Phoenix is slated for significant expansion. The locally based REIT projects an eventual total of two million sf of industrial space and 1.5 million sf of office space there. But it is not the only one of the company's expanding markets. Liberty also acquired five industrial buildings aggregating 902,000 sf in the Houston market during first quarter and took on a 345,000-sf office building in Eden Prairie, MN.

The Minnesota asset is a 47-acre former Best Buy facility. Simultaneous with the acquisition, Liberty leased the full building to Super Value. In all, Liberty's pipeline now stands at eight million sf over 16 markets.

At the end of first quarter, Liberty's portfolio was 92.1% leased, down from 94.2% at the end of the previous quarter. The decline is due primarily to the acquisition of more than 1.3 million sf of vacant space during the quarter. Operating income from same store properties increased 4.9% for the quarter.

Furthermore, rents rates for renewals and new leases in the company's core portfolio during the first quarter were up an average of 5%. During a conference call, Bill Hankowsky, CEO, cited the office markets in Virginia Beach, VA and Orlando as "robust." Other strong markets he said include Tampa, FL; Houston on the industrial side; and Minneapolis. "Minneapolis is a standout in the Midwest," he said.

Despite the strong activity, Hankowsky also said, "There's just a hint of cautiousness." He cited an economic "soft landing," based on the housing markets, and added, "the rate of growth has slowed just a bit. We're seeing that velocity might be down a tad in coming quarters."