Liberty Property Trust (LRY) sold an 80 percent stake in what will be Philadelphia's tallest building and the new headquarters of cable-television company Comcast Corp. (CMCSA) for $404 million to lower its investment risk.
Liberty formed a venture with CommerzLeasing und Immobilien AG, a unit of Germany's Commerzbank AG (CBK), to own the 1.25 million-square-foot Comcast Center. In addition to retaining a 20 percent stake, Liberty will receive leasing and management fees, the real estate investment trust said today in a statement.
The sale reduces the risk of having too much capital in a single property, Liberty said. The proceeds will be used for developments or property purchases in the 20 East Coast and Midwest markets in which Liberty owns real estate, spokeswoman Jeanne Leonard said. The 975-foot-tall Comcast Center will supplant the 945-foot One Liberty Place, also a Liberty-developed property, as the tallest building in Philadelphia.
Comcast Center is 73 percent leased to four tenants. Philadelphia-based Comcast, the biggest U.S. cable-TV provider, will occupy 873,000 square feet at the tower. Under the terms of the sale, Liberty is required to complete the building's development and its initial leasing. Tenants will be ready to move in by late next year.
Liberty shares fell 56 cents to $43.81 in New York Stock Exchange composite trading. They have gained 12 percent in the past year, less than the 20 percent increase in the Bloomberg REIT Index.
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