UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 7, 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 November 7, 2017, we issued a press release announcing our financial results for the quarter ended September 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 5.02. | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
Effective November 8, 2017, our Board of Trustees appointed Howard Roth as a member of the Board of Trustees, to fill the vacancy that was created when Richard J. Rouse was not nominated for reelection at the 2017 Annual Meeting of Shareholders. Mr. Roth was also appointed to the Audit Committee of the Board of Trustees.
Mr. Roth is a principal of HSR Advisors, a consulting firm providing strategic and financial advice. Mr. Roth recently retired from Ernst & Young LLP as the leader of the firm’s global Real Estate, Hospitality & Construction (RHC) practice. Mr. Roth was a partner at Ernst & Young LLP (including its predecessor firm, Kenneth Leventhal & Co.) since 1991. Mr. Roth is also an Advisory Board Member of Hodes Weill & Associates.
The Board of Trustees has determined that Mr. Roth (1) has no material relationship with the Trust or its affiliates or any member of the management of the Trust or his or her affiliates, (2) is “independent” under the Trust’s Corporate Governance Guidelines and the New York Stock Exchange listing standards, and (3) qualifies as an “Audit Committee Financial Expert” in accordance with Item 407(d)(5) of Regulation S-K.
Item 7.01. | Regulation FD Disclosure. |
On November 7, 2017, we made available supplemental information, which we refer to as the “Quarterly Supplemental Information, Third Quarter 2017,” a copy of which is furnished herewith as Exhibit 99.1.
Also on November 7, 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, Third Quarter 2017. |
99.2 | November 7, 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: November 8, 2017 | By: | /s/ Patrick Carroll |
Patrick Carroll | ||
Chief Financial Officer |
Exhibit Index
99.1 | Quarterly Supplemental Information, Third Quarter 2017. |
99.2 | November 7, 2017 Conference Call Transcript. |
Exhibit 99.1
LEXINGTON REALTY TRUST
QUARTERLY SUPPLEMENTAL INFORMATION
September 30, 2017
Table of Contents
Section | Page | |
Third Quarter 2017 Earnings Press Release | 3 | |
Portfolio Data | ||
Investment / Capital Recycling Summary | 15 | |
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 | 43 | |
Selected Balance Sheet Account Data | 44 | |
Non-GAAP Measures – Definitions | 45 | |
Reconciliation of Non-GAAP Measures | 47 | |
Investor Information | 51 |
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 THIRD QUARTER 2017 RESULTS
AND ANNOUNCES DIVIDEND INCREASE
New York, NY - November 7, 2017 - Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant real estate investments, today announced results for the third quarter ended September 30, 2017.
Third Quarter 2017 Highlights
• | Generated Net Income attributable to common shareholders of $3.9 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 $60.7 million, or $0.25 per diluted common share. |
• | Acquired four industrial properties for an aggregated cost of $266.1 million and completed the Opelika, AL industrial build-to-suit project for $37.3 million. |
• | Disposed of 12 properties for $42.0 million. |
• | Amended the revolving credit facility, together with the related term loans, increasing the capacity by $200.0 million. |
• | Retired $25.2 million of secured debt. |
• | Completed 1.2 million square feet of new leases and lease extensions with portfolio 97.9% leased at quarter end. |
Subsequent Events
• | Increased the quarterly common share/unit dividend/distribution to $0.1775 per common share/unit. |
• | Acquired an industrial property in Lafayette, IN for $17.5 million. |
• | Disposed of four properties for $28.2 million. |
• | Completed 700,000 square feet of new and extended leases. |
Adjusted Company FFO is a non-GAAP financial measure. It and certain other non-GAAP financial measures are defined and reconciled later in this press release.
T. Wilson Eglin, Chief Executive Officer and President of Lexington Realty Trust, commented, “We are very pleased with our third quarter results, the continued success of our business plan execution, and today’s announcement on the dividend increase. During the quarter and subsequently, we acquired or completed over $320 million of industrial properties, sold approximately $70 million of non-core assets, and leased over 1.9 million square feet. The quality of our portfolio has significantly improved through our sustained efforts. Our portfolio has an increasing percentage of rents from industrial properties, is younger, has a longer weighted-average lease term, and has less near-term lease rollover.”
3 |
FINANCIAL RESULTS
Revenues
For the quarter ended September 30, 2017, total gross revenues were $97.7 million, compared with total gross revenues of $106.0 million for the quarter ended September 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, and lease expirations, partially offset by revenue generated from property acquisitions and new leases.
Net Income Attributable to Common Shareholders
For the quarter ended September 30, 2017, net income attributable to common shareholders was $3.9 million, or $0.02 per diluted share, compared with net loss attributable to common shareholders for the quarter ended September 30, 2016 of $27.0 million, or $0.12 per diluted share.
Adjusted Company FFO
For the quarter ended September 30, 2017, Lexington generated Adjusted Company FFO of $60.7 million, or $0.25 per diluted share, compared to Adjusted Company FFO for the quarter ended September 30, 2016 of $67.2 million, or $0.28 per diluted share. The decrease was primarily attributable to the items discussed above under “Revenues”.
Dividends/Distributions
As previously announced, during the third quarter of 2017, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended September 30, 2017 of $ 0.175 per common share/unit, which was paid on October 16, 2017 to common shareholders/unitholders of record as of September 29, 2017. Lexington also declared a dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred”), which is expected to be paid on November 15, 2017 to Series C Preferred Shareholders of record as of October 31, 2017.
Subsequent to quarter end, Lexington increased its quarterly common share/unit dividend/distribution to $0.1775 per common share/unit, which equates to an annualized dividend of $0.71 per common share/unit. The declared quarterly dividend/distribution will be payable on January 16, 2018 to common shareholders/unitholders of record as of December 29, 2017. In addition, Lexington declared a dividend of $0.8125 per share on its Series C Preferred, which is expected to be paid February 15, 2018 to Series C Preferred Shareholders of record as of January 31, 2018.
4 |
TRANSACTION ACTIVITY
ACQUISITIONS AND COMPLETED BUILD-TO-SUIT TRANSACTIONS
Tenant (Guarantor) | Location | Sq. Ft. | Property Type | Initial Basis ($000) | Approximate Lease Term (Yrs) | |||||||||||
Golden State Foods Corp. (Golden State Enterprises, Inc.) | Opelika, AL | 165,000 | Industrial | $ | 37,269 | 25 | ||||||||||
Georgia Pacific Consumer Products LP (Georgia-Pacific LLC)(1) | McDonough, GA | 1,121,000 | Industrial | 66,700 | 10 | |||||||||||
McCormick & Company, Inc.(2) | Byhalia, MS | 616,000 | Industrial | 36,590 | 10 | |||||||||||
Kellogg Sales Company (Kellogg Company) | Jackson, TN | 1,062,000 | Industrial | 57,920 | 10 | |||||||||||
Nissan North America, Inc. | Smyrna, TN | 1,505,000 | Industrial | 104,890 | 10 | |||||||||||
4,469,000 | $ | 303,369 |
(1) | Square footage includes a 220,000 square foot expansion that is expected to be completed in 2018. |
(2) | Initial Basis excludes a $133 thousand future tenant improvement allowance and $767 thousand of rent abatements, which were credited at closing. |
The above properties were acquired/completed at aggregate weighted-average estimated GAAP and cash capitalization rates of 6.6% and 5.7%, respectively.
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 | 4Q 17 | 8.3 | % | 7.3 | % | 15 | ||||||||||||||
Romulus, MI | 500,000 | Industrial | 39,330 | 4Q 17 | 6.5 | % | 6.1 | % | 15 | |||||||||||||||
Lafayette, IN | 309,000 | Industrial | 17,450 | 4Q 17 | 7.0 | % | 6.9 | % | 7 | |||||||||||||||
1,069,000 | $ | 103,780 | 7.4 | % | 6.8 | % |
(1) | A $4.6 million letter of credit secures the obligation to purchase this property. |
PROPERTY DISPOSITIONS(1)
Primary Tenant (Guarantor) | Location | Property Type | Gross Disposition Price ($000) | Annualized Net Income(2) ($000) | Annualized NOI(2) ($000) | Month of Disposition | % Leased | |||||||||||||||
Food Lion, LLC/Delhaize America, Inc. | Lexington, NC | Other | $ | 1,412 | $ | 102 | $ | 138 | July | 100 | % | |||||||||||
Vacant | Rock Hill, SC | Multi-Tenant - Office | 6,250 | (407 | ) | (388 | ) | July | 0 | % | ||||||||||||
Bank of America, N.A. (Bank of America Corporation)(3) | Various, GA | Other | 7,050 | 593 | 841 | August | 100 | % | ||||||||||||||
Vacant(4) | Memphis, TN | Multi-Tenant - Office | 3,496 | (533 | ) | (60 | ) | August | 0 | % | ||||||||||||
3D Systems Corporation | Rock Hill, SC | Office | 8,600 | 286 | 703 | September | 100 | % | ||||||||||||||
Wipro Data Center and Cloud Services, Inc. (Infocrossing, Inc.) | Tempe, AZ | Office | 15,200 | 553 | 981 | September | 100 | % | ||||||||||||||
$ | 42,008 | $ | 594 | $ | 2,215 |
(1) | In addition to the dispositions in the table, Lexington disposed of its Port Chester, NY property by its property owner subsidiary abandoning its leasehold interest in September 2017. |
(2) | Quarterly period prior to sale, excluding impairment charges, annualized. |
(3) | Seven properties. |
(4) | Conveyed to lender in a foreclosure sale. |
These dispositions resulted in aggregate gains on sales of $10.6 million and aggregate impairment charges of $5.2 million.
5 |
LEASING
During the third 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 | Rockaway | NJ | Atlantic Health System, Inc. | 12/2027 | 12/2029 | 92,326 | ||||||||
2 | Baton Rouge | LA | New Cingular Wireless PCS, LLC | 10/2017 | 10/2022 | 70,100 | ||||||||
3-7 | Honolulu | HI | N/A | 2017 | 2018-2021 | 6,196 | ||||||||
7 | Total office lease extensions | 168,622 | ||||||||||||
Industrial | ||||||||||||||
1 | Columbus | OH | ODW Logistics, Inc. | 06/2018 | 06/2020 | 772,450 | ||||||||
2 | Marshall | MI | Tenneco Automotive Operating Company, Inc. | 09/2018 | 09/2028 | 246,508 | ||||||||
2 | Total industrial lease extensions | 1,018,958 | ||||||||||||
9 | Total lease extensions | 1,187,580 |
NEW LEASES | ||||||||||||||
Location | Lease Expiration Date | Sq. Ft. | ||||||||||||
Office/Multi-Tenant | ||||||||||||||
1-3 | Honolulu | HI | N/A | 2018-2020 | 952 | |||||||||
3 | Total new office leases | 952 | ||||||||||||
3 | Total new leases | 952 | ||||||||||||
12 | TOTAL NEW AND EXTENDED LEASES | 1,188,532 |
(1) | Leases greater than 10,000 square feet. |
As of September 30, 2017, Lexington's portfolio was 97.9% leased, excluding any property subject to a mortgage loan in default.
BALANCE SHEET/CAPITAL MARKETS
In the third quarter of 2017, Lexington satisfied an aggregate $25.2 million of nonrecourse mortgage debt.
Additionally, in September 2017, Lexington amended its credit facility. The amendment, among other things, (a) increased the amount of the revolving credit line capacity by an aggregate of $105 million for an aggregate capacity of $505 million; (b) obligated the term loan lenders to make additional term loans in the aggregate amount of $95 million, consisting of a $50 million increase in the term loan due in 2020, for an aggregate outstanding amount of $300 million, and a $45 million increase in the term loan due in 2021, for an aggregate outstanding amount of $300 million; and (c) with lender approval, increases the maximum overall capacity of the facility to an aggregate of $2.01 billion.
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 $0.35 to $0.37. Lexington is narrowing its Adjusted Company FFO for the year ended December 31, 2017 to be within an expected range of $0.95 to $0.97 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.
THIRD QUARTER 2017 CONFERENCE CALL
Lexington will host a conference call today, November 7, 2017, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended September 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 February 7, 2018, 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 10113450. A live webcast of the conference call will be available at www.lxp.com within 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 estimates and are not presented or intended to be viewed as a liquidity or performance measure that present a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. The yield or capitalization rate is calculated by dividing the annualized NOI (as defined below, except GAAP rent adjustments are added back to rental income to calculate GAAP yield or capitalization rate) the investment is expected to generate (or has generated) divided by the acquisition/completion cost (or sale) price.
Net Operating Income (“NOI”): NOI is a measure of operating performance used to evaluate the individual performance of an investment. This measure is not presented or intended to be viewed as a liquidity or performance measure that presents a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. Lexington defines NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income), 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 September 30, | Nine months ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Gross revenues: | ||||||||||||||||
Rental | $ | 89,704 | $ | 98,602 | $ | 265,923 | $ | 310,804 | ||||||||
Tenant reimbursements | 7,985 | 7,379 | 23,549 | 23,366 | ||||||||||||
Total gross revenues | 97,689 | 105,981 | 289,472 | 334,170 | ||||||||||||
Expense applicable to revenues: | ||||||||||||||||
Depreciation and amortization | (43,495 | ) | (40,288 | ) | (128,706 | ) | (124,687 | ) | ||||||||
Property operating | (11,694 | ) | (11,472 | ) | (36,784 | ) | (34,843 | ) | ||||||||
General and administrative | (7,963 | ) | (7,510 | ) | (25,561 | ) | (23,032 | ) | ||||||||
Litigation reserve | (2,050 | ) | — | (2,050 | ) | — | ||||||||||
Non-operating income | 1,005 | 3,080 | 4,997 | 9,500 | ||||||||||||
Interest and amortization expense | (18,887 | ) | (23,001 | ) | (57,828 | ) | (68,573 | ) | ||||||||
Debt satisfaction gains (charges), net | 2,424 | 2,538 | 2,378 | (818 | ) | |||||||||||
Impairment charges and loan loss | (21,986 | ) | (72,890 | ) | (43,577 | ) | (75,904 | ) | ||||||||
Gains on sales of properties | 10,645 | 16,072 | 55,078 | 58,413 | ||||||||||||
Income (loss) before provision for income taxes and equity in earnings (losses) of non-consolidated entities | 5,688 | (27,490 | ) | 57,419 | 74,226 | |||||||||||
Provision for income taxes | (375 | ) | (462 | ) | (1,174 | ) | (1,099 | ) | ||||||||
Equity in earnings (losses) of non-consolidated entities | 283 | 340 | (1,064 | ) | 6,394 | |||||||||||
Net income (loss) | 5,596 | (27,612 | ) | 55,181 | 79,521 | |||||||||||
Less net (income) loss attributable to noncontrolling interests | (55 | ) | 2,260 | (448 | ) | 102 | ||||||||||
Net income (loss) attributable to Lexington Realty Trust shareholders | 5,541 | (25,352 | ) | 54,733 | 79,623 | |||||||||||
Dividends attributable to preferred shares – Series C | (1,573 | ) | (1,573 | ) | (4,718 | ) | (4,718 | ) | ||||||||
Allocation to participating securities | (52 | ) | (50 | ) | (183 | ) | (187 | ) | ||||||||
Net income (loss) attributable to common shareholders | $ | 3,916 | $ | (26,975 | ) | $ | 49,832 | $ | 74,718 | |||||||
Net income (loss) attributable to common shareholders - per common share basic | $ | 0.02 | $ | (0.12 | ) | $ | 0.21 | $ | 0.32 | |||||||
Weighted-average common shares outstanding – basic | 237,989,098 | 234,207,396 | 237,632,572 | 233,151,600 | ||||||||||||
Net income (loss) attributable to common shareholders - per common share diluted | $ | 0.02 | $ | (0.12 | ) | $ | 0.21 | $ | 0.31 | |||||||
Weighted-average common shares outstanding – diluted | 241,702,715 | 234,207,396 | 241,442,227 | 237,215,883 |
10 |
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)
September 30, 2017 | December 31, 2016 | |||||||
Assets: | ||||||||
Real estate, at cost | $ | 3,837,705 | $ | 3,533,172 | ||||
Real estate - intangible assets | 595,904 | 597,294 | ||||||
Investments in real estate under construction | — | 106,652 | ||||||
4,433,609 | 4,237,118 | |||||||
Less: accumulated depreciation and amortization | 1,200,814 | 1,208,792 | ||||||
Real estate, net | 3,232,795 | 3,028,326 | ||||||
Assets held for sale | 8,638 | 23,808 | ||||||
Cash and cash equivalents | 140,545 | 86,637 | ||||||
Restricted cash | 34,946 | 31,142 | ||||||
Investment in and advances to non-consolidated entities | 60,683 | 67,125 | ||||||
Deferred expenses, net | 32,426 | 33,360 | ||||||
Loans receivable, net | — | 94,210 | ||||||
Rent receivable – current | 6,388 | 7,516 | ||||||
Rent receivable – deferred | 46,611 | 31,455 | ||||||
Other assets | 32,124 | 37,888 | ||||||
Total assets | $ | 3,595,156 | $ | 3,441,467 | ||||
Liabilities and Equity: | ||||||||
Liabilities: | ||||||||
Mortgages and notes payable, net | $ | 670,345 | $ | 738,047 | ||||
Revolving credit facility borrowings | 200,000 | — | ||||||
Term loans payable, net | 596,369 | 501,093 | ||||||
Senior notes payable, net | 494,989 | 494,362 | ||||||
Trust preferred securities, net | 127,171 | 127,096 | ||||||
Dividends payable | 48,494 | 47,264 | ||||||
Liabilities held for sale | 442 | 191 | ||||||
Accounts payable and other liabilities | 36,728 | 59,601 | ||||||
Accrued interest payable | 11,683 | 6,704 | ||||||
Deferred revenue - including below market leases, net | 34,069 | 39,895 | ||||||
Prepaid rent | 15,371 | 14,723 | ||||||
Total liabilities | 2,235,661 | 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, 240,643,775 and 238,037,177 shares issued and outstanding in 2017 and 2016, respectively | 24 | 24 | ||||||
Additional paid-in-capital | 2,824,379 | 2,800,736 | ||||||
Accumulated distributions in excess of net income | (1,576,459 | ) | (1,500,966 | ) | ||||
Accumulated other comprehensive income (loss) | 510 | (1,033 | ) | |||||
Total shareholders’ equity | 1,342,470 | 1,392,777 | ||||||
Noncontrolling interests | 17,025 | 19,714 | ||||||
Total equity | 1,359,495 | 1,412,491 | ||||||
Total liabilities and equity | $ | 3,595,156 | $ | 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 | Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
EARNINGS PER SHARE: | ||||||||||||||||
Basic: | ||||||||||||||||
Net income (loss) attributable to common shareholders | $ | 3,916 | $ | (26,975 | ) | $ | 49,832 | $ | 74,718 | |||||||
Weighted-average number of common shares outstanding - basic | 237,989,098 | 234,207,396 | 237,632,572 | 233,151,600 | ||||||||||||
Net income (loss) attributable to common shareholders - per common share basic | $ | 0.02 | $ | (0.12 | ) | $ | 0.21 | $ | 0.32 | |||||||
Diluted: | ||||||||||||||||
Net income (loss) attributable to common shareholders - basic | $ | 3,916 | $ | (26,975 | ) | $ | 49,832 | $ | 74,718 | |||||||
Impact of assumed conversions | (173 | ) | — | (192 | ) | (845 | ) | |||||||||
Net income (loss) attributable to common shareholders | $ | 3,743 | $ | (26,975 | ) | $ | 49,640 | $ | 73,873 | |||||||
Weighted-average common shares outstanding - basic | 237,989,098 | 234,207,396 | 237,632,572 | 233,151,600 | ||||||||||||
Effect of dilutive securities: | ||||||||||||||||
Share options | 66,748 | — | 95,788 | 246,166 | ||||||||||||
Operating Partnership Units | 3,646,869 | — | 3,713,867 | 3,818,117 | ||||||||||||
Weighted-average common shares outstanding - diluted | 241,702,715 | 234,207,396 | 241,442,227 | 237,215,883 | ||||||||||||
Net income (loss) attributable to common shareholders - per common share diluted | $ | 0.02 | $ | (0.12 | ) | 0.21 | $ | 0.31 |
12 |
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
ADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS AVAILABLE FOR DISTRIBUTION
(Unaudited and in thousands, except share and per share data)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
FUNDS FROM OPERATIONS: | ||||||||||||||||
Basic and Diluted: | ||||||||||||||||
Net income (loss) attributable to common shareholders | $ | 3,916 | $ | (26,975 | ) | $ | 49,832 | $ | 74,718 | |||||||
Adjustments: | ||||||||||||||||
Depreciation and amortization | 42,015 | 38,642 | 124,633 | 119,523 | ||||||||||||
Impairment charges - real estate, including non-consolidated entities | 21,986 | 72,890 | 41,795 | 75,904 | ||||||||||||
Noncontrolling interests - OP units | (173 | ) | (2,507 | ) | (192 | ) | (845 | ) | ||||||||
Amortization of leasing commissions | 1,480 | 1,646 | 4,073 | 5,164 | ||||||||||||
Joint venture and noncontrolling interest adjustment | 259 | 284 | 864 | 742 | ||||||||||||
Gains on sales of properties, including non-consolidated entities | (10,645 | ) | (16,072 | ) | (56,530 | ) | (63,791 | ) | ||||||||
Tax on sales of properties | — | — | — | 50 | ||||||||||||
FFO available to common shareholders and unitholders - basic | 58,838 | 67,908 | 164,475 | 211,465 | ||||||||||||
Preferred dividends | 1,573 | 1,573 | 4,718 | 4,718 | ||||||||||||
Interest and amortization on 6.00% Convertible Guaranteed Notes | — | 47 | — | 532 | ||||||||||||
Amount allocated to participating securities | 52 | 50 | 183 | 187 | ||||||||||||
FFO available to all equityholders and unitholders - diluted | 60,463 | 69,578 | 169,376 | 216,902 | ||||||||||||
Litigation reserve | 2,050 | — | 2,050 | — | ||||||||||||
Debt satisfaction (gains) charges, net | (2,424 | ) | (2,538 | ) | (2,378 | ) | 818 | |||||||||
Loan loss | — | — | 5,294 | — | ||||||||||||
Transaction costs | 612 | 115 | 1,100 | 329 | ||||||||||||
Adjusted Company FFO available to all equityholders and unitholders - diluted | 60,701 | 67,155 | 175,442 | 218,049 | ||||||||||||
FUNDS AVAILABLE FOR DISTRIBUTION: | ||||||||||||||||
Adjustments: | ||||||||||||||||
Straight-line adjustments | (4,002 | ) | (11,317 | ) | (12,552 | ) | (35,697 | ) | ||||||||
Lease incentives | 515 | 414 | 1,456 | 1,256 | ||||||||||||
Amortization of above/below market leases | 320 | 572 | 1,180 | 1,527 | ||||||||||||
Lease termination payments, net | (142 | ) | (1,839 | ) | (437 | ) | (6,402 | ) | ||||||||
Non-cash interest, net | 795 | (512 | ) | 1,447 | (1,526 | ) | ||||||||||
Non-cash charges, net | 2,066 | 2,296 | 6,199 | 6,906 | ||||||||||||
Tenant improvements | (4,072 | ) | (1,173 | ) | (10,067 | ) | (1,292 | ) | ||||||||
Lease costs | (2,228 | ) | (1,458 | ) | (5,284 | ) | (6,165 | ) | ||||||||
Company Funds Available for Distribution | $ | 53,953 | $ | 54,138 | $ | 157,384 | $ | 176,656 | ||||||||
Per Common Share and Unit Amounts | ||||||||||||||||
Basic: | ||||||||||||||||
FFO | $ | 0.24 | $ | 0.29 | $ | 0.68 | $ | 0.89 | ||||||||
Diluted: | ||||||||||||||||
FFO | $ | 0.24 | $ | 0.29 | $ | 0.69 | $ | 0.89 | ||||||||
Adjusted Company FFO | $ | 0.25 | $ | 0.28 | $ | 0.71 | $ | 0.89 | ||||||||
Basic: | ||||||||||||||||
Weighted-average common shares outstanding - basic EPS | 237,989,098 | 234,207,396 | 237,632,572 | 233,151,600 | ||||||||||||
Operating partnership units(1) | 3,646,869 | 3,815,386 | 3,713,867 | 3,818,117 | ||||||||||||
Weighted-average common shares outstanding - basic FFO | 241,635,967 | 238,022,782 | 241,346,439 | 236,969,717 | ||||||||||||
Diluted: | ||||||||||||||||
Weighted-average common shares outstanding - diluted EPS | 241,702,715 | 234,207,396 | 241,442,227 | 237,215,883 | ||||||||||||
Operating partnership units(1) | — | 3,815,386 | — | — | ||||||||||||
6% Convertible Guaranteed Notes | — | 508,912 | — | 1,439,456 | ||||||||||||
Unvested share-based payment awards | 655,228 | 570,260 | 650,348 | 478,329 | ||||||||||||
Share Options | — | 238,395 | — | — | ||||||||||||
Preferred shares - Series C | 4,710,570 | 4,710,570 | 4,710,570 | 4,710,570 | ||||||||||||
Weighted-average common shares outstanding - diluted FFO | 247,068,513 | 244,050,919 | 246,803,145 | 243,844,238 |
(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) | $ | 0.35 | $ | 0.37 | ||||
Depreciation and amortization | 0.70 | 0.70 | ||||||
Impact of capital transactions | (0.10 | ) | (0.10 | ) | ||||
Estimated Adjusted Company FFO per diluted common share | $ | 0.95 | $ | 0.97 |
(1) | Assumes all convertible securities are dilutive. |
14 |
LEXINGTON REALTY TRUST
2017 Third Quarter Investment / Capital Recycling Summary
PROPERTY INVESTMENTS
Primary Tenant (Guarantor) | Location | Square Feet | Property Type | Initial
Basis ($000) | Month Closed | Primary
Lease Expiration | ||||||||||||||||
1 | Golden State Foods Corp. (Golden State Enterprises, Inc.) | Opelika | AL | 165,000 | Industrial | $ | 37,269 | July | 05/2042 | |||||||||||||
2 | Georgia-Pacific Consumer Products LP (Georgia-Pacific LLC) (6) | McDonough | GA | 1,121,000 | Industrial | 66,700 | August | 01/2028 | ||||||||||||||
3 | McCormick & Company, Inc. (1) | Byhalia | MS | 616,000 | Industrial | 36,590 | September | 09/2027 | ||||||||||||||
4 | Kellogg Sales Company (Kellogg Company) | Jackson | TN | 1,062,000 | Industrial | 57,920 | September | 10/2027 | ||||||||||||||
5 | Nissan North America, Inc. | Smyrna | TN | 1,505,000 | Industrial | 104,890 | September | 04/2027 | ||||||||||||||
5 | TOTAL PROPERTY INVESTMENTS (2) | 4,469,000 | $ | 303,369 |
CAPITAL RECYCLING
PROPERTY DISPOSITIONS (3) | ||||||||||||||||||||||||||||||
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 | Food Lion, LLC / Delhaize America, Inc. | Lexington | NC | Other | $ | 1,412 | $ | 102 | $ | 138 | July | 100 | % | $ | 61.39 | |||||||||||||||
2 | Vacant | Rock Hill | SC | Multi-tenant - Office | 6,250 | (407 | ) | (388 | ) | July | 0 | % | 59.81 | |||||||||||||||||
3-9 | Bank of America, N.A. (7) | Various | GA | Other | 7,050 | 593 | 841 | August | 100 | % | 129.62 | |||||||||||||||||||
10 | Vacant (8) | Memphis | TN | Multi-tenant - Office | 3,496 | (533 | ) | (60 | ) | August | 0 | % | 93.90 | |||||||||||||||||
11 | 3D Systems Corporation | Rock Hill | SC | Office | 8,600 | 286 | 703 | September | 100 | % | 107.46 | |||||||||||||||||||
12 | Wipro Data Center and Cloud Services, Inc. | Tempe | AZ | Office | 15,200 | 553 | 981 | September | 100 | % | 253.33 | |||||||||||||||||||
12 | TOTAL PROPERTY DISPOSITIONS | $ | 42,008 | $ | 594 | $ | 2,215 |
Footnotes
(1) | Initial Basis excludes a $133 thousand future tenant improvement allowance and $767 thousand of rent abatements, which were credited at closing. |
(2) | The above were acquired / completed at aggregate weighted-average GAAP and cash capitalization rates of 6.6% and 5.7%, respectively. |
(3) | Lexington's property owner subsidiary also abandoned its leasehold interest in the property in Port Chester, NY. |
(4) | See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
(5) | Quarterly period prior to sale; excluding impairment charges, annualized. |
(6) | Square feet includes a 220,000 square foot expansion that is expected to be completed in 2018. |
(7) | Seven properties. |
(8) | Conveyed to lender in a foreclosure sale. |
15 |
LEXINGTON REALTY TRUST
2017 Third Quarter Forward Purchase Commitments
FORWARD PURCHASE COMMITMENTS (1)
Location | Property Type | Sq. Ft. | Approximate Lease Term (Years) | Maximum Acquisition Cost ($000) | Estimated Completion Date | Estimated GAAP Yield (2) | Estimated Initial Cash Yield (2) | |||||||||||||||||
1 | Warren, MI (3) | Industrial | 260,000 | 15 | $ | 47,000 | 4Q 17 | 8.3 | % | 7.3 | % | |||||||||||||
2 | Romulus, MI | Industrial | 500,000 | 15 | 39,330 | 4Q 17 | 6.5 | % | 6.1 | % | ||||||||||||||
3 | Lafayette, IN | Industrial | 309,000 | 7 | 17,450 | 4Q 17 | 7.0 | % | 6.9 | % | ||||||||||||||
3 | TOTAL FORWARD PURCHASE COMMITMENTS | 1,069,000 | $ | 103,780 | 7.4 | % | 6.8 | % |
Footnotes
(1) | Lexington can give no assurance that any of the potential investments that are under commitment or contract will be completed or, if completed, will perform to Lexington's expectations. |
(2) | See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
(3) | A $4.6 million letter of credit secures the obligation to purchase this property. |
16 |
LEXINGTON REALTY TRUST
2017 Third Quarter Financing Summary
DEBT RETIRED
Location | Primary Tenant | Property Type | Face / Satisfaction ($000) | Fixed Rate | Maturity Date | |||||||||||
Consolidated Mortgage Debt: | ||||||||||||||||
1 | McDonough, GA | United States Cold Storage, Inc. | Industrial | $ | 21,731 | 6.110 | % | 11/2017 | ||||||||
2 | Memphis, TN (1) | Vacant | Office | 3,496 | 5.710 | % | N/A | |||||||||
$ | 25,227 |
CORPORATE LEVEL FINANCING (2)
Type | Amount ($000) | Current Interest Rate | Maturity Date | |||||
Revolving Credit Facility | $ | 200,000 | LIBOR plus 100 bps | 08/2019 | ||||
Term Loan | 50,000 | LIBOR plus 110 bps | 08/2020 | |||||
Term Loan | 45,000 | LIBOR plus 110 bps | 01/2021 | |||||
$ | 295,000 |
Footnotes:
(1) | Property conveyed to lender in a foreclosure sale. |
(2) | Lexington amended its unsecured credit agreement, increasing the capacity by $200.0 million, consisting of a $105.0 million increase to the revolving credit facility, a $50.0 million increase to the term loan maturing in 2020 and a $45.0 million increase to the term loan maturing in 2021. |
17 |
LEXINGTON REALTY TRUST
2017 Third Quarter Leasing Summary
LEASE EXTENSIONS
Tenant (Guarantor) | 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 | ||||||||||||||||||||||||||||||
1-5 | Various | Honolulu | HI | 2017 | 2018-2021 | 6,196 | $ | 151 | $ | 148 | $ | 151 | $ | 148 | ||||||||||||||||
6 | Atlantic Health System, Inc. | Rockaway | NJ | 12/2027 | 12/2029 | 92,326 | 1,235 | 1,194 | 1,562 | 1,474 | ||||||||||||||||||||
7 | New Cingular Wireless PCS, LLC | Baton Rouge | LA | 10/2017 | 10/2022 | 70,100 | 1,165 | 1,058 | 1,122 | 1,101 | ||||||||||||||||||||
7 | Total office lease extensions | 168,622 | $ | 2,551 | $ | 2,400 | $ | 2,835 | $ | 2,723 | ||||||||||||||||||||
Industrial | ||||||||||||||||||||||||||||||
1 | ODW Logistics, Inc. (Nessent Ltd. And Dist-Trans Co, LLC) | Columbus | OH | 06/2018 | 06/2020 | 772,450 | $ | 1,347 | $ | 1,342 | $ | 1,347 | $ | 1,347 | ||||||||||||||||
2 | Tenneco Automotive Operating Company, Inc. (Tenneco, Inc.) | Marshall | MI | 09/2018 | 09/2028 | 246,508 | 813 | 698 | 740 | 841 | ||||||||||||||||||||
2 | Total industrial lease extensions | 1,018,958 | $ | 2,160 | $ | 2,040 | $ | 2,087 | $ | 2,188 | ||||||||||||||||||||
` | ||||||||||||||||||||||||||||||
9 | TOTAL EXTENDED LEASES | 1,187,580 | $ | 4,711 | $ | 4,440 | $ | 4,922 | $ | 4,911 |
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 | ||||||||||||||||||||||
1-3 | Various | Honolulu | HI | 2018-2020 | 952 | $ | 6 | $ | 6 | |||||||||||||
3 | Total office new leases | 952 | $ | 6 | $ | 6 | ||||||||||||||||
3 | TOTAL NEW LEASES | 952 | $ | 6 | $ | 6 | ||||||||||||||||
12 | TOTAL NEW AND EXTENDED LEASES | 1,188,532 | $ | 4,717 | $ | 4,928 |
18 |
LEXINGTON REALTY TRUST 2017
Third Quarter Leasing Summary (Continued)
LEASE NON-RENEWALS / LEASE REJECTIONS(2)
Tenant | Location | Lease Expiration Date | Sq. Ft. | 2016 GAAP Rent ($000) | 2016 Cash Rent ($000)(3) | |||||||||||||||
Other | ||||||||||||||||||||
1 | Gander Mountain Company (4) | Albany | GA | 11/2028 | 45,554 | $ | 693 | $ | 628 | |||||||||||
2 | Steelcase Inc. (5) | High Point | NC | 09/2017 | 244,851 | 1,087 | 1,145 | |||||||||||||
2 | TOTAL LEASE NON-RENEWALS / LEASE REJECTIONS | 290,405 | $ | 1,780 | $ | 1,773 |
Footnotes
(1) | Assumes twelve months rent from the later of 10/1/17 or lease commencement/extension, excluding free rent periods as applicable. |
(2) | Excludes multi-tenant properties and non-consolidated investments. |
(3) | See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
(4) | Tenant declared bankruptcy and rejected the lease. |
(5) | Property sold subsequent to 9/30/2017. |
19 |
LEXINGTON REALTY TRUST
Other Revenue Data
9/30/2017
($000)
Other Revenue Data
GAAP Rent | ||||||||||||
Asset Class | Nine months ended | |||||||||||
9/30/17 (1) | 9/30/17 Percentage | 9/30/16 Percentage | ||||||||||
Office | $ | 136,633 | 53.0 | % | 54.1 | % | ||||||
Industrial | 107,981 | 41.9 | % | 38.6 | % | |||||||
Multi-tenant | 7,363 | 2.8 | % | 3.7 | % | |||||||
Other | 5,930 | 2.3 | % | 3.6 | % | |||||||
$ | 257,907 | 100.0 | % | 100.0 | % |
GAAP Rent | ||||||||||||
Credit Ratings (2) | Nine months ended | |||||||||||
9/30/17 (1) | 9/30/17 Percentage | 9/30/16 Percentage | ||||||||||
Investment Grade | $ | 101,648 | 39.4 | % | 37.9 | % | ||||||
Non-Investment Grade | 41,029 | 15.9 | % | 16.5 | % | |||||||
Unrated | 115,230 | 44.7 | % | 45.6 | % | |||||||
$ | 257,907 | 100.0 | % | 100.0 | % |
Weighted-Average Lease Term - Cash Basis | As of 9/30/17 | As of 9/30/16 | ||
9.1 years | 8.6 years |
Rent Estimates for Current Assets
Year | GAAP (3) | Cash (3) | Difference | |||||||||
2017 - remaining | $ | 92,116 | $ | 85,705 | $ | (6,411 | ) | |||||
2018 | 362,213 | 346,217 | (15,996 | ) |
Footnotes
(1) | Nine months ended 9/30/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 9/30/2017. |
(2) | Credit ratings are based upon either tenant, guarantor or parent. Generally, multi-tenant assets are included in unrated. |
(3) | Amounts assume (1) lease terms for non-cancellable periods only, (2) no new or renegotiated leases are entered into after 9/30/2017, and (3) no properties are sold or acquired after 9/30/2017. |
20 |
LEXINGTON REALTY TRUST
Other Revenue Data (Continued)
9/30/2017
($000)
Same-Store NOI (1)
Nine months ended September 30, | ||||||||
2017 | 2016 | |||||||
Total Cash Rent | $ | 218,871 | $ | 218,710 | ||||
Tenant Reimbursements | 18,788 | 19,807 | ||||||
Property Operating Expenses | (28,461 | ) | (28,388 | ) | ||||
Same-Store NOI | $ | 209,198 | $ | 210,129 | ||||
Change in Same-Store NOI | (0.4 | %) | ||||||
Same-Store Percent Leased (2) | As of 9/30/17 | As of 9/30/16 | ||||||
97.2 | % | 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 September 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 9/30/2017. |
(3) | Based on nine months consolidated cash rents for single-tenant leases (properties greater than 70% leased) owned as of September 30, 2017. Excludes parking operations and rents from prior tenants. |
21 |
LEXINGTON REALTY TRUST
Portfolio Detail By Asset Class
9/30/2017
($000, except square footage)
Asset Class | YE 2014 | YE 2015 | YE 2016 | Q3 2017 | ||||||||||||
Office | ||||||||||||||||
% of ABR (1) | 51.2 | % | 49.6 | % | 52.9 | % | 53.0 | % | ||||||||
LTL (5) | 31.4 | % | 23.2 | % | 26.9 | % | 33.1 | % | ||||||||
STL (6) | 68.6 | % | 76.8 | % | 73.1 | % | 66.9 | % | ||||||||
Leased | 98.6 | % | 99.6 | % | 99.6 | % | 99.6 | % | ||||||||
Wtd. Avg. Lease Term (2) | 7.4 | 7.2 | 7.2 | 7.7 | ||||||||||||
Mortgage Debt | $ | 426,635 | $ | 329,696 | $ | 490,948 | $ | 474,060 | ||||||||
% Investment Grade (1) | 53.3 | % | 48.0 | % | 48.1 | % | 51.5 | % | ||||||||
Square Feet | 13,264,134 | 12,847,877 | 11,569,940 | 11,177,159 | ||||||||||||
Industrial | ||||||||||||||||
% of ABR (1) | 25.4 | % | 30.5 | % | 39.7 | % | 41.9 | % | ||||||||
LTL (5) | 47.9 | % | 47.4 | % | 50.8 | % | 48.2 | % | ||||||||
STL (6) | 52.1 | % | 52.6 | % | 49.2 | % | 51.8 | % | ||||||||
Leased | 99.7 | % | 99.6 | % | 99.9 | % | 99.9 | % | ||||||||
Wtd. Avg. Lease Term (2) | 8.8 | 10.1 | 10.4 | 10.5 | ||||||||||||
Mortgage Debt | $ | 177,951 | $ | 292,293 | $ | 240,790 | $ | 195,151 | ||||||||
% Investment Grade (1) | 26.6 | % | 27.9 | % | 26.2 | % | 26.4 | % | ||||||||
Square Feet | 22,745,140 | 25,693,585 | 27,476,653 | 33,926,828 | ||||||||||||
Multi-Tenant | ||||||||||||||||
% of ABR (1) | 8.6 | % | 3.0 | % | 3.8 | % | 2.8 | % | ||||||||
Leased | 53.9 | % | 44.1 | % | 43.2 | % | 52.7 | % | ||||||||
Wtd. Avg. Lease Term (2) | 6.9 | 3.4 | 3.0 | 2.8 | ||||||||||||
Mortgage Debt | $ | 116,763 | $ | 14,118 | $ | 10,586 | $ | 7,014 | ||||||||
% Investment Grade (1) | 19.3 | % | 36.9 | % | 14.2 | % | 25.2 | % | ||||||||
Square Feet | 2,414,889 | 2,301,864 | 2,971,126 | 1,973,230 | ||||||||||||
Other | ||||||||||||||||
% of ABR (1) | 14.8 | % | 16.9 | % | 3.6 | % | 2.3 | % | ||||||||
LTL (5) | 86.8 | % | 88.0 | % | 42.7 | % | 48.6 | % | ||||||||
STL (6) | 13.2 | % | 12.0 | % | 57.3 | % | 51.4 | % | ||||||||
Leased | 94.3 | % | 98.0 | % | 100.0 | % | 100.0 | % | ||||||||
Wtd. Avg. Lease Term (2)(3) | 18.2 | 18.5 | 14.6 | 19.0 | ||||||||||||
Mortgage Debt | $ | 226,645 | $ | 255,218 | $ | 2,849 | $ | 710 | ||||||||
% Investment Grade (1) | 4.5 | % | 3.3 | % | 17.8 | % | 14.9 | % | ||||||||
Square Feet | 1,447,724 | 1,426,697 | 1,306,578 | 866,648 | ||||||||||||
Loans Receivable | $ | 105,635 | $ | 95,871 | $ | 94,210 | $ | - | ||||||||
Construction in progress (4) | $ | 121,184 | $ | 103,954 | $ | 111,771 | $ | 1,077 |
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.
22 |
LEXINGTON REALTY TRUST
Portfolio Composition
9/30/2017
Footnotes
(1) Based on gross book value of real estate assets and real estate under construction as of 9/30/2017; excludes held for sale assets.
(2) Based on respective period GAAP rent, excluding termination income.
23 |
LEXINGTON REALTY TRUST
Components of Net Asset Value
9/30/2017
($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 nine month net operating income (NOI) (1) | ||||
Office | $ | 126,010 | ||
Industrial | 96,925 | |||
Multi-Tenant | 2,804 | |||
Other | 4,332 | |||
Total Net Operating Income | $ | 230,071 | ||
Lexington's share of non-consolidated nine month NOI (1) | ||||
Office | $ | 314 | ||
Other | 623 | |||
$ | 937 | |||
Other income | ||||
Advisory fees | $ | 776 | ||
In service assets not fairly valued by capitalized NOI method (1) | ||||
Wholly-owned assets less than 70% leased | $ | 62,545 | ||
Wholly-owned assets acquired in 2017 (2) | $ | 512,268 | ||
Non-consolidated asset completed in 2016 | $ | 56,823 | ||
Add other assets: | ||||
Assets held for sale | $ | 8,638 | ||
Development investment at cost incurred | 1,077 | |||
Cash and cash equivalents | 140,545 | |||
Restricted cash | 34,946 | |||
Accounts receivable, net | 6,388 | |||
Other assets | 32,124 | |||
Total other assets | $ | 223,718 | ||
Liabilities: | ||||
Corporate level debt (face amount) | $ | 1,429,120 | ||
Mortgages and notes payable (face amount) | 676,935 | |||
Liabilities held for sale | 442 | |||
Dividends payable | 48,494 | |||
Accounts payable, accrued expenses and other liabilities | 63,782 | |||
Preferred stock, at liquidation value | 96,770 | |||
Lexington's share of non-consolidated mortgages | 8,395 | |||
Total deductions | $ | 2,323,938 | ||
Common shares & OP units at 9/30/2017 | 244,275,538 |
Footnotes
(1) | NOI for the existing property portfolio at September 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
9/30/2017
Core Based Statistical Area (2) | Percent of GAAP Rent as of 9/30/17 (1) | |||||
1 | Houston-Sugar Land-Baytown, TX | 10.8 | % | |||
2 | Dallas-Fort Worth-Arlington, TX | 5.1 | % | |||
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 | 3.6 | % | |||
7 | Richmond, VA | 3.4 | % | |||
8 | Phoenix-Mesa-Scottsdale, AZ | 3.2 | % | |||
9 | Chicago-Naperville-Joliet, IL-IN-WI | 2.9 | % | |||
10 | Detroit-Warren-Livonia, MI | 2.6 | % | |||
11 | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD | 2.5 | % | |||
12 | Denver-Aurora, CO | 2.3 | % | |||
13 | Columbus, OH | 2.2 | % | |||
14 | Charlotte-Concord-Gastonia, NC-SC | 2.1 | % | |||
15 | Las Vegas-Paradise, NV | 2.0 | % | |||
16 | San Jose-Sunnyvale-Santa Clara, CA | 1.9 | % | |||
17 | Jackson, MS | 1.8 | % | |||
18 | Atlanta-Sandy Springs-Marietta, GA | 1.5 | % | |||
19 | Washington-Arlington-Alexandria, DC-VA-MD-WV | 1.4 | % | |||
20 | Indianapolis-Carmel, IN | 1.4 | % | |||
Total Top Markets (3) | 63.7 | % |
Footnotes
(1) | Nine months ended 9/30/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 9/30/2017. |
(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)
9/30/2017
Footnotes
(1) | Nine months ended 9/30/2017 GAAP rent, excluding termination income, recognized for consolidated single-tenant office properties owned as of 9/30/2017. |
(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)
9/30/2017
Footnotes
(1) Nine months ended 9/30/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 9/30/2017.
27 |
LEXINGTON REALTY TRUST
Top 10 Tenants or Guarantors
9/30/2017
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 9/30/2017 ($000) (1) | Percent of GAAP Rent as of 9/30/2017 ($000) (1) (2) | |||||||||||||
The Dow Chemical Company | 1 | 664,100 | 1.4 | % | $ | 10,906 | 4.2 | % | ||||||||||
Preferred Freezer Services of Richland, LLC / Preferred Freezer Services, LLC & Preferred Freezer Services Operating, LLC | 1 | 456,412 | 1.0 | % | 9,850 | 3.8 | % | |||||||||||
FedEx Corporation / Federal Express Corporation | 2 | 661,616 | 1.4 | % | 9,111 | 3.5 | % | |||||||||||
Metalsa Structural Products, Inc. / Dana Structural Products, LLC / Dana Holding Corporation and Dana Limited | 7 | 2,053,359 | 4.3 | % | 7,456 | 2.9 | % | |||||||||||
Nissan North America, Inc. | 3 | 3,196,049 | 6.7 | % | 7,292 | 2.8 | % | |||||||||||
United States of America | 3 | 398,214 | 0.8 | % | 7,244 | 2.8 | % | |||||||||||
Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation | 2 | 476,123 | 1.0 | % | 5,913 | 2.3 | % | |||||||||||
McGuireWoods LLP | 1 | 224,537 | 0.5 | % | 5,388 | 2.1 | % | |||||||||||
Morgan, Lewis & Bockius LLP | 1 | 289,432 | 0.6 | % | 5,168 | 2.0 | % | |||||||||||
Industrial Terminals Management, L.L.C. / Maritime Holdings (Delaware) LLC | 1 | 132,449 | 0.3 | % | 5,080 | 2.0 | % | |||||||||||
22 | 8,552,291 | 17.8 | % | $ | 73,408 | 28.5 | % |
Footnotes
(1) Nine months ended 9/30/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 9/30/2017.
(2) Total shown may differ from detailed amounts due to rounding.
28 |
LEXINGTON REALTY TRUST
Lease Rollover Schedule - Consolidated Single-Tenant Properties GAAP Basis
9/30/2017
($000)
Year | Number of Leases Expiring | GAAP Rent as of 9/30/2017 | Percent of GAAP Rent as of 9/30/2017 | Percent of GAAP Rent as of 9/30/2016 | ||||||||||||
2017 - remaining | 3 | $ | 1,924 | 0.8 | % | 1.8 | % | |||||||||
2018 | 19 | 11,686 | 4.7 | % | 7.4 | % | ||||||||||
2019 | 18 | 23,063 | 9.3 | % | 9.7 | % | ||||||||||
2020 | 13 | 12,802 | 5.2 | % | 7.0 | % | ||||||||||
2021 | 11 | 15,954 | 6.4 | % | 6.6 | % | ||||||||||
2022 | 6 | 9,460 | 3.8 | % | 3.1 | % | ||||||||||
2023 | 10 | 9,945 | 4.0 | % | 3.6 | % | ||||||||||
2024 | 12 | 14,192 | 5.7 | % | 4.2 | % | ||||||||||
2025 | 17 | 22,979 | 9.2 | % | 10.1 | % | ||||||||||
2026 | 14 | 13,656 | 5.5 | % | 5.6 | % | ||||||||||
Thereafter | 59 | 112,939 | 45.4 | % | 37.2 | % | ||||||||||
Total (1) | 182 | $ | 248,600 | 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.
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LEXINGTON REALTY TRUST
Lease Rollover Schedule - Consolidated Properties GAAP Basis
9/30/2017
($000)
Year | Number of Leases Expiring | GAAP Rent as of 9/30/2017 | Percent of GAAP Rent as of 9/30/2017 | |||||||||
2017 - remaining | 21 | $ | 2,022 | 0.8 | % | |||||||
2018 | 37 | 13,132 | 5.2 | % | ||||||||
2019 | 26 | 24,240 | 9.5 | % | ||||||||
2020 | 18 | 12,906 | 5.1 | % | ||||||||
2021 | 17 | 18,248 | 7.2 | % | ||||||||
2022 | 6 | 9,460 | 3.7 | % | ||||||||
2023 | 10 | 9,945 | 3.9 | % | ||||||||
2024 | 14 | 14,314 | 5.6 | % | ||||||||
2025 | 18 | 23,287 | 9.2 | % | ||||||||
2026 | 14 | 13,656 | 5.4 | % | ||||||||
Thereafter | 60 | 113,264 | 44.5 | % | ||||||||
Total (1) | 241 | $ | 254,474 | 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 - 9/30/2017
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 9/30/2017 ($000) (3) | Cash Rent as of 9/30/2017 ($000) (2) | 9/30/2017 Debt Balance ($000) | Debt Maturity |
|||||||||||||||||||
OFFICE PROPERTIES | ||||||||||||||||||||||||||||||
2017 | 10/31/2017 | 5201 West Barraque St. | Pine Bluff | AR | 18 | Entergy Services, Inc. | 27,189 | 240 | 290 | - | - | |||||||||||||||||||
12/1/2017 | 800 East Canal St. | Richmond | VA | 5 | CRG-Richmond Tenant, LLC | 42,947 | 247 | 247 | - | - | ||||||||||||||||||||
2018 | 2/28/2018 | 850-950 Warrenville Rd. | Lisle | IL | 18 | Flexible Steel Lacing Company, d/b/a Flexco, Inc. | 7,535 | 109 | 109 | - | - | |||||||||||||||||||
5/31/2018 | 8900 Freeport Pkwy. | Irving | TX | — | Pacific Union Financial, LLC. | 43,396 | 588 | 684 | - | - | ||||||||||||||||||||
6/30/2018 | 100 Barnes Rd. | Wallingford | CT | — | 3M Company | 44,400 | 381 | 396 | - | - | ||||||||||||||||||||
8/31/2018 | 3500 North Loop Rd. | McDonough | GA | — | Litton Loan Servicing LP | 62,218 | 740 | 1,025 | - | - | ||||||||||||||||||||
9/30/2018 | 1701 Market St. | Philadelphia | PA | — | CBC Restaurant Corp. | 8,070 | 158 | 168 | - | - | ||||||||||||||||||||
10/31/2018 | 3943 Denny Ave. | Pascagoula | MS | — | Huntington Ingalls Incorporated | 94,841 | 445 | 445 | - | - | ||||||||||||||||||||
12/22/2018 | 5200 Metcalf Ave. | Overland Park | KS | — | Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation | 320,198 | 4,055 | 4,031 | 33,002 | 05/2019 | ||||||||||||||||||||
2019 | 1/31/2019 | 2999 Southwest 6th St. | Redmond | OR | — | VoiceStream PCS I, LLC / T-Mobile West Corporation (T-Mobile USA, Inc.) | 77,484 | 1,101 | 1,337 | - | - | |||||||||||||||||||
820 Gears Rd. | Houston | TX | — | Ricoh USA, Inc. | 78,895 | 865 | 855 | - | - | |||||||||||||||||||||
2/28/2019 | 10475 Crosspoint Blvd. | Indianapolis | IN | — | DMC Insurance Inc. | 3,764 | 52 | 52 | - | - | ||||||||||||||||||||
4/1/2019 | 9201 Stateline Rd. | Kansas City | MO | — | Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation | 155,925 | 1,858 | 1,858 | 15,728 | 05/2019 | ||||||||||||||||||||
6/19/2019 | 3965 Airways Blvd. | Memphis | TN | — | Federal Express Corporation | 521,286 | 5,260 | 5,293 | - | - | ||||||||||||||||||||
6/30/2019 | 3265 East Goldstone Dr. | Meridian | ID | — | VoiceStream PCS Holding, LLC / T-Mobile PCS Holdings, LLC (T-Mobile USA, Inc.) | 77,484 | 829 | 1,096 | 8,544 | 08/2019 | ||||||||||||||||||||
7/15/2019 | 19019 North 59th Ave. | Glendale | AZ | — | Honeywell International Inc. | 252,300 | 1,426 | 1,460 | - | - | ||||||||||||||||||||
7/31/2019 | 500 Jackson St. | Columbus | IN | — | Cummins Inc. | 390,100 | 3,405 | 3,571 | 13,333 | 07/2019 | ||||||||||||||||||||
10/31/2019 | 10475 Crosspoint Blvd. | Indianapolis | IN | — | John Wiley & Sons, Inc. | 123,416 | 1,702 | 1,736 | - | - | ||||||||||||||||||||
9601 Renner Blvd. | Lenexa | KS | — | VoiceStream PCS II Corporation (T-Mobile USA, Inc.) | 77,484 | 857 | 1,115 | 8,739 | 12/2019 | |||||||||||||||||||||
12/31/2019 | 850-950 Warrenville Rd. | Lisle | IL | 4, 18 | National-Louis University | 91,879 | 1,122 | 1,225 | 9,120 | N/A | ||||||||||||||||||||
2020 | 2/14/2020 | 5600 Broken Sound Blvd. | Boca Raton | FL | — | Canon Solutions America, Inc. (Oce - USA Holding, Inc.) | 143,290 | 1,683 | 1,875 | 19,157 | 02/2020 | |||||||||||||||||||
5/31/2020 | 2401 Cherahala Blvd. | Knoxville | TN | — | AdvancePCS, Inc. / CaremarkPCS, L.L.C. | 59,748 | 580 | 576 | - | - | ||||||||||||||||||||
6/30/2020 | 3711 San Gabriel | Mission | TX | — | VoiceStream PCS II Corporation / T-Mobile West Corporation | 75,016 | 742 | 727 | - | - | ||||||||||||||||||||
7/31/2020 | 13775 McLearen Rd. | Herndon | VA | 12 | Orange Business Services U.S., Inc. (Equant N.V.) | 132,617 | 1,256 | 1,362 | - | - | ||||||||||||||||||||
8/31/2020 | 133 First Park Dr. | Oakland | ME | — | Omnipoint Holdings, Inc. (T-Mobile USA, Inc.) | 78,610 | 860 | 1,107 | 8,450 | 10/2020 | ||||||||||||||||||||
9/30/2020 | 9200 South Park Center Loop | Orlando | FL | 4 | Zenith Education Group, Inc. (ECMC Group, Inc.) | 59,927 | 852 | 876 | 9,309 | N/A | ||||||||||||||||||||
10/31/2020 | 12209 West Markham St. | Little Rock | AR | — | Entergy Arkansas, Inc. | 36,311 | 178 | 178 | - | - | ||||||||||||||||||||
2021 | 1/31/2021 | 1701 Market St. | Philadelphia | PA | — | Morgan, Lewis & Bockius LLP | 289,432 | 3,224 | 3,323 | - | - | |||||||||||||||||||
3/31/2021 | 1701 Market St. | Philadelphia | PA | — | Car-Tel Communications, Inc. | 1,220 | 45 | 45 | - | - | ||||||||||||||||||||
6/30/2021 | 1415 Wyckoff Rd. | Wall | NJ | — | New Jersey Natural Gas Company | 157,511 | 2,831 | 2,831 | 11,924 | 01/2021 | ||||||||||||||||||||
2050 Roanoke Rd. | Westlake | TX | — | Charles Schwab & Co., Inc. | 130,199 | 1,129 | 1,152 | - | - | |||||||||||||||||||||
11/30/2021 | 29 South Jefferson Rd. | Whippany | NJ | — | CAE SimuFlite, Inc. (CAE INC.) | 123,734 | 1,745 | 1,926 | 12,837 | 11/2021 | ||||||||||||||||||||
12/31/2021 | 2800 Waterford Lake Dr. | Midlothian | VA | — | Alstom Power, Inc. | 99,057 | 1,638 | 1,729 | - | - | ||||||||||||||||||||
2022 | 5/30/2022 | 13651 McLearen Rd. | Herndon | VA | — | United States of America | 159,644 | 2,460 | 2,632 | - | - | |||||||||||||||||||
6/30/2022 | 8555 South River Pkwy. | Tempe | AZ | — | Versum Materials US, LLC | 95,133 | 1,313 | 1,251 | - | - | ||||||||||||||||||||
7/31/2022 | 1440 E 15th St. | Tucson | AZ | — | CoxCom, LLC | 28,591 | 420 | 420 | - | - | ||||||||||||||||||||
10/31/2022 | 4455 American Way | Baton Rouge | LA | — | New Cingular Wireless PCS, LLC | 70,100 | 795 | 825 | - | - | ||||||||||||||||||||
12/31/2022 | 231 N. Martingale Rd. | Schaumburg | IL | — | CEC Educational Services, LLC (Career Education Corporation) | 317,198 | 3,466 | 3,364 | - | - |
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LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2017
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 9/30/2017 ($000) (3) | Cash Rent as of 9/30/2017 ($000) (2) | 9/30/2017 Debt Balance ($000) | Debt Maturity |
|||||||||||||||||||
OFFICE PROPERTIES | ||||||||||||||||||||||||||||||
2023 | 2/28/2023 | 1315 West Century Dr. | Louisville | CO | — | Rogue Wave Software, Inc. | 20,000 | 259 | 220 | - | - | |||||||||||||||||||
3/31/2023 | 8900 Freeport Pkwy. | Irving | TX | — | Nissan Motor Acceptance Corporation (Nissan North America, Inc.) | 225,049 | 2,569 | 2,781 | - | - | ||||||||||||||||||||
6/30/2023 | 420 Riverport Rd. | Kingsport | TN | — | Kingsport Power Company | 42,770 | 96 | 233 | - | - | ||||||||||||||||||||
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 | 754 | 777 | - | - | ||||||||||||||||||||
12/14/2023 | 3333 Coyote Hill Rd. | Palo Alto | CA | — | Xerox Corporation | 202,000 | 4,981 | 5,303 | 39,226 | 12/2023 | ||||||||||||||||||||
2024 | 2/14/2024 | 1362 Celebration Blvd. | Florence | SC | — | MED3000, Inc. | 32,000 | 430 | 423 | - | - | |||||||||||||||||||
5/31/2024 | 3476 Stateview Blvd. | Fort Mill | SC | — | Wells Fargo Bank, N.A. | 169,083 | 1,462 | 1,408 | - | - | ||||||||||||||||||||
3480 Stateview Blvd. | Fort Mill | SC | — | Wells Fargo Bank, N.A. | 169,218 | 1,519 | 1,409 | - | - | |||||||||||||||||||||
8/31/2024 | 10475 Crosspoint Blvd. | Indianapolis | IN | — | RGN-Indianapolis I, LLC (HQ Global Workplaces LLC) | 14,236 | 225 | 225 | - | - | ||||||||||||||||||||
10/31/2024 | 1409 Centerpoint Blvd. | Knoxville | TN | — | Alstom Power, Inc. | 84,404 | 941 | 893 | - | - | ||||||||||||||||||||
11/30/2024 | 6200 Northwest Pkwy. | San Antonio | TX | — | United HealthCare Services, Inc. | 142,500 | 1,468 | 1,536 | - | - | ||||||||||||||||||||
12/31/2024 | 12000 & 12025 Tech Center Dr. | Livonia | MI | — | Kelsey-Hayes Company (ZF Friedrichshafen AG) | 180,230 | 1,268 | 1,228 | - | - | ||||||||||||||||||||
2025 | 1/31/2025 | 1401 Nolan Ryan Expy. | Arlington | TX | — | Triumph Aerostructures, LLC (Triumph Group, Inc.) | 111,409 | 1,213 | 1,291 | - | - | |||||||||||||||||||
2/28/2025 | 6555 Sierra Dr. | Irving | TX | — | TXU Energy Retail Company, LLC (Texas Competitive Electric Holdings Company, LLC) | 247,254 | 2,103 | 2,304 | - | - | ||||||||||||||||||||
1401 Nolan Ryan Expy. | Arlington | TX | — | Cyient, Inc. (Infotech Enterprise Limited) | 13,590 | 156 | 160 | - | - | |||||||||||||||||||||
3/14/2025 | 601 & 701 Experian Pkwy. | Allen | TX | — | Experian Information Solutions, Inc. / TRW, Inc.(Experian Holdings, Inc.) | 292,700 | 2,225 | 2,305 | - | - | ||||||||||||||||||||
5/31/2025 | 1701 Market St. | Philadelphia | PA | — | TruMark Financial Credit Union | 2,641 | 185 | 185 | - | - | ||||||||||||||||||||
6/30/2025 | 2500 Patrick Henry Pkwy. | McDonough | GA | — | Georgia Power Company | 111,911 | 1,066 | 1,015 | - | - | ||||||||||||||||||||
9/30/2025 | 10001 Richmond Ave. | Houston | TX | — | Schlumberger Holdings Corp. | 554,385 | 4,529 | 4,068 | - | - | ||||||||||||||||||||
11/30/2025 | 11707 Miracle Hills Dr. | Omaha | NE | — | Wipro Data Center and Cloud Services, Inc. (Infocrossing, Inc.) | 85,200 | 875 | 875 | - | - | ||||||||||||||||||||
12/31/2025 | 4001 International Pkwy. | Carrollton | TX | — | Motel 6 Operating, LP | 138,443 | 1,669 | 1,645 | - | - | ||||||||||||||||||||
2026 | 3/31/2026 | 500 Olde Worthington Rd. | Westerville | OH | — | InVentiv Communications, Inc. | 97,000 | 832 | 856 | - | - | |||||||||||||||||||
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 | 58 | 58 | - | - | ||||||||||||||||||||
6/30/2026 | 10419 North 30th St. | Tampa | FL | — | Time Customer Service, Inc. (Time Inc.) | 132,981 | 660 | 837 | - | - | ||||||||||||||||||||
11/30/2026 | 500 Kinetic Dr. | Huntington | WV | — | AMZN WVCS LLC (Amazon.com, Inc.) | 68,693 | 951 | 834 | - | - | ||||||||||||||||||||
12/29/2026 | 5500 New Albany Rd. | Columbus | OH | — | Evans, Mechwart, Hambleton & Tilton, Inc. | 104,807 | 1,303 | 1,258 | - | - | ||||||||||||||||||||
2027 | 1/31/2027 | 1701 Market St. | Philadelphia | PA | — | Drybar Holdings LLC | 1,975 | 103 | 77 | - | - | |||||||||||||||||||
2/28/2027 | 800 East Canal St. | Richmond | VA | — | Pacific Summit Energy LLC (Sumitomo Corporation of Americas) | 8,503 | 58 | 58 | - | - | ||||||||||||||||||||
4/30/2027 | 1315 West Century Dr. | Louisville | CO | — | Global Healthcare Exchange, Inc. (Global Healthcare Exchange, LLC) | 86,877 | 967 | 915 | - | - | ||||||||||||||||||||
6/30/2027 | 3902 Gene Field Rd. | St. Joseph | MO | — | Boehringer Ingelheim Vetmedica, Inc. (Boehringer Ingelheim USA Corporation) | 98,849 | 1,495 | 1,405 | - | - | ||||||||||||||||||||
7/6/2027 | 2221 Schrock Rd. | Columbus | OH | — | MS Consultants, Inc. | 42,290 | 480 | 457 | - | - | ||||||||||||||||||||
8/7/2027 | 25 Lakeview Dr. | Jessup | PA | — | TMG Health, Inc. | 150,000 | 1,876 | 1,557 | - | - | ||||||||||||||||||||
10/31/2027 | 11201 Renner Blvd. | Lenexa | KS | — | United States of America | 169,585 | 3,660 | 3,273 | 33,680 | 11/2027 | ||||||||||||||||||||
11/30/2027 | 1700 Millrace Dr. | Eugene | OR | 10 | Oregon Research Institute / Educational Policy Improvement Center | 80,011 | 1,569 | 1,334 | - | - | ||||||||||||||||||||
2028 | 4/30/2028 | 9655 Maroon Cir. | Englewood | CO | — | TriZetto Corporation | 166,912 | 2,883 | 2,736 | - | - | |||||||||||||||||||
2029 | 1/31/2029 | 6226 West Sahara Ave. | Las Vegas | NV | — | Nevada Power Company | 282,000 | 3,190 | 2,317 | - | - | |||||||||||||||||||
3/31/2029 | 2800 High Meadow Cir. | Auburn Hills | MI | — | Faurecia USA Holdings, Inc. | 278,000 | 2,660 | 2,412 | - | - | ||||||||||||||||||||
12/31/2029 | 333 Mt. Hope Ave. | Rockaway | NJ | — | Atlantic Health System, Inc. | 92,326 | 910 | 987 | - | - | ||||||||||||||||||||
2030 | 8/31/2030 | 800 East Canal St. | Richmond | VA | — | McGuireWoods LLP | 224,537 | 5,388 | 5,000 | 57,500 | 02/2031 | |||||||||||||||||||
9/30/2030 | 800 East Canal St. | Richmond | VA | — | CCA Industries, Inc. (The Riverstone Group, LLC), | 25,707 | 520 | 493 | - | - | ||||||||||||||||||||
2031 | 1/10/2031 | 810 Gears Rd. | Houston | TX | — | United States of America | 68,985 | 1,124 | 1,069 | - | - | |||||||||||||||||||
3/1/2031 | 800 East Canal St. | Richmond | VA | — | Towne Bank | 26,047 | 561 | 485 | - | - | ||||||||||||||||||||
2032 | 4/30/2032 | 1210 AvidXchange Ln. | Charlotte | NC | — | AvidXchange, Inc. | 201,450 | 2,529 | 2,194 | - | - | |||||||||||||||||||
10/31/2032 | 143 Diamond Ave. | Parachute | CO | — | Encana Oil and Gas (USA) Inc. / Caerus Piceance LLC (Alenco Inc.) | 49,024 | 963 | 821 | - | - | ||||||||||||||||||||
12/31/2032 | 3030 North 3rd St. | Phoenix | AZ | — | CopperPoint Mutual Insurance Company | 252,400 | 3,792 | 3,196 | - | - |
32 |
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2017
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 9/30/2017 ($000) (3) | Cash Rent as of 9/30/2017 ($000) (2) | 9/30/2017 Debt Balance ($000) | Debt Maturity |
|||||||||||||||||||
OFFICE PROPERTIES | ||||||||||||||||||||||||||||||
2033 | 3/31/2033 | 9201 East Dry Creek Rd. | Centennial | CO | — | Arrow Electronics, Inc. | 128,500 | 1,810 | 2,144 | - | - | |||||||||||||||||||
11/30/2033 | 1331 Capitol Ave. | Omaha | NE | — | The Gavilon Group, LLC | 127,810 | 2,483 | 2,205 | - | - | ||||||||||||||||||||
2036 | 10/31/2036 | 270 Abner Jackson Pkwy. | Lake Jackson | TX | — | The Dow Chemical Company | 664,100 | 10,906 | 9,097 | 193,511 | 10/2036 | |||||||||||||||||||
2088 | 8/8/2088 | 800 East Canal St. | Richmond | VA | — | The City of Richmond, Virginia | - | 308 | 308 | - | - | |||||||||||||||||||
N/A | N/A | 1701 Market St. | Philadelphia | PA | — | Parking Operations | - | 1,944 | 1,944 | - | - | |||||||||||||||||||
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 | 11,177,159 | $ | 136,633 | $ | 133,803 | $ | 474,060 |
33 |
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2017
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 9/30/2017 ($000) (3) | Cash
Rent as of 9/30/2017 ($000) (2) | 9/30/2017 Debt Balance ($000) | Debt Maturity | |||||||||||||||||||
INDUSTRIAL PROPERTIES | ||||||||||||||||||||||||||||||
2017 | 12/31/2017 | 2203 Sherrill Dr. | Statesville | NC | 16 | Geodis Logistics LLC (OHH Acquisition Corporation) | 639,800 | 1,437 | 1,593 | - | - | |||||||||||||||||||
2018 | 9/30/2018 | 50 Tyger River Dr. | Duncan | SC | — | Plastic Omnium Auto Exteriors, LLC | 221,833 | 769 | 769 | - | - | |||||||||||||||||||
12/31/2018 | 1133 Poplar Creek Rd. | Henderson | NC | — | Staples, Inc. | 196,946 | 647 | 665 | - | - | ||||||||||||||||||||
120 Southeast Pkwy. Dr. | Franklin | TN | — | Essex Group, Inc. (United Technologies Corporation) | 289,330 | 552 | 552 | - | - | |||||||||||||||||||||
2935 Van Vactor Dr. | Plymouth | IN | — | Bay Valley Foods, LLC | 300,500 | 631 | 631 | - | - | |||||||||||||||||||||
749 Southrock Dr. | Rockford | IL | — | Jacobson Warehouse Company, Inc. (Jacobson Distribution Company and Jacobson Transportation Company, Inc.) | 150,000 | 353 | 399 | - | - | |||||||||||||||||||||
2019 | 10/17/2019 | 10345 Philipp Pkwy. | Streetsboro | OH | — | L'Oreal USA S/D, Inc. (L’Oreal USA, Inc.) | 649,250 | 1,958 | 2,113 | 17,048 | 09/2019 | |||||||||||||||||||
12/31/2019 | 191 Arrowhead Dr. | Hebron | OH | — | Owens Corning Insulating Systems, LLC | 250,410 | 423 | 423 | - | - | ||||||||||||||||||||
200 Arrowhead Dr. | Hebron | OH | — | Owens Corning Insulating Systems, LLC | 400,522 | 676 | 676 | - | - | |||||||||||||||||||||
2415 US Hwy. 78 East | Moody | AL | — | Michelin North America, Inc. | 595,346 | 1,056 | 1,066 | - | - | |||||||||||||||||||||
3686 South Central Ave. | Rockford | IL | — | Pierce Packaging Co. | 93,000 | 234 | 234 | - | - | |||||||||||||||||||||
2020 | 1/31/2020 | 101 Michelin Dr. | Laurens | SC | — | Michelin North America, Inc. | 1,164,000 | 2,576 | 2,576 | - | - | |||||||||||||||||||
5/31/2020 | 359 Gateway Dr. | Lavonia | GA | — | TI Group Automotive Systems, LLC (TI Automotive Ltd.) | 133,221 | 714 | 900 | 7,098 | 12/2020 | ||||||||||||||||||||
6/30/2020 | 1650-1654 Williams Rd. | Columbus | OH | — | ODW Logistics, Inc. (Nessent Ltd. And Dist-Trans Co, LLC) | 772,450 | 1,007 | 1,010 | - | - | ||||||||||||||||||||
3102 Queen Palm Dr. | Tampa | FL | — | Time Customer Service, Inc. (Time Inc.) | 229,605 | 926 | 990 | - | - | |||||||||||||||||||||
9/30/2020 | 3350 Miac Cove Rd. | Memphis | TN | — | Mimeo.com, Inc. | 107,400 | 309 | 331 | - | - | ||||||||||||||||||||
12/19/2020 | 1901 Ragu Dr. | Owensboro | KY | 6 | Unilever Supply Chain, Inc. (Unilever United States, Inc.) | 443,380 | 1,119 | 966 | - | - | ||||||||||||||||||||
2021 | 3/31/2021 | 2455 Premier Row | Orlando | FL | — | Walgreen Co. / Walgreen Eastern Co. | 205,016 | 589 | 381 | - | - | |||||||||||||||||||
5/31/2021 | 291 Park Center Dr. | Winchester | VA | — | Kraft Heinz Foods Company | 344,700 | 1,067 | 1,033 | - | - | ||||||||||||||||||||
9/30/2021 | 3820 Micro Dr. | Millington | TN | — | Ingram Micro L.P. (Ingram Micro Inc.) | 701,819 | 1,359 | 1,405 | - | - | ||||||||||||||||||||
10/25/2021 | 6938 Elm Valley Dr. | Kalamazoo | MI | — | Dana Commercial Vehicle Products, LLC (Dana Holding Corporation and Dana Limited) | 150,945 | 1,310 | 1,520 | - | - | ||||||||||||||||||||
11/30/2021 | 2880 Kenny Biggs Rd. | Lumberton | NC | — | Quickie Manufacturing Corporation | 423,280 | 1,017 | 1,061 | - | - | ||||||||||||||||||||
2022 | 3/31/2022 | 5417 Campus Dr. | Shreveport | LA | — | The Tire Rack, Inc. | 257,849 | 1,006 | 1,020 | - | - | |||||||||||||||||||
2023 | 2/28/2023 | 7670 Hacks Cross Rd. | Olive Branch | MS | — | MAHLE Aftermarket Inc. (MAHLE Industries, Incorporated) | 268,104 | 679 | 660 | - | - | |||||||||||||||||||
12/31/2023 | 1601 Pratt Ave. | Marshall | MI | — | Autocam Corporation | 58,707 | 232 | 232 | - | - | ||||||||||||||||||||
2024 | 1/31/2024 | 1285 W. State Road 32 | Lebanon | IN | — | Continental Tire the Americas, LLC | 741,880 | 1,426 | 742 | - | - | |||||||||||||||||||
3/31/2024 | 1520 Lauderdale Memorial Hwy. | Cleveland | TN | — | General Electric Company | 851,370 | 994 | 1,002 | - | - | ||||||||||||||||||||
4/30/2024 | 113 Wells St. | North Berwick | ME | — | United Technologies Corporation | 993,685 | 1,349 | 1,472 | 2,356 | 04/2019 | ||||||||||||||||||||
5/31/2024 | 901 East Bingen Point Way | Bingen | WA | — | The Boeing Company | 124,539 | 1,977 | 1,928 | - | - | ||||||||||||||||||||
10/31/2024 | 43955 Plymouth Oaks Blvd. | Plymouth | MI | — | Tower Automotive Operations USA I, LLC / Tower Automotive Products Inc. (Tower Automotive, Inc.) | 311,612 | 1,133 | 1,080 | - | - | ||||||||||||||||||||
2025 | 6/30/2025 | 10000 Business Blvd. | Dry Ridge | KY | — | Dana Light Axle Products, LLC (Dana Holding Corporation and Dana Limited) | 336,350 | 1,009 | 1,009 | - | - | |||||||||||||||||||
301 Bill Bryan Rd. | Hopkinsville | KY | — | Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited) | 424,904 | 1,266 | 1,266 | - | - | |||||||||||||||||||||
4010 Airpark Dr. | Owensboro | KY | — | Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited) | 211,598 | 906 | 906 | - | - | |||||||||||||||||||||
730 North Black Branch Rd. | Elizabethtown | KY | — | Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited) | 167,770 | 403 | 403 | - | - | |||||||||||||||||||||
750 North Black Branch Rd. | Elizabethtown | KY | — | Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited) | 539,592 | 2,129 | 2,129 | - | - | |||||||||||||||||||||
7/14/2025 | 590 Ecology Ln. | Chester | SC | — | Boral Stone Products LLC (Boral Limited) | 420,597 | 1,286 | 1,731 | 7,455 | 08/2025 | ||||||||||||||||||||
7/31/2025 | 7005 Cochran Rd. | Glenwillow | OH | — | Royal Appliance Mfg. Co. | 458,000 | 1,546 | 1,576 | - | - | ||||||||||||||||||||
12/31/2025 | 1700 47th Ave North | Minneapolis | MN | — | Owens Corning Roofing and Asphalt, LLC | 18,620 | 413 | 413 | - | - | ||||||||||||||||||||
2026 | 3/30/2026 | 121 Technology Dr. | Durham | NH | 15 | Heidelberg Americas, Inc. (Heidelberger Druckmaschinen AG) / Goss International Americas, Inc. (Goss International Corporation) | 500,500 | 1,903 | 2,479 | - | - | |||||||||||||||||||
3/31/2026 | 633 Garrett Pkwy. | Lewisburg | TN | — | Calsonic Kansei North America, Inc. | 310,000 | 971 | 902 | - | - | ||||||||||||||||||||
6/30/2026 | 351 Chamber Dr. | Chillicothe | OH | — | The Kitchen Collection, LLC | 475,218 | 869 | 837 | - | - | ||||||||||||||||||||
9/30/2026 | 900 Industrial Blvd. | Crossville | TN | — | Dana Commercial Vehicle Products, LLC | 222,200 | 433 | 433 | - | - | ||||||||||||||||||||
3931 Lakeview Corporate Dr. | Edwardsville | IL | — | AMAZON.COM.DEDC, LLC (Amazon.com, Inc.) | 769,500 | 2,017 | 1,877 | - | - | |||||||||||||||||||||
10/31/2026 | 5001 Greenwood Rd. | Shreveport | LA | — | Libbey Glass Inc. (Libbey Inc.) | 646,000 | 1,624 | 1,623 | - | - | ||||||||||||||||||||
11/30/2026 | 250 Rittenhouse Cir. | Bristol | PA | — | Northtec LLC (The Estée Lauder Companies Inc.) | 241,977 | 860 | 851 | - | - | ||||||||||||||||||||
736 Addison Rd. | Erwin | NY | — | Corning Property Management Corporation | 408,000 | 998 | 1,004 | 7,107 | 10/2018 |
34 |
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2017
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 9/30/2017 ($000) (3) | Cash
Rent as of 9/30/2017 ($000) (2) | 9/30/2017 Debt Balance ($000) | Debt Maturity | |||||||||||||||||||
INDUSTRIAL PROPERTIES | ||||||||||||||||||||||||||||||
2027 | 1/31/2027 | 27200 West 157th St. | New Century | KS | — | Amazon.com.ksdc, LLC (Amazon.com, Inc.) | 446,500 | 742 | 631 | - | - | |||||||||||||||||||
2/28/2027 | 3456 Meyers Ave. | Memphis | TN | — | Sears, Roebuck and Co. / Sears Logistics Services | 780,000 | 1,271 | 1,194 | - | - | ||||||||||||||||||||
554 Nissan Pkwy. | Canton | MS | — | Nissan North America, Inc. | 1,466,000 | 4,650 | 4,391 | - | - | |||||||||||||||||||||
4/30/2027 | 16407 Applewhite Rd. | San Antonio | TX | 20 | International Heating, Air-Conditioning and Refrigeration Solutions Company | 849,275 | 765 | 698 | - | - | ||||||||||||||||||||
200 Sam Griffin Rd. | Smyrna | TN | — | Nissan North America, Inc. | 1,505,000 | 73 | 69 | - | - | |||||||||||||||||||||
6/30/2027 | 1501 Nolan Ryan Expy. | Arlington | TX | — | Arrow Electronics, Inc. | 74,739 | 305 | 117 | - | - | ||||||||||||||||||||
9/30/2027 | 1550 Hwy 302 | Byhalia | MS | — | McCormick & Company, Inc. | 615,600 | 20 | 0 | - | - | ||||||||||||||||||||
10/31/2027 | 201 James Lawrence Rd. | Jackson | TN | — | Kellogg Sales Company (Kellogg Company) | 1,062,055 | 44 | 40 | - | - | ||||||||||||||||||||
12/31/2027 | 10590 Hamilton Ave. | Cincinnati | OH | — | The Hillman Group, Inc. | 264,598 | 610 | 586 | - | - | ||||||||||||||||||||
2028 | 1/31/2028 | 490 Westridge Pkwy. | McDonough | GA | 17 | Georgia-Pacific Consumer Products LP (Georgia-Pacific LLC) | 1,121,120 | 505 | 453 | - | - | |||||||||||||||||||
3/31/2028 | 29-01-Borden Ave./29-10 Hunters Point Ave. | Long Island City | NY | — | FedEx Ground Package System, Inc. (FedEx Corporation) | 140,330 | 3,851 | 3,578 | 44,087 | 03/2028 | ||||||||||||||||||||
8/31/2028 | 1420 Greenwood Rd. | McDonough | GA | — | United States Cold Storage, Inc. | 296,972 | 1,627 | 1,585 | - | - | ||||||||||||||||||||
9/30/2028 | 904 Industrial Rd. | Marshall | MI | — | Tenneco Automotive Operating Company, Inc. (Tenneco, Inc.) | 246,508 | 505 | 631 | - | - | ||||||||||||||||||||
2029 | 11/24/2029 | 318 Pappy Dunn Blvd. | Anniston | AL | — | International Automotive Components Group North America, Inc. | 276,782 | 1,305 | 1,214 | - | - | |||||||||||||||||||
2030 | 3/31/2030 | 549 Wingo Rd. | Byhalia | MS | — | Asics America Corporation (Asics Corporation) | 855,878 | 3,291 | 3,006 | - | - | |||||||||||||||||||
5/31/2030 | 3301 Stagecoach Rd. NE | Thomson | GA | — | Hollander Sleep Products, LLC (Hollander Home Fashions Holdings) | 208,000 | 697 | 641 | - | - | ||||||||||||||||||||
2031 | 10/31/2031 | 1020 W. Airport Rd. | Romeoville | IL | — | ARYZTA LLC (ARYZTA AG) | 188,166 | 2,658 | 2,476 | - | - | |||||||||||||||||||
2032 | 4/30/2032 | 13930 Pike Rd. | Missouri City | TX | — | Vulcan Construction Materials, LP (Vulcan Materials Company) | - | 1,592 | 1,435 | - | - | |||||||||||||||||||
10/31/2032 | 27255 SW 95th Ave. | Wilsonville | OR | — | Pacific Foods of Oregon, Inc. d/b/a Pacific Natural Foods | 508,277 | 2,340 | 1,933 | - | - | ||||||||||||||||||||
2034 | 9/30/2034 | 5625 North Sloan Ln. | North Las Vegas | NV | — | Nicholas and Co., Inc. | 180,235 | 1,917 | 1,670 | - | - | |||||||||||||||||||
10/31/2034 | 1001 Innovation Rd. | Rantoul | IL | — | Bell Sports, Inc. (Vista Outdoor Inc.) | 813,126 | 3,147 | 2,712 | - | - | ||||||||||||||||||||
2035 | 3/31/2035 | 13863 Industrial Rd. | Houston | TX | — | Curtis Kelly, Inc. (Spitzer Industries, Inc.) | 187,800 | 1,826 | 1,553 | - | - | |||||||||||||||||||
7007 F.M. 362 Rd. | Brookshire | TX | — | Orizon Industries, Inc. (Spitzer Industries, Inc.) | 262,095 | 1,433 | 1,219 | - | - | |||||||||||||||||||||
6/30/2035 | 111 West Oakview Pkwy. | Oak Creek | WI | — | Stella & Chewy's LLC | 164,007 | 1,574 | 1,399 | - | - | ||||||||||||||||||||
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 | 9,850 | 8,274 | 110,000 | 01/2026 | ||||||||||||||||||||
10/22/2035 | 2860 Clark St. | Detroit | MI | — | FCA US LLC (f/k/a Chrysler Group LLC) | 189,960 | 1,653 | 1,653 | - | - | ||||||||||||||||||||
2036 | 5/31/2036 | 671 Washburn Switch Rd. | Shelby | NC | — | Clearwater Paper Corporation | 673,425 | 2,038 | 1,788 | - | - | |||||||||||||||||||
6/30/2036 | 100 Ryobi Drive | Anderson | SC | — | One World Technologies, Inc. (Techtronic Industries Co. Ltd.) | 1,327,022 | 3,335 | 2,763 | - | - | ||||||||||||||||||||
2037 | 3/31/2037 | 4005 E I-30 | Grand Prairie | TX | — | O'Neal Metals (Texas), L.P. (O'Neal Industries, Inc.) | 215,000 | 520 | 427 | - | - | |||||||||||||||||||
2038 | 3/31/2038 | 13901/14035 Industrial Rd. | Houston | TX | — | Industrial Terminals Management, L.L.C. (Maritime Holdings (Delaware) LLC) | 132,449 | 5,080 | 4,264 | - | - | |||||||||||||||||||
2042 | 5/31/2042 | 4801 North Park Dr. | Opelika | AL | — | Golden State Foods Corp. (Golden State Enterprises, Inc.) | 165,493 | 599 | 1,087 | - | - | |||||||||||||||||||
N/A | Vacancy | 3350 Miac Cove Rd. | Memphis | TN | — | (Available for Lease) | 32,679 | - | - | - | - | |||||||||||||||||||
INDUSTRIAL TOTAL/WEIGHTED AVERAGE | 99.9% Leased | 33,926,828 | $ | 107,981 | $ | 102,356 | $ | 195,151 |
35 |
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2017
Year of Lease Expiration |
Date of Lease Expiration |
Property Location | City | State | Note | Primary Tenant (Guarantor) | Sq.Ft. | Percentage Leased | GAAP
Rent as of 9/30/2017 ($000) (3) | Cash
Rent as of 9/30/2017 ($000) (2) | 9/30/2017 Debt Balance ($000) | Debt Maturity | ||||||||||||||||||||||
MULTI-TENANT PROPERTIES (8,14) | ||||||||||||||||||||||||||||||||||
10300 Kincaid Dr. | Fishers | IN | 11, 13 | Available for lease | 193,000 | 0 | % | 245 | 302 | - | - | |||||||||||||||||||||||
11511 Luna Rd. | Farmers Branch | TX | 19 | International Business Machines Corporation | 181,072 | 43 | % | 792 | 756 | - | - | |||||||||||||||||||||||
1311 Broadfield Blvd. | Houston | TX | 11 | Saipem America, Inc. (Saipem S.p.A.) | 155,407 | 53 | % | 540 | 367 | - | - | |||||||||||||||||||||||
13430 North Black Canyon Fwy. | Phoenix | AZ | — | Multi-Tenant | 138,940 | 92 | % | 1,740 | 1,859 | - | - | |||||||||||||||||||||||
1460 Tobias Gadson Blvd. | Charleston | SC | — | Vallen Distribution, Inc. | 50,076 | 41'% | 286 | 286 | 7,014 | 02/2021 | ||||||||||||||||||||||||
2210 Enterprise Dr. | Florence | SC | — | Caliber Funding, LLC | 176,557 | 21 | % | 518 | 569 | - | - | |||||||||||||||||||||||
250 Swathmore Ave. | High Point | NC | 11, 18 | Available for lease | 244,851 | 0 | % | 815 | 865 | - | - | |||||||||||||||||||||||
5104 North Franklin Rd. | Lawrence | IN | — | Available for lease | 35,786 | 0 | % | - | - | - | - | |||||||||||||||||||||||
6050 Dana Way | Antioch | TN | — | Multi-Tenant | 674,528 | 97 | % | 1,728 | 1,693 | - | - | |||||||||||||||||||||||
832 N. Westover Blvd . | Albany | GA | 11 | Available for lease | 45,554 | 0 | % | 173 | 376 | - | - | |||||||||||||||||||||||
King St./1042 Fort St. Mall | Honolulu | HI | — | Multi-Tenant | 77,459 | 49 | % | 526 | 526 | - | - | |||||||||||||||||||||||
MULTI-TENANT TOTAL/WEIGHTED AVERAGE | 52.7% Leased | 1,973,230 | $ | 7,363 | $ | 7,599 | $ | 7,014 |
36 |
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2017
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 9/30/2017 ($000) (3) | Cash
Rent as of 9/30/2017 ($000) (2) | 9/30/2017 Debt Balance ($000) | Debt Maturity | |||||||||||||||||||
OTHER PROPERTIES | ||||||||||||||||||||||||||||||
2018 | 2/26/2018 | 4831 Whipple Ave., NW | Canton | OH | — | Best Buy Co., Inc. | 46,350 | 349 | 349 | - | - | |||||||||||||||||||
9/30/2018 | 835 Julian Ave. | Thomasville | NC | — | Mighty Dollar, LLC | 23,767 | 62 | 62 | - | - | ||||||||||||||||||||
12/31/2018 | 1150 West Carl Sandburg Dr. | Galesburg | IL | — | Kmart Stores of Illinois LLC / Kmart Corporation | 94,970 | 247 | 120 | 105 | 07/2018 | ||||||||||||||||||||
12080 Carmel Mountain Rd. | San Diego | CA | — | Sears, Roebuck and Co / Kmart Corporation | 107,210 | 563 | 136 | 119 | 07/2018 | |||||||||||||||||||||
21082 Pioneer Plaza Dr. | Watertown | NY | — | Kmart Corporation | 120,727 | 361 | 201 | 176 | 07/2018 | |||||||||||||||||||||
255 Northgate Dr. | Manteca | CA | — | Kmart Corporation | 107,489 | 416 | 213 | 187 | 07/2018 | |||||||||||||||||||||
97 Seneca Trail | Fairlea | WV | — | Kmart Corporation | 90,933 | 260 | 141 | 123 | 07/2018 | |||||||||||||||||||||
2019 | 3/31/2019 | B.E.C. 45th St./Lee Blvd. | Lawton | OK | — | Associated Wholesale Grocers, Inc. / Safeway, Inc. | 30,757 | 142 | 139 | - | - | |||||||||||||||||||
6/30/2019 | 1600 East 23rd St. | Chattanooga | TN | — | BI-LO, LLC / K-VA-T Food Stores, Inc. | 42,130 | 97 | 97 | - | - | ||||||||||||||||||||
2023 | 2/28/2023 | 733 East Main St. | Jefferson | NC | — | Food Lion, LLC / Delhaize America, Inc. | 34,555 | 117 | 120 | - | - | |||||||||||||||||||
2411 West Beverly St. | Staunton | VA | — | Food Lion, LLC / Delhaize America, Inc. | 23,000 | 124 | 124 | - | - | |||||||||||||||||||||
7/1/2023 | 1053 Mineral Springs Rd. | Paris | TN | — | The Kroger Co. | 31,170 | 134 | 119 | - | - | ||||||||||||||||||||
2026 | 5/31/2026 | 6910 South Memorial Hwy. | Tulsa | OK | — | Toys “R” Us, Inc. / Toys "R" Us-Delaware, Inc. | 43,123 | 177 | 177 | - | - | |||||||||||||||||||
2029 | 1/31/2029 | 175 Holt Garrison Pkwy. | Danville | VA | — | Home Depot USA, Inc. | - | 162 | 195 | - | - | |||||||||||||||||||
2043 | 2/28/2043 | 1237 W. Sherman Ave. | Vineland | NJ | — | HealthSouth Rehabilitation Hospital of South Jersey, LLC (HealthSouth Corporation) | 39,287 | 861 | 861 | - | - | |||||||||||||||||||
2048 | 12/31/2048 | 30 Light St. | Baltimore | MD | — | 30 Charm City, LLC | - | 224 | 224 | - | - | |||||||||||||||||||
2055 | 1/31/2055 | 499 Derbyshire Dr. | Venice | FL | — | Littlestone Brotherhood LLC (Ralph Little) | 31,180 | 1,431 | 984 | - | - | |||||||||||||||||||
2112 | 8/31/2112 | 201-215 N. Charles St. | Baltimore | MD | — | 201 NC Leasehold LLC | - | 203 | 203 | - | - | |||||||||||||||||||
OTHER TOTAL/WEIGHTED AVERAGE | 100.0% Leased | 866,648 | $ | 5,930 | $ | 4,465 | $ | 710 | ||||||||||||||||||||||
TOTAL CONSOLIDATED PORTFOLIO/WEIGHTED AVERAGE | 97.9% Leased | 47,943,865 | $ | 257,907 | $ | 248,223 | $ | 676,935 |
Footnotes |
1 | Square footage leased or available. |
2 | Nine months ended 9/30/2017 cash rent. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document. |
3 | Nine months ended 9/30/2017 GAAP rent, excluding termination income. |
4 | Mortgage encumbering the property is in default as of 9/30/2017. |
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 9/30/2017 and sold subsequent to 9/30/2017. |
14 | The multi-tenanted properties incurred approximately $3.5 million in operating expenses, net for the nine months ended 9/30/2017. |
15 | Heidelberg Americas, Inc. lease expires 3/30/2021; however, new tenant (Goss International Americas, Inc.) lease expires 3/30/2026. |
16 | Subsequent to 9/30/2017, lease extended to 12/2020. |
17 | Square footage includes a 220,480 square foot expansion expected to be completed in 2018. |
18 | Property disposed of subsequent to 9/30/2017. |
19 | Subsequent to 9/30/2017, an additional 64,788 square feet leased for seven years and nine months. |
20 | Lease restricts certain disclosures. Guarantor is investment grade. |
37 |
LEXINGTON REALTY TRUST
Property Leases and Vacancies - Non-consolidated Portfolio - 9/30/2017
Year of Lease Expiration | Date of Lease Expiration | Property Location | City | State | Note | Primary Tenant (Guarantor) | Sq.Ft. | LXP
% Ownership | GAAP
Rent as of 9/30/2017 ($000) (3) | Cash
Rent as of 9/30/2017 ($000) (2) | 9/30/2017 Debt Balance ($000) | Debt Maturity (7) | ||||||||||||||||||||||
NON-CONSOLIDATED PROPERTIES | ||||||||||||||||||||||||||||||||||
2029 | 1/31/2029 | 18839 McKay Blvd. | Humble | TX | — | Triumph Rehabilitation Hospital of Northeast Houston, LLC (RehabCare Group, Inc.) | 55,646 | 15 | % | 2,049 | 1,879 | 13,913 | 05/2019 | |||||||||||||||||||||
2033 | 10/31/2033 | 607 & 611 Lumsden Professional Ct. | Brandon | FL | 1 | BluePearl Holdings, LLC | 8,500 | 15 | % | 150 | 150 | - | - | |||||||||||||||||||||
4525 Ulmerton Rd. | Clearwater | FL | 1 | BluePearl Holdings, LLC | 3,000 | 15 | % | 89 | 89 | - | - | |||||||||||||||||||||||
455 Abernathy Rd. | Atlanta | GA | 1 | BluePearl Holdings, LLC | 32,000 | 15 | % | 907 | 738 | - | - | |||||||||||||||||||||||
820 Frontage Rd. | Northfield | IL | 1 | BluePearl Holdings, LLC | 14,000 | 15 | % | 348 | 348 | - | - | |||||||||||||||||||||||
4126 Packard Rd. | Ann Arbor | MI | 1 | BluePearl Holdings, LLC | 3,500 | 15 | % | 41 | 41 | - | - | |||||||||||||||||||||||
29080 Inkster Rd. | Southfield | MI | 1 | BluePearl Holdings, LLC | 38,000 | 15 | % | 955 | 835 | 18,791 | 11/2018 | |||||||||||||||||||||||
2036 | 8/31/2036 | 2203 North Westgreen Blvd. | Katy | TX | 4 | British Schools of America, LLC | 274,000 | 25 | % | 4,678 | 4,678 | - | - | |||||||||||||||||||||
N/A | Vacancy | 100 Gander Way | Palm Beach Gardens | FL | 5,6 | (Available for Lease) | 120,000 | 25 | % | 2,692 | 1,742 | 13,957 | 03/2018 | |||||||||||||||||||||
NON-CONSOLIDATED TOTAL/WEIGHTED AVERAGE | 75.3% Leased | 548,646 | $ | 11,909 | $ | 10,500 | $ | 46,661 |
Footnotes
1 | All mortgage notes are cross-collateralized and cross-defaulted. |
2 | Nine months ended 9/30/2017 cash rent. |
3 | Nine months ended 9/30/2017 GAAP rent, excluding termination income. |
4 | Lexington is the lender of a $49.4 million mortgage pursuant to the joint venture agreement. |
5 | Cash and GAAP rent amounts represent/include prior tenant. Tenant declared bankruptcy and rejected the lease. |
6 | Loan is in default. |
7 | Interest rates range from 3.7% to 4.2% at 9/30/2017. |
38 |
LEXINGTON REALTY TRUST
Select Credit Metrics Summary (1)
9/30/2017 | ||||
Adjusted Company FFO Payout Ratio | 73.9 | % | ||
Unencumbered Assets | $3.44 billion | |||
Unencumbered NOI | 72.7 | % | ||
(Debt + Preferred) / Gross Assets | 45.3 | % | ||
Debt/Gross Assets | 43.3 | % | ||
Secured Debt / Gross Assets | 13.9 | % | ||
Net Debt / Adjusted EBITDA | 6.2 | x | ||
(Net Debt + Preferred) / Adjusted EBITDA | 6.5 | x | ||
Credit Facilities Availability (2) | $300.4 million |
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
Bank Loans: | Must be: | 9/30/2017 | ||
Maximum Leverage | < 60% | 45.7% | ||
Fixed Charge Coverage | > 1.5x | 2.7x | ||
Recourse Secured Indebtedness Ratio | < 10% cap value | 0.0% | ||
Secured Indebtedness Ratio | < 45% | 15.8% | ||
Unsecured Debt Service Coverage | > 2.0x | 6.6x | ||
Unencumbered Leverage | < 60% | 37.4% | ||
Bonds: | ||||
Debt to Total Assets | < 60% | 44.1% | ||
Secured Debt to Total Assets | < 40% | 14.1% | ||
Debt Service Coverage | > 1.5x | 4.4x | ||
Unencumbered Assets to Unsecured Debt | > 150% | 258.9% |
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
9/30/2017
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)(j) | $ | 9,120 | 6.500 | % | N/A | $ | - | $ | 9,120 | ||||||||||
Orlando, FL | (b) | 9,309 | 5.722 | % | N/A | - | 9,309 | |||||||||||||
Erwin, NY | 7,107 | 5.910 | % | 10/2018 | 728 | 6,637 | ||||||||||||||
Overland Park, KS | 33,002 | 5.891 | % | 05/2019 | 2,657 | 31,812 | ||||||||||||||
Kansas City, MO | 15,728 | 5.883 | % | 05/2019 | 1,268 | 15,179 | ||||||||||||||
Columbus, IN | 13,333 | 2.210 | % | 07/2019 | 4,757 | 4,993 | ||||||||||||||
Meridian, ID | 8,544 | 6.010 | % | 08/2019 | 753 | 7,675 | ||||||||||||||
Streetsboro, OH | 17,048 | 5.749 | % | 09/2019 | 1,344 | 16,338 | ||||||||||||||
Lenexa, KS | 8,739 | 6.270 | % | 12/2019 | 774 | 7,770 | ||||||||||||||
Boca Raton, FL | 19,157 | 6.470 | % | 02/2020 | 1,542 | 18,414 | ||||||||||||||
Oakland, ME | 8,450 | 5.930 | % | 10/2020 | 750 | 7,660 | ||||||||||||||
Lavonia, GA | 7,098 | 5.460 | % | 12/2020 | 741 | 5,895 | ||||||||||||||
Charleston, SC | 7,014 | 5.850 | % | 02/2021 | 520 | 6,632 | ||||||||||||||
Whippany, NJ | 12,837 | 6.298 | % | 11/2021 | 1,344 | 10,400 | ||||||||||||||
Chester, SC | 7,455 | 5.380 | % | 08/2025 | 1,144 | 362 | ||||||||||||||
Richland, WA | 110,000 | 4.000 | % | 01/2026 | 4,400 | 99,492 | ||||||||||||||
Lenexa, KS | 33,680 | 3.700 | % | 11/2027 | 2,808 | 10,000 | ||||||||||||||
Richmond, VA | 57,500 | 5.191 | % | 02/2031 | 3,026 | 53,176 | ||||||||||||||
Lake Jackson, TX | 193,511 | 4.040 | % | 10/2036 | 12,104 | 11,305 | ||||||||||||||
Subtotal/Wtg. Avg./Years Remaining (i) | $ | 578,632 | 4.657 | % | 10.5 | $ | 40,660 | $ | 332,169 | |||||||||||
Full Amortizing Mortgages | ||||||||||||||||||||
Manteca, CA | $ | 187 | 7.750 | % | 07/2018 | $ | 201 | $ | - | |||||||||||
Watertown, NY | 176 | 7.750 | % | 07/2018 | 189 | - | ||||||||||||||
Fairlea, WV | 123 | 7.750 | % | 07/2018 | 133 | - | ||||||||||||||
San Diego, CA | 119 | 7.750 | % | 07/2018 | 128 | - | ||||||||||||||
Galesburg, IL | 105 | 7.750 | % | 07/2018 | 113 | - | ||||||||||||||
North Berwick, ME | 2,356 | 3.560 | % | 04/2019 | 1,532 | - | ||||||||||||||
Wall, NJ | 11,924 | 6.250 | % | 01/2021 | 3,774 | - | ||||||||||||||
Palo Alto, CA | 39,226 | 3.970 | % | 12/2023 | 7,059 | - | ||||||||||||||
Long Island City, NY | 44,087 | 3.500 | % | 03/2028 | 4,708 | - | ||||||||||||||
Subtotal/Wtg. Avg./Years Remaining (i) | $ | 98,303 | 4.053 | % | 7.6 | $ | 17,837 | $ | - | |||||||||||
Subtotal/Wtg. Avg./Years Remaining (i) | $ | 676,935 | 4.569 | % | 10.1 | $ | 58,497 | $ | 332,169 |
41 |
LEXINGTON REALTY TRUST
Consolidated Properties: Mortgages and Notes Payable
9/30/2017
Property | Footnotes | Debt Balance ($000) | Interest Rate (%) | Maturity (a) | Current Estimated Annual Debt Service ($000) (c) | Balloon Payment ($000) | ||||||||||||||
Corporate (f) | ||||||||||||||||||||
Revolving Credit Facility | (k) | $ | 200,000 | 2.237 | % | 08/2019 | $ | 4,536 | $ | 200,000 | ||||||||||
Term Loan | (g) | 300,000 | 2.216 | % | 08/2020 | 6,740 | 300,000 | |||||||||||||
Term Loan | (h) | 300,000 | 2.495 | % | 01/2021 | 7,589 | 300,000 | |||||||||||||
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 | 3.011 | % | 04/2037 | 3,942 | 129,120 | |||||||||||||
Subtotal/Wtg. Avg./Years Remaining (i) | $ | 1,429,120 | 3.087 | % | 5.5 | $ | 44,432 | $ | 1,429,120 | |||||||||||
Total/Wtg. Avg./Years Remaining (i) | (e) | $ | 2,106,055 | 3.564 | % | 6.9 | $ | 102,929 | $ | 1,761,289 |
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 September 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 on $250.0 million of borrowings. |
(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 on $255.0 million of borrowings. |
(i) | Total shown may differ from detailed amounts due to rounding. |
(j) | Subsequent to September 30, 2017, collateral conveyed to lender in a foreclosure sale. |
(k) | Rate ranges from LIBOR plus 0.85% to 1.55%. |
42 |
LEXINGTON REALTY TRUST
Debt Maturity Schedule
9/30/2017
($000)
Consolidated Properties | ||||||||||||
Year | Mortgage Scheduled Amortization | Mortgage Balloon Payments | Corporate Debt | |||||||||
2017-remaining | $ | 6,328 | $ | 18,429 | $ | - | ||||||
2018 | 29,812 | 6,637 | - | |||||||||
2019 | 26,681 | 83,767 | 200,000 | |||||||||
2020 | 23,178 | 31,969 | 300,000 | |||||||||
2021 | 23,433 | 17,032 | 300,000 | |||||||||
$ | 109,432 | $ | 157,834 | $ | 800,000 |
Footnotes
(1) | Percentage denotes weighted-average interest rate. |
43 |
LEXINGTON REALTY TRUST
Selected Balance Sheet Account Data
9/30/2017
($000)
Balance Sheet | ||||
Other assets | $ | 32,124 | ||
The components of other assets are: | ||||
Deposits | $ | 2,176 | ||
Equipment | 560 | |||
Prepaids | 2,326 | |||
Other receivables | 1,288 | |||
Deferred lease incentives | 17,198 | |||
Lake Jackson developer escrows | 7,942 | |||
Interest rate swap derivative asset | 510 | |||
Other | 124 | |||
Accounts payable and other liabilities | ||||
The components of accounts payable and other liabilities are: | $ | 36,728 | ||
Accounts payable and accrued expenses | $ | 13,356 | ||
CIP accruals and other | 1,222 | |||
Taxes | 345 | |||
Deferred lease and loan costs | 10,341 | |||
Deposits | 1,135 | |||
Escrows | 410 | |||
Litigation reserve | 2,050 | |||
Transaction / build-to-suit costs | 7,869 |
44 |
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, non-recurring charges 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 estimates and are not presented or intended to be viewed as a liquidity or performance measure that present a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. The yield or capitalization rate is calculated by dividing the annualized NOI (as defined below, except GAAP rent adjustments are added back to rental income to calculate GAAP yield or capitalization rate) the investment is expected to generate (or has generated) by the acquisition/completion cost (or sale) price.
45 |
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.
46 |
LEXINGTON REALTY TRUST
RECONCILIATION OF NON-GAAP MEASURES
($000)
Nine months ended September 30, 2017 | ||||
Cash Rent Reconciliation: | ||||
Rental revenue as reported | $ | 265,923 | ||
Rental revenue from sold properties | (5,082 | ) | ||
Lease termination income | (2,934 | ) | ||
GAAP rent per supplement | 257,907 | |||
GAAP rent adjustments: (1) | ||||
Straight-line adjustments | (12,287 | ) | ||
Lease incentives | 1,427 | |||
Amortization of above/below market leases | 1,176 | |||
Cash rent per supplement | $ | 248,223 |
Consolidated debt reconciliation September 30, 2017:
GAAP Balance | Deferred Loan Costs, net | Discounts | Gross Balance | |||||||||||||
Mortgages and notes payable (2) | $ | 670,345 | $ | 6,590 | $ | - | $ | 676,935 | ||||||||
Revolving credit facility borrowings (3) | 200,000 | - | - | 200,000 | ||||||||||||
Term loans payable (3) | 596,369 | 3,631 | - | 600,000 | ||||||||||||
Senior notes payable(3) | 494,989 | 3,435 | 1,576 | 500,000 | ||||||||||||
Trust preferred securities (3) | 127,171 | 1,949 | - | 129,120 | ||||||||||||
Consolidated debt | $ | 2,088,874 | $ | 15,605 | $ | 1,576 | $ | 2,106,055 |
Footnotes
(1) | Individual items are adjusted for sold properties, which were previously reflected in the reconciliation. |
(2) | Secured. |
(3) | Unsecured. |
47 |
LEXINGTON REALTY TRUST
RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)
($000)
Same-Store NOI Reconciliation:
Nine months ended September 30, | ||||||||
2017 | 2016 | |||||||
Net Income | $ | 55,181 | $ | 79,521 | ||||
Interest and amortization expense | 57,828 | 68,573 | ||||||
Provision for income taxes | 1,174 | 1,099 | ||||||
Depreciation and amortization | 128,706 | 124,687 | ||||||
General and administrative | 25,561 | 23,032 | ||||||
Litigation reserve | 2,050 | - | ||||||
Transaction costs | 1,100 | 329 | ||||||
Non-operating income | (4,997 | ) | (9,500 | ) | ||||
Gains on sales of properties | (55,078 | ) | (58,413 | ) | ||||
Impairment charges and loan loss | 43,577 | 75,904 | ||||||
Debt satisfaction (gains) charges, net | (2,378 | ) | 818 | |||||
Equity in (earnings) losses of non-consolidated entities | 1,064 | (6,394 | ) | |||||
Lease termination income | (2,934 | ) | (15,390 | ) | ||||
Straight-line adjustments | (12,552 | ) | (35,697 | ) | ||||
Lease incentives | 1,456 | 1,256 | ||||||
Amortization of above/below market leases | 1,180 | 1,527 | ||||||
Net Operating Income - ("NOI") | 240,938 | 251,352 | ||||||
Less NOI: | ||||||||
Disposed of properties | (2,455 | ) | (36,441 | ) | ||||
Acquired properties | (27,047 | ) | (2,556 | ) | ||||
Properties in default | (2,238 | ) | (2,226 | ) | ||||
Same-Store NOI | $ | 209,198 | $ | 210,129 |
NOI for NAV:
Nine months ended | ||||
September 30, 2017 | ||||
NOI per above | $ | 240,938 | ||
Less NOI: | ||||
Disposed of properties | (2,455 | ) | ||
Assets held for sale | 243 | |||
Assets acquired in 2017 (1) | (7,267 | ) | ||
Assets less than 70% leased / Other | (1,388 | ) | ||
NOI for NAV | $ | 230,071 |
Footnotes
(1) | Excludes Lake Jackson, TX. |
48 |
LEXINGTON REALTY TRUST
RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)
($000)
Reconciliation to Adjusted EBITDA:
Three months ended | ||||||||||||||||||||
9/30/2017 | 6/30/2017 | 3/31/2017 | 12/31/2016 | Trailing 12 Months | ||||||||||||||||
Net income attributable to Lexington Realty Trust shareholders | $ | 5,541 | $ | 7,152 | $ | 42,040 | $ | 16,001 | $ | 70,734 | ||||||||||
Interest and amortization expense | 18,887 | 19,216 | 19,725 | 19,459 | 77,287 | |||||||||||||||
Provision for income taxes | 375 | 377 | 422 | 340 | 1,514 | |||||||||||||||
Depreciation and amortization | 43,495 | 42,320 | 42,891 | 41,361 | 170,067 | |||||||||||||||
Straight-line adjustments | (4,002 | ) | (5,641 | ) | (2,909 | ) | (2,051 | ) | (14,603 | ) | ||||||||||
Lease incentives | 515 | 510 | 431 | 417 | 1,873 | |||||||||||||||
Amortization of above/below market leases | 320 | 346 | 514 | 530 | 1,710 | |||||||||||||||
Gains on sales of properties | (10,645 | ) | (10,240 | ) | (34,193 | ) | (23,097 | ) | (78,175 | ) | ||||||||||
Impairment charges and loan loss | 21,986 | 13,599 | 7,992 | 24,332 | 67,909 | |||||||||||||||
Debt satisfaction (gains) charges, net | (2,424 | ) | 46 | - | 157 | (2,221 | ) | |||||||||||||
Litigation reserve | 2,050 | - | - | - | 2,050 | |||||||||||||||
Non-cash charges, net | 2,066 | 1,987 | 2,146 | 2,092 | 8,291 | |||||||||||||||
Pro-rata share adjustments: | ||||||||||||||||||||
Non-consolidated entities adjustment | 329 | 3,880 | (1,066 | ) | (319 | ) | 2,824 | |||||||||||||
Noncontrolling interests adjustment | (167 | ) | 7 | (13 | ) | 698 | 525 | |||||||||||||
Adjusted EBITDA | $ | 78,326 | $ | 73,559 | $ | 77,980 | $ | 79,920 | $ | 309,785 |
49 |
LEXINGTON REALTY TRUST
RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)
($000)
Reconciliation of Select Credit Metrics:
Adjusted Company FFO Payout: | Nine months ended September 30, 2017 | (Debt + Preferred) / Gross Assets: | Nine months ended September 30, 2017 | |||||||
Common share dividends per share | $ | 0.525 | Consolidated debt | $ | 2,088,874 | |||||
Adjusted Company FFO per diluted share | 0.71 | Preferred shares liquidation preference | 96,770 | |||||||
Adjusted Company FFO payout ratio | 73.9 | % | Debt and preferred | $ | 2,185,644 | |||||
Unencumbered Assets: | Total assets | $ | 3,595,156 | |||||||
Real estate, at cost | $ | 4,433,609 | Plus depreciation and amortization: | |||||||
held for sale real estate, at cost | 8,607 | Real estate | 1,200,814 | |||||||
less encumbered real estate, at cost | (997,356 | ) | Deferred lease costs | 26,462 | ||||||
Unencumbered assets | $ | 3,444,860 | ||||||||
Gross assets | $ | 4,822,432 | ||||||||
Unencumbered NOI: | ||||||||||
NOI | $ | 240,938 | (Debt + Preferred) / Gross Assets | 45.3 | % | |||||
Disposed of properties NOI | (2,455 | ) | ||||||||
Adjusted NOI | 238,483 | Debt / Gross Assets: | ||||||||
less encumbered adjusted NOI | (65,151 | ) | Consolidated debt | $ | 2,088,874 | |||||
Unencumbered adjusted NOI | $ | 173,332 | ||||||||
Unencumbered NOI % | 72.7 | % | Gross assets | $ | 4,822,432 | |||||
Net Debt / Adjusted EBITDA: | Debt / Gross assets | 43.3 | % | |||||||
Adjusted EBITDA | $ | 309,785 | ||||||||
Secured Debt / Gross Assets: | ||||||||||
Consolidated debt | $ | 2,088,874 | Mortgages and notes payable | $ | 670,345 | |||||
less cash and cash equivalents (1) | (169,867 | ) | ||||||||
Net debt | $ | 1,919,007 | Gross assets | $ | 4,822,432 | |||||
Net debt / Adjusted EBITDA | 6.2 | x | Secured Debt / Gross Assets | 13.9 | % | |||||
(Net Debt + Preferred) / Adjusted EBITDA: | ||||||||||
Adjusted EBITDA | $ | 309,785 | ||||||||
Net debt | $ | 1,919,007 | ||||||||
Preferred shares liquidation preference | 96,770 | |||||||||
Net debt + preferred | $ | 2,015,777 | ||||||||
(Net Debt + Preferred) / Adjusted EBITDA | 6.5 | x |
Footnotes
(1) Includes funds held at 1031 exchange intermediaries.
50 |
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 |
hgentry@lxp.com |
Research Coverage |
Bank of America/Merrill Lynch | Jeffries & Company, Inc. | |||
James Feldman | (646) 855-5808 | Jon Peterson | (212) 284-1705 | |
Barclays Capital | KeyBanc Capital Markets Inc. | |||
Ross L. Smotrich | (212) 526-2306 | Craig Mailman | (917) 368-2316 | |
D.A. Davidson | Ladenburg Thalmann & Co., Inc. | |||
Barry Oxford | (212) 240-9871 | 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 |
51 |
EXHIBIT 99.2
Lexington Realty Trust – UNEDITED TRANSCRIPT
Q3 2017 Earnings Call
Company Participants
T. Wilson Eglin, Chief Executive Officer and President
Patrick Carroll, Chief Financial Officer
James Dudley, Executive Vice President and Director of Asset Management
Heather Gentry, Senior Vice President of Investor Relations
Operator:
Good morning, and welcome to the Lexington Realty Trust Third 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 Heather Gentry, Investor Relations. Please go ahead.
Heather T. Gentry:
Thank you, operator. Welcome to the Lexington Realty Trust Third Quarter 2017 Conference Call and webcast. The earnings release was distributed this morning, and both the release and supplemental disclosure package that details 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 files with the SEC from time to time, could cause Lexington's actual results to differ materially from those expressed or implied by such statements. Except as required by law, Lexington does not undertake a 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 all equityholders 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 conference call to discuss Lexington's third quarter 2017 results are Will Eglin, Chief Executive Officer; and 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 now turn the call over to Will.
1 |
T. Wilson Eglin:
Thanks, Heather. Good morning, everyone, and thank you for joining our third quarter 2017 earnings call and webcast. We are pleased to report positive third quarter results. Net income totaled $0.02 per diluted common share, and we generated $0.25 per common share of Adjusted Company Funds from Operations during the quarter. In addition to positive financial results, our business plan execution continues to lead to significant improvements in the overall quality of our portfolio. We added $321 million of industrial assets to the portfolio during and subsequent to the quarter, most notably, a $200 million three-property industrial portfolio acquired at the end of September. We also disposed of another $70 million of non-core assets during the quarter and subsequently, further reducing our exposure to leasing risk and related capex as well as incremental operating expenses.
Leasing volume of 1.2 million square feet in the quarter supported a healthy percentage leased of 97.9% at quarter-end, and we have completed an additional 700,000 square feet of leases since then.
Leverage increased in the third quarter when compared to the past few quarters, primarily as a result of borrowing on our line to fund the I-40 industrial portfolio acquisition without the benefit of recognizing a full quarter of EBITDA. Overall, our balance sheet remains in good shape with 73% of our assets unencumbered and a weighted average debt maturity of 6.9 years.
Given our 2017 acquisition volume, improving risk profile and a longer weighted average lease term, we announced today an increase in our annual dividend rate from $0.70 to $0.71 per common share. Also, as a result of better visibility leading into the remainder of the year, we are tightening our 2017 Adjusted Company FFO guidance within the range of $0.95 to $0.97 per diluted common share.
Let's take a closer look to third quarter and how we're thinking about the rest of the year and beyond. Starting with investments.
During the quarter, we acquired four industrial properties and completed one industrial build-to-suit for a total of $303 million at average GAAP and cash cap rates of 6.6% and 5.7%, respectively. The bulk of the volume in the quarter was the purchase of the I-40 industrial portfolio located within sub-markets in Tennessee and Mississippi that have close proximity to Interstate-40. These assets are all newly constructed, Class A warehouse/distribution facilities leased for approximately 10 years to investment-grade tenants. We were excited to add these properties to our portfolio, given the quality of the real estate, locational attributes and the high credit quality of the Nissan Kellogg and McCormick brands. We also purchased a $67 million distribution facility in McDonough Georgia leased to Georgia-Pacific for 10 and a half years, and completed a 165,000 square-foot industrial build-to-suit in Opelika Alabama leased to Golden State Foods for 25 years.
Subsequent to the end of the quarter, we purchased a distribution facility in Lafayette, Indiana, leased a Caterpillar for seven years for $17 million. We expect an additional $86 million in forward commitments to close shortly. Including these two forward commitments, 2017 investment activity is expected to total almost $700 million at average GAAP and cash cap rates of 7.4% and 6.5%, respectively. These additions to the portfolio, substantially all of which are industrial, will add 9.1 million of new square footage to our holdings and have helped increase both our industrial revenues and weighted average lease term. We would expect industrial exposure to increase further by year-end to approximately 43% of overall portfolio revenues, once a full quarter of revenue is recognized for third quarter acquisitions.
2 |
We continue to source and evaluate new assets to acquire, either through a purchase, sale leaseback transaction or build-to-suit project, primarily in the industrial area. Strong fundamentals and demand have further tightened pricing in the industrial market, increasing the value of our holdings and our acquisitions team continues to leverage our relationships and franchise to find new opportunities. We continue to favor the industrial space, given its better, long-term return profile, its less capital intensive attributes and its greater relevance in the continued shift towards e-commerce and demographic trends. Given our current pipeline, proceeds from dispositions, available cash and ample credit, we believe we are well positioned from a funding perspective.
Moving onto dispositions, we had another successful quarter of selling non-core portfolio assets to further simplify and improve the quality of our portfolio, while reducing operating costs and leasing risk. Sales for the quarter totaled $42 million at GAAP and cash cap rates of 5.2% and 5.3%, respectively and consisted primarily of short-term leased office, retail, multi-tenant and vacant properties. Subsequent to quarter-end, dispositions of $28 million consisted of an office building whose lease expired October 31st and office building in Lisle, Illinois and two vacant properties, which included an industrial building in High Point, North Carolina, and an office building in Fishers, Indiana. To date, we have completed the bulk of our announced 2017 disposition plan, with wholly owned asset dispositions totaling $222 million at average GAAP and cash cap rates of 7.4% and 7.6%, respectively.
Further, we have sold a $600 million non-consolidated asset and raised approximately $89 million from loan sales in 2017. We expect modest disposition volume for the remainder of fourth quarter and are targeting $250 million to $300 million of assets to be sold between now and the end of next year to complete our current portfolio repositioning.
Turning to leasing, during the quarter, we leased approximately 1.2 million square feet, with our portfolio 97.9% leased at quarter-end. The majority of this volume included lease extensions with New Cingular, ODW Logistics, and Tenneco Automotive, all of which had near-term lease expirations.
Renewal rents, overall, were up 6% on a GAAP basis and flat on a cash basis. Breaking this down further, office renewal GAAP and cash rents were up 6% and 4%, respectively and industrial renewal GAAP and cash rents were up 6% and down 5%, respectively. Industrial cash rents decreased as a result of the Tenneco lease in which we lowered rent in exchange for a long lease extension of 10 years in order to create additional value in the property.
Subsequent to the quarter, we renewed a 640,000 square-foot 2017 lease expiration with Geodis Logistics in Statesville, North Carolina for 3 years, which raised GAAP and cash rents by 30% and 14%, respectively. We also signed a new lease at our multi-tenant office property in Farmers Branch, Texas, increasing property occupancy from 43% to approximately 80%. Property sales, lease renewals and new investments coming on-line continue to lengthen our weighted-average lease term, currently at 9.1 years.
3 |
Through our leasing efforts, we have addressed virtually all of our 2017 lease expirations and approximately 40% of 2018 single-tenant lease expirations through renewal or sale since the beginning of the year. We continue to work diligently to address remaining 2018 lease expirations, which represent only about 5% of the overall portfolio. On the office side, the lease with Swiss RE, in Overland Park, Kansas, which is set to expire in December 2018, makes up the largest percentage of our 2018 office lease expirations. We do not anticipate the tenant will renew its lease, and we are marketing the space for lease or sale. There is a large non-recourse mortgage of $33 million on the property, which means that our downside risk is mitigated in the event we cannot create value in excess of the loan balance. Additionally, Pacific Union in Irving, Texas, will be moving out of their 43,000 square-foot space in May 2018, and we have begun marketing this space for lease. Nissan currently occupies the remaining 225,000 square feet in the building.
Current negotiations are underway for our two office properties in Wallingford, Connecticut and McDonough, Georgia. On the industrial side, we have no leases expiring until September 30, 2018, and are actively pursuing renewals on the majority of these expirations. As a whole, these properties represent minimal square footage and revenue in relation to the larger portfolio.
Moving on to retail, we are in the process of marketing both our Gander Mountain properties, which includes a 100%-owned 46,000 square-foot space in Albany, Georgia and a 25% joint venture interest in a 120,000 square-foot space in Palm Beach Gardens, Florida for either lease or sale. Additionally, both our Best Buy and Mighty Dollar retail properties come off lease in 2018 and are actively being marketed for sale. Overall, retail properties represent only about 1% of our revenues and as a result, we do not believe that leasing outcomes are material to our operations.
Moving briefly to the balance sheet, our balance sheet remains in fine shape. Leverage increased to 6.2x net debt to EBITDA during the quarter, primarily as a result of the I-40 industrial portfolio purchase, and our overall credit metrics continue to be strong. In connection with the purchase, we increased borrowings on our line and our two term loans, which Pat will discuss in more detail shortly. As we think about the future direction of our balance sheet, we will continue to maintain flexibility and may obtain non-recourse mortgage financings on some of our office properties. These proceeds could be used to pay down our revolving credit facility.
In summary, we continued to successfully execute our business plan during the third quarter, specifically by acquiring high quality industrial investments, disposing of non-core assets to simplify the portfolio and reduce cost, addressing near-term lease expirations and maintaining a flexible balance sheet. Looking forward, our goals of longer-term growth potential and an improved valuation remain the same as we near completion of a carefully constructed plan we started several years ago. We will continue to act on attractive growth opportunities in the industrial space, while finishing the multi-year disposition plan and managing through the remainder of our near-term lease rollover.
4 |
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 for the quarter were $98 million compared with gross revenues of $106 million for the same time period in 2016. The change is primarily attributable to 2016 and 2017 sales, largely, the New York City land investments we sold in 2016 and lease expirations, which were partially offset by revenues generated from property acquisitions and new leases.
Net income attributable to common shareholders for the quarter was $4 million or $0.02 per diluted common share compared to a net loss of $27 million or $0.12 per diluted common share for the same time period in 2016. Our 2017 guidance for net income is now expected to be within a range of $0.35 to $0.37 per fully diluted common share. This estimate is sensitive to the timing and composition of acquisitions and sales, among other factors.
During the quarter, we recognized impairment charges of $22 million and $11 million of gains related to property sales. Adjusted Company FFO for the quarter was $61 million or $0.25 per diluted common share compared to $67 million or $0.28 per diluted common share for the same time period in 2016. The New York City land investments, which we sold in September 2016, generated $8.7 million of Adjusted Company FFO or about $0.035 per common share in the third quarter of 2016.
GAAP rents were in excess of cash rents during the quarter by approximately $3 million, primarily as a result of 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 September 30, 2017. As a reminder, 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 $209 million for the nine months ended September 30, 2017, compared to $210 million for the same time period in 2016, slightly down primarily as a result of 2016 and 2017 office Move-outs. Subsequent to the end of the quarter, we sold two vacant properties, both of which had been prior move-outs. Same-store percentage leased was 97.2% at September 30, 2017, compared to 98.9% at September 30, 2016, due to those same Move-outs.
Property operating expenses for the third quarter were approximately $12 million, in line with the same time period in 2016 and down from second quarter. Additionally, G&A expenses were $8 million for the quarter, in-line with the second quarter. We expect fourth quarter G&A to be
comparable to the third quarter.
The litigation reserve of $2.05 million results from a settlement of a non-recourse carveout guarantee claim related to a mortgage assumed in the Newkirk merger. The maximum exposure under the guaranty was $10 million.
5 |
Now I'd like to talk about the balance sheet. We continue to maintain a flexible balance sheet. At the end of the quarter, we had $175 million of cash on the balance sheet, including cash classified as restricted. We had approximately $2.1 billion of consolidated debt outstanding at the end of the quarter at a weighted-average interest rate of 3.6%.
As of September 30, 2017, 80% of our debt is at fixed rates and we continue to maintain a well-laddered maturity schedule. Our debt balance increased during the quarter, as we drew $200 million on our revolving credit facility to fund the purchase of the I-40 industrial portfolio, and we increased both our term loans by $45 million and $50 million, respectively, to bring each to $300 million. The term loan increases were part of a larger amendment to our credit facility. In addition to the term loan increases, the amendment increased the amount of our revolving credit facility by $105 million to a total of $505 million and with lender approval increases the maximum overall capacity of this facility to $2 billion.
Fixed charge coverage at the end of the quarter was approximately 2.7x, and leverage for the quarter was 6.2x net debt to Adjusted EBITDA compared to 5.4x at the end of the second quarter of 2017. As Will mentioned earlier, leverage rose as a result of the timing of the I-40 industrial portfolio acquisition. We satisfied $25 million of nonrecourse mortgage debt during the quarter.
As of September 30, 2017, we had $18 million of consolidated mortgages currently the maturity default, but no other non-recourse balloon mortgage payments coming due through the remainder of the year. Our unencumbered asset base was approximately $3.4 billion, representing approximately 73% of our NOI as of September 30, 2017.
As of September 30, 2017, we had $200 million outstanding on our revolving credit facility, which as I just mentioned, was increased to $505 million. This, along with our available cash will be used as capital sources, as we look to fund investment commitments in new investments. We paid approximately $6 million in lease cost and tenant improvements during the quarter. To-date, we paid approximately $15 million TI leasing costs and expect up to an additional $13 million in these costs for the remainder of the year.
Now I'll turn the call over back to Will.
T. Wilson Eglin:
Thanks, Pat. Operator, I have no further comments at this time. So we are ready for you to conduct the question and answer portion of the call.
Operator
(Operator Instructions) The first question will come from Sheila McGrath of Evercore.
Sheila McGrath - Evercore ISI, Research Division:
Ah, yes, good morning. Will, I was wondering, your percentage of industrial has gone up again, which, I know, that's the goal. I wonder if you could talk about what the ideal mix is there, and if you would consider a portfolio sale of non-core assets to get there more quickly?
6 |
T. Wilson Eglin:
Sure, Sheila. I think we're making good progress toward having more of the portfolio in industrial versus office. Some of that will depend on what we find to invest in next year. But most of what we're selling through the end of next year is office. And secondarily, what we sort of refer to as the stub portfolio, which is some retail properties and some multi-tenant properties in it, but if he can execute that plan and reinvestment the proceeds in industrial, I think that the composition of the portfolio is more like 55% industrial, 45% office, which we think is a big improvement. Right now, we're not looking at any office investments. So, it seems to me like if we were to look beyond there, it seems like the portfolio is going to continue to tilt more and more in favor of industrial right now. We have looked at portfolio dispositions in the past, but we felt like from a net asset value standpoint, it's been far better to sell assets in a series of one-off transactions.
Sheila McGrath:
Okay. And then on the acquisitions, fourth quarter, typically, is your most active quarter. But this quarter had $300 million. I was wondering if you could give us some insight, how the pipeline is looking for fourth quarter? Do you think it will be much less than transactions this quarter?
T. Wilson Eglin:
Yes. Right now, we have the $86 million of forward commitments that are about to close, and we don't have anything else scheduled to close in the fourth quarter. So it's possible that something might show up. But right now, it seems to me like once those forward commitments are finished, that's probably -- that will probably constitute our 2017 investment activity. And we're looking at a lot of transactions, but compared to last year, last year at this time, we had quite a good forward pipeline of build-to-suits that we felt will finish in 2017, and our posture is very different from that standpoint, and that we just have the $86 million to finish funding shortly. So we're happy to see what comes.
Sheila McGrath:
Okay. And one last quick one. You mentioned net debt to EBITDA kicking up from the timing of the acquisition. If you adjusted EBITDA for that portfolio to contribute to whole quarter, what would the net debt to EBITDA look like?
Patrick Carroll:
It would be slightly lower, Sheila, but with the sales, it would be burning off. It would change somewhat. But what it will be slightly lower, closer to 6.
Sheila McGrath:
Okay, great. Thank you.
Operator
Your next question will come from John Peterson of Jefferies.
Jonathan Michael Petersen - Jefferies LLC, Research Division:
Great. Thanks. On the cap rate, on the acquisitions you closed in the quarter, did you guys provide that? I don't think I heard that.
7 |
T. Wilson Eglin: 5.7%.
Jonathan Michael Petersen:
Is that GAAP or cash?
T. Wilson Eglin:
That's cash. And I think 6.60% on a GAAP basis.
Patrick Carroll:
Yes. We -- our phone line isn't the greatest, unfortunately, so some of the comments have been blurred out. But on the acquisitions, it's 6 60% on a GAAP basis, 5.70% on a cash basis.
T. Wilson Eglin:
On the I-40 industrial portfolio, the cap rate was 5.80% because we had some free rent. But on year two, it's about 6 1%. So, it does improve pretty quickly.
Jonathan Michael Petersen:
Okay, good. And so you guys did 700,000 square feet of new and extended leases. Could you guys break that out, and what of that is new and what is extended and the stuff that you did subsequent to the end of the quarter?
T. Wilson Eglin:
The extended lease was with Geodis. That was a 3-year lease on a big industrial facility. And then we have one office lease at a multi-tenant property in Farmers Branch, Texas, which was good because it raised the occupancy considerably in that building.
Patrick Carroll:
Yes. So if you look at the 700,000 square feet that we did in the fourth quarter, about 640,000 of it as extensions and about 66,000 is new.
Jonathan Michael Petersen:
Okay. All right. So a little bump in occupancy. Have you have a move-outs that kind of move against that, or should we, kind of, assume occupancy is trending higher?
T. Wilson Eglin:
No. I mean, we sold the one that had a October 31 move-out, and that property has been sold.
Jonathan Michael Petersen:
Okay. And then could you give us an update on the FedEx office lease expiration in 2019? I know it's a ways out, but it's a pretty big one. What are your thoughts there?
T. Wilson Eglin:
Yes. We're continuing to have negotiations with Federal Express, and we're optimistic that those negotiations will lead to continued occupancy in the building by Federal Express.
8 |
Jonathan Michael Petersen:
Do you have any idea of timing of when something that like would complete?
T. Wilson Eglin:
No, I wouldn't want to speculate on that just because it involves two parties. But we think we're making good progress.
Jonathan Michael Petersen:
Okay. And then just one final question on, Shelia asked about 4Q volumes. Just kind of curious about upcoming tax reform in 2018, if you're seeing that impact buyers and sellers and their willingness to make decisions in fourth quarter, whether they want to push things into next year?
Patrick Carroll:
I mean, since it just came out, and it's extremely preliminary, I think the proposals are very favorable to REITs. But we haven't seen it have any impact, just yet, on transaction volume.
Jonathan Michael Petersen:
Okay. If I can sneak in one more. The dividend increase, would you say that's more of a result of, kind of, chasing taxable income? Or is that, kind of, your desire to keep doing consistent bumps every few quarters or so?
Patrick Carroll:
Well, we set the dividend based upon our taxable income. So taxable income is going up, so that's where the dividend is. But we feel it's important also to return the distributions to the shareholders.
Jonathan Michael Petersen:
Great. Thank you.
Operator
Your next question will come from Craig Mailman of KeyBanc Capital Markets.
Craig Mailman - KeyBanc Capital Markets Inc., Research Division:
Hey guys. On the Teneco lease, Will, I know you said there was a cash rolldown. On a GAAP basis, what does that mark-to-market look like though?
Patrick Carroll:
Hold on one second. It's actually in the supplement. It's -- I have to turn to it. The Teneco lease, the GAAP went from -- the prior GAAP was like $700,000 and the new GAAP is about $815,000. It's a very good GAAP bump.
Craig Mailman:
Okay. That make sense. And then, Will, I heard you kind of say, I think, 7.8% on, 7.4% on year-to-date acquisitions GAAP, or was that on the Lafayette and the $86 million of forward commits, you had for 4Q? I didn't hear what that number was for.
9 |
T. Wilson Eglin:
For the whole year.
Craig Mailman:
For the whole year. What does it look like for the fourth quarter?
T. Wilson Eglin:
There's three in the supplemental and the forward commitments page, we laid out the GAAP cap rates for the three transactions.
Patrick Carroll:
It's 7 4% on a GAAP basis, 6.8% on a cash basis. It's on page 16 of the supp.
T. Wilson Eglin:
And on page 5 of the earnings release.
Craig Mailman:
Great. I guess, just bigger picture, you guys have been successful at sourcing acquisitions this year. On the blended basis, your GAAP cap rate of 7.4% makes some sense, but your guys are throwing in some stuff from the third quarter. I guess, just, how do you think about your cost of capital here heading into '18, as the repositioning program's burning off, and so that source of capital is kind of going away than your kind of stuck with pure -- almost debt and equity and looking at your blended, kind of, cost on that. It just seems like that, it gets harder to pencil some of these industrial acquisitions, kind of, just how are you guys thinking about that?
T. Wilson Eglin:
Well, we're thinking that we're redeploying the shareholders capital from being invested in suburban office and some empty buildings and multi-tenanted retail, into a better asset class. And right now, were planning on creating liquidity and access of our current forward pipeline. So that's how we're thinking about the capital plan. We think that should improve our cost of capital and lead to a higher share price. But our game plan right now is to redeploy capital from principally out of office into industrial.
Craig Mailman:
And then just one last one. You guys are running up the line here. I know you have more capacity, but, Pat, just how are you thinking about how much of that capacity you want to use and pro forma, where you guys may be by the time you get the dispositions done versus what you guys have may have earmarked I know you haven’t given guidance for '18 but what you guys have earmarked for acquisitions and funding of some of the development, and kind of, when we should think about, maybe, you guys clearing that down and where you think you could issue debt?
Patrick Carroll:
Well, we just -- as part of the three pack, the $200 million that was used, that's one of the reasons why we amended the agreements. We increased the availability by $200 million, because, obviously, we didn't want to be that far out on our line with limited less amount of availability. So right now, we have about $300 million available on the line. We have $200 million outstanding as of September. That will be paid down through dispositions and to the extent we do any property specific financings in the portfolio.
10 |
T. Wilson Eglin:
I think, if we were selling tenured debt, Craig, it's probably somewhere in the 4.40% or 4.5% area.
Craig Mailman:
Thanks.
Operator
The next question will come from Anthony Paolone from JPMorgan.
Anthony Paolone - JP Morgan Chase & Co, Research Division:
Thanks, good morning. So the deals you guys did in the quarter were 5.7% cash, in the fourth quarter forward pipeline 6.8%, so, it seems like, call it 6-ish, is the spot cap rate for the stuff you all are doing these days. Can you talk a little bit about, kind of, where -- what kind of risk would you have to take to get that to 7% or conversely, if you wanted 15-year duration, like, where does that go? Like, what are the pressure points on that cap rate as you look at deals?
T. Wilson Eglin:
Well, in the purchase market, we really haven't seen much in the 15-year area, Tony. That market has seemed to be, in our case, a 7- and 10-year market. And that's for sure a lot of industrial that's trading with much shorter lease terms and very good pricing. So that -- those longer-term leases have been -- we can originate them in build-to-suit, but build-to-suit is less active right now that it was a year ago. So, in the case of the three-pack portfolio, where we had new construction, A-quality real estate, very high investment-grade but arguably, right, secondary markets, not primary. That led to that, sort of, 6-cap area pricing. To achieve a 7-cap on anything, is probably puts you in the office market without long term. More in the industrial side with highly specialized real estate combined with credit risk. And perhaps, shorter lease duration. So there's not anything that will -- we have one cold storage facility that's going to close this quarter that's in that 7 area. But we're not going, in terms of the things that we're looking at, on a forward basis, we're not going out the risk spectrum.
Anthony Paolone:
Okay. And then so if we think about, just where you sit, looking out to 2018, today, you mentioned the $250 million to $300 million of sales and the forward pipeline gets cleaned out in 4Q. So just timing wise, should we anticipate that your net seller for at least the earlier part of next year and, kind of, see how things go? Or how do we think about that?
T. Wilson Eglin:
I think that right now, that's a realistic assumption. The disposition plan will take time to execute through the end of next year. And I think that we will find new property to invest in. But right now, there's only one property for January acquisition that looks promising. So it may be a mix of acquisitions and deleveraging, as we work our way through next year.
11 |
Anthony Paolone:
Okay. And then is there anything you can tell us in terms of the Swiss RE expiration in terms of where and where rents would need to be to forward to make sense for you to, kind of, keep the building and put CapEx into it versus kicking it back to lender or just any brackets around that?
T. Wilson Eglin:
I think I'll ask James Dudley, our Head of Asset Management is here. So I'll ask him to share his opinion.
James Dudley:
Sure. The real challenge of that building is the load factor, the common area factor. So that's the real challenge. So in order for us get a rate that would work for us, it would probably need to be somewhere around $16 triple net. But that would be the adjustment to the rentable square footage to make it a multitenant building.
Anthony Paolone:
Okay. Got it. And then just last question, remind me, the Golden State deal, the per square foot price was on the high side, was that a cold storage or more specialized building? Can't remember.
T. Wilson Eglin:
Yes, it's essentially a manufacturing facility. So that's why we got 25 year, or required the 25-year lease there.
Operator:
The next question will come from John Guinee of Stifel.
John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division:
Great, great, great. Thank you. Okay. So the idea here is to shift from an income-oriented stock, where you've got to pay a brutal 7% dividend, to industrial stock portfolio, longer lease durations, mostly secondary markets. And looks to us as if you're in the share repurchase mode at below $9 a share and then the issuing equity mode at above $11. Is that a good range, or have you rethought that, kind of, repurchased that below $9 issue equity level above $11?
T. Wilson Eglin:
We would not comment on either where we would repurchase shares or issue them.
John W. Guinee:
Why not?
T. Wilson Eglin:
Well, recall, John, if we're repurchasing shares, we, right, we never know how wide the discount to net asset value we would want. And conversely, the decision to issue equity on behalf of existing shareholders has a lot to do with whether issuing those shares would be likely to drive the value higher. And so I wouldn't want to indicate what the right share price is under that scenario.
12 |
John W. Guinee:
And then in terms of -- looks like you sold, I think, I heard about $222 million this year. You're on schedule to acquire about $700 million. That's caused you to get up into the mid six and a half net debt plus preferred to EBITDA range. Have you presented the street with a maximum, or have you and the board talk about the maximum net debt plus prefer to EBITDA that you shall go in this plan?
T. Wilson Eglin:
In terms of net debt to EBITDA, given the improved credit quality and weighted average lease term and lower CapEx profile of the portfolio, certainly, running the company in the six to six and a half range is comfortable. We have a little bit of a biased towards shrinking our leverage as we work our way through next year. But part of that will be a function of what's available in the acquisition market.
John W. Guinee:
The problem is though, if you shrink the leverage, you can never get where you need to be, which is presenting yourself as a primarily industrial REIT. You really have to lever up to get there, I think. Is that a fair way to look at it?
T. Wilson Eglin:
Well, one thing I would tell you, John, which I did mention in my comments, is it may be that we will leverage some of our office buildings in the mortgage market to push loan-to-value in that portfolio and extract equity from our office portfolio with a view toward being able to reinvest more capital into industrial as we go through next year.
John W. Guinee:
Okay. Have you thought about, when you present your leverage metrics to bifurcate between your industrial portfolio and your asset-specific office leverage?
T. Wilson Eglin:
With the supplemental at year-end, we'll likely break out the two.
John W. Guinee:
So you're essentially doing presales to lenders on your office portfolio?
T. Wilson Eglin:
No.
John W. Guinee:
Okay, thanks.
Operator:
The next question will come from Daniel Donlan of Landenberger Thalmann.
13 |
John James Massocca - Ladenburg Thalmann & Co. Inc., Research Division:
This is actually John Massocca on for Dan. So my question, I just wanted to clarify, did you say that for the remainder of 2017 you're expecting around $13 million in TIs and LCs, leasing commissions?
Patrick Carroll:
That's almost all the TI.
John James Massocca:
Why is that number -- I mean, given you did $15 million of combined tenant improvements and leasing commissions kind of...
Patrick Carroll:
It's a cash basis. It’s a cash basis. And the leases that we have signed, say, in the first in the second quarter, the work is actually being done no.
John James Massocca:
Okay. That make sense no. That number is pretty solid that you have now at this point good visibility that might is going out the door?
Patrick Carroll:
Yes, but lets face it, if a tenant doesn’t finish the work and pushes it off to January, it could change. But yes, based on what we expect to date, right now, we feel that is a very good number.
John James Massocca:
Okay. And then as you look out to 2018, that $200 million to $300 million of dispositions you're guiding to, I mean, how much of that is vacant assets?
T. Wilson Eglin:
Not very much, we're 98% lease right now. So there'll be a little vacancy in the disposition plan. A lot of what we're going to be doing is trying to sell some of our office build to suits that we’ve held for 5 years or so. So while we have remaining term at a good price, we want to lock in our gains and recycle capital out of those investments.
John James Massocca:
Make sense. And kind of, understanding bit of a fluid portfolio, but would you expect by the end of 2018, to basically be completely divested of multi-tenant assets and vacant assets and that's going to change as leases come up, and such, but ...
T. Wilson Eglin:
Yes, I think we want to shoot for, as much of a pure play, single tenant office and industrial company as possible. It's -- it may be that we still have a few assets that we haven't traded out of. And in the multi-tenant portfolio, there some very good buildings and we may not want to rush to let them go and there are some that we certainly want to finish leasing up to a high level before we think about selling them.
14 |
John James Massocca:
Understood. That’s it for me. Thanks very much.
Operator:
The next question is a follow-up from Sheila McGrath of Evercore.
Sheila McGrath:
Yes, just on the CapEx it sounds like, this year, the TIs and leasing commissions would be around $28 million. Is -- if we look at next year, is that mostly office roll that the CapEx number would be similar to this year? Or do we start to see that trending lower next year?
T. Wilson Eglin:
I think, Sheila, we always feel around $20 million to $25 million is the right number. And that's what right now. But it all could change, based on the leasing volume that we do.
Sheila McGrath:
Okay, thanks.
Operator:
The next question will come from Bill Siegel of Development Associates, Inc.
William Segal, Private Ivestor:
Thanks gentleman. I know we have some exposure in the Houston area throughout Mississippi and with the hurricane, flooding, et cetera. Any of our properties either directly or access wise. And anywhere in the Southeast in that regard?
James Dudley:
No, all the properties that we have were in line with the hurricanes, came out with very minor damage, if any at all. The portfolio faired very, very well.
William Segal:
Terrific. And lastly, over the last few quarters, you have mentioned, of course, how competitive the build-to-suit or even acquisition of industrial or warehouse has gotten. Are you still finding it getting more competitive? Are relationships helping us to get those so the properties moving forward?
T. Wilson Eglin:
I would say our relationships should help us a lot. I feel like often -- we see -- we get a last look at transaction opportunities. But things are quite competitive. And we've seen several situations where bidders who have lost an opportunity sure property in the marketplace and drive cap rates even lower, just to be sure that they are able to get the capital investment. So it's quite a competitive marketplace. That's for sure.
William Segal:
Thank you very much.
15 |
T. Wilson Eglin:
Thank you Bill.
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:
Thanks again everyone 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 other members of our senior management team with questions. Thanks, again, and have a great 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.
16 |
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