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

                                  FORM 10-Q

(Mark One)
X  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
   EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 1996

                                     OR

   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND 
   EXCHANGE ACT OF 1934

For the transition period from ____________________ to _____________________

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

                           LIBERTY PROPERTY TRUST
                   LIBERTY PROPERTY LIMITED PARTNERSHIP
   (Exact name of registrants as specified in their governing documents)

MARYLAND (Liberty Property Trust)                                 23-7768996
PENNSYLVANIA (Liberty Property Limited Partnership)               23-2766549
(State or other jurisdiction
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   X    NO  	

On November 12, 1996, 30,779,072 Common Shares of Beneficial Interest, par 
value $.001 per share, of Liberty Property Trust were outstanding.

<PAGE>

         LIBERTY PROPERTY TRUST/LIBERTY PROPERTY LIMITED PARTNERSHIP
              FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1996

                                    INDEX

PART I.  FINANCIAL INFORMATION
------------------------------
Item 1.  Financial Statements

<TABLE>
<CAPTION>
                                                                        PAGE
                                                                        ----
<S>                                                                     <C>
         Consolidated balance sheet of Liberty Property Trust at 
         September 30, 1996 and December 31, 1995.                      4

         Consolidated statement of operations of Liberty Property 
         Trust for the three months ended September 30, 1996 and 
         September 30, 1995.                                            5

         Consolidated statement of operations of Liberty Property 
         Trust for the nine months ended September 30, 1996 and 
         September 30, 1995.                                            6

         Consolidated statement of cash flows of Liberty Property 
         Trust for the nine months ended September 30, 1996 and 
         September 30, 1995.                                            7

         Notes to consolidated financial statements for Liberty 
         Property Trust.                                                8

         Consolidated balance sheet of Liberty Property Limited 
         Partnership at September 30, 1996  and December 31, 1995.      9

         Consolidated statement of operations of Liberty Property 
         Limited Partnership for the three months ended September 
         30, 1996 and September 30, 1995.                               10

         Consolidated statement of operations of Liberty Property 
         Limited Partnership for the nine months ended September 30, 
         1996 and September 30, 1995.                                   11

         Consolidated statement of cash flows of Liberty Property 
         Limited Partnership for the nine months ended September 30, 
         1996 and September 30, 1995.                                   12

         Notes to consolidated financial statements for Liberty 
         Property Limited Partnership.                                  13

Item 2.  Management's Discussion and Analysis of Financial Condition 
         and Results of Operations.                                     14-18

PART II. OTHER INFORMATION                                              19
---------------------------

SIGNATURES                                                              20
----------

                                      2
<PAGE>
_________________________________
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" 
for forward-looking statements.  Certain information included in this 
Quarterly Report on Form 10-Q contain statements that are or will be forward-
looking, such as statements relating to acquisitions and other business 
development activities, future capital expenditures, financing sources and 
availability, and the effects of regulation (including environmental 
regulation) and competition.  Such forward-looking information involves 
important risks and uncertainties that could significantly affect anticipated 
results in the future and, accordingly, such results may differ from those 
expressed in any forward-looking statements made by, or on behalf of, the 
Company. These risks and uncertainties include, but are not limited to, 
uncertainties affecting real estate businesses generally (such as renewals of 
leases and dependence on tenants' business operations), risks relating to 
acquisition, construction and development activities, possible environmental 
liabilities, risks relating to leverage and debt service (including 
availability of financing terms acceptable to the Company and sensitivity of 
the Company's operations to fluctuations in interest rates), the potential for 
the use of borrowings to make distributions necessary to qualify as a REIT, 
dependence on the primary markets in which the Company's properties are 
located, the existence of complex regulations relating to status as a REIT and 
the adverse consequences of the failure to qualify as a REIT and the potential 
adverse impact of market interest rates on the market price for the Company's 
securities.

                                       3

<PAGE>

            CONSOLIDATED BALANCE SHEET OF LIBERTY PROPERTY TRUST
                              (IN THOUSANDS)


</TABLE>
<TABLE>
<CAPTION>
                                             SEPTEMBER 30,     DECEMBER 31,
                                                 1996              1995
                                             -------------     ------------
                                              (UNAUDITED)
<S>                                          <C>               <C>
Assets
Real estate:
  Land and land improvements                 $  123,099        $108,723
  Buildings and improvements                    808,008         715,908
  Less accumulated depreciation                (112,175)        (94,183)
                                             ----------        --------
Operating real estate                           818,932         730,448

  Development in progress                        90,480          67,021
  Land held for development                      37,377          28,578
                                             ----------        --------
Net real estate                                 946,789         826,047

Cash and cash equivalents                         7,973          10,629
Accounts receivable                               6,117           5,608
Deferred financing and leasing costs, 
  net of accumulated amortization (1996, 
  $29,220; 1995, $24,007)                        23,745          26,363
Prepaid expenses and other assets                38,515          29,455
                                             ----------        --------
Total assets                                 $1,023,139        $898,102
                                             ==========        ========

LIABILITIES
Mortgage loans                               $  203,221        $172,115
Subordinated debentures                         183,625         229,900
Line of credit                                  176,618          71,894
Accounts payable                                  5,572           4,577
Accrued interest                                  4,007           9,439
Dividend payable                                 13,993          12,668
Other liabilities                                27,429          20,835
                                             ----------        --------
Total liabilities                               614,465         521,428

Minority interest                                41,399          41,153

SHAREHOLDER'S EQUITY
Common shares of beneficial interest, 
  $.001 par value, 200,000,000 shares 
  authorized, 30,779,072 and 28,348,048 
  shares issued and outstanding as of
  September 30, 1996 and December 31, 1995,
  respectively                                       31              28
Additional paid-in capital                      359,472         314,407
Unearned compensation                            (1,636)              -
Retained earnings                                 9,408          21,086
                                             ----------        --------
Total shareholders' equity                      367,275         335,521
                                             ----------        --------
Total liabilities and shareholders' equity   $1,023,139        $898,102
                                             ==========        ========
</TABLE>

See accompanying notes.

                                       4
<PAGE>

       CONSOLIDATED STATEMENT OF OPERATIONS OF LIBERTY PROPERTY TRUST
          (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                  THREE            THREE
                                               MONTHS ENDED     MONTHS ENDED
                                               SEPTEMBER 30,    SEPTEMBER 30,
                                                   1996             1995
                                               -------------    -------------
<S>                                            <C>              <C>
REVENUE
Rental                                         $      28,921    $      23,206
Operating expense reimbursement                        9,336            6,016
Management fees                                          324              226
Interest and other                                       958              543
                                               -------------    -------------
Total revenue                                         39,539           29,991
                                               -------------    -------------

OPERATING EXPENSES
Rental property expenses                               7,523            4,776
Real estate taxes                                      3,004            2,348
General and administrative                             2,094            1,375
Depreciation and amortization                          7,261            5,855
                                               -------------    -------------

Total operating expenses                              19,882           14,354
                                               -------------    -------------

Operating income                                      19,657           15,637

Premium on debenture conversion                          637                -
Interest expense                                       9,707           10,046
                                               -------------    -------------

Income before minority interest                        9,313            5,591

Minority interest                                        943              783
                                               -------------    -------------

Net income                                     $       8,370    $       4,808
                                               =============    =============

Net income per common share - primary          $        0.28    $        0.23
                                               =============    =============

Dividends declared per common share            $        0.41    $        0.40
                                               =============    =============

Weighted average number of common shares 
  outstanding                                         29,994           21,166
                                               =============    =============
</TABLE>
See accompanying notes.

                                      5
<PAGE>

       CONSOLIDATED STATEMENT OF OPERATIONS OF LIBERTY PROPERTY TRUST
          (UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

<TABLE>
<CAPTION>

                                                    NINE            NINE
                                                MONTHS ENDED    MONTHS ENDED
                                                SEPTEMBER 30,   SEPTEMBER 30,
                                                     1996            1995
                                                -------------   -------------
<S>                                             <C>             <C>
REVENUE
Rental                                          $      82,019   $      64,960
Operating expense reimbursement                        26,463          17,178
Management fees                                         1,190             605
Interest and other                                      3,080           1,717
                                                -------------   -------------
Total revenue                                         112,752          84,460
                                                -------------   -------------

OPERATING EXPENSES
Rental property expenses                               22,158          14,400
Real estate taxes                                       8,176           6,846
General and administrative                              5,681           3,648
Depreciation and amortization                          20,435          16,329
                                                -------------   -------------
Total operating expenses                               56,450          41,223
                                                -------------   -------------

Operating income                                       56,302          43,237

Premium on debenture conversion                         1,027               -
Interest expense                                       28,274          27,453
                                                -------------   -------------

Income before minority interest                        27,001          15,784

Minority interest                                       2,833           2,132
                                                -------------   -------------

Net income                                      $      24,168   $      13,652
                                                =============   =============

Net income per common share - primary           $        0.83   $        0.65
                                                =============   =============

Dividends declared per common share             $        1.21   $        1.20
                                                =============   =============

Weighted average number of common 
  shares outstanding                                   29,176          21,151
                                                =============   =============

</TABLE>
See accompanying notes.

                                      6
<PAGE>

          CONSOLIDATED STATEMENT OF CASH FLOWS OF LIBERTY PROPERTY TRUST
                          (UNAUDITED AND IN THOUSANDS)

<TABLE>
<CAPTION>

                                                    NINE            NINE
                                                MONTHS ENDED    MONTHS ENDED
                                                SEPTEMBER 30,   SEPTEMBER 30,
                                                    1996            1995
                                                -------------   -------------
<S>                                             <C>             <C>
OPERATING ACTIVITIES
Net income                                      $      24,168   $      13,652
Adjustments to reconcile net income to net 
  cash provided by operating activities
    Depreciation and amortization                      20,435          16,329
    Minority interest in net income                     2,833           2,132
    Gain on sale                                         (577)              -
    Noncash compensation                                  477               -
    Changes in operating assets and liabilities:
      Accounts receivable                                (509)            (15)
      Prepaid expense and other assets                (11,469)         (4,710)
      Accounts payable                                    995             400
      Accrued interest on existing debt                (5,432)         (1,395)
      Other liabilities                                 6,947           2,246
                                                -------------   -------------

Net cash provided by operating activities              37,868          28,639
                                                -------------   -------------

INVESTING ACTIVITIES
    Investment in properties                         (138,190)       (194,416)
    Increase in deferred leasing costs                 (4,100)         (2,042)
                                                -------------   -------------

Net cash used by investing activities                (142,290)       (196,458)
                                                -------------   -------------

FINANCING ACTIVITIES
    Proceeds from mortgage loans                       39,650          57,700
    Repayments of mortgage loans                       (8,544)         (7,511)
    Proceeds from line of credit                      143,374         166,110
    Repayments on line of credit                      (38,650)        (35,000)
    Deposits on pending acquisitions                    2,252          16,172
    Decrease (increase) in deferred financing
      costs                                             2,259          (4,993)
    Dividends                                         (38,575)        (28,918)
                                                -------------   -------------

Net cash provided by financing activities             101,766         163,560

Decrease in cash and cash equivalents                  (2,656)         (4,259)

Cash and cash equivalents at beginning of
  period                                               10,629          25,169
                                                -------------   -------------

Cash and cash equivalents at end of period      $       7,973   $      20,910
                                                =============   =============

SUPPLEMENTAL DISCLOSURE OF NONCASH
  TRANSACTIONS
Write-off of fully depreciated property and 
  deferred costs                                $         638   $       2,162
Acquisition of properties                                   -         (55,300)
Assumption of mortgage loans                                -          41,117
Issuance of operating partnership units                     -          14,183
Noncash compensation                                      353               -
Conversion of debentures                               46,275             100
                                                =============   =============
</TABLE>
See accompanying notes.

                                      7
<PAGE>

                            LIBERTY PROPERTY TRUST

            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                             SEPTEMBER 30, 1996

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 generally accepted 
accounting principles 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 generally 
accepted accounting principles 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, 1995.  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 restated to conform to 
current period presentation.

NOTE 2 - ORGANIZATION
---------------------

The Trust, a self-administered and self-managed real estate investment trust
(a "REIT"), was formed in the State of Maryland on March 28, 1994 and 
commenced operations on June 23, 1994 upon completion of its initial public 
offering (the "Share Offering").  The Trust conducts all of its operations 
through the Operating Partnership.  At September 30, 1996, the Trust owned an 
89.84% interest in the Operating Partnership as its sole general partner and a 
 .03% interest as a limited partner.  Concurrent with the Share Offering, the 
Operating Partnership completed a public offering of $230 million of 
Exchangeable Subordinated Debentures (the "Debentures") due 2001.  The 
Debentures are guaranteed by the Trust.  After June 23, 1995,  the Debentures 
are exchangeable, at the option of the holder thereof, at any time prior to 
maturity, into Common Shares at a rate of one share for each $20 outstanding 
principal amount of Debentures, subject to certain adjustments.  The Company 
completed a secondary offering (the "Secondary Offering") on November 27, 1995 
of 7,200,000 Common Shares.

                                     8

<PAGE>

     CONSOLIDATED BALANCE SHEET OF LIBERTY PROPERTY LIMITED PARTNERSHIP
                              (IN THOUSANDS)

<TABLE>
<CAPTION>

                                                 SEPTEMBER 30,   DECEMBER 31,
                                                     1996           1995
                                                 -------------   ------------
                                                  (UNAUDITED)
<S>                                              <C>             <C>
ASSETS
Real estate:
  Land and land improvements                     $     123,099   $    108,723
  Buildings and improvements                           808,008        715,908
  Less accumulated depreciation                       (112,175)       (94,183)
                                                 -------------   ------------
Operating real estate                                  818,932        730,448

  Development in progress                               90,480         67,021
  Land held for development                             37,377         28,578
                                                 -------------   ------------
Net real estate                                        946,789        826,047

Cash and cash equivalents                                7,973         10,629
Accounts receivable                                      6,117          5,608
Deferred financing and leasing costs, net of
  accumulated amortization (1996, $29,220; 
  1995, $24,007)                                        23,745         26,363
Prepaid expenses and other assets                       38,515         29,455
                                                 -------------   ------------
Total assets                                     $   1,023,139   $    898,102
                                                 =============   ============

LIABILITIES
Mortgage loans                                   $     203,221   $    172,115
Subordinated debentures                                183,625        229,900
Line of credit                                         176,618         71,894
Accounts payable                                         5,572          4,577
Accrued interest                                         4,007          9,439
Distributions payable                                   13,993         12,668
Other liabilities                                       27,429         20,835
                                                 -------------   ------------
Total liabilities                                      614,465        521,428

OWNERS' EQUITY
General partner's equity                               367,275        335,521
Limited partners' equity                                41,399         41,153
                                                 -------------   ------------
Total owners' equity                                   408,674        376,674
                                                 -------------   ------------
Total liabilities and owners' equity             $   1,023,139   $    898,102
                                                 =============   ============
</TABLE>
See accompanying notes.

                                      9

<PAGE>

 CONSOLIDATED STATEMENT OF OPERATIONS OF LIBERTY PROPERTY LIMITED PARTNERSHIP
                         (UNAUDITED AND IN THOUSANDS)

<TABLE>
<CAPTION>

                                                   THREE           THREE
                                                MONTHS ENDED    MONTHS ENDED
                                                SEPTEMBER 30,   SEPTEMBER 30,
                                                    1996            1995
                                                -------------   -------------
<S>                                             <C>             <C>
REVENUE
Rental                                          $      28,921   $      23,206
Operating expense reimbursement                         9,336           6,016
Management fees                                           324             226
Interest and other                                        958             543
                                                -------------   -------------
Total revenue                                          39,539          29,991
                                                -------------   -------------

OPERATING EXPENSES
Rental property expenses                                7,523           4,776
Real estate taxes                                       3,004           2,348
General and administrative                              2,094           1,375
Depreciation and amortization                           7,261           5,855
                                                -------------   -------------

Total operating expenses                               19,882          14,354
                                                -------------   -------------

Operating income                                       19,657          15,637

Premium on debenture conversion                           637               -
Interest expense                                        9,707          10,046
                                                -------------   -------------

Net income                                      $       9,313   $       5,591
                                                =============   =============

Net income allocated to general partner         $       8,370   $       4,808
Net income allocated to limited partners                  943             783
                                                =============   =============
</TABLE>
See accompanying notes

                                     10

<PAGE>

 CONSOLIDATED STATEMENT OF OPERATIONS OF LIBERTY PROPERTY LIMITED PARTNERSHIP
                         (UNAUDITED AND IN THOUSANDS)

<TABLE>
<CAPTION>

                                                    NINE            NINE
                                                MONTHS ENDED    MONTHS ENDED
                                                SEPTEMBER 30,   SEPTEMBER 30,
                                                     1996            1995
                                                -------------   -------------
<S>                                             <C>             <C>
REVENUE
Rental                                          $      82,019   $      64,960
Operating expense reimbursement                        26,463          17,178
Management fees                                         1,190             605
Interest and other                                      3,080           1,717
                                                -------------   -------------
Total revenue                                         112,752          84,460
                                                -------------   -------------

OPERATING EXPENSES
Rental property expenses                               22,158          14,400
Real estate taxes                                       8,176           6,846
General and administrative                              5,681           3,648
Depreciation and amortization                          20,435          16,329
                                                -------------   -------------

Total operating expenses                               56,450          41,223
                                                -------------   -------------

Operating income                                       56,302          43,237

Premium on debenture conversion                         1,027               -
Interest expense                                       28,274          27,453
                                                -------------   -------------

Net income                                      $      27,001   $      15,784
                                                =============   =============

Net income allocated to general partner         $      24,168   $      13,652
Net income allocated to limited partners                2,833           2,132
                                                =============   =============
</TABLE>
See accompanying notes.

                                     11

<PAGE>

 CONSOLIDATED STATEMENT OF CASH FLOWS OF LIBERTY PROPERTY LIMITED PARTNERSHIP
                         (UNAUDITED AND IN THOUSANDS)

<TABLE>
<CAPTION>

                                                    NINE            NINE
                                                MONTHS ENDED    MONTHS ENDED
                                                SEPTEMBER 30,   SEPTEMBER 30,
                                                    1996            1995
                                                -------------   -------------
<S>                                             <C>             <C>
OPERATING ACTIVITIES
Net income                                      $      27,001   $      15,784
Adjustments to reconcile net income to 
  net cash provided by operating activities
    Depreciation and amortization                      20,435          16,329
    Gain on sale                                         (577)              -
    Noncash compensation                                  477               -
    Changes in operating assets and liabilities:
      Accounts receivable                                (509)            (15)
      Prepaid expense and other assets                (11,469)         (4,710)
      Accounts payable                                    995             400
      Accrued interest on existing debt                (5,432)         (1,395)
      Other liabilities                                 6,947           2,246
                                                -------------   -------------

Net cash provided by operating activities              37,868          28,639
                                                -------------   -------------

INVESTING ACTIVITIES
     Investment in properties                        (138,190)       (194,416)
     Increase in deferred leasing costs                (4,100)         (2,042)
                                                -------------   -------------

Net cash used by investing activities                (142,290)       (196,458)
                                                -------------   -------------

FINANCING ACTIVITIES
     Proceeds from mortgage loans                      39,650          57,700
     Repayments of mortgage loans                      (8,544)         (7,511)
     Proceeds of line of credit                       143,374         166,110
     Repayments on line of credit                     (38,650)        (35,000)
     Deposits on pending acquisitions                   2,252          16,172
     Decrease (increase) in deferred financing 
       costs                                            2,259          (4,993)
     Distributions to partners                        (38,575)        (28,918)
                                                -------------   -------------

Net cash provided by financing activities             101,766         163,560

Decrease in cash and cash equivalents                  (2,656)         (4,259)

Cash and cash equivalents at beginning of
  period                                               10,629          25,169
                                                -------------   -------------

Cash and cash equivalents at end of period      $       7,973   $      20,910
                                                =============   =============

SUPPLEMENTAL DISCLOSURE OF NONCASH TRANSACTIONS
Write-off of fully depreciated property and 
  deferred costs                                $         638   $       2,162
Acquisition of properties                                   -         (55,300)
Assumption of mortgage loans                                -          41,117
Issuance of operating partnership units                     -          14,183
Noncash compensation                                      353               -
Conversion of subordinated debentures                  46,275             100
                                                =============   =============
</TABLE>
See accompanying notes.

                                       12

<PAGE>

                       LIBERTY PROPERTY LIMITED PARTNERSHIP

              NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

                               SEPTEMBER 30, 1996

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, including Liberty Property Development Corporation, 
have been prepared in accordance with generally accepted accounting principles 
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 generally accepted accounting principles 
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, 1995.  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 restated to conform to current period presentation.

NOTE 2 - ORGANIZATION
---------------------

Liberty Property Trust (the "Trust", and together with the Operating 
Partnership referred to as the "Company"), a self-administered and self-
managed real estate investment trust (a "REIT"), was formed in the State of 
Maryland on March 28, 1994 and commenced operations on June 23, 1994 upon 
completion of its initial public offering (the "Share Offering"). The Trust 
conducts all of its operations through the Operating Partnership. At September 
30, 1996, the Trust owned an 89.84% interest in the Operating Partnership as 
its sole general partner and a .03% interest as a limited partner.  Concurrent 
with the Share Offering, the Operating Partnership completed a public offering 
of $230 million of Exchangeable Subordinated Debentures (the "Debentures") due 
2001.  The Debentures are guaranteed by the Trust.  After June 23, 1995,  the 
Debentures are exchangeable, at the option of the holder thereof, at any time 
prior to maturity, into Common Shares at a rate of one share for each $20 
outstanding principal amount of Debentures, subject to certain adjustments.  
The Company completed a secondary offering (the "Secondary Offering") on 
November 27, 1995 of 7,200,000 Common Shares.

                                  13
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
------------------------------------------------------------------------
RESULTS OF OPERATIONS
---------------------

The following discussion compares the activities of the Company for the three 
month and nine month periods ended September 30, 1996  with the activities of 
the Company for the three month and nine month periods ended September 30, 
1995 (unaudited).  As used herein, the term "Company" includes the Trust, the 
Operating Partnership and their subsidiaries.

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

RESULTS OF OPERATIONS
---------------------

FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 COMPARED
----------------------------------------------------------------------------
TO THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1995.
-------------------------------------------------------------------

Rental revenues increased from $23.2 million to $28.9 million, or by 25% for 
the three month periods ended September 30, 1995 to 1996 and increased from 
$65.0 million to $82.0 million, or by 26% for the nine month periods ended 
September 30, 1995 to 1996.  These increases are primarily due to the increase 
in the number of properties in operation during the respective periods.  As of 
September 30, 1995, the Company had 200 properties in operation and as of 
September 30, 1996, the Company had 242 properties in operation.  From January 
1, 1995 through September 30, 1995, the Company acquired or completed the 
development on 51 properties, for approximately $191.6 million.  From January 
1, 1996 through September 30, 1996, the Company acquired or completed the 
development on 34 properties for approximately $116.8 million.

Operating expense reimbursement increased from $6.0 million to $9.3 million 
for the three month periods ended September 30, 1995 to 1996, and from $17.2 
million to $26.5 million for the nine month periods ended September 30, 1995 
to 1996.  These increases are a result of the reimbursement from tenants for 
increases in rental property expenses and real estate taxes. The operating 
expense recovery percentage (the ratio of operating expense reimbursement to 
rental property expenses and real estate taxes) increased from 84.5% for the 
three months ended September 30, 1995 to 88.7% for the comparable period in 
1996, and from 80.9% for the nine months ended September 30, 1996 to 87.2% for 
the comparable period in 1996.

Rental property expense increased from $4.8 million to $7.5 million for the 
three month periods ended September 30, 1995 to 1996 and from $14.4 million to 
$22.2 million for the nine month periods ended September 30, 1995 to 1996.  
These increases are due to the increase in properties owned during the 
respective periods and, additionally for the nine month periods, because of 
significant snow removal and other seasonal operating costs incurred as a 
result of the severe 1996 winter.  

Real estate taxes increased from $2.3 million to $3.0 million for the three 
month periods ended September 30, 1995 to 1996 and from $6.8 million to $8.2 
million for the nine month periods ended September 30, 1995 to 1996, due to 
the increase in the number of properties owned.

                                   14
<PAGE>

Net operating income for the "Same Store" properties (properties owned since 
January 1, 1995) increased from $50.6 million to $53.1 million, or by 5% for
the nine month periods ended September 30, 1995 to 1996 (see table on page 
16).  These increases are due principally to increases in the occupancy of 
the properties and to a lesser extent, the rental rates for the properties.

General and administrative expenses increased by $719,000 from the three 
months ended September 30, 1995 to the comparable period in 1996, and by $2.0 
million from the nine months ended September 30, 1995 to the comparable period 
in 1996, due to the increase in personnel and other related overhead costs 
necessitated by the increase in the number of properties owned during the 
respective periods.  Included in general and administrative expenses for the 
three months ended September 30, 1996 is a $228,000 noncash charge ($477,000 
for the nine months ended September 30, 1996) resulting from the amortization 
of a stock award over its vesting period.  There is no corresponding charge 
for the three and nine month periods ended September 30, 1995.

Interest expense decreased from $10.0 million for the three months ended 
September 30, 1995 to $9.7 million for the three months ended September 30, 
1996 and increased from $27.5 million for the nine months ended September 30, 
1995 to $28.3 million for the nine months ended September 30, 1996. The 
decrease in interest expense between the three month periods is due to an 
increase in the average outstanding Development in Progress balance, on which 
interest is capitalized, which was partially offset by the increase in the 
average debt outstanding from the third quarter of 1995 to the third quarter 
of 1996, which equalled $517.7 million and $549.3 million, respectively. The 
increase in interest expense from the nine months ended September 30, 1995 to 
the nine months ended September 30, 1996 is due to an increase in the average 
debt outstanding for the periods, which equalled $432.0 million and $518.7 
million, respectively.  This increase is partly offset by the lower interest 
rate on the outstanding debt, primarily as a result of the 1% reduction in the 
interest rate on the Line of Credit borrowings which became effective May 1, 
1995, and is also partly offset by the increase in the average outstanding 
Development in Progress balance.

Depreciation and amortization expense increased by $1.4 million for the three 
month periods from $5.9 million for the three months ended September 30, 1995 
to $7.3 million for the three months ended September 30, 1996, and by $4.1 
million for the nine month periods, from $16.3 million for the nine months 
ended September 30, 1995 to $20.4 million for the nine months ended September 
30, 1996.  These increases are due to an increase in the number of properties 
owned during the respective periods.

As a result of the foregoing, the Company's operating income increased from 
$15.6 million for the three months ended September 30, 1995 to $19.7 million 
for the three months ended September 30, 1996 and from $43.2 million for the 
nine months ended September 30, 1995 to $56.3 million for the nine months 
ended September 30, 1996.  In addition, income before minority interest for 
the three month periods increased by 66%, from $5.6 million for the three 
months ended September 30, 1995 to $9.3 million for the three months ended 
September 30, 1996, and increased by 71% for the nine month periods, from 
$15.8 million for the nine months ended September 30, 1995 to $27.0 million 
for the nine months ended September 30, 1996.

                                   15

<PAGE>

Set forth below is a schedule comparing the operating results for the Same 
Store properties for the nine month periods ended September 30, 1996 and 1995.

<TABLE>
<CAPTION>

                                                     NINE MONTHS ENDED
                                                       (IN THOUSANDS)
                                                -----------------------------
                                                SEPTEMBER 30,   SEPTEMBER 30,
                                                    1996            1995
                                                -------------   -------------
<S>                                             <C>             <C>
Rental revenue                                  $      56,501   $      54,363
Operating expense reimbursement                        18,726          15,576
                                                -------------   -------------

Rental property expenses                               16,245          13,291
Real estate taxes                                       5,860           6,079
                                                -------------   -------------

Property level operating income                 $      53,122   $      50,569
                                                =============   =============

</TABLE>

LIQUIDITY AND CAPITAL RESOURCES
-------------------------------

As of September 30, 1996, the Company had cash and cash equivalents of $8.0 
million.  Working capital at September 30, 1996 was $4.5 million.

Net cash provided by operating activities increased from  $28.6  million for 
the nine months ended September 30, 1995, to $37.9 million for the nine months 
ended September 30, 1996.  This $9.3 million increase was primarily due to the 
cash provided by the additional operating properties in service during the 
latter period.

Net cash used in investing activities decreased from $196.5 million for the 
nine months ended September 30, 1995, to $142.3 million for the nine months 
ended September 30, 1996.  This decrease was a result of the $125 million 
investment made in March 1995 in connection with the acquisition of the 
Lingerfelt portfolio (there was no similar portfolio acquisition made in 
1996), offset by increased development activity in 1996.

Net cash provided by financing activities decreased from $163.6 million for 
the nine months ended September 30, 1995, to $101.8 million for the nine 
months ended September 30, 1996.  This decrease was attributable to the 
aforementioned portfolio acquisition that was completed in March 1995.

The Company believes that its estimated cash flow from operations are adequate 
to fund its short-term liquidity requirements.

The Company has funded its long-term liquidity requirements such as property 
acquisition and development activities primarily through its $250 million Line 
of Credit, which matures on June 15, 1998, subject to the Company's option to 
extend the maturity of the loan as described below.  As of September 30, 1996, 
$176.6 million was outstanding under the Line of Credit.  The Line of Credit 
is recourse to the Company only with respect to 50% of the outstanding 
principal amount thereof.

Funds borrowed under the Line of Credit bear interest at an annual rate of 175 
basis points over LIBOR.  Subject to certain conditions and the payment of a 
fee equal to 0.5% of the then outstanding loan balance, the Company may 
exercise a one-time option to convert the loan balance into a two-year term 
loan upon the maturity of the Line of Credit.  Following such conversion, the 
interest rate on the term loan would be LIBOR plus 4%.

                                   16

<PAGE>


Additional sources of funds are available to the Company through mortgage loan 
financing.  As of September 30, 1996, $203.2 million in mortgage loans were 
outstanding with maturities ranging from 1996 to 2013. The interest rates on 
$192.8 million of mortgage loans are fixed and range from 6% to 10%.  Interest 
rates on $10.4 million of mortgage loans float with LIBOR or prime and are 
subject to certain caps.

The Company expects to incur variable rate debt, including borrowings under 
the Line of Credit, from time to time.  The Company believes that its existing 
sources of capital will provide sufficient funds to complete construction of 
the properties under development.  The Company believes that the amount 
necessary to complete such construction is approximately $74.0 million at 
September 30, 1996.

In July 1995, the Company filed a shelf registration with the Securities and 
Exchange Commission that enabled the Company to offer up to an aggregate of 
$350,000,000 of securities, including common stock, preferred stock and debt.  
On November 27, 1995, the Company completed a follow-on public offering of 
7,200,000 common shares resulting in proceeds of $140.4 million.  The proceeds 
were primarily used to reduce the amount outstanding under the Line of Credit.  
The remaining $209.6 million shelf registration is available for future 
offerings.  On February 8, 1996, Moody's Investors Service assigned a 
prospective rating of Ba2 for senior unsecured debt issued by Liberty Property 
Limited Partnership under the shelf registration.

In June, 1996, the Company closed a $39.7 million mortgage loan with a 12-year 
term bearing interest at 7.125% annually. The proceeds from this loan were 
used to paydown a portion of the outstanding principal amount under the Line 
of Credit.

On October 15, 1996, the Company filed a Registration Statement to initiate a 
Dividend and Interest Reinvestment Plan.  The Plan offers a 3% discount for 
the then market prices of the Shares on reinvested dividends.  Optional cash 
payments of no less than $250 and no greater than $7,500 per month may be made 
with no discount to current market prices.

The Plan contains an open enrollment feature whereby a person can invest a 
minimum of $1,000 and a maximum of $7,500 at current market prices.  The 
Company will pay for brokerage commissions and other administrative charges 
incurred under the Plan.  At the Company's discretion, shares under the plan 
can be newly issued, thereby enhancing the Company's liquidity position, or 
acquired in the open market.

Management considers funds from operations an appropriate measure of the 
performance of an equity REIT.  In March 1995 NAREIT issued a clarification 
of the definition of funds from operations.  The clarification provides that 
amortization of deferred financing costs and depreciation of non-real estate 
assets are no longer to be added back to net income in arriving at funds from 
operations.  Funds from operations under the new definition for the three 
month and nine month periods ended September 30, 1996 and 1995 are as follows:

                                    17

<PAGE>

<TABLE>
<CAPTION>

                                  THREE MONTHS ENDED       NINE MONTHS ENDED
                                    (IN THOUSANDS)           (IN THOUSANDS)
                                 --------------------    --------------------
                                 SEPT. 30,  SEPT. 30,    SEPT. 30,  SEPT. 30,
                                    1996       1995         1996     1995
                                 ---------  ---------    ---------  ---------
<S>                              <C>        <C>          <C>        <C>
Net Income                       $  8,370   $  4,808     $ 24,168   $ 13,652
Add Back:
 Minority Interest                    943        783        2,833      2,132
 Depreciation and amortization      7,170      5,794       20,197     16,175
 Premium on debenture conversion      637          -        1,027          -
 Gain on sale                        (200)         -         (577)         -
                                 --------   --------     --------   --------

Funds from operations            $ 16,920   $ 11,385     $ 47,648   $ 31,959
                                 ========   ========     ========   ========
</TABLE>

INFLATION
---------

Because inflation has remained relatively low during the last three years, it 
has not had a significant impact on the Company during this period.  Since the 
Line of Credit bears interest at a variable rate, the amount of interest 
payable under the Line of Credit will be influenced by changes in short-term 
interest rates, which tend to be sensitive to inflation.  To the extent an 
increase in inflation would result in increased operating costs, such as in 
insurance, real estate taxes and utilities, substantially all of the tenant 
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.

                                     18

<PAGE>

PART II           OTHER INFORMATION
-----------------------------------

Item 1.           Legal Proceedings

                  None

Item 2.           Changes in Securities

                  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

                      27 Financial Data Schedule (EDGAR VERSION ONLY)

                  b.  Reports on Form 8-K

                      None

                                    19

<PAGE>

SIGNATURES

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

LIBERTY PROPERTY TRUST



/s/ Joseph P. Denny                       November 12, 1996
----------------------------------        -------------------------------
Joseph P. Denny                           Date
President



/s/ George J. Alburger, Jr.               November 12, 1996
----------------------------------        -------------------------------
George J. Alburger, Jr.                   Date
Chief Financial Officer


LIBERTY PROPERTY LIMITED PARTNERSHIP
BY:  LIBERTY PROPERTY TRUST, GENERAL PARTNER




/s/ Joseph P. Denny                       November 12, 1996
----------------------------------        --------------------------------
Joseph P. Denny                           Date
President



/s/ George J. Alburger, Jr.               November 12, 1996
----------------------------------        --------------------------------
George J. Alburger, Jr.                   Date
Chief Financial Officer

                                   20