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BRIDGEPORT, NJ-Liberty Property Trust, based in Malvern, PA, has sold a 75% share in a 3.1 million-sf South Jersey industrial portfolio for $123 million. The buyer is the Public Employees’ Retirement Association of Colorado (Colorado PERA), Denver. The transaction includes a total of 28 distribution buildings and 50 development acres, all located within the Pureland Industrial Complex here, and in the Commodore Business Center in Swedesboro, NJ.

Under the terms of the deal, Liberty will retain a 25% ownership position in the portfolio, and will realize proceeds of an estimated $110 million. Liberty will also receive development, leasing and property management fees, and could receive a promoted interest if certain return thresholds are met. The venture will be financed with an estimated 60% leverage.

“Joint ventures allow us to harvest some of the value created through our core competencies,” explains Liberty president and CIO, William P. Hankowsky. He notes that the deal marks his company’s first joint venture since it went public.

“Our criteria for joint ventures have been very stringent,” Hankowsky continues. “First, we were only interested in ventures providing geographic separation of properties. Second, we wished to pursue transactions utilizing all of our strengths – development, acquisition, property management and leasing, allowing us to maintain long-term relationships with our tenants. Third, we only sought partners with a management and decision-making style similar and consistent with our own.

“Finally,” says Hankowsky, “we sought to identify a partner with a long-term view of real estate investing and value creation. We are very pleased to have found such a partner in Colorado PERA.”

The properties within the Pureland Industrial Complex comprise 2.2 million sf, with the largest of them being 407 Heron Dr. (270,000 sf), 405 Heron Dr. (254,000 sf), 2279 Center Square Rd. (246,000 sf) and 2155 High Hill Rd. (231,000 sf). The Pureland portion of the portfolio was acquired in 1998 from its original developer, Pureland Development Co., for a figure that was reported in the $82 million range. Overall, Pureland encompasses almost 10 million sf of space on 3,000 acres, with multiple ownership.

The Commodore Business Center properties, meanwhile, amount to just over 900,000, with the largest single building being 800 Arlington Blvd., which totals about 250,000 sf. All of the subject properties in both parks are used for warehousing and distribution purposes.

Liberty Property Trust retains a portfolio of approximately 50 million sf of office and industry space. Those properties are located along the Atlantic Coast from New Jersey and Pennsylvania to Florida, and in the Upper Midwest/Great Lakes region.

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