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Liberty Property Trust (LRY) is a self-administered and self-managed real estate investment trust (REIT) that focuses primarily on prime suburban properties in the Southeast, Mid-Atlantic, and Midwest regions of the United States. The company's portfolio comprises over 700 industrial and office properties, spanning 77 million square feet of space.

Office and industrial markets continue to weaken throughout the US. In the current environment, we do not favor suburban industrial/office companies as rental rates and occupancies will continue their downward trend.

The company recently cut its quarterly payout to $0.475 per share, 24% lower than the previous payout. Negative job growth trends will keep shares under pressure.

Despite the economic downturn in the US, operations held up relatively well in 4Q08. In addition, the company has used debt and equity to raise capital in a tight credit environment. LRY now has plenty of liquidity to address near-term debt maturities.

We maintain our near-term sell rating based primarily on macroeconomic factors.

Source: Liberty Property: Tarred with the CRE Brush