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Section 1: 8-K (FORM 8-K)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

Current Report Pursuant

to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): May 7, 2020

 

LEXINGTON REALTY TRUST
(Exact name of registrant as specified in its charter)
 

 

Maryland 1-12386 13-3717318

(State or other jurisdiction

of incorporation)

(Commission File Number) (IRS Employer Identification No.)
     

 

One Penn Plaza, Suite 4015, New York, New York 10119-4015

 

(Address of principal executive offices) (Zip Code)

 

(212) 692-7200

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

 

  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class Trading
Symbol(s)
Name of each exchange on which registered
Shares of beneficial interest, par value $0.0001 per share, classified as Common Stock LXP New York Stock Exchange
6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share LXPPRC New York Stock Exchange
   

 

 

Item 2.02.        Results of Operations and Financial Condition.

 

On May 7, 2020, we issued a press release announcing our financial results for the quarter ended March 31, 2020. A copy of the press release is furnished herewith as part of Exhibit 99.1.

 

The information furnished pursuant to this “Item 2.02 - Results of Operations and Financial Condition”, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing made by us under the Exchange Act or Securities Act of 1933, as amended, which we refer to as the Securities Act, regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such a filing.

 

Item 7.01.        Regulation FD Disclosure.

 

On May 7, 2020, we made available supplemental information, which we refer to as the “Quarterly Supplemental Information, First Quarter 2020,” a copy of which is furnished herewith as Exhibit 99.1.

 

On May 7, 2020, our management discussed our financial results and certain aspects of our business plan on a conference call with analysts and investors. A transcript of the conference call is furnished herewith as Exhibit 99.2.

 

The information furnished pursuant to this “Item 7.01 - Regulation FD Disclosure”, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing made by us under the Exchange Act or the Securities Act, regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such a filing. Information contained on our web site is not incorporated by reference into this Current Report on Form 8-K.

 

Item 9.01.        Financial Statements and Exhibits.

 

  (d)      Exhibits  
     
  99.1 Quarterly Supplemental Information, First Quarter 2020.
  99.2 May 7, 2020 Conference Call Transcript.
   

 

SIGNATURES

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  Lexington Realty Trust
   
Date: May 8, 2020 By: /s/ Beth Boulerice  
    Beth Boulerice
    Chief Financial Officer

 

   

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Section 2: EX-99.1 (QUARTERLY SUPPLEMENTAL INFORMATION, FIRST QUARTER 2020)

 

Exhibit 99.1

 

image

 

 

 

 

LEXINGTON REALTY TRUST

QUARTERLY SUPPLEMENTAL INFORMATION

March 31, 2020

 

Table of Contents

 

Section

 

Page

 

 

 

First Quarter 2020 Earnings Press Release

 

3

 

 

 

Portfolio Data

 

 

Investments / Capital Recycling Summary

 

14

Development Projects

 

15

Financing Summary

 

16

Leasing Summary

 

18

Other Revenue Data

 

19

Portfolio Detail by Asset Class

 

21

Portfolio Composition

 

22

Components of Net Asset Value

 

23

Portfolio Concentration

 

24

Tenant Industry Diversification

 

27

Top 15 Tenants

 

29

Lease Rollover Schedules

 

30

Property Leases and Vacancies

 

31

Select Credit Metrics Summary

 

42

Financial Covenants

 

43

Mortgages and Notes Payable

 

44

Debt Maturity Schedule

 

45

Selected Balance Sheet Account Data

 

46

Non-GAAP Measures – Definitions

 

47

Reconciliation of Non-GAAP Measures

 

50

 Investor Information

 

53

 

This Quarterly Earnings Press Release and Quarterly Supplemental Information contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the control of Lexington Realty Trust (“Lexington”), which may cause actual results, performance or achievements of Lexington and its subsidiaries to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Lexington’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, risks related to:  (1) the potential adverse impact on Lexington or its tenants from the novel coronavirus (COVID-19), (2) the authorization of Lexington’s Board of Trustees of future dividend declarations, (3) Lexington’s ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO available to all equity holders and unitholders – diluted  for the year ending March 31,2020, (4) the successful consummation of any lease, acquisition, build-to-suit, development project, disposition, financing or other transaction on the terms described herein or at all, (5) the failure to continue to qualify as a real estate investment trust, (6) changes in general business and economic conditions, including the impact of any new legislation, (7) competition, (8) increases in real estate construction costs, (9) changes in interest rates, (10) changes in accessibility of debt and equity capital markets, and (11) future impairment charges. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington’s web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington’s future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects,” may,” “plans,” “predicts,” “will,” “will likely result,” “is optimistic,” “goal,” “objective” or similar expressions. Except as required by law, Lexington undertakes no obligation to revise those forward-looking statements to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington’s expectations will be realized.

 

 

 

 

 

Lexington Realty Trust

 

TRADED: NYSE: LXP

 

One Penn Plaza, Suite 4015

 

New York, NY 10119-4015

 

FOR IMMEDIATE RELEASE

 

LEXINGTON REALTY TRUST REPORTS FIRST QUARTER 2020 RESULTS

 

New York, NY - May 7, 2020 - Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant industrial real estate investments, today announced results for the first quarter ended March 31, 2020.

 

First Quarter 2020 Highlights

 

 

Recorded Net Income attributable to common shareholders of $16.5 million, or $0.06 per diluted common share.

 

Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $49.3 million, or $0.19 per diluted common share.

 

Acquired four industrial properties for an aggregate cost of $195.5 million.

 

Disposed of two office properties for an aggregate gross price of $29.6 million.

 

Raised net proceeds of $17.3 million by issuing approximately 1.6 million common shares through the ATM program at an average price of $11.24 per share.

 

Repurchased 1.3 million common shares at an average price of $8.28 per share.

 

Completed 337 thousand square feet of new lease and lease extensions.

 

Increased industrial portfolio to 83.2% of gross real estate assets.

 

Subsequent Events

 

 

Collected 99.8% of April 2020 Cash Base Rents.

 

Raised net proceeds of $37.1 million by issuing approximately 3.8 million common shares through the ATM program.

 

Acquired one industrial asset for a cost of approximately $34.7 million.

 

Sold one office property for a gross sales price of $10.7 million.

 

Adjusted Company FFO is a non-GAAP financial measure. It and certain other non-GAAP financial measures are defined and reconciled later in this press release.

 

T. Wilson Eglin, Chairman and Chief Executive Officer of Lexington Realty Trust, commented, “Our portfolio has performed well during the Covid-19 pandemic, demonstrating resilience that is a hallmark of our investment strategy. In this environment, we believe investment opportunities are likely to be more favorable than they have been in the recent past and we plan to use disposition proceeds, retained cash flow, our balance sheet flexibility and access to capital to grow our industrial portfolio. Furthermore, the pandemic has accelerated e-commerce growth, demonstrated the value of more resilient supply chains, and increased the possibility of greater domestic production of goods going forward. These trends bode well for our industrial growth strategy.”

 

 

 

 

COVID-19 RENT UPDATE

 

As of May 6, 2020, 99.8% of April Cash Base Rents have been paid. Information regarding historical collections should not be considered an indication of expected future collections.

 

Lexington has received rent relief requests from certain tenants. The amount of rent relief requests Lexington has received represented 5.5% of its 2019 annual Cash Base rents. Lexington estimates the portion of tenants warranting relief represented less than 1% of its 2019 annual Cash Base Rents. Lexington is currently evaluating these requests, but, absent material tenant defaults, Lexington does not expect any material impact to its rental revenues resulting from rent relief requests. However, Lexington can give no assurances on the outcomes of the negotiation of rent relief requests, the success of any tenant’s financial prospects or the amount of relief requests that it will ultimately receive or grant.

 

FINANCIAL RESULTS

 

Revenues

 

For the quarter ended March 31, 2020, total gross revenues were $80.8 million, compared with total gross revenues of $81.2 million for the quarter ended March 31, 2019. The decrease is primarily attributable to sales, partially offset by property acquisitions and higher fee income.

 

Net Income Attributable to Common Shareholders

 

For the quarter ended March 31, 2020, net income attributable to common shareholders was $16.5 million, or $0.06 per diluted share, compared with net income attributable to common shareholders for the quarter ended March 31, 2019 of $26.4 million, or $0.11 per diluted share.

 

Adjusted Company FFO

 

For the quarter ended March 31, 2020, Lexington generated Adjusted Company FFO of $49.3 million, or $0.19 per diluted share, compared to Adjusted Company FFO for the quarter ended March 31, 2019 of $47.2 million, or $0.20 per diluted share.

 

Dividends/Distributions

 

As previously announced, during the first quarter of 2020, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended March 31, 2020 of $0.1050 per common share/unit, which was paid on April 15, 2020 to common shareholders/unitholders of record as of March 31, 2020. Lexington also declared a cash dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred”) for the quarter ended March 31, 2020, which is expected to be paid on May 15, 2020 to Series C Preferred Shareholders of record as of April 30, 2020.

 

 

 

 

TRANSACTION ACTIVITY

 

ACQUISITION TRANSACTIONS

 

Property Type

 

Market

 

Sq. Ft.

 

Initial Basis
($000)

 

Approximate Lease Term (Yrs)

Industrial-warehouse/distribution

 

Chicago, IL

 

705,661 

 

 

$

53,642 

 

 

10

Industrial-warehouse/distribution

 

Phoenix, AZ

 

160,140 

 

 

19,164 

 

 

6

Industrial-warehouse/distribution

 

Chicago, IL

 

473,280 

 

 

39,153 

 

 

10

Industrial-warehouse/distribution

 

Dallas, TX

 

1,214,526 

 

 

83,495 

 

 

10

 

 

 

 

2,553,607 

 

 

$

195,454 

 

 

 

 

The above properties were acquired at aggregate weighted-average GAAP and cash capitalization rates of 5.3% and 4.8%, respectively.

 

DEVELOPMENT PROJECTS

 

Project (% owned)

 

Market

 

Property
Type

 

Estimated
Sq. Ft.

 

Estimated
Project
Cost ($000)

 

 

GAAP
Investment
Balance as of
03/31/2020
($000)(1)

 

 

Lexington
Amount
Funded as
of
3/31/2020
($000)
 

 

 

Estimated Completion
Date

Consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fairburn (90%)

 

Atlanta, GA

 

Industrial

 

910,000

 

$

53,812 

 

 

$

14,641 

 

 

$

11,474 

 

 

4Q 20

Rickenbacker (100%)

 

Columbus, OH

 

Industrial

 

320,000

 

20,300 

 

 

3,657 

 

 

3,421 

 

 

1Q 21

 

 

 

 

 

 

 

 

$

74,112 

 

 

$

18,298 

 

 

$

14,895 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-consolidated:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ETNA Park 90 (90%)(2)

 

Columbus, OH

 

Industrial

 

TBD

 

TBD

 

$

8,670 

 

 

$

8,984 

 

 

TBD

ETNA Park 70 East (90%)(2)

 

Columbus, OH

 

Industrial

 

TBD

 

TBD

 

5,058 

 

 

5,089 

 

 

TBD

 

 

 

 

 

 

 

 

 

 

$

13,728 

 

 

$

14,073 

 

 

 

 

 

1.

GAAP investment balance is in real estate under construction for consolidated projects and investments in non-consolidated entities for non-consolidated projects.

 

2.

Plans and specifications have not been completed and the estimated square footage, project cost and completion date cannot be determined.

 

PROPERTY DISPOSITIONS(1)

 

Primary Tenant

 

Location

 

Property Type

 

Gross
Disposition

Price
($000)

 

Annualized Net Income(2) ($000)

 

 

Annualized

NOI(2)
($000)
 

 

 

Month of Disposition

 

% Leased

Multi-Tenant (3)

 

Charleston, SC

 

Office

 

$

6,830 

 

 

$

(1,142)

 

 

$

17 

 

 

March

 

23 

%

Burns & McDonnell Engineering

 

Kansas City, MO

 

Office

 

22,775 

 

 

1,277 

 

 

1,589 

 

 

March

 

100 

%

 

 

 

 

 

 

$

29,605 

 

 

$

135 

 

 

$

1,606 

 

 

 

 

 

 

1.

In addition, a joint venture, in which Lexington has a 20% interest, disposed of one office property for $16.9 million and satisfied $13.0 million of non-recourse debt.

2.

Quarterly period prior to sale, annualized.

3.Sold in a foreclosure sale. Disposition price reflects non-recourse debt balance.

 

The consolidated 2020 property dispositions resulted in weighted-average GAAP and Cash capitalization rates of  5.9% and 5.4%, respectively.

 

 

 

 

LEASING

 

 

 

LEASE EXTENSIONS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

Primary Tenant(1)

Prior
Term

 

Lease
Expiration Date

 

Sq. Ft.

 

 

Office

 

 

 

 

 

 

 

 

1

 

Wall                                                 

NJ

 

NJ Natural Gas

 

06/2021

 

06/2037

 

157,511 

2

 

Baton Rouge                                   

LA

 

New Cingular Wireless(2)

 

10/2022

 

11/2023

 

23,750 

2

 

Total office lease extensions

 

 

 

 

 

 

 

181,261 

 

 

 

NEW LEASES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Location

 

 

 

 

 

Lease Expiration Date

 

Sq. Ft.

 

 

Industrial

 

 

 

 

 

 

 

 

1

 

Moody                                            

AL

 

Wal-Mart

 

 

 

02/2023

 

155,766 

1

 

Total industrial leases

 

 

 

 

 

 

 

155,766 

 

 

 

 

 

 

 

 

 

 

 

3

 

TOTAL NEW AND EXTENDED LEASES

 

 

 

 

 

 

 

337,027 

 

(1)    Leases greater than 10,000 square feet.

(2)    Effective November 7, 2020, the square footage leased by the tenant will be reduced from 70,100 square feet to 23,750 square feet.

 

As of March 31, 2020, Lexington’s portfolio was 97.2% leased.

 

BALANCE SHEET/CAPITAL MARKETS

 

During the first quarter of 2020, Lexington issued 1.6 million common shares under its ATM program raising net proceeds of $17.3 million.  During the second quarter of 2020, Lexington issued an additional 3.8 million common shares under its ATM program raising net proceeds of $37.1 million.

 

In the first quarter of 2020, Lexington repurchased 1.3 million common shares at an average price of $8.28 per share under its share repurchase authorization. As of March 31, 2020, there were approximately 9.0 million common shares remaining to be repurchased under the authorization.

 

Year to date, Lexington has issued approximately 4.0 million common shares, net, at an average price of $11.06 per share.

 

During the first quarter, Lexington borrowed $130.0 million on its unsecured revolving credit facility. As of the date of this earnings release, Lexington has $470.0 million of availability under its unsecured revolving credit facility subject to covenant compliance.

 

2020 EARNINGS GUIDANCE

 

Lexington now estimates that its net income attributable to common shareholders for the year ended December 31, 2020 will be within an expected range of $0.77 to $0.80 per diluted common share.

 

Additionally, Lexington is reaffirming that its Adjusted Company FFO for the year ended December 31, 2020 is expected to be within a range of $0.74 to $0.77 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

 

 

 

 

FIRST QUARTER 2020 CONFERENCE CALL

 

Lexington will host a conference call today, May 7, 2020, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended March 31, 2020. Interested parties may participate in this conference call by dialing 1-844-825-9783 (U.S.), 1-412-317-5163 (International) or 1-855-669-9657 (Canada). A replay of the call will be available through August 7, 2020, at 1-877-344-7529 (U.S.), 1-412-317-0088 (International) or 1-855-669-9658 (Canada), pin code for all replay numbers is 10142063. A link to a live webcast of the conference call is available at www.lxp.com within the Investors section.

 

ABOUT LEXINGTON REALTY TRUST 

Lexington Realty Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) that owns a diversified portfolio of real estate assets consisting primarily of equity investments in single-tenant net-leased commercial properties across the United States. Lexington seeks to expand its industrial portfolio through build-to-suit transactions, sale-leaseback transactions and other transactions, including acquisitions. For more information, including Lexington’s Quarterly Supplemental Information package, or to follow Lexington on social media, visit www.lxp.com.

 

Contact: 

Investor or Media Inquiries for Lexington Realty Trust: 

Heather Gentry, Senior Vice President of Investor Relations 

Lexington Realty Trust 

Phone: (212) 692-7200 E-mail: [email protected]

 

This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under Lexington’s control which may cause actual results, performance or achievements of Lexington to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Lexington’s periodic reports filed with the Securities and Exchange Commission, including risks related to: (1) the potential adverse impact on Lexington or its tenants from the novel coronavirus (COVID-19); (2) the authorization by Lexington’s Board of Trustees of future dividend declarations, (3) Lexington’s ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO for the year ending December 31, 2020, (4) the successful consummation of any lease, acquisition, build-to-suit, disposition, financing or other transaction, (5) the failure to continue to qualify as a real estate investment trust, (6) changes in general business and economic conditions, including the impact of any legislation, (7) competition, (8) increases in real estate construction costs, (9) changes in interest rates, (10) changes in accessibility of debt and equity capital markets, and (11) future impairment charges. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington’s web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington’s future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects”, “may,” “plans,” “predicts,” “will,” “will likely result,” “is optimistic,” “goal,” “objective” or similar expressions. Except as required by law, Lexington undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington’s expectations will be realized.

 

References to Lexington refer to Lexington Realty Trust and its consolidated subsidiaries. All interests in properties and loans are held, and all property operating activities are conducted, through special purpose entities, which are separate and distinct legal entities that maintain separate books and records, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. The assets and credit of each special purpose entity with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other special purpose entity or affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member of managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein which interests are subordinate to the claims of the property owner subsidiary’s (or its general partner’s, member’s or managing member’s) creditors.

 

 

 

 

Non-GAAP Financial Measures - Definitions

 

Lexington has used non-GAAP financial measures as defined by the Securities and Exchange Commission Regulation G in this Quarterly Earnings Release and in other public disclosures.

 

Lexington believes that the measures defined below are helpful to investors in measuring our performance or that of an individual investment. Since these measures exclude certain items which are included in their respective most comparable measures under generally accepted accounting principles (“GAAP”), reliance on the measures has limitations; management compensates for these limitations by using the measures simply as supplemental measures that are weighed in balance with other GAAP measures. These measures are not necessarily indications of our cash flow available to fund cash needs. Additionally, they should not be used as an alternative to the respective most comparable GAAP measures when evaluating Lexington’s financial performance or cash flow from operating, investing or financing activities or liquidity.

 

Cash Base Rent: Cash Base Rent is calculated by making adjustments to GAAP rental revenue to remove the impact of GAAP required adjustments to rental income such as adjustments for straight-line rents related to free rent periods and contractual rent increases. Cash Base Rent excludes billed tenant reimbursements and lease termination income and includes ancillary income. Lexington believes Cash Base Rent provides a meaningful indication of an investments ability to fund cash needs.

 

Company Funds Available for Distribution (“FAD”): FAD is calculated by making adjustments to Adjusted Company FFO (see below) for (1) straight-line adjustments, (2) lease incentive amortization, (3) amortization of above/below market leases, (4) lease termination payments, net, (5) non-cash interest, net, (6) non-cash charges, net, (7) cash paid for tenant improvements, and (8) cash paid for lease costs. Although FAD may not be comparable to that of other real estate investment trusts (“REITs”), Lexington believes it provides a meaningful indication of its ability to fund cash needs. FAD is a non-GAAP financial measure and should not be viewed as an alternative measurement of operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of liquidity.

 

Funds from Operations (“FFO”) and Adjusted Company FFO: Lexington believes that Funds from Operations, or FFO, which is a non-GAAP measure, is a widely recognized and appropriate measure of the performance of an equity REIT. Lexington believes FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income. 

 

The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sales of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO.” FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.

 

Lexington presents FFO available to common shareholders and unitholders - basic and also presents FFO available to all equityholders and unitholders - diluted on a company-wide basis as if all securities that are convertible, at the holder’s option, into Lexington’s common shares, are converted at the beginning of the period. Lexington also presents Adjusted Company FFO available to all equityholders and unitholders - diluted which adjusts FFO available to all equityholders  and unitholders - diluted for certain items which we believe are not indicative of the operating results of Lexington’s real estate portfolio. Lexington believes this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate these measures in a similar fashion, these measures may not be comparable to similarly titled measures as reported by others. These measures should not be considered as an alternative to net income as an indicator of Lexington’s operating performance or as an alternative to cash flow as a measure of liquidity.

 

GAAP and Cash Yield or Capitalization Rate: GAAP and cash yields or capitalization rates are measures of operating performance used to evaluate the individual performance of an investment. These measures are estimates and are not presented or intended to be viewed as a liquidity or performance measure that present a numerical measure of Lexington’s historical or future financial performance, financial position or cash flows. The yield or capitalization rate is calculated by dividing the annualized NOI (as defined below, except GAAP rent adjustments are added back to rental income to calculate GAAP yield or capitalization rate) the investment is expected to generate (or has generated) divided by the acquisition/completion cost (or sale) price.

 

Net Operating Income (“NOI”): NOI is a measure of operating performance used to evaluate the individual performance of an investment. This measure is not presented or intended to be viewed as a liquidity or performance measure that presents a numerical measure of Lexington’s historical or future financial performance, financial position or cash flows. Lexington defines NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income), and other property income) less property operating expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, Lexington’s NOI may not be comparable to other companies. Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. Lexington believes that net income is the most directly comparable GAAP measure to NOI.

 

# # #

 

 

 

 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited and in thousands, except share and per share data)

 

 

 

Three months ended March 31,

 

 

 

2020

 

 

2019

 

Gross revenues:

 

 

 

 

 

 

 

 

Rental revenue

 

$

78,735

 

 

$

79,975

 

Other revenue

 

 

2,092

 

 

 

1,273

 

Total gross revenues

 

 

80,827

 

 

 

81,248

 

Expense applicable to revenues:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

(40,509

)

 

 

(37,595

)

Property operating

 

 

(10,276

)

 

 

(10,567

)

General and administrative

 

 

(7,825

)

 

 

(8,527

)

Non-operating income

 

 

190

 

 

 

481

 

Interest and amortization expense

 

 

(14,795

)

 

 

(17,208

)

Debt satisfaction gains (charges), net

 

 

1,393

 

 

 

(103

)

Impairment charges

 

 

 

 

 

(588

)

Gains on sales of properties

 

 

9,805

 

 

 

20,957

 

Income before provision for income taxes and equity in earnings of non-consolidated entities

 

 

18,810

 

 

 

28,098

 

Provision for income taxes

 

 

(653

)

 

 

(437

)

Equity in earnings of non-consolidated entities

 

 

263

 

 

 

619

 

Net income

 

 

18,420

 

 

 

28,280

 

Less net income attributable to noncontrolling interests

 

 

(266

)

 

 

(253

)

Net income attributable to Lexington Realty Trust shareholders

 

 

18,154

 

 

 

28,027

 

Dividends attributable to preferred shares – Series C

 

 

(1,572

)

 

 

(1,572

)

Allocation to participating securities

 

 

(46

)

 

 

(50

)

Net income attributable to common shareholders

 

$

16,536

 

 

$

26,405

 

Net income attributable to common shareholders - per common share basic

 

$

0.07

 

 

$

0.11

 

Weighted-average common shares outstanding – basic

 

 

253,038,161

 

 

 

232,538,495

 

Net income attributable to common shareholders - per common share diluted

 

$

0.06

 

 

$

0.11

 

Weighted-average common shares outstanding – diluted

 

 

257,347,277

 

 

 

236,142,143

 

 

 

 

 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

 

   March 31, 2020   December 31, 2019 
   (unaudited)     
Assets:        
Real estate, at cost  $3,473,384   $3,320,574 
Real estate - intangible assets   420,843    409,756 
Investments in real estate under construction   18,298    13,313 
Real estate, gross   3,912,525    3,743,643 
Less: accumulated depreciation and amortization   914,600    887,629 
Real estate, net   2,997,925    2,856,014 
Assets held for sale   7,873     
Operating lease right-of-use assets, net   37,201    38,133 
Cash and cash equivalents   83,525    122,666 
Restricted cash   6,533    6,644 
Investment in non-consolidated entities   57,210    57,168 
Deferred expenses, net   19,749    18,404 
Rent receivable – current   3,646    3,229 
Rent receivable – deferred   67,205    66,294 
Other assets   12,585    11,708 
Total assets  $3,293,452   $3,180,260 
           
Liabilities and Equity:          
Liabilities:          
Mortgages and notes payable, net  $377,703   $390,272 
Revolving credit facility borrowings   130,000     
Term loan payable, net   297,565    297,439 
Senior notes payable, net   497,079    496,870 
Trust preferred securities, net   127,421    127,396 
Dividends payable   31,720    32,432 
Liabilities held for sale   18     
Operating lease liabilities   38,293    39,442 
Accounts payable and other liabilities   42,479    29,925 
Accrued interest payable   13,992    7,897 
Deferred revenue - including below market leases, net   19,446    20,350 
Prepaid rent   15,066    13,518 
Total liabilities   1,590,782    1,455,541 
           
Commitments and contingencies          
Equity:          
Preferred shares, par value $0.0001 per share; authorized 100,000,000 shares:          
Series C Cumulative Convertible Preferred, liquidation preference $96,770; 1,935,400 shares issued and outstanding   94,016    94,016 
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 255,232,130 and 254,770,719 shares issued and outstanding in 2020 and 2019, respectively   26    25 
Additional paid-in-capital   2,982,363    2,976,670 
Accumulated distributions in excess of net income   (1,374,286)   (1,363,676)
Accumulated other comprehensive loss   (18,924)   (1,928)
Total shareholders’ equity   1,683,195    1,705,107 
Noncontrolling interests   19,475    19,612 
Total equity   1,702,670    1,724,719 
Total liabilities and equity  $3,293,452   $3,180,260 

 

 

 

10 

 

 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

EARNINGS PER SHARE

(Unaudited and in thousands, except share and per share data)

 

   Three Months Ended
March 31,
 
   2020   2019 
EARNINGS PER SHARE:        
         
Basic:          
Net income attributable to common shareholders  $16,536   $26,405 
           
Weighted-average number of common shares outstanding - basic   253,038,161    232,538,495 
           
Net income  attributable to common shareholders - per common share basic  $0.07   $0.11 
           
Diluted:          
Net income attributable to common shareholders - basic  $16,536   $26,405 
Impact of assumed conversions   107    1 
Net income attributable to common shareholders  $16,643   $26,406 
           
Weighted-average common shares outstanding - basic   253,038,161    232,538,495 
Effect of dilutive securities:          
Unvested share-based payment awards and options   1,160,994    53,274 
Operating partnership units   3,148,122    3,550,374 
Weighted-average common shares outstanding - diluted   257,347,277    236,142,143 
           
Net income attributable to common shareholders - per common share diluted  $0.06   $0.11 

 

 

11 

 

 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

ADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS AVAILABLE FOR DISTRIBUTION

(Unaudited and in thousands, except share and per share data)

 

   Three Months Ended 
   March 31, 
   2020   2019 
FUNDS FROM OPERATIONS:          
Basic and Diluted:          
Net income attributable to common shareholders  $16,536   $26,405 
Adjustments:          
Depreciation and amortization   39,717    36,867 
Impairment charges - real estate       588 
Noncontrolling interests - OP units   107    1 
Amortization of leasing commissions   792    728 
Joint venture and noncontrolling interest adjustment   2,214    2,533 
Gains on sales of properties, including non-consolidated entities   (10,354)   (21,605)
FFO available to common shareholders and unitholders - basic   49,012    45,517 
Preferred dividends   1,572    1,572 
Amount allocated to participating securities   46    50 
FFO available to all equityholders and unitholders - diluted   50,630    47,139 
Transaction costs   21     
Debt satisfaction (gains) charges, net, including non-consolidated entities   (1,372)   103 
Adjusted Company FFO available to all equityholders and unitholders - diluted   49,279    47,242 
           
FUNDS AVAILABLE FOR DISTRIBUTION:          
Adjustments:          
Straight-line adjustments   (1,419)   (2,330)
Lease incentives   269    273 
Amortization of above/below market leases   (295)   (6)
Lease termination payments, net   492    (744)
Non-cash interest, net   428    806 
Non-cash charges, net   1,658    1,727 
Tenant improvements   (1,492)   (995)
Lease costs   (3,951)   (1,124)
Joint venture and noncontrolling interest adjustment   (111)   (176)
Company Funds Available for Distribution  $44,858   $44,673 
           
Per Common Share and Unit Amounts          
Basic:          
FFO  $0.19   $0.19 
           
Diluted:          
FFO  $0.19   $0.20 
Adjusted Company FFO  $0.19   $0.20 
           
Basic:          
Weighted-average common shares outstanding - basic EPS   253,038,161    232,538,495 
Operating partnership units(1)   3,148,122    3,550,374 
Weighted-average common shares outstanding - basic FFO   256,186,283    236,088,869 
           
Diluted:          
Weighted-average common shares outstanding - diluted EPS   257,347,277    236,142,143 
Unvested share-based payment awards and options   24,799    16,499 
Preferred shares - Series C   4,710,570    4,710,570 
Weighted-average common shares outstanding - diluted FFO   262,082,646    240,869,212 

 

(1)   Includes OP units other than OP units held by Lexington.

 

 

12 

 

 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

 

2020 EARNINGS GUIDANCE

 

   Twelve Months Ended
December 31, 2020
 
   Range 
Estimated:        
Net income attributable to common shareholders per diluted common share(1)  $0.77   $0.80 
Depreciation and amortization   0.62    0.62 
Impact of capital transactions   (0.65)   (0.65)
Estimated Adjusted Company FFO per diluted common share  $0.74   $0.77 

 

(1)   Assumes all convertible securities are dilutive.

 

13 

 

 

LEXINGTON REALTY TRUST 

2020 First Quarter Investments / Capital Recycling Summary

 

PROPERTY INVESTMENTS

 

    Property Type   Market  Square Feet   Initial Basis ($000) Month Closed  Primary Lease Expiration 
1   Industrial - Warehouse/distribution  Chicago  IL   705,661   $53,642   January   11/2029
2   Industrial - Warehouse/distribution  Phoenix  AZ   160,140    19,164   January   12/2025
3   Industrial - Warehouse/distribution  Chicago  IL   473,280    39,153   January   12/2029
4   Industrial - Warehouse/distribution  Dallas  TX   1,214,526    83,495   February   08/2029
                         
4   TOTAL PROPERTY INVESTMENTS         2,553,607   $195,454         

 

CAPITAL RECYCLING

 

CONSOLIDATED PROPERTY DISPOSITIONS

 

    Primary Tenant  Location  Property Type  Gross Disposition Price ($000)  Annualized Net Income ($000) (1)  Annualized NOI ($000)(1)(2)  Month of Disposition  % Leased   Gross Disposition Price PSF 
1   Multi-Tenant (3)  Charleston  SC  Office  $6,830  $(1,142) $ 17  March  23%  $135.93 
2   Burns & McDonnell Engineering  Kansas City  MO  Office   22,775   1,277   1,589  March  100%   146.07 
2   TOTAL PROPERTY DISPOSITIONS           $29,605  $135  $1,606            

 

NON-CONSOLIDATED PROPERTY DISPOSITIONS (4)

 

    Primary Tenant  Location  Property Type  Gross Disposition Price ($000)  Annualized Net Income ($000) (1)  Annualized NOI ($000)(1)(2)  Month of Disposition  % Leased   Gross Disposition Price PSF 
1  Amazon  Huntington  WV  Office  $16,852  $483  $ 1,158  March  100%  $245.32 

 

  Footnotes
(1)Quarterly period prior to sale annualized.
(2)See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.
(3)Sold in foreclosure sale. Disposition price reflects non-recourse debt balance.
(4)Lexington has a 20% interest in the joint venture that disposed of this property.

 

14 

 

 

LEXINGTON REALTY TRUST
DEVELOPMENT PROJECTS 

3/31/2020

 

DEVELOPMENT PROJECTS

 

    Project
(% owned)
  Market   Property
Type
  Estimated
Sq. Ft.
  Estimated
Project Cost

($000)
  GAAP
Investment Balance

as of 3/31/2020

($000) (1)
  Lexington
Amount Funded

as of 3/31/2020

($000)
  Estimated
Completion

Date
    Consolidated                                  
1   Fairburn (90%)   Atlanta, GA   Industrial   910,000   $ 53,812   $ 14,641   $ 11,474   4Q 2020
2   Rickenbacker (100%)   Columbus, OH   Industrial   320,000     20,300     3,657     3,421   1Q 2021
2   Total Consolidated Development           $ 74,112   $ 18,298   $ 14,895    
                                       
    Non - Consolidated                                  
1   Etna Park 70 (90%) (2)   Columbus, OH   Industrial   TBD     TBD   $ 8,670   $ 8,984   TBD
2   Etna Park 70 East (90%) (2)   Columbus, OH   Industrial   TBD     TBD     5,058     5,089   TBD
2   Total Non-Consolidated Development                 $ 13,728   $ 14,073    
                                       
4   Total Development Projects                 $ 32,026   $ 28,968    

 

Footnotes
(1)GAAP  investment balance is in real estate under construction for consolidated projects and in investments in non-consolidated entities for non-consolidated projects.
(2)Plans and specifications for completion have not been completed and the estimated square footage, project cost and completion date cannot be determined.

 

15 

 

 

LEXINGTON REALTY TRUST
2020 First Quarter Financing Summary

 

DEBT RETIRED

 

   Location  Tenant  Property Type  Face / Satisfaction
($000)
  Rate   Maturity Date
    Consolidated Mortgage Debt (1)                
    Charleston, SC  Multi-Tenant  Office  $ 6,830  5.850%  02/2021
                       
    Non-Consolidated Mortgage Debt (2)                  
    Huntington, WV  Amazon  Office  $ 12,960  LIBOR + 200 bps   09/2021

 

CORPORATE LEVEL FINANCING (3)

 

    Type  Amount ($000)  Current Interest Rate   Maturity Date
    Revolving Credit Facility  $ 130,000  LIBOR + 90 bps   02/2023

 

  Footnotes
(1)Satisfied in foreclosure sale.
(2)Lexington has a 20% interest in the joint venture that disposed of this property. Satisfaction reflects release amount of the joint venture's cross-collateralized debt.
(3)Also, a 20% owned joint venture incurred an additional $3.7 million of secured debt.

 

16 

 

 

LEXINGTON REALTY TRUST
2020 First Quarter Leasing Summary

  

LEASE EXTENSIONS

 

   Tenant (1)  Location  Prior
Term
  Lease Expiration Date  Sq. Ft.  New Base Rent Per Annum ($000)(2)(3)  Prior Base Rent Per Annum ($000)   New Cash Base Rent Per Annum ($000)(2)(3)  Prior Cash Base Rent Per Annum ($000)(3) 
    Office                                              
1   NJ Natural Gas   Wall   NJ   06/2021   06/2037   157,511   $ 3,491   $ 4,234   $ 3,068   $ 4,234  
2   New Cingular Wireless (4) Baton Rouge LA   10/2022   11/2023   23,750     413     395     420     411  
2   Total office lease extensions                 181,261   $ 3,904   $ 4,629   $ 3,488   $ 4,645  
                                                   
2   TOTAL EXTENDED LEASES                 181,261   $ 3,904   $ 4,629   $ 3,488   $ 4,645  

 

NEW LEASES

 

   Tenant (1)  Location  Lease
Expiration
 Date
  Sq. Ft.  New Base Rent Per Annum ($000)(2)(3)  New Cash Base Rent Per Annum
($000)(2)(3)
 
   Industrial                
1   Wal-Mart  Moody  AL  02/2023   155,766  $746  $746 
1   Total Industrial New Leases            155,766  $746  $746 
                           
1   TOTAL NEW LEASES            155,766  $746  $746 
                           
                           
3   TOTAL NEW AND EXTENDED LEASES            337,027  $4,650  $4,234 

 

17 

 

 

LEXINGTON REALTY TRUST
2020 First Quarter Leasing Summary

 

NEW VACANCY (5)

 

         Prior Lease      2019   2019 
         Expiration      Base Rent   Cash Rent 
Former Tenant  Location  Date  Sq. Ft.   ($000)(3)   ($000)(3) 
Office                        
Oce - USA Holding (6)  Boca Raton  FL  02/2020   143,290   $2,244   $2,500 

 

  Footnotes

(1)Leases greater than 10,000 square feet.

(2)Assumes twelve months rent from the later of 4/1/20 or lease commencement/extension, excluding free rent periods as applicable.

(3)See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

(4)Effective 11/7/2020, the square footage leased by tenant is reduced from 70,100 sqft to 23,750.

(5)Excludes multi-tenant properties, disposed properties and non-consolidated investments.

(6)In receivership.

 

18 

 

 

LEXINGTON REALTY TRUST

Other Revenue Data 

03/31/2020

($000)

 

Other Revenue Data

 

   Base Rent 
Asset Class  Three months ended 
    3/31/2020(1)   

3/31/2020 

Percentage

    

3/31/2019

Percentage

 
Industrial  $57,280    79.3%   68.2%
Office/Other   14,915    20.7%   31.8%
   $72,195    100.0%   100.0%
                

 

 

 

 

Base Rent

 

Credit Ratings  (2)

 

 

Three months ended

 

 

 

 

3/31/2020(1)

 

 

3/31/2020 
Percentage

 

 

 

3/31/2019
 Percentage

 

Investment Grade

 

$

37,274

 

 

 

51.6

%

 

 

40.8

%

Non-Investment Grade

 

 

15,959

 

 

 

22.1

%

 

 

19.5

%

Unrated

 

 

18,962

 

 

 

26.3

%

 

 

39.7

%

 

 

$

72,195

 

 

 

100.0

%

 

 

100.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted-Average Lease Term - Cash Basis

 

 

 

 

 

 

As of 3/31/2020

 

 

 

As of 3/31/2019

 

 

 

 

 

 

 

 

8.3 years

 

 

 

9.0 years

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Rent Estimates for Current Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

Year

 

 

Base Rent  (3)

 

 

Cash Base Rent (3)

 

 

 

Difference

 

2020 - remaining

 

$

215,553

 

 

$

203,921

 

 

$

(11,632

)

2021

 

 

269,259

 

 

 

258,603

 

 

 

(10,656

)

 

Footnotes 

(1)Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020.

(2)Credit ratings are based upon either tenant, guarantor or parent/ultimate parent. Historical comparison was not adjusted for subsequent tenant entity changes and multi-tenant was generally reflected as unrated.

(3)Amounts assume (1) lease terms for non-cancellable periods only, (2) no new or renegotiated leases are entered into after 3/31/2020, and (3) no properties are sold or acquired after 3/31/2020.

 

19 

 

 

LEXINGTON REALTY TRUST

Other Revenue Data (Continued)

03/31/2020

($000)

 

Same-Store NOI (1)      

 

   Three months ended March 31, 
   2020   2019 
Total Cash Base Rent  $58,108   $58,179 
Tenant Reimbursements   6,121    6,113 
Property Operating Expenses   (7,692)   (7,616)
Same-Store NOI  $56,537   $56,676 
           

Change in Same-Store NOI (2)

   (0.2%)     
           

 

Same-Store Percent Leased (3)

  As of 3/31/2020   As of 3/31/2019  
    97.4    98.5%
            

Lease Escalation Data (4)

           

 

 

Footnotes

(1)NOI is on a consolidated cash basis excluding properties acquired and sold in 2020 and 2019 and properties subject to mortgage loans in default at March 31, 2020.
 See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

(2)Change in Same-Store NOI was 0.5% excluding single-tenant property vacancies.

(3)Excludes properties acquired or sold in 2020 and 2019 and properties subject to mortgage loans in default at March 31, 2020.

(4)Based on three months consolidated Cash Base Rents for single-tenant leases (properties greater than 50% leased to a single tenant) owned as of March 31, 2020. Excludes parking operations and rents from prior tenants.

 

20 

 

 

LEXINGTON REALTY TRUST

Portfolio Detail By Asset Class

03/31/2020

($000, except square footage)

 

             
Asset Class 

YE 2017 (1) 

 

 

YE 2018 (1)(2) 

 

  YE 2019    Q1 2020  
             
Industrial                    

% of Cost (3)

   49.3%   71.2%   81.5%   83.2%

% of ABR (4)

   44.3%   65.4%   75.5%   79.3%
% Leased   99.9%   96.3%   97.9%   98.3%

Wtd. Avg. Lease Term (5)

   10.5    9.7    8.3    8.0 
Mortgage Debt  $193,529   $206,006   $109,939   $108,825 

% Investment Grade (4)

   28.4%   31.6%   45.9%   49.7%
Square Feet   36,071,422    41,447,962    48,742,014    51,295,621 
                     
Office/Other                    

% of Cost (3)

   50.7%   28.8%   18.5%   16.8%

% of ABR (4)(6)

   55.7%   34.6%   24.5%   20.7%
% Leased   96.0%   87.1%   85.8%   82.1%

Wtd. Avg. Lease Term (5)

   7.9    7.2    8.5    9.6 
Mortgage Debt  $503,539   $369,508   $283,933   $272,368 

% Investment Grade (4)

   49.4%   53.2%   57.3%   59.0%
Square Feet   12,542,640    6,111,588    3,876,294    3,670,123 
                     

Construction in progress (7)

  $4,219   $1,840   $15,208   $24,424 

 

Footnotes

(1)Office and Other properties combined.

(2)Pataskala, Ohio property reclassed to Industrial from Office/Other.

(3)Based on gross book value of real estate assets; excludes held for sale assets.

(4)Percentage of Base Rent, for consolidated properties owned as of each respective period.

(5)Cash basis.

(6)YE 2018 excludes the acceleration of below-market lease intangible accretion on one Kmart asset.

(7)Includes development classified as real estate under construction on a consolidated basis.

 

21 

 

 

 

LEXINGTON REALTY TRUST

Portfolio Composition

03/31/2020

 

As a Percent of Gross Book Value (1)

 

 

 

 

Portfolio Composition (2)

 

 

 

Footnotes

(1)Based on gross book value of real estate assets as of 3/31/2020, exclude held for sale assets.
(2)Based on gross book value of real estate assets as of 3/31/2020, 12/31/2019, 12/31/2018 and 12/31/2017, as applicable and excludes held for sale assets.

 

22 

 

 

LEXINGTON REALTY TRUST

Components of Net Asset Value 

3/31/2020 

($000)

 

The purpose of providing the following information is to enable readers to derive their own estimates of net asset value. This information is not intended to be an asset-by-asset or enterprise valuation.

 

Consolidated properties three month net operating income (NOI) (1)

 

 

 

Industrial

 

$

52,364

 

Office/Other

 

 

13,148

 

Total Net Operating Income

 

$

65,512

 

 

 

 

 

 

Lexington’s share of non-consolidated three month NOI (1)

 

 

 

 

NNN OFFICE JV

 

 

 

 

Office

 

$

2,543

 

OTHER JV

 

 

 

 

Other

 

$

379

 

 

 

 

 

 

Other income

 

 

 

 

Advisory fees

 

$

931

 

 

 

 

 

 

 

 

 

 

 

In service assets not fairly valued by capitalized NOI method (1)

 

 

 

 

Wholly-owned assets acquired in 2020

 

$

194,036

 

Wholly-owned assets less than 70% leased

 

$

50,835

 

 

 

 

 

 

Add other assets:

 

 

 

 

Assets held for sale - consolidated

 

$

7,873

 

Construction in progress

 

 

6,126

 

Developable land

 

 

14,073

 

Development investment at cost incurred

 

 

14,895

 

Cash and cash equivalents

 

 

83,525

 

Restricted cash

 

 

6,533

 

Accounts receivable

 

 

3,646

 

Other assets

 

 

12,585

 

Total other assets

 

$

149,256

 

 

 

 

 

 

Liabilities:

 

 

 

 

 Corporate level debt (face amount)

 

$

1,059,120

 

Mortgages and notes payable (face amount)

 

 

381,193

 

Dividends payable

 

 

31,720

 

Liabilities held for sale - consolidated

 

 

18

 

Accounts payable, accrued expenses and other liabilities

 

 

71,537

 

Preferred stock, at liquidation value

 

 

96,770

 

Lexington’s share of non-consolidated mortgages (face amount)

 

 

87,505

 

Total deductions

 

$

1,727,863

 

 

 

 

 

 

Common shares & OP units at 3/31/2020

 

 

258,328,452

 

 

Footnotes 

(1)

NOI for the existing property portfolio at March 31, 2020, excludes NOI related to assets undervalued by a capitalized NOI method and assets held for sale. Assets undervalued by a capitalized NOI method are identified generally by occupancies under 70% and assets acquired in 2020. For assets in this category an NOI capitalization approach is not appropriate, and accordingly, Lexington’s net book value has been used. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

 

23 

 

 

LEXINGTON REALTY TRUST 

Consolidated Portfolio Concentration 

3/31/2020

 

 

 

Markets (1)

 

Percent of Base Rent as of 3/31/2020  (2)

 

1

 

Houston, TX

 

 

10.2

%

2

 

Memphis, TN

 

 

6.9

%

3

 

Greenville/Spartanburg, SC

 

 

5.7

%

4

 

Atlanta, GA

 

 

5.1

%

5

 

Cincinnati/Dayton, OH

 

 

4.3

%

6

 

Chicago, IL

 

 

4.2

%

7

 

Dallas/Fort Worth, TX

 

 

4.0

%

8

 

Nashville, TN

 

 

4.0

%

9

 

Phoenix, AZ

 

 

3.9

%

10

 

Charlotte, NC

 

 

3.9

%

11

 

New York/New Jersey

 

 

3.7

%

12

 

Detroit, MI

 

 

3.5

%

13

 

DC/Baltimore, MD

 

 

2.6

%

14

 

Philadelphia, PA

 

 

2.6

%

15

 

South Bay/San Jose, CA

 

 

2.3

%

16

 

Jackson, MS

 

 

2.1

%

17

 

St. Louis, MO

 

 

2.1

%

18

 

Cleveland, OH

 

 

1.7

%

19

 

Columbus, OH

 

 

1.7

%

20

 

Champaign-Urbana, IL

 

 

1.5

%

 

 

Total Consolidated Portfolio Concentration (3)

 

 

76.0

%

 

Footnotes 

 

(1)

Markets are based on geographic boundaries defined by CoStar.com. They serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations.

 

(2)

Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020.

 

(3)

Total shown may differ from detailed amounts due to rounding.

 

24 

 

 

LEXINGTON REALTY TRUST 

Portfolio Concentration - Industrial 

3/31/2020

 

 

 

Markets (1)

 

Percent of Base Rent as of 3/31/2020 (2)

 

1

 

Memphis, TN

 

 

8.7

%

2

 

Greenville/Spartanburg, SC

 

 

7.1

%

3

 

Houston, TX

 

 

6.3

%

4

 

Atlanta, GA

 

 

6.0

%

5

 

Cincinnati/Dayton, OH

 

 

5.4

%

6

 

Chicago, IL

 

 

5.3

%

7

 

Nashville, TN

 

 

5.0

%

8

 

Detroit, MI

 

 

4.5

%

9

 

Phoenix, AZ

 

 

3.7

%

10

 

Dallas/Fort Worth, TX

 

 

3.3

%

11

 

Charlotte, NC

 

 

3.1

%

12

 

Jackson, MS

 

 

2.7

%

13

 

St. Louis, MO

 

 

2.7

%

14

 

New York/New Jersey

 

 

2.2

%

15

 

Cleveland, OH

 

 

2.2

%

16

 

Columbus, OH

 

 

2.1

%

17

 

Champaign-Urbana, IL

 

 

1.8

%

18

 

Jackson, TN

 

 

1.7

%

19

 

Richmond, VA

 

 

1.7

%

20

 

DC/Baltimore, MD

 

 

1.7

%

 

 

Total Industrial Portfolio Concentration (3)

 

 

77.3

%

 

Footnotes 

 

(1)

Markets are based on geographic boundaries defined by CoStar.com. They serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations.

 

(2)

Three months ended 3/31/2020 Base Rent recognized for consolidated industrial properties owned as of 3/31/2020.

 

(3)

Total shown may differ from detailed amounts due to rounding.

 

25 

 

 

LEXINGTON REALTY TRUST 

Portfolio Concentration - Office/Other 

3/31/2020

 

 

 

Markets (1)

 

Percent of Base Rent as of 3/31/2020 (2)

 

1

 

Houston, TX

 

 

24.9

%

2

 

South Bay/San Jose, CA

 

 

11.1

%

3

 

Philadelphia, PA

 

 

10.7

%

4

 

New York/New Jersey

 

 

9.5

%

5

 

Charlotte, NC

 

 

6.9

%

6

 

Dallas/Fort Worth, TX

 

 

6.8

%

7

 

DC/Baltimore, MD

 

 

6.3

%

8

 

Phoenix, AZ

 

 

4.9

%

9

 

Tampa/St. Petersburg, FL

 

 

3.2

%

10

 

Baton Rouge, LA

 

 

1.9

%

11

 

South Florida

 

 

1.9

%

12

 

McAllen/Edinburg/Pharr,TX

 

 

1.7

%

13

 

Kansas City, MO

 

 

1.7

%

14

 

Oakland, ME

 

 

1.5

%

15

 

Orlando, FL

 

 

1.5

%

16

 

Knoxville, TN

 

 

1.5

%

17

 

Atlanta, GA

 

 

1.4

%

18

 

Florence, SC

 

 

1.0

%

19

 

Tucson, AZ

 

 

0.9

%

20

 

Hawaii

 

 

0.9

%

 

 

Total Office/Other Portfolio Concentration (3)

 

 

100.0

%

 

Footnotes 

 

(1)

Markets are based on geographic boundaries defined by CoStar.com. They serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations.

 

(2)

Three months ended 3/31/2020 Base Rent recognized for consolidated office/other properties owned as of 3/31/2020.

 

(3)

Total shown may differ from detailed amounts due to rounding.

 

26 

 

 

LEXINGTON REALTY TRUST 

Tenant Industry Diversification - Industrial Assets (1) 

3/31/2020

 

image

 

Footnotes

 

(1)

Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020.

 

27 

 

 

LEXINGTON REALTY TRUST 

Tenant Industry Diversification - Office/Other Assets (1) 

3/31/2020

 

image

 

Footnotes

 

(1)

Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020.

 

28 

 

 

LEXINGTON REALTY TRUST
Top 15 Tenants
03/31/2020

 

Top 15 Tenants

 

Tenants (1)  Property Type  Lease Expirations   Number
of Leases
   Sq. Ft.
Leased
   Sq. Ft. Leased
as a Percent of
Consolidated
Portfolio (2)(3)
   Base Rent
as of
3/31/2020
($000)
   Percent of Base
Rent as of
3/31/2020

($000) (2)(4)
 
Dow  Office  2036   1    664,100    1.2%  $3,712    5.2%
Nissan  Industrial  2027   2    2,971,000    5.6%   3,190    4.4%
Dana  Industrial  2021-2026   7    2,053,359    3.8%   2,485    3.5%
Kellogg  Industrial  2027-2029   3    2,801,916    5.2%   2,426    3.4%
Amazon  Industrial  2026-2030   3    2,515,492    4.7%   2,363    3.3%
Undisclosed (5)  Industrial  2031-2035   3    1,090,383    2.0%   1,785    2.5%
Watco  Industrial  2038   1    132,449    0.2%   1,693    2.4%
Xerox  Office  2023   1    202,000    0.4%   1,660    2.3%
Wal-Mart  Industrial  2023-2027   3    1,491,439    2.8%   1,466    2.0%
FedEx  Industrial  2023 & 2028   2    292,021    0.5%   1,430    2.0%
Morgan Lewis (6)  Office  2024   1    289,432    0.5%   1,414    2.0%
Undisclosed (5)  Industrial  2034   1    1,318,680    2.5%   1,386    1.9%
Mars Wrigley  Industrial  2025   1    604,852    1.1%   1,101    1.5%
Asics  Industrial  2030   1    855,878    1.6%   1,097    1.5%
Spitzer  Industrial  2035   2    449,895    0.8%   1,087    1.5%
                                
          32    17,732,896    33.2%  $28,295    39.5%

 

Footnotes

(1) Tenant, guarantor or parent.
(2) Total shown may differ from detailed amounts due to rounding.
(3) Excludes vacant square feet.
(4) Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020, excluding rent from prior tenants.
(5) Lease restricts certain disclosures.
(6) Includes parking operations.

  

29 

 

 

LEXINGTON REALTY TRUST
 Lease Rollover Schedule - Consolidated Industrial Properties
03/31/2020
($000)

 

Year  Number of
Leases
Expiring
   Base Rent as of
3/31/2020
   Percent of Base
Rent as of
3/31/2020
   Percent of Base
Rent as of
3/31/2019
 
2020 - remaining   9   $1,411    2.5%   4.1%
2021   13    4,488    7.9%   7.2%
2022   2    578    1.0%   0.7%
2023   9    2,328    4.1%   2.0%
2024   16    5,656    9.9%   7.6%
2025   14    5,062    8.9%   6.9%
2026   10    4,573    8.0%   7.9%
2027   9    7,135    12.5%   12.5%
2028   4    2,963    5.2%   6.0%
2029   6    3,510    6.1%   2.3%
Thereafter   25    19,377    33.9%   38.8%
                     
Total (1)   117   $57,081    100.0%     

 

 

(GRAPHIC)

 

Footnotes

(1)Total shown may differ from detailed amounts due to rounding.

 

30 

 

 

LEXINGTON REALTY TRUST
 Lease Rollover Schedule - Consolidated Office/Other Properties
03/31/2020
($000)

 

Year  Number of
Leases
Expiring
   Base Rent as of
3/31/2020
   Percent of
Base Rent as of
3/31/2020
   Percent of
Base Rent as of
3/31/2019
 
2020 - remaining   30   $290    2.0%   1.1%
2021   8    924    6.5%   16.4%
2022   2    920    6.5%   5.4%
2023   3    1,818    12.8%   8.9%
2024   5    2,289    16.1%   13.7%
2025   5    935    6.6%   3.5%
2026   0    -    0.0%   1.3%
2027   3    474    3.3%   7.9%
2028   0    -    0.0%   1.6%
2029   1    220    1.5%   6.5%
Thereafter   8    6,387    44.8%   24.0%
                     
Total (1)   65   $14,257    100.0%     

 

 

(GRAPHIC)

 

Footnotes

(1)   Total shown may differ from detailed amounts due to rounding and does not include parking operations.

 

31 

 

 

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

 

Year of Lease Expiration  Date of Lease
Expiration
  Property Location  City  State  Note  Primary Tenant, Guarantor, or Parent  Sq. Ft.
Leased or
Available (1)
   Base Rent
as of 3/31/2020
($000) (2)
   Cash
Base Rent
as of
3/31/2020
($000) (2)
   3/31/2020
Debt Balance
($000)
   Debt
Maturity
 
INDUSTRIAL PROPERTIES
Single-tenant
2020  6/30/2020  1650-1654 Williams Rd.  Columbus  OH  --  ODW Logistics   772,450    337    336    -    - 
   12/19/2020  1901 Ragu Dr.  Owensboro  KY  5  Unilever   443,380    373    322    -    - 
   12/31/2020  2203 Sherrill Dr.  Statesville  NC  --  Geodis America   639,800    623    653    -    - 
2021  1/31/2021  101 Michelin Dr.  Laurens  SC  18  Michelin   1,164,000    895    895    -    - 
   3/31/2021  2455 Premier Row  Orlando  FL  --  Walgreen Co.   205,016    196    127    -    - 
   5/31/2021  291 Park Center Dr.  Winchester  VA  --  Kraft Heinz   344,700    355    366    -    - 
   6/30/2021  11624 S. Distribution Cv.  Olive Branch  MS  --  Hamilton Beach   1,170,218    947    819    -    - 
   9/30/2021  3820 Micro Dr.  Millington  TN  --  Ingram Micro   701,819    453    468    -    - 
   10/25/2021  6938 Elm Valley Dr.  Kalamazoo  MI  --  Dana   150,945    437    507    -    - 
   11/30/2021  2880 Kenny Biggs Rd.  Lumberton  NC  --  Quickie Manufacturing   423,280    339    370    -    - 
   12/31/2021  191 Arrowhead Dr.  Hebron  OH  --  Owens Corning   250,410    145    145    -    - 
      200 Arrowhead Dr.  Hebron  OH  --  Owens Corning   400,522    231    231    -    - 
      3686 South Central Ave.  Rockford  IL  --  Pierce Packaging   93,000    81    81    -    - 
2022  3/31/2022  5417 Campus Dr.  Shreveport  LA  --  Tire Rack   257,849    336    351    -    - 
   8/31/2022  50 Tyger River Dr.  Duncan  SC  --  Plastic Omnium   221,833    242    252    -    - 
2023  2/28/2023  3102 Queen Palm Dr.  Tampa  FL  --  RC Moore   229,605    288    97    -    - 
      7670 Hacks Cross Rd.  Olive Branch  MS  --  MAHLE Industries   268,104    226    227    -    - 
   5/31/2023  6495 Polk Ln.  Olive Branch  MS  13  Undisclosed   151,691    146    141    -    - 
   8/31/2023  10535 Red Bluff Rd.  Pasadena  TX  --  Unis   257,835    308    300    -    - 
      3737 Duncanville Rd.  Dallas  TX  --  Owens Corning   510,440    428    416    -    - 
   10/31/2023  493 Westridge Pkwy.  McDonough  GA  --  Carlstar   676,000    508    494    -    - 
   12/31/2023  120 Southeast Pkwy. Dr.  Franklin  TN  --  United Technologies   289,330    184    184    -    - 
      675 Gateway Blvd.  Monroe  OH  --  Blue Buffalo   143,664    178    172    -    - 
2024  1/31/2024  1285 W. State Road 32  Lebanon  IN  --  Continental Tire   741,880    570    603    -    - 
      6495 Polk Ln.  Olive Branch  MS  13  Undisclosed   118,211    124    120    -    - 
      70 Tyger River Dr.  Duncan  SC  --  BMW   408,000    500    487    -    - 
      231 Apple Valley Rd.  Duncan  SC  13  Undisclosed   120,680    151    144    -    - 

 

32 

 

 

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

 

Year of Lease Expiration  Date of Lease
Expiration
  Property Location  City  State  Note  Primary Tenant, Guarantor, or Parent  Sq. Ft.
Leased or
Available (1)
   Base Rent
as of 3/31/2020
($000) (2)
   Cash
Base Rent
as of
3/31/2020
($000) (2)
   3/31/2020
Debt Balance
($000)
   Debt
Maturity
 
INDUSTRIAL PROPERTIES
2024  3/31/2024  1520 Lauderdale Memorial Hwy.  Cleveland  TN  --  General Electric   851,370    664    664    -    - 
   4/30/2024  113 Wells St.  North Berwick  ME  --  United Technologies   993,685    450    407    -    - 
      11555 Silo Dr.  Olive Branch  MS  --  Olam Cotton   927,742    714    705    -    - 
   5/31/2024  901 East Bingen Point Way  Bingen  WA  --  Boeing   124,539    659    662    -    - 
      7225 Goodson Rd.  Union City  GA  --  Interface Americas   370,000    361    338    -    - 
   7/31/2024  5795 North Blackstock Rd.  Spartanburg  SC  --  Wal-Mart   341,660    418    417    -    - 
      231 Apple Valley Rd.  Duncan  SC  13  Undisclosed   75,320    94    94    -    - 
   9/30/2024  1621 Veterans Memorial Pkwy. E  Lafayette  IN  --  Caterpillar   309,400    304    301    -    - 
   10/31/2024  43955 Plymouth Oaks Blvd.  Plymouth  MI  --  Tower Automotive   311,612    398    390    -    - 
      2115 East Belt Line Rd.  Carrollton  TX  --  L.E. Klein   58,202    57    58    -    - 
   12/31/2024  749 Southrock Dr.  Rockford  IL  --  Jacobson Warehouse   150,000    159    154    -    - 
2025  4/30/2025  235 Apple Valley Rd.  Duncan  SC  13  Undisclosed   177,320    234    219    -    - 
   5/31/2025  7875 White Road SW  Austell  GA  --  Mars Wrigley   604,852    1,101    897    -    - 
   6/30/2025  10000 Business Blvd.  Dry Ridge  KY  --  Dana   336,350    336    336    -    - 
      4010 Airpark Dr.  Owensboro  KY  --  Metalsa / Dana   211,598    302    302    -    - 
      730 North Black Branch Rd.  Elizabethtown  KY  --  Metalsa / Dana   167,770    134    134    -    - 
      750 North Black Branch Rd.  Elizabethtown  KY  --  Metalsa / Dana   539,592    710    710    -    - 
      301 Bill Bryan Blvd.  Hopkinsville  KY  --  Metalsa / Dana   424,904    422    422    -    - 
   7/14/2025  590 Ecology Ln.  Chester  SC  --  Boral Limited   420,597    454    603    5,554    08/2025 
   7/31/2025  7005 Cochran Rd.  Glenwillow  OH  --  Royal Appliance   458,000    515    525    -    - 
      5352 Performance Way  Whitestown  IN  --  LaCrosse   380,000    319    309    -    - 
   12/31/2025  1700 47th Ave North  Minneapolis  MN  --  Owens Corning   18,620    137    137    -    - 
      4455 N. Cotton Ln.  Goodyear  AZ  --  Ball   160,140    233    218    -    - 
2026  3/30/2026  121 Technology Dr.  Durham  NH  12  Heidelberg   500,500    634    1,811    -    - 
   3/31/2026  633 Garrett Pkwy.  Lewisburg