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Capital Fund Should Take A Buy Recommendation On Liberty Property Trust Essay

Decent Essays

Investment Thesis
Recommendation:
The D’Artagnan Capital Fund should take a buy recommendation on Liberty Property Trust. Some of the main reasons for investing are
• They are continuing to expand their properties – in 2016-2020 there is a plan to expand the amount of properties that they own.
• Able to maintain a stable return on their operating real estate
• They continuously are able to lease almost 100% of their properties
• They are diversifying where they operate
• They have good customer loyalty. They continue to have leases renewed
Net Asset Valuation:
Net Asset Valuation was the valuation to value Liberty Property Trust. The reasoning for using Net Asset Valuation is that real estate investment trusts are just a bundle of individual properties and their gross real estate operating assets and the net operating real estate on their balance sheet. Total real estate value is the largest driver for the value of the company, and total real estate value usually drives between 90% and 95% of their revenue and their net operating income
Capitalization Rates, also known as cap rate, is a ratio of Net Operating Income divided by the property asset value. The Capitalization Rates were retrieved from Bloomberg using the command CPRT. The cap rates were calculated by ensuring that industrials or office was selected in the property type and the state in which the company owns properties. The cap rate for quarter two is the weighted average. Once the states weighted average

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