UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 3, 2016
LEXINGTON REALTY TRUST | ||
(Exact name of registrant as specified in its charter) | ||
Maryland | 1-12386 | 13-3717318 |
(State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
One Penn Plaza, Suite 4015, New York, New York | 10119-4015 |
(Address of principal executive offices) | (Zip Code) |
(212) 692-7200
(Registrant's telephone number, including area code)
_________________________________________________
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):
¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On November 3, 2016, we issued a press release announcing our financial results for the quarter ended September 30, 2016. A copy of the press release is furnished herewith as part of Exhibit 99.1.
The information furnished pursuant to this “Item 2.02 - Results of Operations and Financial Condition”, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act, or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing made by us under the Exchange Act or Securities Act of 1933, as amended, which we refer to as the Securities Act, regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such a filing.
Item 7.01. Regulation FD Disclosure.
On November 3, 2016, we made available supplemental information, which we refer to as the Quarterly Earnings and Supplemental Operating and Financial Data, September 30, 2016, a copy of which is furnished herewith as Exhibit 99.1.
Also on November 3, 2016, our management discussed our financial results and certain aspects of our business plan on a conference call with analysts and investors. A transcript of the conference call is furnished herewith as Exhibit 99.2.
The information furnished pursuant to this “Item 7.01 - Regulation FD Disclosure”, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing made by us under the Exchange Act or the Securities Act, regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such a filing. Information contained on our web site is not incorporated by reference into this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) | Exhibits |
99.1 | Quarterly Earnings and Supplemental Operating and Financial Data, September 30, 2016. |
99.2 | November 3, 2016 Conference Call Transcript. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Lexington Realty Trust | ||
Date: November 4, 2016 | By: | /s/ Patrick Carroll |
Patrick Carroll Chief Financial Officer |
Exhibit Index
99.1 | Quarterly Earnings and Supplemental Operating and Financial Data, September 30, 2016. |
99.2 | November 3, 2016 Conference Call Transcript. |
Exhibit 99.1
LEXINGTON REALTY TRUST
SUPPLEMENTAL REPORTING PACKAGE
September 30, 2016
Table of Contents
Section | Page | |
Third Quarter 2016 Earnings Press Release | 3 | |
Portfolio Data | ||
2016 Third Quarter Investment/Capital Recycling Summary | 15 | |
Build-To-Suit Projects | 16 | |
2016 Third Quarter Financing Summary | 17 | |
2016 Third Quarter Leasing Summary | 18 | |
Other Revenue Data | 20 | |
Portfolio Detail by Asset Class | 22 | |
Portfolio Composition | 23 | |
Components of Net Asset Value | 24 | |
Top Markets | 25 | |
Single-Tenant Office Markets | 26 | |
Tenant Industry Diversification | 27 | |
Top 10 Tenants or Guarantors | 28 | |
Lease Rollover Schedules – GAAP Basis | 29 | |
Property Leases and Vacancies – Consolidated Portfolio | 31 | |
Select Credit Metrics Summary | 38 | |
Financial Covenants | 39 | |
Mortgages and Notes Payable | 40 | |
Debt Maturity Schedule | 43 | |
Mortgage Loans Receivable | 44 | |
Selected Balance Sheet and Income Statement Account Data | 45 | |
Non-GAAP Measures – Definitions | 46 | |
Reconciliation of Non-GAAP Measures | 48 | |
Investor Information | 52 |
This Quarterly Earnings Release and Supplemental Reporting Package contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the control of Lexington Realty Trust “Lexington”, which may cause actual results, performance or achievements of Lexington to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Lexington’s periodic reports filed with the Securities and Exchange Commission, including risks related to: (1) the authorization of Lexington’s Board of Trustees of future dividend declarations, (2) Lexington’s ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO available to all equityholders and unitholders – diluted for the year ending December 31, 2016, (3) the successful consummation of any lease, acquisition, build-to-suit, disposition, financing or other transaction, (4) the failure to continue to qualify as a real estate investment trust, (5) changes in general business and economic conditions, including the impact of any new legislation, (6) competition, (7) increases in real estate construction costs, (8) changes in interest rates, (9) changes in accessibility of debt and equity capital markets, and (10) future impairment charges. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington’s web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington’s future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects,” may,” “plans,” “predicts,” “will,” “will likely result,” “is optimistic,” “goal,” “objective” or similar expressions. Except as required by law, Lexington undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington’s expectations will be realized.
LEXINGTON REALTY TRUST
TRADED: NYSE: LXP
ONE PENN PLAZA, SUITE 4015
NEW YORK, NY 10119-4015
FOR IMMEDIATE RELEASE
LEXINGTON REALTY TRUST REPORTS THIRD QUARTER 2016 RESULTS
New York, NY - Thursday, November 3, 2016 - Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant real estate investments, today announced results for the third quarter ended September 30, 2016.
Third Quarter 2016 Highlights
• | Generated Net Loss attributable to common shareholders of $26.7 million, or $0.11 per diluted common share. |
• | Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $67.5 million, or $0.28 per diluted common share. |
• | Disposed of 10 properties, including the three remaining land investments in New York City, for $409.1 million. |
• | Acquired an industrial property for $43.1 million. |
• | Invested $27.6 million in on-going build-to-suit projects and completed a build-to-suit property with a total cost of $80.0 million. |
• | Executed 1.0 million square feet of new leases and lease extensions with overall portfolio 95.3% leased at quarter end. |
• | Obtained $197.2 million 20-year non-recourse financing, which bears interest at a 4.04% fixed rate and is secured by the build-to-suit project in Lake Jackson, Texas. |
• | Converted the remaining $11.9 million original principal amount of 6.00% Convertible Guaranteed Notes for 1.9 million common shares. |
• | Retired $271.9 million of secured debt and all $123.0 million borrowings outstanding on the $400.0 million revolving credit facility. |
• | Increased the quarterly common share/unit dividend/distribution to $0.175 per common share/unit from $0.17 per common share/unit. |
Subsequent Events
• | Disposed of two properties for aggregate gross proceeds of $40.3 million. |
Adjusted Company FFO is a non-GAAP financial measure. It and certain other non-GAAP financial measures are defined and reconciled later in this press release.
T. Wilson Eglin, Chief Executive Officer and President of Lexington Realty Trust, commented, “We substantially completed our $600-$700 million sales program during the quarter and subsequently sold two properties, bringing our total consolidated sales for the year to $616.2 million at average cash and GAAP cap rates of 5.1% and 10.6%, respectively. The $338 million sale of our New York City land investments, which were purchased in late 2013 for $302 million, turned out to be a great success for our investors. These properties generated strong cash flow and capital appreciation and the sale allowed us to reduce leverage considerably while providing cash to retire debt and fund investments.”
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“Furthermore, as a result of our accomplishments this year, we increased our annualized dividend from $0.68 to $0.70 per common share, we substantially reduced leverage to 5.3x net debt to Adjusted EBITDA compared with 6.2x at June 30, 2016, our cash position is strong, and our credit line is fully available. Given the overall execution of our business plan and better visibility on activity for the remainder of the year, we are increasing our 2016 Adjusted Company FFO guidance to a new range of $1.09-$1.11 from $1.07-$1.10.”
FINANCIAL RESULTS
Revenues
For the quarter ended September 30, 2016, total gross revenues were $106.3 million, a 0.9% increase compared with total gross revenues of $105.4 million for the quarter ended September 30, 2015. The increase was primarily attributable to revenue generated from property acquisitions and new leases signed, partially offset by 2015 and 2016 property sales and lease expirations.
Net Loss Attributable to Common Shareholders
For the quarter ended September 30, 2016, net loss attributable to common shareholders was $26.7 million, or $0.11 per diluted share, compared with net loss attributable to common shareholders for the quarter ended September 30, 2015 of $7.6 million, or $0.03 per diluted share. The Company recognized impairment charges of $72.9 million for the quarter ended September 30, 2016, primarily due to the write-off of the deferred rent receivable relating to the sale of the three remaining New York, New York land investments. The Company, which purchased these three land investments in 2013 for $302.0 million, sold them in the third quarter of 2016 for an aggregate gross sales price of $338.2 million.
Adjusted Company FFO
For the quarter ended September 30, 2016, Lexington generated Adjusted Company FFO of $67.5 million, or $0.28 per diluted share, compared to Adjusted Company FFO for the quarter ended September 30, 2015 of $66.9 million, or $0.27 per diluted share.
Dividends/Distributions
Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended September 30, 2016 of $0.175 per common share/unit, which represented an increase of approximately 3% over the prior regular quarterly common share/unit dividend/distribution. This equates to an increase of $0.02 per common share/unit to an annual dividend/distribution of $0.70 per common share/unit. The common share/unit dividend/distribution was paid on October 17, 2016 to common shareholders/unitholders of record as of September 30, 2016. Lexington also declared a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred Shares”), which is payable on February 15, 2017 to Series C Preferred Shareholders of record as of January 31, 2017.
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OPERATING ACTIVITIES
During the quarter, Lexington acquired/completed the following properties:
ACQUISITIONS | ||||||||||||||||||||||||||
Tenant | Location | Property Type | Initial Basis ($000) | Initial Estimated Annualized GAAP Rent ($000) | Initial Estimated Annualized Cash Rent ($000) | Initial Estimated GAAP Yield | Initial Estimated Cash Yield | Approximate Lease Term (Yrs) | ||||||||||||||||||
Consolidated: | ||||||||||||||||||||||||||
Pacific Foods of Oregon, Inc. | Wilsonville, OR | Industrial | $ | 43,100 | $ | 3,120 | $ | 2,567 | 7.2 | % | 6.0 | % | 16 | |||||||||||||
Nonconsolidated: | ||||||||||||||||||||||||||
British Schools of America, LLC(1) | Houston, TX | Private School | $ | 79,964 | $ | 6,248 | $ | 6,248 | 7.8 | % | 7.8 | % | 20 |
(1) | Lexington had a 25% equity interest as of September 30, 2016. Lexington is providing construction financing up to $56.7 million to the joint venture, of which $43.1 million had been funded as of September 30, 2016. The related lease provides for annual CPI increases. |
During the quarter, Lexington funded $27.6 million of the projected costs of the following projects:
ON-GOING BUILD-TO-SUIT PROJECTS
Location | Sq. Ft. | Property Type | Lease Term (Years) | Maximum Commitment/ Estimated Completion Cost ($000) | GAAP Investment Balance as of 9/30/2016 ($000) | Estimated Acquisition/ Completion Date | Estimated Initial GAAP Yield | Estimated Initial Cash Yield | ||||||||||||||||||
Lake Jackson, TX | 664,000 | Office | 20 | $ | 166,164 | $ | 101,203 | 4Q 16/1Q 17 | 8.9 | % | 7.3 | % | ||||||||||||||
Charlotte, NC | 201,000 | Office | 15 | 62,445 | 32,613 | 1Q 17 | 9.5 | % | 8.3 | % | ||||||||||||||||
Opelika, AL | 165,000 | Industrial | 25 | 37,000 | 3,760 | 2Q 17 | 9.0 | % | 7.1 | % | ||||||||||||||||
1,030,000 | $ | 265,609 | $ | 137,576 |
During the quarter, Lexington sold the following properties:
PROPERTY DISPOSITIONS
Primary Tenant | Location | Property Type | Gross Disposition Price ($000) | Annualized
Net Income(1)(2) ($000) | Annualized NOI(1) ($000) | Month of Disposition | ||||||||||||
Multi-Tenant | Foxboro, MA | Office | $ | 4,100 | $ | (268 | ) | $ | (267 | ) | July | |||||||
Vacant | Franklin, OH | Retail | 338 | (76 | ) | (65 | ) | July | ||||||||||
Vacant | Bremerton, WA | Office | 6,100 | (428 | ) | 1,198 | August | |||||||||||
American Golf Corporation | Oklahoma City, OK | Specialty | 1,995 | 179 | 467 | September | ||||||||||||
Vacant(3) | Bridgewater, NJ | Office | 14,118 | (2,203 | ) | (416 | ) | September | ||||||||||
Addenbrooke Classical Academy | Lakewood, CO | Office | 11,500 | (227 | ) | 314 | September | |||||||||||
Siemens Corporation | Milford, OH | Office | 32,750 | 2,130 | 2,466 | September | ||||||||||||
SM Ascott LLC, Tribeca Ascott LLC & AL-Stone Ground Tenant LLC | New York, NY | Land | 338,200 | 34,773 | 15,484 | September | ||||||||||||
$ | 409,101 | $ | 33,880 | $ | 19,181 |
(1) | Quarterly period prior to sale annualized. |
(2) | Excludes impairment charges recognized. |
(3) | Conveyed to lender in a foreclosure sale. Lender has made a claim under a related non-recourse carveout guaranty. See periodic filings with the Securities and Exchange Commission for more information. |
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LEASING
At September 30, 2016, Lexington's overall portfolio was 95.3% leased compared with 96.2% leased at June 30, 2016, excluding properties subject to secured mortgage loans currently in default. The decrease relates primarily to a reduction in occupancy at the Temperance, Michigan property.
During the third quarter of 2016, Lexington executed the following new and extended leases:
LEASE EXTENSIONS | ||||||||||||||
Location | Primary Tenant(1) | Prior Term | Lease Expiration Date | Sq. Ft. | ||||||||||
Office/Multi-Tenant | ||||||||||||||
1-3 | Honolulu | HI | N/A | 2016 | 2017 | 5,323 | ||||||||
3 | Total office lease extensions | 5,323 | ||||||||||||
Industrial | ||||||||||||||
1 | Hebron | OH | Owens Corning Insulating Systems, LLC | 05/2017 | 12/2019 | 250,410 | ||||||||
2 | Hebron | OH | Owens Corning Insulating Systems, LLC | 05/2017 | 12/2019 | 400,522 | ||||||||
2 | Total industrial lease extensions | 650,932 | ||||||||||||
5 | Total lease extensions | 656,255 |
NEW LEASES | ||||||||||||||||
Location | Lease Expiration Date | Sq. Ft. | ||||||||||||||
Office/Multi-Tenant | ||||||||||||||||
1 | Indianapolis | IN | N/A | 02/2018 | 3,764 | |||||||||||
2-4 | Honolulu | HI | N/A | 2016-2017 | 4,679 | |||||||||||
1 | Total office lease extensions | 8,443 | ||||||||||||||
Industrial | ||||||||||||||||
1 | Temperance | MI | Hollingsworth Logistics Group LLC | 11/2021 | 290,000 | |||||||||||
1 | Total new industrial leases | 290,000 | ||||||||||||||
5 | Total extended leases | 298,443 | ||||||||||||||
10 | TOTAL NEW AND EXTENDED LEASES | 954,698 |
(1) | Leases greater than 10,000 square feet. |
BALANCE SHEET/CAPITAL MARKETS
During the third quarter of 2016, Lexington satisfied $271.9 million of secured debt with a weighted-average interest rate of 4.9%.
In July 2016, the remaining $11.9 million original principal amount of Lexington's 6.00% Convertible Guaranteed Notes due 2030 were converted for 1,892,269 common shares.
In July 2016, Lexington obtained a $197.2 million 20-year non-recourse financing on its build-to-suit project in Lake Jackson, Texas. The loan bears interest at a fixed rate of 4.04% and matures in October 2036.
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2016 EARNINGS GUIDANCE
Lexington now estimates that its net income attributable to common shareholders per diluted common share for the year ended December 31, 2016 will be within an expected range of $0.40 to $0.44. Lexington is increasing its Adjusted Company FFO guidance for the year ended December 31, 2016 to an expected range of $1.09 to $1.11 per diluted common share from a range of $1.07 to $1.10 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.
THIRD QUARTER 2016 CONFERENCE CALL
Lexington will host a conference call today, Thursday, November 3, 2016, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended September 30, 2016. Interested parties may participate in this conference call by dialing 1-844-825-9783 (U.S.), 1-412-317-5163 (International) or 1-855-669-9657 (Canada). A replay of the call will be available through February 3, 2017, at 1-877-344-7529 (U.S.), 1-412-317-0088 (International) or 1-855-669-9658 (Canada), pin code for all replay numbers is 10094638. A live webcast of the conference call will be available at www.lxp.com within the Investors section.
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ABOUT LEXINGTON REALTY TRUST
Lexington Realty Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) that owns a diversified portfolio of real estate assets consisting primarily of equity and debt investments in single-tenant net-leased commercial properties across the United States. Lexington seeks to expand its portfolio through build-to-suit transactions, sale-leaseback transactions and other transactions, including acquisitions. For more information, including Lexington's Quarterly Earnings and Supplemental Operating and Financial Data information package, or to follow Lexington on social media, visit www.lxp.com.
Contact:
Investor or Media Inquiries for Lexington Realty Trust:
Heather Gentry, Senior Vice President of Investor Relations
Lexington Realty Trust
Phone: (212) 692-7200 E-mail: hgentry@lxp.com
This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under Lexington's control which may cause actual results, performance or achievements of Lexington to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings “Management's Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Lexington's periodic reports filed with the Securities and Exchange Commission, including risks related to: (1) the authorization by Lexington's Board of Trustees of future dividend declarations, (2) Lexington's ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO for the year ending December 31, 2016, (3) the successful consummation of any lease, acquisition, build-to-suit, disposition, financing or other transaction, (4) the failure to continue to qualify as a real estate investment trust, (5) changes in general business and economic conditions, including the impact of any legislation, (6) competition, (7) increases in real estate construction costs, (8) changes in interest rates, (9) changes in accessibility of debt and equity capital markets, and (10) future impairment charges. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington's web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington's future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects”, “may,” “plans,” “predicts,” “will,” “will likely result,” “is optimistic,” “goal,” “objective” or similar expressions. Except as required by law, Lexington undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington's expectations will be realized.
References to Lexington refer to Lexington Realty Trust and its consolidated subsidiaries. All interests in properties and loans are held through special purpose entities, which are separate and distinct legal entities, some of which are consolidated for financial statement purposes and/or disregarded for income tax purposes. The assets and credit of each special purpose entity with a property subject to a mortgage loan (a “property owner subsidiary”) are not available to creditors to satisfy the debt and other obligations of any other person, including any other special purpose entity or affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member of managing member of such property owner subsidiary, but merely hold partnership, membership or beneficial interests therein which interests are subordinate to the claims of the property owner subsidiary's general partner's, member's or managing member's creditors).
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Non-GAAP Financial Measures - Definitions
Lexington has used non-GAAP financial measures as defined by the Securities and Exchange Commission Regulation G in this Quarterly Earnings Release and in other public disclosures.
Lexington believes that the measures defined below are helpful to investors in measuring our performance or that of an individual investment. Since these measures exclude certain items which are included in their respective most comparable measures under generally accepted accounting principles (“GAAP”), reliance on the measures has limitations; management compensates for these limitations by using the measures simply as supplemental measures that are weighed in balance with other GAAP measures. These measures are not necessarily indications of our cash flow available to fund cash needs. Additionally, they should not be used as an alternative to the respective most comparable GAAP measures when evaluating Lexington's financial performance or cash flow from operating, investing or financing activities or liquidity.
Cash Rent: Cash Rent is calculated by making adjustments to GAAP rent to remove the impact of GAAP required adjustments to rental income such as adjustments for straight-line rents relating to free rent periods and contractual rent increases. Cash Rent excludes lease termination income. Lexington believes Cash Rent provides a meaningful indication of an investment's ability to fund cash needs.
Company Funds Available for Distribution (“FAD”): FAD is calculated by making adjustments to Adjusted Company FFO (see below) for (1) straight-line adjustments, (2) lease incentive amortization, (3) amortization of above/below market leases, (4) lease termination payments, net, (5) non-cash interest, net, (6) non-cash charges, net, (7) cash paid for tenant improvements, and (8) cash paid for lease costs. Although FAD may not be comparable to that of other real estate investment trusts (“REITs”), Lexington believes it provides a meaningful indication of its ability to fund cash needs. FAD is a non-GAAP financial measure and should not be viewed as an alternative measurement of operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of liquidity.
Funds from Operations (“FFO”) and Adjusted Company FFO: Lexington believes that Funds from Operations, or FFO, which is a non-GAAP measure, is a widely recognized and appropriate measure of the performance of an equity REIT. Lexington believes FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income.
The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (or loss) computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization and after adjustments for non-consolidated partnerships and joint ventures.” NAREIT clarified its computation of FFO to exclude impairment charges on depreciable real estate owned directly or indirectly. FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.
Lexington presents FFO available to common shareholders and unitholders - basic and also presents FFO available to all equityholders and unitholders - diluted on a company-wide basis as if all securities that are convertible, at the holder's option, into Lexington’s common shares, are converted at the beginning of the period. Lexington also presents Adjusted Company FFO available to all equityholders and unitholders - diluted which adjusts FFO available to all equityholders and unitholders - diluted for certain items which we believe are not indicative of the operating results of Lexington's real estate portfolio. Lexington believes this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate these measures in a similar fashion, these measures may not be comparable to similarly titled measures as reported by others. These measures should not be considered as an alternative to net income as an indicator of Lexington’s operating performance or as an alternative to cash flow as a measure of liquidity.
GAAP and Cash Yield or Capitalization Rate: GAAP and cash yields or capitalization rates are measures of operating performance used to evaluate the individual performance of an investment. These measures are not presented or intended to be viewed as a liquidity or performance measure that present a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. The yield or capitalization rate is calculated by dividing the annualized NOI (as defined below, except GAAP rent adjustments are added back to rental income to calculate GAAP yield or capitalization rate) the investment is expected to generate (or has generated) divided by the acquisition/completion cost (or sale) price.
Net Operating Income (“NOI”): NOI is a measure of operating performance used to evaluate the individual performance of an investment. This measure is not presented or intended to be viewed as a liquidity or performance measure that presents a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. Lexington defines NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income), tenant reimbursements and other property income) less property operating expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, Lexington's NOI may not be comparable to other companies. Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. Lexington believes that net income is the most directly comparable GAAP measure to NOI.
# # #
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share data)
Three months ended September 30, | Nine months ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Gross revenues: | ||||||||||||||||
Rental | $ | 98,952 | $ | 98,095 | $ | 304,158 | $ | 300,551 | ||||||||
Tenant reimbursements | 7,379 | 7,343 | 23,366 | 23,662 | ||||||||||||
Total gross revenues | 106,331 | 105,438 | 327,524 | 324,213 | ||||||||||||
Expense applicable to revenues: | ||||||||||||||||
Depreciation and amortization | (40,288 | ) | (39,712 | ) | (124,687 | ) | (121,795 | ) | ||||||||
Property operating | (11,472 | ) | (13,484 | ) | (34,843 | ) | (45,600 | ) | ||||||||
General and administrative | (7,510 | ) | (6,734 | ) | (23,032 | ) | (22,526 | ) | ||||||||
Non-operating income | 3,080 | 2,515 | 9,500 | 8,213 | ||||||||||||
Interest and amortization expense | (23,001 | ) | (21,931 | ) | (68,573 | ) | (68,273 | ) | ||||||||
Debt satisfaction gains (charges), net | 2,538 | (398 | ) | (818 | ) | 13,753 | ||||||||||
Impairment charges | (72,890 | ) | (32,818 | ) | (75,904 | ) | (34,070 | ) | ||||||||
Gains on sales of properties | 16,072 | 1,733 | 58,413 | 23,307 | ||||||||||||
Income (loss) before provision for income taxes, equity in earnings of non-consolidated entities and discontinued operations | (27,140 | ) | (5,391 | ) | 67,580 | 77,222 | ||||||||||
Provision for income taxes | (462 | ) | (75 | ) | (1,099 | ) | (464 | ) | ||||||||
Equity in earnings of non-consolidated entities | 340 | 266 | 6,394 | 938 | ||||||||||||
Income (loss) from continuing operations | (27,262 | ) | (5,200 | ) | 72,875 | 77,696 | ||||||||||
Discontinued operations: | ||||||||||||||||
Income from discontinued operations | — | — | — | 109 | ||||||||||||
Provision for income taxes | — | — | — | (4 | ) | |||||||||||
Gain on sale of property | — | — | — | 1,577 | ||||||||||||
Total discontinued operations | — | — | — | 1,682 | ||||||||||||
Net income (loss) | (27,262 | ) | (5,200 | ) | 72,875 | 79,378 | ||||||||||
Less net (income) loss attributable to noncontrolling interests | 2,232 | (784 | ) | 340 | (2,525 | ) | ||||||||||
Net income (loss) attributable to Lexington Realty Trust shareholders | (25,030 | ) | (5,984 | ) | 73,215 | 76,853 | ||||||||||
Dividends attributable to preferred shares – Series C | (1,573 | ) | (1,573 | ) | (4,718 | ) | (4,718 | ) | ||||||||
Allocation to participating securities | (50 | ) | (72 | ) | (187 | ) | (264 | ) | ||||||||
Net income (loss) attributable to common shareholders | $ | (26,653 | ) | $ | (7,629 | ) | $ | 68,310 | $ | 71,871 | ||||||
Income (loss) per common share – basic: | ||||||||||||||||
Income (loss) from continuing operations | $ | (0.11 | ) | $ | (0.03 | ) | $ | 0.29 | $ | 0.30 | ||||||
Income from discontinued operations | — | — | — | 0.01 | ||||||||||||
Net income (loss) attributable to common shareholders | $ | (0.11 | ) | $ | (0.03 | ) | $ | 0.29 | $ | 0.31 | ||||||
Weighted-average common shares outstanding – basic | 234,207,396 | 234,018,062 | 233,151,600 | 233,457,400 | ||||||||||||
Income (loss) per common share – diluted: | ||||||||||||||||
Income (loss) from continuing operations | $ | (0.11 | ) | $ | (0.03 | ) | $ | 0.28 | $ | 0.30 | ||||||
Income from discontinued operations | — | — | — | 0.01 | ||||||||||||
Net income (loss) attributable to common shareholders | $ | (0.11 | ) | $ | (0.03 | ) | $ | 0.28 | $ | 0.31 | ||||||
Weighted-average common shares outstanding – diluted | 234,207,396 | 234,018,062 | 237,215,883 | 233,776,838 | ||||||||||||
Amounts attributable to common shareholders: | ||||||||||||||||
Income (loss) from continuing operations | $ | (26,653 | ) | $ | (7,629 | ) | $ | 68,310 | $ | 70,189 | ||||||
Income from discontinued operations | — | — | — | 1,682 | ||||||||||||
Net income (loss) attributable to common shareholders | $ | (26,653 | ) | $ | (7,629 | ) | $ | 68,310 | $ | 71,871 |
10
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)
September 30, 2016 | December 31, 2015 | |||||||
Assets: | ||||||||
Real estate, at cost | $ | 3,459,784 | $ | 3,789,711 | ||||
Real estate - intangible assets | 598,359 | 692,778 | ||||||
Investments in real estate under construction | 137,576 | 95,402 | ||||||
4,195,719 | 4,577,891 | |||||||
Less: accumulated depreciation and amortization | 1,201,043 | 1,179,969 | ||||||
Real estate, net | 2,994,676 | 3,397,922 | ||||||
Assets held for sale | 29,819 | 24,425 | ||||||
Cash and cash equivalents | 117,791 | 93,249 | ||||||
Restricted cash | 42,387 | 10,637 | ||||||
Investment in and advances to non-consolidated entities | 63,963 | 31,054 | ||||||
Deferred expenses, net | 34,697 | 42,000 | ||||||
Loans receivable, net | 95,808 | 95,871 | ||||||
Rent receivable – current | 8,875 | 7,193 | ||||||
Rent receivable – deferred | 22,843 | 87,547 | ||||||
Other assets | 39,092 | 18,505 | ||||||
Total assets | $ | 3,449,951 | $ | 3,808,403 | ||||
Liabilities and Equity: | ||||||||
Liabilities: | ||||||||
Mortgages and notes payable, net | $ | 757,718 | $ | 872,643 | ||||
Revolving credit facility borrowings | — | 177,000 | ||||||
Term loans payable, net | 500,839 | 500,076 | ||||||
Senior notes payable, net | 494,153 | 493,526 | ||||||
Convertible guaranteed notes payable, net | — | 12,126 | ||||||
Trust preferred securities, net | 127,071 | 126,996 | ||||||
Dividends payable | 47,944 | 45,440 | ||||||
Liabilities held for sale | 2,220 | 8,405 | ||||||
Accounts payable and other liabilities | 30,796 | 41,479 | ||||||
Accrued interest payable | 11,632 | 8,851 | ||||||
Deferred revenue - including below market leases, net | 43,904 | 42,524 | ||||||
Prepaid rent | 17,432 | 16,806 | ||||||
Total liabilities | 2,033,709 | 2,345,872 | ||||||
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, 237,083,452 and 234,575,225 shares issued and outstanding in 2016 and 2015, respectively | 24 | 23 | ||||||
Additional paid-in-capital | 2,788,966 | 2,776,837 | ||||||
Accumulated distributions in excess of net income | (1,481,484 | ) | (1,428,908 | ) | ||||
Accumulated other comprehensive loss | (4,883 | ) | (1,939 | ) | ||||
Total shareholders’ equity | 1,396,639 | 1,440,029 | ||||||
Noncontrolling interests | 19,603 | 22,502 | ||||||
Total equity | 1,416,242 | 1,462,531 | ||||||
Total liabilities and equity | $ | 3,449,951 | $ | 3,808,403 |
11
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
EARNINGS PER SHARE
(Unaudited and in thousands, except share and per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
EARNINGS PER SHARE: | ||||||||||||||||
Basic: | ||||||||||||||||
Income (loss) from continuing operations attributable to common shareholders | $ | (26,653 | ) | $ | (7,629 | ) | $ | 68,310 | $ | 70,189 | ||||||
Income from discontinued operations attributable to common shareholders | — | — | — | 1,682 | ||||||||||||
Net income (loss) attributable to common shareholders | $ | (26,653 | ) | $ | (7,629 | ) | $ | 68,310 | $ | 71,871 | ||||||
Weighted-average number of common shares outstanding - basic | 234,207,396 | 234,018,062 | 233,151,600 | 233,457,400 | ||||||||||||
Income (loss) per common share: | ||||||||||||||||
Income (loss) from continuing operations | $ | (0.11 | ) | $ | (0.03 | ) | $ | 0.29 | $ | 0.30 | ||||||
Income from discontinued operations | — | — | — | 0.01 | ||||||||||||
Net income (loss) attributable to common shareholders | $ | (0.11 | ) | $ | (0.03 | ) | $ | 0.29 | $ | 0.31 | ||||||
Diluted: | ||||||||||||||||
Income (loss) from continuing operations attributable to common shareholders - basic | $ | (26,653 | ) | $ | (7,629 | ) | $ | 68,310 | $ | 70,189 | ||||||
Impact of assumed conversions | — | — | (1,083 | ) | — | |||||||||||
Income (loss) from continuing operations attributable to common shareholders | (26,653 | ) | (7,629 | ) | 67,227 | 70,189 | ||||||||||
Income from discontinued operations attributable to common shareholders - basic | — | — | — | 1,682 | ||||||||||||
Impact of assumed conversions | — | — | — | — | ||||||||||||
Income from discontinued operations attributable to common shareholders | — | — | — | 1,682 | ||||||||||||
Net income (loss) attributable to common shareholders | $ | (26,653 | ) | $ | (7,629 | ) | $ | 67,227 | $ | 71,871 | ||||||
Weighted-average common shares outstanding - basic | 234,207,396 | 234,018,062 | 233,151,600 | 233,457,400 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Share options | — | — | 246,166 | 319,438 | ||||||||||||
Operating Partnership Units | — | — | 3,818,117 | — | ||||||||||||
Weighted-average common shares outstanding - diluted | 234,207,396 | 234,018,062 | 237,215,883 | 233,776,838 | ||||||||||||
Income (loss) per common share: | ||||||||||||||||
Income (loss) from continuing operations | $ | (0.11 | ) | $ | (0.03 | ) | $ | 0.28 | $ | 0.30 | ||||||
Income from discontinued operations | — | — | — | 0.01 | ||||||||||||
Net income (loss) attributable to common shareholders | $ | (0.11 | ) | $ | (0.03 | ) | $ | 0.28 | $ | 0.31 |
12
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
ADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS AVAILABLE FOR DISTRIBUTION
(Unaudited and in thousands, except share and per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
FUNDS FROM OPERATIONS: | ||||||||||||||||
Basic and Diluted: | ||||||||||||||||
Net income (loss) attributable to common shareholders | $ | (26,653 | ) | $ | (7,629 | ) | $ | 68,310 | $ | 71,871 | ||||||
Adjustments: | ||||||||||||||||
Depreciation and amortization | 38,642 | 38,547 | 119,523 | 117,936 | ||||||||||||
Impairment charges - real estate | 72,890 | 32,818 | 75,904 | 34,070 | ||||||||||||
Noncontrolling interests - OP units | (2,478 | ) | 452 | (1,083 | ) | 1,542 | ||||||||||
Amortization of leasing commissions | 1,646 | 1,166 | 5,164 | 3,859 | ||||||||||||
Joint venture and noncontrolling interest adjustment | 284 | 577 | 742 | 1,335 | ||||||||||||
Gains on sales of properties, including non-consolidated entities | (16,072 | ) | (1,733 | ) | (63,791 | ) | (24,884 | ) | ||||||||
Tax on sales of properties | — | — | 50 | — | ||||||||||||
FFO available to common shareholders and unitholders - basic | 68,259 | 64,198 | 204,819 | 205,729 | ||||||||||||
Preferred dividends | 1,573 | 1,573 | 4,718 | 4,718 | ||||||||||||
Interest and amortization on 6.00% Convertible Guaranteed Notes | 47 | 252 | 532 | 795 | ||||||||||||
Amount allocated to participating securities | 50 | 72 | 187 | 264 | ||||||||||||
FFO available to all equityholders and unitholders - diluted | 69,929 | 66,095 | 210,256 | 211,506 | ||||||||||||
Debt satisfaction (gains) charges, net, including non-consolidated entities | (2,538 | ) | 398 | 818 | (13,689 | ) | ||||||||||
Transaction costs/other | 115 | 405 | 329 | 579 | ||||||||||||
Adjusted Company FFO available to all equityholders and unitholders - diluted | 67,506 | 66,898 | 211,403 | 198,396 | ||||||||||||
FUNDS AVAILABLE FOR DISTRIBUTION: | ||||||||||||||||
Adjustments: | ||||||||||||||||
Straight-line adjustments | (11,317 | ) | (12,899 | ) | (35,697 | ) | (35,242 | ) | ||||||||
Lease incentives | 414 | 212 | 1,256 | 1,157 | ||||||||||||
Amortization of above/below market leases | 572 | 287 | 1,527 | (157 | ) | |||||||||||
Lease termination payments, net | (2,190 | ) | 2,067 | 244 | 666 | |||||||||||
Non-cash interest, net | (512 | ) | (598 | ) | (1,526 | ) | 520 | |||||||||
Non-cash charges, net | 2,296 | 2,205 | 6,906 | 6,608 | ||||||||||||
Tenant improvements | (1,173 | ) | (10,562 | ) | (1,292 | ) | (13,184 | ) | ||||||||
Lease costs | (1,458 | ) | (1,066 | ) | (6,165 | ) | (4,242 | ) | ||||||||
Company Funds Available for Distribution | $ | 54,138 | $ | 46,544 | $ | 176,656 | $ | 154,522 | ||||||||
Per Common Share and Unit Amounts | ||||||||||||||||
Basic: | ||||||||||||||||
FFO | $ | 0.29 | $ | 0.27 | $ | 0.86 | $ | 0.87 | ||||||||
Diluted: | ||||||||||||||||
FFO | $ | 0.29 | $ | 0.27 | $ | 0.86 | $ | 0.87 | ||||||||
Adjusted Company FFO | $ | 0.28 | $ | 0.27 | $ | 0.87 | $ | 0.81 | ||||||||
Basic: | ||||||||||||||||
Weighted-average common shares outstanding - basic EPS | 234,207,396 | 234,018,062 | 233,151,600 | 233,457,400 | ||||||||||||
Operating partnership units(1) | 3,815,386 | 3,852,974 | 3,818,117 | 3,852,974 | ||||||||||||
Weighted-average common shares outstanding - basic FFO | 238,022,782 | 237,871,036 | 236,969,717 | 237,310,374 | ||||||||||||
Diluted: | ||||||||||||||||
Weighted-average common shares outstanding - diluted EPS | 234,207,396 | 234,018,062 | 237,215,883 | 233,776,838 | ||||||||||||
Unvested share-based payment awards | 570,260 | — | 478,329 | 5,130 | ||||||||||||
6.00% Convertible Guaranteed Notes | 508,912 | 1,931,950 | 1,439,456 | 2,086,706 | ||||||||||||
Operating partnership units(1) | 3,815,386 | 3,852,974 | — | 3,852,974 | ||||||||||||
Share Options | 238,395 | 200,993 | — | — | ||||||||||||
Preferred shares - Series C | 4,710,570 | 4,710,570 | 4,710,570 | 4,710,570 | ||||||||||||
Weighted-average common shares outstanding - diluted FFO | 244,050,919 | 244,714,549 | 243,844,238 | 244,432,218 |
(1) Includes OP units other than OP units held by Lexington.
13
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
RECONCILIATION OF NON-GAAP MEASURES
2016 EARNINGS GUIDANCE | ||||||||
Twelve Months Ended December 31, 2016 | ||||||||
Range | ||||||||
Estimated: | ||||||||
Net income attributable to common shareholders per diluted common share(1) | $ | 0.40 | $ | 0.44 | ||||
Depreciation and amortization | 0.68 | 0.68 | ||||||
Impact of capital transactions | 0.01 | (0.01 | ) | |||||
Estimated Adjusted Company FFO per diluted common share | $ | 1.09 | $ | 1.11 |
(1) | Assumes all convertible securities are dilutive. |
14
LEXINGTON REALTY TRUST
2016 Third Quarter Investment / Capital Recycling Summary
PROPERTY INVESTMENTS
Primary Tenant | Location | Property Type | Initial Basis ($000) | Initial Estimated Annualized GAAP Rent ($000) | Initial Estimated Annualized Cash Rent ($000) (1) | Initial Estimated GAAP Yield (1) | Initial Estimated Cash Yield (1) | Month Closed | Primary Lease Expiration | |||||||||||||||||||||||
Consolidated | ||||||||||||||||||||||||||||||||
Pacific Foods of Oregon, Inc. | Wilsonville | OR | Industrial | $ | 43,100 | $ | 3,120 | $ | 2,567 | 7.2 | % | 6.0 | % | Sept | 10/2032 | |||||||||||||||||
Nonconsolidated | ||||||||||||||||||||||||||||||||
British Schools of America, LLC (3) | Katy | TX | Private School | $ | 79,964 | $ | 6,248 | $ | 6,248 | 7.8 | % | 7.8 | % | Sept | 08/2036 |
CAPITAL RECYCLING
PROPERTY DISPOSITIONS
Primary Tenant | Location | Property Type | Gross Sale Price ($000) | Annualized Net Income ($000) (2) | Annualized NOI ($000)(1)(2) | Month of Disposition | % Leased | Gross
Sale Price PSF | ||||||||||||||||||||||
1 | Multi-Tenant | Foxborough | MA | Office | $ | 4,100 | $ | (268 | ) | $ | (267 | ) | July | 11 | % | $ | 53.75 | |||||||||||||
2 | Vacant | Franklin | OH | Retail | 338 | (76 | ) | (65 | ) | July | 0 | % | 11.59 | |||||||||||||||||
3 | Vacant | Bremerton | WA | Office | 6,100 | (428 | ) | 1,198 | August | 0 | % | 101.33 | ||||||||||||||||||
4 | Vacant (4) | Bridgewater | NJ | Office | 14,118 | (2,203 | ) | (416 | ) | September | 0 | % | 122.17 | |||||||||||||||||
5 | Siemens Corporation | Milford | OH | Office | 32,750 | 2,130 | 2,466 | September | 100 | % | 148.05 | |||||||||||||||||||
6 | American Golf Corporation | Oklahoma City | OK | Specialty | 1,995 | 179 | 467 | September | 100 | % | N/A | |||||||||||||||||||
7 | Addenbrooke Classical Academy | Lakewood | CO | Office | 11,500 | (227 | ) | 314 | September | 100 | % | 168.71 | ||||||||||||||||||
8-10 | SM Ascott LLC, Tribeca Ascott LLC, and AL-Stone Ground Tenant LLC | New York | NY | Land | 338,200 | 34,773 | 15,484 | September | 100 | % | N/A | |||||||||||||||||||
10 | TOTAL PROPERTY DISPOSITIONS | $ | 409,101 | $ | 33,880 | $ | 19,181 |
Footnotes
(1) | See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
(2) | 2Q 2016 annualized. |
(3) | Lexington had a 25% equity interest as of September 30, 2016. Lexington is providing construction financing up to $56.7 million to the joint venture of which $43.1 million has been funded as of September 30, 2016. Lease contains annual CPI increases. |
(4) | Conveyed to lender in a foreclosure sale. Lender has made a claim under a related non-recourse carveout guaranty. See periodic filings with the Securities and Exchange Commission for more information. |
15
LEXINGTON REALTY TRUST
2016 Third Quarter Build-to-Suit Projects
BUILD-TO-SUIT PROJECTED CONSTRUCTION FUNDING SCHEDULE (1)
Location | Sq. Ft | Asset Type | Lease Term (Years) | Maximum Commitment/ Estimated Completion Cost ($000) | Investment balance as of 9/30/16 ($000) | Estimated Cash Investment Next 12 Months ($000) | Estimated Completion/ Acquisition Date | Estimated Initial GAAP Yield (4) | Estimated Initial Cash Yield (4) | |||||||||||||||||||||||||||||||||||||||
Q4 2016 | Q1 2017 | Q2 2017 | Q3 2017 | |||||||||||||||||||||||||||||||||||||||||||||
1 | Lake Jackson (2) | TX | 664,000 | Office | 20 | $ | 166,164 | $ | 101,203 | $ | - | $ | - | $ | - | $ | - | 4Q 16 / 1Q 17 | 8.9 | % | 7.3 | % | ||||||||||||||||||||||||||
2 | Charlotte | NC | 201,000 | Office | 15 | 62,445 | 32,613 | 12,563 | 12,563 | 4,188 | - | 1Q 17 | 9.5 | % | 8.3 | % | ||||||||||||||||||||||||||||||||
3 | Opelika | AL | 165,000 | Industrial | 25 | 37,000 | 3,760 | 12,327 | 12,327 | 8,218 | - | 2Q 17 | 9.0 | % | 7.1 | % | ||||||||||||||||||||||||||||||||
3 | TOTAL BUILD-TO-SUIT PROJECTS (3) | $ | 265,609 | $ | 137,576 | $ | 24,890 | $ | 24,890 | $ | 12,406 | $ | - |
Footnotes
(1) | Lexington can give no assurance that any of the build-to-suit projects or other potential investments that are under commitment or contract or in process will be completed or, if completed, will perform to Lexington's expectations. |
(2) | In July 2016, Lexington obtained $197.2 million of non-recourse financing. The loan bears interest at a fixed rate of 4.04%. |
The estimated remaining costs to fund the project of $71.6 million were escrowed at closing, approximately $16.4 million of which were used during 3Q 2016 to fund project costs.
(3) | Investment balance in accordance with GAAP included in investment in real estate under construction. |
Aggregate equity invested is $142.4 million.
(4) | See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
16
LEXINGTON REALTY TRUST
2016 Third Quarter Financing Summary
DEBT RETIRED
Location | Primary Tenant | Property Type | Face / Satisfaction ($000) | Fixed Rate | Maturity Date | |||||||||||
Consolidated Mortgage Debt: | ||||||||||||||||
Plymouth, IN | Bay Valley Foods, LLC | Industrial | $ | 5,723 | 6.315 | % | 09/2016 | |||||||||
Glenwillow, OH | Royal Appliance Mfg. Co. | Industrial | 15,132 | 6.130 | % | 09/2016 | ||||||||||
Bridgewater, NJ (1) | Vacant | Office | 14,118 | 5.732 | % | N/A | ||||||||||
Farmers Branch, TX | International Business Machines Corporation | Office | 18,363 | 5.939 | % | 07/2016 | ||||||||||
Bremerton, WA (2) | Vacant | Office | 5,479 | 6.090 | % | N/A | ||||||||||
New York, NY (3) | SM Ascott LLC, Tribeca Ascott LLC and AL-Stone Ground Tenant LLC | Land | 213,075 | 4.660 | % | 01/2027 | ||||||||||
$ | 271,890 |
CORPORATE LEVEL DEBT
Quarterly Activity, Net ($000) | ||
Revolving Credit Facility | $123,000 satisfaction | |
6.00% Convertible Guaranteed Notes | $11,900 satisfaction (converted for 1,892,269 common shares) |
NEW PROPERTY-LEVEL FINANCING
Location | Tenant | Property Type | Face ($000) | Fixed Rate | Maturity Date | |||||||||||
Lake Jackson, TX (4) | The Dow Chemical Company | BTS - Office | $ | 197,150 | 4.040 | % | 10/2036 |
Footnotes:
(1) Conveyed to lender in a foreclosure sale. Lender has made a claim under a related non-recourse carveout guaranty. See periodic filings with the Securities and Exchange Commission for more information.
(2) Mortgage in default prior to the sale of the property.
(3) Assumed by the buyer in connection with the sale of the properties.
(4) The estimated costs to complete the project were escrowed at closing.
17
LEXINGTON REALTY TRUST
2016 Third Quarter Leasing Summary
LEASE EXTENSIONS
Tenant | Location | Prior Term | Lease Expiration Date | Sq. Ft. | New GAAP Rent Per Annum ($000)(1) | Prior GAAP Rent Per Annum ($000) | New Cash Rent Per Annum ($000)(1)(3) | Prior Cash Rent Per Annum ($000)(3) | ||||||||||||||||||||||||||||||||
Office / Multi-Tenant Office | ||||||||||||||||||||||||||||||||||||||||
1-3 | Various | Honolulu | HI | 2016 | 2017 | 5,323 | $ | 141 | $ | 133 | $ | 141 | $ | 133 | ||||||||||||||||||||||||||
3 | Total office lease extensions | 5,323 | $ | 141 | $ | 133 | $ | 141 | $ | 133 | ||||||||||||||||||||||||||||||
Industrial / Multi-Tenant Industrial | ||||||||||||||||||||||||||||||||||||||||
1 | Owens Corning Insulating Systems, LLC | Hebron | OH | 05/2017 | 12/2019 | 250,410 | $ | 567 | $ | 561 | $ | 567 | $ | 561 | ||||||||||||||||||||||||||
2 | Owens Corning Insulating Systems, LLC | Hebron | OH | 05/2017 | 12/2019 | 400,522 | 907 | 898 | 907 | 898 | ||||||||||||||||||||||||||||||
2 | Total industrial lease extensions | 650,932 | $ | 1,474 | $ | 1,459 | $ | 1,474 | $ | 1,459 | ||||||||||||||||||||||||||||||
` | ||||||||||||||||||||||||||||||||||||||||
5 | TOTAL EXTENDED LEASES | 656,255 | $ | 1,615 | $ | 1,592 | $ | 1,615 | $ | 1,592 |
NEW LEASES
Tenant | Location | Lease Expiration Date | Sq. Ft. | New GAAP Rent Per Annum ($000)(1) | New Cash Rent Per Annum ($000)(1)(3) | |||||||||||||||||||||
Office/Multi-Tenant Office | ||||||||||||||||||||||||||
1 | DMC Insurance Inc. | Indianapolis | IN | 02/2018 | 3,764 | 70 | 70 | |||||||||||||||||||
2-4 | Various | Honolulu | HI | 2016-2017 | 4,679 | 61 | 61 | |||||||||||||||||||
4 | Total office new leases | 8,443 | $ | 131 | $ | 131 | ||||||||||||||||||||
Industrial/Multi-Tenant Industrial | ||||||||||||||||||||||||||
1 | Hollingsworth Logistics Group, LLC | Temperance | MI | 11/2021 | 290,000 | $ | 928 | $ | 870 | |||||||||||||||||
1 | Total industrial new lease | 290,000 | $ | 928 | $ | 870 | ||||||||||||||||||||
5 | TOTAL NEW LEASES | 298,443 | $ | 1,059 | $ | 1,001 | ||||||||||||||||||||
10 | TOTAL NEW AND EXTENDED LEASES | 954,698 | $ | 2,674 | $ | 2,616 |
18
LEXINGTON REALTY TRUST
2016 Third Quarter Leasing Summary (Continued)
LEASE NON-RENEWALS (2)
Tenant | Location | Lease Expiration Date | Sq. Ft. | YTD 6/30/2016 GAAP Rent ($000) | YTD 6/30/2016 Cash Rent ($000)(3) | |||||||||||||||||||||
Office | ||||||||||||||||||||||||||
1 | Hagemeyer North America, Inc. | Charleston | SC | 07/2016 | 29,652 | $ | 592 | $ | 258 | |||||||||||||||||
2 | Michelin North America, Inc. | Temperance | MI | 07/2016 | 744,570 | 1,143 | 1,143 | |||||||||||||||||||
2 | TOTAL LEASE NON-RENEWALS | 774,222 | $ | 1,735 | $ | 1,401 |
Footnotes
(1) | Assumes twelve months rent from the later of 10/1/16 or lease commencement/extension, excluding free rent periods as applicable. |
(2) | Excludes multi-tenant properties. |
(3) | See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
19
LEXINGTON REALTY TRUST
Other Revenue Data
9/30/2016
($000)
Other Revenue Data
GAAP Rent | ||||||||||||
Asset Class | Nine months ended | |||||||||||
9/30/16 (1) | 9/30/16 Percentage | 9/30/15 Percentage (5) | ||||||||||
Office | $ | 144,055 | 55.1 | % | 50.2 | % | ||||||
Industrial | 98,073 | 37.5 | % | 29.6 | % | |||||||
Multi-tenant | 10,125 | 3.9 | % | 3.3 | % | |||||||
Other | 9,074 | 3.5 | % | 16.9 | % | |||||||
$ | 261,327 | 100.0 | % | 100.0 | % |
GAAP Rent | ||||||||||||
Credit Ratings (2) | Nine months ended | |||||||||||
9/30/16 (1) | 9/30/16 Percentage | 9/30/15 Percentage | ||||||||||
Investment Grade | $ | 100,636 | 38.5 | % | 35.0 | % | ||||||
Non-Investment Grade | 44,346 | 17.0 | % | 15.0 | % | |||||||
Unrated | 116,345 | 44.5 | % | 50.0 | % | |||||||
$ | 261,327 | 100.0 | % | 100.0 | % |
Weighted-Average Lease Term - Cash Basis | As of 9/30/16 | As of 9/30/15 | ||||||
8.6 years | 8.7 years | (3) |
Rent Estimates for Current Assets
Year | GAAP (4) | Cash (4) | Projected Straight-line / GAAP Rent Adjustments | |||||||||
2016 - remaining | $ | 86,854 | $ | 81,716 | $ | (5,138 | ) | |||||
2017 | $ | 333,773 | $ | 320,600 | $ | (13,173 | ) |
Footnotes
(1) | Nine months ended 9/30/2016 GAAP rent recognized for consolidated properties owned as of 9/30/2016. |
(2) | Credit ratings are based upon either tenant, guarantor or parent. Generally, multi-tenant assets are included in unrated. |
(3) | Adjusted to reflect NY land leases to first purchase option date. |
(4) | Amounts assume (1) lease terms for non-cancellable periods only, (2) no new or renegotiated leases are entered into after 9/30/2016, and (3) no properties are sold or acquired after 9/30/2016. |
(5) | Houston, TX (Industrial Terminals Management L.L.C. and Missouri City, TX (Vulcan Construction Materials, LP) reclassed to industrial. |
20
LEXINGTON REALTY TRUST
Other Revenue Data (Continued)
9/30/2016
($000)
Same-Store NOI (1)
Nine months ended September 30, | ||||||||
2016 | 2015 | |||||||
Total Cash Rent | $ | 211,336 | $ | 214,884 | ||||
Tenant Reimbursements | 19,282 | 19,976 | ||||||
Property Operating Expenses | (29,295 | ) | (32,263 | ) | ||||
Same-Store NOI | $ | 201,323 | $ | 202,597 | ||||
Change in Same-Store NOI | (0.6 | )% | ||||||
Same-Store Percent Leased (2) | As of 9/30/16 | As of 9/30/15 | ||||||
95.0 | % | 96.8 | % |
Lease Escalation Data (3)
Footnotes
(1) | NOI is on a consolidated cash basis for all consolidated properties except properties acquired/expanded and sold in 2016 and 2015 and properties subject to secured mortgage loans in default at September 30, 2016. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
(2) | Excludes properties acquired or sold in 2016 and 2015 and properties subject to secured mortgage loans in default as of 9/30/2016. |
(3) | Based on nine months consolidated cash rents for single-tenant leases (properties greater than 70% leased) owned as of September 30, 2016. Excludes parking operations and rents from prior tenants. |
21
LEXINGTON REALTY TRUST | ||||||||||||||||
Portfolio Detail By Asset Class | ||||||||||||||||
9/30/2016 | ||||||||||||||||
($000, except square footage) | ||||||||||||||||
Asset Class | YE 2013 | YE 2014 | YE 2015 | 3Q 2016 | ||||||||||||
Office | ||||||||||||||||
% of ABR (1) | 61.3 | % | 51.4 | % | 50.1 | % | 55.1 | % | ||||||||
LTL (5) | 26.8 | % | 31.8 | % | 23.4 | % | 27.9 | % | ||||||||
STL (6) | 73.2 | % | 68.2 | % | 76.6 | % | 72.1 | % | ||||||||
Leased | 99.0 | % | 98.6 | % | 99.6 | % | 99.6 | % | ||||||||
Wtd. Avg. Lease Term (2) | 7.2 | 7.4 | 7.2 | 7.0 | ||||||||||||
Mortgage Debt | $ | 692,460 | $ | 426,635 | $ | 329,696 | $ | 308,125 | ||||||||
% Investment Grade (1) | 57.2 | % | 53.7 | % | 48.7 | % | 48.8 | % | ||||||||
Square Feet | 15,316,875 | 13,264,134 | 12,847,877 | 11,621,528 | ||||||||||||
Industrial (7) | ||||||||||||||||
% of ABR (1) | 25.2 | % | 25.2 | % | 30.2 | % | 37.5 | % | ||||||||
LTL (5) | 40.3 | % | 47.9 | % | 47.4 | % | 53.6 | % | ||||||||
STL (6) | 59.7 | % | 52.1 | % | 52.6 | % | 46.4 | % | ||||||||
Leased | 99.8 | % | 99.7 | % | 99.6 | % | 99.9 | % | ||||||||
Wtd. Avg. Lease Term (2) | 8.4 | 8.8 | 10.1 | 10.6 | ||||||||||||
Mortgage Debt | $ | 206,209 | $ | 177,951 | $ | 292,293 | $ | 242,343 | ||||||||
% Investment Grade (1) | 31.4 | % | 26.6 | % | 27.9 | % | 27.8 | % | ||||||||
Square Feet | 21,606,443 | 22,745,140 | 25,693,585 | 26,518,987 | ||||||||||||
Multi-Tenant | ||||||||||||||||
% of ABR (1) | 7.9 | % | 8.7 | % | 3.0 | % | 3.9 | % | ||||||||
Leased | 66.4 | % | 53.9 | % | 44.1 | % | 40.4 | % | ||||||||
Wtd. Avg. Lease Term (2) | 7.0 | 6.9 | 3.4 | 3.2 | ||||||||||||
Mortgage Debt | $ | 71,754 | $ | 116,763 | $ | 14,118 | $ | 14,578 | ||||||||
% Investment Grade (1) | 34.5 | % | 19.3 | % | 36.9 | % | 14.0 | % | ||||||||
Square Feet | 2,259,189 | 2,414,889 | 2,301,864 | 3,302,936 | ||||||||||||
Other | ||||||||||||||||
% of ABR (1) | 5.6 | % | 14.7 | % | 16.7 | % | 3.5 | % | ||||||||
LTL (5) | 61.2 | % | 86.8 | % | 88.0 | % | 42.7 | % | ||||||||
STL (6) | 38.8 | % | 13.2 | % | 12.0 | % | 57.3 | % | ||||||||
Leased | 98.5 | % | 94.3 | % | 98.0 | % | 100.0 | % | ||||||||
Wtd. Avg. Lease Term (2)(3) | 18.2 | 18.2 | 18.5 | 14.8 | ||||||||||||
Mortgage Debt | $ | 227,066 | $ | 226,645 | $ | 255,218 | $ | 2,849 | ||||||||
% Investment Grade (1) | 9.4 | % | 4.5 | % | 3.3 | % | 17.8 | % | ||||||||
Square Feet | 1,489,267 | 1,447,724 | 1,426,697 | 1,306,578 | ||||||||||||
Loans Receivable | $ | 99,443 | $ | 105,635 | $ | 95,871 | $ | 95,808 | ||||||||
Construction in progress (4) | $ | 78,656 | $ | 121,184 | $ | 103,954 | $ | 138,365 |
Footnotes
(1) Percentage of GAAP rent.
(2) Cash basis.
(3) Cash basis adjusted to reflect NY land leases to the first purchase option date.
(4) Includes development classified as real estate under construction on a consolidated basis.
(5) Long-term leases ("LTL") are defined as leases having a remaining term of ten years or longer.
(6) Short-term leases ("STL") are defined as leases having a remaining term of less than ten years.
(7) Houston, TX (Industrial Terminals Management, L.L.C.) and Missouri City, TX (Vulcan Construction Materials, LP) reclassed to industrial.
22
LEXINGTON REALTY TRUST
Portfolio Composition
9/30/2016
Footnotes
(1) Based on gross book value of real estate assets, real estate under construction, and loans receivable as of 9/30/2016.
(2) Based on nine months GAAP rent as of 9/30/2016.
23
LEXINGTON REALTY TRUST
Components of Net Asset Value
9/30/2016
($000)
The purpose of providing the following information is to enable readers to derive their own estimates of net asset value. This information is not intended to be an asset-by-asset or enterprise valuation.
Consolidated properties nine month net operating income (NOI) (1) | ||||
Office | $ | 128,583 | ||
Industrial | 89,561 | |||
Multi-Tenant | 2,413 | |||
Other | 6,538 | |||
Total Net Operating Income | $ | 227,095 | ||
Lexington's share of non-consolidated nine month NOI (1) | ||||
Office | $ | 800 | ||
Other | 896 | |||
$ | 1,696 | |||
Other income | ||||
Advisory fees | $ | 630 | ||
In service assets not fairly valued by capitalized NOI method (1) | ||||
Wholly-owned assets less than 70% leased | $ | 99,025 | ||
Wholly-owned assets acquired in 2016 | $ | 132,315 | ||
Non-consolidated asset completed in 2016 | $ | 50,825 | ||
Add other assets: | ||||
Assets held for sale | $ | 29,819 | ||
Loans receivable | 95,808 | |||
Development investment at cost incurred | 143,143 | |||
Cash and cash equivalents | 117,791 | |||
Restricted cash | 42,387 | |||
Accounts receivable, net | 8,875 | |||
Other assets | 39,092 | |||
Total other assets | $ | 476,915 | ||
Liabilities: | ||||
Corporate level debt (face amount) | $ | 1,134,120 | ||
Mortgages and notes payable (face amount) | 765,045 | |||
Liabilities held for sale | 2,220 | |||
Dividends payable | 47,944 | |||
Accounts payable, accrued expenses and other liabilities | 59,860 | |||
Preferred stock, at liquidation value | 96,770 | |||
Lexington's share of non-consolidated mortgages | 8,502 | |||
Total deductions | $ | 2,114,461 | ||
Common shares & OP units at 9/30/2016 | 240,897,554 |
Footnotes
(1) | NOI for the existing property portfolio at September 30, 2016, excludes NOI related to assets undervalued by a capitalized NOI method and assets held for sale. Assets undervalued by a capitalized NOI method are identified generally by occupancies under 70% and assets acquired in 2016. For assets in this category an NOI capitalization approach is not appropriate, and accordingly, the Company's net book value has been used. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
24
LEXINGTON REALTY TRUST
Top Markets
9/30/2016
Core Based Statistical Area (2) | Percent of GAAP Rent as of 9/30/16 (1) | |||||
1 | Houston-Sugar Land-Baytown, TX | 8.0 | % | |||
2 | Dallas-Fort Worth-Arlington, TX | 7.0 | % | |||
3 | Memphis, TN-MS-AR | 4.8 | % | |||
4 | Kansas City, MO-KS | 4.3 | % | |||
5 | Phoenix-Mesa-Scottsdale, AZ | 4.3 | % | |||
6 | New York-Northern New Jersey-Long Island, NY-NJ-PA | 3.9 | % | |||
7 | Kennewick-Pasco-Richland, WA | 3.8 | % | |||
8 | Richmond, VA | 3.4 | % | |||
9 | Detroit-Warren-Livonia, MI | 3.1 | % | |||
10 | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | 2.5 | % | |||
11 | Denver-Aurora, CO | 2.4 | % | |||
12 | Indianapolis-Carmel, IN | 2.4 | % | |||
13 | Columbus, OH | 2.1 | % | |||
14 | Las Vegas-Paradise, NV | 2.0 | % | |||
15 | San Jose-Sunnyvale-Santa Clara, CA | 1.9 | % | |||
16 | Charlotte-Gastonia-Rock Hill, NC-SC | 1.9 | % | |||
17 | Jackson, MS | 1.8 | % | |||
18 | Chicago-Naperville-Joliet, IL-IN-WI | 1.8 | % | |||
19 | Orlando-Kissimmee, FL | 1.6 | % | |||
20 | Atlanta-Sandy Springs-Marietta, GA | 1.6 | % | |||
Total Top Markets (3) | 64.3 | % |
Footnotes
(1) | Nine months ended 9/30/2016 GAAP rent recognized for consolidated properties owned as of 9/30/2016. |
(2) | A Core Based Statistical Area is the official term for a functional region based around an urban center of at least 10,000 people, based on standards published by the Office of Management and Budget (OMB) in 2000. These standards are used to replace the definitions of metropolitan areas that were defined in 1990. |
(3) | Total shown may differ from detailed amounts due to rounding. |
25
LEXINGTON REALTY TRUST
Single-Tenant Office Markets (1)(2)
9/30/2016
Footnotes
(1) | Nine months ended 9/30/2016 GAAP rent recognized for consolidated single-tenant office properties owned as of 9/30/2016. |
(2) | A Core Based Statistical Area is the official term for a functional region based around an urban center of at least 10,000 people, based on standards published by the Office of Management and Budget (OMB) in 2000. These standards are used to replace the definitions of metropolitan areas that were defined in 1990. |
26
LEXINGTON REALTY TRUST
Tenant Industry Diversification (1)
9/30/2016
Footnotes
(1) | Nine months ended 9/30/2016 GAAP rent recognized for consolidated properties owned as of 9/30/2016. |
27
LEXINGTON REALTY TRUST
Top 10 Tenants or Guarantors
9/30/2016
Top 10 Tenants or Guarantors - GAAP Basis
Tenants or Guarantors | Number of Leases | Sq. Ft. Leased | Sq. Ft. Leased as a Percent of Consolidated Portfolio (2) | GAAP Rent as of 9/30/2016 ($000) (1) | Percent of GAAP Rent as of 9/30/2016 ($000) (1) (2) | |||||||||||||||
Preferred Freezer Services of Richland, LLC (Preferred Freezer Services, LLC & Preferred Freezer Services Operating, LLC) | 1 | 456,412 | 1.1 | % | $ | 9,850 | 3.8 | % | ||||||||||||
FedEx Corporation / Federal Express Corporation | 2 | 661,616 | 1.5 | % | 9,111 | 3.5 | % | |||||||||||||
United States of America | 3 | 398,214 | 0.9 | % | 8,210 | 3.1 | % | |||||||||||||
Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited) | 7 | 2,053,359 | 4.8 | % | 7,456 | 2.9 | % | |||||||||||||
Nissan North America, Inc. | 2 | 1,691,049 | 4.0 | % | 7,219 | 2.8 | % | |||||||||||||
Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation | 2 | 476,123 | 1.1 | % | 5,748 | 2.2 | % | |||||||||||||
McGuireWoods LLP | 1 | 224,537 | 0.5 | % | 5,388 | 2.1 | % | |||||||||||||
Morgan, Lewis & Bockius LLP | 1 | 289,432 | 0.7 | % | 5,283 | 2.0 | % | |||||||||||||
Industrial Terminals Management, L.L.C. (Maritime Holdings (Delaware) LLC) | 1 | 132,449 | 0.3 | % | 5,080 | 1.9 | % | |||||||||||||
Xerox Corporation | 1 | 202,000 | 0.5 | % | 4,981 | 1.9 | % | |||||||||||||
21 | 6,585,191 | 15.4 | % | $ | 68,326 | 26.1 | % |
Footnotes
(1) Nine months ended 9/30/2016 GAAP rent recognized for consolidated properties owned as of 9/30/2016.
(2) Total shown may differ from detailed amounts due to rounding.
28
LEXINGTON REALTY TRUST
Lease Rollover Schedule - Consolidated Single-Tenant Properties GAAP Basis
9/30/2016
($000)
Year | Number of Leases Expiring | GAAP Rent as of 9/30/2016 | Percent of GAAP Rent as of 9/30/2016 | Percent of GAAP Rent as of 9/30/2015 | ||||||||||||
2016 - remaining | 2 | $ | 965 | 0.4 | % | 0.4 | % | |||||||||
2017 | 12 | 17,531 | 7.0 | % | 6.6 | % | ||||||||||
2018 | 31 | 17,871 | 7.2 | % | 6.7 | % | ||||||||||
2019 | 23 | 23,431 | 9.4 | % | 8.1 | % | ||||||||||
2020 | 15 | 16,937 | 6.8 | % | 6.5 | % | ||||||||||
2021 | 11 | 17,000 | 6.8 | % | 6.2 | % | ||||||||||
2022 | 5 | 7,448 | 3.0 | % | 3.5 | % | ||||||||||
2023 | 6 | 8,782 | 3.5 | % | 3.6 | % | ||||||||||
2024 | 9 | 10,267 | 4.1 | % | 3.9 | % | ||||||||||
2025 | 19 | 24,469 | 9.8 | % | 9.2 | % | ||||||||||
Thereafter | 67 | 104,442 | 41.9 | % | 41.1 | % | ||||||||||
Total (1) | 200 | $ | 249,143 | 100.0 | % |
Footnotes
(1) Total shown may differ from detailed amounts due to rounding and does not include multi-tenant properties and parking operations.
29
LEXINGTON REALTY TRUST
Lease Rollover Schedule - Consolidated Properties GAAP Basis
9/30/2016
($000)
Year | Number of Leases Expiring | GAAP Rent as of 9/30/2016 | Percent of GAAP Rent as of 9/30/2016 | |||||||||
2016 - remaining | 20 | $ | 1,254 | 0.5 | % | |||||||
2017 | 26 | 17,868 | 7.0 | % | ||||||||
2018 | 44 | 19,592 | 7.7 | % | ||||||||
2019 | 27 | 24,656 | 9.6 | % | ||||||||
2020 | 16 | 17,006 | 6.7 | % | ||||||||
2021 | 18 | 19,470 | 7.6 | % | ||||||||
2022 | 5 | 7,448 | 2.9 | % | ||||||||
2023 | 6 | 8,782 | 3.4 | % | ||||||||
2024 | 9 | 10,267 | 4.0 | % | ||||||||
2025 | 20 | 24,777 | 9.7 | % | ||||||||
Thereafter | 67 | 104,442 | 40.9 | % | ||||||||
Total (1) | 258 | $ | 255,562 | 100.0 | % |
Footnotes
(1) Total shown may differ from detailed amounts due to rounding and does not include parking operations.
30
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2016
Year
of Lease Expiration | Date
of Lease Expiration | Property Location | City | State | Note | Primary Tenant (Guarantor) | Sq.Ft.
Leased or Available (1) | GAAP
Rent as of 9/30/2016 ($000) (3) | Cash
Rent as of 9/30/2016 ($000) (2) | 9/30/2016 Debt Balance ($000) | Debt Maturity | |||||||||||||||||||
OFFICE PROPERTIES | ||||||||||||||||||||||||||||||
2016 | 10/31/2016 | 104 & 110 South Front St. | Memphis | TN | — | Hnedak Bobo Group, Inc. | 37,229 | 376 | 389 | 3,502 | 01/2017 | |||||||||||||||||||
2017 | 1/31/2017 | 10300 Kincaid Dr. | Fishers | IN | 16 | Roche Diagnostics Operations, Inc. | 193,000 | 4,122 | 2,678 | - | - | |||||||||||||||||||
1311 Broadfield Blvd. | Houston | TX | 5 | Transocean Offshore Deepwater Drilling, Inc. (Transocean Sedco Forex, Inc.) | 155,040 | 4,363 | 1,977 | - | - | |||||||||||||||||||||
3/31/2017 | 1701 Market St. | Philadelphia | PA | — | Car-Tel Communications, Inc. | 1,220 | 42 | 42 | - | - | ||||||||||||||||||||
9/30/2017 | 9201 East Dry Creek Rd. | Centennial | CO | — | Arrow Electronics, Inc. | 128,500 | 2,274 | 2,092 | - | - | ||||||||||||||||||||
10/31/2017 | 4455 American Way | Baton Rouge | LA | — | New Cingular Wireless PCS, LLC | 70,100 | 794 | 809 | - | - | ||||||||||||||||||||
5201 West Barraque St. | Pine Bluff | AR | — | Entergy Services, Inc. | 27,189 | 240 | 291 | - | - | |||||||||||||||||||||
11/30/2017 | 6200 Northwest Pkwy. | San Antonio | TX | — | United HealthCare Services, Inc. / PacifiCare Healthsystems, LLC | 142,500 | 1,400 | 1,506 | - | - | ||||||||||||||||||||
12/1/2017 | 800 East Canal St. | Richmond | VA | — | CRG-Richmond Tenant, LLC | 51,450 | 409 | 409 | - | - | ||||||||||||||||||||
2018 | 1/31/2018 | 820 Gears Rd. | Houston | TX | — | Ricoh Americas Corporation | 78,895 | 866 | 825 | - | - | |||||||||||||||||||
2/28/2018 | 10475 Crosspoint Blvd. | Indianapolis | IN | — | DMC Insurance Inc. | 3,764 | 9 | 9 | - | - | ||||||||||||||||||||
850-950 Warrenville Rd. | Lisle | IL | — | Flexible Steel Lacing Company, d/b/a Flexco, Inc. | 7,535 | 107 | 107 | - | - | |||||||||||||||||||||
5/30/2018 | 13651 McLearen Rd. | Herndon | VA | — | United States of America | 159,644 | 2,552 | 2,761 | - | - | ||||||||||||||||||||
5/31/2018 | 8900 Freeport Pkwy. | Irving | TX | — | Pacific Union Financial, LLC. | 43,396 | 588 | 673 | - | - | ||||||||||||||||||||
6/30/2018 | 100 Barnes Rd. | Wallingford | CT | — | 3M Company | 44,400 | 380 | 386 | - | - | ||||||||||||||||||||
420 Riverport Rd. | Kingsport | TN | — | Kingsport Power Company | 42,770 | 96 | 233 | - | - | |||||||||||||||||||||
8/31/2018 | 2706 Media Center Dr. | Los Angeles | CA | — | Sony Electronics Inc. | 20,203 | 137 | 137 | - | - | ||||||||||||||||||||
3500 North Loop Rd. | McDonough | GA | — | Litton Loan Servicing LP | 62,218 | 715 | 1,000 | - | - | |||||||||||||||||||||
9/30/2018 | 1701 Market St. | Philadelphia | PA | — | CBC Restaurant Corp. | 8,070 | 158 | 168 | - | - | ||||||||||||||||||||
10/31/2018 | 3943 Denny Ave. | Pascagoula | MS | — | Huntington Ingalls Incorporated | 94,841 | 445 | 445 | - | - | ||||||||||||||||||||
12/22/2018 | 5200 Metcalf Ave. | Overland Park | KS | — | Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation | 320,198 | 3,936 | 3,912 | 33,667 | 05/2019 | ||||||||||||||||||||
2019 | 1/31/2019 | 2999 Southwest 6th St. | Redmond | OR | — | VoiceStream PCS I, LLC / T-Mobile West Corporation (T-Mobile USA, Inc.) | 77,484 | 1,101 | 1,327 | - | - | |||||||||||||||||||
4/1/2019 | 9201 Stateline Rd. | Kansas City | MO | — | Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation | 155,925 | 1,812 | 1,812 | 16,047 | 05/2019 | ||||||||||||||||||||
6/19/2019 | 3965 Airways Blvd. | Memphis | TN | — | Federal Express Corporation | 521,286 | 5,260 | 5,261 | - | - | ||||||||||||||||||||
6/30/2019 | 3265 East Goldstone Dr. | Meridian | ID | — | VoiceStream PCS Holding, LLC / T-Mobile PCS Holdings, LLC (T-Mobile USA, Inc.) | 77,484 | 829 | 1,074 | 8,994 | 08/2019 | ||||||||||||||||||||
7/15/2019 | 19019 North 59th Ave. | Glendale | AZ | — | Honeywell International Inc. | 252,300 | 1,426 | 1,431 | - | - | ||||||||||||||||||||
7/31/2019 | 500 Jackson St. | Columbus | IN | — | Cummins Inc. | 390,100 | 3,405 | 3,571 | 17,743 | 07/2019 | ||||||||||||||||||||
10/31/2019 | 10475 Crosspoint Blvd. | Indianapolis | IN | — | John Wiley & Sons, Inc. | 123,416 | 1,701 | 1,712 | - | - | ||||||||||||||||||||
9601 Renner Blvd. | Lenexa | KS | — | VoiceStream PCS II Corporation (T-Mobile USA, Inc.) | 77,484 | 857 | 1,093 | 9,159 | 12/2019 | |||||||||||||||||||||
12/31/2019 | 400 Butler Farm Rd. | Hampton | VA | — | Nextel Communications of the Mid-Atlantic, Inc. (Nextel Finance Company) | 100,632 | 754 | 759 | - | - | ||||||||||||||||||||
850-950 Warrenville Rd. | Lisle | IL | 4 | National-Louis University / James J. Benes & Associates, Inc. | 91,879 | 1,174 | 1,190 | 9,377 | N/A | |||||||||||||||||||||
2020 | 2/14/2020 | 5600 Broken Sound Blvd. | Boca Raton | FL | — | Canon Solutions America, Inc. (Oce - USA Holding, Inc.) | 143,290 | 1,683 | 1,846 | 19,433 | 02/2020 | |||||||||||||||||||
5/31/2020 | 2401 Cherahala Blvd. | Knoxville | TN | — | AdvancePCS, Inc. / CaremarkPCS, L.L.C. | 59,748 | 580 | 565 | - | - | ||||||||||||||||||||
6/30/2020 | 3711 San Gabriel | Mission | TX | — | VoiceStream PCS II Corporation / T-Mobile West Corporation | 75,016 | 742 | 709 | - | - | ||||||||||||||||||||
7/31/2020 | 13775 McLearen Rd. | Herndon | VA | 12 | Orange Business Services U.S., Inc. (Equant N.V.) | 132,617 | 1,247 | 1,329 | - | - | ||||||||||||||||||||
8/31/2020 | 133 First Park Dr. | Oakland | ME | — | Omnipoint Holdings, Inc. (T-Mobile USA, Inc.) | 78,610 | 860 | 1,085 | 8,665 | 10/2020 | ||||||||||||||||||||
9/30/2020 | 600 Business Center Dr. | Lake Mary | FL | — | JPMorgan Chase Bank, National Association | 125,155 | 1,318 | 1,251 | - | - | ||||||||||||||||||||
9200 South Park Center Loop | Orlando | FL | — | Zenith Education Group, Inc. (ECMC Group, Inc.) | 59,927 | 852 | 858 | 9,360 | 02/2017 | |||||||||||||||||||||
550 International Parkway | Lake Mary | FL | — | JPMorgan Chase Bank, National Association | 125,920 | 1,322 | 1,259 | - | - | |||||||||||||||||||||
10/31/2020 | 12209 West Markham St. | Little Rock | AR | — | Entergy Arkansas, Inc. | 36,311 | 178 | 178 | - | - | ||||||||||||||||||||
2021 | 1/31/2021 | 1701 Market St. | Philadelphia | PA | — | Morgan, Lewis & Bockius LLP | 289,432 | 3,224 | 3,269 | - | - | |||||||||||||||||||
6/30/2021 | 1415 Wyckoff Rd. | Wall | NJ | — | New Jersey Natural Gas Company | 157,511 | 2,830 | 2,830 | 14,816 | 01/2021 | ||||||||||||||||||||
2050 Roanoke Rd. | Westlake | TX | 11, 18 | Charles Schwab & Co, Inc. | 130,199 | 1,715 | 498 | - | - | |||||||||||||||||||||
8/31/2021 | 333 Three D Systems Cir. | Rock Hill | SC | — | 3D Systems Corporation | 80,028 | 516 | 505 | - | - |
31
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2016
Year
of Lease Expiration | Date
of Lease Expiration | Property Location | City | State | Note | Primary Tenant (Guarantor) | Sq.Ft.
Leased or Available (1) | GAAP
Rent as of 9/30/2016 ($000) (3) | Cash
Rent as of 9/30/2016 ($000) (2) | 9/30/2016 Debt Balance ($000) | Debt Maturity | |||||||||||||||||||
OFFICE PROPERTIES | ||||||||||||||||||||||||||||||
11/30/2021 | 29 South Jefferson Rd. | Whippany | NJ | — | CAE SimuFlite, Inc. (CAE INC.) | 123,734 | 1,745 | 1,898 | 13,343 | 11/2021 | ||||||||||||||||||||
12/31/2021 | 2800 Waterford Lake Dr. | Midlothian | VA | — | Alstom Power, Inc. | 99,057 | 1,638 | 1,692 | - | - | ||||||||||||||||||||
2022 | 6/30/2022 | 8555 South River Pkwy. | Tempe | AZ | — | Versum Materials US, LLC | 95,133 | 1,302 | 1,225 | - | - | |||||||||||||||||||
7/31/2022 | 1440 E 15th Street | Tucson | AZ | — | CoxCom, LLC | 28,591 | 420 | 420 | - | - | ||||||||||||||||||||
11/30/2022 | 4201 Marsh Ln. | Carrollton | TX | — | Carlson Restaurants Inc. (Carlson, Inc.) | 130,000 | 1,399 | 1,620 | - | - | ||||||||||||||||||||
12/31/2022 | 231 N. Martingale Rd. | Schaumburg | IL | — | CEC Educational Services, LLC (Career Education Corporation) | 317,198 | 3,322 | 3,299 | - | - | ||||||||||||||||||||
2023 | 2/28/2023 | 1315 West Century Dr. | Louisville | CO | — | Rogue Wave Software, Inc. | 20,000 | 205 | 165 | - | - | |||||||||||||||||||
3/31/2023 | 8900 Freeport Pkwy. | Irving | TX | — | Nissan Motor Acceptance Corporation (Nissan North America, Inc.) | 225,049 | 2,569 | 2,739 | - | - | ||||||||||||||||||||
12/14/2023 | 3333 Coyote Hill Rd. | Palo Alto | CA | — | Xerox Corporation | 202,000 | 4,981 | 5,303 | 44,611 | 12/2023 | ||||||||||||||||||||
2024 | 2/14/2024 | 1362 Celebration Blvd. | Florence | SC | — | MED3000, Inc. | 32,000 | 430 | 415 | - | - | |||||||||||||||||||
5/31/2024 | 3476 Stateview Blvd. | Fort Mill | SC | — | Wells Fargo Bank, N.A. | 169,083 | 1,464 | 1,380 | - | - | ||||||||||||||||||||
3480 Stateview Blvd. | Fort Mill | SC | — | Wells Fargo Bank, N.A. | 169,218 | 1,519 | 1,381 | - | - | |||||||||||||||||||||
8/31/2024 | 10475 Crosspoint Blvd. | Indianapolis | IN | — | RGN-Indianapolis I, LLC | 14,236 | 220 | 220 | - | - | ||||||||||||||||||||
10/31/2024 | 1409 Centerpoint Blvd. | Knoxville | TN | — | Alstom Power, Inc. | 84,404 | 941 | 858 | - | - | ||||||||||||||||||||
12/31/2024 | 12000 & 12025 Tech Center Dr. | Livonia | MI | — | Kelsey-Hayes Company (TRW Automotive Inc.) | 180,230 | 1,268 | 1,204 | - | - | ||||||||||||||||||||
2025 | 1/31/2025 | 1401 Nolan Ryan Expy. | Arlington | TX | — | Triumph Aerostructures, LLC (Triumph Group, Inc.) | 111,409 | 1,216 | 1,256 | - | - | |||||||||||||||||||
2/28/2025 | 6555 Sierra Dr. | Irving | TX | — | TXU Energy Retail Company, LLC (Texas Competitive Electric Holdings Company, LLC) | 247,254 | 2,103 | 2,260 | - | - | ||||||||||||||||||||
1401 Nolan Ryan Expy. | Arlington | TX | — | Cyient, Inc. (Infotech Enterprise Limited) | 13,590 | 148 | 153 | - | - | |||||||||||||||||||||
3/14/2025 | 601 & 701 Experian Pkwy. | Allen | TX | — | Experian Information Solutions, Inc. / TRW, Inc.(Experian Holdings, Inc.) | 292,700 | 2,225 | 2,305 | - | - | ||||||||||||||||||||
3/31/2025 | 2706 Media Center Dr. | Los Angeles | CA | — | Bank of America, National Association | 62,323 | 683 | 673 | - | - | ||||||||||||||||||||
5/31/2025 | 1701 Market St. | Philadelphia | PA | — | TruMark Financial Credit Union | 2,641 | 180 | 180 | - | - | ||||||||||||||||||||
6/30/2025 | 2500 Patrick Henry Pkwy. | McDonough | GA | — | Georgia Power Company | 111,911 | 1,066 | 995 | - | - | ||||||||||||||||||||
9/30/2025 | 10001 Richmond Ave. | Houston | TX | — | Schlumberger Holdings Corp. | 554,385 | 4,529 | 3,950 | - | - | ||||||||||||||||||||
11/30/2025 | 11707 Miracle Hills Dr. | Omaha | NE | — | Wipro Data Center and Cloud Services, Inc. (Infocrossing, Inc.) | 85,200 | 875 | 875 | - | - | ||||||||||||||||||||
12/31/2025 | 2005 East Technology Cir. | Tempe | AZ | — | Wipro Data Center and Cloud Services, Inc. (Infocrossing, Inc.) | 60,000 | 846 | 846 | - | - | ||||||||||||||||||||
4001 International Pkwy. | Carrollton | TX | — | Motel 6 Operating, LP | 138,443 | 1,669 | 1,597 | - | - | |||||||||||||||||||||
2026 | 3/31/2026 | 500 Olde Worthington Rd. | Westerville | OH | — | InVentiv Communications, Inc. | 97,000 | 830 | 560 | - | - | |||||||||||||||||||
4/30/2026 | 800 East Canal St. | Richmond | VA | — | Richmond Belly Ventures, LLC (David Duke, Lauren Duke, Terrence Kee, Cara Kee and John Bokel) | 2,568 | 32 | 32 | - | - | ||||||||||||||||||||
6/30/2026 | 10419 North 30th St. | Tampa | FL | — | Time Customer Service, Inc. / Time Incorporated | 132,981 | 605 | 964 | - | - | ||||||||||||||||||||
8/31/2026 | 2211 South 47th St. | Phoenix | AZ | 7 | Avnet, Inc. | 176,402 | 2,004 | 1,652 | - | - | ||||||||||||||||||||
11/30/2026 | 500 Kinetic Dr. | Huntington | WV | — | AMZN WVCS LLC (Amazon.com, Inc.) | 68,693 | 951 | 817 | 6,500 | 02/2017 | ||||||||||||||||||||
12/29/2026 | 5500 New Albany Rd. | Columbus | OH | — | Evans, Mechwart, Hambleton & Tilton, Inc. | 104,807 | 1,303 | 1,234 | - | - | ||||||||||||||||||||
2027 | 1/31/2027 | 1701 Market St. | Philadelphia | PA | — | Drybar Holdings LLC | 1,975 | - | - | - | - | |||||||||||||||||||
4/30/2027 | 1315 West Century Dr. | Louisville | CO | — | Global Healthcare Exchange, Inc. (Global Healthcare Exchange, LLC) | 86,877 | 967 | 890 | - | - | ||||||||||||||||||||
6/30/2027 | 3902 Gene Field Rd. | St. Joseph | MO | — | Boehringer Ingelheim Vetmedica, Inc. (Boehringer Ingelheim USA Corporation) | 98,849 | 1,495 | 1,376 | - | - | ||||||||||||||||||||
7/6/2027 | 2221 Schrock Rd. | Columbus | OH | — | MS Consultants, Inc. | 42,290 | 473 | 445 | - | - | ||||||||||||||||||||
8/7/2027 | 25 Lakeview Dr. | Jessup | PA | — | TMG Health, Inc. | 150,000 | 1,876 | 1,527 | - | - | ||||||||||||||||||||
10/31/2027 | 11201 Renner Blvd. | Lenexa | KS | — | United States of America | 169,585 | 4,574 | 3,262 | 35,408 | 11/2027 | ||||||||||||||||||||
11/30/2027 | 1700 Millrace Dr. | Eugene | OR | 10 | Oregon Research Institute / Educational Policy Improvement Center | 80,011 | 1,564 | 1,295 | - | - | ||||||||||||||||||||
12/31/2027 | 333 Mt. Hope Ave. | Rockaway | NJ | — | Atlantic Health System, Inc. | 92,326 | 895 | 987 | - | - | ||||||||||||||||||||
2028 | 4/30/2028 | 9655 Maroon Cir. | Englewood | CO | — | TriZetto Corporation | 166,912 | 2,883 | 2,676 | - | - | |||||||||||||||||||
2029 | 1/31/2029 | 6226 West Sahara Ave. | Las Vegas | NV | — | Nevada Power Company | 282,000 | 3,190 | 2,317 | - | - | |||||||||||||||||||
3/31/2029 | 2800 High Meadow Cir. | Auburn Hills | MI | — | Faurecia USA Holdings, Inc. | 278,000 | 2,660 | 2,365 | - | - | ||||||||||||||||||||
2030 | 8/31/2030 | 800 East Canal St. | Richmond | VA | — | McGuireWoods LLP | 224,537 | 5,388 | 4,884 | 57,500 | 02/2031 |
32
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2016
Year
of Lease Expiration | Date
of Lease Expiration | Property Location | City | State | Note | Primary Tenant (Guarantor) | Sq.Ft.
Leased or Available (1) | GAAP
Rent as of 9/30/2016 ($000) (3) | Cash
Rent as of 9/30/2016 ($000) (2) | 9/30/2016 Debt Balance ($000) | Debt Maturity | |||||||||||||||||||
OFFICE PROPERTIES | ||||||||||||||||||||||||||||||
9/30/2030 | 800 East Canal St. | Richmond | VA | — | CCA Industries, Inc. (The Riverstone Group, LLC), | 25,707 | 520 | 493 | - | - | ||||||||||||||||||||
2031 | 1/10/2031 | 810 Gears Rd. | Houston | TX | — | United States of America | 68,985 | 1,084 | 567 | - | - | |||||||||||||||||||
3/1/2031 | 800 East Canal St. | Richmond | VA | — | Towne Bank | 26,047 | 661 | 407 | - | - | ||||||||||||||||||||
2032 | 10/31/2032 | 143 Diamond Ave. | Parachute | CO | — | Encana Oil and Gas (USA) Inc. (Alenco Inc.) | 49,024 | 963 | 821 | - | - | |||||||||||||||||||
12/31/2032 | 3030 North 3rd St. | Phoenix | AZ | — | CopperPoint Mutual Insurance Company | 252,400 | 3,792 | 3,103 | - | - | ||||||||||||||||||||
2033 | 11/30/2033 | 1331 Capitol Ave. | Omaha | NE | — | The Gavilon Group, LLC | 127,810 | 2,483 | 2,161 | - | - | |||||||||||||||||||
12/31/2033 | 3000 Busch Lake Blvd. | Tampa | FL | — | BluePearl Holdings, LLC | 17,000 | 378 | 378 | - | - | ||||||||||||||||||||
2910 Busch Lake Blvd. | Tampa | FL | — | BluePearl Holdings, LLC | 2,500 | 42 | 42 | - | - | |||||||||||||||||||||
2950 Busch Lake Blvd. | Tampa | FL | — | BluePearl Holdings, LLC | 8,000 | 119 | 119 | - | - | |||||||||||||||||||||
19311 SH 249 | Houston | TX | — | BluePearl Holdings, LLC | 12,622 | 169 | 169 | - | - | |||||||||||||||||||||
2039 | 3/31/2039 | 854 Paragon Way | Rock Hill | SC | 13 | Physicians Choice Laboratory Services, LLC | 104,497 | 1,429 | 1,456 | - | - | |||||||||||||||||||
2088 | 8/8/2088 | 800 East Canal St. | Richmond | VA | — | The City of Richmond, Virginia | - | 308 | 308 | - | - | |||||||||||||||||||
N/A | N/A | 1701 Market St. | Philadelphia | PA | — | Parking Operations | - | 2,059 | 2,059 | - | - | |||||||||||||||||||
Vacancy | 1701 Market St. | Philadelphia | PA | — | (Available for Lease) | 699 | - | - | - | - | ||||||||||||||||||||
810 Gears Rd. | Houston | TX | — | (Available for Lease) | 9,910 | - | - | - | - | |||||||||||||||||||||
1401 Nolan Ryan Expy. | Arlington | TX | — | (Available for Lease) | 36,809 | - | - | - | - | |||||||||||||||||||||
OFFICE TOTAL/WEIGHTED AVERAGE | 99.6% Leased | 11,621,528 | $ | 144,055 | $ | 134,536 | $ | 308,125 |
33
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2016
Year
of Lease Expiration | Date
of Lease Expiration | Property Location | City | State | Note | Primary Tenant (Guarantor) | Sq.
Ft. Leased or Available (1) | GAAP
Rent as of 9/30/2016 ($000) (3) | Cash
Rent as of 9/30/2016 ($000) (2) | 9/30/2016 Debt Balance ($000) | Debt Maturity | |||||||||||||||||||
INDUSTRIAL PROPERTIES | ||||||||||||||||||||||||||||||
2016 | 12/31/2016 | 2935 Van Vactor Dr. | Plymouth | IN | 9 | Bay Valley Foods, LLC | 300,500 | 589 | 620 | - | - | |||||||||||||||||||
2017 | 4/30/2017 | 3600 Army Post Rd. | Des Moines | IA | — | HP Enterprise Services, LLC | 405,000 | 1,539 | 1,997 | - | - | |||||||||||||||||||
9/30/2017 | 250 Swathmore Ave. | High Point | NC | — | Steelcase Inc. | 244,851 | 815 | 857 | - | - | ||||||||||||||||||||
12/31/2017 | 2203 Sherrill Dr. | Statesville | NC | — | Ozburn-Hessey Logistics, LLC (OHH Acquisition Corporation) | 639,800 | 1,437 | 1,555 | - | - | ||||||||||||||||||||
2018 | 6/30/2018 | 1133 Poplar Creek Rd. | Henderson | NC | — | Staples, Inc. | 196,946 | 645 | 640 | - | - | |||||||||||||||||||
1650-1654 Williams Rd. | Columbus | OH | — | ODW Logistics, Inc. | 772,450 | 1,007 | 1,010 | - | - | |||||||||||||||||||||
9/30/2018 | 50 Tyger River Dr. | Duncan | SC | — | Plastic Omnium Auto Exteriors, LLC | 221,833 | 769 | 769 | - | - | ||||||||||||||||||||
904 Industrial Rd. | Marshall | MI | — | Tenneco Automotive Operating Company, Inc. (Tenneco, Inc.) | 246,508 | 523 | 631 | - | - | |||||||||||||||||||||
12/31/2018 | 120 Southeast Pkwy. Dr. | Franklin | TN | — | Essex Group, Inc. (United Technologies Corporation) | 289,330 | 551 | 551 | - | - | ||||||||||||||||||||
749 Southrock Dr. | Rockford | IL | — | Jacobson Warehouse Company, Inc. (Jacobson Distribution Company and Jacobson Transportation Company, Inc.) | 150,000 | 353 | 394 | - | - | |||||||||||||||||||||
2019 | 10/17/2019 | 10345 Philipp Pkwy. | Streetsboro | OH | — | L'Oreal USA S/D, Inc. (L’Oreal USA, Inc.) | 649,250 | 1,958 | 2,113 | 17,388 | 09/2019 | |||||||||||||||||||
12/31/2019 | 191 Arrowhead Dr. | Hebron | OH | — | Owens Corning Insulating Systems, LLC | 250,410 | 419 | 419 | - | - | ||||||||||||||||||||
200 Arrowhead Dr. | Hebron | OH | — | Owens Corning Insulating Systems, LLC | 400,522 | 670 | 670 | - | - | |||||||||||||||||||||
2415 US Hwy. 78 East | Moody | AL | — | Michelin North America, Inc. | 595,346 | 1,056 | 1,045 | - | - | |||||||||||||||||||||
3686 South Central Ave. | Rockford | IL | — | Pierce Packaging Co. | 93,000 | 230 | 230 | - | - | |||||||||||||||||||||
2020 | 1/31/2020 | 101 Michelin Dr. | Laurens | SC | — | Michelin North America, Inc. | 1,164,000 | 2,540 | 2,540 | - | - | |||||||||||||||||||
3/31/2020 | 2425 Hwy. 77 North | Waxahachie | TX | — | James Hardie Building Products, Inc. (James Hardie NV & James Hardie Industries NV) | 335,610 | 2,550 | 2,550 | - | - | ||||||||||||||||||||
5/31/2020 | 359 Gateway Dr. | Lavonia | GA | — | TI Group Automotive Systems, LLC (TI Automotive Ltd.) | 133,221 | 714 | 900 | 7,408 | 12/2020 | ||||||||||||||||||||
6/30/2020 | 3102 Queen Palm Dr. | Tampa | FL | — | Time Customer Service, Inc. (Time Incorporated) | 229,605 | 926 | 971 | - | - | ||||||||||||||||||||
9/30/2020 | 3350 Miac Cove Rd. | Memphis | TN | — | Mimeo.com, Inc. | 107,400 | 306 | 329 | - | - | ||||||||||||||||||||
12/19/2020 | 1901 Ragu Dr. | Owensboro | KY | 6 | Unilever Supply Chain, Inc. (Unilever United States, Inc.) | 443,380 | 1,119 | 897 | - | - | ||||||||||||||||||||
2021 | 3/31/2021 | 2455 Premier Row | Orlando | FL | — | Walgreen Co. / Walgreen Eastern Co. | 205,016 | 589 | 381 | - | - | |||||||||||||||||||
5/31/2021 | 291 Park Center Dr. | Winchester | VA | — | Kraft Heinz Foods Company | 344,700 | 1,057 | 998 | - | - | ||||||||||||||||||||
9/30/2021 | 3820 Micro Dr. | Millington | TN | — | Ingram Micro L.P. (Ingram Micro Inc.) | 701,819 | 1,359 | 1,269 | - | - | ||||||||||||||||||||
10/25/2021 | 6938 Elm Valley Dr. | Kalamazoo | MI | — | Dana Commercial Vehicle Products, LLC (Dana Holding Corporation and Dana Limited) | 150,945 | 1,310 | 1,520 | - | - | ||||||||||||||||||||
11/30/2021 | 2880 Kenny Biggs Rd. | Lumberton | NC | — | Quickie Manufacturing Corporation | 423,280 | 1,017 | 1,045 | - | - | ||||||||||||||||||||
2022 | 3/31/2022 | 5417 Campus Dr. | Shreveport | LA | — | The Tire Rack, Inc. | 257,849 | 1,005 | 957 | - | - | |||||||||||||||||||
2023 | 2/28/2023 | 7670 Hacks Cross Rd. | Olive Branch | MS | — | MAHLE Aftermarket Inc. (MAHLE Industries, Incorporated) | 268,104 | 679 | 667 | - | - | |||||||||||||||||||
12/31/2023 | 1601 Pratt Ave. | Marshall | MI | — | Autocam Corporation | 58,707 | 231 | 231 | - | - | ||||||||||||||||||||
2024 | 4/30/2024 | 113 Wells St. | North Berwick | ME | — | United Technologies Corporation | 993,685 | 1,352 | 1,475 | 3,777 | 04/2019 | |||||||||||||||||||
5/31/2024 | 901 East Bingen Point Way | Bingen | WA | — | The Boeing Company | 124,539 | 1,977 | 1,906 | - | - | ||||||||||||||||||||
10/31/2024 | 43955 Plymouth Oaks Blvd. | Plymouth | MI | — | Tower Automotive Operations USA I, LLC / Tower Automotive Products Inc. (Tower Automotive, Inc.) | 290,133 | 1,096 | 1,034 | - | - | ||||||||||||||||||||
2025 | 6/30/2025 | 10000 Business Blvd. | Dry Ridge | KY | — | Dana Light Axle Products, LLC (Dana Holding Corporation and Dana Limited) | 336,350 | 1,009 | 1,009 | - | - | |||||||||||||||||||
301 Bill Bryan Rd. | Hopkinsville | KY | — | Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited) | 424,904 | 1,266 | 1,266 | - | - | |||||||||||||||||||||
4010 Airpark Dr. | Owensboro | KY | — | Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited) | 211,598 | 906 | 906 | - | - | |||||||||||||||||||||
730 North Black Branch Rd. | Elizabethtown | KY | — | Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited) | 167,770 | 403 | 403 | - | - | |||||||||||||||||||||
750 North Black Branch Rd. | Elizabethtown | KY | — | Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited) | 539,592 | 2,129 | 2,129 | - | - | |||||||||||||||||||||
7/14/2025 | 590 Ecology Ln. | Chester | SC | — | Boral Stone Products LLC (Boral Limited) | 420,597 | 1,258 | 1,703 | 8,172 | 08/2025 | ||||||||||||||||||||
7/31/2025 | 7005 Cochran Rd. | Glenwillow | OH | — | Royal Appliance Mfg. Co. | 458,000 | 1,546 | 1,576 | - | - | ||||||||||||||||||||
12/31/2025 | 1700 47th Ave North | Minneapolis | MN | — | Owens Corning Roofing and Asphalt, LLC | 18,620 | 412 | 412 | - | - | ||||||||||||||||||||
2026 | 3/30/2026 | 121 Technology Dr. | Durham | NH | 15 | Heidelberg Americas, Inc. (Heidelberger Druckmaschinen AG) / Goss International Americas, Inc. (Goss International Corporation) | 500,500 | 1,903 | 2,479 | - | - | |||||||||||||||||||
3/31/2026 | 633 Garrett Pkwy. | Lewisburg | TN | — | Calsonic Kansei North America, Inc. | 310,000 | 965 | 896 | - | - | ||||||||||||||||||||
6/30/2026 | 351 Chamber Dr. | Chillicothe | OH | — | The Kitchen Collection, Inc. | 475,218 | 869 | 821 | - | - | ||||||||||||||||||||
9/30/2026 | 900 Industrial Blvd. | Crossville | TN | — | Dana Commercial Vehicle Products, LLC | 222,200 | 433 | 433 | - | - | ||||||||||||||||||||
10/31/2026 | 5001 Greenwood Rd. | Shreveport | LA | — | Libbey Glass Inc. (Libbey Inc.) | 646,000 | 1,624 | 1,602 | 19,000 | 07/2017 | ||||||||||||||||||||
11/30/2026 | 250 Rittenhouse Cir. | Bristol | PA | — | Northtec LLC (The Estée Lauder Companies Inc.) | 241,977 | 860 | 834 | - | - | ||||||||||||||||||||
736 Addison Rd. | Erwin | NY | — | Corning Property Management Corporation | 408,000 | 925 | 1,001 | 7,559 | 10/2018 |
34
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2016
Year
of Lease Expiration | Date
of Lease Expiration | Property Location | City | State | Note | Primary Tenant (Guarantor) | Sq.
Ft. Leased or Available (1) | GAAP Rent as of 9/30/2016 ($000) (3) | Cash
Rent as of 9/30/2016 ($000) (2) | 9/30/2016 Debt Balance ($000) | Debt Maturity | |||||||||||||||||||
INDUSTRIAL PROPERTIES | ||||||||||||||||||||||||||||||
2027 | 2/28/2027 | 3456 Meyers Ave. | Memphis | TN | — | Sears, Roebuck and Co. / Sears Logistics Services | 780,000 | 1,271 | 1,194 | - | - | |||||||||||||||||||
1501 Nolan Ryan Expy. | Arlington | TX | — | Arrow Electronics, Inc. | 74,739 | - | - | - | - | |||||||||||||||||||||
554 Nissan Pkwy. | Canton | MS | — | Nissan North America, Inc. | 1,466,000 | 4,650 | 4,326 | - | - | |||||||||||||||||||||
4/30/2027 | 2424 Alpine Rd. | Eau Claire | WI | 20 | Silver Spring Foods, Inc. (Huntsinger Farms, Inc.) | 159,000 | 752 | 802 | - | - | ||||||||||||||||||||
12/31/2027 | 10590 Hamilton Ave. | Cincinnati | OH | — | The Hillman Group, Inc. | 264,598 | 610 | 586 | - | - | ||||||||||||||||||||
2028 | 3/31/2028 | 29-01-Borden Ave./29-10 Hunters Point Ave. | Long Island City | NY | — | FedEx Ground Package System, Inc. (FedEx Corporation) | 140,330 | 3,851 | 3,578 | 47,038 | 03/2028 | |||||||||||||||||||
8/31/2028 | 1420 Greenwood Rd. | McDonough | GA | 11, 19 | United States Cold Storage, Inc | 296,972 | 1,649 | 1,060 | 22,001 | 11/2017 | ||||||||||||||||||||
2029 | 11/24/2029 | 318 Pappy Dunn Blvd. | Anniston | AL | — | International Automotive Components Group North America, Inc. | 276,782 | 1,305 | 1,197 | - | - | |||||||||||||||||||
2030 | 3/31/2030 | 549 Wingo Rd. | Byhalia | MS | — | Asics America Corporation (Asics Corporation) | 855,878 | 3,271 | 2,928 | - | - | |||||||||||||||||||
5/31/2030 | 3301 Stagecoach Rd. NE | Thomson | GA | — | Hollander Sleep Products, LLC (Hollander Home Fashions Holdings) | 208,000 | 697 | 631 | - | - | ||||||||||||||||||||
2031 | 5/31/2031 | 671 Washburn Switch Rd. | Shelby | NC | — | Clearwater Paper Corporation | 673,518 | 1,950 | 1,753 | - | - | |||||||||||||||||||
2032 | 4/30/2032 | 13930 Pike Rd. | Missouri City | TX | — | Vulcan Construction Materials, LP (Vulcan Materials Company) | - | 1,592 | 1,407 | - | - | |||||||||||||||||||
10/31/2032 | 27255 SW 95th Ave. | Wilsonville | OR | — | Pacific Foods of Oregon Inc. | 508,277 | 7 | 7 | - | - | ||||||||||||||||||||
2034 | 9/30/2034 | 5625 North Sloan Ln. | North Las Vegas | NV | — | Nicholas and Co., Inc. | 180,235 | 1,917 | 1,637 | - | - | |||||||||||||||||||
10/31/2034 | 1001 Innovation Rd. | Rantoul | IL | — | Bell Sports, Inc. (Vista Outdoor Inc.) | 813,126 | 3,134 | 2,658 | - | - | ||||||||||||||||||||
2035 | 3/31/2035 | 13863 Industrial Rd. | Houston | TX | — | Curtis Kelly, Inc. (Spitzer Industries, Inc.) | 187,800 | 1,826 | 1,523 | - | - | |||||||||||||||||||
7007 F.M. 362 Rd. | Brookshire | TX | — | Orizon Industries, Inc. (Spitzer Industries, Inc.) | 262,095 | 1,433 | 1,195 | - | - | |||||||||||||||||||||
6/30/2035 | 111 West Oakview Pkwy. | Oak Creek | WI | — | Stella & Chewy's LLC | 164,007 | 1,573 | 1,399 | - | - | ||||||||||||||||||||
8/31/2035 | 2800 Polar Way | Richland | WA | 21 | Preferred Freezer Services of Richland, LLC (Preferred Freezer Services, LLC & Preferred Freezer Services Operating, LLC) | 456,412 | 9,850 | 8,112 | 110,000 | 01/2026 | ||||||||||||||||||||
10/22/2035 | 2860 Clark St. | Detroit | MI | — | FCA US LLC (f/k/a Chrysler Group LLC) | 190,003 | 1,623 | 1,623 | - | - | ||||||||||||||||||||
2036 | 6/30/2036 | 100 Ryobi Drive | Anderson | SC | — | One World Technologies, Inc. (Techtronic Industries Co. Ltd.) | 1,327,022 | 1,136 | 935 | - | - | |||||||||||||||||||
2038 | 3/31/2038 | 13901/14035 Industrial Rd. | Houston | TX | — | Industrial Terminals Management, L.L.C. (Maritime Holdings (Delaware) LLC) | 132,449 | 5,080 | 4,180 | - | - | |||||||||||||||||||
N/A | Vacancy | 3350 Miac Cove Rd. | Memphis | TN | — | (Available for Lease) | 32,679 | - | - | - | - | |||||||||||||||||||
INDUSTRIAL TOTAL/WEIGHTED AVERAGE | 99.9% Leased | 26,518,987 | $ | 98,073 | $ | 93,372 | $ | 242,343 |
35
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2016
Year
of Lease Expiration | Date
of Lease Expiration | Property Location | City | State | Note | Primary Tenant (Guarantor) | Sq.Ft. | Percentage
Leased | GAAP
Rent as of 9/30/2016 ($000) (3) | Cash
Rent as of 9/30/2016 ($000) (2) | 9/30/2016 Debt Balance ($000) | Debt Maturity | ||||||||||||||||||||||
MULTI-TENANT PROPERTIES (8,14) | ||||||||||||||||||||||||||||||||||
11511 Luna Rd. | Farmers Branch | TX | 11 | International Business Machines Corporation | 180,507 | 37 | % | 1,503 | 1,239 | - | - | |||||||||||||||||||||||
1200 Jupiter Rd. | Garland | TX | 11 | Available for lease | 278,759 | 0 | % | 677 | 628 | - | - | |||||||||||||||||||||||
13430 North Black Canyon Fwy. | Phoenix | AZ | — | Multi-Tenant | 138,940 | 92 | % | 1,738 | 1,741 | - | - | |||||||||||||||||||||||
1460 Tobias Gadson Blvd. | Charleston | SC | 11 | Hagemeyer North America, Inc. | 50,076 | 41 | % | 1,129 | 540 | 7,115 | 02/2021 | |||||||||||||||||||||||
1600 Eberhardt Rd. | Temple | TX | 4 | Nextel of Texas, Inc. (Nextel Finance Company) | 108,800 | 50 | % | 660 | 672 | 7,463 | N/A | |||||||||||||||||||||||
2210 Enterprise Dr. | Florence | SC | 11 | Caliber Funding, LLC | 176,557 | 21 | % | 528 | 568 | - | - | |||||||||||||||||||||||
26555 Northwestern Pkwy. | Southfield | MI | — | Available for lease | 359,645 | 0 | % | - | - | - | - | |||||||||||||||||||||||
275 Technology Dr. | Canonsburg | PA | 7 | Available for lease | 107,872 | 0 | % | - | - | - | - | |||||||||||||||||||||||
33 Commercial St. A | Foxborough | MA | — | Available for lease | 84,441 | 0 | % | - | - | - | - | |||||||||||||||||||||||
3165 McKelvey Rd. | Bridgeton | MO | — | BJC Health System | 51,067 | 50 | % | 302 | 325 | - | - | |||||||||||||||||||||||
6050 Dana Way | Antioch | TN | — | Multi-Tenant | 674,528 | 98 | % | 1,706 | 1,670 | - | - | |||||||||||||||||||||||
700 Oakmont Ln. | Westmont | IL | — | Available for lease | 269,715 | 0 | % | - | - | - | - | |||||||||||||||||||||||
7111 Crabb Rd. | Temperance | MI | 11 | Hollingsworth Logistics Group LLC | 744,570 | 39 | % | 1,333 | 1,333 | - | - | |||||||||||||||||||||||
King St./1042 Fort St. Mall | Honolulu | HI | — | Multi-Tenant | 77,459 | 68 | % | 549 | 549 | - | - | |||||||||||||||||||||||
MULTI-TENANT TOTAL/WEIGHTED AVERAGE | 40.4% Leased | 3,302,936 | $ | 10,125 | $ | 9,265 | $ | 14,578 |
36
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2016
Year
of Lease Expiration | Date
of Lease Expiration | Property Location | City | State | Note | Primary Tenant (Guarantor) | Sq.Ft.
Leased or Available (1) | GAAP Rent as of 9/30/2016 ($000) (3) | Cash Rent as of 9/30/2016 ($000) (2) | 9/30/2016 Debt Balance ($000) | Debt Maturity | |||||||||||||||||||
OTHER PROPERTIES | ||||||||||||||||||||||||||||||
2017 | 6/30/2017 | 1600 East 23rd St. | Chattanooga | TN | — | BI-LO, LLC | 42,130 | 96 | 96 | - | - | |||||||||||||||||||
2018 | 2/26/2018 | 4831 Whipple Ave., NW | Canton | OH | — | Best Buy Co., Inc. | 46,350 | 349 | 349 | - | - | |||||||||||||||||||
2/28/2018 | 291 Talbert Blvd. | Lexington | NC | — | Food Lion, LLC / Delhaize America, Inc. | 23,000 | 104 | 104 | - | - | ||||||||||||||||||||
2411 West Beverly St. | Staunton | VA | — | Food Lion, LLC / Delhaize America, Inc. | 23,000 | 124 | 124 | - | - | |||||||||||||||||||||
7/1/2018 | 1053 Mineral Springs Rd. | Paris | TN | — | The Kroger Co. | 31,170 | 126 | 119 | - | - | ||||||||||||||||||||
9/30/2018 | 835 Julian Ave. | Thomasville | NC | — | Mighty Dollar, LLC | 23,767 | 60 | 60 | - | - | ||||||||||||||||||||
10/31/2018 | 130 Midland Ave. | Port Chester | NY | — | St Anthony Supermarket Corp. (Anthony Pena, Marina Pena, Anthony Corona and Robert Corona) | 59,613 | 731 | 344 | - | - | ||||||||||||||||||||
5104 North Franklin Rd. | Lawrence | IN | — | Marsh Supermarkets, Inc. / Marsh Supermarkets, LLC | 28,721 | 145 | 145 | - | - | |||||||||||||||||||||
12/31/2018 | 1150 West Carl Sandburg Dr. | Galesburg | IL | — | Kmart Corporation (Sears, Roebuck and Co.) | 94,970 | 247 | 122 | 307 | 07/2018 | ||||||||||||||||||||
12080 Carmel Mountain Rd. | San Diego | CA | — | Kmart Corporation (Sears, Roebuck and Co.) | 107,210 | 563 | 139 | 348 | 07/2018 | |||||||||||||||||||||
21082 Pioneer Plaza Dr. | Watertown | NY | — | Kmart Corporation (Sears, Roebuck and Co.) | 120,727 | 361 | 205 | 514 | 07/2018 | |||||||||||||||||||||
255 Northgate Dr. | Manteca | CA | — | Kmart Corporation (Sears, Roebuck and Co.) | 107,489 | 416 | 218 | 546 | 07/2018 | |||||||||||||||||||||
5350 Leavitt Rd. | Lorain | OH | — | Kmart Corporation (Sears, Roebuck and Co.) | 193,193 | 548 | 309 | 773 | 07/2018 | |||||||||||||||||||||
97 Seneca Trail | Fairlea | WV | — | Kmart Corporation (Sears, Roebuck and Co.) | 90,933 | 260 | 144 | 361 | 07/2018 | |||||||||||||||||||||
2019 | 3/31/2019 | B.E.C. 45th St./Lee Blvd. | Lawton | OK | — | Associated Wholesale Grocers, Inc. / Safeway, Inc. | 30,757 | 142 | 139 | - | - | |||||||||||||||||||
12/31/2019 | 1066 Main St. | Forest Park | GA | — | Bank of America, N.A. (Bank of America Corporation) | 14,859 | 150 | 150 | - | - | ||||||||||||||||||||
1698 Mountain Industrial Blvd. | Stone Mountain | GA | — | Bank of America, N.A. (Bank of America Corporation) | 5,704 | 71 | 71 | - | - | |||||||||||||||||||||
201 West Main St. | Cumming | GA | — | Bank of America, N.A. (Bank of America Corporation) | 14,208 | 149 | 149 | - | - | |||||||||||||||||||||
2223 North Druid Hills Rd. | Atlanta | GA | — | Bank of America, N.A. (Bank of America Corporation) | 6,260 | 84 | 84 | - | - | |||||||||||||||||||||
4545 Chamblee – Dunwoody Rd. | Dunwoody | GA | — | Bank of America, N.A. (Bank of America Corporation) | 4,565 | 66 | 66 | - | - | |||||||||||||||||||||
825 Southway Dr. | Jonesboro | GA | — | Bank of America, N.A. (Bank of America Corporation) | 4,894 | 58 | 58 | - | - | |||||||||||||||||||||
956 Ponce de Leon Ave. | Atlanta | GA | — | Bank of America, N.A. (Bank of America Corporation) | 3,900 | 59 | 59 | - | - | |||||||||||||||||||||
2023 | 2/28/2023 | 733 East Main St. | Jefferson | NC | — | Food Lion, LLC / Delhaize America, Inc. | 34,555 | 117 | 120 | - | - | |||||||||||||||||||
2026 | 5/31/2026 | 6910 South Memorial Hwy. | Tulsa | OK | — | Toys “R” Us, Inc. / Toys "R" Us-Delaware, Inc. | 43,123 | 177 | 177 | - | - | |||||||||||||||||||
2028 | 8/31/2028 | 9803 Edmonds Way | Edmonds | WA | — | Puget Consumers Co-op d/b/a PCC Natural Markets | 35,459 | 485 | 485 | - | - | |||||||||||||||||||
11/30/2028 | 832 N. Westover Blvd . | Albany | GA | — | Gander Mountain Company | 45,554 | 520 | 471 | - | - | ||||||||||||||||||||
2029 | 1/31/2029 | 175 Holt Garrison Pkwy. | Danville | VA | — | Home Depot USA, Inc. | - | 162 | 195 | - | - | |||||||||||||||||||
2043 | 2/28/2043 | 1237 W. Sherman Ave. | Vineland | NJ | — | HealthSouth Rehabilitation Hospital of South Jersey, LLC (HealthSouth Corporation) | 39,287 | 846 | 846 | - | - | |||||||||||||||||||
2048 | 12/31/2048 | 30 Light St | Baltimore | MD | — | 30 Charm City, LLC | - | 224 | 224 | - | - | |||||||||||||||||||
2055 | 1/31/2055 | 499 Derbyshire Dr. | Venice | FL | — | Littlestone Brotherhood LLC | 31,180 | 1,431 | 965 | - | - | |||||||||||||||||||
2112 | 8/31/2112 | 201-215 N. Charles St. | Baltimore | MD | — | 201 NC Leasehold LLC | - | 203 | 203 | - | - | |||||||||||||||||||
OTHER TOTAL/WEIGHTED AVERAGE | 100% Leased | 1,306,578 | $ | 9,074 | $ | 6,940 | $ | 2,849 | ||||||||||||||||||||||
TOTAL CONSOLIDATED PORTFOLIO/WEIGHTED AVERAGE | 95.2% Leased (17) | 42,750,029 | $ | 261,327 | $ | 244,113 | $ | 567,895 |
Footnotes
1 | Square footage leased or available. |
2 | Nine months ended 9/30/2016 cash rent. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
3 | Nine months ended 9/30/2016 GAAP rent. |
4 | Mortgage encumbering the property is in default. |
5 | Tenant terminated its lease effective 1/31/2017 for a cash payment of $3.5 million received in 2015. |
6 | Lexington has a 71.1% interest in this property. |
7 | Property sold subsequent to 9/30/2016. |
8 | Multi-tenant properties are properties less than 50% leased to a single tenant. |
9 | Subsequent to 9/30/2016, lease extended to 12/31/2018. |
10 | Educational Policy Improvement Center lease for 10,791 square feet expires 11/2019; however, space is then leased to Oregon Research Institute through 11/2027. |
11 | Cash and GAAP rent amounts represent/include prior tenant. |
12 | 21,365 square feet is leased to 7/31/2025. |
13 | On October 26, 2016, the tenant filed an assignment for the benefit of creditors under Florida law, and Lexington expects that the tenant will reject the lease. |
14 | The multi-tenanted properties incurred approximately $4.3 million in operating expenses, net for the nine months ended 9/30/2016. |
15 | Heidelberg Americas, Inc. lease expires 3/30/2021; however, new tenant (Goss International Americas, Inc.) lease expires 3/30/2026. |
16 | Tenant terminated its lease effective 1/31/2017 for a cash payment of $2.0 million received in July 2015 and an additional $2.0 million is due in 2017. |
17 | Consolidated portfolio is 95.3% leased, excluding properties owned subject to mortgages in default. |
18 | TD Auto Finance LLC lease terminated effective 2/29/2016 for a payment of $7.7 million, which was paid in April 2016. New lease with Charles Schwab & Co. Inc. commenced 3/1/2016. |
19 | Americold Logistics, LLC lease terminated effective 4/15/2016 for $1.0 million to be paid over an 18-month period. New lease with United States Cold Storage, Inc. commenced 4/16/2016. |
20 | Tenant exercised purchase option for $13.6 million. Property classified as held for sale. |
21 | ConAgra Foods, Inc. provides credit support. |
37
LEXINGTON REALTY TRUST
Select Credit Metrics Summary (1)
9/30/2016 | ||||
Adjusted Company FFO Payout Ratio | 59.2 | % | ||
Unencumbered Assets (2) | $ | 3.28 billion | ||
Unencumbered NOI | 74.2 | % | ||
(Debt + Preferred) / Gross Assets | 42.3 | % | ||
Debt/Gross Assets | 40.2 | % | ||
Secured Debt / Gross Assets | 16.2 | % | ||
Net Debt / Adjusted EBITDA | 5.3 | x | ||
(Net Debt + Preferred) / Adjusted EBITDA | 5.6 | x | ||
Credit Facilities Availability (3) | $ | 400.0 million | ||
Development / Gross Assets | 3.0 | % |
Footnotes
(1) See reconciliations of non-GAAP measures in this document. Lexington believes these credit metrics provide investors with additional information to evaluate its liquidity and performance.
(2) Includes loans receivable.
(3) Subject to covenant compliance.
38
LEXINGTON REALTY TRUST
FINANCIAL COVENANTS (1)
Corporate Level Debt
Must be: | 9/30/2016 | |||
Bank Loans: | ||||
Maximum Leverage | < 60% | 42.1% | ||
Fixed Charge Coverage | > 1.5x | 2.5x | ||
Recourse Secured Indebtedness Ratio | < 10% cap value | 0.0% | ||
Secured Indebtedness Ratio | < 45% | 17.9% | ||
Unsecured Debt Service Coverage | > 2.0x | 5.0x | ||
Unencumbered Leverage | < 60% | 32.9% | ||
Bonds: | ||||
Debt to Total Assets | < 60% | 40.7% | ||
Secured Debt to Total Assets | < 40% | 16.4% | ||
Debt Service Coverage | > 1.5x | 4.0x | ||
Unencumbered Assets to Unsecured Debt | > 150% | 313.0% |
Footnotes
(1) | The following is a summary of the key financial covenants for Lexington's credit facility and term loans and senior notes, as defined and calculated per the terms of the credit facility and term loans and senior notes, as applicable. These calculations are presented to show Lexington's compliance with such covenants only and are not measures of Lexington's liquidity or performance. |
39
LEXINGTON REALTY TRUST |
Consolidated Properties: Mortgages and Notes Payable |
9/30/2016 |
Property | Footnotes | Debt Balance ($000) | Interest Rate (%) | Maturity (a) | Current Estimated Annual Debt Service ($000) (c) | Balloon Payment ($000) | ||||||||||||||
Mortgages with Balloons | ||||||||||||||||||||
Temple, TX | (b) | $ | 7,463 | 6.090 | % | N/A | $ | - | $ | 7,463 | ||||||||||
Lisle, IL | (b) | 9,377 | 6.500 | % | N/A | - | 9,377 | |||||||||||||
Memphis, TN | 3,502 | 5.710 | % | 01/2017 | 86 | 3,484 | ||||||||||||||
Huntington, WV | (e) | 6,500 | 4.150 | % | 02/2017 | 113 | 6,500 | |||||||||||||
Orlando, FL | 9,360 | 5.722 | % | 02/2017 | 278 | 9,309 | ||||||||||||||
Shreveport, LA | 19,000 | 5.690 | % | 07/2017 | 910 | 19,000 | ||||||||||||||
McDonough, GA | 22,001 | 6.110 | % | 11/2017 | 1,674 | 21,651 | ||||||||||||||
Erwin, NY | 7,559 | 5.910 | % | 10/2018 | 728 | 6,637 | ||||||||||||||
Overland Park, KS | 33,667 | 5.891 | % | 05/2019 | 2,657 | 31,812 | ||||||||||||||
Kansas City, MO | 16,047 | 5.883 | % | 05/2019 | 1,268 | 15,179 | ||||||||||||||
Columbus, IN | 17,743 | 2.210 | % | 07/2019 | 4,757 | 4,993 | ||||||||||||||
Meridian, ID | 8,994 | 6.010 | % | 08/2019 | 753 | 7,675 | ||||||||||||||
Streetsboro, OH | 17,388 | 5.749 | % | 09/2019 | 1,344 | 16,338 | ||||||||||||||
Lenexa, KS | 9,159 | 6.270 | % | 12/2019 | 774 | 7,770 | ||||||||||||||
Boca Raton, FL | 19,433 | 6.470 | % | 02/2020 | 1,542 | 18,414 | ||||||||||||||
Oakland, ME | 8,665 | 5.930 | % | 10/2020 | 750 | 7,660 | ||||||||||||||
Lavonia, GA | 7,408 | 5.460 | % | 12/2020 | 741 | 5,895 | ||||||||||||||
Charleston, SC | 7,115 | 5.850 | % | 02/2021 | 520 | 6,632 | ||||||||||||||
Whippany, NJ | 13,343 | 6.298 | % | 11/2021 | 1,344 | 10,400 | ||||||||||||||
Chester, SC | 8,172 | 5.380 | % | 08/2025 | 1,144 | 362 | ||||||||||||||
Richland, WA | 110,000 | 4.000 | % | 01/2026 | 4,400 | 99,492 | ||||||||||||||
Lenexa, KS | 35,408 | 3.700 | % | 11/2027 | 3,025 | 10,000 | ||||||||||||||
Richmond, VA | 57,500 | 5.191 | % | 02/2031 | 3,026 | 53,176 | ||||||||||||||
Lake Jackson, TX | 197,150 | 4.040 | % | 10/2036 | 11,543 | 11,305 | ||||||||||||||
Subtotal/Wtg. Avg./Years Remaining (i) | $ | 651,954 | 4.741 | % | 10.5 | $ | 43,377 | $ | 390,524 | |||||||||||
Full Amortizing Mortgages | ||||||||||||||||||||
Lorain, OH | 773 | 7.750 | % | 07/2018 | 569 | - | ||||||||||||||
Manteca, CA | 546 | 7.750 | % | 07/2018 | 402 | - | ||||||||||||||
Watertown, NY | 514 | 7.750 | % | 07/2018 | 378 | - | ||||||||||||||
Fairlea, WV | 361 | 7.750 | % | 07/2018 | 265 | - | ||||||||||||||
San Diego, CA | 348 | 7.750 | % | 07/2018 | 256 | - | ||||||||||||||
Galesburg, IL | 307 | 7.750 | % | 07/2018 | 225 | - | ||||||||||||||
North Berwick, ME | 3,777 | 3.560 | % | 04/2019 | 1,532 | - | ||||||||||||||
Wall, NJ | 14,816 | 6.250 | % | 01/2021 | 3,774 | - | ||||||||||||||
Palo Alto, CA | 44,611 | 3.970 | % | 12/2023 | 7,059 | - | ||||||||||||||
Long Island City, NY | 47,038 | 3.500 | % | 03/2028 | 4,538 | - | ||||||||||||||
Subtotal/Wtg. Avg./Years Remaining (i) | $ | 113,091 | 4.155 | % | 8.3 | $ | 18,998 | $ | - | |||||||||||
Subtotal/Wtg. Avg./Years Remaining (i) | $ | 765,045 | 4.654 | % | 10.1 | $ | 62,375 | $ | 390,524 |
40
LEXINGTON REALTY TRUST |
Consolidated Properties: Mortgages and Notes Payable |
9/30/2016 |
Property | Footnotes | Debt Balance ($000) | Interest Rate (%) | Maturity (a) | Current Estimated Annual Debt Service ($000) (c) | Balloon Payment ($000) | ||||||||||||||
Corporate (f) | ||||||||||||||||||||
Term Loan | (g) | $ | 250,000 | 2.192 | % | 08/2020 | $ | 5,556 | $ | 250,000 | ||||||||||
Term Loan | (h) | 255,000 | 2.523 | % | 01/2021 | 6,523 | 255,000 | |||||||||||||
Senior Notes | 250,000 | 4.250 | % | 06/2023 | 10,625 | 250,000 | ||||||||||||||
Senior Notes | 250,000 | 4.400 | % | 06/2024 | 11,000 | 250,000 | ||||||||||||||
Trust Preferred Notes | (d) | 129,120 | 6.804 | % | 04/2037 | 8,785 | 129,120 | |||||||||||||
Subtotal/Wtg. Avg./Years Remaining (i) | $ | 1,134,120 | 3.732 | % | 7.3 | $ | 42,489 | $ | 1,134,120 | |||||||||||
Total/Wtg. Avg./Years Remaining (i) | (j) | $ | 1,899,165 | 4.103 | % | 8.4 | $ | 104,864 | $ | 1,524,644 |
Footnotes
(a) | Subtotal and total based on weighted-average term to maturity (or put dates) shown in years based on debt balance. |
(b) | Loan is in default. |
(c) | Remaining payments for debt with less than 12 months to maturity, all others are debt service for next 12 months. |
(d) | Rate fixed through 04/2017; thereafter, LIBOR plus 170 bps. |
(e) | Loan satisfied subsequent to 9/30/16. |
(f) | Unsecured. |
(g) | Rate ranges from LIBOR plus 0.90% to 1.75%. LIBOR rate fixed at 1.09% through February 2018 via interest rate swap agreements. |
(h) | Rate ranges from LIBOR plus 0.90% to 1.75%. LIBOR rate fixed at 1.42% through January 2019 via interest rate swap agreements. |
(i) | Total shown may differ from detailed amounts due to rounding. |
(j) | See reconciliations of non-GAAP measures in this document. |
41
LEXINGTON REALTY TRUST
Non- Consolidated Investments: Mortgages & Notes Payable
9/30/2016
Joint Venture | Debt Balance ($000) | Interest Rate (%) | Maturity | Current Estimated Annual Debt Service ($000) (3) | Balloon Payment ($000) | |||||||||||||
Rehab Humble Lessee (1) | $ | 14,150 | 4.700 | % | 05/2017 | $ | 609 | $ | 13,982 | |||||||||
Gan Palm Beach Lessee (2) | 14,245 | 3.700 | % | 03/2018 | 842 | 13,768 | ||||||||||||
BP Lessee (1) | 18,791 | 4.010 | % | 11/2018 | 764 | 18,791 | ||||||||||||
Total/Wtg. Avg. (1)/Years Remaining (2) | $ | 47,186 | 4.123 | % | 1.4 | $ | 2,215 | $ | 46,541 |
Footnotes
(1) | Lexington has a 15% equity interest in the joint venture. |
(2) | Lexington has a 25% equity interest in the joint venture. |
(3) | Remaining payments for debt with less than 12 months to maturity, all others are debt service for next 12 months. |
42
LEXINGTON REALTY TRUST
Debt Maturity Schedule
9/30/2016
($000)
Consolidated Properties | ||||||||||||
Year | Mortgage Scheduled Amortization | Mortgage Balloon Payments | Corporate Debt | |||||||||
2016 - remaining | $ | 5,780 | $ | 16,840 | $ | - | ||||||
2017 | 30,039 | 59,944 | - | |||||||||
2018 | 30,077 | 6,637 | - | |||||||||
2019 | 26,681 | 83,767 | - | |||||||||
2020 | 23,178 | 31,969 | 250,000 | |||||||||
$ | 115,755 | $ | 199,157 | $ | 250,000 |
Footnotes
(1) | Percentage denotes weighted-average interest rate. |
43
LEXINGTON REALTY TRUST |
Mortgage Loans Receivable |
9/30/2016 |
Collateral | ||||||||||||||||||||||
City | State | Loan Balance ($000)(1) | Interest Rate | Maturity Date | Current Estimated Annual Debt Service ($000)(2) | Balloon Payment ($000) | ||||||||||||||||
Office | Oklahoma City (3) | OK | $ | 8,501 | 11.50 | % | N/A | $ | - | $ | 8,420 | |||||||||||
Retail | Various (4) | Various | 780 | 8.00 | % | 02/2021 | 219 | - | ||||||||||||||
Various (4) | Various | 371 | 8.00 | % | 12/2021 | 94 | - | |||||||||||||||
Various (4) | Various | 499 | 8.00 | % | 03/2022 | 112 | - | |||||||||||||||
Hospital | Kennewick | WA | 85,657 | 9.00 | % | 05/2022 | 7,438 | 87,245 | ||||||||||||||
Total Mortgage Loans Receivable | $ | 95,808 | $ | 7,863 | $ | 95,665 |
Footnotes
(1) | Includes accrued interest receivable, loan losses, and net origination fees. |
(2) | Remaining collections for debt less than 12 months to maturity, all others are debt service for next 12 months. |
(3) | Short-term loan to joint venture partner, which is in default. |
(4) | Satisfied subsequent to 9/30/2016. |
44
LEXINGTON REALTY TRUST
Selected Balance Sheet and Income Statement Account Data
9/30/2016
($000)
Balance Sheet | ||||
Other assets | $ | 39,092 | ||
The components of other assets are: | ||||
Deposits | $ | 539 | ||
Equipment | 641 | |||
Prepaids | 2,311 | |||
Other receivables | 705 | |||
Deferred lease incentives | 12,489 | |||
Lake Jackson developer escrows | 22,282 | |||
Other | 125 | |||
Accounts payable and other liabilities | ||||
The components of accounts payable and other liabilities are: | $ | 30,796 | ||
Accounts payable and accrued expenses | $ | 14,201 | ||
CIP accruals and other | 366 | |||
Taxes | 570 | |||
Deferred lease and loan costs | 4,630 | |||
Deposits | 1,121 | |||
Escrows | 825 | |||
Transaction / build-to-suit costs | 4,200 | |||
Interest rate swap derivative liability | 4,883 | |||
Income Statement - Nine months ended September 30, 2016 | ||||
Non-cash interest expense, net | $ | (160 | ) |
45
LEXINGTON REALTY TRUST
NON-GAAP MEASURES
DEFINITIONS
Lexington has used non-GAAP financial measures as defined by the Securities and Exchange Commission Regulation G in the Quarterly Earnings Release, in this Supplemental Operating and Financial Data Report and in other public disclosures.
Lexington believes that the measures defined below are helpful to investors in measuring our performance or that of an individual investment. Since these measures exclude certain items which are included in their respective most comparable Generally Accepted Accounting Principles (“GAAP”) measures, reliance on the measures has limitations; management compensates for these limitations by using the measures simply as supplemental measures that are weighed in balance with other GAAP measures. These measures are not necessarily indications of our cash flow available to fund cash needs. Additionally, they should not be used as an alternative to the respective most comparable GAAP measures when evaluating Lexington's financial performance or cash flow from operating, investing, or financing activities or liquidity.
Definitions:
Adjusted EBITDA: Adjusted EBITDA represents EBITDA (earnings before interest, taxes, depreciation and amortization) modified to include other adjustments to GAAP net income for gains on sales of properties, impairment charges, debt satisfaction gains (charges), net, non-cash charges, net, straight-line adjustments and adjustments for pro-rata share of non-wholly owned entities. Lexington’s calculation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. Lexington believes that net income is the most directly comparable GAAP measure to Adjusted EBITDA.
Cash Rent: Cash Rent is calculated by making adjustments to GAAP rent to remove the impact of GAAP required adjustments to rental income such as adjustments for straight-line rents related to free rent periods and contractual rent increases. Cash Rent excludes lease termination income. Lexington believes Cash Rent provides a meaningful indication of an investments ability to fund cash needs.
Funds from Operations (“FFO”) and Adjusted Company FFO: Lexington believes that Funds from Operations, or FFO, which is a non-GAAP measure, is a widely recognized and appropriate measure of the performance of an equity real estate investment trust (“REIT”). Lexington believes FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income.
The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (or loss) computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization and after adjustments for non-consolidated partnerships and joint ventures.” NAREIT clarified its computation of FFO to exclude impairment charges on depreciable real estate owned directly or indirectly. FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.
Lexington presents FFO available to common shareholders and unitholders - basic and also presents FFO available to all equityholders and unitholders - diluted on a company-wide basis as if all securities that are convertible, at the holder's option, into Lexington’s common shares, are converted at the beginning of the period. Lexington also presents Adjusted Company FFO available to all equityholders and unitholders - diluted which adjusts FFO available to all equityholders and unitholders - diluted for certain items which we believe are not indicative of the operating results of Lexington's real estate portfolio. Lexington believes this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate these measures in a similar fashion, these measures may not be comparable to similarly titled measures as reported by others. These measures should not be considered as an alternative to net income as an indicator of Lexington’s operating performance or as an alternative to cash flow as a measure of liquidity.
GAAP and Cash Yield or Capitalization Rate: GAAP and cash yields or capitalization rates are measures of operating performance used to evaluate the individual performance of an investment. These measures are not presented or intended to be viewed as a liquidity or performance measure that present a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. The yield or capitalization rate is calculated by dividing the annualized NOI (as defined below, except GAAP rent adjustments are added back to rental income to calculate GAAP yield or capitalization rate) the investment is expected to generate (or has generated) divided by the acquisition/completion cost (or sale) price.
46
LEXINGTON REALTY TRUST
NON-GAAP MEASURES
DEFINITIONS (CONTINUED)
Net Operating Income (NOI): NOI is a measure of operating performance used to evaluate the individual performance of an investment. This measure is not presented or intended to be viewed as a liquidity or performance measure that presents a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. Lexington defines NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income), tenant reimbursements and other property income) less property operating expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, Lexington's NOI may not be comparable to other companies. Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. Lexington believes that net income is the most directly comparable GAAP measure to NOI.
Same-Store NOI: Same-Store NOI represents the NOI for consolidated properties that were owned and included in our portfolio for two comparable reporting periods excluding properties encumbered by mortgage loans in default and the revenue associated with the expansion of properties, as applicable. As Same-Store NOI excludes the change in NOI from acquired and disposed of properties and certain other properties, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating Same-Store NOI, and accordingly, Lexington's Same-Store NOI may not be comparable to other REITs. Management believes that Same-Store NOI is a useful supplemental measure of Lexington's operating performance. However, Same-Store NOI should not be viewed as an alternative measure of Lexington 's financial performance since it does not reflect the operations of Lexington's entire portfolio, nor does it reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of Lexington's properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact Lexington's results from operations. Lexington believes that net income is the most directly comparable GAAP measure to Same-Store NOI.
47
LEXINGTON REALTY TRUST |
RECONCILIATION OF NON-GAAP MEASURES |
($000) |
Nine months ended September 30, 2016 | ||||
Cash Rent Reconciliation: | ||||
Rental revenue as reported | $ | 304,158 | ||
Rental revenue from sold properties | (42,831 | ) | ||
GAAP rent per supplement | 261,327 | |||
GAAP rent adjustments: (1) | ||||
Straight-line adjustments | (12,075 | ) | ||
Lease incentives | 1,194 | |||
Amortization of above/below market leases | 1,394 | |||
Lease termination income | (7,727 | ) | ||
Cash rent per supplement | $ | 244,113 |
Consolidated debt reconciliation September 30, 2016:
GAAP Balance | Deferred Loan Costs, net | Discounts | Gross Balance | |||||||||||||
Mortgages and notes payable (2) | $ | 757,718 | $ | 7,327 | $ | - | $ | 765,045 | ||||||||
Term loans payable (3) | 500,839 | 4,161 | - | 505,000 | ||||||||||||
Senior notes payable(3) | 494,153 | 3,999 | 1,848 | 500,000 | ||||||||||||
Trust preferred securities (3) | 127,071 | 2,049 | - | 129,120 | ||||||||||||
Consolidated debt | $ | 1,879,781 | $ | 17,536 | $ | 1,848 | $ | 1,899,165 |
Footnotes
(1) | Individual items are adjusted for sold properties, which were previously reflected in the reconciliation. |
(2) | Secured. |
(3) | Unsecured. |
48
LEXINGTON REALTY TRUST |
RECONCILIATION OF NON-GAAP MEASURES (CONTINUED) |
($000) |
Same-Store NOI Reconciliation: |
Nine months | ||||||||
September 30, 2016 | September 30, 2015 | |||||||
Net Income | $ | 72,875 | $ | 79,378 | ||||
Interest and amortization expense | 68,573 | 68,326 | ||||||
Provision for income taxes | 1,099 | 468 | ||||||
Depreciation and amortization | 124,687 | 121,795 | ||||||
General and administrative | 23,032 | 22,527 | ||||||
Transaction costs | 329 | 1,119 | ||||||
Non-operating income | (9,500 | ) | (8,213 | ) | ||||
Gains on sales of properties | (58,413 | ) | (24,884 | ) | ||||
Impairment charges | 75,904 | 34,070 | ||||||
Debt satisfaction (gains) charges, net | 818 | (13,753 | ) | |||||
Equity in earnings of non-consolidated entities | (6,394 | ) | (938 | ) | ||||
Lease termination income | (8,744 | ) | (2,665 | ) | ||||
Straight-line adjustments | (35,697 | ) | (35,242 | ) | ||||
Lease incentives | 1,256 | 1,157 | ||||||
Amortization of above/below market leases | 1,527 | (157 | ) | |||||
Net Operating Income - ("NOI") | 251,352 | 242,988 | ||||||
Less NOI: | ||||||||
Disposed of properties | (17,874 | ) | (29,535 | ) | ||||
Acquired properties | (28,961 | ) | (7,474 | ) | ||||
Expansion revenue | (1,192 | ) | (924 | ) | ||||
Properties in default | (2,002 | ) | (2,458 | ) | ||||
Same-Store NOI | $ | 201,323 | $ | 202,597 |
NOI for NAV:
Nine months | ||||
September 30, 2016 | ||||
NOI per above | $ | 251,352 | ||
Less NOI: | ||||
Disposed of properties | (17,874 | ) | ||
Assets held for sale | (1,339 | ) | ||
Assets acquired in 2016 | (2,561 | ) | ||
Assets less than 70% leased / Other | (2,483 | ) | ||
NOI for NAV | $ | 227,095 |
49
LEXINGTON REALTY TRUST
RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)
($000)
Reconciliation to Adjusted EBITDA:
Three months ended | ||||||||||||||||||||
9/30/2016 | 6/30/2016 | 3/31/2016 | 12/31/2015 | Trailing 12 Months | ||||||||||||||||
Net income (loss) attributable to Lexington Realty Trust shareholders | $ | (25,030 | ) | $ | 48,476 | $ | 49,769 | $ | 34,850 | $ | 108,065 | |||||||||
Interest and amortization expense | 23,001 | 22,679 | 22,893 | 21,466 | 90,039 | |||||||||||||||
Provision for income taxes | 462 | 224 | 413 | 104 | 1,203 | |||||||||||||||
Depreciation and amortization | 40,288 | 41,272 | 43,127 | 41,403 | 166,090 | |||||||||||||||
Straight-line adjustments | (11,317 | ) | (13,241 | ) | (11,139 | ) | (12,460 | ) | (48,157 | ) | ||||||||||
Lease incentives | 414 | 419 | 423 | 387 | 1,643 | |||||||||||||||
Amortization of above/below market leases | 572 | 499 | 456 | 418 | 1,945 | |||||||||||||||
Gains on sales of properties | (16,072 | ) | (25,326 | ) | (17,015 | ) | - | (58,413 | ) | |||||||||||
Impairment charges | 72,890 | 3,014 | - | 2,762 | 78,666 | |||||||||||||||
Debt satisfaction (gains) charges, net | (2,538 | ) | 3,194 | 162 | (11,397 | ) | (10,579 | ) | ||||||||||||
Non-cash charges, net | 2,296 | 2,403 | 2,207 | 2,213 | 9,119 | |||||||||||||||
Pro-rata share adjustments: | ||||||||||||||||||||
Non-consolidated entities adjustment | 360 | 254 | (5,106 | ) | 52 | (4,440 | ) | |||||||||||||
Noncontrolling interests adjustment | (2,467 | ) | 661 | 761 | 470 | (575 | ) | |||||||||||||
Adjusted EBITDA | $ | 82,859 | $ | 84,528 | $ | 86,951 | $ | 80,268 | $ | 334,606 |
50
LEXINGTON REALTY TRUST
RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)
($000)
Reconciliation of Select Credit Metrics:
Adjusted Company FFO Payout: | Nine months ended September 30, 2016 | |||
Common share dividends per share | $ | 0.515 | ||
Adjusted Company FFO per diluted share | $ | 0.87 | ||
Adjusted Company FFO payout ratio | 59.2 | % | ||
Unencumbered Assets: | ||||
Real estate, at cost | $ | 4,195,719 | ||
held for sale real estate, at cost | 38,950 | |||
less encumbered real estate, at cost | (1,052,165 | ) | ||
Loans receivable, net | 95,808 | |||
Unencumbered assets | $ | 3,278,312 | ||
Unencumbered NOI: | ||||
NOI | $ | 251,352 | ||
Disposed of properties NOI | (17,874 | ) | ||
Termination income | 7,727 | |||
Adjusted NOI | 241,205 | |||
less encumbered adjusted NOI | (62,311 | ) | ||
Unencumbered adjusted NOI | $ | 178,894 | ||
Unencumbered NOI % | 74.2 | % | ||
Net Debt / Adjusted EBITDA: | ||||
Adjusted EBITDA | $ | 334,606 | ||
Consolidated debt | $ | 1,879,781 | ||
less cash and cash equivalents | (117,791 | ) | ||
Net debt | $ | 1,761,990 | ||
Net debt / Adjusted EBITDA | 5.3 | x | ||
(Net Debt + Preferred) / Adjusted EBITDA: | ||||
Adjusted EBITDA | $ | 334,606 | ||
Net debt | $ | 1,761,990 | ||
Preferred shares liquidation preference | 96,770 | |||
Net debt + preferred | $ | 1,858,760 | ||
(Net Debt + Preferred) / Adjusted EBITDA | 5.6 | x |
(Debt + Preferred) / Gross Assets: | Nine months ended September 30, 2016 | |||
Consolidated debt | $ | 1,879,781 | ||
Preferred shares liquidation preference | 96,770 | |||
Debt and preferred | $ | 1,976,551 | ||
Total assets | $ | 3,449,951 | ||
Plus depreciation and amortization: | ||||
Real estate | 1,201,043 | |||
Deferred lease costs | 24,190 | |||
Gross assets | $ | 4,675,184 | ||
(Debt + Preferred) / Gross Assets | 42.3 | % | ||
Debt / Gross Assets: | ||||
Consolidated debt | $ | 1,879,781 | ||
Gross assets | $ | 4,675,184 | ||
Debt / Gross assets | 40.2 | % | ||
Secured Debt / Gross Assets: | ||||
Mortgages and notes payable | $ | 757,718 | ||
Gross assets | $ | 4,675,184 | ||
Secured Debt / Gross Assets | 16.2 | % | ||
Development / Gross Assets: | ||||
Investment in real estate under construction | $ | 137,576 | ||
Construction in progress | 789 | |||
Development | $ | 138,365 | ||
Gross assets | $ | 4,675,184 | ||
Development / Gross Assets | 3.0 | % |
51
Investor Information
Transfer Agent |
Computershare | Overnight Correspondence: |
PO Box 30170 | 211 Quality Circle, Suite 210 |
College Station, TX 77842-3170 | College Station, TX, 77845 |
(800) 850-3948 | |
www-us.computershare.com/investor |
Investor Relations |
Heather Gentry
Senior Vice President, Investor Relations
Telephone (direct) | (212) 692-7219 |
Facsimile (main) | (212) 594-6600 |
hgentry@lxp.com |
Research Coverage |
Bank of America/Merrill Lynch | KeyBanc Capital Markets Inc. | ||
James Feldman | (646) 855-5808 | Craig Mailman | (917) 368-2316 |
Barclays Capital | Ladenburg Thalmann & Co., Inc. | ||
Ross L. Smotrich | (212) 526-2306 | Daniel P. Donlan | (212) 409-2056 |
Evercore Partners | Stifel Nicolaus | ||
Sheila K. McGrath | (212) 497-0882 | John W. Guinee | (443) 224-1307 |
J.P. Morgan Chase | Wells Fargo Securities, LLC | ||
Anthony Paolone | (212) 622-6682 | Todd J. Stender | (562) 637-1371 |
Jeffries & Company, Inc. | |||
Jon Peterson | (212) 284-1705 |
52
LEXINGTON REALTY TRUST
One Penn Plaza, Suite 4015 | New York, NY 10119-4015 | (212) 692-7200 | www.lxp.com
Exhibit 99.2
Lexington Realty Trust – UNEDITED TRANSCRIPT
Q3 2016 Earnings Call
Company Participants:
T. Wilson Eglin, Chief Executive Officer and President
Patrick Carroll, Chief Financial Officer
Heather Gentry, Senior Vice President of Investor Relations
Operator:
Good morning and welcome to the Lexington Realty Trust Third Quarter Earnings Conference Call and Webcast. All participants will be in listen-only mode (Operator Instruction). After today's presentation, there will be an opportunity to ask questions. (Operator Instruction) Please note this event is being recorded. I would now like to turn the conference over to Heather Gentry. Please go ahead.
Heather Gentry:
Thank you, operator. Hi, and welcome to the Lexington Realty Trust Third Quarter 2016 Conference call. The earnings press release was distributed this morning and the release and supplemental disclosure package will be furnished on a Form 8-K. In the press release and supplemental disclosure package, Lexington has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. If you did not receive a copy, these documents are available on our website at www.lxp.com in the Investor section. Additionally, we are hosting a live webcast of today's call, which you can access in the same section.
At this time, we would like to inform you that certain statements made during this conference call which are not historical, may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Lexington believes the expectations reflected in any forward-looking statements are based on reasonable assumptions. Lexington can give no assurance that its expectations will be attained. Factors and risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements are detailed in today's press release and from time to time in Lexington's filings with the SEC and included the successful consummation of any lease, acquisitions, build-to-suit financing, disposition or other transaction or the final terms of any such transaction. Except as required by law, Lexington does not undertake a duty to update any forward-looking statements.
References to Adjusted Company FFO refer to Adjusted Company FFO available to all equity holders and unit holders on a fully diluted basis. Operating performance measures of an individual investment are not presented or intended to be viewed as liquidity or performance measures that present a numerical measure of Lexington's historical or future financial performance, financial position or cash flows.
Joining me today to discuss Lexington's third quarter 2016 results are Will Eglin, Chief Executive Officer; Pat Carroll, Chief Financial Officer and other executive members of management. With that I will now turn the call over to Will.
Will Eglin:
Thank Heather, and good morning, everyone. We appreciate you joining our third quarter earnings call today. It was another productive quarter and overall, we were very pleased with our operating results. Our execution has been strong as we continue to focus on the key areas of our business, namely sales, leasing, balance sheet management and acquisitions. Leasing spreads were positive for the quarter on leasing volume of 1 million square feet and disposition activity of approximately $400 million was consistent with our expectations. We substantially reduced our leverage to a net debt-to-adjusted EBITDA of 5.3 times compared to 6.2 times the prior quarter and we ended the quarter with more cash than usual on our balance sheet due to the timing of sales.
We purchased one industrial asset in a prime distribution market just outside of Portland, Oregon during the quarter and I would expect you will see more industrial investment activity in the coming quarters. We also increased our quarterly dividend for the first time since 2014. The new annualized dividend of $0.70 per common share represents a $0.02 per common share increase.
The most notable disposition during the quarter was the sale of our three remaining New York City land investments, which turned out to be a great success. These investments produced strong cash flow and capital appreciation for our investors while we own them. We sold the investments for approximately $338 million at a better than expected cash cap rate of 4.6% and a GAAP cap rate of 13.6% after initially acquiring them in late 2013 for $302 million. The sale helped us reduce leverage considerably as a result of approximately $213 million of mortgage debt leaving the balance sheet and the cash proceeds allowed us to fully repay our credit facility and fund investments. We recognized a $65.5 million non-cash impairment charge with this sale, primarily due to the write-off of the deferred rent receivable which led to a net loss for the quarter of approximately $27 million.
Adjusted Company Funds from Operations per share for the quarter was $0.28 per share, representing another quarter of strong performance. Given the overall execution of our business plan and better visibility on transaction activity over the remainder of the year, we are moving our 2016 adjusted Company FFO guidance up on both the low and high-ends to a new range of $1.09 to $1.11 per share, from $1.07 to $1.10 per share.
Before I move into some more specifics around investments, dispositions and leasing, I want to highlight the Dow Chemical financing we touched upon in our second quarter call. At the beginning of the third quarter, we obtained a 20 year $197 million long-term non-recourse mortgage loan at a 4.04% fixed interest rate, which is secured by our $166 million build-to-suit project in Lake Jackson, Texas leased to Dow Chemical.
We limit our use of secured financing; but in this case, it made sense in order to extract significant immediate value from the asset. This financing illustrates how we can use secured financing to monetize the rent stream, lock-in a gain, and replace shorter-term debt with longer-term debt. It also shows how our build-to-suit strategy creates additional value for our shareholders.
Moving on to investments; during the quarter, we acquired a 508,000 square foot industrial asset in Wilsonville, Oregon for $43.1 million, at initial cash and GAAP yields of 6% and 7.2% respectively. The asset is net leased for 16 years with escalations of approximately 4.3% every two years and is located just outside of Portland in a supply-constrained strong distribution market with high barriers to entry. Originally a build-to-suit for Nike, the property was later reconfigured to multi-tenant use before the current tenant Pacific Foods of Oregon Inc. leased 100% of the space. Pacific Foods is a high quality tenant in the growing organic foods business.
In our build-to-suit program, we invested approximately $28 million in ongoing projects. Our joint venture completed construction of a private school in Houston, Texas, which serves grades K through 12 during the quarter. We have a 25% equity interest in the joint venture and a construction loan investment of $43.1 million as of September 30, 2016. This property falls into our specialty asset category and while these types of investments will never represent a large portion of our overall portfolio. From time to time, we will come across attractive joint venture opportunities like this one with a 20-year lease term annual rent escalations based on CPI and going in GAAP and cash cap rates of 7.8%.
We also expect three of the four buildings of the Dow Chemical build-to-suit to come online before the end of the year, with the fourth to follow in the first quarter of 2017. This will have a positive impact on our portfolio's weighted average lease term, portfolio occupancy rate, and tenant credit quality. As of September 30, 2016, we had investment commitments of approximately $128 million including the Dow Chemical project, in which funds are being held in escrow by the lender to complete the project. Additional details on our current build-to-suit funding projections can
be found on page 16 of the supplement.
Our current investment commitments include $100 million for 2017 build-to-suit deliveries. We are focused on adding to our 2017 pipeline and are currently looking at approximately $200 million to $300 million of potential new investments. I would expect investment activity to increase moderately in the coming months.
In addition to build-to-suits, this includes sale leasebacks and properties subject to existing leases, primarily in the industrial space. Pricing is still fairly competitive, so we expect to remain disciplined and mindful of price per square foot in our underwriting. We believe asset pricing in the office build-to-suit market is still more attractive than straight purchases, so new office investments will, in most cases, be through build-to-suit opportunities where we can secure a long-term lease of typically 15 years to 20 years.
On the disposition front, we have nearly completed our 2016 sales program. Our execution has been quite successful with year-to-date wholly owned assets sales totaling approximately $616.2 million at an average cash cap rate of 5.1% and a GAAP cap rate of 10.6%. We sold 10 properties totaling $409 million during the quarter with subsequent dispositions of $40.3 million. This includes the three remaining New York City land investments, which we sold for $338 million at a cash cap rate of 4.6% and a GAAP cap rate of 13.6%. We also sold some vacant properties during the quarter and our Milford, Ohio office property was sold for $33 million. We recently renewed the lease on this space with Siemens and we're able to get an excellent price for the property as a result of the full occupancy and longer lease term. We have now exceeded the low end of our $600 million to $700 million disposition guidance and expect up to an additional $40 million in sales for the remainder of the year. We are also revising the estimated average cap rate range to 5% to 5.5% on a cash basis and 10% to 10.5% on a GAAP basis, which represents compression on both the high and low-ends of our prior cash cap rate guidance of 5.5% to 6.25%.
Turning to leasing, as of the end of the third quarter, we have completed approximately 4.1 million square feet of new leases and lease extensions. Third quarter leasing of approximately 1 million square feet led to both GAAP and cash rental increases of more than 1.4% on renewals. Lease renewal square footage for the quarter was comprised primarily of renewals with Owens Corning Insulating Systems in Hebron, Ohio for approximately 651,000 square feet across two properties. For new leases, during the quarter, we leased approximately 39% of our Temperance, Michigan property to Hollingsworth Logistics Corp after the previous tenant vacated at the end of July. We are actively marketing the remaining square footage and currently have several prospects looking at the space.
The Temperance vacancy was the primary driver for the decline in our occupancy for the third quarter, which came in at 95.3% at quarter-end. While this number has moved down over the last couple of quarters, we expect occupancy to be around 96% at year-end due to fourth quarter acquisition and disposition activity.
Subsequent to the end of the quarter, we executed a two-year lease renewal with Bay Valley Foods for their entire 300,000 square foot industrial space. We now have no meaningful lease expirations remaining in 2016. We have been proactively working on upcoming expirations and have already done a great deal of work on 2017 expirations through early renewals and sales. Of the remaining 2.1 million square feet of expirations in 2017, we are negotiating renewals with Arrow Electronics, New Cingular Wireless and United Healthcare. In addition, we are actively marketing properties with expected move-outs, including our Fishers, Indiana office property leased to Roche Diagnostics; our Houston office property leased to Transocean; our industrial property in Des Moines leased to Hewlett-Packard; and our industrial property in High Point, North Carolina leased to Steelcase.
Vacant space to lease or sell represents approximately 4.9% of the overall portfolio or 2.1 million square feet, including 104,000 square feet of newly vacated space in Rock Hill, South Carolina, where the tenant recently terminated the lease upon liquidation. This was largely due to government cuts in reimbursement for their toxicology business, which was the majority of their revenue. Annual rental revenue for this property was $1.9 million.
Our weighted average lease term at the end of the quarter was 8.6 years. This has come down from the previous quarter, mostly due to the New York City land sale. Following the sale, industrial revenue now makes up approximately 38% of the overall portfolio, up from 31% last quarter. We continue to concentrate on managing down our shorter-term leases and expect our weighted average lease term to grow moving forward as longer lease build-to-suit properties are completed and new purchases come into the portfolio. Our lease expirations remain well staggered with about 78% of our revenue from leases with built-in escalations.
In summary, we are very pleased with our progress. We've spent much of the year focused on improving the quality of our portfolio and creating a stronger balance sheet and this focus has paid off. Today, our 2016 disposition program is nearly complete, at better than expected pricing. We've enhanced our balance sheet flexibility with leverage at its lowest level in over five years and we have excess cash on the balance sheet that is likely to be used for investment purposes. With this work behind us, we believe we are well positioned to produce strong adjusted Company FFO per share in relation to our dividend and share price moving forward. We intend to finish out the year strong and as we look toward 2017, we will focus our attention on long-term growth opportunities with continued progress on sales, occupancy and extending lease term.
Now, I'll turn the call over to Pat who will review our financial results in more detail.
Pat Carroll;
Thanks Will. Hello, and good morning everyone. Financial results for the quarter were positive overall. Gross revenues for the quarter ended September 30, 2016 totaled $106.3 million, representing an approximate 1% increase compared with gross revenues of a $105.4 million for the same period in 2015. This was primarily a result of revenue generated from property acquisitions and new leases signed, offset by 2015 and 2016
property sales and lease expirations.
We posted a net loss attributable to common shareholders for the quarter ended September 30, 2016 of $26.7 million or $0.11 per diluted share compared to a net loss of $7.6 million or $0.03 per diluted share for the same time period in 2015. During the quarter, we recognized $72.9 million of non-cash impairment charges primarily the result of the sale of our New York City land investments due to the write-off of the deferred rent receivable balance of $91.2 million. This impairment, which totaled $65.5 million led to net loss attributable to common shareholders for the quarter ended September 30, 2016.
As Will mentioned previously, we purchased these investments for $302 million in the fourth quarter of 2013, and we sold them in the third quarter of 2016 for $338.2 million. Our 2016 guidance for net income attributable to common shareholders is now expected to be within a range of $0.40 to $0.44 per diluted common share. Keep in mind, this guidance is forward-looking, excludes the impact of certain items and is based on current expectations.
Adjusted Company FFO for the quarter was $67.5 million or $0.28 per diluted common share compared to $66.9 million or $0.27 per diluted common share for the same time period in 2015. As Will mentioned earlier, we revised our adjusted company FFO 2016 guidance upwards to $1.09 to $1.11 per diluted share from $1.07 to $1.10 per diluted share, primarily given continued execution of our business plan and better visibility on transaction activity for the remainder of the year.
Again, this guidance is forward looking, excludes the impact of certain items and is based on current expectations. For the quarter ended September 30, 2016, GAAP rents were in excess of cash rents by approximately $10.3 million, and for the nine months ended September 30, 2016, GAAP rents were in excess of cash rents by approximately $32.9 million. This relates primarily to our three New York City land investments, which were sold in September 2016. We'd expect this delta to come down significantly due to this sale. On page 20 of the supplement, we have included our estimates of both cash and GAAP rents for the remainder of 2016 and 2017 for leases in place at September 30, 2016. This does not assume any tenant re-leasing of vacant space, tenant lease extensions on properties with scheduled lease expirations, property sales or property acquisitions.
Same-store net operating income was $201.3 million for the nine months ended September 30, 2016, which represents a decrease of approximately 0.6% compared to the same time period in 2015. As we have said in the past, in 2015, we had two tenants that paid rent semi-annually. And for 2016, one of these tenants now pays rent monthly and one property is currently vacant. These changes primarily resulted in the decrease.
Property operating cost decreased $2 million for the quarter compared to the same time period in 2015 and decreased almost $11 million for the first nine months of the year compared to the same time period in 2015, primarily due to the sale of various multi-tenanted properties. G&A expenses were approximately $7.5 million for the third quarter of 2016 and $23 million for the nine months ended September 30, 2016. We are projecting G&A of approximately $31 million for the full year.
Now turning to the balance sheet, our balance sheet is in very good shape and provides ample flexibility as needed. As of September 30, 2016, we had a $160.2 million of cash on the balance sheet, including cash classified as restricted. The high cash balance is primarily a result of the timing of property sales. Restricted cash balances, primarily related to money held as lend to escrows, including to fund the construction of the Dow Chemical's build-to-suit.
For the quarter ended September 30, 2016, we had $1.9 billion of consolidated debt outstanding, which had a weighted average interest rate of 4.1%; of which, approximately 100% is at fixed rates, including debt currently covered by interest rate swaps. Our fixed charge coverage was approximately 2.5 times and net debt-to-adjusted EBITDA was approximately 5.3 times as of September 30, 2016.
As of September 30, 2016, we had approximately $16.8 million of non-recourse balloon mortgage payments, with an average interest rate of 6.3% coming due this year, all of which represent mortgages currently in default. As of September 30, 2016, our unencumbered asset base was approximately $3.3 billion or 74.2% of our NOI. As a percentage of NOI, our unencumbered asset base has increased by approximately 6.5% over the prior quarter.
As mentioned on our second quarter call, in July, we closed on $197.2 million, 20-year non-recourse financing secured by a build-to-suit projects in Lake Jackson, Texas. The loan bears interest at a fixed rate of 4.04% and provides for an $11.3 million balloon payment on maturity. We committed to fund up to approximately $166 million for the project in 2014. The current investment balance as of September 30, 2016 is $101.2 million. We expect three of the four buildings of this build-to-suit to come online by the end of this year with the fourth one to follow in the first quarter of 2017.
As part of our 2016 balance sheet strategy, this financing allowed us to replace shorter-term debt with some longer fixed rate debt. To date, we have retired $360 million of secured debt, which includes this $272 million retired during the quarter. We currently have no borrowings outstanding on our $400 million revolver as we repaid $123 million during the third quarter. Also in July, all $11.9 million that was outstanding on our 6% notes were satisfied.
During the quarter ended September 30, 2016, we paid approximately $2.6 million in lease cost and tenant improvements. We expect to incur a TI and leasing costs for the remainder of 2016 to range between $7 million and $10 million. Now I'll turn the call over back to Will.
Will Eglin:
Thanks Pat. Operator, I have no further comments at this time. So we are ready for you to conduct the question-and-answer portion of the call.
Operator:
(Operator Instruction) Our first question comes from Sheila McGrath, Evercore ISI.
Sheila McGrath - Evercore ISI – Analyst:
Good morning. Will, you've made progress in terms of deleveraging and also shifting the portfolio to longer-term lease assets, can you just remind us where you are now and how we should think about goals for 2017?
Will Eglin:
If you look at the balance sheet; at the end of last year, we were leveraged 6.7 times net debt-to-EBITDA, so the deleveraging has been pronounced down to 5.3 times. I think as we look at the Company; next year and going forward it looks to me like leverage will probably be somewhere between 5.5 times and under 6 times leveraged. So that's a very good position for us to be in. Almost 75% of our NOI is unencumbered. So from a balance sheet flexibility standpoint, we're arguably in the best shape we've ever been in.
We still have an interest in adding long-term leases to the portfolio and we have an interest in adding more industrial assets to the portfolio as well to try to not just have a balance between long-term revenue and revenue from leases shorter than 10 years, but also to have a balance between office and industrial and to work towards specifically a balance between office and industrial roll over in the shorter than 10-year lease portfolio. So, in addition to our typical build-to-suite and sale leaseback business, there is probably going to be some purchase activity around warehouse and distribution assets to help us toward those objectives.
Sheila McGrath:
And then, in terms of when we look at 2017 in terms of dispositions, this year was significant. We obviously aren't expecting that. But should we expect that funding most new investments will be with dispositions or how should we think about that?
Will Eglin:
We haven't given guidance for next year, but right now, we would expect that new investment activity would be funded principally with disposition proceeds. We're still quite focused on capital recycling. So I think that's our expectation at this point.
Sheila McGrath:
Okay. And last quick question, if you can just review for us, for modeling purposes, the point to that you said about the Dow Chemical phasing in, just kind of on timing?
Will Eglin:
Well, it is a four building complex. Three to four buildings will come-in in the fourth quarter. The fourth one will come in in the first quarter. For a full year, the Dow Chemical has about a $0.02 impact on FFO, ratably each quarter. I would use that as an estimate for modeling.
Operator
Our next question comes from Craig Mailman, KeyBanc Capital Markets.
Laura Dickson - KeyBanc Capital Markets – Analyst:
Hey everyone. This is Laura Dickson here with Craig. I was just wondering how you view your cost of capital here. REITs have generally taking a breather since early September. So curious if this has impacted your appetite for investments if it all?
Will Eglin:
Well, we've been focused primarily on reinvesting disposition proceeds with the plan coming in at -- so far at 5.1% cap rate. It's been fairly easy to reinvest the money at the higher going in yields. So we haven't contemplated issuing equity to fund any investment activity. So share prices go up and down, it's been a very volatile year. But the plan has not been to use equity this year to fund any growth initiatives, but to rely on sale proceeds and pricing we've gotten in the disposition program has been really good. So that's, I think, our view on that. We do have more cash on the balance sheet than usual right now. So there should be, to the extent we can put that to work, some accretion from that investment activity.
Laura Dickson:
Okay, yes. And that makes sense and I was just curious, outside of New York land sales, can you talk about like the types of buyers that you're seeing for your assets?
Will Eglin:
It's a very wide ranging pool of investors that we sell to, depending on the asset. We've sold a couple of office buildings with roughly 10 years of lease term to non-traded REITs. But the purchaser of an empty building is a completely different animal. So the buyer of the New York land was a wealthy family. So it really runs the gamut depending on what type of property we're selling, the nature of the lease term, how asset management intends that the asset might be. But so far, the depth of buyers and the pricing that we've been getting have been very satisfactory and we've done better this year than we thought we would do when the year began.
Laura Dickson:
And then just lastly, I was curious, probably you said 74% of NOI comes from unencumbered assets. So just curious if you have like a target range that you'd like that to be in?
Will Eglin:
Honestly, the target was to be between 65% and 70%. So we've gone beyond what our short-term objectives were. So my expectation is it will fluctuate, but it should be around 70% going forward.
Operator
Our next question comes from Kyle McGrady, Stifel.
Kyle McGrady - Stifel – Analyst:
Along the lines of your Jackson build-to-suit, are there any future build-to-suits or larger scale acquisitions you're planning on a one-off basis and what specific asset classes would you be targeting? Thanks.
Will Eglin:
Looking at the pipeline, there isn't a single one-off transaction that's anywhere near that dollar commitment for Lake Jackson, most of what we tend to look at is in the $30 million to $50 million range, and anything that we're looking for purchase that's subject to lease is industrial. We're interested in adding office to the portfolio to the extend it's a build-to-suit or sale leaseback where we can get 15 years or 20 years of term and we will look at warehouse and distribution on shorter lease term than that, but that would be the sole exception.
Operator
Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.
Will Eglin:
Thanks again, everyone, for joining us this morning. We continue to be very pleased with the progress we're making and the solid execution of our business strategy. We're very excited for what's to come in 2017 and we continue to be very focused on ways to create further shareholder value.
We thank you again for your continued participation and support. And if you would like to receive our quarterly supplemental package, please contact Heather Gentry or you can find additional information on the Company on our website at www.lxp.com. And in addition, as always, you may contact me or the other members of our senior management team with any questions. Thanks again for joining us today and have a great day.
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