x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Maryland (Lexington Realty Trust) | 13-3717318 (Lexington Realty Trust) |
Delaware (Lepercq Corporate Income Fund L.P.) | 13-3779859 (Lepercq Corporate Income Fund L.P.) |
(State or other jurisdiction of incorporation of organization) | (I.R.S. Employer Identification No.) |
One Penn Plaza, Suite 4015, New York, NY 10119-4015 (Address of principal executive offices) (zip code) | |
(212) 692-7200 (Registrant's telephone number, including area code) |
Lexington Realty Trust | Yes x No ¨ |
Lepercq Corporate Income Fund L.P. | Yes x No ¨ |
Lexington Realty Trust | Yes x No ¨ |
Lepercq Corporate Income Fund L.P. | Yes x No ¨ |
Lexington Realty Trust: | ||||
Large accelerated filer x | Accelerated filer ¨ | Non-accelerated filer ¨ | Smaller reporting company ¨ | Emerging growth |
(Do not check if a smaller reporting company) | company ¨ | |||
Lepercq Corporate Income Fund L.P.: | ||||
Large accelerated filer ¨ | Accelerated filer ¨ | Non-accelerated filer x | Smaller reporting company ¨ | Emerging growth |
(Do not check if a smaller reporting company) | company ¨ |
Lexington Realty Trust | o |
Lepercq Corporate Income Fund L.P. | o |
Lexington Realty Trust | Yes ¨ No x |
Lepercq Corporate Income Fund L.P. | Yes ¨ No x |
• | combined reports better reflect how management and the analyst community view the business as a single operating unit; |
• | combined reports enhance investors’ understanding of the Trust and LCIF by enabling them to view the business as a whole and in the same manner as management; |
• | combined reports are more efficient for the Trust and LCIF and result in savings in time, effort and expense; and |
• | combined reports are more efficient for investors by reducing duplicative disclosure and providing a single document for their review. |
PART I. — FINANCIAL INFORMATION | ||
ITEM 1. Financial Statements (Unaudited) | ||
PART II — OTHER INFORMATION | ||
March 31, 2017 | December 31, 2016 | ||||||
Assets: | |||||||
Real estate, at cost | $ | 3,577,239 | $ | 3,533,172 | |||
Real estate - intangible assets | 574,570 | 597,294 | |||||
Investments in real estate under construction | 69,128 | 106,652 | |||||
4,220,937 | 4,237,118 | ||||||
Less: accumulated depreciation and amortization | 1,193,639 | 1,208,792 | |||||
Real estate, net | 3,027,298 | 3,028,326 | |||||
Assets held for sale | 10,080 | 23,808 | |||||
Cash and cash equivalents | 177,301 | 86,637 | |||||
Restricted cash | 63,548 | 31,142 | |||||
Investment in and advances to non-consolidated entities | 62,963 | 67,125 | |||||
Deferred expenses, net | 32,431 | 33,360 | |||||
Loans receivable, net | — | 94,210 | |||||
Rent receivable – current | 6,622 | 7,516 | |||||
Rent receivable – deferred | 35,811 | 31,455 | |||||
Other assets | 30,651 | 37,888 | |||||
Total assets | $ | 3,446,705 | $ | 3,441,467 | |||
Liabilities and Equity: | |||||||
Liabilities: | |||||||
Mortgages and notes payable, net | $ | 730,310 | $ | 738,047 | |||
Term loans payable, net | 501,348 | 501,093 | |||||
Senior notes payable, net | 494,571 | 494,362 | |||||
Trust preferred securities, net | 127,121 | 127,096 | |||||
Dividends payable | 47,719 | 47,264 | |||||
Liabilities held for sale | 48 | 191 | |||||
Accounts payable and other liabilities | 44,326 | 59,601 | |||||
Accrued interest payable | 11,870 | 6,704 | |||||
Deferred revenue - including below market leases, net | 41,464 | 39,895 | |||||
Prepaid rent | 17,934 | 14,723 | |||||
Total liabilities | 2,016,711 | 2,028,976 | |||||
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, 240,394,082 and 238,037,177 shares issued and outstanding in 2017 and 2016, respectively | 24 | 24 | |||||
Additional paid-in-capital | 2,819,058 | 2,800,736 | |||||
Accumulated distributions in excess of net income | (1,502,217 | ) | (1,500,966 | ) | |||
Accumulated other comprehensive income (loss) | 259 | (1,033 | ) | ||||
Total shareholders’ equity | 1,411,140 | 1,392,777 | |||||
Noncontrolling interests | 18,854 | 19,714 | |||||
Total equity | 1,429,994 | 1,412,491 | |||||
Total liabilities and equity | $ | 3,446,705 | $ | 3,441,467 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Gross revenues: | |||||||
Rental | $ | 88,654 | $ | 103,220 | |||
Tenant reimbursements | 7,445 | 8,057 | |||||
Total gross revenues | 96,099 | 111,277 | |||||
Expense applicable to revenues: | |||||||
Depreciation and amortization | (42,891 | ) | (43,127 | ) | |||
Property operating | (12,116 | ) | (12,078 | ) | |||
General and administrative | (9,457 | ) | (7,775 | ) | |||
Non-operating income | 2,621 | 2,867 | |||||
Interest and amortization expense | (19,725 | ) | (22,893 | ) | |||
Debt satisfaction charges, net | — | (162 | ) | ||||
Impairment charges and loan loss | (7,992 | ) | — | ||||
Gains on sales of properties | 34,193 | 17,015 | |||||
Income before provision for income taxes and equity in earnings of non-consolidated entities. | 40,732 | 45,124 | |||||
Provision for income taxes | (422 | ) | (413 | ) | |||
Equity in earnings of non-consolidated entities | 1,910 | 5,742 | |||||
Net income | 42,220 | 50,453 | |||||
Less net income attributable to noncontrolling interests | (180 | ) | (1,010 | ) | |||
Net income attributable to Lexington Realty Trust shareholders | 42,040 | 49,443 | |||||
Dividends attributable to preferred shares – Series C | (1,572 | ) | (1,572 | ) | |||
Allocation to participating securities | (71 | ) | (90 | ) | |||
Net income attributable to common shareholders | $ | 40,397 | $ | 47,781 | |||
Net income attributable to common shareholders - per common share basic | $ | 0.17 | $ | 0.21 | |||
Weighted-average common shares outstanding – basic | 237,179,526 | 232,642,803 | |||||
Net income attributable to common shareholders - per common share diluted | $ | 0.17 | $ | 0.20 | |||
Weighted-average common shares outstanding – diluted | 241,088,049 | 238,885,171 |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 42,220 | $ | 50,453 | |||
Other comprehensive income (loss): | |||||||
Change in unrealized gain (loss) on interest rate swaps, net | 1,292 | (4,625 | ) | ||||
Other comprehensive income (loss) | 1,292 | (4,625 | ) | ||||
Comprehensive income | 43,512 | 45,828 | |||||
Comprehensive income attributable to noncontrolling interests | (180 | ) | (1,010 | ) | |||
Comprehensive income attributable to Lexington Realty Trust shareholders | $ | 43,332 | $ | 44,818 |
Three Months ended March 31, 2017 | Lexington Realty Trust Shareholders | ||||||||||||||||||||||||||
Total | Preferred Shares | Common Shares | Additional Paid-in-Capital | Accumulated Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | |||||||||||||||||||||
Balance December 31, 2016 | $ | 1,412,491 | $ | 94,016 | $ | 24 | $ | 2,800,736 | $ | (1,500,966 | ) | $ | (1,033 | ) | $ | 19,714 | |||||||||||
Issuance of common shares and deferred compensation amortization, net | 18,322 | — | — | 18,322 | — | — | — | ||||||||||||||||||||
Dividends/distributions | (44,331 | ) | — | — | — | (43,291 | ) | — | (1,040 | ) | |||||||||||||||||
Net income | 42,220 | — | — | — | 42,040 | — | 180 | ||||||||||||||||||||
Other comprehensive income | 1,292 | — | — | — | — | 1,292 | — | ||||||||||||||||||||
Balance March 31, 2017 | $ | 1,429,994 | $ | 94,016 | $ | 24 | $ | 2,819,058 | $ | (1,502,217 | ) | $ | 259 | $ | 18,854 |
Three Months ended March 31, 2016 | Lexington Realty Trust Shareholders | ||||||||||||||||||||||||||
Total | Preferred Shares | Common Shares | Additional Paid-in-Capital | Accumulated Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | |||||||||||||||||||||
Balance December 31, 2015 | $ | 1,462,531 | $ | 94,016 | $ | 23 | $ | 2,776,837 | $ | (1,428,908 | ) | $ | (1,939 | ) | $ | 22,502 | |||||||||||
Repurchase of common shares | (8,973 | ) | — | — | (8,973 | ) | — | — | — | ||||||||||||||||||
Issuance of common shares and deferred compensation amortization, net | 5,925 | — | 1 | 5,924 | — | — | — | ||||||||||||||||||||
Dividends/distributions | (42,104 | ) | — | — | — | (41,415 | ) | — | (689 | ) | |||||||||||||||||
Net income | 50,453 | — | — | — | 49,443 | — | 1,010 | ||||||||||||||||||||
Other comprehensive loss | (4,625 | ) | — | — | — | — | (4,625 | ) | — | ||||||||||||||||||
Balance March 31, 2016 | $ | 1,463,207 | $ | 94,016 | $ | 24 | $ | 2,773,788 | $ | (1,420,880 | ) | $ | (6,564 | ) | $ | 22,823 |
Three Months ended March 31, | |||||||
2017 | 2016 | ||||||
Net cash provided by operating activities: | $ | 57,438 | $ | 59,221 | |||
Cash flows from investing activities: | |||||||
Acquisition of real estate, including intangible assets | (48,250 | ) | (27,197 | ) | |||
Investment in real estate under construction | (42,298 | ) | (20,812 | ) | |||
Capital expenditures | (3,330 | ) | (1,325 | ) | |||
Net proceeds from sale of properties | 90,823 | 57,898 | |||||
Net proceeds from sale of non-consolidated investment | 6,127 | — | |||||
Principal payments received on loans receivable | 88,794 | 70 | |||||
Investments in and advances to non-consolidated entities | (1,293 | ) | (14,977 | ) | |||
Distributions from non-consolidated entities in excess of accumulated earnings | 371 | 6,850 | |||||
Increase in deferred leasing costs | (1,671 | ) | (1,230 | ) | |||
Change in restricted cash | (34,216 | ) | (32,193 | ) | |||
Change in real estate deposits, net | 12,229 | (65 | ) | ||||
Net cash provided by (used in) investing activities | 67,286 | (32,981 | ) | ||||
Cash flows from financing activities: | |||||||
Dividends to common and preferred shareholders | (42,836 | ) | (41,182 | ) | |||
Principal amortization payments | (7,913 | ) | (7,120 | ) | |||
Principal payments on debt, excluding normal amortization | — | (8,130 | ) | ||||
Change in revolving credit facility borrowings, net | — | (30,000 | ) | ||||
Payment of developer liabilities | — | (3,851 | ) | ||||
Change in deferred financing costs | (11 | ) | 99 | ||||
Proceeds of mortgages and notes payable | — | 57,500 | |||||
Change in restricted cash | 1,572 | — | |||||
Cash distributions to noncontrolling interests | (1,040 | ) | (689 | ) | |||
Issuance of common shares, net | 16,168 | 3,751 | |||||
Repurchase of common shares | — | (8,973 | ) | ||||
Net cash used in financing activities | (34,060 | ) | (38,595 | ) | |||
Change in cash and cash equivalents | 90,664 | (12,355 | ) | ||||
Cash and cash equivalents, at beginning of period | 86,637 | 93,249 | |||||
Cash and cash equivalents, at end of period | $ | 177,301 | $ | 80,894 |
(1) | The Company and Financial Statement Presentation |
March 31, 2017 | December 31, 2016 | ||||||
Real estate, net | $ | 784,797 | $ | 778,265 | |||
Total assets | $ | 880,176 | $ | 899,801 | |||
Mortgages and notes payable, net | $ | 362,820 | $ | 364,099 | |||
Total liabilities | $ | 384,839 | $ | 395,332 |
Quarter ended March 31, 2016 | ||||||||||
As Originally Reported | Correction | As Adjusted | ||||||||
Total gross revenues | $ | 111,616 | $ | (339 | ) | $ | 111,277 | |||
Net income (loss) | $ | 50,792 | $ | (339 | ) | $ | 50,453 | |||
Net income (loss) attributable to common shareholders | $ | 48,107 | $ | (326 | ) | $ | 47,781 | |||
Net income (loss) attributable to common shareholders - diluted per share | $ | 0.21 | $ | (0.01 | ) | $ | 0.20 |
(2) | Earnings Per Share |
Three months ended March 31, | |||||||
2017 | 2016 | ||||||
BASIC | |||||||
Net income attributable to common shareholders | $ | 40,397 | $ | 47,781 | |||
Weighted-average number of common shares outstanding - basic | 237,179,526 | 232,642,803 | |||||
Net income attributable to common shareholders - per common share basic | $ | 0.17 | 0.21 | ||||
DILUTED | |||||||
Net income attributable to common shareholders - basic | $ | 40,397 | $ | 47,781 | |||
Impact of assumed conversions | (19 | ) | 1,046 | ||||
Net income attributable to common shareholders | $ | 40,378 | $ | 48,827 | |||
Weighted-average common shares outstanding - basic | 237,179,526 | 232,642,803 | |||||
Effect of dilutive securities: | |||||||
Share options | 136,881 | 132,191 | |||||
6.00% Convertible Guaranteed Notes | — | 1,941,237 | |||||
OP Units | 3,771,642 | 3,820,192 | |||||
Nonvested common shares | — | 348,748 | |||||
Weighted-average common shares outstanding - diluted | 241,088,049 | 238,885,171 | |||||
Net income attributable to common shareholders - per common share diluted | $ | 0.17 | $ | 0.20 |
(3) | Investments in Real Estate and Real Estate Under Construction |
Property Type | Location | Acquisition Date | Initial Cost Basis | Lease Expiration | Land and Land Estate | Building and Improvements | Lease in-place Value Intangible | Below Market Lease Intangible | |||||||||||||
Office | Lake Jackson, TX (1) | January 2017 | $ | 70,401 | 10/2036 | $ | 3,078 | $ | 67,323 | $ | — | $ | — | ||||||||
Industrial | New Century, KS | February 2017 | 12,056 | 01/2027 | — | 13,198 | 1,648 | (2,790 | ) | ||||||||||||
Industrial | Lebanon, IN | February 2017 | 36,194 | 01/2024 | 2,100 | 29,443 | 4,651 | — | |||||||||||||
$ | 118,651 | $ | 5,178 | $ | 109,964 | $ | 6,299 | $ | (2,790 | ) |
Location | Property Type | Square Feet (000's) | Maximum Commitment/Estimated Completion Cost | Lease Term (Years) | Estimated Completion/Acquisition Date | GAAP Investment Balance as of 3/31/2017 | |||||||||
Charlotte, NC | Office | 201 | $ | 62,445 | 15 | 2Q 17 | $ | 49,210 | |||||||
Opelika, AL | Industrial | 165 | 37,000 | 25 | 2Q 17 | 19,918 | |||||||||
366 | $ | 99,445 | $ | 69,128 |
Location | Square Feet (000's) | Property Type | Maximum Acquisition Cost | Estimated Acquisition Date | Approximate Lease Term (Yrs) | ||||||||
Grand Prairie, TX | 215 | Industrial | $ | 24,725 | 2Q 17 | 20 | |||||||
Warren, MI (1) | 260 | Industrial | 47,000 | 3Q 17 | 15 | ||||||||
475 | $ | 71,725 |
(4) | Property Dispositions and Real Estate Impairment |
March 31, 2017 | December 31, 2016 | ||||||
Assets: | |||||||
Real estate, at cost | $ | 6,011 | $ | 25,957 | |||
Real estate, intangible assets | 5,589 | 7,789 | |||||
Accumulated depreciation and amortization | (2,319 | ) | (13,346 | ) | |||
Rent receivable - deferred | 799 | 1,715 | |||||
Other assets | — | 1,693 | |||||
$ | 10,080 | $ | 23,808 | ||||
Liabilities: | |||||||
Other | $ | 48 | $ | 191 | |||
$ | 48 | $ | 191 |
(5) | Loans Receivable |
Loan carrying-value(1) | ||||||||||
Loan | 12/31/2016 | Interest Rate | Maturity Date | |||||||
Kennewick, WA(2) | $ | 85,709 | 9.00 | % | 05/2022 | |||||
Oklahoma City, OK(3) | 8,501 | 11.50 | % | 03/2016 | ||||||
$ | 94,210 |
(1) | Loan carrying value includes accrued interest and is net of origination costs, if any. |
(2) | Loan provided for a current pay rate of 8.75%, an accrual rate of 9.0% and a balloon of $87,245 at maturity. During the three months ended March 31, 2017, the loan was assigned to a third party for 94% of its principal balance. The Company recognized a $5,294 loan loss on the transaction. |
(3) | In June 2015, the Company loaned a tenant-in-common $8,420. The loan was secured by the tenant-in-common's interest in an office property, in which the Company had a 40% tenant-in-common interest. The loan was satisfied in full as of March 31, 2017. The Company incurred professional fees of $376 to collect this loan. Such fees are included in general and administrative expenses on the Company's unaudited condensed consolidated statements of operations for the three months ended March 31, 2017. |
(6) | Fair Value Measurements |
Balance | Fair Value Measurements Using | ||||||||||||||
Description | March 31, 2017 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Interest rate swap assets | $ | 550 | $ | — | $ | 550 | $ | — | |||||||
Interest rate swap liabilities | $ | (291 | ) | $ | — | $ | (291 | ) | $ | — |
Balance | Fair Value Measurements Using | ||||||||||||||
Description | December 31, 2016 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Interest rate swap assets | $ | 44 | $ | — | $ | 44 | $ | — | |||||||
Impaired real estate assets* | $ | 15,801 | $ | — | $ | — | $ | 15,801 | |||||||
Interest rate swap liabilities | $ | (1,077 | ) | $ | — | $ | (1,077 | ) | $ | — |
As of March 31, 2017 | As of December 31, 2016 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Assets | |||||||||||||||
Loans Receivable | $ | — | $ | — | $ | 94,210 | $ | 94,911 | |||||||
Liabilities | |||||||||||||||
Debt | $ | 1,853,350 | $ | 1,809,077 | $ | 1,860,598 | $ | 1,814,824 |
(7) | Investment in and Advances to Non-Consolidated Entities |
(8) | Debt |
March 31, 2017 | December 31, 2016 | ||||||
Mortgages and notes payable | $ | 737,260 | $ | 745,173 | |||
Unamortized debt issuance costs | (6,950 | ) | (7,126 | ) | |||
$ | 730,310 | $ | 738,047 |
Issue Date | March 31, 2017 | December 31, 2016 | Interest Rate | Maturity Date | Issue Price | |||||||||||
May 2014 | $ | 250,000 | $ | 250,000 | 4.40 | % | June 2024 | 99.883 | % | |||||||
June 2013 | 250,000 | 250,000 | 4.25 | % | June 2023 | 99.026 | % | |||||||||
500,000 | 500,000 | |||||||||||||||
Unamortized discount | (1,712 | ) | (1,780 | ) | ||||||||||||
Unamortized debt issuance cost | (3,717 | ) | (3,858 | ) | ||||||||||||
$ | 494,571 | $ | 494,362 |
Maturity Date | Current Interest Rate | ||
$400,000 Revolving Credit Facility(1) | August 2019 | LIBOR + 1.00% | |
$250,000 Term Loan(2)(4) | August 2020 | LIBOR + 1.10% | |
$255,000 Term Loan(3)(4) | January 2021 | LIBOR + 1.10% |
(1) | Maturity date can be extended to August 2020 at the Company's option. The interest rate ranges from LIBOR plus 0.85% to 1.55%. At March 31, 2017, the revolving credit facility had no borrowings outstanding, $4,600 of letters of credit and availability of $395,400, subject to covenant compliance. |
(2) | The interest rate ranges from LIBOR plus 0.90% to 1.75%. The Company previously entered into aggregate interest-rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.09% through February 2018 on the $250,000 of outstanding LIBOR-based borrowings. |
(3) | The interest rate ranges from LIBOR plus 0.90% to 1.75%. The Company previously entered into aggregate interest-rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on the $255,000 of outstanding LIBOR-based borrowings. |
(4) | The aggregate unamortized debt issuance costs for the term loans were $3,652 and $3,907 as of March 31, 2017 and December 31, 2016, respectively. |
(9) | Derivatives and Hedging Activities |
Interest Rate Derivative | Number of Instruments | Notional |
Interest Rate Swaps | 10 | $505,000 |
As of March 31, 2017 | As of December 31, 2016 | ||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives designated as hedging instruments | |||||||||||
Interest Rate Swap Asset | Other Assets | $ | 550 | Other Assets | $ | 44 | |||||
Interest Rate Swap Liability | Accounts Payable and Other Liabilities | $ | (291 | ) | Accounts Payable and Other Liabilities | $ | (1,077 | ) |
Derivatives in Cash Flow | Amount of Income (Loss) Recognized in OCI on Derivatives (Effective Portion) March 31, | Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) March 31, | ||||||||||||||||
Hedging Relationships | 2017 | 2016 | 2017 | 2016 | |||||||||||||||
Interest Rate Swaps | $ | 688 | $ | (5,691 | ) | Interest expense | $ | 604 | $ | 1,066 |
(10) | Concentration of Risk |
(11) | Equity |
Three Months ended March 31, | |||
2017 | 2016 | ||
Performance Shares(1) | |||
Shares granted: | |||
Index | 106,706 | 404,466 | |
Peer | 106,705 | 404,463 | |
Grant date fair value per share:(2) | |||
Index | $6.82 | $4.53 | |
Peer | $6.34 | $4.58 | |
Non-Vested Common Shares:(3) | |||
Shares issued | 237,560 | 225,090 | |
Grant date fair value | $2,551 | $1,724 | |
Non-management Board of Trustee grant:(4) | |||
Shares issued | 17,500 | 17,500 | |
Grant date fair value | $190 | $131 |
(1) | The shares vest based on the Company's total shareholder return growth after a three-year measurement period relative to an index and a group of Company peers. Dividends will not be paid on these grants until earned. Once the performance criteria are met and the actual number of shares earned is determined, such shares vest immediately. During the three months ended March 31, 2017, the Company issued an additional 326,929 performance shares, which are subject to shareholder approval. |
(2) | The fair value of grants was determined at the grant date using a Monte Carlo simulation model. |
(3) | The shares vest ratably over a three-year service period. |
(4) | Annual grant and shares vested upon grant. |
Three Months ended March 31, | ||||||||
2017 | 2016 | |||||||
Balance at beginning of period | $ | (1,033 | ) | $ | (1,939 | ) | ||
Other comprehensive income (loss) before reclassifications | 688 | (5,691 | ) | |||||
Amounts of loss reclassified from accumulated other comprehensive income to interest expense | 604 | 1,066 | ||||||
Balance at end of period | $ | 259 | $ | (6,564 | ) |
(12) | Related Party Transactions |
(13) | Commitments and Contingencies |
(14) | Supplemental Disclosure of Statement of Cash Flow Information |
(15) | Subsequent Events |
March 31, 2017 | December 31, 2016 | ||||||
Assets: | |||||||
Real estate, at cost | $ | 716,550 | $ | 731,202 | |||
Real estate - intangible assets | 104,050 | 104,761 | |||||
Investment in real estate under construction | 49,210 | 40,443 | |||||
869,810 | 876,406 | ||||||
Less: accumulated depreciation and amortization | 236,762 | 236,930 | |||||
Real estate, net | 633,048 | 639,476 | |||||
Cash and cash equivalents | 47,027 | 52,031 | |||||
Restricted cash | 1,540 | 1,545 | |||||
Investment in and advances to non-consolidated entities | 5,547 | 5,526 | |||||
Deferred expenses, net | 4,844 | 5,070 | |||||
Rent receivable - current | 486 | 358 | |||||
Rent receivable - deferred | 18,370 | 17,449 | |||||
Related party advances, net | — | 5,967 | |||||
Other assets | 1,763 | 1,182 | |||||
Total assets | $ | 712,625 | $ | 728,604 | |||
Liabilities and Partners' Capital: | |||||||
Liabilities: | |||||||
Mortgages and notes payable, net | $ | 168,914 | $ | 169,212 | |||
Co-borrower debt | 98,593 | 146,404 | |||||
Related party advances, net | 1,910 | — | |||||
Accounts payable and other liabilities | 3,012 | 3,559 | |||||
Accrued interest payable | 503 | 673 | |||||
Deferred revenue - including below market leases, net | 954 | 1,003 | |||||
Distributions payable | 16,916 | 16,916 | |||||
Prepaid rent | 3,775 | 3,214 | |||||
Total liabilities | 294,577 | 340,981 | |||||
Commitments and contingencies | |||||||
Partners' capital | 418,048 | 387,623 | |||||
Total liabilities and partners' capital | $ | 712,625 | $ | 728,604 |
Three months ended March 31, | ||||||||
2017 | 2016 | |||||||
Gross revenues: | ||||||||
Rental | $ | 17,308 | $ | 31,595 | ||||
Tenant reimbursements | 1,973 | 2,505 | ||||||
Total gross revenues | 19,281 | 34,100 | ||||||
Expense applicable to revenues: | ||||||||
Depreciation and amortization | (9,172 | ) | (9,438 | ) | ||||
Property operating | (3,557 | ) | (4,202 | ) | ||||
General and administrative | (1,439 | ) | (2,073 | ) | ||||
Non-operating income | 229 | — | ||||||
Interest and amortization expense | (3,407 | ) | (8,316 | ) | ||||
Impairment charges | (2,497 | ) | — | |||||
Gains on sales of properties | — | 7,839 | ||||||
Income (loss) before provision for income taxes and equity in earnings of non-consolidated entities | (562 | ) | 17,910 | |||||
Provision for income taxes | (8 | ) | (19 | ) | ||||
Equity in earnings of non-consolidated entities | 100 | 136 | ||||||
Net income (loss) | $ | (470 | ) | $ | 18,027 | |||
Net income (loss) per unit | $ | (0.01 | ) | $ | 0.22 | |||
Weighted-average units outstanding | 83,241,396 | 83,241,396 |
Three Months ended March 31, 2017 | Units | Partners' Capital | |||||
Balance December 31, 2016 | 83,241,396 | $ | 387,623 | ||||
Changes in co-borrower debt allocation | — | 47,811 | |||||
Distributions | — | (16,916 | ) | ||||
Net loss | — | (470 | ) | ||||
Balance March 31, 2017 | 83,241,396 | $ | 418,048 | ||||
Three Months ended March 31, 2016 | |||||||
Balance December 31, 2015 | 83,241,396 | $ | 461,657 | ||||
Changes in co-borrower debt allocation | — | 1,532 | |||||
Distributions | — | (16,493 | ) | ||||
Net income | — | 18,027 | |||||
Balance March 31, 2016 | 83,241,396 | $ | 464,723 |
Three Months ended March 31, | |||||||
2017 | 2016 | ||||||
Net cash provided by operating activities | $ | 9,887 | $ | 9,246 | |||
Cash flows from investing activities: | |||||||
Investments in real estate under construction | (8,761 | ) | (5,745 | ) | |||
Capital expenditures | (638 | ) | (228 | ) | |||
Net proceeds from the sale of properties | 3,889 | 29,817 | |||||
Investment in and advances to non-consolidated entities | (175 | ) | — | ||||
Distributions from non-consolidated entities in excess of accumulated earnings | 154 | 176 | |||||
Increase in deferred leasing costs | (1 | ) | (469 | ) | |||
Change in restricted cash | 5 | (29,847 | ) | ||||
Real estate deposits | (2 | ) | — | ||||
Net cash used in investing activities | (5,529 | ) | (6,296 | ) | |||
Cash flows from financing activities: | |||||||
Distributions to partners | (16,916 | ) | (9,617 | ) | |||
Principal amortization payments | (323 | ) | (362 | ) | |||
Increase in deferred financing costs | — | (79 | ) | ||||
Related party advances (payments), net | 7,877 | 787 | |||||
Net cash used in financing activities | (9,362 | ) | (9,271 | ) | |||
Change in cash and cash equivalents | (5,004 | ) | (6,321 | ) | |||
Cash and cash equivalents, at beginning of period | 52,031 | 19,130 | |||||
Cash and cash equivalents, at end of period | $ | 47,027 | $ | 12,809 |
For the quarter ended March 31, 2016 | |||||||||||
As Originally Reported | Correction | As Adjusted | |||||||||
Total gross revenues | $ | 34,439 | $ | (339 | ) | $ | 34,100 | ||||
Net income (loss) | $ | 18,342 | $ | (315 | ) | $ | 18,027 |
Location | Property Type | Square Feet (000's) | Expected Maximum Commitment | Lease Term (Years) | Estimated Completion Date | GAAP Investment Balance as of 3/31/17(1) | |||||||||||
Charlotte, NC | Office | 201 | $ | 62,445 | 15 | 2Q 17 | $ | 49,210 |
As of March 31, 2017 | As of December 31, 2016 | |||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | |||||||||||||
Liabilities | ||||||||||||||||
Debt | $ | 267,507 | $ | 266,383 | $ | 315,616 | $ | 314,509 |
March 31, 2017 | December 31, 2016 | ||||||
Mortgages and notes payable | $ | 169,634 | $ | 169,958 | |||
Unamortized debt issuance costs | (720 | ) | (746 | ) | |||
$ | 168,914 | $ | 169,212 |
Maturity Date | Current Interest Rate | ||
$400,000 Revolving Credit Facility(1) | August 2019 | LIBOR + 1.00% | |
$250,000 Term Loan(2) | August 2020 | LIBOR + 1.10% | |
$255,000 Term Loan(3) | January 2021 | LIBOR + 1.10% |
(1) | Maturity date can be extended to August 2020 at the Lexington's option. The interest rate ranges from LIBOR plus 0.85% to 1.55%. At March 31, 2017, the revolving credit facility had no borrowings outstanding, $4,600 of letters of credit and availability of $395,400 subject to covenant compliance. |
(2) | The interest rate ranges from LIBOR plus 0.90% to 1.75%. Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.09% through February 2018 on the $250,000 of outstanding LIBOR-based borrowings. |
(3) | The interest rate ranges from LIBOR plus 0.90% to 1.75%. Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on the $255,000 of outstanding LIBOR-based borrowings. |
2017 | 2016 | |||||
Preferred Freezer Services of Richland, LLC | 19.0 | % | 10.4 | % | ||
SM Ascott LLC(1) | N/A | 13.7 | % | |||
Tribeca Ascott LLC(1) | N/A | 11.8 | % | |||
AL-Stone Ground Tenant LLC(1) | N/A | 10.8 | % |
(1) | The Partnership net leased these individual land parcels to the tenants under non-cancellable 99-year (original term) leases. The improvements on these parcels are owned by the tenants and consist of three high-rise hotels located in New York, NY. The Partnership sold these assets in September 2016. |
• | Acquired an industrial property for $36.2 million in Lebanon, Indiana. The property is net leased for an approximate seven year term. |
• | Acquired an industrial property for $12.1 million in New Century, Kansas, which is net-leased for a 10-year term. The acquisition price is net of a $2.3 million credit for a future tenant allowance. The property is subject to a ground lease. |
• | Completed the construction of the last building of the Lake Jackson build-to-suit project for $70.4 million. |
• | Disposed of our interests in various consolidated properties for approximately $92.8 million. |
• | Disposed of our 40% tenant-in-common interest in the Oklahoma City, Oklahoma office property for $6.2 million and collected $8.5 million in full satisfaction of the loan receivable owed from the other tenant-in-common. |
• | Sold the Kennewick, Washington loan receivable for $80.4 million. |
• | Issued 1.6 million common shares under our At-The-Market offering program at an average gross price of $10.89 per share. |
Location | Property Type | Square Feet (000's) | Capitalized Cost (millions) | Date Acquired | Approximate Lease Term (Years) | ||||||||
Lake Jackson, TX (1) | Office | 275 | $ | 70.4 | January 2017 | 20 | |||||||
Lebanon, IN | Industrial | 742 | 36.2 | February 2017 | 7 | ||||||||
New Century, KS | Industrial | 447 | 12.1 | February 2017 | 10 | ||||||||
1,464 | $ | 118.7 |
(1) | Completed the construction of the final building of a four-building project. Capitalized cost excludes estimated developer partner payout of approximately $8.0 million. |
Location | Property Type | Square Feet (000's) | Maximum Commitment/Estimated Completion Cost (millions) | Estimated Completion/Acquisition Date | GAAP Investment Balance as of 3/31/2017 (millions) | ||||||||||
Charlotte, NC | Office | 201 | $ | 62.4 | 2Q 2017 | $ | 49.2 | ||||||||
Opelika, AL | Industrial | 165 | 37.0 | 2Q 2017 | 19.9 | ||||||||||
Total: | 366 | $ | 99.4 | $ | 69.1 |
Location | Square Feet (000's) | Property Type | Maximum Acquisition Cost (millions) | Estimated Acquisition Date | Approximate Lease Term (Yrs) | |||||||
Grand Prairie, TX | 215 | Industrial | $ | 24.7 | 2Q 17 | 20 | ||||||
Warren, MI (1) | 260 | Industrial | 47.0 | 3Q 17 | 15 | |||||||
475 | $ | 71.7 |
Issue Date | Face Amount ($000) | Interest Rate | Maturity Date | Issue Price | ||||||||
May 2014 | $ | 250,000 | 4.40 | % | June 2024 | 99.883 | % | |||||
June 2013 | 250,000 | 4.25 | % | June 2023 | 99.026 | % | ||||||
$ | 500,000 |
Maturity Date | Current Interest Rate | ||
$400.0 Million Revolving Credit Facility(1) | August 2019 | LIBOR + 1.00% | |
$250.0 Million Term Loan(2) | August 2020 | LIBOR + 1.10% | |
$255.0 Million Term Loan(3) | January 2021 | LIBOR + 1.10% |
(1) | Maturity date can be extended to August 2020 at our option. The interest rate ranges from LIBOR plus 0.85% to 1.55%. At March 31, 2017, the unsecured revolving credit facility had no borrowings outstanding, $4.6 million of letters of credit, and availability of $395.4 million subject to covenant compliance. |
(2) | The interest rate ranges from LIBOR plus 0.90% to 1.75%. We previously entered into aggregate interest-rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.09% through February 2018 on the $250.0 million of outstanding LIBOR-based borrowings. |
(3) | The interest rate ranges from LIBOR plus 0.90% to 1.75%. We previously entered into aggregate interest-rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on the $255.0 million of outstanding LIBOR-based borrowings. |
2017 | 2016 | ||||||
Total cash base rent | $ | 76,263 | $ | 77,286 | |||
Tenant reimbursements | 6,254 | 6,647 | |||||
Property operating expenses | (10,527 | ) | (9,864 | ) | |||
Same-store NOI | $ | 71,990 | $ | 74,069 |
Three Months ended March 31, | |||||||
2017 | 2016 | ||||||
Net income | $ | 42,220 | $ | 50,453 | |||
Interest and amortization expense | 19,725 | 22,893 | |||||
Provision for income taxes | 422 | 413 | |||||
Depreciation and amortization | 42,891 | 43,127 | |||||
General and administrative | 9,457 | 7,775 | |||||
Transaction costs | 186 | 146 | |||||
Non-operating income | (2,621 | ) | (2,867 | ) | |||
Gains on sales of properties | (34,193 | ) | (17,015 | ) | |||
Impairment charges and loan loss | 7,992 | — | |||||
Debt satisfaction charges, net | — | 162 | |||||
Equity in earnings of non-consolidated entities | (1,910 | ) | (5,742 | ) | |||
Lease termination income | (1,929 | ) | (2,411 | ) | |||
Straight-line adjustments | (2,909 | ) | (11,139 | ) | |||
Lease incentives | 431 | 423 | |||||
Amortization of above/below market leases | 514 | 456 | |||||
NOI | 80,276 | 86,674 | |||||
Less NOI: | |||||||
Disposed of properties | (642 | ) | (11,208 | ) | |||
Acquired properties | (6,945 | ) | (520 | ) | |||
Properties in default | (699 | ) | (877 | ) | |||
Same-Store NOI | $ | 71,990 | $ | 74,069 |
Three Months ended March 31, | |||||||||||
2017 | 2016 | ||||||||||
FUNDS FROM OPERATIONS: | |||||||||||
Basic and Diluted: | |||||||||||
Net income attributable to common shareholders | $ | 40,397 | $ | 47,781 | |||||||
Adjustments: | |||||||||||
Depreciation and amortization | 41,542 | 41,193 | |||||||||
Impairment charges - real estate | 2,698 | — | |||||||||
Noncontrolling interests - OP units | (19 | ) | 735 | ||||||||
Amortization of leasing commissions | 1,349 | 1,934 | |||||||||
Joint venture and noncontrolling interest adjustment | 340 | 236 | |||||||||
Gains on sales of properties, including non-consolidated entities | (35,645 | ) | (22,343 | ) | |||||||
FFO available to common shareholders and unitholders - basic | 50,662 | 69,536 | |||||||||
Preferred dividends | 1,572 | 1,572 | |||||||||
Interest and amortization on 6.00% Convertible Guaranteed Notes | — | 252 | |||||||||
Amount allocated to participating securities | 71 | 90 | |||||||||
FFO available to all equityholders and unitholders - diluted | 52,305 | 71,450 | |||||||||
Debt satisfaction charges, net | — | 162 | |||||||||
Loan loss | 5,294 | — | |||||||||
Transaction costs | 186 | 146 | |||||||||
Adjusted Company FFO available to all equityholders and unitholders - diluted | $ | 57,785 | $ | 71,758 |
Per Common Share and Unit Amounts | |||||||||
Basic: | |||||||||
FFO | $ | 0.21 | $ | 0.29 | |||||
Diluted: | |||||||||
FFO | $ | 0.21 | $ | 0.29 | |||||
Adjusted Company FFO | $ | 0.23 | $ | 0.29 |
Three Months ended March 31, | |||||||||
2017 | 2016 | ||||||||
Weighted-Average Common Shares: | |||||||||
Basic: | |||||||||
Weighted-average common shares outstanding - basic EPS | 237,179,526 | 232,642,803 | |||||||
Operating partnership units(1) | 3,771,642 | 3,820,192 | |||||||
Weighted-average common shares outstanding - basic FFO | 240,951,168 | 236,462,995 | |||||||
Diluted: | |||||||||
Weighted-average common shares outstanding - diluted EPS | 241,088,049 | 238,885,171 | |||||||
Unvested share-based payment awards | 691,936 | — | |||||||
Preferred shares - Series C | 4,710,570 | 4,710,570 | |||||||
Weighted-average common shares outstanding - diluted FFO | 246,490,555 | 243,595,741 |
ITEM 1. | Legal Proceedings. |
ITEM 1A. | Risk Factors. |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Issuer Purchases of Equity Securities | |||||||||||||
Period | (a) Total Number of Shares/Units Purchased | (b) Average Price Paid Per Share/ Unit | (c) Total Number of Shares/Units Purchased as Part of Publicly Announced Plans or Programs(1) | (d) Maximum Number of Shares/Units That May Yet Be Purchased Under the Plans or Programs(1) | |||||||||
January 1 - 31, 2017 | — | $ | — | — | 6,599,088 | ||||||||
February 1 - 28, 2017 | — | $ | — | — | 6,599,088 | ||||||||
March 1 - 31, 2017 | — | $ | — | — | 6,599,088 | ||||||||
First quarter 2017 | — | $ | — | — | 6,599,088 |
(1) | Share repurchase authorization announced on July 2, 2015, which has no expiration date. |
ITEM 3. | Defaults Upon Senior Securities - not applicable. |
ITEM 4. | Mine Safety Disclosures - not applicable. |
ITEM 5. | Other Information - not applicable. |
ITEM 6. | Exhibits. |
Exhibit No. | Description | |||
3.1 | — | Articles of Merger and Amended and Restated Declaration of Trust of the Company, dated December 31, 2006 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed January 8, 2007 (the “01/08/07 8-K”))(1) | ||
3.2 | — | Articles Supplementary Relating to the Reclassification of 8.05% Series B Cumulative Redeemable Preferred Stock, par value $0.0001 per share, and 7.55% Series D Cumulative Redeemable Preferred Stock, par value $0.0001 per share (filed as Exhibit 3.4 to the Company's Current Report on Form 8-K filed November 21, 2013)(1) | ||
3.3 | — | Amended and Restated By-laws of the Company (filed as Exhibit 3.2 to the 01/08/07 8-K)(1) | ||
3.4 | — | First Amendment to Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 20, 2009)(1) | ||
3.5 | __ | Second Amendment to Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed April 3, 2017) (1) | ||
3.6 | — | Agreement and Plan of Merger dated as of December 23, 2013, by and among Lepercq Corporate Income Fund L.P. (“LCIF”) and Lepercq Corporate Income Fund II L.P. (“LCIF II”) (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed December 24, 2013)(1) | ||
3.7 | — | Sixth Amended and Restated Agreement of Limited Partnership of LCIF, dated as of December 30, 2013 (filed as Exhibit 3.25 to the Company's Annual Report on Form 10-K filed February 26, 2014)(1) | ||
4.1 | — | Specimen of Common Shares Certificate of the Company (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006)(1) | ||
4.2 | — | Form of 6.50% Series C Cumulative Convertible Preferred Stock certificate (filed as Exhibit 4.1 to the Company's Registration Statement on Form 8A filed December 8, 2004)(1) | ||
4.3 | — | Indenture, dated as of January 29, 2007, among the Company (as successor by merger), the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 29, 2007 (the “01/29/07 8-K”))(1) | ||
4.4 | — | Amended and Restated Trust Agreement, dated March 21, 2007, among the Company, The Bank of New York Trust Company, National Association, The Bank of New York (Delaware), the Administrative Trustees (as named therein) and the several holders of the Preferred Securities from time to time (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 27, 2007 (the “03/27/2007 8-K”))(1) | ||
4.5 | — | Junior Subordinated Indenture, dated as of March 21, 2007, between Lexington Realty Trust and The Bank of New York Trust Company, National Association (filed as Exhibit 4.2 to the 03/27/07 8-K)(1) | ||
4.6 | — | Fourth Supplemental Indenture, dated as of December 31, 2008, among the Company, the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 2, 2009)(1) | ||
4.7 | — | Fifth Supplemental Indenture, dated as of June 9, 2009, among the Company (as successor to the MLP), the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed June 15, 2009)(1) | ||
4.8 | — | Sixth Supplemental Indenture, dated as of January 26, 2010 among the Company, the guarantors named therein and U.S. Bank National Association, as trustee, including the Form of 6.00% Convertible Guaranteed Notes due 2030 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 26, 2010)(1) | ||
4.9 | — | Seventh Supplemental Indenture, dated as of September 28, 2012, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed October 3, 2012)(1) | ||
4.10 | — | Eighth Supplemental Indenture, dated as of February 13, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 13, 2013 (the “02/13/13 8-K”))(1) | ||
4.11 | — | Ninth Supplemental Indenture, dated as of May 6, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 8, 2013)(1) | ||
4.12 | — | Tenth Supplemental Indenture, dated as of June 13, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to the Company's Current Report on Form 8-K filed on June 13, 2013 (“06/13/13 8-K”))(1) |
4.13 | — | Tenth Supplemental Indenture, dated as of September 30, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on October 3, 2013)(1) | ||
4.14 | — | Indenture, dated as of June 10, 2013, among the Company, the subsidiary guarantors named therein, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the 06/13/2013 8-K))(1) | ||
4.15 | — | First Supplemental Indenture, dated as of June 13, 2013, among the Company, the subsidiary guarantors named therein, and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to the 06/13/2013 8-K)(1) | ||
4.16 | — | Indenture dated as of May 9, 2014, among the Company, LCIF and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 13, 2014)(1) | ||
4.17 | — | First Supplemental Indenture, dated as of May 20, 2014, among the Company, LCIF and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 20, 2014)(1) | ||
31.1 | — | Certification pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2) | ||
31.2 | — | Certification pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2) | ||
31.3 | — | Certification pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2) | ||
31.4 | — | Certification pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2) | ||
32.1 | — | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3) | ||
32.2 | — | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3) | ||
32.3 | — | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3) | ||
32.4 | — | Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3) | ||
101.INS | — | XBRL Instance Document (2, 5) | ||
101.SCH | — | XBRL Taxonomy Extension Schema (2, 5) | ||
101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase (2, 5) | ||
101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document (2, 5) | ||
101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document (2, 5) | ||
101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document (2, 5) |
(1) | Incorporated by reference. |
(2) | Filed herewith. |
(3) | Furnished herewith. This exhibit shall not be deemed "filed" for purposes of Section 11 or 12 of the Securities Act of 1933, as amended (the "Securities Act"), or Section 18 of the Securities Exchanges Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of those sections, and shall not be part of any registration statement to which it may relate, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing or document. |
(4) | Management contract or compensatory plan or arrangement. |
(5) | The following materials from this Quarterly Report on Form 10-Q for the period ended March 31, 2017 are formatted in XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets of the Company; (ii) Unaudited Condensed Consolidated Statements of Operations of the Company; (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) of the Company; (iv) Unaudited Condensed Consolidated Statements of Changes in Equity of the Company; (v) Unaudited Condensed Consolidated Statements of Cash Flows of the Company; (vi) Notes to Unaudited Condensed Consolidated Financial Statements of the Company, detailed tagged; (vii) Unaudited Condensed Consolidated Balance Sheets of LCIF; (viii) Unaudited Condensed Consolidated Statements of Operations of LCIF; (ix) Unaudited Condensed Consolidated Statements of Changes in Partners' Capital of LCIF; (x) Unaudited Condensed Consolidated Statements of Cash Flows of LCIF; and (xi) Notes to Unaudited Condensed Consolidated Financial Statements of LCIF, detailed tagged. |
Lexington Realty Trust | |||
Date: | May 9, 2017 | By: | /s/ T. Wilson Eglin |
T. Wilson Eglin | |||
Chief Executive Officer and President (principal executive officer) | |||
Date: | May 9, 2017 | By: | /s/ Patrick Carroll |
Patrick Carroll | |||
Chief Financial Officer, Executive Vice President and Treasurer (principal financial officer) |
Lepercq Corporate Income Fund L.P. | |||
By: | Lex GP-1 Trust, its General Partner | ||
Date: | May 9, 2017 | By: | /s/ T. Wilson Eglin |
T. Wilson Eglin | |||
President (principal executive officer) | |||
Date: | May 9, 2017 | By: | /s/ Patrick Carroll |
Patrick Carroll | |||
Vice President and Treasurer (principal financial officer) |
1. | I have reviewed this report on Form 10-Q of Lexington Realty Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
May 9, 2017 |
/s/ T. Wilson Eglin |
T. Wilson Eglin Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Lexington Realty Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
May 9, 2017 |
/s/ Patrick Carroll |
Patrick Carroll |
Chief Financial Officer |
1. | I have reviewed this report on Form 10-Q of Lepercq Corporate Income Fund L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
May 9, 2017 |
/s/ T. Wilson Eglin |
T. Wilson Eglin President (principal executive officer) of Lex GP-1 Trust, the general partner of Lepercq Corporate Income Fund L.P. |
1. | I have reviewed this report on Form 10-Q of Lepercq Corporate Income Fund L.P.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
May 9, 2017 |
/s/ Patrick Carroll |
Patrick Carroll Vice President and Treasurer (principal financial officer) of Lex GP-1 Trust, the general partner of Lepercq Corporate Income Fund L.P. |
/s/ T. Wilson Eglin |
T. Wilson Eglin Chief Executive Officer |
May 9, 2017 |
/s/ Patrick Carroll |
Patrick Carroll |
Chief Financial Officer |
May 9, 2017 |
/s/ T. Wilson Eglin |
T. Wilson Eglin President (principal executive officer) of Lex GP-1 Trust, the general partner of Lepercq Corporate Income Fund L.P. |
May 9, 2017 |
/s/ Patrick Carroll |
Patrick Carroll Vice President and Treasurer (principal financial officer) of Lex GP-1 Trust, the general partner of Lepercq Corporate Income Fund L.P. |
May 9, 2017 |
Document and Entity Information - shares |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
May 08, 2017 |
|
Entity Information [Line Items] | ||
Entity Registrant Name | LEXINGTON REALTY TRUST | |
Entity Central Index Key | 0000910108 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 240,400,480 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period Ended Date | Mar. 31, 2017 | |
LCIF [Member] | ||
Entity Information [Line Items] | ||
Entity Registrant Name | LEPERCQ CORPORATE INCOME FUND L.P. | |
Entity Central Index Key | 0000790877 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 0 | |
Document Fiscal Year Focus | 2017 | |
Document Fiscal Period Focus | Q1 | |
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period Ended Date | Mar. 31, 2017 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Equity: | ||
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred shares, authorized shares (in shares) | 100,000,000 | 100,000,000 |
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common shares, authorized shares (in shares) | 400,000,000 | 400,000,000 |
Common shares, shares issued (in shares) | 240,394,082 | 238,037,177 |
Common shares, outstanding (in shares) | 240,394,082 | 238,037,177 |
Preferred shares, liquidation preference | $ 96,770 | $ 96,770 |
Preferred shares, shares issued (in shares) | 1,935,400 | 1,935,400 |
Preferred shares, shares outstanding (in shares) | 1,935,400 | 1,935,400 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 42,220 | $ 50,453 |
Other comprehensive income (loss): | ||
Change in unrealized gain (loss) on interest rate swaps, net | 1,292 | (4,625) |
Other comprehensive income (loss) | 1,292 | (4,625) |
Comprehensive income | 43,512 | 45,828 |
Comprehensive income attributable to noncontrolling interests | (180) | (1,010) |
Comprehensive income attributable to Lexington Realty Trust shareholders | $ 43,332 | $ 44,818 |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) - USD ($) $ in Thousands |
Total |
Preferred Shares [Member] |
Common Stock [Member] |
Additional Paid-in-Capital [Member] |
Accumulated Distributions in Excess of Net Income [Member] |
Accumulated Other Comprehensive Income (Loss) [Member] |
Non-controlling Interests [Member] |
---|---|---|---|---|---|---|---|
Beginning Balance at Dec. 31, 2015 | $ 1,462,531 | $ 94,016 | $ 23 | $ 2,776,837 | $ (1,428,908) | $ (1,939) | $ 22,502 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Repurchase of common shares | (8,973) | (8,973) | |||||
Issuance of common shares and deferred compensation amortization, net | 5,925 | 1 | 5,924 | ||||
Dividends/distributions | (42,104) | (41,415) | (689) | ||||
Net income | 50,453 | 49,443 | 1,010 | ||||
Other comprehensive income | (4,625) | (4,625) | |||||
Ending Balance at Mar. 31, 2016 | 1,463,207 | 94,016 | 24 | 2,773,788 | (1,420,880) | (6,564) | 22,823 |
Beginning Balance at Dec. 31, 2016 | 1,412,491 | 94,016 | 24 | 2,800,736 | (1,500,966) | (1,033) | 19,714 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of common shares and deferred compensation amortization, net | 18,322 | 18,322 | |||||
Dividends/distributions | (44,331) | (43,291) | (1,040) | ||||
Net income | 42,220 | 42,040 | 180 | ||||
Other comprehensive income | 1,292 | 1,292 | |||||
Ending Balance at Mar. 31, 2017 | $ 1,429,994 | $ 94,016 | $ 24 | $ 2,819,058 | $ (1,502,217) | $ 259 | $ 18,854 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (Unaudited) Statement - USD ($) $ in Thousands |
Total |
LCIF [Member] |
---|---|---|
Beginning balance (in units) at Dec. 31, 2015 | 83,241,396 | |
Beginning balance at Dec. 31, 2015 | $ 461,657 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||
Changes in co-borrower debt allocation | 1,532 | |
Distributions | (16,493) | |
Net income | $ 50,453 | $ 18,027 |
Ending balance (in units) at Mar. 31, 2016 | 83,241,396 | |
Ending balance at Mar. 31, 2016 | $ 464,723 | |
Beginning balance (in units) at Dec. 31, 2016 | 83,241,396 | |
Beginning balance at Dec. 31, 2016 | $ 387,623 | |
Increase (Decrease) in Partners' Capital [Roll Forward] | ||
Changes in co-borrower debt allocation | 47,811 | |
Distributions | (16,916) | |
Net income | $ 42,220 | $ (470) |
Ending balance (in units) at Mar. 31, 2017 | 3,350,000 | 83,241,396 |
Ending balance at Mar. 31, 2017 | $ 418,048 |
The Company and Financial Statement Presentation |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company and Financial Statement Presentation | The Company and Financial Statement Presentation Lexington Realty Trust (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Company”) is a Maryland real estate investment trust (“REIT”) that owns a diversified portfolio of equity and, from time to time, debt investments in single-tenant commercial properties. As of March 31, 2017, the Company had ownership interests in approximately 190 consolidated real estate properties, located in 39 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries. As of March 31, 2017, the Company operated in a manner intended to enable it to continue to qualify as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain activities historically prohibited for REITs in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS are subject to federal income taxes on the income from these activities. The Company conducts its operations either directly or indirectly through (1) property owner subsidiaries and lender subsidiaries, which are single purpose entities, (2) an operating partnership, Lepercq Corporate Income Fund L.P. (“LCIF”), in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests, (3) a wholly-owned TRS, and (4) investments in joint ventures. References to “OP units” refer to units of limited partner interests in LCIF. Property owner subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan agreements secured by properties in which the Company has an interest and lender subsidiaries are lenders under loan agreements where the Company made an investment in a loan asset, but in all cases are separate and distinct legal entities. Each property owner subsidiary is a separate legal entity that maintains separate books and records. The assets and credit of each property owner subsidiary 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 property owner subsidiary or any other 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 or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors. The financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three months ended March 31, 2017 have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 1, 2017 (“Annual Report”). Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates the wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP. The Company determined that it was the primary beneficiary of certain VIEs as it has a controlling financial interest in these entities, including LCIF, in which the Company has an approximate 96% interest. See the unaudited condensed consolidated financial statements of LCIF included within this Quarterly Report. The Company has a joint venture limited partnership with a developer which is a consolidated VIE. In January 2017, the joint venture completed the development of an office campus in Lake Jackson, Texas. The Company currently has a 100% interest in the joint venture; however, the developer has certain protective rights, and, upon project close-out, the developer will be credited with a notional capital account for a profit interest and certain cost savings. As of March 31, 2017, the joint venture had $147,144 in real estate, net. The assets of each VIE are only available to satisfy such VIE's respective liabilities. As of March 31, 2017, the VIEs' mortgages and notes payable are non-recourse to the Company. Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016:
Use of Estimates. Management has made a number of significant estimates and assumptions to prepare these unaudited condensed consolidated financial statements in conformity with GAAP, including, among others, those relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets, loans receivable and equity method investments, the valuation of derivative financial instruments, the valuation of compensation plans and the useful lives of long-lived assets. Actual results could differ materially from those estimates. Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, as amended (“Topic 820”), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements. Acquisition, Development and Construction Arrangements. The Company evaluates loans receivable where the Company participates in residual profits through loan provisions or other contracts to ascertain whether the Company has the same risks and rewards as an owner or a joint venture partner. Where the Company concludes that such arrangements are more appropriately treated as an investment in real estate, the Company reflects such loan receivable as an equity investment in real estate under construction in the unaudited condensed consolidated balance sheets. In these cases, no interest income is recorded on the loan receivable and the Company capitalizes interest during the construction period. In arrangements where the Company engages a developer to construct a property or provides funds to a tenant to develop a property, the Company will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period. Revision to Previously Issued Financial Statements. During the quarter ended December 31, 2016, the Company corrected an immaterial error in the treatment of a lease termination payment received in the quarter ended June 30, 2016 in the amount of $7,685. The lease termination payment was originally amortized over the life of the new tenant lease that necessitated the lease termination. As corrected, the payment was fully recognized in the Company's total gross revenues in the quarter ended June 30, 2016. The Company concluded that the error noted above was not material to any historical periods presented. However, in order to correctly present the treatment of the lease termination payment, management elected to revise previously issued financial statements in the Company's next subsequent periodic filing that included such financial statements. The following table shows the affected line items within the Company's unaudited condensed consolidated financial statements:
Recently Issued Accounting Guidance. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the guidance for revenue recognition to eliminate the industry-specific revenue recognition guidance and replace it with a principle based approach for determining revenue recognition. Leases are specifically excluded from this ASU and will be governed by the applicable lease codifications; however, this update may have implications in certain variable payment terms included in lease agreements and in sale and leaseback transactions. The effective date of the new guidance was updated by ASU 2015-14 and is effective for reporting periods beginning after December 15, 2017. The Company will adopt ASU 2014-09 effective January 1, 2018 and anticipates using the modified retrospective with cumulative-effective transition method. The Company is identifying applicable revenue streams and continues to evaluate the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date that have lease terms of more than 12 months. The accounting applied to lessors under this new guidance is largely unchanged from prior guidance. Lessors in most cases will continue to record operating leases as operating leases and recognize lease income from those leases generally on a straight-line basis over the lease term. The ASU is expected to result in the recognition of a right-to-use asset and related liability to account for the Company's future obligations under its ground lease arrangements for which the Company is the lessee. Additionally, the new ASU will require that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements; with early adoption permitted. The Company continues to evaluate the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation-Improvements to Employee Share-Based Payment Accounting (Topic 718), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this new guidance on January 1, 2017. This new guidance did not have a material impact on the Company's unaudited condensed consolidated financial statements. The Company has made an accounting policy election to account for share-based award forfeitures in compensation costs when they occur. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those years; however early adoption is permitted. The Company does not believe this guidance will have a material impact on its unaudited condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies guidance on the classification and presentation of changes in restricted cash. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and will be applied retrospectively to all periods presented. Upon adoption, restricted cash balances will be included along with cash and cash equivalents as of the end of the period and beginning of period, respectively, in the Company's unaudited condensed consolidated statement of cash flows for all periods presented. Upon adoption, separate line items showing changes in restricted cash balances will be eliminated from the Company's unaudited condensed consolidated statement of cash flows. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business and thus will be treated as asset acquisitions. Acquisition costs for those acquisitions that are not businesses will be capitalized rather than expensed. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20), which requires that all entities account for the derecognition of a business in accordance with ASC 810, including instances in which the business is considered in-substance real estate. The ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early application is permitted. The Company is currently evaluating the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company and Financial Statement Presentation | The Partnership and Financial Statement Presentation Lepercq Corporate Income Fund L.P. (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Partnership”) was organized in 1986 as a limited partnership under the Delaware Revised Uniform Limited Partnership Act. The Partnership's sole general partner, Lex GP-1 Trust (the “General Partner”), is a wholly-owned subsidiary of Lexington Realty Trust (“Lexington”). The Partnership serves as an operating partnership subsidiary for Lexington. As of March 31, 2017, Lexington, through Lex LP-1 Trust, a wholly-owned subsidiary, and the General Partner, owned approximately 96% of the outstanding units of the Partnership. As of March 31, 2017, the Partnership had ownership interests in 32 consolidated real estate properties, located in 21 states. The properties in which the Partnership has an interest are leased to tenants in various industries. The assets and credit of each property owner subsidiary of the Partnership with a property subject to a mortgage loan are not available to creditors to satisfy the debt and the other obligations of any other person, including any other property owner subsidiary of the Partnership or any other 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 or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors. The financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three months ended March 31, 2017 have been prepared by the Partnership in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Partnership's audited consolidated financial statements and notes thereto included in the Partnership's Annual Report on Form 10-K for the year ended December 31, 2016 filed with the SEC on March 1, 2017 (“Annual Report”). Basis of Presentation and Consolidation. The Partnership's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Partnership and its consolidated subsidiaries. The Partnership consolidates its wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Partnership is the primary beneficiary of a variable interest entity (“VIE”). Entities that the Partnership does not control and entities that are VIEs in which the Partnership is not the primary beneficiary are accounted for under appropriate GAAP. Earnings Per Unit. Net income (loss) per unit is computed by dividing net income (loss) by the weighted-average number of units outstanding during the period. There are no potential dilutive securities. Unit Redemptions. The Partnership's limited partner units that are issued and outstanding, other than those held by Lexington, are currently redeemable at certain times, only at the option of the holders, for shares of beneficial interests classified as common stock of Lexington, par value $0.0001 per share ("common shares"), on a one to approximately 1.13 basis, subject to future adjustments. These units are not mandatorily redeemable by the Partnership. As of March 31, 2017, Lexington's common shares had a closing price of $9.98 per share. The estimated fair value of these units was $37,641, assuming all outstanding limited partner units not held by Lexington were redeemed on such date. Allocation of Overhead Expenses. The Partnership does not pay a fee to the General Partner for the day-to-day management of the Partnership. Certain expenses incurred by the General Partner and its affiliates, including Lexington, such as corporate-level interest, amortization of deferred loan costs, payroll and general and administrative expenses are allocated to the Partnership and reimbursed to the General Partner in accordance with the Partnership's partnership agreement. The allocation is based upon gross rental revenues. Distributions; Allocations of Income and Loss. As provided in the Partnership's partnership agreement, distributions and income and loss for financial reporting purposes are allocated to the partners based on their ownership of units. Special allocation rules included in the partnership agreement affect the allocation of taxable income and loss. The Partnership paid or accrued gross distributions of $16,916 ($0.20 per weighted-average unit) and $16,493 ($0.20 per weighted-average unit) to its partners during the three months ended March 31, 2017 and 2016, respectively. Certain units owned indirectly by Lexington are entitled to aggregate annual distributions of $3.25 per unit. Use of Estimates. The Partnership has made a number of significant estimates and assumptions to prepare these unaudited condensed consolidated financial statements in conformity with GAAP, including, among others, relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. These estimates and assumptions are based on management's best estimates and judgment. The Partnership evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors. The Partnership adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments and the useful lives of long-lived assets. Actual results could differ materially from those estimates. Fair Value Measurements. The Partnership follows the guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“Topic 820”), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Partnership utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. Acquisition, Development and Construction Arrangements. The Partnership evaluates loans receivable where the Partnership participates in residual profits through loan provisions or other contracts to ascertain whether the Partnership has the same risks and rewards as an owner or a joint venture partner. Where the Partnership concludes that such arrangements are more appropriately treated as an investment in real estate, the Partnership reflects such loan receivable as an equity investment in real estate under construction in the unaudited condensed consolidated balance sheets. In these cases, no interest income is recorded on the loan receivable and the Partnership records capitalized interest during the construction period. In arrangements where the Partnership engages a developer to construct a property or provide funds to a tenant to develop a property, the Partnership will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period. Co-borrower Debt. The Partnership is subject to ASC 405-40, which requires recognition of such obligations as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. Revision to Previously Issued Financial Statements. During the quarter ended December 31, 2016, the Partnership corrected an immaterial error in the treatment of a lease termination payment received in the quarter of June 30, 2016 in the amount of $7,685. The lease termination payment was originally amortized over the life of the new tenant lease that necessitated the lease termination. As corrected, the payment was fully recognized in the Partnership's total gross revenues in the quarter ended June 30, 2016. The Partnership concluded that the error noted above was not material to any historical periods presented. However, in order to correctly present the treatment of the lease termination payment, management elected to revise previously issued financial statements in the Partnership's next subsequent periodic filing that included such financial statements. The following table shows the affected line items within the Partnership's unaudited condensed consolidated financial statements:
Recently Issued Accounting Guidance. In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the guidance for revenue recognition to eliminate the industry-specific revenue recognition guidance and replace it with a principle based approach for determining revenue recognition. The effective date of the new guidance was updated by ASU 2015-14 and is effective for reporting periods beginning after December 15, 2017. The Partnership will adopt ASU 2014-09 effective January 1, 2018 and anticipates using the modified retrospective with cumulative-effective transition method. The Partnership is identifying applicable revenue streams and continues to evaluate the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and have lease terms of more than 12 months. The accounting applied to lessors under this new guidance is largely unchanged from prior guidance. Lessors in most cases will continue to record operating leases as operating leases and recognize lease income from these leases generally on a straight-line basis over the lease term. The ASU is expected to result in the recognition of a right-to-use asset and related liability to account for our future obligations under our ground lease arrangements for which the Partnership is the lessee. Additionally, the new ASU will require that the Partnership capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Partnership continues to evaluate the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those years; however early adoption is permitted. The Partnership does not believe this guidance will have a material impact on its unaudited condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies guidance on the classification and presentation of changes in restricted cash. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and will be applied retrospectively to all periods presented. Upon adoption, restricted cash balances will be included along with cash and cash equivalents as of the end of the period and beginning of period, respectively, in the Partnership's unaudited condensed consolidated statement of cash flows for all periods presented. Upon adoption, separate line items showing changes in restricted cash balances will be eliminated from the Partnership's unaudited condensed consolidated statement of cash flows. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Partnership expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business and thus will be treated as asset acquisitions. Acquisition costs for these acquisitions that are not businesses will be capitalized rather than expensed. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20), which requires that all entities account for the derecognition of a business in accordance with ASC 810, including instances in which the business is considered in-substance real estate. The ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early application is permitted. The Partnership is currently evaluating the impact of the adoption of the new guidance on its consolidated financial statements. |
Earnings Per Share |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share A portion of the Company's non-vested share-based payment awards are considered participating securities and as such, the Company is required to use the two-class method for the computation of basic and diluted earnings per share. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The non-vested share-based payment awards are not allocated losses as the awards do not have a contractual obligation to share in losses of the Company. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three months ended March 31, 2017 and 2016:
For per common share amounts, all incremental shares are considered anti-dilutive for periods that have a loss from continuing operations attributable to common shareholders. In addition, other common share equivalents may be anti-dilutive in certain periods. |
Investments in Real Estate and Real Estate Under Construction |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Real Estate and Real Estate Under Construction | Investments in Real Estate and Real Estate Under Construction The Company completed the following acquisition and build-to-suit arrangements during the three months ended March 31, 2017:
(1) Completed the construction of the final building of a four-building project. Initial basis excludes estimated developer partner payout of approximately $8,000. The Company recognized aggregate transaction costs of $186 and $146 for the three months ended March 31, 2017 and 2016, respectively, which are included as property operating expenses within the Company's unaudited condensed consolidated statements of operations. The Company is engaged in various forms of build-to-suit development activities. The Company, through lender subsidiaries and property owner subsidiaries, may enter into the following acquisition, development and construction arrangements: (1) lend funds to construct a build-to-suit project subject to a single-tenant lease with an agreement to purchase the property upon completion of construction and commencement of the single-tenant lease, (2) hire a developer to construct a built-to-suit project on owned property leased to a single tenant, (3) fund the construction of a build-to-suit project on owned property pursuant to the terms of a single-tenant lease or (4) enter into a purchase and sale agreement with a developer to acquire a single-tenant build-to-suit property upon completion of construction and commencement of a single-tenant lease. As of March 31, 2017, the Company had the following development arrangements outstanding:
As of March 31, 2017 and December 31, 2016, the Company's aggregate investment in development arrangements was $69,128 and $106,652, respectively, which included $1,683 and $3,442 of capitalized interest, respectively, and is presented as investments in real estate under construction in the accompanying unaudited condensed consolidated balance sheets. In addition, as of March 31, 2017, the Company had the following forward purchase commitments:
(1) The Company issued a $4,600 letter of credit to secure its obligation to purchase the property. The Company can give no assurances that any of these development arrangements or forward purchase commitments will be consummated or, if consummated, will perform to the Company's expectations. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Real Estate and Real Estate Under Construction | Real Estate and Real Estate Under Construction As of March 31, 2017, the Partnership had the following development arrangement outstanding:
(1) Includes $1,455 of capitalized interest. The Partnership can give no assurances that this development arrangement will be consummated or, if consummated, will perform to the Partnership's expectations. During the three months ended March 31, 2017, the Partnership sold its interest in a vacant office property for a gross sale price of $4,130 and recognized an impairment charge of $2,497. During the three months ended March 31, 2016, the Partnership sold its interest in a property for a gross sale price of $30,050 and a vacant land parcel for $400. The Partnership recognized gains on sales of properties of $7,839 during the three months ended March 31, 2016. The Partnership assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability and the potential sale or transfer of the property in the near future. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value. Other than the property sold during the three months ended March 31, 2017, no properties were impaired during the three months ended March 31, 2017 and 2016. |
Property Dispositions, and Real Estate Impairment |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property Dispositions, Discontinued Operations and Real Estate Impairment | Property Dispositions and Real Estate Impairment During the three months ended March 31, 2017, the Company sold its interests in various properties for an aggregate gross sales price of $92,756. During the three months ended March 31, 2016, the Company disposed of its interest in various properties for an aggregate gross sales price of $58,225 and disposed of its interest in a vacant parcel of land for a gross sales price of $400. During the three months ended March 31, 2017 and 2016, the Company recognized aggregate gains on sales of properties of $34,193 and $17,015, respectively. In addition, during the three months ended March 31, 2016, the Company recognized a debt satisfaction charge of $162 relating to a sold property. During the three months ended March 31, 2017, the Company recognized aggregate impairment charges of $2,698 relating to properties that were sold. As of March 31, 2017 and December 31, 2016, the Company had one property and two properties, respectively, classified as held for sale. Assets and liabilities of held for sale properties as of March 31, 2017 and December 31, 2016 consisted of the following:
The Company assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability and the potential sale or transfer of the property in the near future. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value. Other than properties sold during the three months ended March 31, 2017, no properties were impaired during the three months ended March 31, 2017 and 2016. |
Loans Receivable |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Loans Receivable | Loans Receivable As of March 31, 2017, the Company's loans receivable were fully satisfied. As of December 31, 2016, the Company's loans receivable were comprised primarily of mortgage loans on real estate. The following is a summary of the Company's loans receivable as of December 31, 2016:
|
Fair Value Measurements |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of March 31, 2017 and December 31, 2016, aggregated by the level in the fair value hierarchy within which those measurements fall:
*Represents a non-recurring fair value measurement. The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments as of March 31, 2017 and December 31, 2016.
The majority of the inputs used to value the Company's interest rate swaps fall within Level 2 of the fair value hierarchy, such as observable market interest rate curves; however, the credit valuation associated with the interest rate swaps utilizes Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of March 31, 2017 and December 31, 2016, the Company determined that the credit valuation adjustment relative to the overall fair value of the interest rate swaps was not significant. As a result, the interest rate swaps have been classified in Level 2 of the fair value hierarchy. The Company estimates the fair value of its real estate assets, including non-consolidated real estate assets, by using income and market valuation techniques. The Company may estimate fair values using market information such as broker opinions of value, recent sale offers or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations. To the extent the Company under estimates forecasted cash outflows (tenant improvements, lease commissions and operating costs) or over estimates forecasted cash inflows (rental revenue rates), the estimated fair value of its real estate assets could be overstated. The Company estimated the fair values of its loans receivable utilizing Level 3 inputs by using a discounted cash flow analysis consisting of scheduled cash flows and discount rate estimates to approximate those that a willing buyer and seller might use and/or the estimated value of the underlying collateral. The fair value of the Company's debt is primarily estimated utilizing Level 3 inputs by using a discounted cash flow analysis, based upon estimates of market interest rates, except for the Company's senior notes payable. The Company determines the fair value of its senior notes payable using market prices. The inputs used in determining the fair value of these notes are categorized as Level 1 due to the fact that the Company uses quoted market rates to value these instruments. However, the inputs used in determining the fair value could be categorized as Level 2 if trading volumes are low. Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts. Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Company estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The table below sets forth the carrying amounts and estimated fair values of the Partnership's financial instruments as of March 31, 2017 and December 31, 2016:
The fair value of the Partnership's debt is primarily estimated utilizing Level 3 inputs by using an estimated discounted cash flow analysis, based upon estimates of market interest rates. Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts. Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Partnership estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments. |
Investment in and Advances to Non-Consolidated Entities |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Schedule of Equity Method Investments [Line Items] | |
Investment in and Advances to Non-Consolidated Entities | Investment in and Advances to Non-Consolidated Entities As of March 31, 2017, the Company had ownership interests ranging from 15% to 25% in certain non-consolidated entities, which primarily own single-tenant net-leased assets. The acquisitions of these assets by the non-consolidated entities were partially funded through non-recourse mortgage debt with an aggregate balance of $46,885 at March 31, 2017 (the Company's proportionate share was $8,441) with rates ranging from 3.7% to 4.7%. In February 2017, the Company sold its 40% tenant-in-common interest in the Oklahoma City, Oklahoma office property for $6,198. In January 2016, the Company received $6,681 in connection with the sale of a non-consolidated office property in Russellville, Arkansas. The Company recognized gains of $1,452 and $5,378, respectively, relating to these sales, which are included in equity in earnings of non-consolidated entities. In November 2014, the Company formed a joint venture to construct a private school in Houston, Texas. As of March 31, 2017, the Company had a 25% equity interest in the joint venture. The joint venture completed the project during 2016 for a total construction cost of $79,964. The Company is contractually obligated to provide construction financing to the joint venture up to $56,686, of which $47,303 had been funded as of March 31, 2017. The property is net leased for a 20-year term. |
LCIF [Member] | |
Schedule of Equity Method Investments [Line Items] | |
Investment in and Advances to Non-Consolidated Entities | Investments in and Advances to Non-Consolidated Entities In July 2014, the Partnership acquired a 1.0% interest in an office property in Philadelphia, Pennsylvania for $263. The Partnership accounts for this investment under the cost basis of accounting. On September 1, 2012, the Partnership acquired a 2% equity interest in Net Lease Strategic Assets Fund L.P. (“NLS”) for cash of $189 and the issuance of 457,211 limited partner units to Lexington. The Partnership's carrying value in NLS at March 31, 2017 and December 31, 2016 was $5,246 and $5,224, respectively. The Partnership recognized net income from NLS of $97 and $131 in equity in earnings from non-consolidated entities during the three months ended March 31, 2017 and 2016, respectively. The Partnership contributed $175 to NLS during the three months ended March 31, 2017. In addition, the Partnership received distributions of $250 and $308 from NLS during the three months ended March 31, 2017 and 2016, respectively. |
Debt |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company had the following mortgages and notes payable outstanding as of March 31, 2017 and December 31, 2016:
Interest rates, including imputed rates on mortgages and notes payable, ranged from 2.2% to 7.8% at March 31, 2017 and December 31, 2016 and the mortgages and notes payables mature between 2017 and 2036 as of March 31, 2017. The weighted-average interest rate was 4.7% and 4.6% at March 31, 2017 and December 31, 2016, respectively. The Company had the following senior notes outstanding as of March 31, 2017 and December 31, 2016:
Each series of the senior notes is unsecured and requires payment of interest semi-annually in arrears. The Company may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium. The Company has a $905,000 unsecured credit agreement with KeyBank National Association, as agent. With lender approval, the Company can increase the size of the facility to an aggregate $1,810,000. A summary of the significant terms are as follows:
The Company was in compliance with all applicable financial covenants contained in its corporate level debt agreements at March 31, 2017. During 2007, the Company issued $200,000 original principal amount of Trust Preferred Securities. The Trust Preferred Securities, which are classified as debt, are due in 2037, were open for redemption at the Company's option commencing April 2012 and bear interest at a fixed rate of 6.804% through April 2017 and thereafter, at a variable rate of three month LIBOR plus 170 basis points through maturity. As of March 31, 2017 and December 31, 2016, there was $129,120 original principal amount of Trust Preferred Securities outstanding and $1,999 and $2,024, respectively, of unamortized debt issuance costs. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Mortgages and Notes Payable and Co-Borrower Debt The Partnership had the following mortgages and notes payable outstanding as of March 31, 2017 and December 31, 2016:
Interest rates, including imputed rates, ranged from 4.0% to 6.5% at March 31, 2017 and December 31, 2016, and the mortgages and notes payable mature between 2019 and 2026. The weighted-average interest rate at March 31, 2017 and December 31, 2016 was approximately 4.7%. Lexington, and the Partnership as co-borrower, have a $905,000 unsecured credit agreement with KeyBank National Association, as agent. With lender approval, Lexington can increase the size of the facility to an aggregate $1,810,000. A summary of the significant terms are as follows:
Lexington was in compliance with all applicable financial covenants contained in its corporate level debt agreements at March 31, 2017. In accordance with the guidance of ASC 405-40, the Partnership, as it is a co-borrower with Lexington, recognizes a proportion of the outstanding amounts of the above-mentioned term loans and revolving credit facility as co-borrower debt in the accompanying unaudited condensed consolidated balances sheets. In accordance with the Partnership’s partnership agreement, the Partnership is allocated a portion of these debts based on gross rental revenues, which represents its agreed to obligation. The Partnership's allocated co-borrower debt was $98,593 and $146,404 as of March 31, 2017 and December 31, 2016, respectively. Non-cash changes in co-borrower debt are recognized in partners’ capital in the accompanying unaudited condensed consolidated statements of changes in partners’ capital. |
Derivatives and Hedging Activities |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities | Derivatives and Hedging Activities Risk Management Objective of Using Derivatives. The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the type, amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash receipts and its known or expected cash payments principally related to the Company's investments and borrowings. Cash Flow Hedges of Interest Rate Risk. The Company's objectives in using interest rate derivatives are to add stability to interest expense, to manage its exposure to interest rate movements and therefore manage its cash outflows as it relates to the underlying debt instruments. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy relating to certain of its variable-rate debt instruments. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company did not incur any ineffectiveness during the three months ended March 31, 2017 and 2016. The Company has designated the interest-rate swap agreements with its counterparties as cash flow hedges of the risk of variability attributable to changes in the LIBOR swap rate on $505,000 of LIBOR-indexed variable-rate unsecured term loans. Accordingly, changes in the fair value of the swaps are recorded in other comprehensive income (loss) and reclassified to earnings as interest becomes receivable or payable. Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest expense as interest payments are made on the term loans. During the next 12 months, the Company estimates that an additional $234 will be reclassified as an increase to interest expense. As of March 31, 2017, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the unaudited condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016.
The tables below present the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the three months ended March 31, 2017 and 2016.
The Company's agreements with swap derivative counterparties contain provisions whereby if the Company defaults on the underlying indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of the swap derivative obligation. As of March 31, 2017, the Company had not posted any collateral related to the agreements. |
Concentration of Risk |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration of Risk | Concentration of Risk The Company seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the three months ended March 31, 2017 and 2016, no single tenant represented greater than 10% of rental revenues. Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions. |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration of Risk | Concentration of Risk Subject to the terms of the partnership agreement, the Partnership seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the three months ended March 31, 2017 and 2016, the following tenants represented greater than 10% of rental revenues:
Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Partnership believes it mitigates this risk by investing in or through major financial institutions. |
Equity |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Shareholders' Equity. During the three months ended March 31, 2017, the Company issued 1,593,603 common shares under its At-The-Market offering program and generated aggregate gross proceeds of $17,362. During the three months ended March 31, 2016, the Company issued 577,823 common shares under its direct share purchase plan, which includes its dividend reinvestment plan, raising net proceeds of $4,115. During the three months ended March 31, 2017 and 2016, the Company granted common shares to certain employees and trustees as follows:
In July 2015, the Company's Board of Trustees authorized the repurchase of up to 10,000,000 common shares. During the three months ended March 31, 2016, the Company repurchased 1,184,113 common shares, at an average price of $7.56 per common share. No repurchases occurred in the three months ended March 31, 2017. A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:
Noncontrolling Interests. In conjunction with several of the Company's acquisitions in prior years, sellers were issued OP units as a form of consideration. All OP units, other than OP units owned by the Company, are redeemable for common shares at certain times, at the option of the holders, and are generally not otherwise mandatorily redeemable by the Company. The OP units are classified as a component of permanent equity as the Company has determined that the OP units are not redeemable securities as defined by GAAP. Each OP unit is currently redeemable at the holder's option for approximately 1.13 common shares, subject to future adjustments. As of March 31, 2017, there were approximately 3,350,000 OP units outstanding other than OP units owned by the Company. All OP units receive distributions in accordance with the LCIF partnership agreement. To the extent that the Company's dividend per common share is less than the stated distribution per OP unit per the LCIF partnership agreement, the distributions per OP unit are reduced by the percentage reduction in the Company's dividend per common share. No OP units have a liquidation preference. |
Related Party Transactions |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Related Party Transaction [Line Items] | |
Related Party Transactions | Related Party Transactions In connection with efforts to procure non-recourse mezzanine financing from an affiliate of the Company's Chairman, pursuant to the terms of the EB-5 visa program administered by the United States Citizenship and Immigration Services (“USCIS”), for a joint venture in Houston, Texas, in which the Company has an investment, the Company executed a guaranty in favor of an affiliate of its Chairman. The guaranty provides that the Company will reimburse investors providing the funds for such financing if the following occurs: (1) the joint venture receives such funds, (2) the USCIS denies the financing solely because the project is not permitted under the EB-5 visa program, and (3) the joint venture fails to return such funds. As of March 31, 2017, the joint venture has not received any such funds and the Company has not recorded any liability related to this guaranty. The maximum amount of funds that would be subject to the guaranty obligation is $18,000. In addition, in connection with efforts, on a non-binding basis, to procure non-recourse mezzanine financing from an affiliate of the Company's Chairman, pursuant to the terms of the EB-5 visa program administered by the USCIS, for an investment in Charlotte, North Carolina, the Company agreed to reimburse the Chairman's affiliate up to approximately $7 for its expenses. There were no other related party transactions other than those disclosed elsewhere in this Quarterly Report and the audited consolidated financial statements in the Annual Report. |
LCIF [Member] | |
Related Party Transaction [Line Items] | |
Related Party Transactions | Related Party Transactions The Partnership had the following related party transactions in addition to related party transactions discussed elsewhere in this Quarterly Report and the audited consolidated financial statements in the Annual Report. The Partnership had outstanding net advances owed from (to) Lexington of $(1,910) and $5,967 as of March 31, 2017 and December 31, 2016, respectively. The advances are payable on demand. Lexington earned distributions of $16,287 and $15,876 during the three months ended March 31, 2017 and 2016, respectively. The Partnership was allocated interest expense by Lexington, in accordance with the partnership agreement, relating to certain lending facilities of $1,811 and $3,137 for the three months ended March 31, 2017 and 2016, respectively. Lexington, on behalf of the General Partner, pays for certain general administrative and other costs on behalf of the Partnership from time to time. These costs are reimbursable by the Partnership. These costs were approximately $1,418 and $2,124 for the three months ended March 31, 2017 and 2016, respectively. A Lexington affiliate provides property management services for certain Partnership properties. The Partnership recognized property operating expenses of $170 and $204 for the three months ended March 31, 2017 and 2016, respectively, for aggregate fees and reimbursements charged by the affiliate. |
Commitments and Contingencies |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Commitments and Contingencies [Line Items] | |
Commitments and Contingencies | Commitments and Contingencies In addition to the commitments and contingencies disclosed elsewhere, including in Note 12 above, and previously disclosed, the Company has the following commitments and contingencies. The Company is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Company, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries. The Company and LCIF are parties to a funding agreement under which the Company may be required to fund distributions made on account of LCIF's OP units. Pursuant to the funding agreement, the parties agreed that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, Lexington will fund the shortfall. Payments under the agreement will be made in the form of loans to LCIF and will bear interest at prevailing rates as determined by the Company in its discretion, but no less than the applicable federal rate. LCIF's right to receive these loans will expire if no OP units remain outstanding and all such loans repaid. No amounts have been advanced under this agreement. From time to time, the Company is directly and indirectly involved in legal proceedings arising in the ordinary course of business. Management believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's business, financial condition and results of operations. GSMSC II 2006-GG6 Bridgewater Hills Corporate Center, LLC v. Lexington Realty Trust (Supreme Court of the State of New York, County of New York-Index No. 653117/2015) On September 16, 2015, GSMSC II 2006-GG6 Bridgewater Hills Corporate Center, LLC commenced an action as lender against the Company based on a limited guaranty of recourse obligations executed by a predecessor entity of the Company in connection with a mortgage loan secured by a property owner subsidiary's commercial property in Bridgewater, New Jersey. The property owner subsidiary defaulted due to non-payment after the sole tenant vacated at the end of the lease term. The lender seeks approximately $9,200 in order to satisfy the outstanding amount of the loan, plus interest, reasonable attorney’s fees and other costs and disbursements related thereto. The Company has not recorded any liability relating to this litigation as of March 31, 2017 as the Company believes that a loss contingency is “reasonably possible” (as defined by FASB ASC 450-20-20) but not “probable” (as defined by FASB ASC 450-20-20). The lender claims that the Company's limited guaranty was triggered due to the merger of Newkirk Realty Trust, Inc. and Lexington Corporate Properties Trust on December 31, 2006, arguing that it constituted an event of default because it was a transfer that was not permitted by the loan agreement. The limited guaranty provides that the guarantor's liability for the guaranteed obligations shall not exceed $10,000, which the Company believes is its maximum exposure to loss. The Company intends to vigorously defend the lender’s claim. The Company filed a motion to dismiss, which was generally denied. The parties are presently in the discovery phase, with document productions ongoing and with fact and expert depositions currently expected to be conducted and completed later this year. The lender also brought a foreclosure action against the property owner subsidiary. A foreclosure sale was held September 13, 2016 and the lender acquired the property for a nominal amount. During the three months ended March 31, 2017, the Company incurred $984 in legal costs relating to this litigation, which are included in general and administrative expense on the Company's unaudited condensed consolidated statement of operations. |
LCIF [Member] | |
Commitments and Contingencies [Line Items] | |
Commitments and Contingencies | Commitments and Contingencies In addition to the commitments and contingencies disclosed elsewhere, the Partnership has the following commitments and contingencies. The Partnership is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Partnership, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries. The Partnership and Lexington are parties to a funding agreement under which Lexington may be required to fund distributions made on account of OP units. Pursuant to the funding agreement, if the Partnership does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, Lexington is required to fund the shortfall. Payments under the agreement will be made in the form of loans to the Partnership and will bear interest at prevailing rates as determined by Lexington in its discretion, but no less than the applicable federal rate. The Partnership's right to receive these loans will expire if no OP units remain outstanding and all such loans are repaid. No amounts had been advanced under this funding agreement. In May 2014, the Partnership guaranteed $250,000 aggregate principal amount of 4.40% Senior Notes due 2024 (“2024 Senior Notes”) issued by Lexington at an issuance price of 99.883% of the principal amount and in June 2013, the Partnership guaranteed $250,000 aggregate principal amount of 4.25% Senior Notes due 2023 (“2023 Senior Notes”) issued by Lexington at an issuance price of 99.026% of the principal amount, collectively referred to as the Senior Notes. The Senior Notes are unsecured and pay interest semi-annually in arrears. Lexington may redeem the Senior Notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium. From time to time, the Partnership is directly or indirectly involved in legal proceedings arising in the ordinary course of the Partnership's business. The Partnership believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Partnership's business, financial condition and results of operations. |
Supplemental Disclosure of Statement of Cash Flow Information |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Condensed Cash Flow Statements, Captions [Line Items] | |
Supplemental Disclosure of Statement of Cash Flow Information | Supplemental Disclosure of Statement of Cash Flow Information In addition to disclosures discussed elsewhere, during the three months ended March 31, 2017 and 2016, the Company paid $14,351 and $17,002, respectively, for interest and $548 and $169, respectively, for income taxes. |
LCIF [Member] | |
Condensed Cash Flow Statements, Captions [Line Items] | |
Supplemental Disclosure of Statement of Cash Flow Information | Supplemental Disclosure of Statement of Cash Flow Information In addition to disclosures discussed elsewhere, during the three months ended March 31, 2017 and 2016, the Partnership paid (received) $3,869 and $7,585, respectively, for interest and $45 and $(40), respectively, for income taxes. |
Subsequent Events |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
Subsequent Event [Line Items] | |
Subsequent Events | Subsequent Events Subsequent to March 31, 2017 and in addition to disclosures elsewhere in the unaudited condensed consolidated financial statements, the Company sold two properties to unrelated third parties for an aggregate gross sales price of $17,107. |
LCIF [Member] | |
Subsequent Event [Line Items] | |
Subsequent Events | Subsequent Events Subsequent to March 31, 2017 and in addition to disclosures elsewhere in the unaudited condensed consolidated financial statements, the Partnership sold a property to an unrelated third party for a gross sales price of $3,461. |
The Company and Financial Statement Presentation (Policies) |
3 Months Ended |
---|---|
Mar. 31, 2017 | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Basis of presentation and consolidation | Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. |
Variable interest entity | The Company determined that it was the primary beneficiary of certain VIEs as it has a controlling financial interest in these entities, including LCIF, in which the Company has an approximate 96% interest. |
Use of estimates | Use of Estimates. Management has made a number of significant estimates and assumptions to prepare these unaudited condensed consolidated financial statements in conformity with GAAP, including, among others, those relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets, loans receivable and equity method investments, the valuation of derivative financial instruments, the valuation of compensation plans and the useful lives of long-lived assets. Actual results could differ materially from those estimates. |
Fair value measurements | Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, as amended (“Topic 820”), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements. |
Acquisition, development and construction arrangements | Acquisition, Development and Construction Arrangements. The Company evaluates loans receivable where the Company participates in residual profits through loan provisions or other contracts to ascertain whether the Company has the same risks and rewards as an owner or a joint venture partner. Where the Company concludes that such arrangements are more appropriately treated as an investment in real estate, the Company reflects such loan receivable as an equity investment in real estate under construction in the unaudited condensed consolidated balance sheets. In these cases, no interest income is recorded on the loan receivable and the Company capitalizes interest during the construction period. In arrangements where the Company engages a developer to construct a property or provides funds to a tenant to develop a property, the Company will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period. |
Recently issued accounting guidance | Recently Issued Accounting Guidance. In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the guidance for revenue recognition to eliminate the industry-specific revenue recognition guidance and replace it with a principle based approach for determining revenue recognition. Leases are specifically excluded from this ASU and will be governed by the applicable lease codifications; however, this update may have implications in certain variable payment terms included in lease agreements and in sale and leaseback transactions. The effective date of the new guidance was updated by ASU 2015-14 and is effective for reporting periods beginning after December 15, 2017. The Company will adopt ASU 2014-09 effective January 1, 2018 and anticipates using the modified retrospective with cumulative-effective transition method. The Company is identifying applicable revenue streams and continues to evaluate the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date that have lease terms of more than 12 months. The accounting applied to lessors under this new guidance is largely unchanged from prior guidance. Lessors in most cases will continue to record operating leases as operating leases and recognize lease income from those leases generally on a straight-line basis over the lease term. The ASU is expected to result in the recognition of a right-to-use asset and related liability to account for the Company's future obligations under its ground lease arrangements for which the Company is the lessee. Additionally, the new ASU will require that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. ASU 2016-02 will be effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements; with early adoption permitted. The Company continues to evaluate the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation-Stock Compensation-Improvements to Employee Share-Based Payment Accounting (Topic 718), which involves several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The Company adopted this new guidance on January 1, 2017. This new guidance did not have a material impact on the Company's unaudited condensed consolidated financial statements. The Company has made an accounting policy election to account for share-based award forfeitures in compensation costs when they occur. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those years; however early adoption is permitted. The Company does not believe this guidance will have a material impact on its unaudited condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies guidance on the classification and presentation of changes in restricted cash. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and will be applied retrospectively to all periods presented. Upon adoption, restricted cash balances will be included along with cash and cash equivalents as of the end of the period and beginning of period, respectively, in the Company's unaudited condensed consolidated statement of cash flows for all periods presented. Upon adoption, separate line items showing changes in restricted cash balances will be eliminated from the Company's unaudited condensed consolidated statement of cash flows. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Company expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business and thus will be treated as asset acquisitions. Acquisition costs for those acquisitions that are not businesses will be capitalized rather than expensed. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20), which requires that all entities account for the derecognition of a business in accordance with ASC 810, including instances in which the business is considered in-substance real estate. The ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early application is permitted. The Company is currently evaluating the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. |
LCIF [Member] | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Basis of presentation and consolidation | Basis of Presentation and Consolidation. The Partnership's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Partnership and its consolidated subsidiaries. The Partnership consolidates its wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Partnership is the primary beneficiary of a variable interest entity (“VIE”). Entities that the Partnership does not control and entities that are VIEs in which the Partnership is not the primary beneficiary are accounted for under appropriate GAAP. |
Earnings per unit | Earnings Per Unit. Net income (loss) per unit is computed by dividing net income (loss) by the weighted-average number of units outstanding during the period. There are no potential dilutive securities. |
Unit redemptions | Unit Redemptions. The Partnership's limited partner units that are issued and outstanding, other than those held by Lexington, are currently redeemable at certain times, only at the option of the holders, for shares of beneficial interests classified as common stock of Lexington, par value $0.0001 per share ("common shares"), on a one to approximately 1.13 basis, subject to future adjustments. These units are not mandatorily redeemable by the Partnership. |
Use of estimates | Use of Estimates. The Partnership has made a number of significant estimates and assumptions to prepare these unaudited condensed consolidated financial statements in conformity with GAAP, including, among others, relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses. These estimates and assumptions are based on management's best estimates and judgment. The Partnership evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors. The Partnership adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments and the useful lives of long-lived assets. Actual results could differ materially from those estimates. |
Fair value measurements | Fair Value Measurements. The Partnership follows the guidance in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 820, Fair Value Measurements and Disclosures (“Topic 820”), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Partnership utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. |
Acquisition, development and construction arrangements | Acquisition, Development and Construction Arrangements. The Partnership evaluates loans receivable where the Partnership participates in residual profits through loan provisions or other contracts to ascertain whether the Partnership has the same risks and rewards as an owner or a joint venture partner. Where the Partnership concludes that such arrangements are more appropriately treated as an investment in real estate, the Partnership reflects such loan receivable as an equity investment in real estate under construction in the unaudited condensed consolidated balance sheets. In these cases, no interest income is recorded on the loan receivable and the Partnership records capitalized interest during the construction period. In arrangements where the Partnership engages a developer to construct a property or provide funds to a tenant to develop a property, the Partnership will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period. |
Recently issued accounting guidance | Recently Issued Accounting Guidance. In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09, Revenue from Contracts with Customers (Topic 606), which amends the guidance for revenue recognition to eliminate the industry-specific revenue recognition guidance and replace it with a principle based approach for determining revenue recognition. The effective date of the new guidance was updated by ASU 2015-14 and is effective for reporting periods beginning after December 15, 2017. The Partnership will adopt ASU 2014-09 effective January 1, 2018 and anticipates using the modified retrospective with cumulative-effective transition method. The Partnership is identifying applicable revenue streams and continues to evaluate the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and have lease terms of more than 12 months. The accounting applied to lessors under this new guidance is largely unchanged from prior guidance. Lessors in most cases will continue to record operating leases as operating leases and recognize lease income from these leases generally on a straight-line basis over the lease term. The ASU is expected to result in the recognition of a right-to-use asset and related liability to account for our future obligations under our ground lease arrangements for which the Partnership is the lessee. Additionally, the new ASU will require that the Partnership capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. Early adoption is permitted. The Partnership continues to evaluate the impact of the adoption of the new guidance on its unaudited condensed consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which addresses how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those years; however early adoption is permitted. The Partnership does not believe this guidance will have a material impact on its unaudited condensed consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash, which clarifies guidance on the classification and presentation of changes in restricted cash. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted, and will be applied retrospectively to all periods presented. Upon adoption, restricted cash balances will be included along with cash and cash equivalents as of the end of the period and beginning of period, respectively, in the Partnership's unaudited condensed consolidated statement of cash flows for all periods presented. Upon adoption, separate line items showing changes in restricted cash balances will be eliminated from the Partnership's unaudited condensed consolidated statement of cash flows. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which clarifies the definition of a business when evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The ASU is effective for reporting periods beginning after December 15, 2017, with early adoption permitted. The Partnership expects that acquisitions of real estate or in-substance real estate will not meet the revised definition of a business and thus will be treated as asset acquisitions. Acquisition costs for these acquisitions that are not businesses will be capitalized rather than expensed. In February 2017, the FASB issued ASU 2017-05, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Topic 610-20), which requires that all entities account for the derecognition of a business in accordance with ASC 810, including instances in which the business is considered in-substance real estate. The ASU is effective for annual periods, and interim periods therein, beginning after December 15, 2017. Early application is permitted. The Partnership is currently evaluating the impact of the adoption of the new guidance on its consolidated financial statements. |
Allocation of overhead expenses | Allocation of Overhead Expenses. The Partnership does not pay a fee to the General Partner for the day-to-day management of the Partnership. Certain expenses incurred by the General Partner and its affiliates, including Lexington, such as corporate-level interest, amortization of deferred loan costs, payroll and general and administrative expenses are allocated to the Partnership and reimbursed to the General Partner in accordance with the Partnership's partnership agreement. The allocation is based upon gross rental revenues. |
Distributions and allocations of income and loss | Distributions; Allocations of Income and Loss. As provided in the Partnership's partnership agreement, distributions and income and loss for financial reporting purposes are allocated to the partners based on their ownership of units. Special allocation rules included in the partnership agreement affect the allocation of taxable income and loss. |
Co-borrower debt | Co-borrower Debt. The Partnership is subject to ASC 405-40, which requires recognition of such obligations as the sum of (a) the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects to pay on behalf of its co-obligors. |
The Company and Financial Statement Presentation (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments | The following table shows the affected line items within the Company's unaudited condensed consolidated financial statements:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Error Corrections and Prior Period Adjustments |
|
Earnings Per Share (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share Reconciliation | The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three months ended March 31, 2017 and 2016:
|
Investments in Real Estate and Real Estate Under Construction (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of acquired properties | The Company completed the following acquisition and build-to-suit arrangements during the three months ended March 31, 2017:
(1) Completed the construction of the final building of a four-building project. Initial basis excludes estimated developer partner payout of approximately |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of acquisition development and construction arrangements outstanding | As of March 31, 2017, the Company had the following development arrangements outstanding:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of development arrangements outstanding | In addition, as of March 31, 2017, the Company had the following forward purchase commitments:
(1) The Company issued a $4,600 letter of credit to secure its obligation to purchase the property. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of acquisition development and construction arrangements outstanding | As of March 31, 2017, the Partnership had the following development arrangement outstanding:
(1) Includes $1,455 of capitalized interest. |
Property Dispositions and Real Estate Impairment (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Assets and Liabilities Held for Sale | Assets and liabilities of held for sale properties as of March 31, 2017 and December 31, 2016 consisted of the following:
|
Loans Receivable (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Loans Receivable | The following is a summary of the Company's loans receivable as of December 31, 2016:
|
Fair Value Measurements (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurement Inputs | The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of March 31, 2017 and December 31, 2016, aggregated by the level in the fair value hierarchy within which those measurements fall:
*Represents a non-recurring fair value measurement. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts and Fair Value of Financial Instruments | The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments as of March 31, 2017 and December 31, 2016.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Carrying Amounts and Fair Value of Financial Instruments | The table below sets forth the carrying amounts and estimated fair values of the Partnership's financial instruments as of March 31, 2017 and December 31, 2016:
|
Debt (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | The Company had the following mortgages and notes payable outstanding as of March 31, 2017 and December 31, 2016:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument Redemption | The Company had the following senior notes outstanding as of March 31, 2017 and December 31, 2016:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Line of Credit Facilities | A summary of the significant terms are as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | The Partnership had the following mortgages and notes payable outstanding as of March 31, 2017 and December 31, 2016:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Line of Credit Facilities | A summary of the significant terms are as follows:
|
Derivatives and Hedging Activities (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Outstanding Interest Rate Derivatives Designated as Cash Flow Hedges | As of March 31, 2017, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of the Company's Derivative Financial Instruments and Classification on the Balance Sheets | The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the unaudited condensed consolidated balance sheets as of March 31, 2017 and December 31, 2016.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Effect of the Company's Derivative Financial Instruments on the Statements of Operation | The tables below present the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the three months ended March 31, 2017 and 2016.
|
Concentration of Risk (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
LCIF [Member] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Concentration Risk [Line Items] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Concentration of Risk | For the three months ended March 31, 2017 and 2016, the following tenants represented greater than 10% of rental revenues:
|
Equity (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2017 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Common Stock Granted | During the three months ended March 31, 2017 and 2016, the Company granted common shares to certain employees and trustees as follows:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:
|
The Company and Financial Statement Presentation - Schedule of Variable Interest Entities (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Real estate, net | $ 3,027,298 | $ 3,028,326 |
Total assets | 3,446,705 | 3,441,467 |
Mortgages and notes payable, net | 730,310 | 738,047 |
Total liabilities | 2,016,711 | 2,028,976 |
Variable Interest Entity, Primary Beneficiary [Member] | ||
Variable Interest Entity [Line Items] | ||
Real estate, net | 784,797 | 778,265 |
Total assets | 880,176 | 899,801 |
Mortgages and notes payable, net | 362,820 | 364,099 |
Total liabilities | $ 384,839 | $ 395,332 |
Investments in Real Estate and Real Estate Under Construction - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | |
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
Business Acquisition [Line Items] | |||
Aggregate acquisition expenses | $ 186 | $ 146 | |
Construction in progress | 69,128 | $ 106,652 | |
Proceeds from sale of real estate | 90,823 | 57,898 | |
LCIF [Member] | |||
Business Acquisition [Line Items] | |||
Construction in progress | 49,210 | 40,443 | |
Proceeds from sale of real estate | 3,889 | 29,817 | |
Impairment of real estate | 2,497 | ||
Certain Properties [Member] | LCIF [Member] | |||
Business Acquisition [Line Items] | |||
Proceeds from sale of real estate | 4,130 | 30,050 | |
Gain on sale of properties | 7,839 | ||
Proceeds from sale of land | $ 400 | ||
Development Deals [Member] | |||
Business Acquisition [Line Items] | |||
Capitalized interest | $ 1,683 | $ 3,442 |
Investments in Real Estate and Real Estate Under Construction - Summary of forward purchase commitments (Details) ft² in Thousands, $ in Thousands |
12 Months Ended | |
---|---|---|
Dec. 31, 2016
USD ($)
ft²
|
Mar. 31, 2017
ft²
|
|
Real Estate [Line Items] | ||
Square Feet (000's) | ft² | 475 | 366 |
Maximum Acquisition Cost | $ 71,725 | |
Industrial Property [Member] | Grand Prairie, TX [Member] | ||
Real Estate [Line Items] | ||
Square Feet (000's) | ft² | 215 | |
Maximum Acquisition Cost | $ 24,725 | |
Approximate Lease Term (Yrs) | 20 years | |
Industrial Property [Member] | Warren, MI [Member] | ||
Real Estate [Line Items] | ||
Square Feet (000's) | ft² | 260 | |
Maximum Acquisition Cost | $ 47,000 | |
Approximate Lease Term (Yrs) | 15 years | |
Letters of credit outstanding, amount | $ 4,600 |
Property Dispositions and Real Estate Impairment - Schedule of Assets and Liabilities Held for Sale (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets: | ||
Real estate, at cost | $ 6,011 | $ 25,957 |
Real estate, intangible assets | 5,589 | 7,789 |
Accumulated depreciation and amortization | (2,319) | (13,346) |
Rent receivable - deferred | 799 | 1,715 |
Other assets | 0 | 1,693 |
Assets held for sale | 10,080 | 23,808 |
Liabilities: | ||
Other | 48 | 191 |
Liabilities held for sale | $ 48 | $ 191 |
Loans Receivable (Details) - USD ($) $ in Thousands |
3 Months Ended | 12 Months Ended | ||
---|---|---|---|---|
Mar. 31, 2017 |
Dec. 31, 2016 |
Jan. 31, 2017 |
Jun. 30, 2015 |
|
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan carrying-value | $ 94,210 | |||
Kennewick, Washington [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan carrying-value | $ 85,709 | |||
Interest rate of mortgage loans | 9.00% | 9.00% | ||
Loans receivable, current pay rate | 8.75% | |||
Periodic payment terms, balloon payment to be received | $ 87,245 | |||
Percent of principal balance | 94.00% | |||
Loss on the transaction | $ 5,294 | |||
Oklahoma City, Oklahoma [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan carrying-value | $ 8,501 | |||
Interest rate of mortgage loans | 11.50% | 11.50% | ||
Oklahoma City, Oklahoma [Member] | Tenant-in-Common [Member] | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Loan carrying-value | $ 8,420 | |||
Ownership percentage | 40.00% | 40.00% | ||
Professional fees | $ 376 |
Fair Value Measurements - Fair Value by Balance Sheet Grouping (Details) - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Assets | ||
Carrying value of loans receivable | $ 0 | $ 94,210 |
Carrying Amount [Member] | Fair Value Measurements Using Level 3 [Member] | ||
Assets | ||
Carrying value of loans receivable | 0 | 94,210 |
Liabilities | ||
Carrying value of debt | 1,853,350 | 1,860,598 |
Carrying Amount [Member] | Fair Value Measurements Using Level 3 [Member] | LCIF [Member] | ||
Liabilities | ||
Carrying value of debt | 267,507 | 315,616 |
Fair Value [Member] | Fair Value Measurements Using Level 3 [Member] | ||
Assets | ||
Fair value of loans receivable | 0 | 94,911 |
Liabilities | ||
Fair value of debt | 1,809,077 | 1,814,824 |
Fair Value [Member] | Fair Value Measurements Using Level 3 [Member] | LCIF [Member] | ||
Liabilities | ||
Fair value of debt | $ 266,383 | $ 314,509 |
Debt - Schedule of Mortgages and Notes Payable (Details) - Mortgages and Notes Payable [Member] - USD ($) $ in Thousands |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Mortgages and notes payable | $ 737,260 | $ 745,173 |
Unamortized debt issuance costs | (6,950) | (7,126) |
Long-term debt | 730,310 | 738,047 |
LCIF [Member] | ||
Debt Instrument [Line Items] | ||
Mortgages and notes payable | 169,634 | 169,958 |
Unamortized debt issuance costs | (720) | (746) |
Long-term debt | $ 168,914 | $ 169,212 |
Debt - Schedule of Debt Instrument Redemption (Details) - Senior Notes [Member] - USD ($) |
Mar. 31, 2017 |
Dec. 31, 2016 |
---|---|---|
Debt Instrument [Line Items] | ||
Face amount of debt instrument | $ 500,000,000 | $ 500,000,000 |
Unamortized discount | (1,712,000) | (1,780,000) |
Unamortized debt issuance costs | (3,717,000) | (3,858,000) |
Long-term debt | 494,571,000 | 494,362,000 |
Senior Notes Due 2024 [Member] | ||
Debt Instrument [Line Items] | ||
Face amount of debt instrument | $ 250,000,000 | $ 250,000,000 |
Stated interest rate | 4.40% | 4.40% |
Percentage of issuance price | 99.883% | |
Senior Notes Due 2023 [Member] | ||
Debt Instrument [Line Items] | ||
Face amount of debt instrument | $ 250,000,000 | $ 250,000,000 |
Stated interest rate | 4.25% | 4.25% |
Percentage of issuance price | 99.026% |
Equity - Additional Information (Details) $ / shares in Units, $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017
USD ($)
shares
|
Mar. 31, 2016
USD ($)
$ / shares
shares
|
Jul. 31, 2015
shares
|
|
Equity [Line Items] | |||
Proceeds from issuance of common shares | $ | $ 16,168 | $ 3,751 | |
Authorized amount (in shares) | 10,000,000 | ||
Treasury stock acquired (in shares) | 0 | 1,184,113 | |
Treasury stock acquired, average cost (in dollars per share) | $ / shares | $ 7.56 | ||
OP unit equivalent in common shares | 1.13 | ||
Partners' capital account (in units) | 3,350,000 | ||
Performance Shares [Member] | |||
Equity [Line Items] | |||
Common shares issued during period (in shares) | 326,929 | ||
At The Market [Member] | |||
Equity [Line Items] | |||
Common shares issued during period (in shares) | 1,593,603 | ||
Proceeds from issuance of common shares | $ | $ 17,362 | ||
Direct Share Purchase Plan [Member] | |||
Equity [Line Items] | |||
Common shares issued during period (in shares) | 577,823 | ||
Proceeds from issuance of common stock, net | $ | $ 4,115 |
Equity - Changes in Other Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | $ 1,412,491 | $ 1,462,531 |
Ending Balance | 1,429,994 | 1,463,207 |
AOCI Attributable to Parent [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | (1,033) | (1,939) |
Ending Balance | 259 | (6,564) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest [Member] | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Other comprehensive income (loss) before reclassifications | 688 | (5,691) |
Amounts of loss reclassified from accumulated other comprehensive income to interest expense | $ 604 | $ 1,066 |
Related Party Transactions (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
Dec. 31, 2016 |
|
LCIF [Member] | |||
Related Party Transaction [Line Items] | |||
General and administrative expense | $ 1,418 | $ 2,124 | |
Property operating expenses | 170 | 204 | |
Affiliated Entity [Member] | |||
Related Party Transaction [Line Items] | |||
Contractual Obligation | 18,000 | ||
Maximum amount to be distributed to related party | (7) | ||
Lexington Realty Trust [Member] | LCIF [Member] | |||
Related Party Transaction [Line Items] | |||
Maximum amount to be distributed to related party | (1,910) | $ 5,967 | |
Unit distributions earned | 16,287 | 15,876 | |
Interest expense | $ 1,811 | $ 3,137 |
Supplemental Disclosure of Statement of Cash Flow Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2017 |
Mar. 31, 2016 |
|
Condensed Cash Flow Statements, Captions [Line Items] | ||
Interest paid | $ 14,351 | $ 17,002 |
Income taxes paid, net | 548 | 169 |
LCIF [Member] | ||
Condensed Cash Flow Statements, Captions [Line Items] | ||
Interest paid | 3,869 | 7,585 |
Income taxes paid, net | $ 45 | $ (40) |
Subsequent Events (Details) - Subsequent Event [Member] $ in Thousands |
1 Months Ended |
---|---|
May 09, 2017
USD ($)
Property
| |
Subsequent Event [Line Items] | |
Number of properties sold | Property | 2 |
Proceeds from sale of real estate | $ 17,107 |
LCIF [Member] | |
Subsequent Event [Line Items] | |
Proceeds from sale of real estate | $ 3,461 |
JU&RJ7G4J9@"PU-YBB#A34
MDEKNQP4UD/ABMJ[.K21>1H*"6B++@8(ZR^7^!JJ83*7R?H<)ZD!-+3,2I]%X
M(1\N2$.IF<'P=*" SO[:C+C]0/J6II^/O^7-H:C;X$EI,]G9^6NOE):&([DS1^QH
M1O)Q4#Z"-(;R-& 7Q]!>0,U&DASU2#Q!LF[@;QJH+V!?I?4&\3#
M=/3S>Y>VZ7)>5Z=9/2S18]KM!'JCW0K:=B_[!=/_YJ:X<6]?EY21>?S:.?+,
M:F#8A*%3YA9CV)2YPQ@^9>XQ1DR9-<;(*?. ,6K*;# F&9G8Y6U,'D.3QWH'
M8N) @^0-3-(SY< (Q22'"0PY(P@%DN]"*L@@@B2)TCP!60RY3U0P;0B(X $#
M#3<@F
$3
M%RK#'<@N7ZCWS+Y0XR@)1YMB4-<=<0QW,[OBTC68\Q..CE<=#-J%4M3;KA5K
MO)4\5*K]IWLP>VKW[J!M-T;S"]T&]DW;>YJ^A_R1U=N\:KPGJ70ST[4<&RF5
MT"3)1&_#3K>MIT$A-JI]C?5[W?=N_4#)O>E+@U-S//\/4$L#!!0 ( /F#
MJ4H.V,O/&0, 0, 9 >&PO=V]R:W-H965T%]33";*01.?!@0H9:X2
M "(3%Q6!WG] &*! K@X>513CC$P(P=9%$2"$)RA@\R)RNRL0;$P$.=/UA04-
MC1%."<$&1LD-SH! )'*SN0X:)@-_#!#P-2!3QP<;'
=0KA^=;YO,L
M*'?J[MJHQ*>J1] 7178X#*D-S*\-'@A&TT]'.>5L V@(PV80>P &KFB;C+L
MTP)A!T(J$0,JD;MO7S-_XTZ%BS\@8A&"+D-J$0.V! J[C4@)81.V! PI(0S8
M$KCX?X-$"IM^I,XPH(0HZ0;R=P14(KLZAM09!M09A6P(.%)"^(0- 4=* P=*
M@[?7A40>B@,B.QL$>>XCSQ526#F"*I^P'^#8$[9/(9/>K/@BX3;A]8#(S@:A
MD/L4B@@I8!RAD$^@D",4.8^SP)[+.4(JER-
MGSJ!H"J ;N]A!HF\1\H!D9T- KWP41414M8%@JJ8\* M$%2%WU7]!06(1.2^
M5AL0V=D@T L(56Q$V-LP,6%6$%2%O^<&9L47B2AV9V6$Z'% 9*>,5 8!]6=L
M02&HBF3"U"&H"J"KNI@]@"+WK?. R'X=B4 O(52=0/?2?W4F"=8W)0*T!'JO
MVXINI;\I)URX!37L??IHOPO^F9:OAV,U>R[JNLB[3QV[HJAUXS'ZTJSVO4ZW
MUY-,[^KV,&Z.R\OWN,M)79S,M\;P^L%S^3]02P,$% @ ^8.I2HMO2NDY
M @ (0< !D !X;"]W;W)K