increased to $30.6 million
for the three months ended March 31, 2003 from
$27.9 million for the three months ended March 31,
2002. This increase is due to an increase in the average debt
outstanding for the respective periods, which was
$1,883.6 million in 2003 and $1,772.0 million in 2002.
Interest expense also increased because less interest was
capitalized for the first quarter of 2003 compared to 2002 due
to the decrease in development in progress. These increases were
partially offset by decreases in the weighted average interest
rates for the periods, to 6.98% in 2003 from 7.23% in 2002.

Costs directly related to the development of
rental properties and land being readied for development are
capitalized. Capitalized development costs include interest,
salaries, property taxes, insurance and other directly
identifiable costs during the period of development. Capitalized
salaries and benefits historically represent approximately 1% of
the cost of developed properties brought into service. These
amounts are not included in general and administrative expenses
as discussed above. Capitalized interest for the three months
ended March 31, 2003 was $3.2 million as compared to
$5.0 million for the three months ended March 31,
2002. Included in capitalized interest costs are the interest
costs relating to the Companys $59.3 million
investment (as of March 31, 2003) in its proposed downtown
Philadelphia office tower.

Implementation of SFAS No. 144
Accounting for the Impairment or Disposal of Long-Lived
Assets requires that the operating results for real estate
sold after December 31, 2001 should be reflected as
discontinued operations. Sales occurring before
December 31, 2001, as well as sales of land and development
properties, continue to be reflected as a component of income
from continuing operations.

In the three months ended March 31, 2003,
the Company realized a net gain on property dispositions of
$598,000, due to the sale of one parcel of land and additional
proceeds from the sale of a property developed for sale in the
United Kingdom with a joint venture partner, for an aggregate of
$1.4 million. In the three months ended March 31,
2002, the Company realized a loss on property dispositions of
$518,000 due to the sale of two parcels of land for an aggregate
of $1.4 million.

In accordance with SFAS No. 144, net income
and gain/(loss) on dispositions of real estate for properties
sold subsequent to December 31, 2001 are reflected in the
consolidated statements of operations as discontinued operations
for all periods presented. The decrease in income from
discontinued operations of $1.7 million for the three
months ended March 31, 2003, as compared to the same period
in 2002, is primarily

18



---



##### 



due to the larger gain on the disposition of the
properties sold in the three months ended March 31, 2002 as
compared to the three months ended March 31, 2003.


As a result of the foregoing, the Companys
net income increased to $41.6 million for the three months ended
March 31, 2003 from $39.5 million for the three months
ended March 31, 2002.

Liquidity and Capital Resources

As of March 31, 2003, the Company had cash
and cash equivalents of $29.8 million including
$3.7 million in cash held in escrow for the payment of real
estate taxes.

Net cash flow provided by operating activities
increased to $60.3 million for the three months ended
March 31, 2003 from $52.8 million for the three months
ended March 31, 2002. This $7.5 million increase was
primarily due to fluctuations in operating assets and
liabilities during the respective periods. Net cash flow
provided by operations is the primary source of liquidity to
fund distributions to shareholders and for the recurring capital
expenditures and leasing transaction costs for the
Companys Properties in Operation.

Net cash used in investing activities decreased
to $34.8 million for the three months ended March 31,
2003 from $51.9 million for the three months ended
March 31, 2002. This decrease primarily resulted from a
decrease in investment in development in progress and land held
for development in 2003, which is consistent with the diminished
opportunity to develop property due to the general slowdown in
the economy. This decrease is partially offset by the reduced
level of disposition activity during 2003.

Net cash used in financing activities increased
to $6.8 million for the three months ended March 31,
2003 as compared to cash provided by financing activities of
$1.9 million for the three months ended March 31,
2002. This $8.7 million decrease was primarily due to costs
incurred related to the restructuring of the Companys
credit facility as well as a reduced level of net borrowings
under mortgage and unsecured notes obligations. Net cash
provided by or used in financing activities includes proceeds
from the issuance of equity and debt net of debt repayments and
shareholder distributions. Cash provided by financing activities
is a source of capital utilized by the Company to fund
investment activities and the decrease in such funding
activities for 2003 is consistent with the decrease in the level
of the Companys investment activities as described above.

The Company believes that its undistributed cash
flow from operations is adequate to fund its operating needs.

The Company funds its development and
acquisitions with long-term capital sources including proceeds
from the disposition of Properties. For the year ended
December 31, 2002, these activities were funded through a
$450 million unsecured credit facility (the
$450 million Credit Facility), which was
replaced in January 2003, with the $350 million Credit
Facility. The interest rate on borrowings under the
$350 million Credit Facility fluctuates based upon ratings
from Moodys Investors Service, Inc.
(Moodys), Standard and Poors Ratings
Group (S&P) and Fitch, Inc. (Fitch).
The current ratings for the Companys senior unsecured debt
are Baa2, BBB and BBB from Moodys, S&P and Fitch,
respectively. At these ratings, the interest rate for borrowings
under the $350 million Credit Facility is 70 basis points
over LIBOR. The $350 million Credit Facility expires in
January 2006.

The Company uses debt financing to lower its
overall cost of capital in an attempt to increase the return to
shareholders. The Company staggers its debt maturities and
maintains debt levels it considers to be prudent. In determining
its debt levels, the Company considers various financial
measures including the debt to gross assets ratio and the
earnings to fixed charge coverage ratio. As of March 31,
2003 the Companys debt to gross assets ratio was 45.5%,
and the earnings to fixed charge coverage ratio was 2.9x. Debt
to gross assets equals total long-term debt and borrowings under
the $350 million Credit Facility divided by total assets
plus accumulated depreciation. Earnings to fixed charges equals
income before property dispositions and minority interest,
including operating activity from discontinued operations, plus
interest expense and depreciation and amortization divided by
interest expense, including capitalized interest, plus
distributions on preferred shares and units.

19



---



##### 



As of March 31, 2003, $314.3 million in
mortgage loans and $1,428.7 million in unsecured notes were
outstanding with a weighted average interest rate of 7.4%. The
interest rates on $1,719.5 million of mortgage loans and
unsecured notes are fixed and range from 0% to 8.8%. Interest
rates on $23.5 million of mortgage loans float with the
base rate of the respective lending bank or a municipal bond
index. The weighted average remaining term for the mortgage
loans and unsecured notes is 6.4 years. The scheduled
maturities of principal amortization of the Companys
mortgage loans, unsecured notes and borrowings under the
$350 million Credit Facility and the related weighted
average interest rates as of March 31, 2003 are as follows
(in thousands, except percentages):

|                |  |              |        |            |  |           |         |          |  |          |           |               |  |   |         |  |  |   |           |  |  |  |     |  
|--------------- |  | ------------ | ------ | ---------- |  | --------- | ------- | -------- |  | -------- | --------- | ------------- |  | - | ------- |  |  | - | --------- |  |  |  | --- | -
|                |  |              |        |            |  |           |         |          |  |         
|                |  | Mortgages    |        |            |  |           |         |          |  |         
|                |  |              |        |            |  |           |         |          |  | Weighted
|                |  | Principal    |        | Principal  |  | Unsecured |         | Credit   |  |          |           | Average      
|                |  | Amortization |        | Maturities |  | Notes     |         | Facility |  | Total    |           | Interest Rate
|                |  |              |        |            |  |           |         |          |  |          |           |              
|2003 (9 months) |  | $            | 5,774  |            |  | $         | 3,840   |          |  | $        | 73,739    |               |  | $ |        |  |  | $ | 83,353    |  |  |  | 7.2 | %
|2004            |  |              | 8,176  |            |  |           | 33,258  |          |  |          | 100,000   |               |  |   |        |  |  |   | 141,434   |  |  |  | 7.0 | %
|2005            |  |              | 7,099  |            |  |           | 115,039 |          |  |          |          |               |  |   |        |  |  |   | 122,138   |  |  |  | 7.6 | %
|2006            |  |              | 5,010  |            |  |           | 30,098  |          |  |          | 100,000   |               |  |   | 158,000 |  |  |   | 293,108   |  |  |  | 4.4 | %
|2007            |  |              | 4,552  |            |  |           |        |          |  |          | 100,000   |               |  |   |        |  |  |   | 104,552   |  |  |  | 7.3 | %
|2008            |  |              | 4,248  |            |  |           | 29,268  |          |  |          |          |               |  |   |        |  |  |   | 33,516    |  |  |  | 7.2 | %
|2009            |  |              | 2,015  |            |  |           | 42,119  |          |  |          | 270,000   |               |  |   |        |  |  |   | 314,134   |  |  |  | 7.8 | %
|2010            |  |              | 1,348  |            |  |           |        |          |  |          | 200,000   |               |  |   |        |  |  |   | 201,348   |  |  |  | 8.5 | %
|2011            |  |              | 1,098  |            |  |           | 3,533   |          |  |          | 250,000   |               |  |   |        |  |  |   | 254,631   |  |  |  | 7.3 | %
|2012            |  |              | 192    |            |  |           | 17,674  |          |  |          | 235,000   |               |  |   |        |  |  |   | 252,866   |  |  |  | 6.5 | %
|2018            |  |              |       |            |  |           |        |          |  |          | 100,000   |               |  |   |        |  |  |   | 100,000   |  |  |  | 7.5 | %
|                |  |              |        |            |  |           |         |          |  |          |           |               |  |   |         |  |  |   |           |  |  |  |     |  
|                |  | $            | 39,512 |            |  | $         | 274,829 |          |  | $        | 1,428,739 |               |  | $ | 158,000 |  |  | $ | 1,901,080 |  |  |  | 6.9 | %
|                |  |              |        |            |  |           |         |          |  |          |           |               |  |   |         |  |  |   |           |  |  |  |     |  

For the remainder of 2003, $73.7 million
principal amount of 7.2% unsecured debt will mature. The Company
anticipates that it will refinance or retire these maturities
through its available sources of capital.

General

The Company has continued to pursue development
and acquisition opportunities and the strategic disposition of
certain properties. In addition, the Company has continued to
focus on the performance of the Same Store portfolio. The
Company attempts to outperform in its markets by maintaining
higher than market occupancy levels and obtaining higher than
market rental rates.

The expiring square feet and annual net rent by
year for the Properties in Operation as of March 31, 2003
are as follows (in thousands):

|                |  |              |        |                   |  |        |        |          |  |        |        |          |  |        |         |          |  |  |        |  |  |   |         |  |  |  |        |  |  |   |         | 
|--------------- |  | ------------ | ------ | ----------------- |  | ------ | ------ | -------- |  | ------ | ------ | -------- |  | ------ | ------- | -------- |  |  | ------ |  |  | - | ------- |  |  |  | ------ |  |  | - | ------- | 
|                |  |              |        |                   |  |        |        |          |  |        |        |          |  |       
|                |  | Industrial  |        |                   |  |        |        |         
|                |  | Distribution |        | Industrial  Flex |  | Office |        | Total   
|                |  |              |        |                   |  |        |        |         
|                |  | Square       |        | Annual            |  | Square |        | Annual   |  | Square |        | Annual   |  | Square |         | Annual  
|Year            |  | Feet         |        | Net Rent          |  | Feet   |        | Net Rent |  | Feet   |        | Net Rent |  | Feet   |         | Net Rent
|                |  |              |        |                   |  |        |        |          |  |        |        |          |  |        |         |         
|2003 (9 months) |  |              | 1,354  |                   |  | $      | 5,926  |          |  |        | 1,730  |          |  | $      | 14,626  |          |  |  | 1,585  |  |  | $ | 20,460  |  |  |  | 4,669  |  |  | $ | 41,012  | 
|2004            |  |              | 2,059  |                   |  |        | 10,232 |          |  |        | 2,078  |          |  |        | 17,622  |          |  |  | 1,829  |  |  |   | 27,378  |  |  |  | 5,966  |  |  |   | 55,232  | 
|2005            |  |              | 2,092  |                   |  |        | 11,454 |          |  |        | 1,781  |          |  |        | 15,818  |          |  |  | 2,936  |  |  |   | 41,803  |  |  |  | 6,809  |  |  |   | 69,075  | 
|2006            |  |              | 2,161  |                   |  |        | 9,485  |          |  |        | 1,858  |          |  |        | 19,877  |          |  |  | 1,131  |  |  |   | 16,875  |  |  |  | 5,150  |  |  |   | 46,237  | 
|2007            |  |              | 2,468  |                   |  |        | 11,276 |          |  |        | 1,280  |          |  |        | 12,470  |          |  |  | 1,722  |  |  |   | 26,688  |  |  |  | 5,470  |  |  |   | 50,434  | 
|2008            |  |              | 1,782  |                   |  |        | 8,280  |          |  |        | 1,570  |          |  |        | 15,779  |          |  |  | 1,891  |  |  |   | 28,698  |  |  |  | 5,243  |  |  |   | 52,757  | 
|Thereafter      |  |              | 6,223  |                   |  |        | 35,212 |          |  |        | 1,883  |          |  |        | 20,692  |          |  |  | 4,637  |  |  |   | 84,623  |  |  |  | 12,743 |  |  |   | 140,527 | 
|                |  |              |        |                   |  |        |        |          |  |        |        |          |  |        |         |          |  |  |        |  |  |   |         |  |  |  |        |  |  |   |         | 
|Total           |  |              | 18,139 |                   |  | $      | 91,865 |          |  |        | 12,180 |          |  | $      | 116,884 |          |  |  | 15,731 |  |  | $ | 246,525 |  |  |  | 46,050 |  |  | $ | 455,274 | 
|                |  |              |        |                   |  |        |        |          |  |        |        |          |  |        |         |          |  |  |        |  |  |   |         |  |  |  |        |  |  |   |         | 

20



---



##### 



The Company believes that its existing sources of
capital will provide sufficient funds to finance its continued
development and acquisition activities. The scheduled deliveries
of the 822,000 square feet of Properties under Development as of
March 31, 2003 are as follows (in thousands, except
percentages):

|                          |  |              |     |              |  |        |    |           |  |       |     |            |  |  |     |  |  |  |       |   |  |   |         | 
|------------------------- |  | ------------ | --- | ------------ |  | ------ | -- | --------- |  | ----- | --- | ---------- |  |  | --- |  |  |  | ----- | - |  | - | ------- | 
|                          |  |              |     |              |  |       
|                          |  | Square Feet  |     | Percent      |  |       
|                          |  |              |     | Leased       |  |       
|                          |  | Industrial  |     | Industrial  |  |        |    | March 31, |  | Total
|Scheduled In-Service Date |  | Distribution |     | Flex         |  | Office |    | Total     |  | 2003  |     | Investment
|                          |  |              |     |              |  |        |    |           |  |       |     |           
|2nd Quarter 2003          |  |              |    |              |  |        |   |           |  |       | 252 |            |  |  | 252 |  |  |  | 85.3  | % |  | $ | 60,262  | 
|3rd Quarter 2003          |  |              | 134 |              |  |        |   |           |  |       | 68  |            |  |  | 202 |  |  |  | 66.5  | % |  |   | 41,363  | 
|1st Quarter 2004          |  |              | 262 |              |  |        | 75 |           |  |       |    |            |  |  | 337 |  |  |  | 100.0 | % |  |   | 14,934  | 
|3rd Quarter 2004          |  |              |    |              |  |        |   |           |  |       | 31  |            |  |  | 31  |  |  |  | 42.9  | % |  |   | 4,869   | 
|                          |  |              |     |              |  |        |    |           |  |       |     |            |  |  |     |  |  |  |       |   |  |   |         | 
|Total                     |  |              | 396 |              |  |        | 75 |           |  |       | 351 |            |  |  | 822 |  |  |  | 85.1  | % |  | $ | 121,428 | 
|                          |  |              |     |              |  |        |    |           |  |       |     |            |  |  |     |  |  |  |       |   |  |   |         | 

The Companys existing sources of capital
include the public debt and equity markets, proceeds from
Property dispositions and net cash provided by operating
activities. Additionally, the Company expects to incur variable
rate debt, including borrowings under the $350 million
Credit Facility from time to time.

The Board of Trustees has authorized a share
repurchase program under which the Company may purchase up to
$100 million of the Companys Common Shares, preferred
shares or convertible debentures. Through March 31, 2003,
the Company purchased 59,100 Common Shares and purchased
convertible debentures exchangeable into 877,950 Common Shares.
The total cost for the purchase of the Common Shares and
convertible debentures was approximately $21.9 million. The
convertible debentures expired in 2001.

The Company has an effective S-3 shelf
registration statement on file with the Securities and Exchange
Commission (the Shelf Registration Statement). As of
May 7, 2003, pursuant to the Shelf Registration Statement,
the Trust had the capacity to issue up to $688.4 million in
equity securities and the Operating Partnership had the capacity
to issue up to $324.3 million in debt securities.

Related Party Transactions

Pursuant to agreements, the Company provides
management services with respect to RKL (see Note 6 to the
Liberty Property Trust and Liberty Property Limited Partnership
financial statements), which is currently owned by certain
affiliates of the Company. For the three months ended
March 31, 2003, the fees for these services were $150,000.
The Company pays a fee to RKL for management services which it
provides for the Companys properties owned in the United
Kingdom. For the three months ended March 31, 2003, the
fees for these services were $119,000. The Company had accounts
receivable and loans receivable from RKL and affiliates with
balances of $987,000 and $25.0 million, respectively, as of
March 31, 2003. The Company recognized interest income on
notes receivable from RKL of $853,000 for the three months ended
March 31, 2003. The Company has the option to purchase this
affiliate for nominal consideration. It is likely that RKL will
be consolidated into the Companys financial statements
either through exercise of the option to buy, or through the
adoption of FIN No. 46, as defined in Note 6 of the
Companys financial statements. The Company does not expect
its financial position or results of operations to be materially
affected by this potential consolidation.

Investment in Unconsolidated Joint
Ventures

In 2002 the Company partnered with the Public
Employees Retirement Association of Colorado on a
$123 million joint venture consisting of the Companys
southern New Jersey industrial portfolio. The Company sold or
contributed 28 distribution Properties totaling
approximately 3.1 million leasable square feet and
approximately 43 acres of developable land. The Company
retained a 25% ownership interest in the venture, and realized
proceeds of approximately $109 million from the
transaction. The Company will receive development, leasing and
property management fees, and may receive a promoted interest if
certain return thresholds are met. The venture is financed with
approximately 60% leverage.

21



---



##### 



Calculation of Funds from Operations

Management generally considers Funds from
operations (as defined below) a useful financial performance
measure of the operating performance of an equity REIT. Funds
from operations is defined by NAREIT as net income (computed in
accordance with generally accepted accounting principles
(GAAP)), excluding gains (or losses) from sales of
property, plus depreciation and amortization, and after
adjustments for unconsolidated partnerships and joint ventures.
Funds from operations does not represent net income or cash
flows from operations as defined by GAAP and does not
necessarily indicate that cash flows will be sufficient to fund
cash needs. It should not be considered as an alternative to net
income as an indicator of the Companys operating
performance or to cash flows as a measure of liquidity. Funds
from operations also does not represent cash flows generated
from operating, investing or financing activities as defined by
GAAP. Funds from operations for the three months ended
March 31, 2003 and 2002 are as follows:

|                                        |                                                                    |                    |        |           |   |   |        |        |  
|--------------------------------------- | ------------------------------------------------------------------ | ------------------ | ------ | --------- | - | - | ------ | ------ | -
|                                        |                                                                    |                   
|                                        |                                                                    | Three Months Ended
|                                        |                                                                    |                   
|                                        |                                                                    | March 31,          |        | March 31,
|                                        |                                                                    | 2003               |        | 2002     
|                                        |                                                                    |                    |        |          
|                                        |                                                                    |                   
|                                        |                                                                    | (In thousands)    
|Income available to common shareholders |                                                                    | $                  | 41,587 |           |   | $ | 39,450 |       
|Adjustments:                            |                                                                    |                    |        |           |   |   |        |       
|                                        | Minority interest less preferred unit
    distributions            |                    |        | 1,993     |   |   |        | 2,081  |  
|                                        | Depreciation and amortization                                      |                    |        | 28,463    |   |   |        | 26,078 |  
|                                        | Depreciation and amortization of unconsolidated
    joint ventures |                    |        | 166       |   |   |        |       |  
|                                        | Gain on disposition of properties                                  |                    |        | (178      | ) |   |        | (871   | )
|                                        |                                                                    |                    |        |           |   |   |        |       
|Funds from operations                   |                                                                    | $                  | 72,031 |           |   | $ | 66,738 |       
|                                        |                                                                    |                    |        |           |   |   |        |       

Inflation

Inflation has remained relatively low during the
last three years, and as a result, it has not had a significant
impact on the Company during this period. The $350 million
Credit Facility bears interest at a variable rate; therefore,
the amount of interest payable under the $350 million
Credit Facility will be influenced by changes in short-term
interest rates, which tend to be sensitive to inflation. To the
extent an increase in inflation would result in increased
operating costs, such as in insurance, real estate taxes and
utilities, substantially all of the tenants leases require
the tenants to absorb these costs as part of their rental
obligations. In addition, inflation also may have the effect of
increasing market rental rates.



|        |                                                               
|------- | --------------------------------------------------------------
|Item 3: | Quantitative and Qualitative Disclosures
    about Market Risk

There have been no material changes to the
Companys exposure to market risk since its Annual Report
on Form 10-K for the year ended December 31, 2002.



|        |                        
|------- | -----------------------
|Item 4: | Controls and Procedures

Evaluation of Disclosure Controls and
Procedures

We maintain disclosure controls and procedures
designed to provide reasonable assurance that information
required to be disclosed in the reports we file with the SEC is
recorded, processed, summarized and reported within the time
periods specified in the rules of the SEC. Within 90 days
prior to the filing of this Quarterly Report on Form 10-Q,
we carried out an evaluation, under the supervision and the
participation of our management, including our Chief Executive
Officer and Chief Financial Officer, of the design and operation
of these disclosure controls and procedures pursuant to Exchange
Act Rule 13a-14. Based upon that evaluation, our Chief
Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures are effective in alerting
them in a timely manner to material information relating to the
Company required to be included in our periodic SEC filings.

22



---



##### 



Changes in Internal Controls

There are no significant changes in internal
controls or other factors that could significantly affect our
internal controls subsequent to the date of our evaluation.

PART II:     OTHER
INFORMATION



|        |                  
|------- | -----------------
|Item 1. | Legal Proceedings

None.



|        |                                              
|------- | ---------------------------------------------
|Item 2. | Changes in Securities and Use of
    Proceeds

None.



|        |                                    
|------- | -----------------------------------
|Item 3. | Defaults upon Senior
    Securities

None.



|        |                                                        
|------- | -------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders

None.



|        |                  
|------- | -----------------
|Item 5. | Other Information

None.



|        |                                     
|------- | ------------------------------------
|Item 6. | Exhibits and Reports on
    Form 8-K

a.     Exhibits

|      |  |                                                                                                                                                                                                                                                                                                                                                                                                                             
|----- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|10.1  |  | Credit Agreement, dated as of January 16,
    2003, by and among the Operating Partnership, the Trust, certain
    affiliated co-borrowers, the Banks named therein and Fleet
    National Bank, as agent for itself and the other lending
    institutions. (Incorporated by reference to Exhibit 10.10
    filed with the Registrants Annual Report on Form 10-K
    for the year ended December 31, 2002).              
|10.2  |  | Multi-Currency Credit Agreement, dated as of
    January 16, 2003, by and among the Operating Partnership,
    the Trust, certain affiliated co-borrowers, the Banks named
    therein and Fleet National Bank, as agent for itself and the
    other lending institutions. (Incorporated by reference to
    Exhibit 10.1 filed with the Registrants Annual Report
    on Form 10-K for the year ended December 31, 2002).
|99.1* |  | Certification of the Chief Executive Officer of
    Liberty Property Trust pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                                                                                                                                                                                                
|99.2* |  | Certification of the Chief Financial Officer of
    Liberty Property Trust pursuant to 18 U.S.C. Section 1350,
    as adopted pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002.                                                                                                                                                                                                                                
|99.3* |  | Certification of the Chief Executive Officer of
    Liberty Property Trust, in its capacity as the general partner
    of Liberty Property Limited Partnership, pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                           
|99.4* |  | Certification of the Chief Financial Officer of
    Liberty Property Trust, in its capacity as of the general
    partner of Liberty Property Limited Partnership, pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                        



---



|  |               
|- | --------------
|* | Filed herewith

23



---



##### 



b.     Reports of
Form 8-K

During the quarter ended March 31, 2003 the
Registrant filed the following Current Reports on Form 8-K:



| |    |                                                                                                                                                                                                                                                                                                              
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | Current Report on Form 8-K dated
    January 14, 2003 reporting Items 5 and 7 containing as
    Exhibits the Underwriting Agreement dated January 10, 2003
    among the Registrants and the Underwriters (as defined therein)
    and a Statement Re: Computation of Ratio of Earnings to
    Fixed Charges.
|
| | 2. | Current Report on Form 8-K dated
    February 11, 2003 reporting items 7 and 9 and
    containing as an Exhibit the Press Release dated
    February 10, 2003 issued by Liberty Property Trust and
    Liberty Property Limited Partnership.                                                                 

24



---



##### 



SIGNATURES

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



| |                                          
| | -----------------------------------------
| | LIBERTY PROPERTY TRUST                   
|
| | /s/ WILLIAM P. HANKOWSKY                 
| |                                          
| | William P. Hankowsky                     
| | President and Chief Executive
    Officer

Date: May 7, 2003



| |                                                         
| | --------------------------------------------------------
| | /s/ GEORGE J. ALBURGER, JR.                             
| |                                                         
| | George J. Alburger, Jr.                                 
| | Executive Vice President and Chief Financial
    Officer

Date: May 7, 2003

25



---



##### 



CERTIFICATION

I, William P. Hankowsky, certify that:



| |    |                                                                                                                                                                                                                                                                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | I have reviewed this Quarterly Report on
    Form 10-Q of Liberty Property Trust;                                                                                                                                                                                                                                                                 
|
| | 2. | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    quarterly report;
|
| | 3. | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|
| | 4. | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                             



| |    |                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this quarterly report is being prepared;



| |    |                                                                                                                                                                                                          
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and



| |    |                                                                                                                                                                                
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) | presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;



| |    |                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |    |                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and



| |    |                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. | The registrants other certifying officers
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



| |     |                         
| | --- | ------------------------
| | By: | /s/ WILLIAM P. HANKOWSKY

| |                                          
| | -----------------------------------------
| |                                          
| | William P. Hankowsky                     
| | President and Chief Executive
    Officer

Date: May 7, 2003

26



---



##### 



CERTIFICATION

I, George J. Alburger, Jr., certify that:



| |    |                                                                                                                                                                                                                                                                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | I have reviewed this Quarterly Report on
    Form 10-Q of Liberty Property Trust;                                                                                                                                                                                                                                                                 
|
| | 2. | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    quarterly report;
|
| | 3. | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|
| | 4. | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                             



| |    |                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this quarterly report is being prepared;



| |    |                                                                                                                                                                                                          
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and



| |    |                                                                                                                                                                                
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) | presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;



| |    |                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |    |                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and



| |    |                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. | The registrants other certifying officers
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



| |                                                         
| | --------------------------------------------------------
| | /s/ GEORGE J. ALBURGER, JR.                             
| |                                                         
| | George J. Alburger, Jr.                                 
| | Executive Vice President and Chief Financial
    Officer

Date: May 7, 2003

27



---



##### 



SIGNATURES

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



| |                                     
| | ------------------------------------
| | LIBERTY PROPERTY LIMITED PARTNERSHIP



| |     |                       
| | --- | ----------------------
| | By: | LIBERTY PROPERTY TRUST

| |                                          
| | -----------------------------------------
| | General Partner                          
|
| | /s/ WILLIAM P. HANKOWSKY                 
| |                                          
| | William P. Hankowsky                     
| | President and Chief Executive
    Officer

Date: May 7, 2003



| |                                                         
| | --------------------------------------------------------
| | /s/ GEORGE J. ALBURGER, JR.                             
| |                                                         
| | George J. Alburger, Jr.                                 
| | Executive Vice President and Chief Financial
    Officer

Date: May 7, 2003

28



---



##### 



CERTIFICATION

I, William P. Hankowsky, certify that:



| |    |                                                                                                                                                                                                                                                                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | I have reviewed this Quarterly Report on
    Form 10-Q of Liberty Property Limited Partnership;                                                                                                                                                                                                                                                   
|
| | 2. | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    quarterly report;
|
| | 3. | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|
| | 4. | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                             



| |    |                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this quarterly report is being prepared;



| |    |                                                                                                                                                                                                          
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and



| |    |                                                                                                                                                                                
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) | presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;



| |    |                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |    |                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and



| |    |                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. | The registrants other certifying officers
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



| |     |                         
| | --- | ------------------------
| | By: | /s/ WILLIAM P. HANKOWSKY

| |                                                     
| | ----------------------------------------------------
| |                                                     
| | William P. Hankowsky                                
| | President and Chief Executive Officer
    of        
| | Liberty Property Trust, its sole general
    partner

Date: May 7, 2003

29



---



##### 



CERTIFICATION

I, George J. Alburger, Jr., certify that:



| |    |                                                                                                                                                                                                                                                                                                                                                   
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. | I have reviewed this Quarterly Report on
    Form 10-Q of Liberty Property Limited Partnership;                                                                                                                                                                                                                                                   
|
| | 2. | Based on my knowledge, this quarterly report does
    not contain any untrue statement of a material fact or omit to
    state a material fact necessary to make the statements made, in
    light of the circumstances under which such statements were
    made, not misleading with respect to the period covered by this
    quarterly report;
|
| | 3. | Based on my knowledge, the financial statements,
    and other financial information included in this quarterly
    report, fairly present in all material respects the financial
    condition, results of operations and cash flows of the
    registrant as of, and for, the periods presented in this
    quarterly report;                   
|
| | 4. | The registrants other certifying officers
    and I are responsible for establishing and maintaining
    disclosure controls and procedures (as defined in Exchange Act
    Rules 13a-14 and 15d-14) for the registrant and we have:                                                                                                             



| |    |                                                                                                                                                                                                                                                                                                                
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | designed such disclosure controls and procedures
    to ensure that material information relating to the registrant,
    including its consolidated subsidiaries, is made known to us by
    others within those entities, particularly during the period in
    which this quarterly report is being prepared;



| |    |                                                                                                                                                                                                          
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | evaluated the effectiveness of the
    registrants disclosure controls and procedures as of a
    date within 90 days prior to the filing date of this
    quarterly report (the Evaluation Date); and



| |    |                                                                                                                                                                                
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | c) | presented in this quarterly report our
    conclusions about the effectiveness of the disclosure controls
    and procedures based on our evaluation as of the Evaluation Date;



| |    |                                                                                                                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. | The registrants other certifying officers
    and I have disclosed, based on our most recent evaluation, to
    the registrants auditors and the audit committee of
    registrants board of directors (or persons performing the
    equivalent function):



| |    |                                                                                                                                                                                                                                                                                                                   
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | a) | all significant deficiencies in the design or
    operation of internal controls which could adversely affect the
    registrants ability to record, process, summarize and
    report financial data and have identified for the
    registrants auditors any material weaknesses in internal
    controls; and



| |    |                                                                                                                                                               
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------
| | b) | any fraud, whether or not material, that involves
    management or other employees who have a significant role in the
    registrants internal controls; and



| |    |                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 6. | The registrants other certifying officers
    and I have indicated in this quarterly report whether or not
    there were significant changes in internal controls or in other
    factors that could significantly affect internal controls
    subsequent to the date of our most recent evaluation, including
    any corrective actions with regard to significant deficiencies
    and material weaknesses.



| |     |                            
| | --- | ---------------------------
| | By: | /s/ GEORGE J. ALBURGER, JR.

| |                                                                                    
| | -----------------------------------------------------------------------------------
| |                                                                                    
| | George J. Alburger, Jr.                                                            
| | Executive Vice President and Chief Financial
    Officer of Liberty Property Trust,
| | its sole general partner                                                           

Date: May 7, 2003

30



---



##### 



EXHIBIT INDEX

|        |      |             |  |                                                                                                                                                                                                                                                                                  
|------- | ---- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |      |            
|No.     |      | Description
|        |      |            
|        | 99.1 |             |  | Certification of the Chief Executive Officer of
    Liberty Property Trust pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                                                     
|        | 99.2 |             |  | Certification of the Chief Financial Officer of
    Liberty Property Trust pursuant to 18 U.S.C.
    Section 1350, as adopted pursuant to Section 906 of
    the Sarbanes-Oxley Act of 2002.                                                                                     
|        | 99.3 |             |  | Certification of the Chief Executive Officer of
    Liberty Property Trust, in its capacity as the general partner
    of Liberty Property Limited Partnership, pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.
|        | 99.4 |             |  | Certification of the Chief Financial Officer of
    Liberty Property Trust, in its capacity as the general partner
    of Liberty Property Limited Partnership, pursuant to
    18 U.S.C. Section 1350, as adopted pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002.

31