8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant

to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): February 27, 2018

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 February 27, 2018, we issued a press release announcing our financial results for the quarter ended December 31, 2017. A copy of the press release is furnished herewith as part of Exhibit 99.1.

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

Item 7.01. Regulation FD Disclosure.

On February 27, 2018, we made available supplemental information, which we refer to as the “Quarterly Supplemental Information, Fourth Quarter 2017,” a copy of which is furnished herewith as Exhibit 99.1.

Also on February 27, 2018, 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, Fourth Quarter 2017.
99.2	February 27, 2018 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: February 28, 2018	By:	/s/ Patrick Carroll
	Patrick Carroll
	Chief Financial Officer

Exhibit Index

99.1	Quarterly Supplemental Information, Fourth Quarter 2017.
99.2	February 27, 2018 Conference Call Transcript.

EX-99.1

Exhibit 99.1

LEXINGTON REALTY TRUST

QUARTERLY SUPPLEMENTAL INFORMATION

December 31, 2017

Table of Contents

Section	Page
Fourth Quarter 2017 Earnings Press Release	3
Portfolio Data
Investment / Capital Recycling Summary	15
Financing Summary	16
Leasing Summary	17
Other Revenue Data	19
Portfolio Detail by Asset Class	21
Portfolio Composition	22
Components of Net Asset Value	23
Top Markets	24
Single-Tenant Office Markets	25
Tenant Industry Diversification	26
Top 10 Tenants or Guarantors	27
Lease Rollover Schedules – GAAP Basis	28
Property Leases and Vacancies – Consolidated Portfolio	30
Property Leases and Vacancies – Non-consolidated Portfolio	36
Select Credit Metrics Summary	37
Financial Covenants	38
Mortgages and Notes Payable	39
Debt Maturity Schedule	41
Selected Balance Sheet Account Data	42
Non-GAAP Measures – Definitions	43
Reconciliation of Non-GAAP Measures	45
Investor Information	49

This Quarterly Earnings Press Release and Quarterly Supplemental Information contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the control of Lexington Realty Trust (“Lexington”), which may cause actual results, performance or achievements of Lexington and its subsidiaries to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Lexington’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, risks related to: (1) the 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, 2018, (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 FOURTH QUARTER 2017 RESULTS

New York, NY - February 27, 2018 - Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant real estate investments, today announced results for the fourth quarter and year ended December 31, 2017.

Fourth Quarter 2017 Highlights

• Generated Net Income attributable to common shareholders of $29.2 million, or $0.12 per diluted common share.

• Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $63.1 million, or $0.26 per diluted common share.

• Acquired four industrial properties for an aggregate cost of $140.0 million.

• Formed a joint venture which acquired a 151-acre parcel of developable land to pursue industrial build-to-suit opportunities.

• Disposed of eight properties for an aggregate of $47.9 million.

• Completed one million square feet of new leases and lease extensions with portfolio 98.9% leased at quarter end.

• Collected $49.1 million in full satisfaction of a loan to a joint venture.

• Financed an office property generating initial gross proceeds of $45.4 million.

• Repaid $40.0 million on the revolving credit facility and retired an aggregate of $18.4 million of secured debt.

• Increased the quarterly common share/unit dividend/distribution to $0.1775 per common share/unit.

Full Year 2017 Highlights

• Generated Net Income attributable to common shareholders of $79.1 million, or $0.33 diluted common share.

• Generated Adjusted Company FFO of $238.6 million, or $0.97 per diluted common share.

• Acquired/completed 15 consolidated properties and the last building of the Lake Jackson, Texas build-to-suit project for an aggregate initial basis of $727.6 million.

• Disposed of 34 consolidated properties for gross proceeds of $241.7 million.

• Sold a non-consolidated interest in an office property for $6.2 million.

• Completed 3.8 million square feet of new leases and lease extensions.

• Retired an aggregate of $63.4 million of secured debt with a weighted-average fixed interest rate of 6.0% and obtained $45.4 million of secured debt with a weighted-average fixed interest rate of 5.2%.

• Amended the revolving credit facility, together with the related term loans, increasing the capacity by $200.0 million.

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• Collected an aggregate of $138.0 million in full satisfaction of three loan investments.

• Issued 1.6 million common shares at an average gross price of $10.89 per share under its ATM offering program.

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 finished off the year strong with fourth quarter Adjusted Company FFO of $0.26 per diluted common share. During 2017, we raised $386 million by monetizing our loan portfolio and disposing of 34 properties while adding 15 properties to our portfolio for $728 million.  As a result, we have substantially upgraded the quality of our holdings, shrunk our office footprint and simplified our operations which we expect to lead to lower operating costs. Additionally, strong leasing volume, along with non-core assets sales, brought our overall portfolio to approximately 99% leased at year end.

The guidance we have initiated today in the range of $0.95 to $0.98 per share suggests that our operating results in 2018 will be comparable to 2017 even as we anticipate lengthening our average debt maturity, providing concessions on early lease extensions and continuing with our capital recycling activities.  We intend to use proceeds from financings and dispositions to reinvest into industrial acquisitions and build-to-suit opportunities and to pay down debt.”

FINANCIAL RESULTS

Revenues

For the quarter ended December 31, 2017, total gross revenues were $102.2 million, compared with total gross revenues of $95.3 million for the quarter ended December 31, 2016. The increase was primarily attributable to revenue generated from property acquisitions and new leases, partially offset by 2017 property sales and lease expirations.

Net Income Attributable to Common Shareholders

For the quarter ended December 31, 2017, net income attributable to common shareholders was $29.2 million, or $0.12 per diluted share, compared with net income attributable to common shareholders for the quarter ended December 31, 2016 of $14.4 million, or $0.06 per diluted share.

Adjusted Company FFO

For the quarter ended December 31, 2017, Lexington generated Adjusted Company FFO of $63.1 million, or $0.26 per diluted share, compared to Adjusted Company FFO for the quarter ended December 31, 2016 of $59.7 million, or $0.24 per diluted share.

Dividends/Distributions

As previously announced, during the fourth quarter of 2017, 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 was paid 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 was paid February 15, 2018 to Series C Preferred Shareholders of record as of January 31, 2018.

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Transaction Activity

ACQUISITIONS

Primary Tenant (Guarantor)	Location	Sq. Ft. (Approx.)		Property Type	Initial Basis ($000)		Approximate Lease Term (Yrs)
Caterpillar, Inc.	Lafayette, IN		309,000	Industrial	$	17,450		7
Undisclosed(1)	Romulus, MI		500,000	Industrial		38,893		15
Lipari Foods Operating Company, LLC	Warren, MI		260,000	Industrial		46,955		15
Undisclosed(1)	Winchester, VA		400,000	Industrial		36,700		14
			1,469,000		$	139,998

1. Tenant is a domestic subsidiary of an international automaker.

Including fourth quarter acquisition activity, consolidated 2017 acquisition activity totaled $727.6 million at average GAAP and cash capitalization rates of 7.3% and 6.4%, respectively.

In December 2017, Lexington made an initial contribution of $5.8 million for a 90% interest in a newly-formed joint venture with a developer, which will pursue industrial build-to-suit opportunities. The joint venture acquired a parcel of developable land totaling 151 acres in a submarket of Columbus, Ohio.

PROPERTY DISPOSITIONS

Primary Tenant	Location	Property Type	Gross Disposition Price ($000)		Annualized Net Income(1) ($000)			Annualized NOI(1) ($000)			Month of Disposition	% Leased
National-Louis University(2)	Lisle, IL	Office	$	9,120	$	222		$	1,813		October		100	%
Vacant	High Point, NC	Multi-Tenant Industrial		10,000		508			1,134		October		0	%
Vacant	Fisher, IN	Multi-Tenant Office		9,000		(371	)		(371	)	October		0	%
Vacant(3)	Pine Bluff, AR	Office		43		311			386		October		0	%
Food Lion, LLC/Delhaize America, Inc.	Staunton, VA	Other		1,688		158			166		November		100	%
Entergy Arkansas, Inc.	Little Rock, AR	Office		3,100		182			237		December		100	%
Time Customer Service, Inc.	Tampa, FL	Office		13,700		722			1,128		December		100	%
Toys "R" Us, Inc./Toys "R" Us-Delaware, Inc.(4)	Tulsa, OK	Other		1,233		3			106		December		100	%
			$	47,884	$	1,735		$	4,599

1. Quarterly period prior to sale, excluding impairment charges, annualized.

2. Conveyed to lender in a foreclosure sale.

3. Property was sold subject to a lease which expired October 31, 2017.

4. Tenant has declared bankruptcy.

Including fourth quarter disposition activity, consolidated 2017 property disposition volume totaled $241.7 million at average GAAP and cash capitalization rates of 7.5% and 7.7%, respectively.

LOAN INVESTMENTS

Lexington collected $49.1 million in full satisfaction of a loan made to a joint venture that owns a property in Katy, Texas. The joint venture satisfied the loan with proceeds from a new third-party non-recourse mortgage financing in the original principal amount of $50.0 million, which bears interest at an annual rate of 5.1% and matures in December 2022.

5

Leasing Activity

During the fourth 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	Honolulu	HI	N/A	MTM	09/2018		1,900
1	Total office lease extensions						1,900
	Industrial
1	Statesville	NC	Geodis Logistics LLC	12/2017	12/2020		639,800
2	Franklin	TN	Essex Group, Inc.	12/2018	12/2023		289,330
2	Total industrial lease extensions						929,130
3	Total lease extensions						931,030

	NEW LEASES
	Location			Lease Expiration Date	Sq. Ft.
	Office/Multi-Tenant
1	Farmers Branch	TX	Home Point Financial Corporation	09/2025		64,788
2	Farmers Branch	TX	BBVA Dallas Creation Center, Inc.	07/2028		33,028
2	Total new office leases					97,816
2	Total new leases					97,816
5	TOTAL NEW AND EXTENDED LEASES					1,028,846

1. Leases greater than 10,000 square feet.

As of December 31, 2017, Lexington's portfolio was 98.9% leased.

BALANCE SHEET/CAPITAL MARKETS

In the fourth quarter, Lexington obtained an aggregate of $45.4 million in non-recourse financing on an office property in Charlotte, North Carolina, consisting of a first mortgage loan and a mezzanine loan. The first mortgage loan in the original principal amount of $37.4 million has a 15-year term, bears interest at a fixed rate of 5.3% per annum and is interest only for the first 10 years. The mezzanine financing in the initial principal amount of $8.0 million has a five-year term, is interest only at a fixed rate of 5.0% per annum and may be increased to $12.0 million upon certain events.

Also, during the fourth quarter, Lexington repaid $40.0 million on its revolving credit facility and satisfied an aggregate of $18.4 million of non-recourse mortgage debt.

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2018 EARNINGS GUIDANCE

Lexington estimates that its net income attributable to common shareholders per diluted common share for the year ended December 31, 2018 will be within an expected range of $0.76 to $0.79. Lexington estimates that its Adjusted Company FFO for the year ended December 31, 2018 will be within an expected range of $0.95 to $0.98 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

FOURTH QUARTER 2017 CONFERENCE CALL

Lexington will host a conference call today, Tuesday, February 27, 2018, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended December 31, 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 May 27, 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 10116720. A live webcast of the conference call will be available at www.lxp.com within the Investors section.

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ABOUT LEXINGTON REALTY TRUST

Lexington Realty Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) that owns a diversified portfolio of real estate assets consisting primarily of equity 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, 2018, (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 REIT, (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 has filed 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 or other obligations of any other person, including any other special purpose entity or affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member of managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein which interests are subordinate to the claims of the property owner subsidiary's (or its general partner's, member's or managing member's) creditors.

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Non-GAAP Financial Measures - Definitions

Lexington has used non-GAAP financial measures as defined by the Securities and Exchange Commission Regulation G in this Quarterly Earnings Press 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 rent 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 estimated 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.

# # #

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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Three months ended December 31,						Twelve months ended December 31,
	2017			2016			2017			2016
Gross revenues:
Rental	$	93,909		$	87,261		$	359,832		$	398,065
Tenant reimbursements		8,260			8,065			31,809			31,431
Total gross revenues		102,169			95,326			391,641			429,496
Expense applicable to revenues:
Depreciation and amortization		(45,262	)		(41,361	)		(173,968	)		(166,048	)
Property operating		(12,410	)		(12,512	)		(49,194	)		(47,355	)
General and administrative		(8,597	)		(8,072	)		(34,158	)		(31,104	)
Litigation settlement		—			—			(2,050	)		—
Non-operating income		5,381			3,543			10,378			13,043
Interest and amortization expense		(20,055	)		(19,459	)		(77,883	)		(88,032	)
Debt satisfaction gains (charges), net		3,818			(157	)		6,196			(975	)
Impairment charges and loan losses		(1,419	)		(24,332	)		(44,996	)		(100,236	)
Gains on sales of properties		8,350			23,097			63,428			81,510
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities		31,975			16,073			89,394			90,299
Provision for income taxes		(743	)		(340	)		(1,917	)		(1,439	)
Equity in earnings (losses) of non-consolidated entities		216			1,196			(848	)		7,590
Net income		31,448			16,929			86,629			96,450
Less net income attributable to noncontrolling interests		(598	)		(928	)		(1,046	)		(826	)
Net income attributable to Lexington Realty Trust shareholders		30,850			16,001			85,583			95,624
Dividends attributable to preferred shares – Series C		(1,572	)		(1,572	)		(6,290	)		(6,290	)
Allocation to participating securities		(43	)		(38	)		(226	)		(225	)
Net income attributable to common shareholders	$	29,235		$	14,391		$	79,067		$	89,109
Net income attributable to common shareholders – per common share basic	$	0.12		$	0.06		$	0.33		$	0.38
Weighted-average common shares outstanding – basic		238,131,814			235,066,967			237,758,408			233,633,058
Net income attributable to common shareholders – per common share diluted	$	0.12		$	0.06		$	0.33		$	0.37
Weighted-average common shares outstanding – diluted		241,821,194			235,204,568			241,537,837			237,679,031

10

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

As of December 31,

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

	2017			2016
Assets:
Real estate, at cost	$	3,936,459		$	3,533,172
Real estate - intangible assets		599,091			597,294
Investments in real estate under construction		—			106,652
		4,535,550			4,237,118
Less: accumulated depreciation and amortization		1,225,650			1,208,792
Real estate, net		3,309,900			3,028,326
Assets held for sale		2,827			23,808
Cash and cash equivalents		107,762			86,637
Restricted cash		4,394			31,142
Investment in and advances to non-consolidated entities		17,476			67,125
Deferred expenses, net		31,693			33,360
Loans receivable, net		—			94,210
Rent receivable – current		5,450			7,516
Rent receivable – deferred		52,769			31,455
Other assets		20,749			37,888
Total assets	$	3,553,020		$	3,441,467
Liabilities and Equity:
Liabilities:
Mortgages and notes payable, net	$	689,810		$	738,047
Revolving credit facility borrowings		160,000			—
Term loans payable, net		596,663			501,093
Senior notes payable, net		495,198			494,362
Trust preferred securities, net		127,196			127,096
Dividends payable		49,504			47,264
Liabilities held for sale		—			191
Accounts payable and other liabilities		38,644			59,601
Accrued interest payable		5,378			6,704
Deferred revenue - including below market leases, net		33,182			39,895
Prepaid rent		16,610			14,723
Total liabilities		2,212,185			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, 240,689,081 and 238,037,177 shares issued and outstanding in 2017 and 2016, respectively		24			24
Additional paid-in-capital		2,818,520			2,800,736
Accumulated distributions in excess of net income		(1,589,724	)		(1,500,966	)
Accumulated other comprehensive income (loss)		1,065			(1,033	)
Total shareholders’ equity		1,323,901			1,392,777
Noncontrolling interests		16,934			19,714
Total equity		1,340,835			1,412,491
Total liabilities and equity	$	3,553,020		$	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 December 31,				Twelve Months Ended December 31,
	2017		2016		2017		2016
EARNINGS PER SHARE:
Basic:
Net income attributable to common shareholders	$	29,235	$	14,391	$	79,067	$	89,109
Weighted-average number of common shares outstanding - basic		238,131,814		235,066,967		237,758,408		233,633,058
Net income attributable to common shareholders - per common share basic	$	0.12	$	0.06	$	0.33	$	0.38
Diluted:
Net income attributable to common shareholders - basic	$	29,235	$	14,391	$	79,067	$	89,109
Impact of assumed conversions		338		—		147		(159	)
Income from continuing operations attributable to common shareholders	$	29,573	$	14,391	$	79,214	$	88,950
Weighted-average common shares outstanding - basic		238,131,814		235,066,967		237,758,408		233,633,058
Effect of dilutive securities:
Share options		57,731		137,601		86,285		230,352
Operating Partnership Units		3,631,649		—		3,693,144		3,815,621
Weighted-average common shares outstanding - diluted		241,821,194		235,204,568		241,537,837		237,679,031
Net income attributable to common shareholders - per common share diluted	$	0.12	$	0.06	$	0.33	$	0.37

12

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

ADJUSTED COMPANY FUNDS FROM OPERATIONS & FUNDS AVAILABLE FOR DISTRIBUTION

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

	Three Months Ended December 31,						Twelve Months Ended December 31,
	2017			2016			2017			2016
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income attributable to common shareholders	$	29,235		$	14,391		$	79,067		$	89,109
Adjustments:
Depreciation and amortization		44,050			39,840			168,683			159,363
Impairment charges - real estate, including non-consolidated entities		1,419			24,332			43,214			100,236
Noncontrolling interests - OP units		339			686			147			(159	)
Amortization of leasing commissions		1,212			1,520			5,285			6,684
Joint venture and noncontrolling interest adjustment		257			369			1,121			1,111
Gains on sales of properties, including non-consolidated entities		(8,350	)		(23,729	)		(64,880	)		(87,520	)
Tax on sales of properties		—			2			—			52
FFO available to common shareholders and unitholders - basic		68,162			57,411			232,637			268,876
Preferred dividends		1,572			1,572			6,290			6,290
Interest and amortization on 6.00% Convertible Notes		—			—			—			532
Amount allocated to participating securities		43			38			226			225
FFO available to all equityholders and unitholders - diluted		69,777			59,021			239,153			275,923
Litigation reserve		—			—			2,050			—
Debt satisfaction (gains) charges, net, including non-consolidated entities		(3,796	)		157			(6,174	)		975
Impairment loss - loan receivable		—			—			5,294			—
Unearned contingent acquisition consideration		(3,922	)		—			(3,922	)		—
Transaction costs		1,071			508			2,171			837
Adjusted Company FFO available to all equityholders and unitholders - diluted		63,130			59,686			238,572			277,735
FUNDS AVAILABLE FOR DISTRIBUTION:
Adjustments:
Straight-line rents		(7,232	)		(2,051	)		(19,784	)		(37,748	)
Lease incentives		513			417			1,969			1,673
Amortization of above/below market leases		364			530			1,544			2,057
Lease termination payments, net		(253	)		(1,814	)		(690	)		(8,216	)
Non-cash interest, net		1,018			(387	)		2,465			(1,913	)
Non-cash charges, net		2,119			2,092			8,318			8,998
Tenant improvements		(1,136	)		(665	)		(11,203	)		(1,957	)
Lease costs		(1,242	)		(393	)		(6,526	)		(6,558	)
Company Funds Available for Distribution	$	57,281		$	57,415		$	214,665		$	234,071
Per Common Share and Unit Amounts
Basic:
FFO	$	0.28		$	0.24		$	0.96		$	1.13
Diluted:
FFO	$	0.28		$	0.24		$	0.97		$	1.13
Adjusted Company FFO	$	0.26		$	0.24		$	0.97		$	1.14
Weighted-Average Common Shares
Basic:
Weighted-average common shares outstanding - basic EPS		238,131,814			235,066,967			237,758,408			233,633,058
Operating partnership units(1)		3,631,649			3,808,185			3,693,144			3,815,621
Weighted-average common shares outstanding - basic FFO		241,763,463			238,875,152			241,451,552			237,448,679
Diluted:
Weighted-average common shares outstanding - diluted EPS		241,821,194			235,204,568			241,537,837			237,679,031
Unvested share-based payment awards		713,351			674,053			666,127			549,049
6.00% Convertible Guaranteed Notes		—			—			—			1,077,626
Operating partnership units(1)		—			3,808,185			—			—
Preferred shares - Series C		4,710,570			4,710,570			4,710,570			4,710,570
Weighted-average common shares outstanding - diluted FFO		247,245,115			244,397,376			246,914,534			244,016,276

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

13

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

(UNAUDITED)

2018 EARNINGS GUIDANCE

	Twelve Months Ended December 31, 2018
	Range
Estimated:
Net income attributable to common shareholders per diluted common share(1)	$	0.76		$	0.79
Depreciation and amortization		0.68			0.68
Impact of capital transactions		(0.49	)		(0.49	)
Estimated Adjusted Company FFO per diluted common share	$	0.95		$	0.98

(1)       Assumes all convertible securities are dilutive.

14

LEXINGTON REALTY TRUST

2017 Fourth Quarter Investment / Capital Recycling Summary

PROPERTY INVESTMENTS

	Primary Tenant	Location		Square Feet (Approx.)		Property Type	Initial Basis ($000)		Month Closed	Primary Lease Expiration
1	Caterpillar, Inc.	Lafayette	IN		309,000	Industrial	$	17,450	October	09/2024
2	Undisclosed (1)	Romulus	MI		500,000	Industrial		38,893	November	08/2032
3	Lipari Foods Operating Company, LLC	Warren	MI		260,000	Industrial		46,955	November	10/2032
4	Undisclosed (1)	Winchester	VA		400,000	Industrial		36,700	December	12/2031
4	TOTAL PROPERTY INVESTMENTS (2)				1,469,000		$	139,998

CAPITAL RECYCLING

	PROPERTY DISPOSITIONS
	Primary Tenant	Location		Property Type	Gross Sale Price ($000)		Annualized Net Income ($000) (3)			Annualized NOI ($000)(3)(4)			Month of Disposition	% Leased			Gross Sale Price PSF
1	National-Louis University (5)	Lisle	IL	Office	$	9,120	$	222		$	1,813		October		100	%	$	91.74
2	Vacant	High Point	NC	Multi-tenant - Industrial		10,000		508			1,134		October		0	%		40.84
3	Vacant	Fishers	IN	Multi-tenant - Office		9,000		(371	)		(371	)	October		0	%		46.63
4	Vacant (6)	Pine Bluff	AR	Office		43		311			386		October		0	%		1.58
5	Food Lion, LLC / Delhaize America, Inc.	Staunton	VA	Other		1,688		158			166		November		100	%		73.39
6	Entergy Arkansas Inc.	Little Rock	AR	Office		3,100		182			237		December		100	%		85.37
7	Time Customer Service, Inc.	Tampa	FL	Office		13,700		722			1,128		December		100	%		103.02
8	Toys “R” Us, Inc. / Toys "R" Us-Delaware, Inc.(7)	Tulsa	OK	Other		1,233		3			106		December		100	%		28.58
8	TOTAL PROPERTY DISPOSITIONS				$	47,884	$	1,735		$	4,599

Footnotes

(1) Tenant is a domestic subsidiary of an international automaker.

(2) The above were acquired at aggregate weighted-average GAAP and cash capitalization rates of 7.2% and 6.5%, respectively. Lexington also made an initial contribution of $5.8 million for a 90% interest in a newly-formed joint venture with a developer.

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

(4) Quarterly period prior to sale; excluding impairment charges, annualized.

(5) Conveyed to lender in a foreclosure sale.

(6) Property was sold subject to a lease which expired October 31, 2017.

(7) Tenant has declared bankruptcy.

15

LEXINGTON REALTY TRUST

2017 Fourth Quarter Financing Summary

DEBT RETIRED

	Location	Primary Tenant	Property Type	Face / Satisfaction ($000)		Fixed Rate			Maturity Date
	Consolidated Mortgage Debt:
1	Lisle, IL (1)	National-Louis University	Office	$	9,120		6.500	%	N/A
2	Orlando, FL	Zenith Education Group, Inc.	Office		9,309		5.722	%	N/A
				$	18,429

PROPERTY LEVEL FINANCING

	Location	Primary Tenant	Property Type	Face / Satisfaction ($000)		Fixed Rate			Maturity Date
	Consolidated Mortgage Debt:
1	Charlotte, NC	AvidXchange, Inc.	Office	$	37,400		5.298	%	01/2033
2	Charlotte, NC (2)	AvidXchange, Inc.	Office		8,000		5.000	%	12/2022
				$	45,400
	Non-Consolidated Mortgage Debt:
1	Houston, TX (3)	British Schools of America, LLC	Other	$	50,000		5.130	%	12/2022

CORPORATE LEVEL FINANCING

	Quarterly Activity, Net ($000)
Revolving Credit Facility	$40,000 satisfaction

Footnotes:

(1) Property conveyed to lender in a foreclosure sale.

(2) May be increased to $12.0 million upon certain events.

(3) $49.1 million of proceeds were used to satisfy a loan from Lexington.

16

LEXINGTON REALTY TRUST

2017 Fourth Quarter Leasing Summary

LEASE EXTENSIONS

	Tenant (Guarantor) (4)	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	N/A	Honolulu	HI	MTM	09/2018		1,900	$	37	$	36	$	37	$	36
1	Total office lease extension						1,900	$	37	$	36	$	37	$	36
	Industrial
1	Geodis Logistics LLC (Geodis America, Inc.)	Statesville	NC	12/2017	12/2020		639,800	$	2,493	$	1,916	$	2,463	$	2,154
2	Essex Group, Inc. (United Technologies Corporation)	Franklin	TN	12/2018	12/2023		289,330		735		735		735		735
2	Total industrial lease extensions						929,130	$	3,228	$	2,651	$	3,198	$	2,889
				`
3	TOTAL EXTENDED LEASES						931,030	$	3,265	$	2,687	$	3,235	$	2,925

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	Home Point Financial Corporation (Home Point Capital Inc.)	Farmers Branch	TX	09/2025		64,788	$	908	$	1,004
2	BBVA Dallas Creation Center, Inc. (BBVA Compass Bancshares, Inc.)	Farmers Branch	TX	07/2028		33,028		521		537
2	Total office new leases					97,816	$	1,429	$	1,541
2	TOTAL NEW LEASES					97,816	$	1,429	$	1,541
5	TOTAL NEW AND EXTENDED LEASES					1,028,846	$	4,694	$	4,776

17

LEXINGTON REALTY TRUST

2017 Fourth Quarter Leasing Summary (Continued)

LEASE NON-RENEWALS⁽²⁾

	Tenant	Location		Lease Expiration  Date	Sq. Ft.		9 months 2017 GAAP Rent ($000)		9 months 2017 Cash Rent ($000)(3)
	Office
1	CRG-Richmond Tenant, LLC	Richmond	VA	12/2017		42,947	$	247	$	247
1	TOTAL LEASE NON-RENEWALS

Footnotes

(1) Assumes twelve months rent from the later of 1/1/18 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) Leases greater than 10,000 square feet.

18

LEXINGTON REALTY TRUST

Other Revenue Data

12/31/2017

($000)

Other Revenue Data

	GAAP  Rent
Asset Class	Twelve months ended
	12/31/17 (1)		12/31/17 Percentage			12/31/16 Percentage
Office	$	179,939		51.8	%		52.9	%
Industrial		151,440		43.6	%		39.7	%
Other
Multi-tenant		8,513		2.5	%		3.8	%
Retail		3,648		1.0	%		2.5	%
Specialty		3,843		1.1	%		1.1	%
	$	347,383		100.0	%		100.0	%

	GAAP  Rent
Credit Ratings  (2)	Twelve months ended
	12/31/17 (1)		12/31/17 Percentage			12/31/16 Percentage
Investment Grade	$	139,336		40.1	%		37.0	%
Non-Investment Grade		53,825		15.5	%		17.0	%
Unrated		154,222		44.4	%		46.0	%
	$	347,383		100.0	%		100.0	%

Weighted-Average Lease Term - Cash Basis	As of 12/31/17	As of 12/31/16
	9.1 years	8.6 years

Rent Estimates for Current Assets

Year	GAAP  (3)		Cash  (3)		Difference
2018	$	372,105	$	354,240	$	(17,865	)
2019		344,287		333,463		(10,824	)

Footnotes

(1) Twelve months ended 12/31/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 12/31/2017.

(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 12/31/2017, and (3) no properties are sold or acquired after 12/31/2017.

19

LEXINGTON REALTY TRUST

Other Revenue Data (Continued)

12/31/2017

($000)

Same-Store NOI ⁽¹⁾

	Twelve months ended December 31,
	2017			2016			2015
Total Cash  Rent	$	251,384		$	249,954		$	248,539
Tenant Reimbursements		22,134			22,811			23,930
Property Operating Expenses		(34,697	)		(33,346	)		(37,469	)
Same-Store NOI	$	238,821		$	239,419		$	235,000
Change in Same-Store NOI		(0.2	)%		1.9	%

Same-Store Percent Leased (2)	As of 12/31/17			As of 12/31/16			As of 12/31/15
		98.4	%		98.7	%		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, 2016 and 2015. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

(2) Excludes properties acquired or sold in 2017, 2016 and 2015.

(3) Based on twelve months consolidated cash rents for single-tenant leases (properties greater than 70% leased) owned as of December 31, 2017. Excludes parking operations and rents from prior tenants.

20

LEXINGTON REALTY TRUST

Portfolio Detail By Asset Class

12/31/2017

($000, except square footage)

Asset Class	YE 2015			YE 2016			YE 2017
Office
% of ABR (1)		49.6	%		52.9	%		51.8	%
LTL (5)		23.2	%		26.9	%		30.1	%
STL (6)		76.8	%		73.1	%		69.9	%
Leased		99.6	%		99.6	%		99.2	%
Wtd. Avg. Lease Term (2)		7.2			7.2			7.7
Mortgage Debt	$	329,696		$	490,948		$	495,842
% Investment Grade (1)		48.0	%		48.1	%		52.0	%
Square Feet		12,847,877			11,569,940			10,881,264
Industrial
% of ABR (1)		30.5	%		39.7	%		43.6	%
LTL (5)		47.4	%		50.8	%		47.1	%
STL (6)		52.6	%		49.2	%		52.9	%
Leased		99.6	%		99.9	%		99.9	%
Wtd. Avg. Lease Term (2)		10.1			10.4			10.6
Mortgage Debt	$	292,293		$	240,790		$	193,529
% Investment Grade (1)		27.9	%		26.2	%		28.9	%
Square Feet		25,693,585			27,476,653			35,396,894
Other
% of ABR (1)		19.9	%		7.4	%		4.6	%
LTL (5)		74.7	%		20.9	%		26.1	%
STL (6)		25.3	%		79.1	%		73.9	%
Leased		64.7	%		60.5	%		81.8	%
Wtd. Avg. Lease Term (2)(3)		15.3			9.5			10.1
Mortgage Debt	$	269,336		$	13,435		$	7,697
% Investment Grade (1)		8.4	%		16.0	%		12.9	%
Square Feet		3,728,561			4,277,704			2,335,904
Loans Receivable	$	95,871		$	94,210		$	-
Construction in progress (4)	$	103,954		$	111,771		$	4,219

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.

21

LEXINGTON REALTY TRUST

Portfolio Composition

12/31/2017

 

 

Footnotes

(1) Based on gross book value of real estate assets and real estate under construction as of 12/31/2017; excludes held for sale assets.

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

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LEXINGTON REALTY TRUST

Components of Net Asset Value

12/31/2017

($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 twelve month net operating income (NOI) (1)
Office	$	163,974
Industrial		128,253
Other
Multi-Tenant		4,033
Retail		2,215
Specialty		3,291
Total Net Operating Income	$	301,766
Lexington's share of non-consolidated twelve month NOI (1)
Office	$	421
Other		1,775
	$	2,196
Other income
Advisory fees	$	1,049

In service assets not fairly valued by capitalized NOI method (1)
Wholly-owned assets less than 70% leased	$	32,480
Wholly-owned assets acquired in 2017 (2)	$	645,212
Add other assets:
Assets held for sale	$	2,827
Construction in progress		4,219
Cash and cash equivalents		107,762
Restricted cash		4,394
Accounts receivable, net		5,450
Other assets		20,749
Total other assets	$	145,401
Liabilities:
Corporate level debt (face amount)	$	1,389,120
Mortgages and notes payable (face amount)		697,068
Dividends payable		49,504
Accounts payable, accrued expenses and other liabilities		60,632
Preferred stock, at liquidation value		96,770
Lexington's share of non-consolidated mortgages		20,886
Total deductions	$	2,313,980
Common shares & OP units at 12/31/2017		244,318,237

Footnotes

(1) NOI for the existing property portfolio at December 31, 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.

23

LEXINGTON REALTY TRUST

Top Markets

12/31/2017

	Core Based Statistical Area (2)	Percent of GAAP Rent as of 12/31/17  (1)
1	Houston-Sugar Land-Baytown, TX		10.8	%
2	Dallas-Fort Worth-Arlington, TX		5.2	%
3	Memphis, TN-MS-AR		4.8	%
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		3.3	%
8	Phoenix-Mesa-Scottsdale, AZ		3.2	%
9	Detroit-Warren-Livonia, MI		2.9	%
10	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD		2.5	%
11	Chicago-Naperville-Joliet, IL-IN-WI		2.4	%
12	Charlotte-Concord-Gastonia, NC-SC		2.3	%
13	Denver-Aurora, CO		2.3	%
14	Columbus, OH		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		1.8	%
19	Washington-Arlington-Alexandria, DC-VA-MD-WV		1.4	%
20	Nashville-Davidson—Murfreesboro—Franklin, TN		1.4	%
	Total Top Markets (3)		63.7	%

Footnotes

(1) Twelve months ended 12/31/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 12/31/2017.

(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.

24

LEXINGTON REALTY TRUST

Single-Tenant Office Markets ⁽¹⁾⁽²⁾

12/31/2017

Footnotes

(1) Twelve months ended 12/31/2017 GAAP rent, excluding termination income, recognized for consolidated single-tenant office properties owned as of 12/31/2017.

(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.

25

LEXINGTON REALTY TRUST

Tenant Industry Diversification ⁽¹⁾

12/31/2017

Footnotes

(1) Twelve months ended 12/31/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 12/31/2017.

26

LEXINGTON REALTY TRUST

Top 10 Tenants or Guarantors

12/31/2017

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 12/31/2017 ($000) (1)		Percent of GAAP Rent as of 12/31/2017 ($000) (1) (2)
The Dow Chemical Company	1		664,100		1.4	%	$	14,619		4.2	%
Preferred Freezer Services of Richland, LLC (Preferred Freezer Services, LLC & Preferred Freezer Services Operating, LLC)	1		456,412		0.9	%		13,133		3.8	%
FedEx Corporation / Federal Express Corporation	2		661,616		1.4	%		12,148		3.5	%
Nissan North America, Inc.	3		3,196,049		6.6	%		11,338		3.3	%
Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)	7		2,053,359		4.2	%		9,941		2.9	%
United States of America	3		398,214		0.8	%		9,628		2.8	%
Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation	2		476,123		1.0	%		7,889		2.3	%
McGuireWoods LLP	1		224,537		0.5	%		7,184		2.1	%
Morgan, Lewis & Bockius LLP	1		289,432		0.6	%		6,894		2.0	%
Industrial Terminals Management, L.L.C. (Maritime Holdings (Delaware) LLC)	1		132,449		0.3	%		6,773		1.9	%
	22		8,552,291		17.6	%	$	99,547		28.7	%

Footnotes

(1) Twelve months ended 12/31/2017 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 12/31/2017.

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

27

LEXINGTON REALTY TRUST

Lease Rollover Schedule - Consolidated Single-Tenant Properties GAAP Basis

12/31/2017

($000)

Year	Number of Leases Expiring		GAAP Rent as of 12/31/2017		Percent of GAAP Rent as of 12/31/2017			Percent of GAAP Rent as of 12/31/2016
2018		17	$	14,698		4.4	%		7.7	%
2019		17		29,263		8.7	%		9.5	%
2020		13		18,888		5.6	%		7.1	%
2021		11		21,417		6.4	%		6.7	%
2022		6		12,607		3.8	%		3.1	%
2023		10		13,829		4.1	%		4.0	%
2024		13		19,642		5.8	%		4.9	%
2025		17		30,658		9.1	%		10.0	%
2026		12		17,101		5.1	%		4.8	%
2027		17		28,660		8.5	%		7.6	%
Thereafter		45		129,307		38.5	%		30.1	%
Total (1)		178	$	336,070		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.

28

LEXINGTON REALTY TRUST

Lease Rollover Schedule - Consolidated Properties GAAP Basis

12/31/2017

($000)

Year	Number of Leases Expiring		GAAP Rent as of 12/31/2017		Percent of GAAP Rent as of 12/31/2017
2018		52	$	16,765		4.9	%
2019		25		30,844		9.0	%
2020		18		19,030		5.5	%
2021		17		24,476		7.1	%
2022		6		12,607		3.7	%
2023		10		13,829		4.0	%
2024		15		19,843		5.8	%
2025		19		31,068		9.0	%
2026		12		17,101		5.0	%
2027		17		28,660		8.3	%
Thereafter		47		129,637		37.7	%
Total (1)		238	$	343,860		100.0	%

Footnotes

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

29

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 12/31/2017

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 12/31/2017 ($000) (3)		Cash Rent as of 12/31/2017 ($000) (2)		12/31/2017 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
2018	5/31/2018	8900 Freeport Pkwy.	Irving	TX	—	Pacific Union Financial, LLC.		43,396		784		911		-	-
	6/30/2018	100 Barnes Rd.	Wallingford	CT	—	3M Company		44,400		507		528		-	-
	8/31/2018	3500 North Loop Rd.	McDonough	GA	—	Litton Loan Servicing LP		62,218		995		1,374		-	-
	9/30/2018	1701 Market St.	Philadelphia	PA	—	CBC Restaurant Corp.		8,070		211		224		-	-
	10/31/2018	3943 Denny Ave.	Pascagoula	MS	—	Huntington Ingalls Incorporated		94,841		593		593		-	-
	12/22/2018	5200 Metcalf Ave.	Overland Park	KS	—	Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation		320,198		5,406		5,374		32,828	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		1,469		1,783		-	-
		820 Gears Rd.	Houston	TX	—	Ricoh USA, Inc.		78,895		1,154		1,141		-	-
	2/28/2019	10475 Crosspoint Blvd.	Indianapolis	IN	—	DMC Insurance Inc.		3,764		70		70		-	-
	4/1/2019	9201 Stateline Rd.	Kansas City	MO	—	Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation		155,925		2,483		2,483		15,618	05/2019
	6/19/2019	3965 Airways Blvd.	Memphis	TN	—	Federal Express Corporation		521,286		7,013		7,059		-	-
	6/30/2019	3265 East Goldstone Dr.	Meridian	ID	—	VoiceStream PCS Holding, LLC / T-Mobile PCS Holdings, LLC (T-Mobile USA, Inc.)		77,484		1,105		1,466		8,428	08/2019
	7/15/2019	19019 North 59th Ave.	Glendale	AZ	—	Honeywell International Inc.		252,300		1,902		1,954		-	-
	7/31/2019	500 Jackson St.	Columbus	IN	—	Cummins Inc.		390,100		4,540		4,762		11,842	07/2019
	10/31/2019	10475 Crosspoint Blvd.	Indianapolis	IN	—	John Wiley & Sons, Inc.		123,416		2,268		2,319		-	-
		9601 Renner Blvd.	Lenexa	KS	—	VoiceStream PCS II Corporation (T-Mobile USA, Inc.)		77,484		1,142		1,492		8,631	12/2019
2020	2/14/2020	5600 Broken Sound Blvd.	Boca Raton	FL	—	Canon Solutions America, Inc. (Oce - USA Holding, Inc.)		143,290		2,244		2,500		19,088	02/2020
	5/31/2020	2401 Cherahala Blvd.	Knoxville	TN	—	AdvancePCS, Inc. / CaremarkPCS, L.L.C.		59,748		773		771		-	-
	6/30/2020	3711 San Gabriel	Mission	TX	—	VoiceStream PCS II Corporation /  T-Mobile West Corporation		75,016		989		973		-	-
	7/31/2020	13775 McLearen Rd.	Herndon	VA	12	Orange Business Services U.S., Inc. (Equant N.V.)		132,617		1,676		1,820		-	-
	8/31/2020	133 First Park Dr.	Oakland	ME	—	Omnipoint Holdings, Inc. (T-Mobile USA, Inc.)		78,610		1,147		1,482		8,370	10/2020
	9/30/2020	9200 South Park Center Loop	Orlando	FL	—	Zenith Education Group, Inc. (ECMC Group, Inc.)		59,927		1,136		1,173		-	-
2021	1/31/2021	1701 Market St.	Philadelphia	PA	—	Morgan, Lewis & Bockius LLP		289,432		4,298		4,432		-	-
	3/31/2021	1701 Market St.	Philadelphia	PA	—	Car-Tel Communications, Inc.		1,220		61		61		-	-
	6/30/2021	1415 Wyckoff Rd.	Wall	NJ	—	New Jersey Natural Gas Company		157,511		3,774		3,774		11,924	01/2021
		2050 Roanoke Rd.	Westlake	TX	—	Charles Schwab & Co., Inc.		130,199		1,647		1,677		-	-
	11/30/2021	29 South Jefferson Rd.	Whippany	NJ	—	CAE SimuFlite, Inc. (CAE INC.)		123,734		2,327		2,571		12,704	11/2021
	12/31/2021	2800 Waterford Lake Dr.	Midlothian	VA	—	Alstom Power, Inc.		99,057		2,184		2,306		-	-
2022	5/30/2022	13651 McLearen Rd.	Herndon	VA	—	United States of America		159,644		3,246		3,437		-	-
	6/30/2022	8555 South River Pkwy.	Tempe	AZ	—	Versum Materials US, LLC		95,133		1,750		1,674		-	-
	7/31/2022	1440 E 15th St.	Tucson	AZ	—	CoxCom, LLC		28,591		561		561		-	-
	10/31/2022	4455 American Way	Baton Rouge	LA	—	New Cingular Wireless PCS, LLC		70,100		1,087		1,104		-	-
	12/31/2022	231 N. Martingale Rd.	Schaumburg	IL	—	CEC Educational Services, LLC (Career Education Corporation)		317,198		4,621		4,485		-	-
2023	2/28/2023	1315 West Century Dr.	Louisville	CO	—	Rogue Wave Software, Inc.		20,000		347		294		-	-
	3/31/2023	8900 Freeport Pkwy.	Irving	TX	—	Nissan Motor Acceptance Corporation (Nissan North America, Inc.)		225,049		3,425		3,713		-	-
	6/30/2023	420 Riverport Rd.	Kingsport	TN	—	Kingsport Power Company		42,770		128		310		-	-
	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		1,006		1,037		-	-
	12/14/2023	3333 Coyote Hill Rd.	Palo Alto	CA	—	Xerox Corporation		202,000		6,642		7,070		37,846	12/2023

30

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Property Leases and Vacancies - Consolidated Portfolio - 12/31/2017

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 12/31/2017 ($000) (3)		Cash Rent as of 12/31/2017 ($000) (2)		12/31/2017 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
2024	2/14/2024	1362 Celebration Blvd.	Florence	SC	—	MED3000, Inc.		32,000		573		565		-	-
	5/31/2024	3476 Stateview Blvd.	Fort Mill	SC	—	Wells Fargo Bank, N.A.		169,083		1,950		1,877		-	-
		3480 Stateview Blvd.	Fort Mill	SC	—	Wells Fargo Bank, N.A.		169,218		2,026		1,878		-	-
	8/31/2024	10475 Crosspoint Blvd.	Indianapolis	IN	—	RGN-Indianapolis I, LLC (HQ Global Workplaces LLC)		14,236		302		302		-	-
	10/31/2024	1409 Centerpoint Blvd.	Knoxville	TN	—	Alstom Power, Inc.		84,404		1,255		1,199		-	-
	11/30/2024	6200 Northwest Pkwy.	San Antonio	TX	—	United HealthCare Services, Inc.		142,500		1,957		1,877		-	-
	12/31/2024	12000 & 12025 Tech Center Dr.	Livonia	MI	19	Kelsey-Hayes Company (ZF Friedrichshafen AG)		180,230		1,691		1,638		-	-
2025	1/31/2025	1401 Nolan Ryan Expy.	Arlington	TX	—	Triumph Aerostructures, LLC (Triumph Group, Inc.)		111,409		1,637		1,742		-	-
	2/28/2025	6555 Sierra Dr.	Irving	TX	—	TXU Energy Retail Company, LLC (Texas Competitive Electric Holdings Company, LLC)		247,254		2,804		3,076		-	-
		1401 Nolan Ryan Expy.	Arlington	TX	—	Cyient, Inc. (Infotech Enterprise Limited)		13,590		203		210		-	-
	3/14/2025	601 & 701 Experian Pkwy.	Allen	TX	—	Experian Information Solutions, Inc. / TRW, Inc.(Experian Holdings, Inc.)		292,700		2,966		3,073		-	-
	5/31/2025	1701 Market St.	Philadelphia	PA	—	TruMark Financial Credit Union		2,641		247		247		-	-
	6/30/2025	2500 Patrick Henry Pkwy.	McDonough	GA	—	Georgia Power Company		111,911		1,422		1,358		-	-
	9/30/2025	10001 Richmond Ave.	Houston	TX	—	Schlumberger Holdings Corp.		554,385		6,038		5,465		-	-
	11/30/2025	11707 Miracle Hills Dr.	Omaha	NE	—	Wipro Data Center and Cloud Services, Inc. (Infocrossing, Inc.)		85,200		1,167		1,166		-	-
	12/31/2025	4001 International Pkwy.	Carrollton	TX	—	Motel 6 Operating, LP		138,443		2,226		2,194		-	-
2026	3/31/2026	500 Olde Worthington Rd.	Westerville	OH	—	InVentiv Communications, Inc.		97,000		1,109		1,147		-	-
	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		77		77		-	-
	11/30/2026	500 Kinetic Dr.	Huntington	WV	—	AMZN WVCS LLC (Amazon.com, Inc.)		68,693		1,268		1,113		-	-
	12/29/2026	5500 New Albany Rd.	Columbus	OH	—	Evans, Mechwart, Hambleton & Tilton, Inc.		104,807		1,737		1,678		-	-
2027	1/31/2027	1701 Market St.	Philadelphia	PA	—	Drybar Holdings LLC		1,975		138		103		-	-
	2/28/2027	800 East Canal St.	Richmond	VA	—	Pacific Summit Energy LLC (Sumitomo Corporation of Americas)		8,503		93		93		-	-
	4/30/2027	1315 West Century Dr.	Louisville	CO	—	Global Healthcare Exchange, Inc. (GHX Ultimate Parent Corporation)		86,877		1,289		1,221		-	-
	6/30/2027	3902 Gene Field Rd.	St. Joseph	MO	—	Boehringer Ingelheim Vetmedica, Inc. (Boehringer Ingelheim USA Corporation)		98,849		1,993		1,880		-	-
	7/6/2027	2221 Schrock Rd.	Columbus	OH	—	MS Consultants, Inc.		42,290		640		612		-	-
	8/7/2027	25 Lakeview Dr.	Jessup	PA	—	TMG Health, Inc.		150,000		2,501		2,084		-	-
	10/31/2027	11201 Renner Blvd.	Lenexa	KS	—	United States of America		169,585		4,883		4,424		33,212	11/2027
	11/30/2027	1700 Millrace Dr.	Eugene	OR	10	Oregon Research Institute / Educational Policy Improvement Center		80,011		2,093		1,784		-	-
2028	4/30/2028	9655 Maroon Cir.	Englewood	CO	—	TriZetto Corporation		166,912		3,844		3,655		-	-
2029	1/31/2029	6226 West Sahara Ave.	Las Vegas	NV	—	Nevada Power Company		282,000		4,253		3,089		-	-
	3/31/2029	2800 High Meadow Cir.	Auburn Hills	MI	—	Faurecia USA Holdings, Inc.		278,000		3,547		3,220		-	-
	12/31/2029	333 Mt. Hope Ave.	Rockaway	NJ	—	Atlantic Health System, Inc.		92,326		1,219		1,316		-	-
2030	8/31/2030	800 East Canal St.	Richmond	VA	—	McGuireWoods LLP		224,537		7,184		6,702		57,500	02/2031
	9/30/2030	800 East Canal St.	Richmond	VA	—	CCA Industries, Inc. (The Riverstone Group, LLC),		25,707		693		657		-	-
2031	1/10/2031	810 Gears Rd.	Houston	TX	—	United States of America		68,985		1,499		1,425		-	-
	3/1/2031	800 East Canal St.	Richmond	VA	—	Towne Bank		26,047		755		655		-	-
2032	4/30/2032	1210 AvidXchange Ln.	Charlotte	NC	—	AvidXchange, Inc.		201,450		4,017		3,484		45,400	12/2022 & 01/2033
	10/31/2032	143 Diamond Ave.	Parachute	CO	—	Encana Oil and Gas (USA) Inc. / Caerus Piceance LLC (Alenco Inc.)		49,024		1,284		1,094		-	-
	12/31/2032	3030 North 3rd St.	Phoenix	AZ	—	CopperPoint Mutual Insurance Company		252,400		5,056		4,261		-	-
2033	3/31/2033	9201 East Dry Creek Rd.	Centennial	CO	—	Arrow Electronics, Inc.		128,500		2,451		2,144		-	-
	11/30/2033	1331 Capitol Ave.	Omaha	NE	—	The Gavilon Group, LLC		127,810		3,311		2,945		-	-
2036	10/31/2036	270 Abner Jackson Pkwy.	Lake Jackson	TX	—	The Dow Chemical Company		664,100		14,619		12,170		192,451	10/2036
2088	8/8/2088	800 East Canal St.	Richmond	VA	—	The City of Richmond, Virginia		-		411		411		-	-
N/A	N/A	1701 Market St.	Philadelphia	PA	—	Parking Operations		-		2,596		2,596		-	-

31

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Property Leases and Vacancies - Consolidated Portfolio - 12/31/2017

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 12/31/2017 ($000) (3)		Cash Rent as of 12/31/2017 ($000) (2)		12/31/2017 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
N/A	Vacancy	800 East Canal St.	Richmond	VA	5, 11	(Available for Lease)		42,947		204		204		-	-
		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						99.2% Leased		10,881,264	$	179,939	$	174,869	$	495,842

32

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 12/31/2017

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 12/31/2017 ($000) (3)		Cash Rent as of 12/31/2017  ($000) (2)		12/31/2017 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
2018	9/30/2018	50 Tyger River Dr.	Duncan	SC	—	Plastic Omnium Auto Exteriors, LLC		221,833		1,025		1,025		-	-
	12/31/2018	1133 Poplar Creek Rd.	Henderson	NC	—	Staples, Inc.		196,946		865		886		-	-
		2935 Van Vactor Dr.	Plymouth	IN	—	Bay Valley Foods, LLC		300,500		841		841		-	-
		749 Southrock Dr.	Rockford	IL	—	Jacobson Warehouse Company, Inc. (Jacobson Distribution Company and Jacobson Transportation Company, Inc.)		150,000		471		533		-	-
2019	10/17/2019	10345 Philipp Pkwy.	Streetsboro	OH	—	L'Oreal USA S/D, Inc. (L’Oreal USA, Inc.)		649,250		2,611		2,817		16,931	09/2019
	12/31/2019	191 Arrowhead Dr.	Hebron	OH	—	Owens Corning Insulating Systems, LLC		250,410		564		564		-	-
		200 Arrowhead Dr.	Hebron	OH	—	Owens Corning Insulating Systems, LLC		400,522		903		903		-	-
		2415 US Hwy. 78 East	Moody	AL	—	Michelin North America, Inc.		595,346		1,408		1,422		-	-
		3686 South Central Ave.	Rockford	IL	—	Pierce Packaging Co.		93,000		312		312		-	-
2020	1/31/2020	101 Michelin Dr.	Laurens	SC	—	Michelin North America, Inc.		1,164,000		3,438		3,438		-	-
	5/31/2020	359 Gateway Dr.	Lavonia	GA	—	TI Group Automotive Systems, LLC (TI Automotive Ltd.)		133,221		952		1,200		7,010	12/2020
	6/30/2020	1650-1654 Williams Rd.	Columbus	OH	—	ODW Logistics, Inc. (Nessent Ltd. And Dist-Trans Co, LLC)		772,450		1,342		1,347		-	-
		3102 Queen Palm Dr.	Tampa	FL	—	Time Mailing Services LLC (Time Inc.)		229,605		1,234		1,325		-	-
	9/30/2020	3350 Miac Cove Rd.	Memphis	TN	—	Mimeo.com, Inc.		107,400		414		443		-	-
	12/19/2020	1901 Ragu Dr.	Owensboro	KY	6	Unilever Supply Chain, Inc. (Unilever United States, Inc.)		443,380		1,493		1,288		-	-
	12/31/2020	2203 Sherrill Dr.	Statesville	NC	—	Geodis Logistics LLC (Geodis America, Inc.)		639,800		2,050		1,683		-	-
2021	3/31/2021	2455 Premier Row	Orlando	FL	—	Walgreen Co. / Walgreen Eastern Co.		205,016		786		508		-	-
	5/31/2021	291 Park Center Dr.	Winchester	VA	—	Kraft Heinz Foods Company		344,700		1,422		1,382		-	-
	9/30/2021	3820 Micro Dr.	Millington	TN	—	Ingram Micro L.P. (Ingram Micro Inc.)		701,819		1,812		1,874		-	-
	10/25/2021	6938 Elm Valley Dr.	Kalamazoo	MI	—	Dana Commercial Vehicle Products, LLC (Dana Holding Corporation and Dana Limited)		150,945		1,747		2,027		-	-
	11/30/2021	2880 Kenny Biggs Rd.	Lumberton	NC	—	Quickie Manufacturing Corporation		423,280		1,359		1,419		-	-
2022	3/31/2022	5417 Campus Dr.	Shreveport	LA	—	The Tire Rack, Inc.		257,849		1,342		1,371		-	-
2023	2/28/2023	7670 Hacks Cross Rd.	Olive Branch	MS	—	MAHLE Aftermarket Inc. (MAHLE Industries, Incorporated)		268,104		906		880		-	-
	12/31/2023	120 Southeast Pkwy. Dr.	Franklin	TN	—	Essex Group, Inc. (United Technologies Corporation)		289,330		736		736		-	-
		1601 Pratt Ave.	Marshall	MI	—	Autocam Corporation (NN Inc.)		58,707		310		310		-	-
2024	1/31/2024	1285 W. State Road 32	Lebanon	IN	—	Continental Tire the Americas, LLC		741,880		1,996		1,039		-	-
	3/31/2024	1520 Lauderdale Memorial Hwy.	Cleveland	TN	—	General Electric Company		851,370		1,636		1,649		-	-
	4/30/2024	113 Wells St.	North Berwick	ME	—	United Technologies Corporation		993,685		1,798		1,962		1,992	04/2019
	5/31/2024	901 East Bingen Point Way	Bingen	WA	—	The Boeing Company		124,539		2,636		2,576		-	-
	9/30/2024	1621 Veterans Memorial Pkwy. E	Lafayette	IN	—	Caterpillar Inc.		309,400		291		288		-	-
	10/31/2024	43955 Plymouth Oaks Blvd.	Plymouth	MI	—	Tower Automotive Operations USA I, LLC  / Tower Automotive Products Inc. (Tower Automotive, Inc.)		311,612		1,531		1,459		-	-
2025	6/30/2025	10000 Business Blvd.	Dry Ridge	KY	—	Dana Light Axle Products, LLC (Dana Holding Corporation and Dana Limited)		336,350		1,346		1,346		-	-
		301 Bill Bryan Rd.	Hopkinsville	KY	—	Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)		424,904		1,687		1,687		-	-
		4010 Airpark Dr.	Owensboro	KY	—	Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)		211,598		1,208		1,208		-	-
		730 North Black Branch Rd.	Elizabethtown	KY	—	Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)		167,770		537		537		-	-
		750 North Black Branch Rd.	Elizabethtown	KY	—	Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)		539,592		2,838		2,838		-	-
	7/14/2025	590 Ecology Ln.	Chester	SC	—	Boral Stone Products LLC (Boral Limited)		420,597		1,721		2,314		7,271	08/2025
	7/31/2025	7005 Cochran Rd.	Glenwillow	OH	—	Royal Appliance Mfg. Co.		458,000		2,061		2,101		-	-
	12/31/2025	1700 47th Ave North	Minneapolis	MN	—	Owens Corning Roofing and Asphalt, LLC		18,620		550		550		-	-
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		2,537		2,479		-	-
	3/31/2026	633 Garrett Pkwy.	Lewisburg	TN	—	Calsonic Kansei North America, Inc.		310,000		1,293		1,200		-	-
	6/30/2026	351 Chamber Dr.	Chillicothe	OH	—	The Kitchen Collection, LLC		475,218		1,159		1,118		-	-
	9/30/2026	900 Industrial Blvd.	Crossville	TN	—	Dana Commercial Vehicle Products, LLC		222,200		578		578		-	-
		3931 Lakeview Corporate Dr.	Edwardsville	IL	—	AMAZON.COM.DEDC, LLC (Amazon.com, Inc.)		769,500		2,687		2,512		-	-
	10/31/2026	5001 Greenwood Rd.	Shreveport	LA	—	Libbey Glass Inc. (Libbey Inc.)		646,000		2,165		2,170		-	-
	11/30/2026	250 Rittenhouse Cir.	Bristol	PA	—	Northtec LLC (The Estée Lauder Companies Inc.)		241,977		1,146		1,136		-	-
		736 Addison Rd.	Erwin	NY	—	Corning Property Management Corporation		408,000		1,345		1,352		6,991	10/2018

33

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 12/31/2017

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 12/31/2017 ($000) (3)		Cash Rent as of 12/31/2017 ($000) (2)		12/31/2017 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		1,053		893		-	-
	2/28/2027	3456 Meyers Ave.	Memphis	TN	—	Sears, Roebuck and Co. / Sears Logistics Services		780,000		1,676		1,592		-	-
		554 Nissan Pkwy.	Canton	MS	—	Nissan North America, Inc.		1,466,000		6,200		5,860		-	-
	4/30/2027	16407 Applewhite Rd.	San Antonio	TX	18	International Heating, Air-Conditioning and Refrigeration Solutions Company		849,275		1,514		1,380		-	-
		200 Sam Griffin Rd.	Smyrna	TN	—	Nissan North America, Inc.		1,505,000		1,713		1,619		-	-
	6/30/2027	1501 Nolan Ryan Expy.	Arlington	TX	—	Arrow Electronics, Inc.		74,739		406		215		-	-
	9/30/2027	1550 Hwy 302	Byhalia	MS	—	McCormick & Company, Inc.		615,600		625		430		-	-
	10/31/2027	201 James Lawrence Rd.	Jackson	TN	—	Kellogg Sales Company (Kellogg Company)		1,062,055		1,030		958		-	-
	12/31/2027	10590 Hamilton Ave.	Cincinnati	OH	—	The Hillman Group, Inc.		264,598		813		781		-	-
2028	1/31/2028	490 Westridge Pkwy.	McDonough	GA	17	Georgia-Pacific Consumer Products LP (Georgia-Pacific LLC)		1,121,120		1,556		1,133		-	-
	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		5,135		4,770		43,334	03/2028
	8/31/2028	1420 Greenwood Rd.	McDonough	GA	—	United States Cold Storage, Inc.		296,972		2,170		2,117		-	-
	9/30/2028	904 Industrial Rd.	Marshall	MI	—	Tenneco Automotive Operating Company, Inc. (Tenneco, Inc.)		246,508		675		841		-	-
2029	11/24/2029	318 Pappy Dunn Blvd.	Anniston	AL	—	International Automotive Components Group North America, Inc.		276,782		1,739		1,622		-	-
2030	3/31/2030	549 Wingo Rd.	Byhalia	MS	—	Asics America Corporation (Asics Corporation)		855,878		4,388		4,014		-	-
	5/31/2030	3301 Stagecoach Rd. NE	Thomson	GA	—	Hollander Sleep Products, LLC  (Hollander Home Fashions Holdings)		208,000		929		856		-	-
2031	10/31/2031	1020 W. Airport Rd.	Romeoville	IL	—	ARYZTA LLC (ARYZTA AG)		188,166		3,552		3,313		-	-
	12/18/2031	80 Tyson Dr.	Winchester	VA	16	Undisclosed		400,400		70		61		-	-
2032	4/30/2032	13930 Pike Rd.	Missouri City	TX	—	Vulcan Construction Materials, LP (Vulcan Materials Company)		-		2,123		1,917		-	-
	8/24/2032	16950 Pine Dr.	Romulus	MI	16	Undisclosed		500,023		378		352		-	-
	10/31/2032	27255 SW 95th Ave.	Wilsonville	OR	—	Pacific Foods of Oregon, Inc. d/b/a Pacific Natural Foods		508,277		3,120		2,578		-	-
		26700 Bunert Road	Warren	MI	—	Lipari Foods Operating Company, LLC		260,243		572		505		-	-
2034	9/30/2034	5625 North Sloan Ln.	North Las Vegas	NV	—	Nicholas and Co., Inc.		180,235		2,557		2,238		-	-
	10/31/2034	1001 Innovation Rd.	Rantoul	IL	—	Bell Sports, Inc. (Vista Outdoor Inc.)		813,126		4,195		3,628		-	-
2035	3/31/2035	13863 Industrial Rd.	Houston	TX	—	Curtis Kelly, Inc. (Spitzer Industries, Inc.)		187,800		2,434		2,075		-	-
		7007 F.M. 362 Rd.	Brookshire	TX	—	Orizon Industries, Inc. (Spitzer Industries, Inc.)		262,095		1,910		1,628		-	-
	6/30/2035	111 West Oakview Pkwy.	Oak Creek	WI	—	Stella & Chewy's LLC		164,007		2,098		1,865		-	-
	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		13,133		11,081		110,000	01/2026
	10/22/2035	2860 Clark St.	Detroit	MI	16	Undisclosed		189,960		2,203		2,204		-	-
2036	5/31/2036	671 Washburn Switch Rd.	Shelby	NC	—	Clearwater Paper Corporation		673,425		2,734		2,390		-	-
	6/30/2036	100 Ryobi Drive	Anderson	SC	—	One World Technologies, Inc. (Techtronic Industries Co. Ltd.)		1,327,022		4,446		3,697		-	-
2037	3/31/2037	4005 E I-30	Grand Prairie	TX	—	O'Neal Metals (Texas), L.P. (O'Neal Industries, Inc.)		215,000		988		812		-	-
2038	3/31/2038	13901/14035 Industrial Rd.	Houston	TX	—	Industrial Terminals Management, L.L.C. (Maritime Holdings (Delaware) LLC)		132,449		6,773		5,694		-	-
2042	5/31/2042	4801 North Park Dr.	Opelika	AL	—	Golden State Foods Corp. (Golden State Enterprises, Inc.)		165,493		1,443		1,739		-	-
N/A	Vacancy	3350 Miac Cove Rd.	Memphis	TN	—	(Available for Lease)		32,679		-		-		-	-
INDUSTRIAL TOTAL/WEIGHTED AVERAGE						99.9% Leased		35,396,894	$	151,440	$	141,491	$	193,529

34

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 12/31/2017

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 12/31/2017 ($000) (3)		Cash Rent as of 12/31/2017 ($000) (2)		12/31/2017 Debt Balance ($000)		Debt Maturity
OTHER PROPERTIES
Retail
2018	2/26/2018	4831 Whipple Ave., NW	Canton	OH	13	Best Buy Co., Inc.		46,350		465		465		-	-
	9/30/2018	835 Julian Ave.	Thomasville	NC	—	Mighty Dollar, LLC		23,767		82		82		-	-
	12/31/2018	1150 West Carl Sandburg Dr.	Galesburg	IL	—	Kmart Stores of Illinois LLC / Kmart Corporation		94,970		318		225		105	07/2018
		12080 Carmel Mountain Rd.	San Diego	CA	—	Sears, Roebuck and Co / Kmart Corporation		107,210		751		256		119	07/2018
		21082 Pioneer Plaza Dr.	Watertown	NY	—	Kmart Corporation		120,727		482		378		176	07/2018
		255 Northgate Dr.	Manteca	CA	—	Kmart Corporation		107,489		555		402		187	07/2018
		97 Seneca Trail	Fairlea	WV	—	Kmart Corporation		90,933		347		265		123	07/2018
2019	3/31/2019	B.E.C. 45th St./Lee Blvd.	Lawton	OK	—	Associated Wholesale Grocers, Inc. / Safeway, Inc.		30,757		189		185		-	-
	6/30/2019	1600 East 23rd St.	Chattanooga	TN	—	BI-LO, LLC / K-VA-T Food Stores, Inc.		42,130		130		130		-	-
2023	2/28/2023	733 East Main St.	Jefferson	NC	—	Food Lion, LLC / Delhaize America, Inc.		34,555		156		160		-	-
	7/1/2023	1053 Mineral Springs Rd.	Paris	TN	—	The Kroger Co.		31,170		173		159		-	-
Specialty														-	-
2029	1/31/2029	175 Holt Garrison Pkwy.	Danville	VA	—	Home Depot USA, Inc.		-		216		260		-	-
2043	2/28/2043	1237 W. Sherman Ave.	Vineland	NJ	—	HealthSouth Rehabilitation Hospital of South Jersey, LLC (HealthSouth Corporation)		39,287		1,150		1,150		-	-
2048	12/31/2048	30 Light St.	Baltimore	MD	—	30 Charm City, LLC		-		299		299		-	-
2055	1/31/2055	499 Derbyshire Dr.	Venice	FL	—	Littlestone Brotherhood LLC (Ralph Little)		31,180		1,908		1,313		-	-
2112	8/31/2112	201-215 N. Charles St.	Baltimore	MD	—	201 NC Leasehold LLC		-		270		270		-	-
Multi-tenant (4)(8)(14)														-	-
	Various	11511 Luna Rd.	Farmers Branch	TX	4 (97%)	International Business Machines Corporation		181,072		1,104		1,059		-	-
	Various	1311 Broadfield Blvd.	Houston	TX	4 (35%), 11	Saipem America, Inc. (Saipem S.p.A.)		155,407		810		485		-	-
	Various	13430 North Black Canyon Fwy.	Phoenix	AZ	4 (92%)	Multi-Tenant		138,940		2,328		2,493		-	-
	Various	1460 Tobias Gadson Blvd.	Charleston	SC	4 (41%)	Vallen Distribution, Inc.		50,076		384		384		6,987	02/2021
	Various	2210 Enterprise Dr.	Florence	SC	4 (21%)	Caliber Funding, LLC		176,557		691		761		-	-
	Various	5104 North Franklin Rd.	Lawrence	IN	4 (0%)	Available for lease		35,786		-		-		-	-
	Various	6050 Dana Way	Antioch	TN	4 (97%)	Multi-Tenant		674,528		2,300		2,255		-	-
	Various	832 N. Westover Blvd .	Albany	GA	4 (0%), 11	Available for lease		45,554		200		403		-	-
	Various	King St./1042 Fort St. Mall	Honolulu	HI	4 (48%)	Multi-Tenant		77,459		696		696		-	-
OTHER TOTAL/WEIGHTED AVERAGE						81.8% Leased		2,335,904	$	16,004	$	14,535	$	7,697
TOTAL CONSOLIDATED PORTFOLIO/WEIGHTED AVERAGE						98.9% Leased		48,614,062	$	347,383	$	330,895	$	697,068

Footnotes

1 Square footage leased or available.

2 Twelve months ended 12/31/2017 cash rent. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

3 Twelve months ended 12/31/2017 GAAP rent, excluding termination income.

4 Percent represents % leased as of 12/31/2017.

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.

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 12/31/2017.

14 The multi-tenanted properties incurred approximately $3.9 million in operating expenses, net for the twelve months ended 12/31/2017.

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

16 Tenant is a domestic subsidiary of an international automaker.

17 Square footage includes a 220,480 square foot expansion expected to be completed in 2018.

18 Lease restricts certain disclosures. Guarantor is investment grade.

19 Property sold subsequent to 12/31/2017.

35

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Non-consolidated Portfolio - 12/31/2017

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant (Guarantor)	Sq.Ft.		LXP % Ownership			GAAP  Rent as of 12/31/2017 ($000) (3)		Cash Rent as of 12/31/2017 ($000) (2)		12/31/2017 Debt Balance  ($000)		Debt Maturity (4)
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	%		2,733		2,507		13,855	05/2019
2033	10/31/2033	607 & 611 Lumsden Professional Ct.	Brandon	FL	1	BluePearl Holdings, LLC		8,500		15	%		201		201		-	-
		4525 Ulmerton Rd.	Clearwater	FL	1	BluePearl Holdings, LLC		3,000		15	%		120		120		-	-
		455 Abernathy Rd.	Atlanta	GA	1	BluePearl Holdings, LLC		32,000		15	%		1,209		988		-	-
		820 Frontage Rd.	Northfield	IL	1	BluePearl Holdings, LLC		14,000		15	%		467		467		-	-
		4126 Packard Rd.	Ann Arbor	MI	1	BluePearl Holdings, LLC		3,500		15	%		55		55		-	-
		29080 Inkster Rd.	Southfield	MI	1	BluePearl Holdings, LLC		38,000		15	%		1,273		1,117		18,791	11/2018
2036	8/31/2036	2203 North Westgreen Blvd.	Katy	TX		British Schools of America, LLC		274,000		25	%		6,299		6,299		50,000	12/2022
N/A	Vacancy	100 Gander Way	Palm Beach Gardens	FL	5,6	(Available for Lease)		120,000		25	%		2,816		1,865		13,957	03/2018
NON-CONSOLIDATED TOTAL/WEIGHTED AVERAGE						78.1% Leased		548,646				$	15,173	$	13,619	$	96,603

Footnotes

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

2 Twelve months ended 12/31/2017 cash rent.

3 Twelve months ended 12/31/2017 GAAP rent, excluding termination income.

4 Interest rates range from 3.7% to 5.1% at 12/31/2017.

5 Cash and GAAP rent amounts represent/include prior tenant. Tenant declared bankruptcy and rejected the lease.

6 Loan is in default.

36

LEXINGTON REALTY TRUST

Select Credit Metrics Summary ⁽¹⁾

	12/31/2017
Adjusted Company FFO Payout Ratio		72.4	%
Unencumbered Assets		$3.5 billion
Unencumbered NOI		72.4	%
(Debt + Preferred) / Gross Assets		45.1	%
Debt/Gross Assets		43.0	%
Secured Debt / Gross Assets		14.4	%
Net Debt / Adjusted EBITDA		6.4	x
(Net Debt + Preferred) / Adjusted EBITDA		6.7	x
Credit Facilities Availability (2)		$345.0 million
Unsecured Debt / Unencumbered NOI		6.0	x

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.

37

LEXINGTON REALTY TRUST

FINANCIAL COVENANTS ⁽¹⁾

Corporate Level Debt

	Must be:	12/31/2017
Bank Loans:
Maximum Leverage	< 60%	46.9%
Fixed Charge Coverage	> 1.5x	2.8x
Recourse Secured Indebtedness Ratio	< 10% cap value	0.0%
Secured Indebtedness Ratio	< 45%	16.6%
Unsecured Debt Service Coverage	> 2.0x	6.2x
Unencumbered Leverage	< 60%	37.6%
Bonds:
Debt to Total Assets	< 60%	43.8%
Secured Debt to Total Assets	< 40%	14.6%
Debt Service Coverage	> 1.5x	4.1x
Unencumbered Assets to Unsecured Debt	> 150%	265.8%

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.

38

LEXINGTON REALTY TRUST

Consolidated Properties: Mortgages and Notes Payable

12/31/2017

Property	Footnotes	Debt Balance ($000)		Interest Rate (%)			Maturity (a)	Current Estimated Annual Debt Service ($000)  (c)		Balloon Payment ($000)
OFFICE
Overland Park, KS		$	32,828		5.891	%	05/2019	$	2,657	$	31,812
Kansas City, MO			15,618		5.883	%	05/2019		1,268		15,179
Columbus, IN			11,842		2.210	%	07/2019		4,757		4,993
Meridian, ID			8,428		6.010	%	08/2019		753		7,675
Lenexa, KS			8,631		6.270	%	12/2019		774		7,770
Boca Raton, FL			19,088		6.470	%	02/2020		1,542		18,414
Oakland, ME			8,370		5.930	%	10/2020		750		7,660
Wall, NJ			11,924		6.250	%	01/2021		3,774		-
Whippany, NJ			12,704		6.298	%	11/2021		1,344		10,400
Charlotte, NC	(b)		8,000		5.000	%	12/2022		406		8,000
Palo Alto, CA			37,846		3.970	%	12/2023		7,059		-
Lenexa, KS			33,212		3.700	%	11/2027		2,740		10,000
Richmond, VA			57,500		5.191	%	02/2031		3,026		53,176
Charlotte, NC			37,400		5.298	%	01/2033		2,009		34,699
Lake Jackson, TX			192,451		4.040	%	10/2036		12,165		11,305
		$	495,842		4.701	%	11.6	$	45,024	$	221,083
INDUSTRIAL
Erwin, NY		$	6,991		5.910	%	10/2018	$	567	$	6,637
North Berwick, ME			1,992		3.560	%	04/2019		1,532		-
Streetsboro, OH			16,931		5.749	%	09/2019		1,344		16,338
Lavonia, GA			7,010		5.460	%	12/2020		741		5,895
Chester, SC			7,271		5.380	%	08/2025		1,144		362
Richland, WA			110,000		4.000	%	01/2026		4,400		99,492
Long Island City, NY			43,334		3.500	%	03/2028		4,793		-
		$	193,529		4.210	%	7.4	$	14,521	$	128,724
OTHER
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		-
Charleston, SC			6,987		5.850	%	02/2021		520		6,632
		$	7,697		6.025	%	2.8	$	1,284	$	6,632
Subtotal/Wtg. Avg./Years Remaining (i)		$	697,068		4.580	%	10.4	$	60,829	$	356,439

39

LEXINGTON REALTY TRUST

Consolidated Properties: Mortgages and Notes Payable

12/31/2017

Property	Footnotes	Debt Balance ($000)		Interest Rate (%)			Maturity (a)	Current Estimated Annual Debt Service ($000)  (c)		Balloon Payment ($000)
Corporate (f)
Revolving Credit Facility	(j)	$	160,000		2.552	%	08/2019	$	4,140	$	160,000
Term Loan	(g)		300,000		2.235	%	08/2020		6,798		300,000
Term Loan	(h)		300,000		2.512	%	01/2021		7,641		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		3.078	%	04/2037		4,030		129,120
Subtotal/Wtg. Avg./Years Remaining (i)		$	1,389,120		3.162	%	5.3	$	44,234	$	1,389,120
Total/Wtg. Avg./Years Remaining (i)	(e)	$	2,086,188		3.636	%	7.0	$	105,063	$	1,745,559

Footnotes

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

(b) Amount may be increased to $12.0 million upon certain events.

(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) Rate ranges from LIBOR plus 0.85% to 1.55%.

40

LEXINGTON REALTY TRUST

Debt Maturity Schedule

12/31/2017

($000)

Consolidated Properties
Year	Mortgage Scheduled Amortization		Mortgage Balloon Payments		Corporate Debt
2018	$	29,303	$	6,637	$	-
2019		26,681		83,767		160,000
2020		23,178		31,969		300,000
2021		23,433		17,032		300,000
2022		22,120		8,000		-
	$	124,715	$	147,405	$	760,000

 

Footnotes

(1) Percentage denotes weighted-average interest rate.

41

LEXINGTON REALTY TRUST

Selected Balance Sheet Account Data

12/31/2017

($000)

Balance Sheet
Other assets	$	20,749
The components of other assets are:
Deposits	$	228
Equipment		540
Prepaids		1,198
Other receivables		801
Deferred lease incentives		16,794
Interest rate swap derivative asset		1,065
Other		123
Accounts payable and other liabilities
The components of accounts payable and other liabilities are:	$	38,644
Accounts payable and accrued expenses	$	15,278
CIP accruals and other		8,961
Taxes		420
Deferred lease costs		10,529
Deposits		1,116
Escrows		649
Transaction / build-to-suit costs		1,691

42

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.

43

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.

44

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES

($000)

	Twelve months ended December 31, 2017
Cash Rent Reconciliation:
Rental revenue as reported	$	359,832
Rental revenue from sold properties		(9,207	)
Lease termination income		(3,242	)
GAAP rent per supplement		347,383
GAAP rent adjustments: (1)
Straight-line adjustments		(19,738	)
Lease incentives		1,844
Amortization of above/below market leases		1,406
Cash rent per supplement	$	330,895

Consolidated debt reconciliation December 31, 2017:

	GAAP Balance		Deferred Loan Costs, net		Discounts		Gross Balance
Mortgages and notes payable (2)	$	689,810	$	7,258	$	-	$	697,068
Revolving credit facility borrowings (3)		160,000		-		-		160,000
Term loans payable (3)		596,663		3,337		-		600,000
Senior notes payable(3)		495,198		3,295		1,507		500,000
Trust preferred securities (3)		127,196		1,924		-		129,120
Consolidated debt	$	2,068,867	$	15,814	$	1,507	$	2,086,188

Footnotes

(1) Individual items are adjusted for sold properties, which were previously reflected in the reconciliation.

(2) Secured.

(3) Unsecured.

45

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Same-Store NOI Reconciliation:

	Twelve months ended December 31,
	2017			2016			2015
Net Income	$	86,629		$	96,450		$	114,891
Interest and amortization expense		77,883			88,032			89,792
Provision for income taxes		1,917			1,439			572
Depreciation and amortization		173,968			166,048			163,198
General and administrative		34,158			31,104			29,277
Litigation settlement		2,050			-			-
Transaction costs		2,171			836			2,404
Non-operating income		(10,378	)		(13,043	)		(11,429	)
Gains on sales of properties		(63,428	)		(81,510	)		(24,884	)
Impairment charges and loan losses		44,996			100,236			36,832
Debt satisfaction (gains) charges, net		(6,196	)		975			(25,150	)
Equity in (earnings) losses of non-consolidated entities		848			(7,590	)		(1,752	)
Lease termination income		(3,242	)		(17,363	)		(4,241	)
Straight-line adjustments		(19,784	)		(37,748	)		(47,702	)
Lease incentives		1,969			1,673			1,544
Amortization of above/below market leases		1,544			2,057			261
Net Operating Income - ("NOI")		325,105			331,596			323,613
Less NOI:
Acquisitions and dispositions		(86,284	)		(92,177	)		(88,613	)
Same-Store NOI	$	238,821		$	239,419		$	235,000

NOI for NAV:

	Twelve months ended
	December 31, 2017
NOI per above	$	325,105
Less NOI:
Disposed of properties		(6,260	)
Assets held for sale		(459	)
Assets acquired in 2017 (1)		(16,246	)
Assets less than 70% leased / Other		(374	)
NOI for NAV	$	301,766

Footnotes

(1) Excludes Lake Jackson, TX.

46

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Reconciliation to Adjusted EBITDA:

	Year-end December 31, 2017
Net income attributable to
Lexington Realty Trust shareholders	$	85,583
Interest and amortization expense		77,883
Provision for income taxes		1,917
Depreciation and amortization		173,968
Straight-line adjustments		(19,784	)
Lease incentives		1,969
Amortization of above/below market leases		1,544
Gains on sales of properties		(63,428	)
Impairment charges and loan loss		44,996
Debt satisfaction (gains) charges, net		(6,196	)
Litigation settlement		2,050
Unearned contingent acquisition consideration		(3,922	)
Non-cash charges, net		8,318
Pro-rata share adjustments:
Non-consolidated entities adjustment		3,484
Noncontrolling interests adjustment		172
Adjusted EBITDA	$	308,554

47

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Reconciliation of Select Credit Metrics:

Adjusted Company FFO Payout:	Twelve months ended December 31, 2017			(Debt + Preferred) / Gross Assets:	Twelve months ended December 31, 2017
Common share dividends per share	$	0.7025		Consolidated debt	$	2,068,867
Adjusted Company FFO per diluted share		0.97		Preferred shares liquidation preference		96,770
Adjusted Company FFO payout ratio		72.4	%	Debt and preferred	$	2,165,637
Unencumbered Assets:				Total assets	$	3,553,020
Real estate, at cost	$	4,535,550		Plus depreciation and amortization:
held for sale real estate, at cost		2,827		Real estate		1,225,650
less encumbered real estate, at cost		(1,037,266	)	Deferred lease costs		27,521
Unencumbered assets	$	3,501,111
				Gross assets	$	4,806,191
Unencumbered NOI:
NOI	$	325,105		(Debt + Preferred) / Gross Assets		45.1	%
Disposed of properties NOI		(6,260	)
Adjusted NOI		318,845		Debt  / Gross Assets:
less encumbered adjusted NOI		(87,983	)	Consolidated debt	$	2,068,867
Unencumbered adjusted NOI	$	230,862
Unencumbered NOI %		72.4	%	Gross assets	$	4,806,191
Net Debt  / Adjusted EBITDA:				Debt / Gross assets		43.0	%
Adjusted EBITDA	$	308,554
				Secured Debt  / Gross Assets:
Consolidated debt	$	2,068,867		Mortgages and notes payable	$	689,810
less cash and cash equivalents		(107,762	)
Net debt	$	1,961,105		Gross assets	$	4,806,191
Net debt / Adjusted EBITDA		6.4	x	Secured Debt / Gross Assets		14.4	%
(Net Debt + Preferred)  / Adjusted EBITDA:				Unsecured Debt / Unencumbered NOI:
Adjusted EBITDA	$	308,554		Consolidated debt	$	2,068,867
				less mortgages and notes payable		(689,810	)
Net debt	$	1,961,105		Unsecured Debt	$	1,379,057
Preferred shares liquidation preference		96,770
Net debt + preferred	$	2,057,875		Unencumbered adjusted NOI	$	230,862
(Net Debt + Preferred) / Adjusted EBITDA		6.7	x	Unsecured Debt / Unencumbered NOI		6.0	x

48

Investor Information

Transfer Agent

Computershare	Overnight Correspondence:
PO Box 505000	462 South 4th Street, Suite 1600
Louisville, KY 40233	Louisville, KY 40202
(800) 850-3948
www-us.computershare.com/investor

Investor Relations

Heather Gentry
Senior Vice President, Investor Relations
Telephone (direct)	(212) 692-7219
Facsimile (main)	(212) 594-6600
E-mail	hgentry@lxp.com

Research Coverage

Bank of America/Merrill Lynch		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	John Massocca	(212) 409-2543
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

49

 

LEXINGTON REALTY TRUST

One Penn Plaza, Suite 4015 | New York, NY 10119-4015 | (212) 692-7200 | www.lxp.com

EX-99.2

Exhibit 99.2

Lexington Realty Trust – UNEDITED TRANSCRIPT

Q4 2017 Earnings Call

Company Participants:

T. Wilson Eglin, Chief Executive Officer and President

Patrick Carroll, Chief Financial Officer

Brendan Mullinix, Executive Vice President

Lara Johnson, Executive Vice President

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 Fourth Quarter 2017 Earnings 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. Please go ahead.

Heather T. Gentry:

Thank you, operator. Welcome to the Lexington Realty Trust Fourth 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.

On today's conference call, Will Eglin, CEO; Pat Carroll, CFO; and Executive Vice Presidents: Brendan Mullinix, Lara Johnson and James Dudley, will provide commentary around fourth quarter and full year results.

I will now turn the call over to Will.

1

T. Wilson Eglin:

Thanks, Heather. Good morning, and welcome to our fourth quarter 2017 earnings call and webcast.

Our year finished on a positive note with strong fourth quarter results. We generated net income attributable to common shareholders of $0.12 per diluted common share for the quarter and $0.33 per diluted common share for the full year 2017. Adjusted company FFO totaled $0.26 per diluted common share in the fourth quarter, which brought our total full year 2017 adjusted company FFO to $0.97 per diluted common share. This represents the high end of our revised 2017 adjusted company FFO guidance range. We provided initial 2018 guidance for net income and adjusted company FFO this morning with adjusted company FFO in the range of $0.95 to $0.98 per diluted common share. This indicates that 2018 results will be similar to 2017 despite lease rollover and concessions on early extensions, continued non-core asset dispositions and higher average borrowing costs as we extend debt maturities. Pat will speak in more detail shortly on guidance assumptions.

The past year was heavily focused on acquiring more high-quality industrial real estate, selling non-core assets as part of a multiyear disposition plan and managing our near-term lease expirations in an effort to improve the quality of our holdings and the value of our overall business. We were quite successful in all 3 areas and fully executed on the plan we put forward a year ago. Industrial revenues continue to increase, and we expect more than half of our revenue to come from industrial properties by year-end 2018. Our investment efforts resulted in the addition of 9.5 million square feet of primarily industrial assets to the portfolio for $728 million, the highest investment volume we've seen in recent years.

Our investment activities have been mostly concentrated in well-located industrial properties leased to strong credit tenants in secondary markets and have been predominantly newer generic distribution centers that we believe can be easily repurposed. In spite of the recent rise in treasury yields, we have not seen pricing across markets change in a meaningful way as demand for industrial real estate investments stayed strong. Given the competitive environment, we don't anticipate that 2018 investment activity will be as robust as it was in 2017, though we will continue to pursue investments in this space to the extent they make sense from both the pricing and asset quality standpoint. We still very much believe that reshaping our portfolio towards a better risk-adjusted long-term total return profile warrants continued investment in the industrial space, particularly as fundamentals remain positive. Our intent is to remain leverage neutral at year-end, so we would expect capital for new investments to come primarily from dispositions
and available cash.

In regard to dispositions. We have enhanced the quality of our portfolio and further simplified our operations through asset sales. Dispositions have largely centered on short-term office, multi-tenanted, vacant and specialty assets, including retail, which represents only about 1% of our revenue. As we continue to sell more assets similar to these, we expect rollover risks and related capital expenditures to come down substantially over the long term. Although in the short term, these expenditures will fluctuate considerably quarter-to-quarter as we prepare assets for sale or extend leases in advance of expiration. We were pleased with the pricing we achieved on the properties we sold in 2017, and we expect to sell an additional $250 million to $300 million of office and other assets in 2018 as part of our ongoing disposition program.

2

Leasing remains a major area of concentration for us. Currently, leases representing approximately 4.4% of our single-tenant revenue are rolling this year, down from almost 8% a year ago. Once we managed through 2018 and the first half of 2019 lease roll, the vast majority of our office portfolio will have been mark-to-market or acquired subsequent to the financial crisis. So we believe we should see some relative relief thereafter as it relates to reduced rental rates and lease concessions.

On a positive note, strong leasing volume, along with property sales, brought our portfolio to approximately 99% leased at year-end. Additionally, GAAP and cash renewal rents were strong for the quarter, increasing 22% and 11%, respectively. Overall, 2017 rents increased 7% on a GAAP basis but decreased 3% on a cash basis, mainly as a result of 2 office lease extensions.

I want to briefly touch on our balance sheet before I turn the call over to Brendan to discuss investments. Low leverage coming into 2017 positioned us well to utilize our balance sheet more efficiently during the year. Given our active year, we ended the year with leverage at 6.4x net debt to adjusted EBITDA, still within a comfortable range for us. Our unencumbered asset base also remained strong at more than 72% of our NOI and our unsecured debt to unencumbered NOI is 6x. Leverage may fluctuate quarter-to-quarter, but our goal is to end the year about where we are today.

As part of our balance sheet strategy, in the fourth quarter, we obtained secured financing on one wholly-owned property and one joint-venture property. The financing has mitigated risk, enhanced our yields and generated approximately $95 million of proceeds. We plan on obtaining additional office financings this year in order to reduce our equity investment in our office portfolio with the proceeds used to pay down our revolving credit facility and other debt. We will now have our respective department heads from three of our main business units: investments, dispositions and asset management provide more specifics on the quarter.

And with that, I will turn the call over to Brendan to discuss our investment activity.

Brendan Mullinix:

Thanks, Will.

We had another active investment quarter where we acquired approximately $140 million of industrial assets, bringing our total 2017 acquisition volume to $728 million at average GAAP and cash cap rates of 7.3% and 6.4%. Three properties we had committed to early in the year, closed during the quarter. These consisted of a 260,000 square foot cold storage facility in Warren, Michigan leased to Lipari Foods for 15 years; a 500,000 square foot distribution center in Romulus, Michigan leased to an automaker for 15 years; and a distribution center leased to Caterpillar for seven years in Lafayette, Indiana. We also purchased one distribution center located in Winchester, Virginia leased to the same automaker for 14 years.

At the end of 2016, we had a number of build-to-suits or forward commitments in our pipeline for delivery in 2017. As yield from the build-to-suit market compressed, there were fewer opportunities that we found compelling last year. And as a result, we were more active in the purchase of existing industrial properties. While we presently have no forward commitments in our 2018 pipeline, built-to-suits have started to become more active again, which we believe bodes well for us. While the majority of our investments last year were purchases, our business strategy still focuses on working directly with builders so we can generate more favorable yields.

3

During the fourth quarter, we formed a joint venture with an affiliate of Clayco, a developer with whom we have worked numerous times in the past to pursue industrial build-to-suit projects. The joint venture acquired 151-acre parcel of land in a submarket of Columbus, Ohio, in which our initial investment totaled $5.8 million. The construction of site infrastructure is on target to start this quarter, and the first phase of development to make the pad-ready is expected to be completed this summer. The site can accommodate up to 2.4 million square feet of warehouse/distribution properties.

The Columbus industrial market has been quick to absorb space, and recent upgrades and completions to highway surrounding the park make it a great location for future industrial and distribution users. We will continue to keep you updated on the progress of the park and our other investment activities as the year progresses.

I'll now turn the call back over to Lara to discuss dispositions.

Lara Johnson:

Thanks, Brendan.

In the fourth quarter, we sold another $48 million of non-core assets, bringing our total disposition activity for 2017 to $242 million at average GAAP and cash cap rates of 7.5% and 7.7%, respectively. We made progress reshaping the portfolio during the year, disposing of 34 consolidated assets, including vacant, multi-tenanted, short-term single-tenant office and retail properties. The portfolio of sold properties was 49% leased at the time of sale and 2.2 million square feet of vacancy less the portfolio as a result of disposition activity in 2017. At the beginning of last year, our multiyear disposition plan had anticipated the sale of an additional $250 million to $300 million of properties in 2017 at an average cash cap rate range of 8.4% to 8.9%. The pricing came in much better than we had projected. Additionally, we collected $138 million from winding down our loan portfolio, which generated greater proceeds than we had forecast when the year began.

In an effort to further reposition our portfolio, we anticipate selling up to $250 million to $300 million in 2018 at estimated average GAAP and cash rate ranges of 8.25% to 9% and 7.5% to 8.25%, respectively. About 80% of the plan is anticipated to be the sale of office properties, with the balance in other non-core assets. Importantly, we expect a meaningful part of the 2018 disposition program to be focused on our expanded efforts to sell certain single-tenant office properties with remaining intermediate lease terms of seven to 10 years, some of which are build-to-suits originated in 2011 or 2012 where we expect net gain. We believe that these dispositions, along with the sale of vacancy, multi-tenant office and other non-core assets, will further simplify and enhance the quality of our portfolio.

With that, I'll turn the call over to James, who will provide an update on leasing.

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James Dudley:

Thanks, Lara.

We leased an additional one million-plus square feet of space in the fourth quarter to end the year with strong leasing volume of roughly four million square feet. Our portfolio was 98.9% leased at year-end with a weighted average lease term of 9.1 years. At year-end, our industrial portfolio was approximately 100% leased with a weighted-average lease term of 10.6 years compared to 10.4 years at the end of 2016. Other office portfolio was just over 99% leased with a weighted-average lease term of 7.7 years compared to 7.2 years at the end of 2016. Our three-year lease extension with Geodis Logistics in Statesville, North Carolina for 640,000 square feet was the main driver of our GAAP and cash rental increases at 22% and 11%, respectively, for the quarter.

Also during the quarter, we signed approximately 100,000 square feet of new leases at our Farmers Branch, Texas multi-tenant office property. Our team has done an excellent job at creating value at this property by taking this formerly single-tenant asset and securing new tenants to raise occupancy from 37% in second quarter of 2016 to almost 100% at year-end 2017. The property will now be marketed for sale. At the end of 2017, we had one nonrenewal from a tenant that had been leasing approximately 43,000 square feet at an office property in Richmond, Virginia. We are in the process of marking the space for lease. Subsequent to quarter-end, we signed a three-year lease with TSYS at our 62,000 square foot office property in McDonough, Georgia, which had been leased to Litton Loan Servicing. There will be an annual cash rental decline of approximately $500,000 for this property.

We continue to proactively pursue tenant renewals through our tenant relationships, and when we have visibility on forward vacancy, we promptly began to market to mitigate downside potential. Already we have done a great deal of work managing our 2018 lease for all through sale or releasing. We currently have a little less than 4.5% of single-tenant lease revenue to address.

As it relates to 2018 expirations. On the office side, negotiations are underway with Huntington Ingalls in Pascagoula, Mississippi for 95,000 square feet and with a prospective tenant for 43,000 square feet of space in our Irving, Texas office property that is currently leased to Pacific Union. We are also marketing our 44,000 square foot office property in Wallingford, Connecticut currently leased to 3M through the end of June 2018, as well as our 320,000 square foot Overland Park, Kansas office property currently leased to Swiss Re through the end of 2018. As Will mentioned on previous calls, there is a large nonrecourse 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. In addition, we have been negotiating a lease extension or possible sale with FedEx on our 520,000 square foot office facility in Memphis. Their current lease is through June of 2019 and represents about a third of 2019 office lease roll. If we secure a long-term lease extension with them, we would expect a decrease in rent from what they are currently paying.

On the industrial side. We don't have any 2018 leases rolling until the end of September, although Plastic Omnium in Duncan, South Carolina; Staples in Henderson, North Carolina; and Bay Valley Foods in Plymouth, Indiana will not be renewing at the end of their respective lease terms. We have made progress on marketing these assets for sale or lease. And because of the advanced notice of vacancy and continued strong demand for industrial product, we are optimistic on favorable sales or leasing outcomes. As a whole, these properties represent only 720,000 square feet and less than 1% of overall portfolio revenue. Additionally, we expect Sears, who's located in one of our Memphis warehouses, to stop paying rent on March 1, 2018, in breach of the lease. This property generated approximately $1.7 million in GAAP rent and $1.6 million in cash rent, representing less than a $0.01 per share of adjusted company FFO in 2017.

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Touching briefly on retail. We're still in the process of marketing our 46,000 square foot vacant property in Albany, Georgia. And we believe we have a promising prospect to lease the entire space.

I'll turn the call over to Pat now, who will discuss financial results.

Patrick Carroll:

Thanks, James.

Gross revenues for the quarter were $102 million compared with gross revenues of $95 million for the same time period of 2016. The increase for the quarter was primarily related to revenue generated from property acquisitions and new leases. Gross revenues for the full year 2017 totaled $392 million compared to gross revenues of $429 million for calendar year 2016. This decrease was largely attributable to heavy disposition volume, most notably, the New York City land investments in 2016. Despite a decrease in full year revenue, we believe our portfolio repositioning has improved overall portfolio quality and positioned the company more favorably over the long term.

Net income attributable to common shareholders for the quarter was $29 million or $0.12 per diluted common share compared to $14 million or $0.06 per diluted common share for the same time period in 2016. Full year 2017 net income attributable to common shareholders totaled $79 million or $0.33 per diluted common share compared to $89 million or $0.37 per diluted common share. We provided an expected net income attributable to common shareholders guidance range this morning of $0.76 to $0.79 per diluted common share. This range is subject to change throughout the year.

Adjusted company FFO for the quarter was $63 million or $0.26 per diluted common share compared to $60 million or $0.24 per diluted common share for the same time period in 2016. The increase relates to acquisitions coming online and the sale of vacant properties in 2017. Full year 2017 adjusted company FFO totaled $0.97 per diluted common share compared to $1.14 per diluted common share for the full year 2016. As we have discussed on previous earnings calls, the primary change in our adjusted company FFO resulted from high disposition volume in 2016, particularly the sale of the New York City land investments, which contributed roughly $0.11 per diluted common share to adjusted company FFO in 2016.

We provided initial 2018 adjusted company FFO guidance this morning in the range of $0.95 to $0.98 per diluted common share, which is roughly in line with 2017. Guidance assumptions include, but are not limited to, up to $250 million to $300 million of dispositions, the leasing outcomes we have visibility on, as James discussed, and higher borrowing costs as we extend our average debt maturity and replace floating-rate debt with fixed-rate debt. The main differences in the high and low ends of our guidance relates to the amount and timing of disposition proceeds and whether they are used for debt reduction versus new investments.

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Same-store NOI was approximately $239 million as of year-end 2017, down just 0.2% when compared to 2016 same-store NOI. Same-store percentage lease was 98.4% as of the end of 2017 compared to 98.7% at the year-end 2016.

Property operating expenses were just over $12 million and in line with the same time period in 2016. We paid approximately $2.4 million in leasing costs and tenant improvements during the quarter, which brings our total TI and leasing costs to approximately $18 million at year-end. We have budgeted approximately $17 million in 2018, although this amount could increase as we address future lease expirations.

G&A expenses were approximately $8.6 million for the quarter. Full year G&A came in at about $34 million. Our 2018 G&A budget is expected to be approximately $32 million. We have made good progress in simplifying our operations, and we continue to focus on lowering our costs.

Now moving on to the balance sheet. At year-end, we had $112 million of cash from the balance sheet, including cash classified as restricted. We have approximately $2.1 billion of consolidated debt outstanding, which bears a weighted-average interest rate of approximately 3.6% and has a weighted-average term of seven years. Our weighted average interest rate has increased slightly since last quarter as a result of additional secured property financing. However, the rate has decreased year-over-year by 46 basis points.

Fixed charge coverage at the end of the quarter was approximately 2.8x with leverage at 6.4x net debt to adjusted EBITDA at the end of the year due primarily to increase in investment activity.

We repaid $40 million on our revolving credit facility during the quarter and we end the year with $160 million outstanding. Our intention is to pay down our revolver with mortgage proceeds on some of our office properties.

We also retired an aggregate of $18.4 million of secured mortgage debt during the quarter at a weighted-average interest rate of 6.1%, bringing total mortgage debt that's satisfied during the year to approximately $63 million. Currently, we have $7 million of non-recourse balloon mortgage payments coming due in 2018. Our unencumbered asset base was approximately $3.5 billion, representing approximately 72% of our NOI as of December 31, 2017.

We did take the opportunity in the fourth quarter to finance 2 properties in an effort to mitigate risks, lengthen debt maturities and extract attractively priced capital from the assets. In the first financing, we obtained approximately $45.4 million non-recourse financing on our AvidXchange office property in Charlotte, North Carolina that has a weighted-average debt maturity of 13.2 years and a weighted-average fixed rate of 5.2%. The financing consisted of a $37.4 million, 15-year first mortgage and an $8 million 5-year mezzanine loan. This build-to-suit was completed in the second quarter of 2017, and our 2018 cash-on-cash return is now an estimated 17.7% on our equity. In the second financing, our joint venture, in which we have a 25% interest, obtained third-party mortgage financing for the British school in Katy, Texas in the amount of $50 million at an annual fixed rate of 5.13%, which matures in December 2022. The joint venture used $49.1 million of the proceeds to satisfy the construction loan we had provided. Completed in the third quarter of 2016, the 2018 cash-on-cash return is an estimated 9.4% on equity.

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

T. Wilson Eglin:

Thanks, Pat. Operator, I have no further comments at this time. So we 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 ISI.

Sheila McGrath:

Oh yes, good morning. Will, you did have a goal over time to lower the cap expenditure profile of the company partly by mix shift to industrial and partly by moving office to longer-weighted average lease term. I just wonder if you could give us an update of how the CapEx kind of profile for the company looks in '18, '19 versus the past couple of years?

Patrick Carroll:

Hi, Sheila. It's Pat. Yes. The transformation to more industrial has reduced that -- our budgeted CapEx --expense. In '18, we're estimated to be about $17 million, which is really a part because of the extensions of the leases we've already done and the reduced exposure we have to office roll in the next couple of years compared to what we had prior.

Sheila McGrath:

Okay. So that...

T. Wilson Eglin:

Over 5 or 6 years, it's probably been roughly cut in half as office has shrunk and weighted average term has been extended from about 5.5 years in that portfolio to about 7.7 years today. So...

Sheila McGrath:

Okay. So that $17 million number for 2018 includes all TI and commissions for the year?

Patrick Carroll:

Yes. Budgeted TI and lease commissions for the whole portfolio. I mean, if you look at what we had in the '17 year, the vast majority of the expenditures are on the office portfolio and the multi-tenant portfolio and a very small amount is on the industrial portfolio. So as we transform more to an industrial, you'll see those numbers coming down.

Sheila McGrath:

Okay. That's great. And as a follow-up on that. If you look at what you're planning to sell this year and targeted acquisitions, how does the portfolio look in terms of mix of industrial, office, shorter-term leases versus like a couple of years ago? Just so we could kind of look at the progress there.

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T. Wilson Eglin:

Well, in the last 5 years, the amount of NOI that we've derived from industrial has about doubled. And if we can find a little more industrial to buy this year, we have a chance of having portfolio mix be roughly 55% industrial, 45% office as we get toward year-end. And the portfolio disposition plan this year is heavier than we would've thought than last year, and about 80% of it is in office so that shift is going to continue.

Sheila McGrath:

Okay. And last question. Just on FedEx, is there -- is that -- there is no change to that situation? That it's still under negotiation? Or I thought you said you might consider selling the asset. Is that new information?

T. Wilson Eglin:

Yes. The discussions with FedEx are ongoing. And they've expressed an interest in either/or, continuing to occupy the building subject to a lease or perhaps purchasing it. So that's an -- a discussion that's continuing.

Sheila McGrath:

Okay. Thank you.

Operator:

Our next question comes from Craig Mailman of KeyBanc Capital Markets. Please go ahead.

Laura Dickson:

Hi everyone. This is Laura Dickson here with Craig. Will, I know it continues to be a tough investment environment. But I just was wondering if you could kind of elaborate on what you're seeing right now like in terms like cap rates and competition on forward commitments? And then in regards to like the improvement in BTS opportunity -- in build-to-suit opportunities, is that primarily from the joint venture? Or if you can elaborate there, too.

T. Wilson Eglin:

Yes. So far even though treasury yields have gone up, we still see a lot of capital chasing industrial investments and no change in cap rates yet. So there are some things we're working on. We have no commitments presently. So it's certainly possible that erring on the side of preserving balance sheet would work in our favor to the extent cap rates inch up a little bit as the year progresses. So most of what we see is sort of in the middle of that 5.5% to 6.5% cap rate area. The one change that I would say this year is we are starting to see some build-to-suit opportunities for delivery next year, which we think may prove to be more -- it may be more lucrative to wait for those opportunities versus pursuing purchases this year. Last year, yields had compressed from build-to-suit and there was a lot of spec building, and we didn't see many opportunities as the year progressed. But this year, we're starting to see a little bit more opportunity in that space, which -- that's the best part of our business. So, I think that bodes well for us.

Laura Dickson:

Okay. And then, for -- regarding the JV for the land parcel. Is that primarily going to be spec? Or is that a bigger strain to market ahead of time?

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Brendan Mullinix:

No. This is Brendan. No, we're planning to pursue build-to-suit opportunities in that park.

Laura Dickson:

Okay. And then can you recap the downside from the move-outs in 2018? It sounded like there were a couple like in Sears, for example.

Patrick Carroll:

Well -- I mean, Sears, is -- as we said in the calls, about $1.7 million in GAAP. And we obviously are not agreeing with their interpretation of the lease, so we will fight back. The rest of the move-outs from an industrial standpoint happen in the tail-end of the year. So they don't have as big an impact on '18 as if they were obviously in the forefront of the year.

Laura Dickson:

Okay. So it's primarily the Sears move-out then. And then...

Patrick Carroll:

Yes, it is. If it's a true lease, a true stop payment on the lease from the industrial.

Laura Dickson:

Okay. Okay. And then just quickly, what rate do you think you'll able to turn out -- turn out the revolver at with mortgage debt? Just kind of curious like what kind of drag that could be on guidance.

T. Wilson Eglin:

That's probably in the high fours. Right now, or like if we were selling bonds, we'd be at about 200 over the 10-year treasury. I think mortgage financing would be comparable.

Laura Dickson:

Okay. That’s it for me. Thank you..

Operator:

[Operator Instructions] Our next question comes from John Guinee of Stifel. Please go ahead.

John Guinee:

Great. And welcome aboard to all of the new speakers. Did you talk at all Will about any sort of reorg or personnel changes?

T. Wilson Eglin:

I didn't.

John Guinee:

Do you want to?

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T. Wilson Eglin:

Actually, I think it's appropriate given the passage of time that the next generation of leadership have an opportunity to present themselves to shareholders and talk about the parts of our business that they're responsible for. So -- that's the thinking behind it.

John Guinee:

Great. Okay. A couple of things. First, is $2 billion worth of asset sales to completely eradicate yourself of that product type. You've got $250 million to $300 million a year is a -- 7, 8-year process. Any thought about just ripping the Band-Aid off sooner even though it'll most likely be a couple 100 basis points dilutive on each asset sale and repurchase into industrial? That's one question. And then the next obvious question is, at $8.30 a share for the share price, I think you have a track record of being a modest share repurchasers at that level.

T. Wilson Eglin:

All right. I'll answer the second question first. We do believe that the share price is attractive, and we havean existing share repurchase authorization. So I think that at these levels, you should expect us to be active to take stock out of circulation. And to the question of what the direction is with respect to the office portfolio, I think the idea of transacting for all of it in size like that, there's -- it's a very large check to write. I think as we think of what we want to do with that portfolio not over eight years, but over a few years is to continue to maximize value on a portion of it that tends to be the shorter-lease stuff and in markets where maybe we only own one building. So directionally, we may, over a few year period, shift the portfolio mix to 75% industrial, 25% office if we choose to go down that path. But I want to be clear and say that all options are on the table for how we continue to shrink the office portfolio, and we do recognize that that exposure weighs heavily on our cost of capital.

John Guinee:

Yes. And then the last question is essentially, $0.96 at the midpoint, about $0.24 a share. That's probably going to be under some pressure in the first half of '19, as you've pointed out. Can you maintain $0.24 a share and $0.96 a year into '19 given the dilutive reinvestment strategy plus the known lease expirations?

T. Wilson Eglin:

It depends on what reinvestment yields are and how well we finance. We pointed out some events around 2019, and particularly the Swiss Re buildings in the Kansas City market and resolving the Federal Express lease that would put pressure on FFO. As we look into '19, I would say that the AFFO number doesn't suffer as much because so much CapEx is coming out of our cash flow as we reposition the portfolio. And we have about 80% of our revenue now from leases with escalations in it. So you're correct that there might be some additional weakness in FFO, but the underlying cash flow number still looks pretty good.

John Guinee:

Pat about how much weakness?

Patrick Carroll:

Haha. Nice try, John.

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John Guinee:

Thanks. Talk later.

Operator:

Our next question comes from Jon Peterson of Jefferies. Please go ahead.

Jon Petersen:

I wanted to follow up. You talked about swapping out some floating for fixed-rate debt. I'm looking at your debt page here. You've got a couple of floating-rate term loans that are already swapped. One through, I guess, that'll probably expire this month and another through January of '19. So should we be thinking about you guys putting new swaps on those term loans when the current swaps expire through their maturity? Or are you guys going to be issuing new debt and getting rid of that? Or were you just talking about the $160 million on the credit facility that you'd swap now?

Patrick Carroll:

Hey, Jon. The answer's on that one swap, the 20 swap. Those -- the 20-term loan in that -- that swap did expire in February. When we talked about replacing it, we were talking about the financing of the mortgage -- the office portfolio with mortgage debt and paying down the revolver. And to the extent that we want to, we can pay down the term loan and then we'll discuss whether swapping it for the remaining term after that.

Jonathan Petersen:

Got it. Okay. All right. That makes sense. And then when Lara was talking about dispositions on office properties, it sounded like there was a target towards those with 5 to 7 years left on the lease. Just kind of curious if you guys can maybe stagger out for us like what kind of cap rates do you get on kind of a single-tenant building with 5 to 7 years left versus something with 10-plus years left versus something that has less than 5 years left? Just maybe give us an ideal of range of those cap rates when you're at those different durations on the lease.

Lara Johnson:

Sure. This is Lara. Good morning. So to some extent, obviously, it depends on the market, the tenant and the credit of the tenant. So there is a fairly sizable range. So we are seeing a reasonable amount of appetite in private investors for the yield associated with those types of assets. So if I had to generalize, I would say in the eights. But again, it's fairly specific to the asset market and tenancy.

Jonathan Petersen:

Okay. So it's eights on the 5 to 7 years. How does that compare for like a 10-year today for these same types of properties.

Lara Johnson:

Obviously, the longer the term -- if you have a reasonably good credit and you're in a comparable market, we're going to see a better cap rate. Office buyers are more term-sensitive than they had been in the past 5 years. So it's kind of the 15-year term is the new 10 year, if you will. But meaningfully better if you're over 10 years.

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Jonathan Petersen:

Alright, I appreciate it. Thank you.

Operator:

Our next question comes from John Massocca of Ladenburg Salmon. Please go ahead.

John Massocca:

Good morning. I know you kind of -- you may not want to give the exact number on this, but TI is coming down a little bit year-over-year this year. But would you expect that it can maybe bounce back up kind of given the office lease roll and maybe some potential noise around FedEx in 2019 and 2020? Or is this kind of going to be a steady run rate going forward?

T. Wilson Eglin:

Well, it can fluctuate, John, from quarter-to-quarter. And there will be times where we think it's advisable to spend meaningful capital to position an asset to be sold where it's just -- is a sensible investment for us. So sometimes it'll be low, sometimes it'll be a little higher. But directionally, over a 3- to 5-year period, it's certainly going to be lower than it is today.

John Massocca:

Okay. And then I know it's not a huge portion of your portfolio, but do you kind of look at the retail and the specialty side of the business? I mean, would that be something you'd look to exit? And then – and what kind of pricing do you think you can get on those assets if you did try to get out of that space?

T. Wilson Eglin:

Yes. We're trying to grind that stuff portfolio down to 0. And it's less than 5% of our NOI. At this point, cap rates are all over the map and in some cases, we're selling buildings that are under occupied. So it's more of a per-square-foot question, not cap rate. But it's -- the retail portfolio is so small now that the values are sort of de minimis. And regardless of what the cap rates are, it wouldn't have a meaningful impact on our results by selling that stuff and redeployment of capital.

John Massocca:

Understood. That’s it for me. Thanks very much.

T. Wilson Eglin:

Thank you.

Operator:

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

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T. Wilson Eglin:

Well, thanks again, everyone, for joining us this morning. We appreciate your continued participation and support. And if you would like to receive our quarterly supplemental package, please contact Heather Gentry or you can find additional information on the company on our website at www.lxp.com. And as always, you may contact me or the other members of our senior management team if you have any questions. Thanks, again. And have a great day.

Operator:

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

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