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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): August 6, 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 August 6, 2020, we issued a press release announcing our financial results for the quarter ended June 30, 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 August 6, 2020, we made available supplemental information, which we refer to as the “Quarterly Supplemental Information, Second Quarter 2020,” a copy of which is furnished herewith as Exhibit 99.1.

 

On August 6, 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, Second Quarter 2020.
  99.2 August 6, 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: August 7, 2020   By: /s/ Beth Boulerice
      Beth Boulerice
      Chief Financial Officer
       

 

   

 

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

 

Exhibit 99.1

 

 

 

LEXINGTON REALTY TRUST

QUARTERLY SUPPLEMENTAL INFORMATION

June 30, 2020

 

Table of Contents

 

Section Page
   
Second Quarter 2020 Earnings Press Release 3
   
Portfolio Data  
Investments / Capital Recycling Summary 14
Development Projects 15
Leasing Summary 16
Other Revenue Data 17
Portfolio Detail by Asset Class 19
Portfolio Composition 20
Components of Net Asset Value 21
Portfolio Concentration 22
Tenant Industry Diversification 24
Top 15 Tenants 25
Lease Rollover Schedules 26
Property Leases and Vacancies 28
Select Credit Metrics Summary 38
Financial Covenants 39
Mortgages and Notes Payable 40
Debt Maturity Schedule 41
Selected Balance Sheet Account Data 42
Non-GAAP Measures – Definitions 43
Reconciliation of Non-GAAP Measures 45
Investor Information 49

 

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 December 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 SECOND QUARTER 2020 RESULTS

Collected 99.5% of Second Quarter Cash Base Rents and

Increased Industrial Renewal Cash Base Rents by 21.6%

 

New York, NY - August 6, 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 second quarter ended June 30, 2020.

 

Second Quarter 2020 Highlights

 

Recorded Net Income attributable to common shareholders of $17.3 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 $51.4 million, or $0.19 per diluted common share.

Acquired six industrial properties for an aggregate cost of $164.3 million.

Disposed of three properties for an aggregate gross price of $44.4 million.

Collected 99.5% of Cash Base Rents due during the second quarter.

Raised net proceeds of approximately $201.0 million through an underwritten equity offering and the ATM program.

Repaid $90.0 million, net on the revolving credit facility.

Completed 3.0 million square feet of new leases and lease extensions, increasing industrial renewal Cash Base Rents by 21.6%.

Increased industrial portfolio to 84.5% of gross book value of real estate assets, excluding held for sale assets.

 

Subsequent Events

 

Collected 99.4% of Cash Base Rents due in July 2020.

Disposed of three properties for an aggregate gross price of $67.0 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.

 

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T. Wilson Eglin, Chairman and Chief Executive Officer of Lexington Realty Trust, commented, “We posted strong second quarter results, and we continue to make progress in our transition to an industrial REIT, with industrial exposure at quarter-end representing almost 85% of our gross real estate assets. Our rent collections have been excellent, averaging over 99.5% in the second quarter. We capitalized on investment opportunities during the quarter and acquired $164 million of high-quality industrial real estate product at average GAAP and cash capitalization rates of 5.6% and 5.3%, respectively. Industrial renewal rents increased by nearly 22% and our overall portfolio leased of 97.3% is slightly up when compared to last quarter.”

 

FINANCIAL RESULTS

 

Revenues

 

For the quarter ended June 30, 2020, total gross revenues were $81.8 million, compared with total gross revenues of $80.1 million for the quarter ended June 30, 2019. The increase is primarily attributable to acquisitions, partially offset by property sales and a decrease in fee and parking income.

 

Net Income Attributable to Common Shareholders

 

For the quarter ended June 30, 2020, net income attributable to common shareholders was $17.3 million, or $0.06 per diluted share, compared with net income attributable to common shareholders for the quarter ended June 30, 2019 of $21.7 million, or $0.09 per diluted share.

 

Adjusted Company FFO

 

For the quarter ended June 30, 2020, Lexington generated Adjusted Company FFO of $51.4 million, or $0.19 per diluted share, compared to Adjusted Company FFO for the quarter ended June 30, 2019 of $48.3 million, or $0.20 per diluted share.

 

Dividends/Distributions

 

As previously announced, during the second quarter of 2020, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended June 30, 2020 of $0.1050 per common share/unit, which was paid on July 15, 2020 to common shareholders/unitholders of record as of June 30, 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 June 30, 2020, which is expected to be paid on August 17, 2020 to Series C Preferred Shareholders of record as of July 31, 2020.

 

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TRANSACTION ACTIVITY

 

ACQUISITION TRANSACTIONS
                 
Property Type   Market   Sq. Ft.   Initial Basis
($000)
  Approximate Lease Term (Yrs)
Industrial-Warehouse/distribution   Savannah, GA   499,500   $ 34,753   7
Industrial-Warehouse/distribution   Dallas, TX   120,960   10,731   10
Industrial-Warehouse/distribution   Savannah, GA   355,527   30,448   5
Industrial-Warehouse/distribution   Savannah, GA   88,503   9,130   5
Industrial-Warehouse/distribution   Houston, TX   248,240   20,949   5
Industrial-Warehouse/distribution   Ocala, FL   617,055   58,283   10
        1,929,785   $ 164,294    

 

The above properties were acquired at aggregate weighted-average GAAP and Cash capitalization rates of 5.6% and 5.3%, respectively. Year to date total 2020 acquisition activity was $359.7 million at aggregate weighted-average GAAP and Cash capitalization rates of 5.4% and 5.0%, respectively.

 

DEVELOPMENT PROJECTS    
Project (% owned)   Market   Property
Type
  Estimated Sq.
Ft.
  Estimated
Project
Cost ($000)
  GAAP
Investment
Balance as of
6/30/2020
($000)(1)
  Lexington
Amount
Funded as of 6/30/2020
($000)
  Estimated
Completion
Date
Consolidated:                            
Fairburn (90%)   Atlanta, GA   Industrial   910,000   $ 53,812   $ 20,535   $ 15,806   1Q 21
Rickenbacker (100%)   Columbus, OH   Industrial   320,000   20,300   5,891   4,390   1Q 21
                $ 74,112   $ 26,426   $ 20,196    
                             
Non-consolidated:                            
ETNA Park 70 (90%)(2)   Columbus, OH   Industrial   TBD   TBD   $ 10,229   $ 10,569   TBD
ETNA Park 70 East (90%)(2)   Columbus, OH   Industrial   TBD   TBD   5,148   5,188   TBD
                    $ 15,377   $ 15,757    

 

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
T-Mobile USA   Oakland, ME   Office   $ 10,700   $ 477   $ 1,562   April   100 %
Caremark PCS   Knoxville, TN   Office   9,183   545   807   May   100 %
Stella & Chewy’s   Oak Creek, WI   Industrial   24,511   1,218   1,922   June   100 %
            $ 44,394   $ 2,240   $ 4,291        

 

1.In addition, Lexington sold a vacant parcel of land for $65 thousand.
2.Quarterly period prior to sale, annualized.

 

As of June 30, 2020, total consolidated property disposition volume was $74.1 million at weighted-average GAAP and Cash capitalization rates of 7.6% and 8.0%, respectively.

 

5

 

 

LEASING
                       
    LEASE EXTENSIONS        
                       
    Location   Primary Tenant/Guarantor(1) Prior
Term
  Lease
Expiration Date
  Sq. Ft.  
    Industrial                  
1   Laurens SC   Michelin   01/2021   05/2021   1,164,000   
2   Owensboro KY   Unilever   12/2020   12/2025   443,380   
3   Duncan SC   Undisclosed   01/2024   01/2026   120,680   
4   Columbus OH   ODW Logistics   06/2020   06/2025   772,450   
5   Winchester VA   Kraft Heinz   05/2021   05/2026   344,700   
5   Total industrial lease extensions               2,845,210   

 

    NEW LEASES                  
                       
    Location           Lease
Expiration Date
  Sq. Ft.  
    Industrial/Multi-tenant                  
1   Chillicothe OH   Adena Health System       02/2021   23,270   
2   Chillicothe OH   Consolidated Metco       06/2026   136,495   
2   Total industrial/multi-tenant leases               159,765   
                       
    Office/Multi-tenant                  
1   Arlington TX   Arrow Electronics       09/2024   23,228   
1   Total office/multi-tenant leases               23,228   
                       
3   Total New Leases               182,993   
                     
8   TOTAL NEW AND EXTENDED LEASES               3,028,203   

 

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

 

As of June 30, 2020, Lexington’s portfolio was 97.3% leased.

 

BALANCE SHEET/CAPITAL MARKETS

 

During the second quarter of 2020, Lexington issued 21 million common shares through an underwritten equity offering and its ATM program raising net proceeds of approximately $201.0 million.

 

During the second quarter, Lexington repaid $90.0 million, net, on its unsecured revolving credit facility. As of the date of this earnings release, Lexington has $560 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 $0.78 to $0.80 per diluted common share.

 

Additionally, Lexington is tightening its Adjusted Company FFO guidance for the year ended December 31, 2020 to be within a range of $0.74 to $0.76 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

 

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SECOND QUARTER 2020 CONFERENCE CALL

 

Lexington will host a conference call today, August 6, 2020, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended June 30, 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 November 6, 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 10146388. A link to a live webcast of the conference call is available at www.lxp.com within the Investors section.

 

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.

 

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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.

 

# # #

 

8

 

 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

                 
   Three months ended June 30,   Six months ended June 30, 
   2020   2019   2020   2019 
Gross revenues:                    
Rental revenue  $81,094   $78,758   $159,829   $158,733 
Other revenue   698    1,377    2,790    2,650 
Total gross revenues   81,792    80,135    162,619    161,383 
Expense applicable to revenues:                    
Depreciation and amortization   (39,805)   (36,811)   (80,314)   (74,406)
Property operating   (10,276)   (9,788)   (20,552)   (20,355)
General and administrative   (7,555)   (7,334)   (15,380)   (15,861)
Non-operating income   84    914    274    1,395 
Interest and amortization expense   (14,166)   (17,026)   (28,961)   (34,234)
Debt satisfaction gains (charges), net           1,393    (103)
Impairment charges   (1,617)   (1,094)   (1,617)   (1,682)
Gains on sales of properties   11,193    15,244    20,998    36,201 
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities   19,650    24,240    38,460    52,338 
Provision for income taxes   (422)   (430)   (1,075)   (867)
Equity in earnings (losses) of non-consolidated entities   (97)   (41)   166    578 
Net income   19,131    23,769    37,551    52,049 
Less net income attributable to noncontrolling interests   (265)   (436)   (531)   (689)
Net income attributable to Lexington Realty Trust shareholders   18,866    23,333    37,020    51,360 
Dividends attributable to preferred shares – Series C   (1,573)   (1,573)   (3,145)   (3,145)
Allocation to participating securities   (39)   (39)   (85)   (85)
Net income attributable to common shareholders  $17,254   $21,721   $33,790   $48,130 
                     
Net income attributable to common shareholders - per common share basic  $0.07   $0.09   $0.13   $0.21 
Weighted-average common shares outstanding – basic   264,785,583    232,635,137    258,911,872    232,587,083 
                     
Net income attributable to common shareholders - per common share diluted  $0.06   $0.09   $0.13   $0.20 
Weighted-average common shares outstanding – diluted   269,088,631    236,299,878    263,217,352    236,221,330 

 

9

 

 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

 

  June 30, 2020   December 31, 2019  
  (unaudited)        
Assets:            
Real estate, at cost $ 3,586,861   $ 3,320,574  
Real estate - intangible assets   420,583     409,756  
Investments in real estate under construction   26,426     13,313  
Real estate, gross   4,033,870   3,743,643  
Less: accumulated depreciation and amortization   928,334   887,629  
Real estate, net   3,105,536     2,856,014  
Assets held for sale   9,817      
Operating lease right-of-use assets, net   36,633     38,133  
Cash and cash equivalents   67,043     122,666  
Restricted cash   16,791     6,644  
Investments in non-consolidated entities   56,040     57,168  
Deferred expenses, net   18,256     18,404  
Rent receivable – current   1,841     3,229  
Rent receivable – deferred   70,258     66,294  
Other assets   11,318     11,708  
Total assets $ 3,393,533   $ 3,180,260  
             
Liabilities and Equity:            
Liabilities:            
Mortgages and notes payable, net $ 373,681   $ 390,272  
Revolving credit facility borrowings   40,000      
Term loan payable, net   297,691     297,439  
Senior notes payable, net   497,288     496,870  
Trust preferred securities, net   127,445     127,396  
Dividends payable   34,161     32,432  
Liabilities held for sale   1,716      
Operating lease liabilities   37,815     39,442  
Accounts payable and other liabilities   49,747   29,925  
Accrued interest payable   9,548     7,897  
Deferred revenue - including below market leases, net   18,749     20,350  
Prepaid rent 13,506     13,518  
Total liabilities   1,501,347     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,          
276,267,259 and 254,770,719 shares issued and outstanding in 2020 and 2019, respectively   28     25  
Additional paid-in-capital   3,185,458     2,976,670  
Accumulated distributions in excess of net income   (1,386,001 )   (1,363,676 )
Accumulated other comprehensive loss   (20,730 )   (1,928 )
Total shareholders’ equity   1,872,771     1,705,107  
Noncontrolling interests   19,415     19,612  
Total equity   1,892,186     1,724,719  
Total liabilities and equity $ 3,393,533   $ 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
June 30,
  Six Months Ended
June 30,
 
    2020   2019   2020   2019  
EARNINGS PER SHARE:                    
                 
Basic:                
Net income attributable to common shareholders   $ 17,254   $ 21,721   $ 33,790   $ 48,130  
                     
Weighted-average number of common shares outstanding - basic   264,785,583   232,635,137   258,911,872   232,587,083  
                     
Net income  attributable to common shareholders - per common share basic   $ 0.07   $ 0.09   $ 0.13   $ 0.21  
                     
Diluted:                
Net income attributable to common shareholders - basic   $ 17,254   $ 21,721   $ 33,790   $ 48,130  
Impact of assumed conversions   77   165   184   166  
Net income attributable to common shareholders   $ 17,331   $ 21,886   $ 33,974   $ 48,296  
                     
Weighted-average common shares outstanding - basic   264,785,583   232,635,137   258,911,872   232,587,083  
Effect of dilutive securities:                
Unvested share-based payment awards and options   1,210,241   129,810   1,185,016   91,637  
Operating partnership units   3,092,807   3,534,931   3,120,464   3,542,610  
Weighted-average common shares outstanding - diluted   269,088,631   236,299,878   263,217,352   236,221,330  
                     
Net income attributable to common shareholders - per common share diluted   $ 0.06   $ 0.09   $ 0.13   $ 0.20  

 

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   Six Months Ended 
   June 30,   June 30, 
   2020   2019   2020   2019 
FUNDS FROM OPERATIONS:                    
Basic and Diluted:                    
Net income attributable to common shareholders  $17,254   $21,721   $33,790   $48,130 
Adjustments:                    
Depreciation and amortization   39,030    36,065    78,747    72,932 
Impairment charges - real estate   1,617    1,094    1,617    1,682 
Noncontrolling interests - OP units   77    165    184    166 
Amortization of leasing commissions   775    746    1,567    1,474 
Joint venture and noncontrolling interest adjustment   2,155    2,400    4,369    4,933 
Gains on sales of properties, including non-consolidated entities   (11,193)   (15,513)   (21,547)   (37,118)
FFO available to common shareholders and unitholders - basic   49,715    46,678    98,727    92,199 
Preferred dividends   1,573    1,573    3,145    3,145 
Amount allocated to participating securities   39    39    85    85 
FFO available to all equityholders and unitholders - diluted   51,327    48,290    101,957    95,429 
Transaction costs   59        80     
Debt satisfaction (gains) charges, net, including non-consolidated entities           (1,372)   103 
Adjusted Company FFO available to all equityholders and unitholders - diluted   51,386    48,290    100,665    95,532 
                     
FUNDS AVAILABLE FOR DISTRIBUTION:                    
Adjustments:                    
Straight-line adjustments   (4,810)   (4,355)   (6,229)   (6,685)
Lease incentives   249    307    518    580 
Amortization of above/below market leases   (380)   (26)   (675)   (32)
Lease termination payments, net   (211)   (256)   281    (1,000)
Non-cash interest, net   360    773    788    1,579 
Non-cash charges, net   1,663    1,552    3,321    3,279 
Tenant improvements   (5,630)   (2,557)   (7,122)   (3,552)
Lease costs   (468)   (3,549)   (4,419)   (4,673)
Joint venture and noncontrolling interest adjustment   (73)   (460)   (184)   (636)
Company Funds Available for Distribution  $42,086   $39,719   $86,944   $84,392 
                     
Per Common Share and Unit Amounts                    
Basic:                    
FFO  $0.19   $0.20   $0.38   $0.39 
                     
Diluted:                    
FFO  $0.19   $0.20   $0.38   $0.40 
Adjusted Company FFO  $0.19   $0.20   $0.38   $0.40 
                     
Basic:                    
Weighted-average common shares outstanding - basic EPS   264,785,583    232,635,137    258,911,872    232,587,083 
Operating partnership units(1)   3,092,807    3,534,931    3,120,464    3,542,610 
Weighted-average common shares outstanding - basic FFO   267,878,390    236,170,068    262,032,336    236,129,693 
                     
Diluted:                    
Weighted-average common shares outstanding - diluted EPS   269,088,631    236,299,878    263,217,352    236,221,330 
Unvested share-based payment awards   14,028    15,927    19,272    16,280 
Preferred shares - Series C   4,710,570    4,710,570    4,710,570    4,710,570 
Weighted-average common shares outstanding - diluted FFO   273,813,229    241,026,375    267,947,194    240,948,180 

 

(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) $ 0.78     $ 0.80  
Depreciation and amortization 0.62     0.62  
Impact of capital transactions (0.66 )   (0.66 )
Estimated Adjusted Company FFO per diluted common share $ 0.74     $ 0.76  

 

(1)       Assumes all convertible securities are dilutive.

 

13

 

LEXINGTON REALTY TRUST

2020 Second Quarter Investments / Capital Recycling Summary

 

PROPERTY INVESTMENTS
                               
  Property Type   Market   Square Feet    Initial Basis ($000)   Month Closed   Primary Lease Expiration  
1 Industrial - Warehouse/distribution   Savannah   GA    499,500   $   34,753   April   07/2027  
2 Industrial - Warehouse/distribution   Dallas   TX    120,960    10,731   May   06/2030  
3 Industrial - Warehouse/distribution   Savannah   GA    355,527    30,448   June   06/2025  
4 Industrial - Warehouse/distribution   Savannah   GA    88,503    9,130   June   08/2025  
5 Industrial - Warehouse/distribution   Houston   TX    248,240    20,949   June   04/2025  
6 Industrial - Warehouse/distribution   Ocala   FL    617,055    58,283   June   08/2030  
                               
6 TOTAL PROPERTY INVESTMENTS            1,929,785   $   164,294          

 

CAPITAL RECYCLING (1)
                                             
                                       
CONSOLIDATED PROPERTY DISPOSITIONS                                
  Primary Tenant   Location   Property Type   Gross
Disposition Price
($000)
  Annualized Net Income ($000) (2)   Annualized
NOI ($000)(2)(3)
  Month of Disposition   % Leased   Gross Disposition Price PSF
1 T-Mobile USA   Oakland   ME   Office   $ 10,700   $ 477   $ 1,562   April   100%   $ 136.11
2 CaremarkPCS   Knoxville   TN   Office    9,183    545    807   May   100%    153.70
3 Stella & Chewy’s   Oak Creek   WI   Industrial    24,511    1,218    1,922   June   100%    149.45
3 TOTAL PROPERTY DISPOSITIONS         $ 44,394   $ 2,240   $ 4,291            

 

Footnotes
(1) In addition, Lexington sold a vacant parcel of land for $65 thousand.
(2) Quarterly period prior to sale annualized.
(3) See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

 

14

 

 

LEXINGTON REALTY TRUST

DEVELOPMENT PROJECTS

6/30/2020

 

DEVELOPMENT PROJECTS
                               
  Project
(% owned)
  Market   Property
Type
  Estimated
Sq. Ft.
  Estimated
Project Cost
($000)
  GAAP
Investment Balance
as of 6/30/2020
($000) (1)
  Lexington
Amount Funded
as of 6/30/2020
($000)
  Estimated
Completion
Date
  Consolidated                            
1 Fairburn (90%)   Atlanta, GA   Industrial    910,000   $ 53,812   $ 20,535   $ 15,806   1Q 2021
2 Rickenbacker (100%)   Columbus, OH   Industrial    320,000     20,300     5,891     4,390   1Q 2021
2 Total Consolidated Development           $ 74,112   $ 26,426   $ 20,196    
 
  Non - Consolidated
1 Etna Park 70 (90%) (2)   Columbus, OH   Industrial    TBD    TBD   $ 10,229   $ 10,569    TBD
2 Etna Park 70 East (90%) (2)   Columbus, OH   Industrial    TBD    TBD     5,148     5,188    TBD
2 Total Non-Consolidated Development               $ 15,377   $ 15,757    
                                   
4 Total Development Projects                   $ 41,803   $ 35,953    

 

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

2020 Second Quarter Leasing Summary

 

LEASE EXTENSIONS
                                     
  Tenant/Guarantor (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)
  Industrial                                  
1 Michelin   Laurens SC   01/2021   05/2021    1,164,000   $ 3,594   $ 3,594   $ 3,594   $ 3,594
2 Unilever   Owensboro KY   12/2020   12/2025    443,380    1,882    1,493    1,933    1,288
3 Undisclosed (4)   Duncan SC   01/2024   01/2026    120,680    598    604    650    632
4 ODW Logistics   Columbus OH   06/2020   06/2025    772,450    2,260    1,347    2,163    1,347
5 Kraft Heinz (5)   Winchester VA   05/2021   05/2026    344,700    N/A    N/A    N/A    N/A
5 Total Industrial Lease Extensions                  2,845,210   $ 8,334   $ 7,038 $ 8,340   $ 6,861
                                     
5 TOTAL EXTENDED LEASES                  2,845,210   $ 8,334   $ 7,038   $ 8,340   $ 6,861

 

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/Multi-tenant                                  
1 Adena Health System   Chillicothe OH       02/2021    23,270   $ 117       $ 117    
2 Consolidated Metco   Chillicothe OH       06/2026    136,495    590        590    
2 Total Industrial New Leases                  159,765   $ 707       $ 707    
                                     
  Office/Multi-tenant                                  
1 Arrow Electronics   Arlington TX       09/2024    23,228   $ 336       $ 336    
1 Total Office New Leases                  23,228   $ 336       $ 336    
                                     
3 TOTAL NEW LEASES                  182,993   $ 1,043       $ 1,043    
                                     
8 TOTAL NEW AND EXTENDED LEASES                3,028,203   $ 9,377       $ 9,383    

 

Footnotes
(1) Leases greater than 10,000 square feet.
(2) Assumes twelve months rent from the later of 7/1/20 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) Lease restricts certain disclosures
(5) Extension fair market value rent to be determined.

 

16

 

 

LEXINGTON REALTY TRUST
Other Revenue Data
6/30/2020
($000)
Other Revenue Data
             
   Base Rent 
Asset Class  Six months ended 
    6/30/2020(1)   6/30/2020
Percentage
    6/30/2019
Percentage
 
Industrial  $114,958    80.2%   69.4%
Office/Other   28,298    19.8%   30.6%
   $143,256    100.0%   100.0%

 

    Base Rent  
Credit Ratings (2)   Six months ended 
    6/30/2020(1)   6/30/2020
Percentage
    6/30/2019
Percentage
 
Investment Grade  $74,712    52.2%   46.5%
Non-Investment Grade   30,684    21.4%   28.1%
Unrated   37,860    26.4%   25.4%
   $143,256    100.0%   100.0%
                
Weighted-Average Lease Term - Cash Basis        As of 6/30/2020    As of 6/30/2019 
         8.1 years    8.7 years 

 

Rent Estimates for Current Assets               
                
Year   Base Rent (3)    Cash Base
Rent (3)
    Difference 
2020 - remaining  $147,740   $139,732   $(8,008)
2021   284,278    273,185    (11,093)

 

Footnotes
(1) Six months ended 6/30/2020 Base Rent recognized for consolidated properties owned as of 6/30/2020.
(2) Credit ratings are based upon either tenant, guarantor or parent/ultimate parent.
(3) Amounts assume (i) lease terms for non-cancellable periods only, (ii) no new or renegotiated leases are entered into after 6/30/2020, and (iii) no properties are sold or acquired after 6/30/2020.

 

17

 

 

LEXINGTON REALTY TRUST
Other Revenue Data (Continued)
6/30/2020
($000)

 

Same-Store NOI (1)    
   Six months ended June 30, 
   2020   2019 
Total Cash Base Rent  $112,371   $112,210 
Tenant Reimbursements   12,102    11,737 
Property Operating Expenses   (15,911)   (14,743)
Same-Store NOI  $108,562   $109,204 
           
Change in Same-Store NOI (2)   (0.6%)     
           
Same-Store Percent Leased (3)   As of 6/30/2020    As of 6/30/2019 
    97.4%   99.0%
           
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 June 30, 2020.
  See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.
(2) Change in Same-Store NOI was breakeven excluding single-tenant property vacancies.
(3) Excludes properties acquired or sold in 2020 and 2019 and properties subject to mortgage loans in default at June 30, 2020.
(4) Based on six months consolidated Cash Base Rents for single-tenant leases (properties greater than 50% leased to a single tenant) owned as of June 30, 2020. Excludes parking operations and rents from prior tenants.

 

18

 

 

LEXINGTON REALTY TRUST
Portfolio Detail By Asset Class
6/30/2020
($000, except square footage)

 

Asset Class  YE 2017 (1)   YE 2018 (1)(2)   YE 2019   Q2 2020 
                 
Industrial                    
% of Cost (3)   49.3%   71.2%   81.5%   84.5%
% of ABR (4)   44.3%   65.4%   75.5%   80.2%
% Leased   99.9%   96.3%   97.9%   98.3%
Wtd. Avg. Lease Term (5)   10.5    9.7    8.3    7.8 
Mortgage Debt  $193,529   $206,006   $109,939   $107,701 
% Investment Grade (4)   28.4%   31.6%   45.9%   50.3%
Square Feet   36,071,422    41,447,962    48,742,014    53,061,399 
                     
Office/Other                    
% of Cost (3)   50.7%   28.8%   18.5%   15.5%
% of ABR (4)(6)   55.7%   34.6%   24.5%   19.8%
% Leased   96.0%   87.1%   85.8%   82.0%
Wtd. Avg. Lease Term (5)   7.9    7.2    8.5    9.4 
Mortgage Debt  $503,539   $369,508   $283,933   $269,369 
% Investment Grade (4)   49.4%   53.2%   57.3%   59.5%
Square Feet   12,542,640    6,111,588    3,876,294    3,531,785 
                     
Construction in progress (7)  $4,219   $1,840   $15,208   $36,505 

 

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.

 

19

 

 

LEXINGTON REALTY TRUST
Portfolio Composition
6/30/2020

 

As a Percent of Gross Book Value (1)

 

 

 

Portfolio Composition (2)

 

 

 

Footnotes
(1) Based on gross book value of real estate assets as of 6/30/2020.
(2) Based on gross book value of real estate assets as of 6/30/2020, 12/31/2019, 12/31/2018 and 12/31/2017, as applicable and excludes held for sale assets.

 

20

 

 

LEXINGTON REALTY TRUST
Components of Net Asset Value
6/30/2020
($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 six month net operating income (NOI) (1)    
Industrial  $101,698 
Office/Other   25,667 
Total Net Operating Income  $127,365 
      
Lexington’s share of non-consolidated six month NOI (1)     
NNN OFFICE JV     
Office  $4,803 
OTHER JV     
Other  $757 
      
Other income     
Advisory fees  $1,552 
      
      
In service assets not fairly valued by capitalized NOI method (1)     
Wholly-owned assets acquired in 2020  $355,533 
Wholly-owned assets less than 70% leased  $48,973 
      
Add other assets:     
Assets held for sale - consolidated  $9,817 
Construction in progress   10,079 
Developable land   15,757 
Development investment at cost incurred   20,196 
Cash and cash equivalents   67,043 
Restricted cash   16,791 
Accounts receivable   1,841 
Other assets   11,318 
Total other assets  $152,842 
      
Liabilities:     
 Corporate level debt (face amount)  $969,120 
Mortgages and notes payable (face amount)   377,070 
Dividends payable   34,161 
Liabilities held for sale - consolidated   1,716 
Accounts payable, accrued expenses and other liabilities   72,801 
Preferred stock, at liquidation value   96,770 
Lexington’s share of non-consolidated mortgages (face amount)   87,445 
Total deductions  $1,639,083 
      
Common shares & OP units at 6/30/2020   279,352,157 

 

Footnotes
(1) NOI for the existing property portfolio at June 30, 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.

 

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LEXINGTON REALTY TRUST
Portfolio Concentration - Industrial
6/30/2020

 

    Markets (1)  Percent of Base Rent
as of 6/30/2020 (2)
 
1   Memphis, TN   8.7%
2   Greenville/Spartanburg, SC   7.1%
3   Houston, TX   6.3%
4   Atlanta, GA   6.0%
5   Chicago, IL   5.4%
6   Cincinnati/Dayton, OH   5.4%
7   Nashville, TN   5.0%
8   Detroit, MI   4.5%
9   Dallas/Fort Worth, TX   3.8%
10   Phoenix, AZ   3.7%
11   Charlotte, NC   3.1%
12   Jackson, MS   2.7%
13   St. Louis, MO   2.7%
14   New York/New Jersey   2.2%
15   Columbus, OH   2.2%
16   Cleveland, OH   2.2%
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)   77.8%

 

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) Six months ended 6/30/2020 Base Rent recognized for consolidated industrial properties owned as of 6/30/2020.
(3) Total shown may differ from detailed amounts due to rounding.

 

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LEXINGTON REALTY TRUST

Portfolio Concentration - Office/Other

6/30/2020

 

   Markets (1)  Percent of Base Rent
as of 6/30/2020 (2)
 
1  Houston, TX   26.2%
2  South Bay/San Jose, CA   11.7%
3  Philadelphia, PA   10.1%
4  New York/New Jersey   9.9%
5  Charlotte, NC   7.2%
6  Dallas/Fort Worth, TX   7.1%
7  DC/Baltimore, MD   6.6%
8  Phoenix, AZ   5.1%
9  Tampa/St. Petersburg, FL   3.4%
10  Baton Rouge, LA   2.0%
11  McAllen/Edinburg/Pharr,TX   1.8%
12  Kansas City, MO   1.8%
13  Orlando, FL   1.6%
14  Atlanta, GA   1.5%
15  Florence, SC   1.0%
16  South Florida   1.0%
17  Tucson, AZ   1.0%
18  Hawaii   1.0%
   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)Six months ended 6/30/2020 Base Rent recognized for consolidated office/other properties owned as of 6/30/2020.

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

 

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LEXINGTON REALTY TRUST

Tenant Industry Diversification - Industrial Assets (1)

6/30/2020

 

 

 

Footnotes

(1)Six months ended 6/30/2020 Base Rent recognized for consolidated properties owned as of 6/30/2020.

 

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LEXINGTON REALTY TRUST

Top 15 Tenants

6/30/2020

 

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
6/30/2020
($000)
   Percent of Base
Rent as of
6/30/2020
($000) (2)(4)
 
Dow  Office  2036   1    664,100    1.2%  $7,425    5.2%
Nissan  Industrial  2027   2    2,971,000    5.4%   6,380    4.5%
Dana  Industrial  2021-2026   7    2,053,359    3.7%   4,970    3.5%
Kellogg  Industrial  2027-2029   3    2,801,916    5.1%   4,858    3.4%
Amazon  Industrial  2026-2030   4    3,132,547    5.7%   4,726    3.3%
Undisclosed (5)  Industrial  2031-2035   3    1,090,383    2.0%   3,570    2.5%
Watco  Industrial  2038   1    132,449    0.2%   3,386    2.4%
Xerox  Office  2023   1    202,000    0.4%   3,321    2.3%
Wal-Mart  Industrial  2023-2027   3    1,491,439    2.7%   3,058    2.1%
FedEx  Industrial  2023 & 2028   2    292,021    0.5%   2,860    2.0%
Undisclosed (5)  Industrial  2034   1    1,318,680    2.4%   2,772    1.9%
Morgan Lewis (6)  Office  2024   1    289,432    0.5%   2,526    1.8%
Mars Wrigley  Industrial  2025   1    604,852    1.1%   2,203    1.5%
Asics  Industrial  2030   1    855,878    1.6%   2,194    1.5%
Spitzer  Industrial  2035   2    449,895    0.8%   2,172    1.5%
                                
          33    18,349,951    33.3%  $56,421    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)Six months ended 6/30/2020 Base Rent recognized for consolidated properties owned as of 6/30/2020, excluding rent from prior tenants.

(5)Lease restricts certain disclosures.

(6)Includes parking operations.

 

25

 

 

LEXINGTON REALTY TRUST

Lease Rollover Schedule - Consolidated Industrial Properties

6/30/2020

($000)

 

Year   Number of
Leases
Expiring
   Base Rent as of
6/30/2020
   Percent of Base
Rent as of
6/30/2020
   Percent of Base
Rent as of
6/30/2019
 
2020 - remaining    3   $1,447    1.3%   2.2%
2021    13    8,294    7.2%   7.1%
2022    2    1,154    1.0%   0.8%
2023    9    4,780    4.2%   2.6%
2024    15    11,010    9.6%   8.2%
2025    19    11,750    10.2%   6.9%
2026    13    10,189    8.9%   9.1%
2027    10    14,709    12.8%   12.4%
2028    4    5,927    5.2%   6.0%
2029    6    7,682    6.7%   2.3%
Thereafter    26    37,779    32.9%   38.5%
                      
Total (1)    120   $1,14,721    100.0%     

 

 

 

Footnotes

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

 

26

 

 

LEXINGTON REALTY TRUST

Lease Rollover Schedule - Consolidated Office/Other Properties

6/30/2020

($000)

 

Year   Number of
Leases
Expiring
   Base Rent as of
6/30/2020
   Percent of Base
Rent as of
6/30/2020
   Percent of Base
Rent as of
6/30/2019
 
2020 - remaining    29   $570    2.1%   0.0%
2021    8    1,850    6.7%   14.4%
2022    2    1,840    6.7%   5.7%
2023    3    3,637    13.2%   8.6%
2024    6    4,582    16.6%   11.8%
2025    5    1,855    6.7%   3.7%
2026    0    -    0.0%   1.3%
2027    1    46    0.2%   8.1%
2028    0    -    0.0%   1.6%
2029    1    440    1.6%   6.6%
Thereafter    8    12,737    46.2%   27.4%
                      
Total (1)    63   $27,557    100.0%     

 

 

 

Footnotes

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

 

27

 

 

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2020

 

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
6/30/2020
($000) (2)
   Cash
Base Rent
as of
6/30/2020
($000) (2)
   6/30/2020
Debt Balance
($000)
   Debt
Maturity
 
INDUSTRIAL PROPERTIES
Single-tenant
2020  12/31/2020  2203 Sherrill Dr.  Statesville  NC  --  Geodis America   639,800    1,247    1,307    -    - 
2021  3/31/2021  2455 Premier Row  Orlando  FL  --  Walgreen Co.   205,016    393    254    -    - 
   5/31/2021  101 Michelin Dr.  Laurens  SC  --  Michelin   1,164,000    1,793    1,793    -    - 
   6/30/2021  11624 S. Distribution Cv.  Olive Branch  MS  --  Hamilton Beach   1,170,218    1,895    1,638    -    - 
   9/30/2021  3820 Micro Dr.  Millington  TN  --  Ingram Micro   701,819    906    937    -    - 
   10/25/2021  6938 Elm Valley Dr.  Kalamazoo  MI  --  Dana   150,945    873    1,013    -    - 
   11/30/2021  2880 Kenny Biggs Rd.  Lumberton  NC  --  Quickie Manufacturing   423,280    678    739    -    - 
   12/31/2021  191 Arrowhead Dr.  Hebron  OH  --  Owens Corning   250,410    289    289    -    - 
      200 Arrowhead Dr.  Hebron  OH  --  Owens Corning   400,522    462    462    -    - 
      3686 South Central Ave.  Rockford  IL  --  Pierce Packaging   93,000    163    163    -    - 
2022  3/31/2022  5417 Campus Dr.  Shreveport  LA  --  Tire Rack   257,849    671    702    -    - 
   8/31/2022  50 Tyger River Dr.  Duncan  SC  --  Plastic Omnium   221,833    483    507    -    - 
2023  2/28/2023  3102 Queen Palm Dr.  Tampa  FL  --  RC Moore   229,605    576    387    -    - 
      7670 Hacks Cross Rd.  Olive Branch  MS  --  MAHLE Industries   268,104    453    455    -    - 
   5/31/2023  6495 Polk Ln.  Olive Branch  MS  13  Undisclosed   151,691    292    285    -    - 
   8/31/2023  10535 Red Bluff Rd.  Pasadena  TX  --  Unis   257,835    615    600    -    - 
      3737 Duncanville Rd.  Dallas  TX  --  Owens Corning   510,440    857    833    -    - 
   10/31/2023  493 Westridge Pkwy.  McDonough  GA  --  Carlstar   676,000    1,016    987    -    - 
   12/31/2023  120 Southeast Pkwy. Dr.  Franklin  TN  --  Raytheon Technologies   289,330    367    367    -    - 
      675 Gateway Blvd.  Monroe  OH  --  Blue Buffalo   143,664    355    343    -    - 
2024  1/31/2024  1285 W. State Road 32  Lebanon  IN  --  Continental Tire   741,880    1,140    1,209    -    - 
      6495 Polk Ln.  Olive Branch  MS  13  Undisclosed   118,211    247    239    -    - 
      70 Tyger River Dr.  Duncan  SC  --  BMW   408,000    1,000    976    -    - 
   3/31/2024  1520 Lauderdale Memorial Hwy.  Cleveland  TN  --  General Electric   851,370    1,329    1,337    -    - 
   4/30/2024  113 Wells St.  North Berwick  ME  --  Raytheon Technologies   993,685    899    813    -    - 
      11555 Silo Dr.  Olive Branch  MS  --  Olam Cotton   927,742    1,428    1,420    -    - 
   5/31/2024  901 East Bingen Point Way  Bingen  WA  --  Boeing   124,539    1,318    1,328    -    - 

 

28

 

 

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2020

 

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
6/30/2020
($000) (2)
   Cash
Base Rent
as of
6/30/2020
($000) (2)
   6/30/2020
Debt Balance
($000)
   Debt
Maturity
 
INDUSTRIAL PROPERTIES
2024  5/31/2024  7225 Goodson Rd.  Union City  GA  --  Interface Americas   370,000    721    685    -    - 
   7/31/2024  5795 North Blackstock Rd.  Spartanburg  SC  --  Wal-Mart   341,660    836    838    -    - 
      231 Apple Valley Rd.  Duncan  SC  13  Undisclosed   75,320    188    188    -    - 
   9/30/2024  1621 Veterans Memorial Pkwy. E  Lafayette  IN  --  Caterpillar   309,400    607    602    -    - 
   10/31/2024  43955 Plymouth Oaks Blvd.  Plymouth  MI  --  Tower Automotive   311,612    796    781    -    - 
      2115 East Belt Line Rd.  Carrollton  TX  --  L.E. Klein   58,202    115    117    -    - 
   12/31/2024  749 Southrock Dr.  Rockford  IL  --  Jacobson Warehouse   150,000    319    308    -    - 
2025  4/30/2025  235 Apple Valley Rd.  Duncan  SC  13  Undisclosed   177,320    468    442    -    - 
      10565 Red Bluff Rd.  Pasadena  TX  --  Unis   248,240    21    20    -    - 
   5/31/2025  7875 White Road SW  Austell  GA  --  Mars Wrigley   604,852    2,203    1,847    -    - 
   6/30/2025  10000 Business Blvd.  Dry Ridge  KY  --  Dana   336,350    673    673    -    - 
      1650-1654 Williams Rd.  Columbus  OH  --  ODW Logistics   772,450    686    673    -    - 
      4010 Airpark Dr.  Owensboro  KY  --