Liberty to Buy Cabot Fund Partnership for $1.25 Billion

Liberty Property Trust (LRY), a Pennsylvania-based industrial landlord, agreed to buy the operating partnership of a private real estate fund for about $1.25 billion to add properties and expand into new markets.

The acquisition of the Cabot Industrial Value Fund III LP partnership will add 23 million square feet (2.1 million square meters) and 177 properties to Liberty’s portfolio, the Malvern-based company said today in a statement. About 13 million square feet are located in Liberty’s existing markets, while the remaining are in 10 new areas for the company.

“With approximately 58 percent of this portfolio located in Liberty’s current markets and approximately 21 percent in the target markets of Atlanta, Dallas and Southern California, we are expanding into three of the top five national industrial markets,” William Hankowsky, chief executive officer of Liberty, said in the statement.

Liberty, which currently owns 662 properties, said it will fund the deal with a combination of real estate sales, debt and equity financing. The company plans to sell 21 million shares, according to a separate statement today.

Liberty will assume $230 million of outstanding mortgage debt as part of the deal. The transaction is expected to close in October, according to the statement.

Shares of Liberty fell 1.7 percent today to $38.21. They have climbed about 6.8 percent this year.

To contact the reporter on this story: Elizabeth Dexheimer in New York at edexheimer@bloomberg.net

To contact the editor responsible for this story: Kara Wetzel at kwetzel@bloomberg.net

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