8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant

to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 8, 2017

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))

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

Emerging growth company ¨

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

Item 2.02. Results of Operations and Financial Condition.

On August 8, 2017, we issued a press release announcing our financial results for the quarter ended June 30, 2017. A copy of the press release is furnished herewith as part of Exhibit 99.1.

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

Item 7.01. Regulation FD Disclosure.

On August 8, 2017, we made available supplemental information, which we refer to as the “Quarterly Supplemental Information, Second Quarter 2017,” a copy of which is furnished herewith as Exhibit 99.1.

Also on August 8, 2017, our management discussed our financial results and certain aspects of our business plan on a conference call with analysts and investors. A transcript of the conference call is furnished herewith as Exhibit 99.2.

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

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits

99.1	Quarterly Supplemental Information, Second Quarter 2017.
99.2	August 8, 2017 Conference Call Transcript.

SIGNATURES

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

	Lexington Realty Trust
Date: August 9, 2017	By:	/s/ Patrick Carroll
		Patrick Carroll
		Chief Financial Officer

Exhibit Index

99.1	Quarterly Supplemental Information, Second Quarter 2017.
99.2	August 8, 2017 Conference Call Transcript.

EX-99.1

Exhibit 99.1

LEXINGTON REALTY TRUST

QUARTERLY SUPPLEMENTAL INFORMATION

June 30, 2017

Table of Contents

Section	Page
Second Quarter 2017 Earnings Press Release	3
Portfolio Data
Investment / Capital Recycling Summary	15
Build-To-Suit Projects / Forward Purchase Commitments	16
Financing Summary	17
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
Property Leases and Vacancies – Non-consolidated Portfolio	38
Select Credit Metrics Summary	39
Financial Covenants	40
Mortgages and Notes Payable	41
Debt Maturity Schedule	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 Press Release and Quarterly Supplemental Information contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the control of Lexington Realty Trust (“Lexington”), which may cause actual results, performance or achievements of Lexington and its subsidiaries to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Lexington’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, risks related to: (1) the 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, 2017, (3) the successful consummation of any lease, acquisition, build-to-suit, disposition, financing or other transaction on the terms described herein or at all, (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 revise those forward-looking statements to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington’s expectations will be realized.

LEXINGTON REALTY TRUST

TRADED: NYSE: LXP

ONE PENN PLAZA, SUITE 4015

NEW YORK, NY 10119-4015

FOR IMMEDIATE RELEASE

LEXINGTON REALTY TRUST REPORTS SECOND QUARTER 2017 RESULTS

New York, NY - August 8, 2017 - Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant real estate investments, today announced results for the second quarter ended June 30, 2017.

Second Quarter 2017 Highlights

• Generated Net Income attributable to common shareholders of $5.5 million, or $0.02 per diluted common share.

• Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $57.0 million, or $0.23 per diluted common share.

• Acquired three industrial properties for an aggregated cost of $104.2 million and completed the Charlotte, NC build-to-suit project for $61.3 million.

• Committed to acquire an industrial property in Romulus, MI for $39.3 million.

• Invested $9.3 million in an on-going build-to-suit project.

• Sold six properties for $59.1 million.

• Retired $19.8 million of secured debt.

• Completed 1.4 million square feet of new leases and lease extensions with overall portfolio 98.1% leased at quarter end.

Subsequent Events

• Disposed of a retail property in Lexington, NC and a vacant office property in Rock Hill, SC for an aggregate $7.7 million.

• Acquired an industrial property in McDonough, GA for $66.7 million, which is net leased for 10.5 years.

• Extended the 2018 lease maturities on an industrial property in Columbus, OH and an industrial property in Marshall, MI aggregating 1.0 million square feet.

• Borrowed $70.0 million under its unsecured revolving credit facility.

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, “During the second quarter, we continued to execute on our business plan by addressing lease rollover, selling under-performing and non-core properties, completing build-to-suit projects and acquiring high-quality industrial properties.  Acquisition and build-to-suit completions of $166 million exceeded sales volume of $59 million for the quarter, and our industrial investment pipeline remains promising. After strong leasing volume of 1.4 million square feet, our portfolio was 98.1% leased at quarter end. In the second half of the year, we will continue to focus on adding high quality industrial properties to our portfolio while further simplifying our holdings through asset sales, primarily in the office area.”

3

FINANCIAL RESULTS

Revenues

For the quarter ended June 30, 2017, total gross revenues were $95.7 million, compared with total gross revenues of $116.9 million for the quarter ended June 30, 2016. The decrease was primarily attributable to 2017 and 2016 property sales, particularly the sale of the New York City land investments in 2016, a lease termination payment received in 2016 and lease expirations, partially offset by revenue generated from property acquisitions and new leases.

Net Income Attributable to Common Shareholders

For the quarter ended June 30, 2017, net income attributable to common shareholders was $5.5 million, or $0.02 per diluted share, compared with net income attributable to common shareholders for the quarter ended June 30, 2016 of $53.9 million, or $0.23 per diluted share.

Adjusted Company FFO

For the quarter ended June 30, 2017, Lexington generated Adjusted Company FFO of $57.0 million, or $0.23 per diluted share, compared to Adjusted Company FFO for the quarter ended June 30, 2016 of $79.1 million, or $0.32 per diluted share. The decrease was primarily attributable to the items discussed above under "Revenues".

Dividends/Distributions

As previously announced, during the second quarter of 2017, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended June 30, 2017 of $ 0.175 per common share/unit, which was paid on July 17, 2017 to common shareholders/unitholders of record as of June 30, 2017. Lexington also declared a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock, which is expected to be paid on August 15, 2017 to Series C Preferred Shareholders of record as of July 31, 2017.

TRANSACTION ACTIVITY

ACQUISITIONS AND COMPLETED BUILD-TO-SUIT TRANSACTIONS

Tenant	Location	Sq. Ft.		Property Type	Initial Basis ($000)		Approximate Lease Term (Yrs)
AvidXchange, Inc.	Charlotte, NC		201,000	Office	$	61,339		15
General Electric Company(1)	Cleveland, TN		851,000	Industrial		34,400		7
O'Neal Metals (Texas), L.P.	Grand Prairie, TX		215,000	Industrial		24,317		20
Carrier Corporation	San Antonio, TX		849,000	Industrial		45,507		10
			2,116,000		$	165,563

(1) Initial Basis excludes an $850 thousand future tenant allowance, which was credited at closing.

The above were acquired/completed at aggregate weighted-average GAAP and cash capitalization rates of 8.1% and 7.2%, respectively.

4

ON-GOING BUILD-TO-SUIT PROJECT

Location	Sq. Ft.		Property Type	Maximum Commitment/Estimated  Completion Cost ($000)		GAAP Investment Balance as of 6/30/2017 ($000)		Estimated Acquisition/ Completion Date	Estimated Initial GAAP Yield			Estimated  Initial Cash Yield			Approximate Lease Term (Yrs)
Opelika, AL		165,000	Industrial	$	37,370	$	29,442	3Q 17		8.9	%		7.0	%		25

FORWARD PURCHASE COMMITMENTS

Location	Sq. Ft.		Property Type	Maximum Acquisition Cost ($000)		Estimated  Acquisition Date	Estimated Initial  GAAP  Yield			Estimated Initial  Cash Yield			Approximate Lease Term (Yrs)
Warren, MI(1)		260,000	Industrial	$	47,000	3Q 17		8.3	%		7.3	%		15
Romulus, MI		500,000	Industrial		39,330	3Q 17		6.5	%		6.1	%		15
		760,000		$	86,330			7.5	%		6.7	%

(1) A $4.6 million letter of credit secures the obligation to purchase this property.

PROPERTY DISPOSITIONS

Primary Tenant	Location	Property Type	Gross Disposition Price ($000)		Annualized Net Income(1) ($000)			Annualized NOI(1) ($000)			Month of Disposition	% Leased
Silver Spring Foods, Inc.	Eau Claire, WI	Industrial	$	13,647	$	1,002		$	1,070		April		100	%
Vacant	Southfield, MI	Multi-Tenant - Office		3,461		(3,323	)		(956	)	May		0	%
BJC Health System	Bridgeton, MO	Multi-Tenant - Office		1,100		(139	)		(2	)	May		50	%
Marketlink, Inc.	Des Moines, IA	Industrial		15,592		381			2,676		May		6	%
Kmart Corporation	Lorain, OH	Other		6,300		407			71		May		100	%
Hollingsworth Logistics Group, L.L.C.	Temperance, MI	Multi-Tenant - Industrial		19,000		(55	)		258		May		52	%
			$	59,100	$	(1,727	)	$	3,117

(1) Quarterly period prior to sale annualized.

These sales resulted in aggregate gains of $10.2 million and aggregate impairment charges of $3.6 million.

5

LEASING

During the second quarter of 2017, 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	Centennial	CO	Arrow Electronics, Inc.	09/2017	03/2033		128,500
2	Herndon	VA	United States of America	05/2018	05/2022		159,644
3	Kingsport	TN	Kingsport Power Company	06/2018	06/2023		42,770
4-6	Honolulu/Indianapolis	HI/IN	N/A	2017-2018	2018-2020		4,472
6	Total office lease extensions						335,386
	Industrial / Multi-Tenant
1	Shelby	NC	Clearwater Paper Corporation	05/2031	05/2036		673,518
2	Antioch	TN	Evergreen Presbyterian Ministries	04/2017	04/2024		11,238
3	Henderson	NC	Staples, Inc.	06/2018	12/2018		196,946
3	Total industrial lease extensions						881,702
	Other
1	Paris	TN	The Kroger Co.	07/2018	07/2023		31,170
1	Total other lease extensions						31,170
10	Total lease extensions						1,248,258

	NEW LEASES
	Location			Lease  Expiration Date	Sq. Ft.
	Office/Multi-Tenant
1	Houston	TX	Saipem America, Inc.	10/2017		27,213
1	Total new office leases					27,213
	Industrial/Multi-Tenant
1	Temperance(2)	MI	Hollingsworth Logistics Group L.L.C.	11/2021		112,549
1	Total new industrial leases					112,549
2	Total new leases					139,762
12	TOTAL NEW AND EXTENDED LEASES					1,388,020

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

(2) Property subsequently sold.

As of June 30, 2017, Lexington's portfolio was 98.1% leased, excluding any property subject to a mortgage loan in default.

BALANCE SHEET/CAPITAL MARKETS

In the second quarter of 2017, Lexington satisfied an aggregate $19.8 million of nonrecourse mortgage debt.

6

2017 EARNINGS GUIDANCE

Lexington now estimates that its net income attributable to common shareholders per diluted common share for the year ended December 31, 2017 will be within an expected range of $0.65 to $0.69. Lexington is reaffirming that its Adjusted Company FFO for the year ended December 31, 2017 will be within an expected range of $0.94 to $0.98 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

SECOND QUARTER 2017 CONFERENCE CALL

Lexington will host a conference call today, August 8, 2017, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended June 30, 2017. Interested parties may participate in this conference call by dialing 1-844-825-9783 (U.S.), 1-412-317-5163 (International) or 1-855-669-9657 (Canada). A replay of the call will be available through November 8, 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 10110777. A live webcast of the conference call will be available at www.lxp.comwithin the Investors section.

7

ABOUT LEXINGTON REALTY TRUST

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

Contact:

Investor or Media Inquiries for Lexington Realty Trust:

Heather Gentry, Senior Vice President of Investor Relations

Lexington Realty Trust

Phone: (212) 692-7200 E-mail: 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, 2017, (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, and all property operating activities are conducted, through special purpose entities, which are separate and distinct legal entities that maintain separate books and records, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. The assets and credit of each special purpose entity with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other special purpose entity or affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member of managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein which interests are subordinate to the claims of the property owner subsidiary's (or its general partner's, member's or managing member's) creditors.

8

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.

# # #

9

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Three months ended June 30,						Six months ended June 30,
	2017			2016			2017			2016
Gross revenues:
Rental	$	87,565		$	108,982		$	176,219		$	212,202
Tenant reimbursements		8,119			7,930			15,564			15,987
Total gross revenues		95,684			116,912			191,783			228,189
Expense applicable to revenues:
Depreciation and amortization		(42,320	)		(41,272	)		(85,211	)		(84,399	)
Property operating		(12,974	)		(11,293	)		(25,090	)		(23,371	)
General and administrative		(8,141	)		(7,747	)		(17,598	)		(15,522	)
Non-operating income		1,371			3,553			3,992			6,420
Interest and amortization expense		(19,216	)		(22,679	)		(38,941	)		(45,572	)
Debt satisfaction charges, net		(46	)		(3,194	)		(46	)		(3,356	)
Impairment charges and loan loss		(13,599	)		(3,014	)		(21,591	)		(3,014	)
Gains on sales of properties		10,240			25,326			44,433			42,341
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities		10,999			56,592			51,731			101,716
Provision for income taxes		(377	)		(224	)		(799	)		(637	)
Equity in earnings (losses) of non-consolidated entities		(3,257	)		312			(1,347	)		6,054
Net income		7,365			56,680			49,585			107,133
Less net income attributable to noncontrolling interests		(213	)		(1,148	)		(393	)		(2,158	)
Net income attributable to Lexington Realty Trust shareholders		7,152			55,532			49,192			104,975
Dividends attributable to preferred shares – Series C		(1,573	)		(1,573	)		(3,145	)		(3,145	)
Allocation to participating securities		(60	)		(84	)		(131	)		(175	)
Net income attributable to common shareholders	$	5,519		$	53,875		$	45,916		$	101,655
Net income attributable to common shareholders - per common share basic	$	0.02		$	0.23		$	0.19		$	0.44
Weighted-average common shares outstanding – basic		237,720,198			232,592,998			237,451,355			232,617,901
Net income attributable to common shareholders - per common share diluted	$	0.02		$	0.23		$	0.19		$	0.43
Weighted-average common shares outstanding – diluted		241,531,313			235,227,199			241,310,529			235,151,256

10

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	June 30, 2017			December 31, 2016
Assets:
Real estate, at cost	$	3,638,123		$	3,533,172
Real estate - intangible assets		575,172			597,294
Investments in real estate under construction		29,442			106,652
		4,242,737			4,237,118
Less: accumulated depreciation and amortization		1,185,911			1,208,792
Real estate, net		3,056,826			3,028,326
Assets held for sale		5,984			23,808
Cash and cash equivalents		93,279			86,637
Restricted cash		35,939			31,142
Investment in and advances to non-consolidated entities		61,771			67,125
Deferred expenses, net		32,873			33,360
Loans receivable, net		—			94,210
Rent receivable – current		5,407			7,516
Rent receivable – deferred		41,789			31,455
Other assets		32,935			37,888
Total assets	$	3,366,803		$	3,441,467
Liabilities and Equity:
Liabilities:
Mortgages and notes payable, net	$	703,845		$	738,047
Term loans payable, net		501,602			501,093
Senior notes payable, net		494,780			494,362
Trust preferred securities, net		127,146			127,096
Dividends payable		48,037			47,264
Liabilities held for sale		324			191
Accounts payable and other liabilities		33,901			59,601
Accrued interest payable		5,953			6,704
Deferred revenue - including below market leases, net		39,116			39,895
Prepaid rent		15,974			14,723
Total liabilities		1,970,678			2,028,976
Commitments and contingencies
Equity:
Preferred shares, par value $0.0001 per share; authorized 100,000,000 shares:
Series C Cumulative Convertible Preferred, liquidation preference $96,770; 1,935,400 shares issued and outstanding		94,016			94,016
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 240,612,821 and 238,037,177 shares issued and outstanding in 2017 and 2016, respectively		24			24
Additional paid-in-capital		2,822,217			2,800,736
Accumulated distributions in excess of net income		(1,538,442	)		(1,500,966	)
Accumulated other comprehensive income (loss)		443			(1,033	)
Total shareholders’ equity		1,378,258			1,392,777
Noncontrolling interests		17,867			19,714
Total equity		1,396,125			1,412,491
Total liabilities and equity	$	3,366,803		$	3,441,467

11

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

EARNINGS PER SHARE

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

	Three Months Ended June 30,				Six Months Ended June 30,
	2017		2016		2017			2016
EARNINGS PER SHARE:
Basic:
Net income attributable to common shareholders	$	5,519	$	53,875	$	45,916		$	101,655
Weighted-average number of common shares outstanding - basic		237,720,198		232,592,998		237,451,355			232,617,901
Net income attributable to common shareholders - per common share basic	$	0.02	$	0.23	$	0.19		$	0.44
Diluted:
Net income attributable to common shareholders - basic	$	5,519	$	53,875	$	45,916		$	101,655
Impact of assumed conversions		—		315		(19	)		628
Net income attributable to common shareholders	$	5,519	$	54,190	$	45,897		$	102,283
Weighted-average common shares outstanding - basic		237,720,198		232,592,998		237,451,355			232,617,901
Effect of dilutive securities:
Share options		86,653		273,920		111,252			204,783
6.00% Convertible Guaranteed Notes		—		1,878,445		—			1,909,841
Operating Partnership Units		3,724,462		—		3,747,922			—
Non-vested common shares		—		481,836		—			418,731
Weighted-average common shares outstanding - diluted		241,531,313		235,227,199		241,310,529			235,151,256
Net income attributable to common shareholders - per common share diluted	$	0.02	$	0.23		0.19		$	0.43

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 June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income attributable to common shareholders	$	5,519		$	53,875		$	45,916		$	101,655
Adjustments:
Depreciation and amortization		41,076			39,688			82,618			80,881
Impairment charges - real estate, including non-consolidated entities		17,111			3,014			19,809			3,014
Noncontrolling interests - OP units		—			927			(19	)		1,662
Amortization of leasing commissions		1,244			1,584			2,593			3,518
Joint venture and noncontrolling interest adjustment		265			222			605			458
Gains on sales of properties, including non-consolidated entities		(10,240	)		(25,326	)		(45,885	)		(47,719	)
Tax on sales of properties		—			—			—			50
FFO available to common shareholders and unitholders - basic		54,975			73,984			105,637			143,519
Preferred dividends		1,573			1,573			3,145			3,145
Interest and amortization on 6.00% Convertible Guaranteed Notes		—			233			—			485
Amount allocated to participating securities		60			84			131			175
FFO available to all equityholders and unitholders - diluted		56,608			75,874			108,913			147,324
Debt satisfaction charges, net		46			3,194			46			3,356
Loan loss		—			—			5,294			—
Transaction costs		302			68			488			214
Adjusted Company FFO available to all equityholders and unitholders - diluted		56,956			79,136			114,741			150,894
FUNDS AVAILABLE FOR DISTRIBUTION:
Adjustments:
Straight-line adjustments		(5,641	)		(13,241	)		(8,550	)		(24,380	)
Lease incentives		510			419			941			842
Amortization of above/below market leases		346			499			860			955
Lease termination payments, net		(530	)		(2,152	)		(295	)		(4,563	)
Non-cash interest, net		497			(632	)		652			(1,014	)
Non-cash charges, net		1,987			2,403			4,133			4,610
Tenant improvements		(4,233	)		601			(5,995	)		(119	)
Lease costs		(1,385	)		(3,477	)		(3,056	)		(4,707	)
Company Funds Available for Distribution	$	48,507		$	63,556		$	103,431		$	122,518
Per Common Share and Unit Amounts
Basic:
FFO	$	0.23		$	0.31		$	0.44		$	0.61
Diluted:
FFO	$	0.23		$	0.31		$	0.44		$	0.60
Adjusted Company FFO	$	0.23		$	0.32		$	0.47		$	0.62
Basic:
Weighted-average common shares outstanding - basic EPS		237,720,198			232,592,998			237,451,355			232,617,901
Operating partnership units(1)		3,724,462			3,818,805			3,747,922			3,819,498
Weighted-average common shares outstanding - basic FFO		241,444,660			236,411,803			241,199,277			236,437,399
Diluted:
Weighted-average common shares outstanding - diluted EPS		241,531,313			235,227,199			241,310,529			235,151,256
Operating partnership units(1)		—			3,818,805			—			3,819,498
Unvested share-based payment awards		606,934			—			648,810			—
Preferred shares - Series C		4,710,570			4,710,570			4,710,570			4,710,570
Weighted-average common shares outstanding - diluted FFO		246,848,817			243,756,574			246,669,909			243,681,324

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

13

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

2017 EARNINGS GUIDANCE

	Twelve Months Ended December 31, 2017
	Range
Estimated:
Net income attributable to common shareholders per diluted common share(1)	$	0.65		$	0.69
Depreciation and amortization		0.70			0.70
Impact of capital transactions		(0.41	)		(0.41	)
Estimated Adjusted Company FFO per diluted common share	$	0.94		$	0.98

(1) Assumes all convertible securities are dilutive.

14

EXINGTON REALTY TRUST

2017 Second Quarter Investment / Capital Recycling Summary

PROPERTY INVESTMENTS

	Primary Tenant (Guarantor)	Location		Square Feet		Property Type	Initial Basis ($000)		Month Closed	Primary Lease  Expiration
1	AvidXchange, Inc.	Charlotte	NC		201,000	Office	$	61,339	April	04/2032
2	General Electric Company (1)	Cleveland	TN		851,000	Industrial		34,400	May	03/2024
3	O'Neal Metals (Texas), L.P. (O'Neal Industries, Inc.)	Grand Prairie	TX		215,000	Industrial		24,317	June	03/2037
4	Carrier Corporation (United Technologies Corporation)	San Antonio	TX		849,000	Industrial		45,507	June	04/2027
4	TOTAL PROPERTY INVESTMENTS (2)(3)						$	165,563

CAPITAL RECYCLING

	PROPERTY DISPOSITIONS (5)
	Primary Tenant	Location		Property Type	Gross Sale Price ($000)		Annualized Net Income ($000) (5)			Annualized NOI ($000)(4)(5)			Month of Disposition	% Leased			Gross Sale Price PSF
1	Silver Spring Foods, Inc.	Eau Claire	WI	Industrial	$	13,647	$	1,002		$	1,070		April		100	%	$	85.83
2	Vacancy	Southfield	MI	Multi-Tenant - Office		3,461		(3,323	)		(956	)	May		0	%		9.62
3	BJC Health System	Bridgeton	MO	Multi-Tenant - Office		1,100		(139	)		(2	)	May		50	%		21.54
4	Marketlink, Inc.	Des Moines	IA	Industrial		15,592		381			2,676		May		6	%		38.50
5	Kmart Corporation	Lorain	OH	Other		6,300		407			71		May		100	%		32.61
6	Hollingsworth Logistics Group, L.L.C.	Temperance	MI	Multi-Tenant - Industrial		19,000		(55	)		258		May		52	%		25.10
6	TOTAL PROPERTY DISPOSITIONS				$	59,100	$	(1,727	)	$	3,117

Footnotes

(1) Initial Basis excludes an $850 thousand future tenant allowance, which was credited at closing.

(2) The above were acquired / completed at aggregate weighted-average GAAP and cash capitalization rates of 8.1% and 7.2%, respectively.

(3) In addition, Lexington expanded its Plymouth, MI, building by 21,479 square feet at a cost of $1.5 million.

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

(5) 1Q 2017 annualized.

15

LEXINGTON REALTY TRUST

2017 Second Quarter Build-to-Suit Projects / Forward Purchase Commitments

BUILD-TO-SUIT PROJECTED CONSTRUCTION FUNDING SCHEDULE ⁽¹⁾

	Location	Property Type	Sq. Ft		Approximate Lease Term (Years)		Maximum Commitment/ Estimated Completion  Cost ($000)		Investment balance as of 6/30/17 ($000) (2)		Estimated Cash Investment Next 12 Months ($000)								Estimated Completion/ Acquisition Date	Estimated Initial GAAP Yield (3)			Estimated  Initial Cash Yield (3)
											Q3 2017		Q4 2017		Q1 2018		Q2 2018
1	Opelika, AL	Industrial		165,000		25	$	37,370	$	29,442	$	7,700	$	-	$	-	$	-	3Q 17		8.9	%		7.0	%

FORWARD PURCHASE COMMITMENTS ⁽¹⁾

	Location	Property Type	Sq. Ft.		Approximate Lease Term (Years)		Maximum Acquisition Cost ($000)		Estimated Completion Date	Estimated GAAP Yield (3)			Estimated Initial Cash Yield (3)
1	Warren, MI (4)	Industrial		260,000		15	$	47,000	3Q 17		8.3	%		7.3	%
2	Romulus, MI	Industrial		500,000		15		39,330	3Q 17		6.5	%		6.1	%
2	TOTAL FORWARD PURCHASE COMMITMENTS			760,000			$	86,330			7.5	%		6.7	%

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) Investment balance in accordance with GAAP included in investment in real estate under construction. Aggregate equity invested is $29.8 million.

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

(4) A $4.6 million letter of credit secures the obligation to purchase this property.

16

LEXINGTON REALTY TRUST

2017 Second Quarter Financing Summary

DEBT RETIRED

	Location	Primary Tenant (Guarantor)	Property Type	Face / Satisfaction ($000)		Fixed Rate			Maturity Date
	Consolidated Mortgage Debt:
1	Shreveport, LA	Libbey Glass, Inc. (Libbey Inc.)	Industrial	$	19,000		5.690	%	07/2017
2	Lorain, OH (1)	Kmart Corporation	Other		767		7.750	%	07/2018
				$	19,767

Footnotes:

(1) Property sold. Debt defeased at closing.

17

LEXINGTON REALTY TRUST

2017 Second 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	Arrow Electronics, Inc. (4)	Centennial	CO	09/2017	03/2033		128,500	$	2,562	$	2,256	$	2,377	$	2,853
2	United States of America	Herndon	VA	05/2018	05/2022		159,644		3,128		3,402		3,220		3,741
3	Kingsport Power Company	Kingsport	TN	06/2018	06/2023		42,770		310		128		310		310
4-6	Various	Honolulu/Indianapolis	HI/IN	2017-2018	2018-2020		4,472		85		88		85		88
6	Total office lease extensions						335,386	$	6,085	$	5,874	$	5,992	$	6,992
	Industrial / Multi-Tenant Industrial
1	Clearwater Paper Corporation	Shelby	NC	05/2031	05/2036		673,518	$	2,786	$	2,601	$	3,180	$	3,117
2	Evergreen Presbyterian Ministries	Antioch	TN	04/2017	04/2024		11,238		126		149		126		149
3	Staples, Inc.	Henderson	NC	06/2018	12/2018		196,946		869		860		886		886
3	Total industrial lease extensions						881,702	$	3,781	$	3,610	$	4,192	$	4,152
				`
	Other
1	The Kroger Co.	Paris	TN	07/2018	07/2023		31,170	$	159	$	169	$	159	$	159
1	Total other lease extensions						31,170	$	159	$	169	$	159	$	159
10	TOTAL EXTENDED LEASES						1,248,258	$	10,025	$	9,653	$	10,343	$	11,303

NEW LEASES

	Tenant (Guarantor)	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	Saipem America, Inc. (Saipem S.p.A.)	Houston	TX	10/2017		27,213	$	354	$	354
1	Total office new lease					27,213	$	354	$	354
	Industrial/Multi-Tenant Industrial
1	Hollingsworth Logistics Group, L.L.C. (5)	Temperance	MI	11/2021		112,549	$	338	$	338
1	Total industrial new leases					112,549	$	338	$	338
2	TOTAL NEW LEASES					139,762	$	692	$	692
12	TOTAL NEW AND EXTENDED LEASES					1,388,020	$	10,717	$	11,035

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LEXINGTON REALTY TRUST

2017 Second Quarter Leasing Summary (Continued)

LEASE NON-RENEWALS ⁽²⁾

	Tenant	Location		Lease  Expiration  Date	Sq. Ft.		2016 GAAP Rent ($000)		2016 Cash Rent ($000)(3)
	Other
1	Marsh Supermarkets, Inc. (6)	Lawrence	IN	10/2018		28,721	$	193	$	193

Footnotes 

(1) Assumes twelve months rent from the later of 7/1/17 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.

(4) Prior GAAP rent excludes termination income recognized from a prior tenant of $776. New lease is a net lease while prior lease was a gross lease.

(5) Property subsequently sold.

(6) Tenant declared bankruptcy and rejected the lease.

19

LEXINGTON REALTY TRUST

Other Revenue Data

6/30/2017

($000)

Other Revenue Data

	GAAP Rent
Asset Class	Six months ended
	6/30/17 (1)		6/30/17 Percentage			6/30/16 Percentage (5)
Office	$	91,072		53.3	%		48.3	%
Industrial		70,406		41.2	%		33.8	%
Multi-tenant		4,336		2.6	%		2.9	%
Other		5,027		2.9	%		15.0	%
	$	170,841		100.0	%		100.0	%

	GAAP Rent
Credit Ratings (2)	Six months ended
	6/30/17 (1)		6/30/17 Percentage			6/30/16 Percentage
Investment Grade	$	66,930		39.2	%		33.1	%
Non-Investment Grade		27,149		15.9	%		14.0	%
Unrated		76,762		44.9	%		52.9	%
	$	170,841		100.0	%		100.0	%

Weighted-Average Lease Term - Cash Basis	As of 6/30/17	As of 6/30/16
	9.0 years	9.3 years	(3)

Rent Estimates for Current Assets

Year	GAAP (4)		Cash (4)		Difference
2017 - remaining	$	176,197	$	166,269	$	(9,928	)
2018		343,971		329,953		(14,018	)

Footnotes

(1) Six months ended 6/30/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 6/30/2017.

(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 6/30/2017, and (3) no properties are sold or acquired after 6/30/2017.

(5) Houston, TX (Industrial Terminals Management L.L.C.) and Missouri City, TX (Vulcan Construction Materials, LP) reclassed to industrial from "other".

20

LEXINGTON REALTY TRUST

Other Revenue Data (Continued)

6/30/2017

($000)

Same-Store NOI ⁽¹⁾

	Six months ended June 30,
	2017			2016
Total Cash Rent	$	147,306		$	148,368
Tenant Reimbursements		12,400			13,284
Property Operating Expenses		(19,856	)		(18,525	)
Same-Store NOI	$	139,850		$	143,127
Change in Same-Store NOI		(2.3	%)

Same-Store Percent Leased (2)	As of 6/30/17			As of 6/30/16
		97.8	%		98.9	%

Lease Escalation Data ⁽³⁾

 

Footnotes

(1) NOI is on a consolidated cash basis for all consolidated properties except properties acquired and sold in 2017 and 2016 and properties subject to mortgage loans in default at June 30, 2017. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

(2) Excludes properties acquired or sold in 2017 and 2016 and properties subject to mortgage loans in maturity default as of 6/30/2017.

(3) Based on six months consolidated cash rents for single-tenant leases (properties greater than 70% leased) owned as of June 30, 2017. Excludes parking operations and rents from prior tenants.

21

LEXINGTON REALTY TRUST

Portfolio Detail By Asset Class

6/30/2017

($000, except square footage)

Asset Class	YE 2014			YE 2015			YE 2016			Q2 2017
Office
% of ABR (1)		51.2	%		49.6	%		52.9	%		53.3	%
LTL (5)		31.4	%		23.2	%		26.9	%		34.0	%
STL (6)		68.6	%		76.8	%		73.1	%		66.0	%
Leased		98.6	%		99.6	%		99.6	%		99.6	%
Wtd. Avg. Lease Term (2)		7.4			7.2			7.2			7.9
Mortgage Debt	$	426,635		$	329,696		$	490,948		$	479,528
% Investment Grade (1)		53.3	%		48.0	%		48.1	%		50.9	%
Square Feet		13,264,134			12,847,877			11,569,940			11,317,187
Industrial
% of ABR (1)		25.4	%		30.5	%		39.7	%		41.2	%
LTL (5)		47.9	%		47.4	%		50.8	%		47.2	%
STL (6)		52.1	%		52.6	%		49.2	%		52.8	%
Leased		99.7	%		99.6	%		99.9	%		99.9	%
Wtd. Avg. Lease Term (2)		8.8			10.1			10.4			10.4
Mortgage Debt	$	177,951		$	292,293		$	240,790		$	218,485
% Investment Grade (1)		26.6	%		27.9	%		26.2	%		26.5	%
Square Feet		22,745,140			25,693,585			27,476,653			29,702,504
Multi-Tenant
% of ABR (1)		8.6	%		3.0	%		3.8	%		2.6	%
Leased		53.9	%		44.1	%		43.2	%		57.4	%
Wtd. Avg. Lease Term (2)		6.9			3.4			3.0			2.9
Mortgage Debt	$	116,763		$	14,118		$	10,586		$	10,535
% Investment Grade (1)		19.3	%		36.9	%		14.2	%		17.8	%
Square Feet		2,414,889			2,301,864			2,971,126			1,817,486
Other
% of ABR (1)		14.8	%		16.9	%		3.6	%		2.9	%
LTL (5)		86.8	%		88.0	%		42.7	%		43.7	%
STL (6)		13.2	%		12.0	%		57.3	%		56.3	%
Leased		94.3	%		98.0	%		100.0	%		100.0	%
Wtd. Avg. Lease Term (2)(3)		18.2			18.5			14.6			16.5
Mortgage Debt	$	226,645		$	255,218		$	2,849		$	2,060
% Investment Grade (1)		4.5	%		3.3	%		17.8	%		21.7	%
Square Feet		1,447,724			1,426,697			1,306,578			1,049,205
Loans Receivable	$	105,635		$	95,871		$	94,210		$	-
Construction in progress (4)	$	121,184		$	103,954		$	111,771		$	31,976

Footnotes

(1) Percentage of GAAP rent, excluding termination income, for consolidated properties owned as of each respective period.

(2) Cash basis.

(3) Cash basis adjusted to reflect NY land leases to the first purchase option date, as applicable.

(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.

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LEXINGTON REALTY TRUST

Portfolio Composition

6/30/2017

 

 

Footnotes

(1) Based on gross book value of real estate assets and real estate under construction as of 6/30/2017; excludes held for sale assets.

(2) Based on respective period GAAP rent, excluding termination income.

23

LEXINGTON REALTY TRUST

Components of Net Asset Value

6/30/2017

($000)

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

Consolidated properties six month net operating income (NOI) (1)
Office	$	84,562
Industrial		65,499
Multi-Tenant		1,866
Other		2,944
Total Net Operating Income	$	154,871
Lexington's share of non-consolidated six month NOI (1)
Office	$	220
Other		458
	$	678
Other income
Advisory fees	$	525
In service assets not fairly valued by capitalized NOI method (1)
Wholly-owned assets less than 70% leased	$	67,789
Wholly-owned assets acquired in 2017 (2)	$	213,813
Non-consolidated asset completed in 2016	$	57,870
Add other assets:
Assets held for sale	$	5,984
Development investment at cost incurred		32,289
Cash and cash equivalents		93,279
Restricted cash		35,939
Accounts receivable, net		5,407
Other assets		32,935
Total other assets	$	205,833
Liabilities:
Corporate level debt (face amount)	$	1,134,120
Mortgages and notes payable (face amount)		710,608
Liabilities held for sale		324
Dividends payable		48,037
Accounts payable, accrued expenses and other liabilities		55,828
Preferred stock, at liquidation value		96,770
Lexington's share of non-consolidated mortgages		8,411
Total deductions	$	2,054,098
Common shares & OP units at 6/30/2017		244,267,121

Footnotes

(1) NOI for the existing property portfolio at June 30, 2017, 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 2017. For assets in this category an NOI capitalization approach is not appropriate, and accordingly, Lexington's net book value has been used. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

(2) Excludes Lake Jackson, TX, which is included in NOI above.

24

LEXINGTON REALTY TRUST

Top Markets

6/30/2017

	Core Based Statistical Area (2)	Percent of GAAP Rent as of 6/30/17 (1)
1	Houston-Sugar Land-Baytown, TX		10.8	%
2	Dallas-Fort Worth-Arlington, TX		4.9	%
3	Memphis, TN-MS-AR		4.7	%
4	Kansas City, MO-KS		4.3	%
5	Kennewick-Pasco-Richland, WA		3.8	%
6	New York-Northern New Jersey-Long Island, NY-NJ-PA		3.8	%
7	Phoenix-Mesa-Scottsdale, AZ		3.6	%
8	Richmond, VA		3.4	%
9	Chicago-Naperville-Joliet, IL-IN-WI		2.9	%
10	Detroit-Warren-Livonia, MI		2.6	%
11	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD		2.6	%
12	Denver-Aurora, CO		2.3	%
13	Columbus, OH		2.2	%
14	Las Vegas-Paradise, NV		2.0	%
15	Charlotte-Concord-Gastonia, NC-SC		2.0	%
16	San Jose-Sunnyvale-Santa Clara, CA		1.9	%
17	Jackson, MS		1.8	%
18	Atlanta-Sandy Springs-Marietta, GA		1.6	%
19	Washington-Arlington-Alexandria, DC-VA-MD-WV		1.5	%
20	Indianapolis-Carmel, IN		1.4	%
	Total Top Markets (3)		64.2	%

Footnotes

(1) Six months ended 6/30/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 6/30/2017.

(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⁾

6/30/2017

 

Footnotes

(1) Six months ended 6/30/2017 GAAP rent, excluding termination income, recognized for consolidated single-tenant office properties owned as of 6/30/2017.

(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⁾

6/30/2017

 

Footnotes

(1) Six months ended 6/30/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 6/30/2017.

27

LEXINGTON REALTY TRUST

Top 10 Tenants or Guarantors

6/30/2017

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 6/30/2017 ($000) (1)		Percent of GAAP Rent as of 6/30/2017 ($000) (1) (2)
The Dow Chemical Company		1		664,100		1.5	%	$	7,193		4.2	%
Preferred Freezer Services of Richland, LLC / Preferred Freezer Services, LLC & Preferred Freezer Services Operating, LLC		1		456,412		1.0	%		6,566		3.8	%
FedEx Corporation / Federal Express Corporation		2		661,616		1.5	%		6,075		3.6	%
Metalsa Structural Products, Inc. / Dana Structural Products, LLC / Dana Holding Corporation and Dana Limited		7		2,053,359		4.7	%		4,970		2.9	%
United States of America		3		398,214		0.9	%		4,862		2.8	%
Nissan North America, Inc.		2		1,691,049		3.9	%		4,813		2.8	%
Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation		2		476,123		1.1	%		3,937		2.3	%
McGuireWoods LLP		1		224,537		0.5	%		3,592		2.1	%
Morgan, Lewis & Bockius LLP		1		289,432		0.7	%		3,494		2.0	%
Industrial Terminals Management, L.L.C. / Maritime Holdings (Delaware) LLC		1		132,449		0.3	%		3,386		2.0	%
		21		7,047,291		16.1	%	$	48,888		28.6	%

Footnotes

(1) Six months ended 6/30/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 6/30/2017.

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

28

LEXINGTON REALTY TRUST

Lease Rollover Schedule - Consolidated Single-Tenant Properties GAAP Basis

6/30/2017

($000)

Year	Number of Leases Expiring		GAAP Rent as of  6/30/2017		Percent of GAAP Rent as of 6/30/2017			Percent of GAAP Rent as of 6/30/2016
2017 - remaining		5	$	2,355		1.4	%		2.5	%
2018		22		9,110		5.5	%		6.4	%
2019		25		15,789		9.6	%		8.0	%
2020		12		7,860		4.8	%		6.0	%
2021		12		10,839		6.6	%		5.7	%
2022		5		5,810		3.5	%		2.6	%
2023		11		6,705		4.1	%		3.1	%
2024		12		9,035		5.5	%		3.7	%
2025		18		15,876		9.6	%		8.7	%
2026		14		9,040		5.5	%		5.5	%
Thereafter		54		72,741		44.0	%		44.0	%
Total (1)		190	$	165,160		100.0	%

 

Footnotes

(1) Total shown may differ from detailed amounts due to rounding and does not include multi-tenant properties, parking operations and lease termination income.

29

LEXINGTON REALTY TRUST

Lease Rollover Schedule - Consolidated Properties GAAP Basis

6/30/2017

($000)

Year	Number of Leases Expiring		GAAP Rent as of 6/30/2017		Percent of GAAP Rent as of 6/30/2017
2017 - remaining		29	$	2,514		1.5	%
2018		37		10,063		6.0	%
2019		32		16,569		9.8	%
2020		16		7,926		4.7	%
2021		17		12,314		7.3	%
2022		5		5,810		3.4	%
2023		11		6,705		4.0	%
2024		14		9,125		5.4	%
2025		19		16,081		9.5	%
2026		14		9,040		5.3	%
Thereafter		55		72,889		43.1	%
Total (1)		249	$	169,036		100.0	%

 

Footnotes

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

30

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2017

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  6/30/2017 ($000) (3)		Cash Rent as of 6/30/2017  ($000) (2)		6/30/2017 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
2017	10/31/2017	4455 American Way	Baton Rouge	LA	—	New Cingular Wireless PCS, LLC		70,100		529		550		-	-
		5201 West Barraque St.	Pine Bluff	AR	—	Entergy Services, Inc.		27,189		160		194		-	-
	12/1/2017	800 East Canal St.	Richmond	VA	5	CRG-Richmond Tenant, LLC		42,947		165		165		-	-
2018	2/28/2018	850-950 Warrenville Rd.	Lisle	IL	—	Flexible Steel Lacing Company, d/b/a Flexco, Inc.		7,535		73		73		-	-
	5/31/2018	8900 Freeport Pkwy.	Irving	TX	—	Pacific Union Financial, LLC.		43,396		392		456		-	-
	6/30/2018	100 Barnes Rd.	Wallingford	CT	—	3M Company		44,400		254		264		-	-
	8/31/2018	3500 North Loop Rd.	McDonough	GA	—	Litton Loan Servicing LP		62,218		492		681		-	-
	9/30/2018	1701 Market St.	Philadelphia	PA	—	CBC Restaurant Corp.		8,070		106		112		-	-
	10/31/2018	3943 Denny Ave.	Pascagoula	MS	—	Huntington Ingalls Incorporated		94,841		296		296		-	-
	12/22/2018	5200 Metcalf Ave.	Overland Park	KS	—	Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation		320,198		2,705		2,689		33,168	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		734		891		-	-
		820 Gears Rd.	Houston	TX	—	Ricoh USA, Inc.		78,895		575		569		-	-
	2/28/2019	10475 Crosspoint Blvd.	Indianapolis	IN	—	DMC Insurance Inc.		3,764		35		35		-	-
	4/1/2019	9201 Stateline Rd.	Kansas City	MO	—	Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation		155,925		1,232		1,232		15,779	05/2019
	6/19/2019	3965 Airways Blvd.	Memphis	TN	—	Federal Express Corporation		521,286		3,507		3,529		-	-
	6/30/2019	3265 East Goldstone Dr.	Meridian	ID	—	VoiceStream PCS Holding, LLC / T-Mobile PCS Holdings, LLC (T-Mobile USA, Inc.)		77,484		553		726		8,657	08/2019
	7/15/2019	19019 North 59th Ave.	Glendale	AZ	—	Honeywell International Inc.		252,300		951		968		-	-
	7/31/2019	500 Jackson St.	Columbus	IN	—	Cummins Inc.		390,100		2,270		2,381		14,075	07/2019
	10/31/2019	10475 Crosspoint Blvd.	Indianapolis	IN	—	John Wiley & Sons, Inc.		123,416		1,134		1,157		-	-
		9601 Renner Blvd.	Lenexa	KS	—	VoiceStream PCS II Corporation (T-Mobile USA, Inc.)		77,484		571		743		8,845	12/2019
	12/31/2019	850-950 Warrenville Rd.	Lisle	IL	4	National-Louis University		91,879		748		810		9,228	N/A
2020	2/14/2020	5600 Broken Sound Blvd.	Boca Raton	FL	—	Canon Solutions America, Inc. (Oce - USA Holding, Inc.)		143,290		1,122		1,250		19,225	02/2020
	5/31/2020	2401 Cherahala Blvd.	Knoxville	TN	—	AdvancePCS, Inc. / CaremarkPCS, L.L.C.		59,748		387		382		-	-
	6/30/2020	3711 San Gabriel	Mission	TX	—	VoiceStream PCS II Corporation / T-Mobile West Corporation		75,016		495		481		-	-
	7/31/2020	13775 McLearen Rd.	Herndon	VA	12	Orange Business Services U.S., Inc. (Equant N.V.)		132,617		837		904		-	-
	8/31/2020	133 First Park Dr.	Oakland	ME	—	Omnipoint Holdings, Inc. (T-Mobile USA, Inc.)		78,610		573		736		8,489	10/2020
	9/30/2020	9200 South Park Center Loop	Orlando	FL	4	Zenith Education Group, Inc. (ECMC Group, Inc.)		59,927		568		584		9,309	N/A
	10/31/2020	12209 West Markham St.	Little Rock	AR	—	Entergy Arkansas, Inc.		36,311		119		119		-	-
2021	1/31/2021	1701 Market St.	Philadelphia	PA	—	Morgan, Lewis & Bockius LLP		289,432		2,149		2,213		-	-
	3/31/2021	1701 Market St.	Philadelphia	PA	—	Car-Tel Communications, Inc.		1,220		30		30		-	-
	6/30/2021	1415 Wyckoff Rd.	Wall	NJ	—	New Jersey Natural Gas Company		157,511		1,887		1,887		13,392	01/2021
		2050 Roanoke Rd.	Westlake	TX	—	Charles Schwab & Co., Inc.		130,199		612		626		-	-
	8/31/2021	333 Three D Systems Cir.	Rock Hill	SC	—	3D Systems Corporation		80,028		344		355		-	-
	11/30/2021	29 South Jefferson Rd.	Whippany	NJ	—	CAE SimuFlite, Inc. (CAE INC.)		123,734		1,164		1,284		12,965	11/2021
	12/31/2021	2800 Waterford Lake Dr.	Midlothian	VA	—	Alstom Power, Inc.		99,057		1,092		1,153		-	-
2022	5/30/2022	13651 McLearen Rd.	Herndon	VA	—	United States of America		159,644		1,673		1,827		-	-
	6/30/2022	8555 South River Pkwy.	Tempe	AZ	—	Versum Materials US, LLC		95,133		875		828		-	-
	7/31/2022	1440 E 15th St.	Tucson	AZ	—	CoxCom, LLC		28,591		280		280		-	-
	12/31/2022	231 N. Martingale Rd.	Schaumburg	IL	—	CEC Educational Services, LLC (Career Education Corporation)		317,198		2,311		2,243		-	-
2023	2/28/2023	1315 West Century Dr.	Louisville	CO	—	Rogue Wave Software, Inc.		20,000		172		145		-	-

31

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2017

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  6/30/2017 ($000) (3)		Cash Rent as of 6/30/2017  ($000) (2)		6/30/2017 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
	3/31/2023	8900 Freeport Pkwy.	Irving	TX	—	Nissan Motor Acceptance Corporation (Nissan North America, Inc.)		225,049		1,713		1,849		-	-
	6/30/2023	420 Riverport Rd.	Kingsport	TN	—	Kingsport Power Company		42,770		64		155		-	-
	8/31/2023	400 Butler Farm Rd.	Hampton	VA	7	Nextel Communications of the Mid-Atlantic, Inc. (Nextel Finance Company) / Wisconsin Physicians Service Insurance Corp.		100,632		503		518		-	-
	12/14/2023	3333 Coyote Hill Rd.	Palo Alto	CA	—	Xerox Corporation		202,000		3,321		3,535		40,593	12/2023
2024	2/14/2024	1362 Celebration Blvd.	Florence	SC	—	MED3000, Inc.		32,000		287		281		-	-
	5/31/2024	3476 Stateview Blvd.	Fort Mill	SC	—	Wells Fargo Bank, N.A.		169,083		975		938		-	-
		3480 Stateview Blvd.	Fort Mill	SC	—	Wells Fargo Bank, N.A.		169,218		1,013		939		-	-
	8/31/2024	10475 Crosspoint Blvd.	Indianapolis	IN	—	RGN-Indianapolis I, LLC (HQ Global Workplaces LLC)		14,236		150		150		-	-
	10/31/2024	1409 Centerpoint Blvd.	Knoxville	TN	—	Alstom Power, Inc.		84,404		627		595		-	-
	11/30/2024	6200 Northwest Pkwy.	San Antonio	TX	—	United HealthCare Services, Inc.		142,500		978		1,024		-	-
	12/31/2024	12000 & 12025 Tech Center Dr.	Livonia	MI	—	Kelsey-Hayes Company (TRW Automotive Inc.)		180,230		845		819		-	-
2025	1/31/2025	1401 Nolan Ryan Expy.	Arlington	TX	—	Triumph Aerostructures, LLC (Triumph Group, Inc.)		111,409		809		859		-	-
	2/28/2025	6555 Sierra Dr.	Irving	TX	—	TXU Energy Retail Company, LLC (Texas Competitive Electric Holdings Company, LLC)		247,254		1,402		1,533		-	-
		1401 Nolan Ryan Expy.	Arlington	TX	—	Cyient, Inc. (Infotech Enterprise Limited)		13,590		105		107		-	-
	3/14/2025	601 & 701 Experian Pkwy.	Allen	TX	—	Experian Information Solutions, Inc. / TRW, Inc.(Experian Holdings, Inc.)		292,700		1,483		1,537		-	-
	5/31/2025	1701 Market St.	Philadelphia	PA	—	TruMark Financial Credit Union		2,641		122		122		-	-
	6/30/2025	2500 Patrick Henry Pkwy.	McDonough	GA	—	Georgia Power Company		111,911		711		677		-	-
	9/30/2025	10001 Richmond Ave.	Houston	TX	—	Schlumberger Holdings Corp.		554,385		3,019		2,712		-	-
	11/30/2025	11707 Miracle Hills Dr.	Omaha	NE	—	Wipro Data Center and Cloud Services, Inc. (Infocrossing, Inc.)		85,200		583		583		-	-
	12/31/2025	2005 East Technology Cir.	Tempe	AZ	—	Wipro Data Center and Cloud Services, Inc. (Infocrossing, Inc.)		60,000		564		564		-	-
		4001 International Pkwy.	Carrollton	TX	—	Motel 6 Operating, LP		138,443		1,113		1,097		-	-
2026	3/31/2026	500 Olde Worthington Rd.	Westerville	OH	—	InVentiv Communications, Inc.		97,000		555		571		-	-
	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		38		38		-	-
	6/30/2026	10419 North 30th St.	Tampa	FL	—	Time Customer Service, Inc. / Time Incorporated		132,981		377		554		-	-
	11/30/2026	500 Kinetic Dr.	Huntington	WV	—	AMZN WVCS LLC (Amazon.com, Inc.)		68,693		634		556		-	-
	12/29/2026	5500 New Albany Rd.	Columbus	OH	—	Evans, Mechwart, Hambleton & Tilton, Inc.		104,807		869		839		-	-
2027	1/31/2027	1701 Market St.	Philadelphia	PA	—	Drybar Holdings LLC		1,975		68		51		-	-
	2/28/2027	800 East Canal St.	Richmond	VA	—	Pacific Summit Energy LLC (Sumitomo Corporation of Americas)		8,503		24		24		-	-
	4/30/2027	1315 West Century Dr.	Louisville	CO	—	Global Healthcare Exchange, Inc. (Global Healthcare Exchange, LLC)		86,877		644		610		-	-
	6/30/2027	3902 Gene Field Rd.	St. Joseph	MO	—	Boehringer Ingelheim Vetmedica, Inc. (Boehringer Ingelheim USA Corporation)		98,849		997		930		-	-
	7/6/2027	2221 Schrock Rd.	Columbus	OH	—	MS Consultants, Inc.		42,290		320		303		-	-
	8/7/2027	25 Lakeview Dr.	Jessup	PA	—	TMG Health, Inc.		150,000		1,250		1,034		-	-
	10/31/2027	11201 Renner Blvd.	Lenexa	KS	—	United States of America		169,585		2,440		2,182		34,117	11/2027
	11/30/2027	1700 Millrace Dr.	Eugene	OR	10	Oregon Research Institute / Educational Policy Improvement Center		80,011		1,046		889		-	-
	12/31/2027	333 Mt. Hope Ave.	Rockaway	NJ	—	Atlantic Health System, Inc.		92,326		597		658		-	-
2028	4/30/2028	9655 Maroon Cir.	Englewood	CO	—	TriZetto Corporation		166,912		1,922		1,817		-	-
2029	1/31/2029	6226 West Sahara Ave.	Las Vegas	NV	—	Nevada Power Company		282,000		2,126		1,545		-	-
	3/31/2029	2800 High Meadow Cir.	Auburn Hills	MI	—	Faurecia USA Holdings, Inc.		278,000		1,773		1,605		-	-
2030	8/31/2030	800 East Canal St.	Richmond	VA	—	McGuireWoods LLP		224,537		3,592		3,324		57,500	02/2031
	9/30/2030	800 East Canal St.	Richmond	VA	—	CCA Industries, Inc. (The Riverstone Group, LLC),		25,707		346		327		-	-
2031	1/10/2031	810 Gears Rd.	Houston	TX	—	United States of America		68,985		749		712		-	-
	3/1/2031	800 East Canal St.	Richmond	VA	—	Towne Bank		26,047		366		316		-	-
2032	4/30/2032	1210 AvidXchange Ln.	Charlotte	NC	—	AvidXchange, Inc.		201,450		1,041		903		-	-
	10/31/2032	143 Diamond Ave.	Parachute	CO	—	Encana Oil and Gas (USA) Inc. (Alenco Inc.)		49,024		642		547		-	-

32

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Property Leases and Vacancies - Consolidated Portfolio - 6/30/2017

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  6/30/2017 ($000) (3)		Cash Rent as of 6/30/2017  ($000) (2)		6/30/2017 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
	12/31/2032	3030 North 3rd St.	Phoenix	AZ	—	CopperPoint Mutual Insurance Company		252,400		2,528		2,131		-	-
2033	3/31/2033	9201 East Dry Creek Rd.	Centennial	CO	—	Arrow Electronics, Inc.		128,500		1,170		1,418		-	-
	11/30/2033	1331 Capitol Ave.	Omaha	NE	—	The Gavilon Group, LLC		127,810		1,655		1,469		-	-
2036	10/31/2036	270 Abner Jackson Pkwy.	Lake Jackson	TX	—	The Dow Chemical Company		664,100		7,193		6,065		194,186	10/2036
2088	8/8/2088	800 East Canal St.	Richmond	VA	—	The City of Richmond, Virginia		-		206		206		-	-
N/A	N/A	1701 Market St.	Philadelphia	PA	—	Parking Operations		-		1,345		1,345		-	-
	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		11,317,187	$	91,072	$	89,411	$	479,528

33

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2017

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 6/30/2017 ($000) (3)		Cash Rent as of 6/30/2017 ($000) (2)		6/30/2017 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
2017	9/30/2017	250 Swathmore Ave.	High Point	NC	—	Steelcase Inc.		244,851		543		577		-	-
	12/31/2017	2203 Sherrill Dr.	Statesville	NC	—	Geodis Logistics LLC (OHH Acquisition Corporation)		639,800		958		1,055		-	-
2018	6/30/2018	1650-1654 Williams Rd.	Columbus	OH	16	ODW Logistics, Inc.		772,450		671		674		-	-
	9/30/2018	50 Tyger River Dr.	Duncan	SC	—	Plastic Omnium Auto Exteriors, LLC		221,833		512		512		-	-
		904 Industrial Rd.	Marshall	MI	20	Tenneco Automotive Operating Company, Inc. (Tenneco, Inc.)		246,508		349		421		-	-
	12/31/2018	1133 Poplar Creek Rd.	Henderson	NC	—	Staples, Inc.		196,946		430		443		-	-
		120 Southeast Pkwy. Dr.	Franklin	TN	—	Essex Group, Inc. (United Technologies Corporation)		289,330		369		369		-	-
		2935 Van Vactor Dr.	Plymouth	IN	—	Bay Valley Foods, LLC		300,500		421		421		-	-
		749 Southrock Dr.	Rockford	IL	—	Jacobson Warehouse Company, Inc. (Jacobson Distribution Company and Jacobson Transportation Company, Inc.)		150,000		236		266		-	-
2019	10/17/2019	10345 Philipp Pkwy.	Streetsboro	OH	—	L'Oreal USA S/D, Inc. (L’Oreal USA, Inc.)		649,250		1,305		1,409		17,103	09/2019
	12/31/2019	191 Arrowhead Dr.	Hebron	OH	—	Owens Corning Insulating Systems, LLC		250,410		281		281		-	-
		200 Arrowhead Dr.	Hebron	OH	—	Owens Corning Insulating Systems, LLC		400,522		450		450		-	-
		2415 US Hwy. 78 East	Moody	AL	—	Michelin North America, Inc.		595,346		704		711		-	-
		3686 South Central Ave.	Rockford	IL	—	Pierce Packaging Co.		93,000		156		156		-	-
2020	1/31/2020	101 Michelin Dr.	Laurens	SC	—	Michelin North America, Inc.		1,164,000		1,714		1,714		-	-
	5/31/2020	359 Gateway Dr.	Lavonia	GA	—	TI Group Automotive Systems, LLC (TI Automotive Ltd.)		133,221		476		600		7,154	12/2020
	6/30/2020	3102 Queen Palm Dr.	Tampa	FL	—	Time Customer Service, Inc. (Time Incorporated)		229,605		617		656		-	-
	9/30/2020	3350 Miac Cove Rd.	Memphis	TN	—	Mimeo.com, Inc.		107,400		206		221		-	-
	12/19/2020	1901 Ragu Dr.	Owensboro	KY	6	Unilever Supply Chain, Inc. (Unilever United States, Inc.)		443,380		746		644		-	-
2021	3/31/2021	2455 Premier Row	Orlando	FL	—	Walgreen Co. / Walgreen Eastern Co.		205,016		393		254		-	-
	5/31/2021	291 Park Center Dr.	Winchester	VA	—	Kraft Heinz Foods Company		344,700		711		684		-	-
	9/30/2021	3820 Micro Dr.	Millington	TN	—	Ingram Micro L.P. (Ingram Micro Inc.)		701,819		906		937		-	-
	10/25/2021	6938 Elm Valley Dr.	Kalamazoo	MI	—	Dana Commercial Vehicle Products, LLC (Dana Holding Corporation and Dana Limited)		150,945		873		1,014		-	-
	11/30/2021	2880 Kenny Biggs Rd.	Lumberton	NC	—	Quickie Manufacturing Corporation		423,280		678		707		-	-
2022	3/31/2022	5417 Campus Dr.	Shreveport	LA	—	The Tire Rack, Inc.		257,849		671		670		-	-
2023	2/28/2023	7670 Hacks Cross Rd.	Olive Branch	MS	—	MAHLE Aftermarket Inc. (MAHLE Industries, Incorporated)		268,104		453		439		-	-
	12/31/2023	1601 Pratt Ave.	Marshall	MI	—	Autocam Corporation		58,707		155		155		-	-
2024	1/31/2024	1285 W. State Road 32	Lebanon	IN	—	Continental Tire the Americas, LLC		741,880		855		445		-	-
	3/31/2024	1520 Lauderdale Memorial Hwy.	Cleveland	TN	—	General Electric Company		851,370		352		355		-	-
	4/30/2024	113 Wells St.	North Berwick	ME	—	United Technologies Corporation		993,685		899		981		2,716	04/2019
	5/31/2024	901 East Bingen Point Way	Bingen	WA	—	The Boeing Company		124,539		1,318		1,281		-	-
	10/31/2024	43955 Plymouth Oaks Blvd.	Plymouth	MI	—	Tower Automotive Operations USA I, LLC / Tower Automotive Products Inc. (Tower Automotive, Inc.)		311,612		736		700		-	-
2025	6/30/2025	10000 Business Blvd.	Dry Ridge	KY	—	Dana Light Axle Products, LLC (Dana Holding Corporation and Dana Limited)		336,350		673		673		-	-
		301 Bill Bryan Rd.	Hopkinsville	KY	—	Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)		424,904		844		844		-	-
		4010 Airpark Dr.	Owensboro	KY	—	Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)		211,598		604		604		-	-
		730 North Black Branch Rd.	Elizabethtown	KY	—	Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)		167,770		268		268		-	-
		750 North Black Branch Rd.	Elizabethtown	KY	—	Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)		539,592		1,419		1,419		-	-
	7/14/2025	590 Ecology Ln.	Chester	SC	—	Boral Stone Products LLC (Boral Limited)		420,597		851		1,148		7,698	08/2025
	7/31/2025	7005 Cochran Rd.	Glenwillow	OH	—	Royal Appliance Mfg. Co.		458,000		1,031		1,051		-	-
	12/31/2025	1700 47th Ave North	Minneapolis	MN	—	Owens Corning Roofing and Asphalt, LLC		18,620		275		275		-	-
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		1,269		2,233		-	-
	3/31/2026	633 Garrett Pkwy.	Lewisburg	TN	—	Calsonic Kansei North America, Inc.		310,000		643		597		-	-
	6/30/2026	351 Chamber Dr.	Chillicothe	OH	—	The Kitchen Collection, Inc.		475,218		580		556		-	-
	9/30/2026	900 Industrial Blvd.	Crossville	TN	—	Dana Commercial Vehicle Products, LLC		222,200		289		289		-	-
		3931 Lakeview Corporate Dr.	Edwardsville	IL	—	AMAZON.COM.DEDC, LLC (Amazon.com, Inc.)		769,500		1,346		1,250		-	-
	10/31/2026	5001 Greenwood Rd.	Shreveport	LA	—	Libbey Glass Inc. (Libbey Inc.)		646,000		1,083		1,079		-	-
	11/30/2026	250 Rittenhouse Cir.	Bristol	PA	—	Northtec LLC (The Estée Lauder Companies Inc.)		241,977		573		567		-	-

34

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Property Leases and Vacancies - Consolidated Portfolio - 6/30/2017

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 6/30/2017 ($000) (3)		Cash Rent as of 6/30/2017 ($000) (2)		6/30/2017 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
		736 Addison Rd.	Erwin	NY	—	Corning Property Management Corporation		408,000		666		669		7,221	10/2018
2027	1/31/2027	27200 West 157th St.	New Century	KS	—	Amazon.com.ksdc, LLC (Amazon.com, Inc.)		446,500		432		368		-	-
	2/28/2027	3456 Meyers Ave.	Memphis	TN	—	Sears, Roebuck and Co. / Sears Logistics Services		780,000		847		796		-	-
		554 Nissan Pkwy.	Canton	MS	—	Nissan North America, Inc.		1,466,000		3,100		2,922		-	-
	4/30/2027	16407 Applewhite Rd.	San Antonio	TX	—	Carrier Corporation (United Technologies Corporation)		849,275		17		15		-	-
	6/30/2027	1501 Nolan Ryan Expy.	Arlington	TX	—	Arrow Electronics, Inc.		74,739		203		19		-	-
	12/31/2027	10590 Hamilton Ave.	Cincinnati	OH	—	The Hillman Group, Inc.		264,598		406		391		-	-
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		2,568		2,385		44,834	03/2028
	8/31/2028	1420 Greenwood Rd.	McDonough	GA	—	United States Cold Storage, Inc		296,972		1,085		1,054		21,759	11/2017
2029	11/24/2029	318 Pappy Dunn Blvd.	Anniston	AL	—	International Automotive Components Group North America, Inc.		276,782		870		810		-	-
2030	3/31/2030	549 Wingo Rd.	Byhalia	MS	—	Asics America Corporation (Asics Corporation)		855,878		2,194		1,997		-	-
	5/31/2030	3301 Stagecoach Rd. NE	Thomson	GA	—	Hollander Sleep Products, LLC (Hollander Home Fashions Holdings)		208,000		465		425		-	-
2031	10/31/2031	1020 W. Airport Rd.	Romeoville	IL	—	ARYZTA LLC (ARYZTA AG)		188,166		1,772		1,650		-	-
2032	4/30/2032	13930 Pike Rd.	Missouri City	TX	—	Vulcan Construction Materials, LP (Vulcan Materials Company)		-		1,062		952		-	-
	10/31/2032	27255 SW 95th Ave.	Wilsonville	OR	—	Pacific Foods of Oregon, Inc. d/b/a Pacific Natural Foods		508,277		1,560		1,289		-	-
2034	9/30/2034	5625 North Sloan Ln.	North Las Vegas	NV	—	Nicholas and Co., Inc.		180,235		1,278		1,113		-	-
	10/31/2034	1001 Innovation Rd.	Rantoul	IL	—	Bell Sports, Inc. (Vista Outdoor Inc.)		813,126		2,098		1,808		-	-
2035	3/31/2035	13863 Industrial Rd.	Houston	TX	—	Curtis Kelly, Inc. (Spitzer Industries, Inc.)		187,800		1,217		1,032		-	-
		7007 F.M. 362 Rd.	Brookshire	TX	—	Orizon Industries, Inc. (Spitzer Industries, Inc.)		262,095		955		810		-	-
	6/30/2035	111 West Oakview Pkwy.	Oak Creek	WI	—	Stella & Chewy's LLC		164,007		1,049		933		-	-
	8/31/2035	2800 Polar Way	Richland	WA	9	Preferred Freezer Services of Richland, LLC (Preferred Freezer Services, LLC & Preferred Freezer Services Operating, LLC)		456,412		6,566		5,504		110,000	01/2026
	10/22/2035	2860 Clark St.	Detroit	MI	—	FCA US LLC (f/k/a Chrysler Group LLC)		189,960		1,102		1,102		-	-
2036	5/31/2036	671 Washburn Switch Rd.	Shelby	NC	—	Clearwater Paper Corporation		673,518		1,341		1,185		-	-
	6/30/2036	100 Ryobi Drive	Anderson	SC	—	One World Technologies, Inc. (Techtronic Industries Co. Ltd.)		1,327,022		2,223		1,830		-	-
2037	3/31/2037	4005 E I-30	Grand Prairie	TX	—	O'Neal Metals (Texas), L.P. (O'Neal Industries, Inc.)		215,000		52		43		-	-
2038	3/31/2038	13901/14035 Industrial Rd.	Houston	TX	—	Industrial Terminals Management, L.L.C. (Maritime Holdings (Delaware) LLC)		132,449		3,386		2,833		-	-
N/A	Vacancy	3350 Miac Cove Rd.	Memphis	TN	—	Available for lease		32,679		-		-		-	-
INDUSTRIAL TOTAL/WEIGHTED AVERAGE						99.9% Leased		29,702,504	$	70,406	$	66,990	$	218,485

35

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2017

Property Location	City	State	Note	Primary Tenant (Guarantor)	Sq.Ft.		Percentage Leased			GAAP  Rent as of 6/30/2017 ($000) (3)		Cash Rent as of 6/30/2017 ($000) (2)		6/30/2017 Debt  Balance  ($000)		Debt Maturity
MULTI-TENANT PROPERTIES (8,14)
10300 Kincaid Dr.	Fishers	IN	11	Available for lease		193,000		0	%		245		302		-	-
104 & 110 Front St.	Memphis	TN	4	Available for lease		37,229		0	%		-		-		3,496	N/A
11511 Luna Rd.	Farmers Branch	TX	—	International Business Machines Corporation		181,072		43	%		528		500		-	-
1311 Broadfield Blvd.	Houston	TX	11	Saipem America, Inc. (Saipem S.p.A.)		155,407		53	%		363		279		-	-
13430 North Black Canyon Fwy.	Phoenix	AZ	—	Multi-Tenant		138,940		92	%		1,158		1,231		-	-
1460 Tobias Gadson Blvd.	Charleston	SC	—	Vallen Distribution, Inc.		50,076		41'%			189		189		7,039	02/2021
2210 Enterprise Dr.	Florence	SC	—	Caliber Funding, LLC		176,557		21	%		346		377		-	-
5104 North Franklin Rd.	Lawrence	IN	—	Available for lease		28,721		0	%		-		-		-	-
6050 Dana Way	Antioch	TN	—	Multi-Tenant		674,528		97	%		1,157		1,132		-	-
854 Paragon Way	Rock Hill	SC	13	Available for lease		104,497		0	%		-		-		-	-
King St./1042 Fort St. Mall	Honolulu	HI	—	Multi-Tenant		77,459		53	%		350		350		-	-
MULTI-TENANT TOTAL/WEIGHTED AVERAGE				57.4% Leased		1,817,486				$	4,336	$	4,360	$	10,535

36

LEXINGTON REALTY TRUST

 Property Leases and Vacancies - Consolidated Portfolio - 6/30/2017

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 6/30/2017 ($000) (3)		Cash Rent as of 6/30/2017 ($000) (2)		6/30/2017 Debt Balance ($000)		Debt Maturity
OTHER PROPERTIES
2018	2/26/2018	4831 Whipple Ave., NW	Canton	OH	—	Best Buy Co., Inc.		46,350		233		233		-	-
	9/30/2018	835 Julian Ave.	Thomasville	NC	—	Mighty Dollar, LLC		23,767		41		41		-	-
	10/31/2018	130 Midland Ave.	Port Chester	NY	—	St. Anthony Supermarket Corp. (Anthony Pena, Marina Pena, Anthony Corona and Robert Corona)		59,613		298		40		-	-
	12/31/2018	1150 West Carl Sandburg Dr.	Galesburg	IL	—	Kmart Stores of Illinois LLC / Kmart Corporation		94,970		164		14		304	07/2018
		12080 Carmel Mountain Rd.	San Diego	CA	—	Sears, Roebuck and Co / Kmart Corporation		107,210		376		16		346	07/2018
		21082 Pioneer Plaza Dr.	Watertown	NY	—	Kmart Corporation		120,727		241		24		510	07/2018
		255 Northgate Dr.	Manteca	CA	—	Kmart Corporation		107,489		278		25		542	07/2018
		97 Seneca Trail	Fairlea	WV	—	Kmart Corporation		90,933		173		17		358	07/2018
2019	3/31/2019	B.E.C. 45th St./Lee Blvd.	Lawton	OK	—	Associated Wholesale Grocers, Inc. / Safeway, Inc.		30,757		94		93		-	-
	6/30/2019	1600 East 23rd St.	Chattanooga	TN	—	BI-LO, LLC / K-VA-T Food Stores, Inc.		42,130		64		64		-	-
	12/31/2019	1066 Main St.	Forest Park	GA	—	Bank of America, N.A. (Bank of America Corporation)		14,859		100		100		-	-
		1698 Mountain Industrial Blvd.	Stone Mountain	GA	—	Bank of America, N.A. (Bank of America Corporation)		5,704		48		48		-	-
		201 West Main St.	Cumming	GA	—	Bank of America, N.A. (Bank of America Corporation)		14,208		99		99		-	-
		2223 North Druid Hills Rd.	Atlanta	GA	—	Bank of America, N.A. (Bank of America Corporation)		6,260		56		56		-	-
		4545 Chamblee – Dunwoody Rd.	Dunwoody	GA	—	Bank of America, N.A. (Bank of America Corporation)		4,565		44		44		-	-
		825 Southway Dr.	Jonesboro	GA	—	Bank of America, N.A. (Bank of America Corporation)		4,894		39		39		-	-
		956 Ponce de Leon Ave.	Atlanta	GA	—	Bank of America, N.A. (Bank of America Corporation)		3,900		39		39		-	-
2023	2/28/2023	291 Talbert Blvd.	Lexington	NC	18	Food Lion, LLC / Delhaize America, Inc.		23,000		69		69		-	-
		733 East Main St.	Jefferson	NC	—	Food Lion, LLC / Delhaize America, Inc.		34,555		78		80		-	-
		2411 West Beverly St.	Staunton	VA	—	Food Lion, LLC / Delhaize America, Inc.		23,000		83		83		-	-
	7/1/2023	1053 Mineral Springs Rd.	Paris	TN	—	The Kroger Co.		31,170		94		80		-	-
2026	5/31/2026	6910 South Memorial Hwy.	Tulsa	OK	—	Toys “R” Us, Inc. / Toys "R" Us-Delaware, Inc.		43,123		118		118		-	-
2028	11/30/2028	832 N. Westover Blvd .	Albany	GA	19	Gander Mountain Company		45,554		279		263		-	-
2029	1/31/2029	175 Holt Garrison Pkwy.	Danville	VA	—	Home Depot USA, Inc.		-		108		130		-	-
2043	2/28/2043	1237 W. Sherman Ave.	Vineland	NJ	—	HealthSouth Rehabilitation Hospital of South Jersey, LLC (HealthSouth Corporation)		39,287		573		573		-	-
2048	12/31/2048	30 Light St.	Baltimore	MD	—	30 Charm City, LLC		-		149		149		-	-
2055	1/31/2055	499 Derbyshire Dr.	Venice	FL	—	Littlestone Brotherhood LLC (Ralph Little)		31,180		954		655		-	-
2112	8/31/2112	201-215 N. Charles St.	Baltimore	MD	—	201 NC Leasehold LLC		-		135		135		-	-
OTHER TOTAL/WEIGHTED AVERAGE						100.0% Leased		1,049,205	$	5,027	$	3,327	$	2,060
TOTAL CONSOLIDATED PORTFOLIO/WEIGHTED AVERAGE						98.1% Leased (17)		43,886,382	$	170,841	$	164,088	$	710,608

Footnotes

1 Square footage leased or available.

2 Six months ended 6/30/2017 cash rent. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

3 Six months ended 6/30/2017 GAAP rent, excluding termination income.

4 Mortgage encumbering the property is in default as of 6/30/2017.

5 Part of Richmond, Virginia property, which is primarily leased to McGuireWoods LLP.

6 Lexington has a 71.1% interest in this property.

7 Nextel Communications of the Mid-Atlantic, Inc. (Nextel Finance Company) lease for 100,632 square feet expires 12/31/2019; however, 71,073 square feet is then leased to Wisconsin Physicians Service Insurance Corp. through 8/31/2023.

8 Multi-tenant properties are properties less than 50% leased to a single tenant; however, Houston, TX, considered multi-tenant as 27,213 square feet of Saipem America, Inc.'s lease expires 10/2017.

9 ConAgra Foods, Inc. provides credit support.

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 Property classified as held for sale at 6/30/2017 and sold subsequent to 6/30/2017.

14 The multi-tenanted properties incurred approximately $2.5 million in operating expenses, net for the six months ended 6/30/2017.

15 Heidelberg Americas, Inc. lease expires 3/30/2021; however, new tenant (Goss International Americas, Inc.) lease expires 3/30/2026.

16 Subsequent to 6/30/2017, lease extended to 06/2020.

17 Consolidated portfolio is 98.1% leased, excluding properties owned subject to mortgages in maturity default.

18 Property sold subsequent to 6/30/2017.

19 Tenant has declared bankruptcy; however, lease has not been rejected.

20 Subsequent to 6/30/2017, lease extended to 09/2028.

37

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Non-consolidated Portfolio - 6/30/2017

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant (Guarantor)	Sq.Ft.		LXP % Ownership			GAAP  Rent as of 6/30/2017 ($000) (3)		Cash Rent as of 6/30/2017 ($000) (2)		6/30/2017 Debt  Balance  ($000)		Debt Maturity
NON-CONSOLIDATED PROPERTIES
2028	3/31/2028	100 Gander Way	Palm Beach Gardens	FL	4	Gander Mountain Company		120,000		25	%		1,514		1,458		14,010	03/2018
2029	1/31/2029	18839 McKay Blvd.	Humble	TX	—	Triumph Rehabilitation Hospital of Northeast Houston, LLC (RehabCare Group, Inc.)		55,646		15	%		1,366		1,251		13,933	08/2017
2033	10/31/2033	607 & 611 Lumsden Professional Ct.	Brandon	FL	1	BluePearl Holdings, LLC		8,500		15	%		100		100		-	-
		4525 Ulmerton Rd.	Clearwater	FL	1	BluePearl Holdings, LLC		3,000		15	%		60		60		-	-
		455 Abernathy Rd.	Atlanta	GA	1	BluePearl Holdings, LLC		32,000		15	%		604		492		-	-
		820 Frontage Rd.	Northfield	IL	1	BluePearl Holdings, LLC		14,000		15	%		232		232		-	-
		4126 Packard Rd.	Ann Arbor	MI	1	BluePearl Holdings, LLC		3,500		15	%		27		27		-	-
		29080 Inkster Rd.	Southfield	MI	1	BluePearl Holdings, LLC		38,000		15	%		637		556		18,791	11/2018
2036	8/31/2036	2203 North Westgreen Blvd.	Katy	TX	—	British Schools of America, LLC		274,000		25	%		3,100		3,100		-	-
NON-CONSOLIDATED TOTAL/WEIGHTED AVERAGE						100.0% Leased		548,646				$	7,640	$	7,276	$	46,734

Footnotes

1 All mortgage notes are cross-collateralized and cross-defaulted.

2 Six months ended 6/30/2017 cash rent.

3 Six months ended 6/30/2017 GAAP rent, excluding termination income.

4 Tenant has declared bankruptcy; however, lease has not been rejected.

38

LEXINGTON REALTY TRUST

Select Credit Metrics Summary ⁽¹⁾

	6/30/2017
Adjusted Company FFO Payout Ratio		74.5	%
Unencumbered Assets		$3.22 billion
Unencumbered NOI		72.0	%
(Debt + Preferred) / Gross Assets		42.0	%
Debt/Gross Assets		39.9	%
Secured Debt / Gross Assets		15.4	%
Net Debt / Adjusted EBITDA		5.4	x
(Net Debt + Preferred) / Adjusted EBITDA		5.7	x
Credit Facilities Availability (2)		$395.4 million
Development / Gross Assets		0.7	%

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) Subject to covenant compliance.

39

LEXINGTON REALTY TRUST

FINANCIAL COVENANTS ⁽¹⁾

Corporate Level Debt

	Must be:	6/30/2017
Bank Loans:
Maximum Leverage	< 60%	42.8%
Fixed Charge Coverage	> 1.5x	2.6x
Recourse Secured Indebtedness Ratio	< 10% cap value	0.0%
Secured Indebtedness Ratio	< 45%	17.5%
Unsecured Debt Service Coverage	> 2.0x	5.3x
Unencumbered Leverage	< 60%	33.1%
Bonds:
Debt to Total Assets	< 60%	40.7%
Secured Debt to Total Assets	< 40%	15.6%
Debt Service Coverage	> 1.5x	4.0x
Unencumbered Assets to Unsecured Debt	> 150%	302.3%

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.

40

LEXINGTON REALTY TRUST

Consolidated Properties: Mortgages and Notes Payable

6/30/2017

Property	Footnotes	Debt Balance ($000)		Interest Rate (%)			Maturity (a)	Current Estimated Annual Debt Service ($000) (c)		Balloon Payment ($000)
Mortgages with Balloons
Lisle, IL	(b)	$	9,228		6.500	%	N/A	$	-	$	9,228
Memphis, TN	(b)		3,496		5.710	%	N/A		-		3,496
Orlando, FL	(b)		9,309		5.722	%	N/A		-		9,309
McDonough, GA	(j)		21,759		6.110	%	11/2017		672		21,651
Erwin, NY			7,221		5.910	%	10/2018		728		6,637
Overland Park, KS			33,168		5.891	%	05/2019		2,657		31,812
Kansas City, MO			15,779		5.883	%	05/2019		1,268		15,179
Columbus, IN			14,075		2.210	%	07/2019		4,757		4,993
Meridian, ID			8,657		6.010	%	08/2019		753		7,675
Streetsboro, OH			17,103		5.749	%	09/2019		1,344		16,338
Lenexa, KS			8,845		6.270	%	12/2019		774		7,770
Boca Raton, FL			19,225		6.470	%	02/2020		1,542		18,414
Oakland, ME			8,489		5.930	%	10/2020		750		7,660
Lavonia, GA			7,154		5.460	%	12/2020		741		5,895
Charleston, SC			7,039		5.850	%	02/2021		520		6,632
Whippany, NJ			12,965		6.298	%	11/2021		1,344		10,400
Chester, SC			7,698		5.380	%	08/2025		1,144		362
Richland, WA			110,000		4.000	%	01/2026		4,400		99,492
Lenexa, KS			34,117		3.700	%	11/2027		2,889		10,000
Richmond, VA			57,500		5.191	%	02/2031		3,026		53,176
Lake Jackson, TX			194,186		4.040	%	10/2036		12,065		11,305
Subtotal/Wtg. Avg./Years Remaining (i)		$	607,013		4.714	%	10.3	$	41,374	$	357,424
Full Amortizing Mortgages
Manteca, CA			542		7.750	%	07/2018		385		-
Watertown, NY			510		7.750	%	07/2018		362		-
Fairlea, WV			358		7.750	%	07/2018		254		-
San Diego, CA			346		7.750	%	07/2018		245		-
Galesburg, IL			304		7.750	%	07/2018		216		-
North Berwick, ME			2,716		3.560	%	04/2019		1,532		-
Wall, NJ			13,392		6.250	%	01/2021		3,774		-
Palo Alto, CA			40,593		3.970	%	12/2023		7,059		-
Long Island City, NY			44,834		3.500	%	03/2028		4,623		-
Subtotal/Wtg. Avg./Years Remaining (i)		$	103,595		4.126	%	7.7	$	18,450	$	-
Subtotal/Wtg. Avg./Years Remaining (i)		$	710,608		4.628	%	9.9	$	59,824	$	357,424

41

LEXINGTON REALTY TRUST

Consolidated Properties: Mortgages and Notes Payable

6/30/2017

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		2.870	%	04/2037		3,757		129,120
Subtotal/Wtg. Avg./Years Remaining (i)		$	1,134,120		3.284	%	6.5	$	37,461	$	1,134,120
Total/Wtg. Avg./Years Remaining (i)	(e)	$	1,844,728		3.802	%	7.9	$	97,285	$	1,491,544

Footnotes

(a) Subtotal and total based on weighted-average term to maturity shown in years based on debt balance.

(b) Loan is in maturity default as of June 30, 2017.

(c) Remaining payments for debt with less than 12 months to maturity, all others are debt service for next 12 months.

(d) Rate is three month LIBOR plus 170 bps.

(e) See reconciliations of non-GAAP measures in this document.

(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) Loan satisfied subsequent to June 30, 2017.

42

LEXINGTON REALTY TRUST

Non- Consolidated Investments: Mortgages & Notes Payable

6/30/2017

Joint Venture	Debt Balance ($000)		Interest Rate (%)			Maturity	Current  Estimated Annual Debt Service  ($000) (3)		Balloon Payment ($000)
Rehab Humble Lessee (1)	$	13,933		4.700	%	08/2017	$	134	$	13,908
Gan Palm Beach Lessee (2)		14,010		3.700	%	03/2018		632		13,768
BP Lessee (1)		18,791		4.010	%	11/2018		764		18,791
Total/Wtg. Avg. (1)/Years Remaining (2)	$	46,734		4.123	%	0.8	$	1,530	$	46,467

Joint Venture	Debt Balance ($000)		Interest Rate (%)			Maturity	Current  Estimated Annual Debt Service  ($000) (3)		Balloon Payment ($000)
BS Lessee (4)	$	50,349		7.500	%	09/2031	$	5,726	$	-

Footnotes

(1) Lexington has a 15% equity interest in the joint venture; loan maturity extended to 09/2017.

(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.

(4) Lexington has a 25% equity interest in the joint venture. Lexington is the lender of this mortgage pursuant to the joint venture agreement.

43

LEXINGTON REALTY TRUST

Debt Maturity Schedule

6/30/2017

($000)

Consolidated Properties

Year	Mortgage Scheduled  Amortization		Mortgage Balloon Payments		Corporate Debt
2017-remaining	$	14,747	$	43,684	$	-
2018		29,812		6,637		-
2019		26,681		83,767		-
2020		23,178		31,969		250,000
2021		23,433		17,032		255,000
	$	117,851	$	183,089	$	505,000

 

Footnotes

(1) Percentage denotes weighted-average interest rate.

44

LEXINGTON REALTY TRUST

Selected Balance Sheet and Income Statement Account Data

6/30/2017

($000)

Balance Sheet
Other assets	$	32,935
The components of other assets are:
Deposits	$	1,426
Equipment		581
Prepaids		2,994
Other receivables		1,554
Deferred lease incentives		17,713
Lake Jackson developer escrows		7,942
Interest rate swap derivative asset		600
Other		125
Accounts payable and other liabilities
The components of accounts payable and other liabilities are:	$	33,901
Accounts payable and accrued expenses	$	11,403
CIP accruals and other		3,802
Taxes		351
Deferred lease and loan costs		12,172
Deposits		1,139
Escrows		711
Transaction / build-to-suit costs		4,166
Interest rate swap derivative liability		157
Income Statement - Six months ended June 30, 2017
Non-cash interest expense, net	$	987

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 Press Release, in this Quarterly Supplemental Information 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) 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 that of 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)

	Six months ended  June 30, 2017
Cash Rent Reconciliation:
Rental revenue as reported	$	176,219
Rental revenue from sold properties		(2,753	)
Lease termination income		(2,625	)
GAAP rent per supplement		170,841
GAAP rent adjustments: (1)
Straight-line adjustments		(8,295	)
Lease incentives		911
Amortization of above/below market leases		631
Cash rent per supplement	$	164,088

Consolidated debt reconciliation June 30, 2017:

	GAAP Balance		Deferred Loan  Costs, net		Discounts		Gross Balance
Mortgages and notes payable (2)	$	703,845	$	6,763	$	-	$	710,608
Term loans payable (3)		501,602		3,398		-		505,000
Senior notes payable(3)		494,780		3,576		1,644		500,000
Trust preferred securities (3)		127,146		1,974		-		129,120
Consolidated debt	$	1,827,373	$	15,711	$	1,644	$	1,844,728

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:

	Six months ended June 30,
	2017			2016
Net Income	$	49,585		$	107,133
Interest and amortization expense		38,941			45,572
Provision for income taxes		799			637
Depreciation and amortization		85,211			84,399
General and administrative		17,598			15,522
Transaction costs		488			214
Non-operating income		(3,992	)		(6,420	)
Gains on sales of properties		(44,433	)		(42,341	)
Impairment charges and loan loss		21,591			3,014
Debt satisfaction charges, net		46			3,356
Equity in (earnings) losses of non-consolidated entities		1,347			(6,054	)
Lease termination income		(2,625	)		(13,382	)
Straight-line adjustments		(8,550	)		(24,380	)
Lease incentives		941			842
Amortization of above/below market leases		860			955
Net Operating Income - ("NOI")		157,807			169,067
Less NOI:
Disposed of properties		(1,063	)		(23,103	)
Acquired properties		(15,464	)		(1,088	)
Properties in default		(1,430	)		(1,749	)
Same-Store NOI	$	139,850		$	143,127

NOI for NAV:

	Six months ended
	June 30, 2017
NOI per above	$	157,807
Less NOI:
Disposed of properties		(1,063	)
Assets held for sale		187
Assets acquired in 2017 (1)		(2,075	)
Assets less than 70% leased / Other		15
NOI for NAV	$	154,871

Footnotes

(1) Excludes Lake Jackson, TX.

49

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Reconciliation to Adjusted EBITDA:

				Three months ended
	6/30/2017			3/31/2017			12/31/2016			9/30/2016			Trailing 12 Months
Net income (loss) attributable to
Lexington Realty Trust shareholders	$	7,152		$	42,040		$	16,001		$	(25,352	)	$	39,841
Interest and amortization expense		19,216			19,725			19,459			23,001			81,401
Provision for income taxes		377			422			340			462			1,601
Depreciation and amortization		42,320			42,891			41,361			40,288			166,860
Straight-line adjustments		(5,641	)		(2,909	)		(2,051	)		(11,317	)		(21,918	)
Lease incentives		510			431			417			414			1,772
Amortization of above/below market leases		346			514			530			572			1,962
Gains on sales of properties		(10,240	)		(34,193	)		(23,097	)		(16,072	)		(83,602	)
Impairment charges and loan loss		13,599			7,992			24,332			72,890			118,813
Debt satisfaction (gains) charges, net		46			-			157			(2,538	)		(2,335	)
Non-cash charges, net		1,987			2,146			2,092			2,296			8,521
Pro-rata share adjustments:
Non-consolidated entities adjustment		3,880			(1,066	)		(319	)		360			2,855
Noncontrolling interests adjustment		7			(13	)		698			(2,495	)		(1,803	)
Adjusted EBITDA	$	73,559		$	77,980		$	79,920		$	82,509		$	313,968

50

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Reconciliation of Select Credit Metrics:

Adjusted Company FFO Payout:	Six months ended June 30, 2017			(Debt + Preferred) / Gross Assets:	Six months ended June 30, 2017
Common share dividends per share	$	0.35		Consolidated debt	$	1,827,373
Adjusted Company FFO per diluted share		0.47		Preferred shares liquidation preference		96,770
Adjusted Company FFO payout ratio		74.5	%	Debt and preferred	$	1,924,143
Unencumbered Assets:				Total assets	$	3,366,803
Real estate, at cost	$	4,242,737		Plus depreciation and amortization:
held for sale real estate, at cost		5,941		Real estate		1,185,911
less encumbered real estate, at cost		(1,032,850	)	Deferred lease costs		26,350
Unencumbered assets	$	3,215,828
				Gross assets	$	4,579,064
Unencumbered NOI:
NOI	$	157,807		(Debt + Preferred) / Gross Assets		42.0	%
Disposed of properties NOI		(1,063	)
Adjusted NOI		156,744		Debt / Gross Assets:
less encumbered adjusted NOI		(43,930	)	Consolidated debt	$	1,827,373
Unencumbered adjusted NOI	$	112,814
Unencumbered NOI %		72.0	%	Gross assets	$	4,579,064
Net Debt / Adjusted EBITDA:				Debt / Gross assets		39.9	%
Adjusted EBITDA	$	313,968
				Secured Debt / Gross Assets:
Consolidated debt	$	1,827,373		Mortgages and notes payable	$	703,845
less cash and cash equivalents (1)		(122,670	)
Net debt	$	1,704,703		Gross assets	$	4,579,064
Net debt / Adjusted EBITDA		5.4	x	Secured Debt / Gross Assets		15.4	%
(Net Debt + Preferred) / Adjusted EBITDA:
Adjusted EBITDA	$	313,968		Development / Gross Assets:
				Investment in real estate under construction	$	29,442
Net debt	$	1,704,703		Construction in progress		2,534
Preferred shares liquidation preference		96,770		Development	$	31,976
Net debt + preferred	$	1,801,473
				Gross assets	$	4,579,064
(Net Debt + Preferred) / Adjusted EBITDA		5.7	x
				Development / Gross Assets		0.7	%

Footnotes

(1) Includes funds held at 1031 exchange intermediaries.

51

Investor Information

Transfer Agent

Computershare	Overnight Correspondence:
PO Box 505000	462 South 4th Street, Suite 1600
Louisville, KY 40233	Louisville, KY 40202
(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
E-mail	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

EX-99.2

EXHIBIT 99.2 

Lexington Realty Trust – UNEDITED TRANSCRIPT

Q2 2017 Earnings Call

Company Participants
T. Wilson Eglin, Chief Executive Officer and President
Patrick Carroll, Chief Financial Officer
James Dudley, Director of Asset Management
Heather Gentry, Senior Vice President of Investor Relations

Operator:

Good morning, and welcome to the Lexington Realty Trust Second Quarter 2017 Conference Call and Webcast. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the conference over to Ms. Heather Gentry, Investor Relations. Please go ahead.

Heather Gentry:

Thank you, operator. Welcome to the Lexington Realty Trust Second Quarter 2017 Conference Call and Webcast. The earnings release was distributed this morning, and both the release and supplemental disclosure package that detailed this quarter's results are available on our website at www.lxp.com in the Investors section and will be furnished to the SEC on a Form 8-K.

Certain statements made during this conference call regarding future events and expected results may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Lexington believes that these statements are based on reasonable assumptions. However, certain factors and risks, including those included in today's earnings press release and those described in reports that Lexington Realty Trust files with the SEC from time to time, could cause less intense action results to differ materially from those expressed or implied by such statements. Except as required by law, Lexington does not undertake our duty to update any forward-looking statements.

In the earnings press release and supplemental disclosure package, Lexington has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure. Any references in these documents to adjusted company FFO refer to adjusted company funds from operations available to equity holders and unitholders on a fully diluted basis. Operating performance measures of an individual investment are not intended to be viewed as presenting a numerical measure of Lexington's historical or future financial performance, financial position or cash flows.

Joining me on today's call to discuss Lexington's Second Quarter 2017 results are Will Eglin, Chief Executive Officer; Pat Carroll, Chief Financial Officer. Will, Pat and other executive members of management, including our transactions group, will be available to answer questions following our prepared remarks. I will turn the call over to Will.

T. Wilson Eglin:

Thanks Heather. Good morning everyone and thank you for joining our Second Quarter 2017 earnings call and webcast.

During the second quarter, we continued to make progress on multiple fronts, including high-quality industrial investment activity, portfolio simplification through asset sales, continued headway on addressing lease expirations, and maintaining a strong and flexible balance sheet. These are larger themes you will continue to see in the coming quarters as we actively improve and reposition our existing portfolio. During the quarter, acquisition and build-to-suit activity progressed, and we had the opportunity to sell a good portion of non-core, low revenue-generating assets. Our portfolio was 98.1% leased at quarter end on strong leasing volume of 1.4 million square feet, and our balance sheet remains in excellent shape, with leverage at 5.4x and nothing drawn on our credit line at June 30. We generated net income of $0.02 per diluted common share and adjusted company FFO of $0.23 per diluted common share for the quarter, and we are reaffirming our 2017 adjusted company FFO guidance within the range of $0.94 to $0.98 per diluted common share. Now let's take a closer look at the quarter and how we are positioned moving into the second half of the year.

Starting with dispositions, we sold $60 million of property during the quarter at GAAP and cash cap rates of 5.2% and 5.3%, respectively. These asset sales, which included a mix of short-term leased, multi-tenanted and vacant properties, further simplified our portfolio and helped to improve our overall portfolio lease term. Additionally, the sales created liquidity to accretively redeploy into new investments, as the sold properties were generating low revenue in relation

to the sales price. Total disposition volume of approximately $247 million through June 30 included $152 million of wholly-owned properties at average GAAP and cash cap rates of 7.6% and 7.8%, respectively; $6 million related to a nonconsolidated property; and approximately $89 million in loan sales. We sold an additional $8 million of assets subsequent to quarter end, which included 1 retail property and 1 vacant office property. With only approximately $100 million to $150 million left to sell of our announced 2017 property disposition plan, each quarter, we have consistently made further progress towards a higher-quality, single-tenant industrial and office portfolio.

On the investment front, we closed on approximately $166 million of investments at average GAAP and cash cap rates of 8.1% and 7.2%, respectively, during the quarter. This brings our completed investment volume for the first half of the year to $284 million at GAAP and cash cap rates of 8.1% and 7.2%, respectively. Industrial purchases included 2 large warehouses, 1 of which is located in Cleveland, Tennessee, and leased to GE for 7 years, and the other located in San Antonio, Texas, leased to Carrier Corporation for 10 years. The third industrial asset was a previously announced build-to-suit located in Grand Prairie, Texas, leased to O'Neal Metals for 20 years. We also completed an office build-to-suit for AvidXchange, a key player in the automated accounting solutions industry, in Charlotte, North Carolina, for a 15-year term. Subsequent to the end of the quarter, in early August, we purchased an industrial facility for $67 million located in McDonough, Georgia, leased to Georgia Pacific for 10.5 years. An addition $124 million of industrial build-to-suit projects at average GAAP and cash cap rates of 7.9% and 6.8%, respectively, are expected to come online in the third quarter of 2017. Assuming all of these transactions close, new portfolio investments in 2017 will have an average weighted lease term of 14.6 years and add an additional 5.6 million square feet to our portfolio.

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Our investment strategy continues to emphasize build-to-suit industrial projects and the purchase of high-quality warehouse and distribution facilities leased to good credit tenants in mainly secondary markets, with less focus on office transactions. While we have yet to see much change in overall pricing for industrial assets, we are still finding relatively attractive pricing in the market for properties with 7 to 10 years of lease term. We expect higher-yielding investments will be originated in the build-to-suit market, including specialized industrial or office properties where we can secure a 15- to 20-year lease commitment, although our preference remains on the industrial sector. We continue to see opportunities in the industrial area, and we believe that, longer term, a higher percentage of industrial assets versus office assets will allow for improved earnings growth, lower capital expenditures, and potential multiple expansion over time. To date, investment volume, including closed transactions and commitments, totals $475 million at estimated GAAP and cash cap rates of 7.7% and 6.7%, respectively. We believe with our strong balance sheet position, cash on hand and active disposition program, we are well positioned to fund our current commitments and act on new opportunities.

Turning to leasing, we had an active quarter, having leased approximately 1.4 million square feet and sold 1.1 million square feet of vacancy during the second quarter. On renewals, GAAP and cash rents for industrial properties increased approximately 5% and 1%, respectively, while office renewal rents increased approximately 4% on a GAAP basis and decreased 14% on a cash basis. The decrease in cash office rents was primarily the result of a rent reset for our Herndon, Virginia, property leased to the government, as well as a change in the lease structure from gross to triple-net for our 15-year lease renewal with Arrow Electronics in Centennial, Colorado. The Arrow lease renewal was an extremely positive transaction for us, as Arrow's previous annualized gross rent of $22.06 per square foot, when netted for expenses, was approximately $13.06 per square foot. The new net lease rent per square foot totals $18.50, allowing us to collect a higher overall net rent, which encompasses savings of approximately $1.2 million in annual property expenses for this asset. We were 98.1% leased at quarter end, a 190 basis point increase compared to the first quarter of 2017, and both second quarter property sales and new investments coming online helped to increase our weighted average lease term from 8.8 years at March 31, 2017, to 9 years at the end of the second quarter.

Significant lease renewals for the quarter included the 15-year office lease renewal with Arrow Electronics in Centennial, Colorado, and the 4-year office lease renewal with our government property we just mentioned, as well as a 5-year industrial lease renewal with Clearwater Paper Corporation in Shelby, North Carolina, which extends their lease out to 2036. With only limited lease expirations left to address this year, we remain in negotiations with New Cingular and have begun negotiations with the tenant in our 640,000-square-foot industrial facility in Statesville, North Carolina, whose lease is set to expire at the end of the year. Subsequent to the end of the quarter, we extended 2018 lease maturities for 2 industrial assets. This included a 247,000-square-foot 10-year lease renewal with Tenneco Automotive in Marshall, Michigan, and a 772,000-square-foot 2-year lease renewal with ODW Logistics in Columbus, Ohio. Briefly touching on some of our properties with 2017 vacancies, we were able to sell our Des Moines, Iowa, property very shortly after coming off-lease, and we continue to be active in marketing both our Fishers, Indiana, and High Point, North Carolina, properties for sale or lease. Our vacant square footage to lease or sell represented approximately 1.9% of the overall portfolio at quarter end, and we continue to make progress whittling down this segment of the portfolio.

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In summary, through June 30, we have been a net acquirer, with current acquisition and completed build-to-suit volume exceeding property disposition volume. We continue to be well positioned to act on opportunities that may arise in the second half of the year. Investment activity will remain focused on industrial purchases and build-to-suits, with select opportunities in the office sector. Leasing activity was strong in the second quarter, and the majority of 2017 lease expirations have been addressed. We expect that the concentrated period of elevated office rollover we have been managing through will end by mid-2019. Our multi-year disposition program will be substantially completed over the remainder of 2017, with a relatively modest amount left to sell in 2018. And the addition of new assets over this time period will continue to improve the quality of our portfolio. We believe these 3 factors will significantly influence our longer-term growth potential and provide for an improved valuation. Our efforts have begun to pay off, and we will continue to proceed diligently to finish the job.

With that, I will now turn the call over to Pat, who will review our financial results in more detail.

Patrick Carroll:

Thanks, Will. Good morning, everyone. Gross revenues in the second quarter were $96 million, compared with gross revenues of $117 million for the same time period in 2016. The year-over-year change is attributable to 2016 and 2017 property sales, mainly the New York City land investments that we've sold in 2016; the lease termination payment we received in 2016; and lease expirations, which were offset by revenues generated from acquisitions and new leases.

Net income attributable to common shareholders for the second quarter was $0.02 per diluted common share, or approximately $6 million, compared to net income attributable to common shareholders of $0.23 per diluted common share, or $54 million, for the same time period in 2016. Impairment charges of $14 million were recognized during the quarter, compared to $10 million of gains related to property sales. These impairment charges were primarily attributable to our Fishers, Indiana, office property, which is currently being marketed for sale. For the first half of the year, gains on sales totaled approximately $44 million, compared to impairment charges of $22 million. In addition, during the second quarter of 2017, we took a $3.5 million impairment charge on our joint venture investment that owns a Gander Mountain retail property in Palm Beach Gardens, Florida. We estimate our 2017 guidance for net income attributable to common shareholders in the expected range of $0.65 to $0.69 per fully diluted common share. This estimate is sensitive to the timing and composition of acquisitions and sales, among other factors.

Adjusted company FFO for the quarter was approximately $57 million, or $0.23 per diluted common share, compared to $79 million, or $0.32 per diluted common share, for the same time period in 2016. This decrease was primarily the result of the sale of the New York City land investments in 2016, which generated $0.04 per share of adjusted company FFO in the second quarter of 2016, coupled with a reduction in recognized lease termination income, which generated an additional $0.04 per share of adjusted company FFO in the second quarter of 2016. Furthermore, certain items impacted our adjusted company FFO in the second quarter of 2017. We incurred $900,000 in litigation expenses for a previously foreclosed upon property, $600,000 in net operating costs for our Des Moines, Iowa, property price to its sale, and a $300,000 write-off of reimbursements for a delinquent retail tenant. We also did not recognize any revenue in our Gander Mountain Palm Beach Garden asset, in which we have a 25% joint venture interest. In the first quarter of 2017, we recognized approximately $100,000 of earnings for this asset. These items taken together reduced adjusted company FFO by $1.9 million in the second quarter of 2017.

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GAAP rents were in excess of cash rents in the second quarter by approximately $4.8 million. This relates primarily to the straight-lining of tenant rents. On page 20 of the supplement, we have included estimates of both GAAP and cash rents for the remainder of 2017 and 2018 for leases in place at June 30, 2017. This does not assume any tenant releasing of vacant space, tenant lease extensions on properties with scheduled lease expirations, property sales or property acquisitions.

Same-store net operating income was $140 million for the 6 months ended June 30, 2017, compared to $143 million for the same time period in 2016. And same-store percentage leased was 97.8% for the 6 months ended June 30, 2017, compared to 98.9% for the same time period in 2016. These decreases are primarily the result of 2016 and 2017 office move-outs and a tenant liquidation in Rock Hill, South Carolina, which property was sold in the third quarter of 2017.

Property operating expenses for the second quarter were approximately $13 million, slightly higher compared to the same time period in 2016. As previously noted, this was attributable to cost incurred on a vacant property prior to its sale and the write-off of reimbursements attributable to a tenant delinquency coupled with operating expense obligations of newly vacant properties.

G&A expenses were $8.1 million for the second quarter of 2017, which were in line with the same time period in 2016. Our guidance assumes that for the second half of the year, G&A will range between $17 million and $18 million.

Now, turning to the balance sheet, our balance sheet remains in good shape as we move into the second half of the year. At the end of the second quarter, we had $129 million if cash on the balance sheet, including cash classified as restricted. We utilized cash in the second quarter to fund new acquisitions and anticipate that we will continue to do so as needed for the current investment commitments and new investments. We had approximately $1.8 billion of consolidated debt outstanding at the end of the second quarter, at a weighted average interest rate of 3.8%. All of our current debt is fixed, with the exception of $129.1 million of trust preferred securities, which converted on May 1 to an attractive rate of 3-month LIBOR plus 170 basis points, which was 2.87% at June 30, 2017. The previous fixed rate was 6.804% per annum.

Fixed charge coverage at the end of the quarter was approximately 2.6x, and leverage for the quarter was 5.4x net debt to adjusted EBITDA, compared to 4.9x at the end of the first quarter of 2017. Leverage has ticked up primarily due to the timing of dispositions and acquisitions, as we

use cash on our balance sheet to fund new acquisitions. We retired $20 million of secured debt during the second quarter. As of June 30, 2017, we had approximately $44 million of non-recourse balloon mortgage payments with an average rate of 6.1% coming down in the remainder of 2017, of which $22 million represents mortgages currently in maturity default. Subsequent to quarter end, we satisfied $21.7 million of non-resource secured mortgages which were scheduled to mature in the fourth quarter of 2017. Our unencumbered asset base was approximately $3.2 billion, representing approximately 72% of our NOI as of June 30, 2017, and continues to give us significant financial flexibility.

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As of June 30, 2017, we had no borrowings outstanding on our $400 million revolving credit facility, with the exception of a $4.6 million letter of credit to secure our obligation to purchase a new industrial forward commitment. Again, this is another capital source we can utilize as we look to fund investment commitments and new investments. Subsequent to quarter end, we drew $70 million on our line to complete the Georgia Pacific acquisition.

We paid approximately $5.6 million in lease costs and tenant improvements during the quarter, and we expect our TIs and leasing costs could be up to $17 million in the second half of 2017, depending on leasing and releasing volume.

Now I'll turn the call back over to Will.

T. Wilson Eglin:

Thanks, Pat. Operator, I have no further comments at this time. So we're ready for you to conduct a question-and-answer portion of the call.

Operator:

(Operator Instructions) The first question comes from Craig Mailman of KeyBanc.

Laura Dickson:

Hi, everyone. This is Laura Dickson here with Craig. Will, on the last call, you noted the competitive bidding environment for industrial. Can you just talk a bit about the industrial assets you acquired this quarter and subsequent to quarter end, and then the range of cap rates you had on the assets?

T. Wilson Eglin:

Sure. It has been a competitive environment, and I think everyone in our line of business has probably said the same thing for several years. But that said, nobody either has so much capital or so much low-cost capital that they're crowding us out, so I think everybody's been able to continue to be satisfied with the opportunities that they've been able to uncover. In our case, we added a couple of distribution purchases in second quarter that weren't in our initial guidance for the year, and cap rates have ranged sort of between 6% and 7% for some of the new transactions that have come into the portfolio. We have $124 million of transactions that are scheduled to come into the portfolio in third quarter. And I think earlier this year, we had indicated that we hope to deploy capital at an average going in cap rate of around 6.5%, and with larger volume than anticipated, I think, at least right now, that we would be about 20 basis points above that target, at about 6.7%, and we've been able to add quite good credit quality and asset quality to the portfolio, so far, so good.

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Laura Dickson:

Okay. And then regarding capital sources, I think I might have missed this part in Pat's closing remarks, but are there any debt or equity assumptions or additional equity baked into guidance?

T. Wilson Eglin:

None.

Laura Dickson:

None. Okay. And then for the update on -- you guys have mostly covered 2017 expirations, and so looking at 2018, are there any big chunks there, especially for like Swiss Re, which I think is set to expire at the end of 2018?

T. Wilson Eglin:

Yes, what we typically do with third quarter is go into great detail about 2018, and so a lot of extension negotiations going on right now, so we're hopeful that when we get to next quarter, we'll be able to give a clearer picture. But, yes, looking at the office rollover next year, the Swiss Re building at the end of the year has been one that we've flagged before as a known vacancy that's coming at us. That one does have quite a large non-recourse mortgage on the building, so it may be that we can eek out some equity value, but the real downside risk has been protected already.

Operator:

The next question comes from Sheila McGrath with Evercore.

Sheila McGrath:

Will, on the 2 forward build-to-suits announced in the quarter, the same lease term, 15 years, both industrial, but much different cap rates and also price per square foot. I was just wondering if you could give us a little more detail. Is the one with the higher price per square foot special purpose or have TI? What exactly is the difference?

T. Wilson Eglin:

Yes, the one higher basis and higher cap rate asset is a cold storage facility, Sheila, so that's the principle reason why the cap rate is higher in that instance.

Sheila McGrath:

Okay. Great. And then, Will, on the Arrow transaction, I think you mentioned that that was a very good outcome, but when you look in the supplemental, it kind of skewed the leasing spreads negative. Any idea, if you kind of made the adjustment for the benefit of converting that to net, how the leasing spreads would have looked?

T. Wilson Eglin:

Yes, I think cash rents adjusted for comparability would have been up about 29%.

Patrick Carroll:

That’s right.

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Sheila McGrath:

So it would take the minus 14 to plus 29?

Patrick Carroll:

On that asset, yes. I mean, the -- right, on the net rents for that property, it's -- currently, when it was a gross lease, it was like $13.06, and net rent is $18.50 after.

Sheila McGrath:

Okay. Okay. And then on W.P. Carey's call, they mentioned how competitive the environment was and that they were looking towards forward build-to-suit. Have you noticed that market getting a lot more -- the forward build-to-suit market getting a lot more competitive?

T. Wilson Eglin:

Not particularly. We've been able to continue to find good opportunity for ourselves. There have always been others active in that space as well, so I think we're still finding a good mix of forward commitments and acquisitions to meet our investment objectives, at least.

Sheila McGrath:

Okay. And then last question -- Pat, on net debt to EBITDA, I think you said it was 5, 4 at quarter end. What is the guidance for the year or year end, if you could remind us?

Patrick Carroll:

We're comfortable with anything under 6, but mid-5s is where we would expect it to remain for the year.

Sheila McGrath:

Okay. Thanks.

Patrick Carroll:

Oh, hey, Sheila?

Sheila McGrath:

Yes.

Patrick Carroll:

The 29% was on a GAAP basis. It's 2.7% on a cash basis adjusting for Arrow.

Operator:

The next question comes from John Guinee of Stifel.

John W. Guinee:

A few little sort of curiosity questions. On Statesville, I guess you imply that you aren't really sure whether that'll release or you'll get it back. It looks to me -- and I might be off on this -- that your net rent is about $3.30 a foot. If you sell something like that vacant, what would that trade for?

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T. Wilson Eglin:

I have James Dudley here, who heads our Asset Management Group, John, so he may be able to give you some perspective on what that building would be worth empty versus leased.

James Dudley:

Well, first, John, I think that there is a very high probability we get that lease renewed, and I think we'll do better than what we currently have with the in-place rents. So we're pretty far along in that process, but, secondarily, I think it's probably around $40 a foot vacant.

John W. Guinee:

Okay. Great. And then the second question -- you did a short-term renewal on the U.S. government. Can you talk a little bit -- and I guess it was a big rent roll-down. Talk about how they do business. Was there any chance that they would leave? How did they negotiate it? Why a 4-year renewal? Any cash involved in the -- for TIs and releasing?

James Dudley:

There were some base-building improvements that needed to happen, so it was an opportunity to provide them with some base-building improvements and to get them to renew. Their lease rate, at around $24, was well above market, and the $20, approximately, lease rate that we have now is still above market. So it was an effort to try to get some additional term out of them and also enhance the building.

John W. Guinee:

Those were net numbers, or are they gross numbers?

James Dudley:

They're net numbers.

John W. Guinee:

Okay. And then I guess while we've got you here, your big rollover year is office in 2019, and you mentioned that Swiss Re in late '18 was already a known vacancy. Any of these big tenants -- FedEx, Swiss Re, Honeywell, Cummins -- known move-outs already for '19, or are they all in place paying rent?

T. Wilson Eglin:

Well, no, the other Swiss Re building in 2019 would be another one that we've flagged before on our watch list for that year. The big one is Federal Express, and we are in discussions with them about extending that lease. And Cummins -- there's actually a put call at the end of that lease term where that building can either be -- will end up being sold to them for about $5 million.

John W. Guinee:

So that's essentially they have the purchase option at $5 million?

T. Wilson Eglin:

Essentially, and recall that we did a credit tenant lease financing earlier where we monetized that whole rent stream, John, so that asset is actually not generating any free cash flow right now.

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John W. Guinee:

So when you're talking about your difference between GAAP and cash, is it primarily the Cummins building?

Patrick Carroll:

For what? You mean, going forward?

John W. Guinee:

Oh, you're saying it's --

Patrick Carroll:

Well, right, and the answer is GAAP and cash in that asset are probably very close, but even though we put full financing on it and we monetize the whole rental stream, we still have the asset, the debt and the revenue stream on our books.

John W. Guinee:

Okay. So what you're saying is it's still paying a $12 or so net rent, whether it's GAAP or cash, but there's no free cash flow because you're amortizing the debt fully?

T. Wilson Eglin:

Because the qualifies for principal and interest.

Patrick Carroll:

Right, because of the debt service.

John W. Guinee:

So we should value that $4.6 million annual income stream at about a $5 million value because that's the purchase option?

Patrick Carroll:

That is the purchase option, but, remember, it's levered, so if you're going to do that, you have to take off the mortgage also.

Operator:

And the next question comes from Gene Nusinzon of JP Morgan.

Gene Nusinzon:

Just two questions, first on dispositions. You talked about 1.9% of the portfolio being vacant and 2019 being the time for an end to heavy office lease rollover. Just big picture-wise, is there a certain level of vacancy you're comfortable with running at? And generally how long does it take to sell an average vacant office building?

T. Wilson Eglin:

I think that we've always said that running the company, up until now, at above 96% occupancy was sort of a good number. We've made real progress, however, it addressing vacant buildings that would be, in our minds, very difficult to lease or might require a lot of capital to lease in a multi-year lease up period, so that should be the trend. We are still going to be trying to move some vacancy out of the portfolio, and principally that's going to involve disposition work. There are several buildings in our multi-tenant portfolio that we're comfortable leasing up to high occupancy. There are others that we're going to focus on turning into cash. Some of the disposition activity you'll see that may show up in fourth quarter this year will be a process that we've talked about before, where we want to be disciplined about selling some properties when they reach that point when there's 10 years of lease term left. That's a way of booking gains and generating high IRRs without holding every asset to the end of the lease term. So there are really two things that are going on on the disposition program between here and, say, the end of next year. One is to try to shrink that stub portfolio that's not single-tenant office or industrial down close to zero, and the other thing is to take advantage of opportunities to sell some buildings with 10 years of term remaining. So I would think that we should be able to sustain pretty high occupancy through the process.

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Gene Nusinzon:

Maybe looking back to 2016, is there a way you could put a number around average time on market for an average vacant office building before it transacted?

T. Wilson Eglin:

Every situation is different. It depends on how -- one of the nice things about owning single-tenant real estate is you know often if you're going to have a vacancy. You're not surprised, so you can get a head start and effect some sales pretty quickly after they come off-lease. But our general assumption with respect to leasing is that sometimes a big office building can take 1 to 2 years to lease up, and if we decide to make a sale, we should be able to turn that asset into cash more quickly.

Gene Nusinzon:

Okay, great. Thank you. Last question, on acquisitions. Your message around just deal flow changes a little bit from quarter-to-quarter. Can you talk about just how many build-to-suit opportunities you looked at in the first quarter, maybe some you placed under LOI, and how many you expect to win going forward?

T. Wilson Eglin:

Gene, we try to talk about our pipeline in terms of reality, and we talk about transactions when they're actually under contract and committed to. We began the year thinking that we might have volume of $300 million or so, and now there have been transaction opportunities that have allowed us to go above and beyond that. It's a very large market. We could sit here and brag that we see billions and billions and billions of dollars of opportunity, but the real skill is to try to sift through it and find what meets our criteria and also where our skill set in the build-to-suit area can add some value. So people talk about their pipeline and how many deals they look at, but the trick is to really try to focus in and use your time wisely.

Gene Nusinzon:

You're saying your hit rate has improved from, I guess, the first quarter.

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T. Wilson Eglin:

I think our hit rate is usually pretty high, but, like I say, we could say that we've looked at billions and billions of dollars of transactions and feel like we had a low hit rate, but where we're really trying to focus on is where we can find merchant builders that want to use our balance sheet to help their business, and I think we've done a good job focusing on those relationships where we're more likely to have a high hit rate and where it's worth us spending the time to underwrite new transactions.

Operator:

(Operator Instructions) The next question is a follow-up from Sheila McGrath of Evercore.

Sheila McGrath:

Will or Pat, I think you mentioned in the back half of the year CapEx could be about $17 million. If you look at '17 CapEx and then go forward to 2018 and 2019, when do you think we will see the benefit of your portfolio shift and see that CapEx kind of trending lower?

Patrick Carroll:

Well, as you get out of the office rollovers, that number should come down dramatically.

T. Wilson Eglin:

It's already about half of what it was a few years ago, so we've had some of the benefit.

Patrick Carroll:

Yes.

Sheila McGrath:

Okay, great. And then the AFFO payout ratio is reasonably conservative and looks better even next year. How should we think about your dividend policy as we look towards the end of this year and into next?

T. Wilson Eglin:

Well, we have the dividend right now roughly in line with our taxable income run rate, and that's sort of where we want to keep it. We do have a bias towards growing the dividend modestly every year. We have a shareholder constituency that values the income, and we'll be discussing dividend policy with the board and have an announcement later this year.

Sheila McGrath:

Okay. And last question -- I think you said you have about $100 million of disposed for the balance of the year, but you'll continue to always prune the portfolio. What's like a good kind of recurring disposition volume that we should kind of think about as an ongoing kind of metric?

T. Wilson Eglin:

I would say once we're finished with the portfolio repositioning, and we want to be finished with that by the end of next year. I always think, given our size, about $100 million of dispositions is what we want to always do to keep upgrading the portfolio, and like I said earlier, there are times when we think the best time to get a good value for an asset is when there's 10 years of term left. So there's going to be some continual capital recycling, but that's probably in the out years. If you're modeling the company longer term, that would be what I would assume right now. Next year, our disposition thoughts are probably a little bit heavier than $100 million because we still have some repositioning work left, but last year was the heaviest year, this year less so, and next year a little bit less so to get to our desired portfolio state.

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Operator:

The next question comes from Joshua Dennerlein of Bank of America.

Joshua Dennerlein:

Just wanted to follow up on Sheila's question. What's in the $100 million of assets left to sell this year? How many assets?

T. Wilson Eglin:

It's a combination of things. As I said, some office buildings where we're marketing with 10 years of term, some assets in that small portfolio that has retail properties and some vacancy in it, so it's a mix of assets, and there will be some assets marketed for sale over and above that that could potentially -- might come into the disposition plan towards the end of fourth quarter.

Operator:

The next question comes from Daniel Donlan of Ladenburg Thalmann.

John Massocca:

Hi, this is actually John Massocca on for Dan. Just looking -- I know it's a long way out and it's kind of a small portion of the portfolio, but I was kind of curious. When you look at your Kmart retail exposure, you're in some of those buildings, and those buildings are paying a pretty low rent per square foot. I mean, as those come offline or the leases expire on those, would you look to put CapEx in those maybe to reposition them, or is it something where you would just, if the rents don't -- if Kmart doesn't renew, you would just sell as is?

James Dudley:

I think for the vast majority of them, they'll be sales. We're looking to sell the users, and we've had some activity on some of the assets already to potentially be user sales.

John Massocca:

And what -- it's kind of a mixed bag, but what do you think you could sell those for on like a square-foot-per-square-foot basis?

James Dudley:

I think it's a pretty wide range, because the locations are so different. I mean, it's just -- we don't really know yet I guess would be the way I would put it, but it's going to be a wider range because the locations vary so dramatically.

Operator:

The next question is a follow-up from John Guinee of Stifel.

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John W. Guinee:

Yes, two questions. One is essentially, Pat, you described Cummins in a manner very similar to the Xerox deal in Palo Alto, where the debt fully amortizes over the lease term and the building reverts back to somebody else, so there's really -- it looks good on a NAV basis, but there's no residual, but you have to adjust for the debt also. Are there any other assets that have a similar structure of significance?

T. Wilson Eglin:

No. No, the Palo Alto is a ground lease, so we don't own the fee. That's why it reverts back. And Cummins we monetized the rental stream with the balloon in the call put, but there are no others.

John W. Guinee:

Okay. And then 1701 Market keeps popping up as a very big, multi-tenant building. What's your plan for that building, 1701 Market in Philadelphia?

James Dudley:

We've initially started discussing a renewal with the tenant, so we're hopeful that we're going to get Morgan, Lewis to renew.

John W. Guinee:

Okay, but it's a bit -- every building in Center City, Philadelphia -- every B building in Center City, Philadelphia, has traded in the last few years. Is that on the thought process?

T. Wilson Eglin:

Not right now. We have a happy tenant. We'd like to have them stay in the building longer term.

Operator:

And this concludes our question-and-answer session. I would now like to turn the conference back over to Will Eglin for any closing remarks.

T. Wilson Eglin:

Well, thanks to all of you again for joining us this morning. We appreciate your continued participation and support. 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, and have a good day, everyone.

Operator:

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect your lines. Have a great day.

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