Phoenix is slated for significant expansion. The locally basedREIT projects an eventual total of two million sf of industrialspace and 1.5 million sf of office space there. But it is not theonly one of the company's expanding markets. Liberty also acquiredfive industrial buildings aggregating 902,000 sf in the Houstonmarket during first quarter and took on a 345,000-sf officebuilding in Eden Prairie, MN.

The Minnesota asset is a 47-acre former Best Buy facility.Simultaneous with the acquisition, Liberty leased the full buildingto Super Value. In all, Liberty's pipeline now stands at eightmillion 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. Thedecline is due primarily to the acquisition of more than 1.3million sf of vacant space during the quarter. Operating incomefrom same store properties increased 4.9% for the quarter.