Investor Relations

GOVERNANCE GUIDELINES

The objective of these governance guidelines is to provide appropriate checks and balances on the Board and management of the Company to ensure that those to whom the shareholders entrust the direction and success of the Company act in the best interests of the shareholders. The mission of the Board is to oversee the governance of the Company and to facilitate the Company's business objective of maximizing long-term profitability for its shareholders by being a recognized leader in commercial real estate through the ownership, management, development, and acquisition, of superior office and industrial properties. In fulfilling this mission, the Board also will consider the interests of its other stakeholders and interested parties, including its employees, tenants, vendors, creditors, local communities, and the public at large.

Board Size and Qualification

The Board believes that approximately nine to thirteen is an appropriate number of trustees for the Company. The Corporate Governance and Nominating Committee reviews annually the appropriate skills and characteristics required of Board members in light of the then current composition of the Board. This assessment includes considerations of diversity, age, public company experience and skills such as knowledge of corporate governance, an understanding of real estate, finance, marketing, technology, regulation and public policy matters and international background. The principal qualification for a trustee is the ability to act in the best interests of all the shareholders.

Mix of Inside and Outside Trustees

The Board believes there should always be a substantial majority of independent trustees. The Board believes that, in addition to the Chief Executive Officer/ President of the Trust, it may be appropriate, from time to time, for one or more additional officers of the Trust to be members of the Board. However, no officer of the Trust - other than the Chief Executive Officer/ President - should expect to be elected to the Board by virtue of his or her position in the Trust.

Frequency of Meetings

The Board will typically meet in person five times a year. (One meeting will generally be conducted in one of the Company's regional offices.) Special meetings are called as necessary. It is the responsibility of the trustees to attend all of the meetings, and a trustee who is unable to attend a meeting is expected to notify the Chairperson of the Board in advance of such meeting. Attendance at a meeting by telephone, videoconference or other means of communication generally will be discouraged unless a particular Board meeting was scheduled to be so conducted.

The Board meeting schedule for each year is submitted to and approved by the Board in advance.

Trustee Attendance at Annual Meetings

The Board believes that all of the trustees should attend the Company's annual meeting of shareholders, and encourages all trustees to make every effort to do so.

Communications with Shareholders

The Board believes that the Company's shareholders and other interested parties should have the opportunity to communicate with the members of the Board, including without limitation the independent trustees or the chairperson of any of the committees of the Board. These communications should be accepted via e-mail or regular mail.

The Board believes that all communications received in accordance with this process should be reviewed by the Company's management in order to determine whether the communication requires immediate action. Management should pass on all communications received, or a summary of such communications, to the appropriate trustee or trustees. However, management should have the right to disregard any communication that it determines is unduly hostile, threatening, illegal, does not reasonably relate to the Company or its business, or is similarly inappropriate, and should have the authority to discard or disregard any inappropriate communications or to take other appropriate actions with respect to any such inappropriate communications.

Executive Sessions of the Board; Meetings of Non-Management and Independent Trustees

The non-management trustees will meet periodically in executive session with the Chief Executive Officer.

In addition, the non-management trustees shall meet at least twice each year in regularly scheduled executive sessions, and the independent trustees shall meet at least once each year in executive session. The Board designates the chairpersons of the Audit Committee, the Compensation Committee and the Corporate Governance and Nominating Committee to preside over these sessions in a rotating fashion.

Shareholder Nominations for Trustees

Shareholders shall have the opportunity to make nominations for election to the Board. Any such nominations should be sent to the attention of the Secretary of the Company, describe the candidate's qualifications and be accompanied by the candidate's written statement of willingness and affirmative desire to serve representing the interest of all shareholders. The Board also notes that shareholders may also make nominations directly by following the procedure specified in the Company's By-laws.

Candidates proposed by shareholders will be considered using the same criteria and in the same manner utilized by the Corporate Governance and Nominating Committee of the Board in considering all candidates for election to the Board.

Vote Standard for Election of Trustees

The Company has adopted by-laws to provide that the vote standard for the election of trustees in uncontested elections is a majority of all the votes cast.

If a candidate for Trustee who is an incumbent Trustee fails to receive a majority of all the votes cast in an uncontested election, the Trustee shall offer to tender his or her resignation to the Board. The Corporate Governance and Nominating Committee shall then make a recommendation to the Board on whether to accept or reject the resignation, or whether other action should be taken. The Board will act on the Committee's recommendation and publicly disclose its decision and the rationale behind it within 90 days from the date of the certification of the election results. The Trustee who tenders his or her resignation will not participate in the Board's decision.

Review of Materials

Trustees are expected to have, prior to the meetings, reviewed all written meeting materials distributed to them in advance. The Company will distribute written materials, including the agenda, for use at Board meetings sufficiently in advance of meetings to permit meaningful review. It is recognized, however, that under certain circumstances written materials may be unavailable to trustees in advance of the meeting. On those occasions in which the subject matter is too sensitive to provide in writing, the Chairperson of the Board may elect to contact each trustee by telephone in advance of the meeting to discuss the subject and the principal issues the Board will need to consider.

Number and Types of Committees

A substantial portion of the analysis and work of the Board is done by standing Committees. A trustee is expected to participate actively in the meetings of each Committee to which he or she is appointed.

The Board has established the following standing Committees: Audit, Compensation and Corporate Governance and Nominating. Each Committee has adopted a charter. Each such charter will be reviewed by the Board and thereafter will be subject to periodic review by such Committee and the Board.

Each independent trustee is expected to serve on at least one Committee and is encouraged to serve on two Committees.

Assignment and Rotation of Committee Members and Chair Designation

The Board, through the Corporate Governance and Nominating Committee, designates the members and chairs of the Committees, taking into account the desires and skills of individual Board members and the suggestions of the Chief Executive Officer.

It is the sense of the Board that Committee chairpersons should generally be appointed for a three year term and should be rotated at the end of the term. The Board does not feel that such a rotation should be mandated as a policy since there may be reasons at a given time to maintain an individual trustee's status as chair for a longer period or to shorten the period.

The Board believes that Committee membership should be considered annually with a view to utilizing the talents of individual Board members to best serve the Trust's needs. The Board does not feel that rotation of Committee membership should be mandated as a policy since there may be reasons at a given time to maintain an individual trustee's Committee membership status for a longer period or to shorten the period. The learning time to become an active contributor on a particular Committee is also a factor.

Construction of Committees

The Board has the flexibility to form a new Committee or to disband a current Committee, as it deems appropriate. The chair of each Committee reports to the full Board, whenever appropriate, with respect to those matters considered and acted upon by his or her Committee.

Assessing the Board's Function

The members of the Corporate Governance and Nominating Committee will be required to report annually to the Board on the Committee's assessment of the Board's function. This assessment should include such items as the frequency of Board and Committee meetings, and should be discussed with the full Board at the February quarterly meeting.

The assessment should be of the Board's contribution as a whole and specifically review the areas in which the Board and management believes a better contribution could be made. The goal of this assessment is to increase the effectiveness of the Board.

With the goal of increasing the effectiveness of the Board and its relationship to management at such time as a member of the Board stands for re-nomination, the Corporate Governance and Nominating Committee will engage in evaluation of that member, such evaluation to include a survey of the individual views of all non-employee trustees, which are then shared with the full Board and with management.

Access to Management and Independent Advisors

Board members will have complete and open access to senior members of management. The Board, including the independent members of the Board, have the authority, in their discretion, to retain independent advisors.

Formal Evaluation of the Chief Executive Officer

The outside trustees are responsible for evaluating the performance of the Chief Executive Officer. This evaluation should be conducted annually, and it should be communicated to the Chief Executive Officer by the Chairman of the Compensation Committee. The evaluation is to be used by the Compensation Committee in determining the compensation of the Chief Executive Officer.

The evaluation should be based on objective criteria to include the performance of the business, accomplishment of reported goals and long-term strategic objectives and the development of management.

Succession Planning

The Board plans for the succession to the positions of CEO and other executive officers of the Company. To assist the Board, the Chief Executive Officer will provided the Board with an annual report on succession planning.

Term Limits

The Board does not believe it should establish term limits. While term limits could help insure that there are fresh ideas and viewpoints available to the Board, they hold the disadvantage of losing the contribution of trustees who have been able to develop, over a period of time, increasing insight into the Trust and its operations and, therefore, provide an increasing contribution to the Board as a whole. The Board believes that its present annual board evaluation process provides appropriate checks and balances to assure the ongoing vitality of the Board.

Compensation of Trustees

Management should report annually as to how the Company's outside trustee compensation practices compare with those of other similarly situated public companies. The Board should make changes in its outside trustee compensation practices only upon the recommendation of the Compensation Committee after discussion and unanimous concurrence by the full Board. In discharging this duty, the Compensation Committee and the full Board should be guided by the following principles: compensation should fairly pay trustees for the work required; compensation should align trustees' interests with the long-term interests of shareholders; and the structure of the compensation should be simple, transparent and easy for shareholders to understand.

Education of Trustees

The Company will provide an appropriate educational program for new Board members that includes written materials, meetings with key management, and visits to Company facilities. Additionally, all trustee should periodically attend educational opportunities enabling them to better perform their duties.

Trustees Who Change Their Vocation

Individual trustees who change the primary vocation that they pursued when they were elected to the Board should inform the Chief Executive Officer and the Chair of the Corporate Governance and Nominating Committee of the change. In addition, they must volunteer, in writing, to resign from the Board.

The Corporate Governance and Nominating Committee, in consultation with the Chief Executive Officer, will evaluate the offer to resign and make a recommendation to the Board.

Share Ownership of Trustees

The Board believes that trustees should be shareholders and have a financial stake in the Company. Each trustee should develop a meaningful ownership position in the Company over time. In furtherance of this belief, non-management trustees are paid a portion of their annual fees in the Company's common shares.

Additionally, the trustees are expected to own an amount of the Company's common shares equal to five times the annual retainer paid to trustees. The target date for acquiring such ownership is five years following the adoption of the guideline.

Share Ownership of Senior Officers

Consistent with an emphasis on higher standards of corporate governance, the Board believes that the investment community values share ownership by senior management and that, by holding an equity position in the Company, officers demonstrate their commitment to and belief in the long-term profitability of the Company. Accordingly, the Board believes that ownership of Company shares by officers should be encouraged.

Covered Officers

These share ownership guidelines for Senior Officers apply to the Company's officers at the Senior Vice President level and above.

Target Ownership

Each Senior Officer should seek to acquire and maintain a level of ownership of Company common shares (determined based on the fair market value of such shares from time to time) as follows:

Officer	Ownership Target as Multiple of Base Salary
CEO	5x
COO, CFO, CIO and General Counsel	3x
Senior Vice Presidents	1x

Each Senior Officer should work toward achieving these levels of ownership with the objective of meeting the requirements by January 31, 2008 or within five years of becoming subject to these requirements, as applicable. Once a Senior Officer has achieved the targeted level of share ownership, the Senior Officer (1) should maintain at least that level of ownership for the duration of his or her tenure with the Company and (2) within three years after receiving an increase in salary or a promotion, should seek to achieve the resulting greater target level of ownership.

Implementation

For purposes of determining whether the above ownership target is satisfied, the following sources of share ownership will be included:

• Shares of Company common stock acquired by a Senior Officer, including unvested restricted stock awards;
• Units of interest in Liberty Property Limited Partnership;
• Shares of Company common shares owned directly by a Senior Officer's spouse or minor children who reside with the Senior Officers; and
• Shares of Company common shares held in a trust established for estate and/or tax planning purposes that is revocable by the Senior Officer and/or the Senior Officer's spouse.

For purposes of determining whether the ownership target is satisfied, shares underlying any outstanding options will not be included.

Restriction on Disposition of Restricted Stock

Until such time as a Senior Officer has attained the stated Ownership Target, a Senior Officer must retain common stock obtained as a result of a restricted stock award. The Board may provide an exception to this general rule based on circumstances which it deems appropriate.