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MALVERN, PA-Despite a deteriorating economy, Liberty Property Trust experienced “one of our strongest leasing periods ever,” said Chairman and CEO Bill Hankowsky, during the REIT’s fourth-quarter conference call. Across its 700-building office and industrial portfolio, the firm leased 5.8 million square feet during the period.

Though occupancy dipped from 92% in the third quarter to 91.3% in the fourth quarter, other fundamentals showed improvement. The Q4 FFO per share was at 80 cents, up from 79 cents during the same year-ago period, while net income per share came in at 53 cents, increasing from 39 cents.

But Hankowsky sees a tough year to come with the recession chipping away at corporations’ workforces. “We think 2009 will be a very tough year on the fundamental side,” he says. “Our major concern is what we can’t control–the affect of the downturn on our tenant base.”

One thing Hankowsky pointed out is that tenants are looking for smaller spaces now, both in the office and industrial sectors. Specifically in industrial, the “sweet spot” is leases between 50,000 square feet and 200,000 square feet. The market for space larger than that “has really thinned out,” he conceded.

Liberty has sold $39 million of assets this year, on the way to a goal of $160 million in dispositions. The company has 1.1 million square feet of development underway totaling just under $85 million, with no new plans to start additional new projects.

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