8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant

to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 8, 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 August 8, 2018, we issued a press release announcing our financial results for the quarter ended June 30, 2018. A copy of the press release is furnished herewith as part of Exhibit 99.1.

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

Item 7.01. Regulation FD Disclosure.

On August 8, 2018, we made available supplemental information, which we refer to as the “Quarterly Supplemental Information, Second Quarter 2018,” a copy of which is furnished herewith as Exhibit 99.1.

Also on August 8, 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, Second Quarter 2018.
99.2	August 8, 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: August 9, 2018	By:	/s/ Patrick Carroll
		Patrick Carroll
		Chief Financial Officer

Exhibit Index

99.1	Quarterly Supplemental Information, Second Quarter 2018.
99.2	August 8, 2018 Conference Call Transcript.

EX-99.1

Exhibit 99.1

LEXINGTON REALTY TRUST

QUARTERLY SUPPLEMENTAL INFORMATION

June 30, 2018

Table of Contents

Section	Page
Second Quarter 2018 Earnings Press Release	3
Portfolio Data
Investment / Capital Recycling Summary	14
Financing Summary	15
Leasing Summary	16
Other Revenue Data	18
Portfolio Detail by Asset Class	20
Portfolio Composition	21
Components of Net Asset Value	22
Top Markets	23
Single-Tenant Office Markets	24
Tenant Industry Diversification	25
Top 10 Tenants or Guarantors	26
Lease Rollover Schedules – GAAP Basis	27
Property Leases and Vacancies	29
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 SECOND QUARTER 2018 RESULTS

New York, NY - August 8, 2018 - Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant real estate investments, today announced results for the second quarter ended June 30, 2018.

Second Quarter 2018 Highlights

• Generated Net Loss attributable to common shareholders of $3.3 million, or $(0.01) per diluted common share.

• Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $62.4 million, or $0.25 per diluted common share.

• Acquired three industrial properties for an aggregate cost of $136.8 million.

• Sold three non-industrial properties for an aggregate of $65.6 million.

• Financed an industrial property generating initial gross proceeds of $25.9 million.

• Repurchased and retired 130,000 common shares at an average price of $7.87 per share.

• Borrowed $95.0 million, net, under its unsecured revolving credit facility.

• Completed 331,000 square feet of new leases and lease extensions with portfolio 97.3% leased at quarter end.

Subsequent Events

• Sold three non-industrial properties for an aggregate of $46.6 million.

Adjusted Company FFO is a non-GAAP financial measure. It and certain other non-GAAP financial measures are defined and reconciled later in this press release.

T. Wilson Eglin, Chief Executive Officer and President of Lexington Realty Trust, commented, “To date, we have added $137 million of new industrial assets to our portfolio and disposed of $175 million of office and other non-core assets.  We remain committed to our business strategy of repositioning our portfolio so that it consists primarily of single-tenant net-leased industrial assets.  Considerable progress has been made on reducing our office exposure and we continue to focus on accelerating our disposition efforts in this area of our business.”

3

FINANCIAL RESULTS

Revenues

For the quarter ended June 30, 2018, total gross revenues were $105.5 million, compared with total gross revenues of $95.7 million for the quarter ended June 30, 2017. The increase was primarily attributable to revenue generated from 2018 and 2017 property acquisitions and new leases, partially offset by property sales and lease expirations.

Net Income (Loss) Attributable to Common Shareholders

For the quarter ended June 30, 2018, net loss attributable to common shareholders was $3.3 million, or $(0.01) per diluted share, compared with net income attributable to common shareholders for the quarter ended June 30, 2017 of $5.5 million, or $0.02 per diluted share. The change between periods relates primarily to the timing of gains on sales and impairments recognized on real estate.

Adjusted Company FFO

For the quarter ended June 30, 2018, Lexington generated Adjusted Company FFO of $62.4 million, or $0.25 per diluted share, compared to Adjusted Company FFO for the quarter ended June 30, 2017 of $57.0 million, or $0.23 per diluted share. The increase was primarily attributable to the items discussed above under “Revenues”.

Dividends/Distributions

As previously announced, during the second quarter of 2018, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended June 30, 2018 of $0.1775 per common share/unit, which was paid on July 16, 2018 to common shareholders/unitholders of record as of June 29, 2018. Lexington previously declared a cash dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred”) for the quarter ended June 30, 2018, which is expected to be paid on August 15, 2018 to Series C Preferred Shareholders of record as of July 31, 2018.

TRANSACTION ACTIVITY

ACQUISITION TRANSACTIONS

Tenant	Location	Sq. Ft.		Property Type	Initial Basis ($000)		Approximate Lease Term (Yrs)
Sephora USA, Inc.	Olive Branch, MS		716,080	Industrial	$	44,090	11
Hamilton Beach Brands, Inc.	Olive Branch, MS		1,170,218	Industrial		48,575	3
Spectrum Brands Pet Group, Inc.	Edwardsville, IL		1,017,780	Industrial		44,178	12
			2,904,078		$	136,843

The above were acquired at aggregate weighted-average GAAP and cash capitalization rates of 7.3% and 5.8%, respectively.

4

PROPERTY DISPOSITIONS

Primary Tenant	Location	Property Type	Gross Disposition Price ($000)		Annualized Net Income (Loss)(1) ($000)			Annualized NOI(1) ($000)			Month of Disposition	% Leased
Vacant	Lawrence, IN	Other	$	550	$	(200	)	$	(185	)	May		0	%
Mighty Dollar, LLC	Thomasville, NC	Other		600		66			86		June		100	%
CopperPoint Mutual Insurance Company	Phoenix, AZ	Office		64,499		2,991			4,173		June		100	%
			$	65,649	$	2,857		$	4,074

(1) Quarterly period prior to sale annualized.

These dispositions resulted in aggregate gain on sales of $14.4 million.

LEASING

	LEASE EXTENSIONS
	Location		Primary Tenant(1)	Prior Term	Lease Expiration Date		Sq. Ft.
	Office
1	Pascagoula	MS	Huntington Ingalls Incorporated	10/2018	10/2023			94,841
2	Tempe	AZ	Versum Materials US, LLC	06/2022	12/2033			95,133
2	Total office lease extensions							189,974
	NEW LEASES
	Location				Lease Expiration Date	Sq. Ft.
	Office/Multi-Tenant
1	Irving	TX	Nissan Motor Acceptance Corporation		03/2023		43,396
2	Redmond	OR	Consumer Cellular, Incorporated		07/2029		77,260
3	Phoenix	AZ	HealthPlanOne, LLC		02/2024		20,164
3	Total new office leases						140,820
5	TOTAL NEW AND EXTENDED LEASES						330,794

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

As of June 30, 2018, Lexington's portfolio was 97.3% leased.

5

BALANCE SHEET/CAPITAL MARKETS

In the second quarter of 2018, Lexington repurchased and retired 130,000 common shares at an average price of $7.87 per share under its repurchase authorization announced on July 2, 2015 in the amount of 10.0 million common shares. As of June 30, 2018, there were approximately 5.7 million common shares remaining to be repurchased under the authorization.

Also, in the second quarter, Lexington obtained $25.9 million in non-recourse financing on an industrial property in Warren, Michigan. The loan matures in November 2032, bears interest at a fixed rate of 5.4% and is interest only through November 2027.

2018 EARNINGS GUIDANCE

Lexington now 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 $0.24 to $0.27. Lexington is reaffirming that its Adjusted Company FFO for the year ended December 31, 2018 is expected to be within a 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.

SECOND QUARTER 2018 CONFERENCE CALL

Lexington will host a conference call today, August 8, 2018, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended June 30, 2018. Interested parties may participate in this conference call by dialing 1-844-825-9783 (U.S.), 1-412-317-5163 (International) or 1-855-669-9657 (Canada). A replay of the call will be available through November 8, 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 10122347. A link to a live webcast of the conference call is available at www.lxp.com within the Investors section.

6

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 real estate investment trust, (5) changes in general business and economic conditions, including the impact of any legislation, (6) competition, (7) increases in real estate construction costs, (8) changes in interest rates, (9) changes in accessibility of debt and equity capital markets, and (10) future impairment charges. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington's web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington's future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects”, “may,” “plans,” “predicts,” “will,” “will likely result,” “is optimistic,” “goal,” “objective” or similar expressions. Except as required by law, Lexington undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington's expectations will be realized.

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

7

Non-GAAP Financial Measures - Definitions

Lexington has used non-GAAP financial measures as defined by the Securities and Exchange Commission Regulation G in this Quarterly Earnings Release and in other public disclosures.

Lexington believes that the measures defined below are helpful to investors in measuring our performance or that of an individual investment. Since these measures exclude certain items which are included in their respective most comparable measures under generally accepted accounting principles (“GAAP”), reliance on the measures has limitations; management compensates for these limitations by using the measures simply as supplemental measures that are weighed in balance with other GAAP measures. These measures are not necessarily indications of our cash flow available to fund cash needs. Additionally, they should not be used as an alternative to the respective most comparable GAAP measures when evaluating Lexington's financial performance or cash flow from operating, investing or financing activities or liquidity.

Cash Rent: Cash Rent is calculated by making adjustments to GAAP rent to remove the impact of GAAP required adjustments to rental income such as adjustments for straight-line rents relating to free rent periods and contractual rent increases. Cash Rent excludes lease termination income. Lexington believes Cash Rent provides a meaningful indication of an investment's ability to fund cash needs.

Company Funds Available for Distribution (“FAD”): FAD is calculated by making adjustments to Adjusted Company FFO (see below) for (1) straight-line adjustments, (2) lease incentive amortization, (3) amortization of above/below market leases, (4) lease termination payments, net, (5) non-cash interest, net, (6) non-cash charges, net, (7) cash paid for tenant improvements, and (8) cash paid for lease costs. Although FAD may not be comparable to that of other real estate investment trusts (“REITs”), Lexington believes it provides a meaningful indication of its ability to fund cash needs. FAD is a non-GAAP financial measure and should not be viewed as an alternative measurement of operating performance to net income, as an alternative to net cash flows from operating activities or as a measure of liquidity.

Funds from Operations (“FFO”) and Adjusted Company FFO: Lexington believes that Funds from Operations, or FFO, which is a non-GAAP measure, is a widely recognized and appropriate measure of the performance of an equity REIT. Lexington believes FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income.

The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (or loss) computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization and after adjustments for non-consolidated partnerships and joint ventures.” NAREIT clarified its computation of FFO to exclude impairment charges on depreciable real estate owned directly or indirectly. FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.

Lexington presents FFO available to common shareholders and unitholders - basic and also presents FFO available to all equityholders and unitholders - diluted on a company-wide basis as if all securities that are convertible, at the holder's option, into Lexington’s common shares, are converted at the beginning of the period. Lexington also presents Adjusted Company FFO available to all equityholders and unitholders - diluted which adjusts FFO available to all equityholders and unitholders - diluted for certain items which we believe are not indicative of the operating results of Lexington's real estate portfolio. Lexington believes this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate these measures in a similar fashion, these measures may not be comparable to similarly titled measures as reported by others. These measures should not be considered as an alternative to net income as an indicator of Lexington’s operating performance or as an alternative to cash flow as a measure of liquidity.

GAAP and Cash Yield or Capitalization Rate: GAAP and cash yields or capitalization rates are measures of operating performance used to evaluate the individual performance of an investment. These measures are estimates and are not presented or intended to be viewed as a liquidity or performance measure that present a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. The yield or capitalization rate is calculated by dividing the annualized NOI (as defined below, except GAAP rent adjustments are added back to rental income to calculate GAAP yield or capitalization rate) the investment is expected to generate (or has generated) divided by the acquisition/completion cost (or sale) price.

Net Operating Income (“NOI”): NOI is a measure of operating performance used to evaluate the individual performance of an investment. This measure is not presented or intended to be viewed as a liquidity or performance measure that presents a numerical measure of Lexington's historical or future financial performance, financial position or cash flows. Lexington defines NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income), tenant reimbursements and other property income) less property operating expenses. Other REITs may use different methodologies for calculating NOI, and accordingly, Lexington's NOI may not be comparable to other companies. Because NOI excludes general and administrative expenses, interest expense, depreciation and amortization, acquisition-related expenses, other nonproperty income and losses, and gains and losses from property dispositions, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate and the impact to operations from trends in occupancy rates, rental rates, and operating costs, providing a perspective on operations not immediately apparent from net income. Lexington believes that net income is the most directly comparable GAAP measure to NOI.

# # #

8

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Three months ended June 30,						Six months ended June 30,
	2018			2017			2018			2017
Gross revenues:
Rental	$	97,649		$	87,565		$	192,171		$	176,219
Tenant reimbursements		7,844			8,119			15,959			15,564
Total gross revenues		105,493			95,684			208,130			191,783
Expense applicable to revenues:
Depreciation and amortization		(45,440	)		(42,320	)		(91,977	)		(85,211	)
Property operating		(10,906	)		(12,974	)		(22,383	)		(25,090	)
General and administrative		(7,421	)		(8,141	)		(16,417	)		(17,598	)
Non-operating income		354			1,371			900			3,992
Interest and amortization expense		(21,734	)		(19,216	)		(42,065	)		(38,941	)
Debt satisfaction charges, net		—			(46	)		—			(46	)
Impairment charges and loan loss		(35,269	)		(13,599	)		(88,318	)		(21,591	)
Gains on sales of properties		14,432			10,240			37,206			44,433
Income (loss) before provision for income taxes and equity in earnings (losses) of non-consolidated entities		(491	)		10,999			(14,924	)		51,731
Provision for income taxes		(379	)		(377	)		(882	)		(799	)
Equity in earnings (losses) of non-consolidated entities		75			(3,257	)		188			(1,347	)
Net income (loss)		(795	)		7,365			(15,618	)		49,585
Less net income attributable to noncontrolling interests		(899	)		(213	)		(391	)		(393	)
Net income (loss) attributable to Lexington Realty Trust shareholders		(1,694	)		7,152			(16,009	)		49,192
Dividends attributable to preferred shares – Series C		(1,573	)		(1,573	)		(3,145	)		(3,145	)
Allocation to participating securities		(60	)		(60	)		(130	)		(131	)
Net income (loss) attributable to common shareholders	$	(3,327	)	$	5,519		$	(19,284	)	$	45,916
Net income (loss) attributable to common shareholders - per common share basic	$	(0.01	)	$	0.02		$	(0.08	)	$	0.19
Weighted-average common shares outstanding – basic		237,312,726			237,720,198			237,690,306			237,451,355
Net income (loss) attributable to common shareholders - per common share diluted	$	(0.01	)	$	0.02		$	(0.08	)	$	0.19
Weighted-average common shares outstanding – diluted		237,312,726			241,531,313			237,690,306			241,310,529

9

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

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

	June 30, 2018			December 31, 2017
Assets:
Real estate, at cost	$	3,650,121		$	3,936,459
Real estate - intangible assets		523,097			599,091
		4,173,218			4,535,550
Less: accumulated depreciation and amortization		1,139,865			1,225,650
Real estate, net		3,033,353			3,309,900
Assets held for sale		171,550			2,827
Cash and cash equivalents		75,373			107,762
Restricted cash		71,564			4,394
Investment in and advances to non-consolidated entities		17,199			17,476
Deferred expenses, net		29,472			31,693
Rent receivable – current		4,712			5,450
Rent receivable – deferred		52,861			52,769
Other assets		20,107			20,749
Total assets	$	3,476,191		$	3,553,020
Liabilities and Equity:
Liabilities:
Mortgages and notes payable, net	$	701,774		$	689,810
Revolving credit facility borrowings		195,000			160,000
Term loans payable, net		597,251			596,663
Senior notes payable, net		495,616			495,198
Trust preferred securities, net		127,246			127,196
Dividends payable		48,474			49,504
Liabilities held for sale		2,333			—
Accounts payable and other liabilities		26,207			38,644
Accrued interest payable		6,069			5,378
Deferred revenue - including below market leases, net		33,736			33,182
Prepaid rent		13,189			16,610
Total liabilities		2,246,895			2,212,185
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, 239,888,688 and 240,689,081 shares issued and outstanding in 2018 and 2017, respectively		24			24
Additional paid-in-capital		2,811,981			2,818,520
Accumulated distributions in excess of net income		(1,693,165	)		(1,589,724	)
Accumulated other comprehensive income		1,098			1,065
Total shareholders’ equity		1,213,954			1,323,901
Noncontrolling interests		15,342			16,934
Total equity		1,229,296			1,340,835
Total liabilities and equity	$	3,476,191		$	3,553,020

10

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

EARNINGS PER SHARE

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

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2018			2017		2018			2017
EARNINGS PER SHARE:
Basic:
Net income (loss) attributable to common shareholders	$	(3,327	)	$	5,519	$	(19,284	)	$	45,916
Weighted-average number of common shares outstanding - basic		237,312,726			237,720,198		237,690,306			237,451,355
Net income (loss) attributable to common shareholders - per common share basic	$	(0.01	)	$	0.02	$	(0.08	)	$	0.19
Diluted:
Net income (loss) attributable to common shareholders - basic	$	(3,327	)	$	5,519	$	(19,284	)	$	45,916
Impact of assumed conversions		—			—		—			(19	)
Net income (loss) attributable to common shareholders	$	(3,327	)	$	5,519	$	(19,284	)	$	45,897
Weighted-average common shares outstanding - basic		237,312,726			237,720,198		237,690,306			237,451,355
Effect of dilutive securities:
Share options		—			86,653		—			111,252
Operating partnership units		—			3,724,462		—			3,747,922
Weighted-average common shares outstanding - diluted		237,312,726			241,531,313		237,690,306			241,310,529
Net income (loss) attributable to common shareholders - per common share diluted	$	(0.01	)	$	0.02	$	(0.08	)	$	0.19

11

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

ADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS AVAILABLE FOR DISTRIBUTION

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

	Three Months Ended June 30,						Six Months Ended June 30,
	2018			2017			2018			2017
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income (loss) attributable to common shareholders	$	(3,327	)	$	5,519		$	(19,284	)	$	45,916
Adjustments:
Depreciation and amortization		44,225			41,076			89,379			82,618
Impairment charges - real estate		35,269			17,111			88,318			19,809
Noncontrolling interests - OP units		649			—			(80	)		(19	)
Amortization of leasing commissions		1,215			1,244			2,598			2,593
Joint venture and noncontrolling interest adjustment		258			265			516			605
Gains on sales of properties, including non-consolidated entities		(14,432	)		(10,240	)		(37,206	)		(45,885	)
FFO available to common shareholders and unitholders - basic		63,857			54,975			124,241			105,637
Preferred dividends		1,573			1,573			3,145			3,145
Amount allocated to participating securities		60			60			130			131
FFO available to all equityholders and unitholders - diluted		65,490			56,608			127,516			108,913
Debt satisfaction charges, net		—			46			—			46
Loan loss		—			—			—			5,294
Other(1)		(3,120	)		302			(3,120	)		488
Adjusted Company FFO available to all equityholders and unitholders - diluted		62,370			56,956			124,396			114,741
FUNDS AVAILABLE FOR DISTRIBUTION:
Adjustments:
Straight-line adjustments		(6,013	)		(5,641	)		(10,879	)		(8,550	)
Lease incentives		519			510			1,055			941
Amortization of above/below market leases		246			346			224			860
Lease termination payments, net		(309	)		(530	)		(617	)		(295	)
Non-cash interest, net		1,299			497			2,324			652
Non-cash charges, net		1,625			1,987			3,564			4,133
Tenant improvements		(662	)		(4,233	)		(6,594	)		(5,995	)
Lease costs		(1,192	)		(1,385	)		(1,801	)		(3,056	)
Company Funds Available for Distribution	$	57,883		$	48,507		$	111,672		$	103,431
Per Common Share and Unit Amounts
Basic:
FFO	$	0.27		$	0.23		$	0.51		$	0.44
Diluted:
FFO	$	0.27		$	0.23		$	0.52		$	0.44
Adjusted Company FFO	$	0.25		$	0.23		$	0.50		$	0.47
Basic:
Weighted-average common shares outstanding - basic EPS		237,312,726			237,720,198			237,690,306			237,451,355
Operating partnership units(2)		3,619,315			3,724,462			3,624,228			3,747,922
Weighted-average common shares outstanding - basic FFO		240,932,041			241,444,660			241,314,534			241,199,277
Diluted:
Weighted-average common shares outstanding - diluted EPS		237,312,726			241,531,313			237,690,306			241,310,529
Operating partnership units(2)		3,619,315			—			3,624,228			—
Unvested share-based payment awards and options		445,283			606,934			503,461			648,810
Preferred shares - Series C		4,710,570			4,710,570			4,710,570			4,710,570
Weighted-average common shares outstanding - diluted FFO		246,087,894			246,848,817			246,528,565			246,669,909

(1) "Other" primarily consisted of the acceleration of below-market lease intangible accretion in 2018 and transaction related costs in 2017.

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

12

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

2018 EARNINGS GUIDANCE

	Twelve Months Ended December 31, 2018
	Range
Estimated:
Net income attributable to common shareholders per diluted common share(1)	$	0.24		$	0.27
Depreciation and amortization		0.73			0.73
Impact of capital transactions		(0.02	)		(0.02	)
Estimated Adjusted Company FFO per diluted common share	$	0.95		$	0.98

(1) Assumes all convertible securities are dilutive.

13

LEXINGTON REALTY TRUST

2018 Second Quarter Investment / Capital Recycling Summary 

PROPERTY INVESTMENTS

	Primary Tenant	Location		Square Feet (Approx.)	Property Type	Initial Basis ($000)		Month Closed	Primary Lease Expiration
1	Sephora USA, Inc.	Olive Branch	MS	716,000	Industrial	$	44,090	April	07/2029
2	Hamilton Beach Brands, Inc.	Olive Branch	MS	1,170,000	Industrial		48,575	April	06/2021
3	Spectrum Brands Pet Group, Inc.	Edwardsville	IL	1,018,000	Industrial		44,178	June	05/2030
3	TOTAL PROPERTY INVESTMENTS			2,904,000		$	136,843

CAPITAL RECYCLING

PROPERTY DISPOSITIONS

	Primary Tenant	Location		Property Type	Gross Sale Price ($000)		Annualized  Net Income (Loss) ($000) (1)			Annualized NOI ($000)(1)(2)			Month of Disposition	% Leased			Gross Sale Price PSF
1	Vacant	Lawrence	IN	Other	$	550	$	(200	)	$	(185	)	May		0	%	$	15.39
2	Mighty Dollar, LLC	Thomasville	NC	Other		600		66			86		June		100	%		25.25
3	Copperpoint Mutual Insurance Company	Phoenix	AZ	Office		64,499		2,991			4,173		June		100	%		255.54
3	TOTAL PROPERTY DISPOSITIONS				$	65,649	$	2,857		$	4,074

Footnotes

(1) Quarterly period prior to sale annualized.

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

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LEXINGTON REALTY TRUST

2018 Second Quarter Financing Summary

PROPERTY LEVEL FINANCING

Location	Primary Tenant	Property Type	Face ($000)		Fixed Rate			Maturity Date
Consolidated Mortgage Debt:
Warren, MI (1)	Lipari Foods Operating Company, LLC	Industrial	$	25,850		5.380	%	11/2032
CORPORATE LEVEL FINANCING
	Quarterly Activity, Net ($000)
Revolving Credit Facility	$              95,000 borrowing

Footnotes

(1) Loan is interest-only through November 2027.

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LEXINGTON REALTY TRUST

2018 Second Quarter Leasing Summary

LEASE EXTENSIONS

	Tenant (3)	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)(2)		Prior Cash Rent Per Annum ($000)(2)
	Office
1	Huntington Ingalls Incorporated	Pascagoula	MS	10/2018	10/2023		94,841	$	593	$	593	$	593	$	593
2	Versum Materials US, LLC	Tempe	AZ	06/2022	12/2033		95,133		1,803		1,750		1,574		1,691
2	Total office lease extensions						189,974	$	2,396	$	2,343	$	2,167	$	2,284
				`
2	TOTAL EXTENDED LEASES						189,974	$	2,396	$	2,343	$	2,167	$	2,284
NEW LEASES
	Tenant (Guarantor)(3)	Location			Lease Expiration  Date	Sq. Ft.		New GAAP Rent Per Annum ($000)(1)				New Cash Rent Per Annum ($000)(1)(2)
	Office / Multi-tenant Office
1	Nissan Motor Acceptance Corporation (Nissan North America, Inc.) (4)	Irving	TX		03/2023		43,396	$	641			$	736
2	Consumer Cellular, Incorporated (5)	Redmond	OR		07/2029		77,260		920				843
3	HealthPlanOne, LLC(6)	Phoenix	AZ		02/2024		20,164		347				403
3	Total office new leases						140,820	$	1,908			$	1,982
3	TOTAL NEW LEASES						140,820	$	1,908			$	1,982
5	TOTAL NEW AND EXTENDED LEASES						330,794	$	4,304			$	4,149

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LEXINGTON REALTY TRUST

2018 Second Quarter Leasing Summary (Continued)

NEW VACANCY ⁽⁷⁾

Tenant	Location		Lease Expiration  Date	Sq. Ft.		2017 GAAP Rent ($000)		2017 Cash Rent ($000)(2)
Office
3M Company	Wallingford	CT	06/2018		44,400	$	507	$	528

Footnotes 

(1) Assumes twelve months rent from the later of 7/1/18 or lease commencement/extension, excluding free rent periods as applicable.

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

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

(4) Previous tenant lease expired 5/31/2018 and provided for annual GAAP and cash rents of $0.8 million and $0.9 million, respectively.

(5) Current lease with T-Mobile USA expires 1/31/2019. Consumer Cellular lease commences 2/1/2019. T-Mobile USA lease has annual GAAP and cash rent of $1.5 million and $1.8 million, respectively.

(6) Previous tenant lease expires 7/31/2018 and provided for annual GAAP and cash rents of $408 thousand and $423 thousand, respectively.

(7) Excludes multi-tenant properties and non-consolidated investments.

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LEXINGTON REALTY TRUST

Other Revenue Data

6/30/2018

($000)

Other Revenue Data

	GAAP  Rent
Asset Class	Six months ended
	6/30/18 (1)(4)		6/30/18 Percentage			6/30/17 Percentage
Industrial	$	89,767		48.6	%		41.2	%
Office		86,008		46.6	%		53.3	%
Other
Multi-tenant		5,497		3.0	%		2.6	%
Specialty		1,931		1.0	%		1.1	%
Retail		1,488		0.8	%		1.8	%
	$	184,691		100.0	%		100.0	%

	GAAP  Rent
Credit Ratings  (2)	Six months ended
	6/30/18 (1)(4)		6/30/18 Percentage			6/30/17 Percentage
Investment Grade	$	79,219		42.9	%		39.2	%
Non-Investment Grade		27,565		14.9	%		15.9	%
Unrated		77,907		42.2	%		44.9	%
	$	184,691		100.0	%		100.0	%

Weighted-Average Lease Term - Cash Basis	As of 6/30/18	As of 6/30/17
	8.8 years	9.0 years

Rent Estimates for Current Assets

Year	GAAP (3)(4)		Cash (3)		Difference
2018 - remaining	$	185,653	$	175,312	$	(10,341	)
2019		347,345		335,170		(12,175	)

Footnotes

(1) Six months ended 6/30/2018 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 6/30/2018.

(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 6/30/2018, and (3) no properties are sold or acquired after 6/30/2018.

(4) Excludes the acceleration of below-market lease intangible accretion on three Kmart assets.

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LEXINGTON REALTY TRUST

Other Revenue Data (Continued)

6/30/2018

($000)

Same-Store NOI ⁽¹⁾

	Six months ended June 30,
	2018			2017
Total Cash  Rent	$	153,401		$	152,878
Tenant Reimbursements		14,616			13,599
Property Operating Expenses		(20,386	)		(19,752	)
Same-Store NOI	$	147,631		$	146,725
Change in Same-Store NOI		0.6	%
Same-Store Percent Leased (2)	As of 6/30/18			As of 6/30/17
		96.4	%		98.7	%

Lease Escalation Data ⁽³⁾

Footnotes

(1) NOI is on a consolidated cash basis for all consolidated properties except properties acquired and sold in 2018 and 2017. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

(2) Excludes properties acquired or sold in 2018 and 2017.

(3) Based on six months consolidated cash rents for single-tenant leases (properties greater than 70% leased) owned as of June 30, 2018. Excludes parking operations and rents from prior tenants.

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LEXINGTON REALTY TRUST

Portfolio Detail By Asset Class

6/30/2018

($000, except square footage)

Asset Class	YE 2015			YE 2016			YE 2017			Q2 2018
Industrial
% of ABR (1)		30.5	%		39.7	%		43.6	%		48.6	%
LTL (5)		47.4	%		50.8	%		47.1	%		42.7	%
STL (6)		52.6	%		49.2	%		52.9	%		57.3	%
Leased		99.6	%		99.9	%		99.9	%		99.9	%
Wtd. Avg. Lease Term (2)		10.1			10.4			10.6			10.1
Mortgage Debt	$	292,293		$	240,790		$	193,529		$	216,148
% Investment Grade (1)		27.9	%		26.2	%		28.9	%		36.2	%
Square Feet		25,693,585			27,476,653			35,396,894			37,462,265
Office
% of ABR (1)		49.6	%		52.9	%		51.8	%		46.6	%
LTL (5)		23.2	%		26.9	%		30.1	%		29.5	%
STL (6)		76.8	%		73.1	%		69.9	%		70.5	%
Leased		99.6	%		99.6	%		99.2	%		99.1	%
Wtd. Avg. Lease Term (2)		7.2			7.2			7.7			7.2
Mortgage Debt	$	329,696		$	490,948		$	495,842		$	485,266
% Investment Grade (1)		48.0	%		48.1	%		52.0	%		52.9	%
Square Feet		12,847,877			11,569,940			10,881,264			10,214,003
Other
% of ABR (1)(7)		19.9	%		7.4	%		4.6	%		4.8	%
LTL (5)		74.7	%		20.9	%		26.1	%		27.7	%
STL (6)		25.3	%		79.1	%		73.9	%		72.3	%
Leased		64.7	%		60.5	%		81.8	%		59.0	%
Wtd. Avg. Lease Term (2)(3)		15.3			9.5			10.1			11.6
Mortgage Debt	$	269,336		$	13,435		$	7,697		$	7,636
% Investment Grade (1)		8.4	%		16.0	%		12.9	%		14.2	%
Square Feet		3,728,561			4,277,704			2,335,904			3,054,572
Loans Receivable	$	95,871		$	94,210		$	-		$	-
Construction in progress (4)	$	103,954		$	111,771		$	4,219		$	1,122

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.

(7) Excludes the acceleration of below-market lease intangible accretion on three Kmart assets in Q2 2018.

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LEXINGTON REALTY TRUST

Portfolio Composition

6/30/2018

Footnotes

(1) Based on gross book value of real estate assets and real estate under construction as of 6/30/2018; excludes held for sale assets.

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

(3) Excludes the acceleration of below-market lease intangible accretion on three Kmart assets in Q2 2018. 

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LEXINGTON REALTY TRUST

Components of Net Asset Value

6/30/2018

($000)

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

Consolidated properties six month net operating income (NOI) (1)
Industrial	$	81,748
Office		74,518
Other
Multi-Tenant		1,335
Specialty		1,082
Retail		329
Total Net Operating Income	$	159,012
Lexington's share of non-consolidated six month NOI (1)
Office	$	215
Other		908
	$	1,123
Other income
Advisory fees	$	364
In service assets not fairly valued by capitalized NOI method (1)
Wholly-owned assets acquired in 2018	$	135,548
Wholly-owned assets less than 70% leased	$	36,951
Add other assets:
Assets held for sale	$	171,550
Construction in progress		1,122
Developable land		6,018
Cash and cash equivalents		75,373
Restricted cash		71,564
Accounts receivable, net		4,712
Other assets		20,107
Total other assets	$	350,446
Liabilities:
Corporate level debt (face amount)	$	1,424,120
Mortgages and notes payable (face amount)		708,946
Dividends payable		48,474
Liabilities held for sale		2,333
Accounts payable, accrued expenses and other liabilities		45,465
Preferred stock, at liquidation value		96,770
Lexington's share of non-consolidated mortgages		20,749
Total deductions	$	2,346,857
Common shares & OP units at 6/30/2018		243,498,791

Footnotes

(1) NOI for the existing property portfolio at June 30, 2018, 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 2018. 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.

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LEXINGTON REALTY TRUST

Top Markets

6/30/2018

	Core Based Statistical Area (2)	Percent of GAAP Rent as of 6/30/18  (1)(4)
1	Houston-Sugar Land-Baytown, TX		10.2	%
2	Memphis, TN-MS-AR		6.0	%
3	Dallas-Fort Worth-Arlington, TX		5.6	%
4	Kansas City, MO-KS		4.2	%
5	Detroit-Warren-Livonia, MI		3.7	%
6	Kennewick-Pasco-Richland, WA		3.6	%
7	New York-Northern New Jersey-Long Island, NY-NJ-PA		3.4	%
8	Richmond, VA		3.1	%
9	Charlotte-Concord-Gastonia, NC-SC		2.7	%
10	Nashville-Davidson-Murfreesboro-Franklin, TN		2.6	%
11	Atlanta-Sandy Springs-Marietta, GA		2.3	%
12	Chicago-Naperville-Joliet, IL-IN-WI		2.2	%
13	Philadelphia-Camden-Wilmington, PA-NJ-DE-MD		2.2	%
14	Denver-Aurora, CO		2.2	%
15	Las Vegas-Paradise, NV		1.8	%
16	San Jose-Sunnyvale-Santa Clara, CA		1.8	%
17	Jackson, MS		1.7	%
18	Columbus, OH		1.6	%
19	San Antonio, TX		1.3	%
20	Indianapolis-Carmel, IN		1.3	%
	Total Top Markets (3)		63.4	%

Footnotes

(1) Six months ended 6/30/2018 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 6/30/2018.

(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.

(4) Excludes the acceleration of below-market lease intangible accretion on three Kmart assets.

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LEXINGTON REALTY TRUST

Single-Tenant Office Markets ⁽¹⁾⁽²⁾

6/30/2018

Footnotes

(1) Six months ended 6/30/2018 GAAP rent, excluding termination income, recognized for consolidated single-tenant office properties owned as of 6/30/2018.

(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.

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LEXINGTON REALTY TRUST

Tenant Industry Diversification ⁽¹⁾⁽²⁾

6/30/2018

Footnotes

(1) Six months ended 6/30/2018 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 6/30/2018.

(2) Excludes the acceleration of below-market lease intangible accretion on three Kmart assets.

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LEXINGTON REALTY TRUST

Top 10 Tenants or Guarantors

6/30/2018

Top 10 Tenants or Guarantors - GAAP Basis

Tenants or Guarantors	Number of Leases	Sq. Ft. Leased		Sq. Ft. Leased as a Percent of Consolidated Portfolio (2)			GAAP Rent as of 6/30/2018 ($000) (1)(4)		Percent of GAAP Rent as of 6/30/2018 ($000) (1) (2) (4)
Nissan North America, Inc.	3		3,239,445		6.4	%	$	8,142		4.4	%
The Dow Chemical Company	1		664,100		1.3	%		7,425		4.0	%
Preferred Freezer Services of Richland, LLC (Preferred Freezer Services, LLC & Preferred Freezer Services Operating, LLC)	1		456,412		0.9	%		6,566		3.6	%
FedEx Corporation / Federal Express Corporation	2		661,616		1.3	%		6,075		3.3	%
Metalsa Structural Products, Inc. / Dana Structural Products, LLC (Dana Holding Corporation and Dana Limited)	7		2,053,359		4.0	%		4,970		2.7	%
United States of America	3		398,214		0.8	%		4,771		2.6	%
Swiss Re America Holding Corporation / Westport Insurance Corporation / Swiss Re Management (US) Corporation	2		476,123		0.9	%		4,050		2.2	%
McGuireWoods LLP	1		224,537		0.4	%		3,592		1.9	%
Undisclosed (3)	3		1,090,383		2.1	%		3,570		1.9	%
Watco Dock & Rail III, L.L.C. (Watco Companies, L.L.C.)	1		132,449		0.3	%		3,386		1.8	%
	24		9,396,638		18.5	%	$	52,547		28.5	%

Footnotes

(1) Six months ended 6/30/2018 GAAP rent, excluding termination income, recognized for consolidated properties owned as of 6/30/2018.

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

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

(4) Excludes the acceleration of below-market lease intangible accretion on three Kmart assets.

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LEXINGTON REALTY TRUST

Lease Rollover Schedule - Consolidated Single-Tenant Properties GAAP Basis

6/30/2018

($000)

Year	Number of Leases Expiring		GAAP Rent as of 6/30/2018		Percent of GAAP Rent as of 6/30/2018			Percent of GAAP Rent as of 6/30/2017
2018 - remaining		5	$	4,391		2.5	%		4.5	%
2019		19		14,861		8.3	%		9.6	%
2020		13		9,673		5.4	%		4.8	%
2021		14		12,454		7.0	%		6.6	%
2022		5		5,416		3.0	%		3.5	%
2023		11		7,482		4.2	%		4.1	%
2024		13		10,175		5.7	%		5.5	%
2025		16		14,764		8.3	%		9.6	%
2026		11		7,704		4.3	%		5.5	%
2027		16		19,212		10.8	%		7.5	%
Thereafter		48		72,021		40.4	%		36.5	%
Total (1)		171	$	178,153		100.0	%

 

Footnotes

(1) Total shown may differ from detailed amounts due to rounding and does not include multi-tenant properties, parking operations, lease termination income and the acceleration of below-market lease intangible accretion on three Kmart assets.

27

LEXINGTON REALTY TRUST

Lease Rollover Schedule - Consolidated Properties GAAP Basis

6/30/2018

($000)

Year	Number of Leases Expiring		GAAP Rent as of 6/30/2018		Percent of GAAP Rent as of 6/30/2018
2018 - remaining		36	$	5,233		2.9	%
2019		28		15,211		8.3	%
2020		20		9,753		5.3	%
2021		20		13,986		7.7	%
2022		5		5,416		3.0	%
2023		12		7,482		4.1	%
2024		15		10,431		5.7	%
2025		18		15,458		8.5	%
2026		11		7,704		4.2	%
2027		16		19,212		10.5	%
Thereafter		50		72,596		39.8	%
Total (1)		231	$	182,482		100.0	%

 

Footnotes

(1) Total shown may differ from detailed amounts due to rounding and does not include parking operations, lease termination income and the acceleration of below-market lease intangible accretion on three Kmart assets.

28

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2018

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note		Primary Tenant or Guarantor (19)	Sq. Ft. Leased or Available (1)		GAAP Rent as of 6/30/2018 ($000) (3)		Cash Rent as of 6/30/2018 ($000) (2)		6/30/2018 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
2018	9/30/2018	50 Tyger River Dr.	Duncan	SC		—	Plastic Omnium		221,833		512		512		-	-
	12/31/2018	1133 Poplar Creek Rd.	Henderson	NC		—	Staples		196,946		434		443		-	-
		2935 Van Vactor Dr.	Plymouth	IN		—	Bay Valley Foods		300,500		428		428		-	-
		749 Southrock Dr.	Rockford	IL		—	Jacobson Warehouse		150,000		236		270		-	-
2019	10/17/2019	10345 Philipp Pkwy.	Streetsboro	OH		—	L'Oreal USA		649,250		1,305		1,409		16,778	09/2019
	12/31/2019	191 Arrowhead Dr.	Hebron	OH		—	Owens Corning		250,410		284		284		-	-
		200 Arrowhead Dr.	Hebron	OH		—	Owens Corning		400,522		454		454		-	-
		2415 US Hwy. 78 East	Moody	AL		—	Michelin		595,346		704		725		-	-
2020	1/31/2020	101 Michelin Dr.	Laurens	SC		—	Michelin		1,164,000		1,724		1,724		-	-
	5/31/2020	359 Gateway Dr.	Lavonia	GA		—	TI Automotive		133,221		476		600		6,831	12/2020
	6/30/2020	1650-1654 Williams Rd.	Columbus	OH		—	ODW Logistics		772,450		671		674		-	-
		3102 Queen Palm Dr.	Tampa	FL		—	Time		229,605		617		669		-	-
	9/30/2020	3350 Miac Cove Rd.	Memphis	TN		—	Mimeo.com		107,400		209		224		-	-
	12/19/2020	1901 Ragu Dr.	Owensboro	KY		6	Unilever		443,380		746		644		-	-
	12/31/2020	2203 Sherrill Dr.	Statesville	NC		—	Geodis America		639,800		1,247		1,232		-	-
2021	3/31/2021	2455 Premier Row	Orlando	FL		—	Walgreen Co.		205,016		393		254		-	-
	5/31/2021	291 Park Center Dr.	Winchester	VA		—	Kraft Heinz		344,700		710		700		-	-
	6/30/2021	11624 S. Distribution Cv.	Olive Branch	MS		—	Hamilton Beach		1,170,218		865		671		-	-
	9/30/2021	3820 Micro Dr.	Millington	TN		—	Ingram Micro		701,819		906		937		-	-
	10/25/2021	6938 Elm Valley Dr.	Kalamazoo	MI		—	Dana		150,945		873		1,014		-	-
	11/30/2021	2880 Kenny Biggs Rd.	Lumberton	NC		—	Quickie Manufacturing		423,280		678		718		-	-
	12/31/2021	3686 South Central Ave.	Rockford	IL		—	Pierce Packaging		93,000		158		158		-	-
2022	3/31/2022	5417 Campus Dr.	Shreveport	LA		—	Tire Rack		257,849		671		702		-	-
2023	2/28/2023	7670 Hacks Cross Rd.	Olive Branch	MS		—	MAHLE Industries		268,104		453		445		-	-
	12/31/2023	120 Southeast Pkwy. Dr.	Franklin	TN		—	United Technologies		289,330		369		369		-	-
2024	1/31/2024	1285 W. State Road 32	Lebanon	IN		—	Continental Tire		741,880		1,140		1,073		-	-
	3/31/2024	1520 Lauderdale Memorial Hwy.	Cleveland	TN		—	General Electric		851,370		1,284		1,303		-	-
	4/30/2024	113 Wells St.	North Berwick	ME		—	United Technologies		993,685		899		981		1,256	04/2019
	5/31/2024	901 East Bingen Point Way	Bingen	WA		—	Boeing		124,539		1,318		1,297		-	-

29

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2018 

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note		Primary Tenant or Guarantor (19)	Sq. Ft. Leased or Available (1)		GAAP Rent as of 6/30/2018 ($000) (3)		Cash Rent as of 6/30/2018 ($000) (2)		6/30/2018 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
2024	9/30/2024	1621 Veterans Memorial Pkwy. E	Lafayette	IN		—	Caterpillar		309,400		607		602		-	-
	10/31/2024	43955 Plymouth Oaks Blvd.	Plymouth	MI		—	Tower Automotive		311,612		796		758		-	-
2025	6/30/2025	10000 Business Blvd.	Dry Ridge	KY		—	Dana		336,350		673		673		-	-
		301 Bill Bryan Rd.	Hopkinsville	KY		—	Metalsa / Dana		424,904		844		844		-	-
		4010 Airpark Dr.	Owensboro	KY		—	Metalsa / Dana		211,598		604		604		-	-
		730 North Black Branch Rd.	Elizabethtown	KY		—	Metalsa / Dana		167,770		268		268		-	-
		750 North Black Branch Rd.	Elizabethtown	KY		—	Metalsa / Dana		539,592		1,419		1,419		-	-
	7/14/2025	590 Ecology Ln.	Chester	SC		—	Boral Limited		420,597		870		1,167		6,956	08/2025
	7/31/2025	7005 Cochran Rd.	Glenwillow	OH		—	Royal Appliance		458,000		1,031		1,051		-	-
	12/31/2025	1700 47th Ave North	Minneapolis	MN		—	Owens Corning		18,620		275		275		-	-
2026	3/30/2026	121 Technology Dr.	Durham	NH		15	Heidelberg		500,500		1,269		2,303		-	-
	3/31/2026	633 Garrett Pkwy.	Lewisburg	TN		—	Calsonic Kansei		310,000		649		603		-	-
	6/30/2026	351 Chamber Dr.	Chillicothe	OH		—	Kitchen Collection		475,218		580		568		-	-
	9/30/2026	900 Industrial Blvd.	Crossville	TN		—	Dana		222,200		289		289		-	-
		3931 Lakeview Corporate Dr.	Edwardsville	IL		—	Amazon.com		769,500		1,341		1,269		-	-
	10/31/2026	5001 Greenwood Rd.	Shreveport	LA		—	Libbey		646,000		1,083		1,094		-	-
	11/30/2026	250 Rittenhouse Cir.	Bristol	PA		—	Estée Lauder		241,977		573		578		-	-
		736 Addison Rd.	Erwin	NY		—	Corning		408,000		692		696		6,756	10/2018
2027	1/31/2027	27200 West 157th St.	New Century	KS		—	Amazon.com		446,500		620		533		-	-
	2/28/2027	554 Nissan Pkwy.	Canton	MS		—	Nissan		1,466,000		3,150		3,016		-	-
	4/30/2027	16407 Applewhite Rd.	San Antonio	TX		18	Undisclosed / HVAC		849,275		1,497		1,374		-	-
		200 Sam Griffin Rd.	Smyrna	TN		—	Nissan		1,505,000		3,280		3,113		-	-
	6/30/2027	1501 Nolan Ryan Expy.	Arlington	TX		—	Arrow Electronics		74,739		203		196		-	-
	9/30/2027	1550 Hwy 302	Byhalia	MS		—	McCormick		615,600		1,233		875		-	-
	10/31/2027	201 James Lawrence Rd.	Jackson	TN		—	Kellogg		1,062,055		1,972		1,844		-	-
	12/31/2027	10590 Hamilton Ave.	Cincinnati	OH		—	Hillman Group		264,598		406		406		-	-
2028	1/31/2028	490 Westridge Pkwy.	McDonough	GA		—	Georgia-Pacific		1,121,120		1,868		1,636		-	-
	3/31/2028	29-01-Borden Ave./29-10 Hunters Point Ave.	Long Island City	NY		—	FedEx		140,330		2,568		2,474		41,721	03/2028
	8/31/2028	1420 Greenwood Rd.	McDonough	GA		—	United States Cold Storage		296,972		1,085		1,065		-	-

30

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2018

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note		Primary Tenant or Guarantor (19)	Sq. Ft. Leased or Available (1)		GAAP Rent as of 6/30/2018 ($000) (3)		Cash Rent as of 6/30/2018 ($000) (2)		6/30/2018 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
2028	9/30/2028	904 Industrial Rd.	Marshall	MI		—	Tenneco		246,508		341		421		-	-
2029	7/31/2029	8500 Nail Rd.	Olive Branch	MS		—	Sephora		716,080		619		307		-	-
	11/24/2029	318 Pappy Dunn Blvd.	Anniston	AL		—	IAC Group		276,782		870		822		-	-
2030	3/31/2030	549 Wingo Rd.	Byhalia	MS		—	Asics		855,878		2,194		2,037		-	-
	5/31/2030	3301 Stagecoach Rd. NE	Thomson	GA		—	Hollander		208,000		465		432		-	-
		4015 Lakeview Corporate Drive	Edwardsville	IL		—	Spectrum		1,017,780		52		45		-	-
2031	10/31/2031	1020 W. Airport Rd.	Romeoville	IL		—	ARYZTA		188,166		1,793		1,687		-	-
	12/18/2031	80 Tyson Dr.	Winchester	VA		16	Undisclosed / Automaker		400,400		1,184		1,033		-	-
2032	4/30/2032	13930 Pike Rd.	Missouri City	TX		—	Vulcan		-		1,062		971		-	-
	8/24/2032	16950 Pine Dr.	Romulus	MI		16	Undisclosed / Automaker		500,023		1,284		1,195		-	-
	10/31/2032	27255 SW 95th Ave.	Wilsonville	OR		—	Pacific Natural Foods		508,277		1,560		1,289		-	-
		26700 Bunert Road	Warren	MI		—	Lipari		260,243		1,942		1,715		25,850	11/2032
2034	9/30/2034	5625 North Sloan Ln.	North Las Vegas	NV		—	Nicholas		180,235		1,278		1,135		-	-
	10/31/2034	1001 Innovation Rd.	Rantoul	IL		—	Vista Outdoor		813,126		2,098		1,844		-	-
2035	3/31/2035	13863 Industrial Rd.	Houston	TX		—	Spitzer		187,800		1,217		1,053		-	-
		7007 F.M. 362 Rd.	Brookshire	TX		—	Spitzer		262,095		955		826		-	-
	6/30/2035	111 West Oakview Pkwy.	Oak Creek	WI		—	Stella & Chewy's		164,007		1,049		933		-	-
	8/31/2035	2800 Polar Way	Richland	WA		9	Preferred Freezer		456,412		6,566		5,614		110,000	01/2026
	10/22/2035	2860 Clark St.	Detroit	MI		16	Undisclosed / Automaker		189,960		1,102		1,102		-	-
2036	5/31/2036	671 Washburn Switch Rd.	Shelby	NC		—	Clearwater Paper		673,425		1,393		1,209		-	-
	6/30/2036	100 Ryobi Drive	Anderson	SC		26	One World Technologies		1,327,022		2,223		1,867		-	-
2037	3/31/2037	4005 E I-30	Grand Prairie	TX		—	O'Neal  Industries		215,000		936		777		-	-
2038	3/31/2038	13901/14035 Industrial Rd.	Houston	TX		—	Watco		132,449		3,386		2,890		-	-
2042	5/31/2042	4801 North Park Dr.	Opelika	AL		—	Golden State Enterprises		165,493		1,689		1,313		-	-
N/A	Vacancy	3350 Miac Cove Rd.	Memphis	TN		—	(Available for Lease)		32,679		-		-		-	-
INDUSTRIAL TOTAL/WEIGHTED AVERAGE							99.9% Leased		37,462,265	$	89,767	$	85,024	$	216,148

31

LEXINGTON REALTY TRUST 

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2018 

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note		Primary Tenant or Guarantor (19)	Sq.Ft. Leased or Available (1)		GAAP Rent as of 6/30/2018 ($000) (3)		Cash Rent as of 6/30/2018 ($000) (2)		6/30/2018 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
2018	12/22/2018	5200 Metcalf Ave.	Overland Park	KS		—	Swiss Re		320,198		2,781		2,769		32,411	05/2019
2019	1/31/2019	820 Gears Rd.	Houston	TX		—	Ricoh		78,895		589		588		-	-
	2/28/2019	10475 Crosspoint Blvd.	Indianapolis	IN		—	DMC Insurance		3,764		36		36		-	-
	4/1/2019	9201 Stateline Rd.	Kansas City	MO		—	Swiss Re		155,925		1,269		1,269		15,473	05/2019
	6/19/2019	3965 Airways Blvd.	Memphis	TN		26	Federal Express		521,286		3,507		3,551		-	-
	6/30/2019	3265 East Goldstone Dr.	Meridian	ID		—	T-Mobile USA		77,484		553		740		8,195	08/2019
	7/15/2019	19019 North 59th Ave.	Glendale	AZ		27	Honeywell		252,300		951		987		-	-
	7/31/2019	500 Jackson St.	Columbus	IN		—	Cummins		390,100		2,270		2,381		9,584	07/2019
	10/31/2019	10475 Crosspoint Blvd.	Indianapolis	IN		—	John Wiley		123,416		1,135		1,173		-	-
		9601 Renner Blvd.	Lenexa	KS		—	T-Mobile USA		77,484		571		758		8,375	12/2019
2020	2/14/2020	5600 Broken Sound Blvd.	Boca Raton	FL		—	Oce - USA Holding		143,290		1,122		1,250		18,935	02/2020
	5/31/2020	2401 Cherahala Blvd.	Knoxville	TN		—	CaremarkPCS		59,748		387		390		-	-
	6/30/2020	3711 San Gabriel	Mission	TX		—	T-Mobile West		75,016		494		493		-	-
	7/31/2020	13775 McLearen Rd.	Herndon	VA		12	Equant		132,617		839		926		-	-
	8/31/2020	133 First Park Dr.	Oakland	ME		—	T-Mobile USA		78,610		573		751		8,265	10/2020
	9/30/2020	9200 South Park Center Loop	Orlando	FL		—	ECMC Group		59,927		568		595		-	-
2021	1/31/2021	1701 Market St.	Philadelphia	PA		—	Morgan Lewis		289,432		2,150		2,250		-	-
	3/31/2021	1701 Market St.	Philadelphia	PA		—	Car-Tel		1,220		31		31		-	-
	6/30/2021	1415 Wyckoff Rd.	Wall	NJ		—	NJ Natural Gas		157,511		1,887		1,887		10,409	01/2021
		2050 Roanoke Rd.	Westlake	TX		—	Charles Schwab		130,199		1,034		1,051		-	-
	8/31/2021	3500 North Loop Rd.	McDonough	GA		13	Litton Loan / TSYS		62,218		509		699		-	-
	11/30/2021	29 South Jefferson Rd.	Whippany	NJ		—	CAE		123,734		1,168		1,307		12,434	11/2021
	12/31/2021	2800 Waterford Lake Dr.	Midlothian	VA		—	Alstom Power		99,057		1,092		1,179		-	-
2022	5/30/2022	13651 McLearen Rd.	Herndon	VA		—	United States of America		159,644		1,571		1,610		-	-
	7/31/2022	1440 E 15th St.	Tucson	AZ		—	CoxCom		28,591		280		280		-	-
	10/31/2022	4455 American Way	Baton Rouge	LA		—	New Cingular Wireless		70,100		583		561		-	-

32

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2018

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note		Primary Tenant or Guarantor (19)	Sq.Ft. Leased or Available (1)		GAAP Rent as of 6/30/2018 ($000) (3)		Cash Rent as of 6/30/2018 ($000) (2)		6/30/2018 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
2022	12/31/2022	231 N. Martingale Rd.	Schaumburg	IL		—	Career Education Corporation		317,198		2,311		2,287		-	-
2023	2/28/2023	1315 West Century Dr.	Louisville	CO		—	Rogue Wave Software		20,000		177		150		-	-
	3/31/2023	8900 Freeport Pkwy.	Irving	TX		11	Nissan		268,445		2,039		2,257		-	-
	6/30/2023	420 Riverport Rd.	Kingsport	TN		—	Kingsport Power		42,770		64		155		-	-
	8/31/2023	400 Butler Farm Rd.	Hampton	VA		7	Nextel / Wisconsin Physicians Service Insurance		100,632		503		531		-	-
	9/30/2023	1701 Market St.	Philadelphia	PA		—	CBC Restaurant		8,070		102		112		-	-
	10/31/2023	3943 Denny Ave.	Pascagoula	MS		—	Huntington Ingalls		94,841		296		296		-	-
	12/14/2023	3333 Coyote Hill Rd.	Palo Alto	CA		—	Xerox		202,000		3,321		3,535		35,045	12/2023
2024	2/14/2024	1362 Celebration Blvd.	Florence	SC		—	MED3000		32,000		287		287		-	-
	5/31/2024	3476 Stateview Blvd.	Fort Mill	SC		—	Wells Fargo		169,083		975		957		-	-
		3480 Stateview Blvd.	Fort Mill	SC		—	Wells Fargo		169,218		1,013		958		-	-
	8/31/2024	10475 Crosspoint Blvd.	Indianapolis	IN		—	HQ Global Workplaces		14,236		153		153		-	-
	10/31/2024	1409 Centerpoint Blvd.	Knoxville	TN		—	Alstom Power		84,404		627		620		-	-
	11/30/2024	6200 Northwest Pkwy.	San Antonio	TX		25, 26	United HealthCare		142,500		979		897		-	-
2025	1/31/2025	1401 Nolan Ryan Expy.	Arlington	TX		—	Triumph Group		111,409		825		880		-	-
	2/28/2025	6555 Sierra Dr.	Irving	TX		—	TXU		247,254		1,402		1,563		-	-
		1401 Nolan Ryan Expy.	Arlington	TX		—	Infotech Enterprise		13,590		102		104		-	-
	3/14/2025	601 & 701 Experian Pkwy.	Allen	TX		—	Experian Holdings		292,700		1,483		1,537		-	-
	5/31/2025	1701 Market St.	Philadelphia	PA		—	TruMark Financial		2,641		125		125		-	-
	6/30/2025	2500 Patrick Henry Pkwy.	McDonough	GA		—	Georgia Power		111,911		711		690		-	-
	9/30/2025	10001 Richmond Ave.	Houston	TX		—	Schlumberger		554,385		3,019		2,794		-	-
	12/31/2025	4001 International Pkwy.	Carrollton	TX		—	Motel 6		138,443		1,113		1,130		-	-
2026	3/31/2026	500 Olde Worthington Rd.	Westerville	OH		—	inVentiv Health		97,000		555		582		-	-
	4/30/2026	800 East Canal St.	Richmond	VA		5	Richmond Belly Ventures		2,568		39		39		-	-
	11/30/2026	500 Kinetic Dr.	Huntington	WV		—	Amazon.com		68,693		634		567		-	-
2027	1/31/2027	1701 Market St.	Philadelphia	PA		—	Drybar		1,975		70		53		-	-
	2/28/2027	800 East Canal St.	Richmond	VA		5	Sumitomo		8,503		70		70		-	-

33

LEXINGTON REALTY TRUST 

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2018

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note		Primary Tenant or Guarantor (19)	Sq.Ft. Leased or Available (1)		GAAP Rent as of 6/30/2018 ($000) (3)		Cash Rent as of 6/30/2018 ($000) (2)		6/30/2018 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
2027	4/30/2027	1315 West Century Dr.	Louisville	CO		—	GHX Ultimate Parent		86,877		644		628		-	-
	6/30/2027	3902 Gene Field Rd.	St. Joseph	MO		—	Boehringer Ingelheim USA		98,849		997		950		-	-
	7/6/2027	2221 Schrock Rd.	Columbus	OH		—	MS Consultants		42,290		320		309		-	-
	8/7/2027	25 Lakeview Dr.	Jessup	PA		—	TMG Health		150,000		1,250		1,054		-	-
	10/31/2027	11201 Renner Blvd.	Lenexa	KS		—	United States of America		169,585		2,450		2,364		32,482	11/2027
	11/30/2027	1700 Millrace Dr.	Eugene	OR		10	Oregon Research Institute		80,011		1,050		916		-	-
2028	4/30/2028	9655 Maroon Cir.	Englewood	CO		—	TriZetto		166,912		1,922		1,858		-	-
2029	1/31/2029	6226 West Sahara Ave.	Las Vegas	NV		—	Nevada Power		282,000		2,126		1,545		-	-
	3/31/2029	2800 High Meadow Cir.	Auburn Hills	MI		—	Faurecia		278,000		1,773		1,637		-	-
	7/31/2029	2999 Southwest 6th St.	Redmond	OR		24	T-Mobile USA / Consumer Cellular		77,260		734		891		-	-
	12/31/2029	333 Mt. Hope Ave.	Rockaway	NJ		—	Atlantic Health		92,326		618		658		-	-
2030	8/31/2030	800 East Canal St.	Richmond	VA		—	McGuireWoods		224,537		3,592		3,404		57,500	02/2031
	9/30/2030	800 East Canal St.	Richmond	VA		5	The Riverstone Group		25,707		346		329		-	-
2031	1/10/2031	810 Gears Rd.	Houston	TX		—	United States of America		68,985		750		713		-	-
	3/1/2031	800 East Canal St.	Richmond	VA		5	Towne Bank		26,047		389		345		-	-
2032	4/30/2032	1210 AvidXchange Ln.	Charlotte	NC		—	AvidXchange		201,450		2,975		2,598		45,900	12/2022; 01/2033
	10/31/2032	143 Diamond Ave.	Parachute	CO		—	Alenco		49,024		642		547		-	-
2033	3/31/2033	9201 East Dry Creek Rd.	Centennial	CO		—	Arrow Electronics		128,500		1,281		594		-	-
	11/30/2033	1331 Capitol Ave.	Omaha	NE		26	The Gavilon Group		127,810		1,655		1,499		-	-
	12/31/2033	8555 South River Pkwy.	Tempe	AZ		—	Versum		95,133		877		845		-	-
2036	10/31/2036	270 Abner Jackson Pkwy.	Lake Jackson	TX		—	Dow		664,100		7,425		6,186		190,258	10/2036
2088	8/8/2088	800 East Canal St.	Richmond	VA		5	The City of Richmond, Virginia		-		206		206		-	-
N/A	N/A	1701 Market St.	Philadelphia	PA		—	Parking Operations		-		1,041		1,041		-	-
	Vacancy	1701 Market St.	Philadelphia	PA		—	(Available for Lease)		699		-		-		-	-
		810 Gears Rd.	Houston	TX		—	(Available for Lease)		9,910		-		-		-	-
		1401 Nolan Ryan Expy.	Arlington	TX		—	(Available for Lease)		36,809		-		-		-	-
		800 East Canal St.	Richmond	VA		5	(Available for Lease)		42,947		-		-		-	-
OFFICE TOTAL/WEIGHTED AVERAGE							99.1% Leased		10,214,003	$	86,008	$	83,958	$	485,266

34

LEXINGTON REALTY TRUST 

Property Leases and Vacancies - Consolidated Portfolio - 6/30/2018

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note		Primary Tenant or Guarantor (19)	Sq.Ft. Leased or Available (1)		GAAP Rent as of 6/30/2018 ($000) (3)		Cash Rent as of 6/30/2018 ($000) (2)		6/30/2018 Debt Balance ($000)		Debt Maturity
OTHER PROPERTIES
Retail
2019	1/31/2019	1150 West Carl Sandburg Dr.	Galesburg	IL		25, 26	Kmart		94,970		148		5		104	07/2018
		12080 Carmel Mountain Rd.	San Diego	CA		17	Kmart		107,210		2,840		6		118	07/2018
		21082 Pioneer Plaza Dr.	Watertown	NY		17	Kmart		120,727		500		8		174	07/2018
		255 Northgate Dr.	Manteca	CA		17	Kmart		107,489		979		9		185	07/2018
		97 Seneca Trail	Fairlea	WV		—	Kmart		90,933		173		6		122	07/2018
	6/30/2019	1600 East 23rd St.	Chattanooga	TN		—	K-VA-T		42,130		65		65		-	-
2023	2/28/2023	733 East Main St.	Jefferson	NC		—	Delhaize		34,555		78		80		-	-
	7/1/2023	1053 Mineral Springs Rd.	Paris	TN		—	Kroger		31,170		80		80		-	-
2024	3/31/2024	B.E.C. 45th St./Lee Blvd.	Lawton	OK		—	Safeway		30,757		97		93		-	-
N/A	Vacancy	832 N. Westover Blvd .	Albany	GA		—	(Available for Lease)		45,554		-		-		-	-
Specialty															-	-
2029	1/31/2029	175 Holt Garrison Pkwy.	Danville	VA		—	Home Depot		-		108		130		-	-
2043	2/28/2043	1237 W. Sherman Ave.	Vineland	NJ		25, 26	Encompass Health		39,287		585		585		-	-
2048	12/31/2048	30 Light St.	Baltimore	MD		—	30 Charm City		-		149		149		-	-
2055	1/31/2055	499 Derbyshire Dr.	Venice	FL		—	Littlestone Brotherhood		31,180		954		668		-	-
2112	8/31/2112	201-215 N. Charles St.	Baltimore	MD		—	201 NC Leasehold		-		135		135		-	-
Multi-tenant (4)(8)(14)															-	-
	Various	100 Barnes Rd.	Wallingford	CT		4, 11	Vacant		44,400		254		270		-	-
	Various	11511 Luna Rd.	Farmers Branch	TX		4 (90%)	IBM		181,072		1,262		621		-	-
	Various	1311 Broadfield Blvd.	Houston	TX		4 (35%)	Saipem		155,407		358		189		-	-
	Various	13430 North Black Canyon Fwy.	Phoenix	AZ		4 (65%)	Multi-Tenant		138,940		568		778		-	-
	Various	1460 Tobias Gadson Blvd.	Charleston	SC		4 (64%)	Vallen Distribution		50,247		195		195		6,933	02/2021
	Various	2210 Enterprise Dr.	Florence	SC		4 (21%)	Caliber Funding		176,557		346		384		-	-
	Various	3456 Meyers Ave.	Memphis	TN		4, 11	Vacant		780,000		1,031		504		-	-
	Various	6050 Dana Way	Antioch	TN		4 (97%)	Multi-Tenant		674,528		1,146		1,129		-	-
	Various	King St./1042 Fort St. Mall	Honolulu	HI		4 (48%)	Multi-Tenant		77,459		337		337		-	-
OTHER TOTAL/WEIGHTED AVERAGE							59.0% Leased		3,054,572	$	12,388	$	6,426	$	7,636
TOTAL CONSOLIDATED PORTFOLIO/WEIGHTED AVERAGE							97.3% Leased		50,730,840	$	188,163	$	175,408	$	709,050

35

LEXINGTON REALTY TRUST 

Property Leases and Vacancies - Non-consolidated Portfolio - 6/30/2018

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note		Primary Tenant or Guarantor (19)	Sq.Ft. Leased or Available (1)		LXP % Ownership			GAAP Rent as of 6/30/2018 ($000) (3)		Cash Rent as of 6/30/2018 ($000) (2)		6/30/2018 Debt Balance ($000)		Debt Maturity (21)
NON-CONSOLIDATED PROPERTIES
2029	1/31/2029	18839 McKay Blvd.	Humble	TX		—	RehabCare Group		55,646		15	%		1,366		1,282		13,746	05/2019
2033	10/31/2033	607 & 611 Lumsden Professional Ct.	Brandon	FL		20	BluePearl		8,500		15	%		103		103		-	-
		4525 Ulmerton Rd.	Clearwater	FL		20	BluePearl		3,000		15	%		61		61		-	-
		455 Abernathy Rd.	Atlanta	GA		20	BluePearl		32,000		15	%		604		506		-	-
		820 Frontage Rd.	Northfield	IL		20	BluePearl		14,000		15	%		239		239		-	-
		4126 Packard Rd.	Ann Arbor	MI		20	BluePearl		3,500		15	%		28		28		-	-
		29080 Inkster Rd.	Southfield	MI		20	BluePearl		38,000		15	%		637		568		18,791	11/2018
2036	8/31/2036	2203 North Westgreen Blvd.	Katy	TX		—	British Schools		274,000		25	%		3,220		3,220		49,515	12/2022
N/A	Vacancy	100 Gander Way	Palm Beach Gardens	FL		22, 23	(Available for Lease)		120,000		25	%		-		-		13,957	03/2018
NON-CONSOLIDATED TOTAL/WEIGHTED AVERAGE							78.1% Leased		548,646				$	6,258	$	6,007	$	96,009

Footnotes

1 Square footage leased or available.

2 Six months ended 6/30/2018 cash rent. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

3 Six months ended 6/30/2018 GAAP rent, excluding termination income.

4 Percent represents % leased as of 6/30/2018.

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 Litton Loan Servicing LP lease expires 8/31/2018; however, new tenant (Total System Services Inc.) lease expires 8/31/2021.

14 The multi-tenanted properties incurred approximately $1.9 million in operating expenses, net for the six months ended 6/30/2018.

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 Includes the acceleration of below-market lease intangible accretion.

18 Lease restricts certain disclosures. Guarantor is investment grade.

19 See Annual Report and other applicable disclosures for actual tenant names.

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

21 Interest rates range from 3.7% to 5.1% at 6/30/2018.

22 Tenant declared bankruptcy and rejected the lease.

23 Loan was in default at 6/30/2018. Lender foreclosed on the property subsequent to 6/30/2018.

24 T-Mobile USA lease expires 1/31/2019; however, new tenant (Consumer Cellular Incorporated) lease expires 7/31/2029.

25 Property sold subsequent to 6/30/2018.

26 Property held for sale at 6/30/2018.

27 Subsequent to 6/30/2018, lease extended to 7/15/2024.

36

LEXINGTON REALTY TRUST

Select Credit Metrics Summary ⁽¹⁾ 

	6/30/2018
Adjusted Company FFO Payout Ratio		71.0	%
Unencumbered Assets		$3.4 billion
Unencumbered NOI		73.0	%
(Debt + Preferred) / Gross Assets		47.4	%
Debt/Gross Assets		45.3	%
Secured Debt / Gross Assets		15.0	%
Net Debt / Adjusted EBITDA		6.2	x
(Net Debt + Preferred) / Adjusted EBITDA		6.5	x
Credit Facilities Availability (2)		$310.0 million
Unsecured Debt / Unencumbered NOI		5.9	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:	6/30/2018
Bank Loans:
Maximum Leverage	< 60%	47.2%
Fixed Charge Coverage	> 1.5x	2.8x
Recourse Secured Indebtedness Ratio	< 10% cap value	0.0%
Secured Indebtedness Ratio	< 45%	16.9%
Unsecured Debt Service Coverage	> 2.0x	5.1x
Unencumbered Leverage	< 60%	38.7%
Bonds:
Debt to Total Assets	< 60%	46.2%
Secured Debt to Total Assets	< 40%	15.3%
Debt Service Coverage	> 1.5x	4.0x
Unencumbered Assets to Unsecured Debt	> 150%	251.9%

Footnotes

(1) The following is a summary of the key financial covenants for Lexington's credit facility and term loans and senior notes, as defined and calculated per the terms of the credit facility and term loans and senior notes, as applicable. These calculations are presented to show Lexington's compliance with such covenants only and are not measures of Lexington's liquidity or performance.

38

LEXINGTON REALTY TRUST

Consolidated Properties: Mortgages and Notes Payable

6/30/2018

Property	Footnotes	Debt Balance ($000)		Interest Rate (%)			Maturity (a)	Current Estimated Annual Debt Service ($000)  (c)		Balloon Payment ($000)
INDUSTRIAL
Erwin, NY	(k)	$	6,756		5.910	%	10/2018	$	202	$	6,637
North Berwick, ME			1,256		3.560	%	04/2019		1,277		-
Streetsboro, OH			16,778		5.749	%	09/2019		1,344		16,338
Lavonia, GA			6,831		5.460	%	12/2020		741		5,895
Chester, SC			6,956		5.380	%	08/2025		1,144		362
Richland, WA			110,000		4.000	%	01/2026		4,400		99,492
Long Island City, NY			41,721		3.500	%	03/2028		4,879		-
Warren, MI			25,850		5.380	%	11/2032		1,391		22,037
		$	216,148		4.352	%	7.8	$	15,378	$	150,761
OFFICE
Overland Park, KS		$	32,411		5.891	%	05/2019	$	2,148	$	31,812
Kansas City, MO			15,473		5.883	%	05/2019		1,130		15,179
Columbus, IN			9,584		2.210	%	07/2019		4,757		4,993
Meridian, ID			8,195		6.010	%	08/2019		753		7,675
Lenexa, KS			8,375		6.270	%	12/2019		774		7,770
Boca Raton, FL			18,935		6.470	%	02/2020		1,542		18,414
Oakland, ME			8,265		5.930	%	10/2020		750		7,660
Wall, NJ			10,409		6.250	%	01/2021		3,774		-
Whippany, NJ			12,434		6.298	%	11/2021		1,344		10,400
Charlotte, NC	(b)		8,500		5.000	%	12/2022		431		8,500
Palo Alto, CA			35,045		3.970	%	12/2023		7,059		-
Lenexa, KS			32,482		3.700	%	11/2027		2,984		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			190,258		4.040	%	10/2036		12,286		11,305
		$	485,266		4.713	%	11.2	$	44,767	$	221,583
OTHER
Manteca, CA	(k)	$	185		7.750	%	07/2018	$	193	$	-
Watertown, NY	(k)		174		7.750	%	07/2018		181		-
Fairlea, WV	(k)		122		7.750	%	07/2018		127		-
San Diego, CA	(k)		118		7.750	%	07/2018		123		-
Galesburg, IL	(k)(l)		104		7.750	%	07/2018		108		-
Charleston, SC			6,933		5.850	%	02/2021		520		6,632
		$	7,636		6.025	%	2.3	$	1,252	$	6,632
Subtotal/Wtg. Avg./Years Remaining (i)		$	709,050		4.617	%	10.1	$	61,397	$	378,976

39

LEXINGTON REALTY TRUST

Consolidated Properties: Mortgages and Notes Payable

6/30/2018

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)	$	195,000		3.070	%	08/2019	$	6,070	$	195,000
Term Loan	(g)		300,000		3.139	%	08/2020		9,548		300,000
Term Loan	(h)		300,000		2.607	%	01/2021		7,930		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		4.059	%	04/2037		5,314		129,120
Subtotal/Wtg. Avg./Years Remaining (i)		$	1,424,120		3.517	%	4.7	$	50,487	$	1,424,120
Total/Wtg. Avg./Years Remaining (i)	(e)	$	2,133,170		3.883	%	6.5	$	111,884	$	1,803,096

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 was 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%.

(k) Loan satisfied subsequent to 6/30/2018.

(l) Loan included in liabilities held for sale at 6/30/2018.

40

LEXINGTON REALTY TRUST

Debt Maturity Schedule

6/30/2018

($000)

Consolidated Properties
Year	Mortgage Scheduled  Amortization		Mortgage Balloon Payments		Corporate Debt
2018 - remaining	$	14,938	$	6,637	$	-
2019		26,681		83,767		195,000
2020		23,174		31,969		300,000
2021		23,433		17,032		300,000
2022		22,120		8,500		-
	$	110,346	$	147,905	$	795,000

 

Footnotes

(1) Percentage denotes weighted-average interest rate.

41

LEXINGTON REALTY TRUST

Selected Balance Sheet Account Data

6/30/2018

($000)

Balance Sheet
Other assets	$	20,107
The components of other assets are:
Deposits	$	235
Equipment		500
Prepaids		3,130
Other receivables		337
Deferred lease incentives		14,807
Interest rate swap derivative asset		1,098
Accounts payable and other liabilities
The components of accounts payable and other liabilities are:	$	26,207
Accounts payable and accrued expenses	$	11,259
CIP accruals and other		3,117
Taxes		220
Deferred lease costs		7,824
Deposits		1,189
Escrows		944
Transaction costs		1,654

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)

	Six months ended June 30, 2018
Cash Rent Reconciliation:
Rental revenue as reported	$	192,171
Rental revenue from sold properties		(3,391	)
Lease termination income		(617	)
GAAP rent per supplement		188,163
GAAP rent adjustments: (1)
Straight-line adjustments		(10,562	)
Lease incentives		1,055
Amortization of above/below market leases		(3,248	)
Cash rent per supplement	$	175,408

Consolidated debt reconciliation June 30, 2018:

	GAAP Balance		Deferred Loan Costs, net		Discounts		Loan Classified as Held for Sale		Gross Balance
Mortgages and notes payable (2)	$	701,774	$	7,172	$	-	$	104	$	709,050
Revolving credit facility borrowings (3)		195,000		-		-		-		195,000
Term loans payable (3)		597,251		2,749		-		-		600,000
Senior notes payable(3)		495,616		3,013		1,371		-		500,000
Trust preferred securities (3)		127,246		1,874		-		-		129,120
Consolidated debt	$	2,116,887	$	14,808	$	1,371	$	104	$	2,133,170

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:

	Six months ended June 30,
	2018			2017
Net Income (loss)	$	(15,618	)	$	49,585
Interest and amortization expense		42,065			38,941
Provision for income taxes		882			799
Depreciation and amortization		91,977			85,211
General and administrative		16,417			17,598
Pursuit / transaction costs		353			488
Non-operating income		(900	)		(3,992	)
Gains on sales of properties		(37,206	)		(44,433	)
Impairment charges and loan loss		88,318			21,591
Debt satisfaction charges, net		-			46
Equity in (earnings) losses of non-consolidated entities		(188	)		1,347
Lease termination income		(617	)		(2,625	)
Straight-line adjustments		(10,879	)		(8,550	)
Lease incentives		1,055			941
Amortization of above/below market leases		(3,248	)		860
Net Operating Income - ("NOI")		172,411			157,807
Less NOI:
Acquisitions and dispositions		(24,780	)		(11,082	)
Same-Store NOI	$	147,631		$	146,725

NOI for NAV:

	Six months ended
	June 30, 2018
NOI per above	$	172,411
Less NOI:
Disposed of properties		(2,823	)
Assets held for sale		(8,388	)
Assets acquired in 2018		(1,068	)
Assets less than 70% leased / Other		(1,120	)
NOI for NAV	$	159,012

46

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Reconciliation to Adjusted EBITDA:

	Three months ended
	6/30/2018			3/31/2018			12/31/2017			9/30/2017			Trailing 12 Months
Net income (loss) attributable to Lexington Realty Trust shareholders	$	(1,694	)	$	(14,315	)	$	30,850		$	5,541		$	20,382
Interest and amortization expense		21,734			20,331			20,055			18,887			81,007
Provision for income taxes		379			503			743			375			2,000
Depreciation and amortization		45,440			46,537			45,262			43,495			180,734
Straight-line adjustments		(6,013	)		(4,866	)		(7,232	)		(4,002	)		(22,113	)
Lease incentives		519			536			513			515			2,083
Amortization of above/below market leases		(3,226	)		(22	)		364			320			(2,564	)
Gains on sales of properties		(14,432	)		(22,774	)		(8,350	)		(10,645	)		(56,201	)
Impairment charges and loan loss		35,269			53,049			1,419			21,986			111,723
Debt satisfaction (gains) charges, net		-			-			(3,818	)		(2,424	)		(6,242	)
Litigation reserve		-			-			-			2,050			2,050
Unearned contingent acquisition consideration		-			-			(3,922	)		-			(3,922	)
Non-cash charges, net		1,625			1,939			2,119			2,066			7,749
Pro-rata share adjustments:
Non-consolidated entities adjustment		449			445			341			329			1,564
Noncontrolling interests adjustment		644			(723	)		345			(167	)		99
Adjusted EBITDA	$	80,694		$	80,640		$	78,689		$	78,326		$	318,349

47

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Reconciliation of Select Credit Metrics:

Adjusted Company FFO Payout:	Six months ended June 30, 2018			(Debt + Preferred) / Gross Assets:	Six months ended June 30, 2018
Common share dividends per share	$	0.355		Consolidated debt	$	2,116,887
Adjusted Company FFO per diluted share		0.50		Held for sale debt		104
Adjusted Company FFO payout ratio		71.0	%	Preferred shares liquidation preference		96,770
				Debt and preferred	$	2,213,761
Unencumbered Assets:
Real estate, at cost	$	4,173,218		Total assets	$	3,476,191
held for sale real estate, at cost		191,102		Plus depreciation and amortization:
less encumbered real estate, at cost		(996,828	)	Real estate		1,139,865
Unencumbered assets	$	3,367,492		Deferred lease costs		28,198
				Held for sale assets		27,408
Unencumbered NOI:
NOI	$	172,411		Gross assets	$	4,671,662
Disposed of properties NOI		(2,823	)
Adjusted NOI		169,588		(Debt + Preferred) / Gross Assets		47.4	%
less encumbered adjusted NOI		(45,720	)
Unencumbered adjusted NOI (Quarter)	$	123,868		Debt  / Gross Assets:
Unencumbered NOI %		73.0	%	Consolidated debt and held for sale debt	$	2,116,991
Net Debt  / Adjusted EBITDA:				Gross assets	$	4,671,662
Adjusted EBITDA	$	318,349
				Debt / Gross assets		45.3	%
Consolidated debt	$	2,116,887
Held for sale debt		104		Secured Debt  / Gross Assets:
less cash and cash equivalents (1)		(139,884	)	Mortgages and notes payable and held for sale debt	$	701,878
Net debt	$	1,977,107
				Gross assets	$	4,671,662
Net debt / Adjusted EBITDA		6.2	x
				Secured Debt / Gross Assets		15.0	%
(Net Debt + Preferred)  / Adjusted EBITDA:
Adjusted EBITDA	$	318,349		Unsecured Debt / Unencumbered NOI:
				Consolidated debt	$	2,116,887
Net debt	$	1,977,107		less mortgages and notes payable		(701,774	)
Preferred shares liquidation preference		96,770		Unsecured Debt	$	1,415,113
Net debt + preferred	$	2,073,877
				Unencumbered adjusted NOI (Annual)	$	238,399
(Net Debt + Preferred) / Adjusted EBITDA		6.5	x
				Unsecured Debt / Unencumbered NOI		5.9	x

Footnotes

(1) Includes funds held at 1031 exchange intermediaries.

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

Q2 2018 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 day, and welcome to the Lexington Realty Trust Second Quarter 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 of Investor Relations. Please go ahead.

Heather T. Gentry:

Thank you, operator. Welcome to Lexington Reality Trust's second quarter 2018 conference call and Webcast. The earnings release was distributed this morning, and both the release and quarterly supplemental are available on our website at www.lxp.com in the Investor 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 quarterly supplemental disclosure package, Lexington has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure.

Any references in these documents to adjust the company FFO refer to adjusted company funds from operations available to all equity holders and unitholders on a fully diluted basis. Operating performance measures of an individual investment are not intended to be viewed as presenting a numerical measure of Lexington's historical or future financial performance, financial position or cash flow.

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

I will now turn the call over to Will.

1

T. Wilson Eglin:

Thanks, Heather, and good morning, everyone. We were pleased with our second quarter results. Same-store NOI increased approximately 1% year-over-year, and our portfolio lease at June 30 remained high at 97.3%. While we posted a slight net loss of $0.01 per diluted common share, we generated $0.25 of adjusted company FFO per diluted common share. Solid investment activity resulted in the purchase of $137 million of high-quality industrial assets, raising revenue from our industrial properties to nearly 49% of our total portfolio revenue, up from 41% just a year ago.

We continue working diligently to reposition our portfolio, so that it consists primarily of single tenant net lease industrial assets. Our current pipeline includes a number of assets that fit our desired investment criteria of well-located Class A industrial facilities in primary and secondary industrial markets. Demand continues to be strong for industrial product. And while bidding can be competitive for these types of assets, we are finding opportunities that we believe will benefit the company's longer-term growth profile.

To date, we're more than halfway through our announced $250 million to $300 million disposition plan, with $175 million of dispositions completed. As discussed on our first conference call, we would expect this figure to increase as we accelerate our efforts to sell our office properties. We remain committed to reducing our office and nonindustrial exposure in a meaningful way and continue to work through how to achieve this most effectively.

In contemplating a potentially shorter holding period for our nonindustrial property assets, during the quarter, we conducted a detailed impairment analysis of these properties, which resulted in $35 million of impairment charges. Pat will discuss these in more detail shortly. We will continue to keep you updated on our progress as we accelerate the transition of our portfolio.

Our balance sheet remains in good shape, with leverage at 6.2x net debt to adjusted EBITDA at quarter- end, unsecured debt to unsecured NOI leverage at 5.9x and unencumbered NOI of 73%. We utilize our credit facility during the quarter to help fund our recent industrial purchases.

Additionally, we financed a cold storage facility in Warren, Michigan, which generated approximately $26 million in gross proceeds. While we are still in favor of asset sales over financings, we will selectively finance certain properties if we believe it is the right business strategy for that asset.

I will now turn the call over to Brendan to discuss investments.

Brendan Mullinix:

Thanks, Will. Investment activity for the quarter included the purchase of 2.9 million square feet of industrial product for $137 million at GAAP and cash cap rates of 7.3% and 5.8%, respectively. This included the 2-property industrial transaction we highlighted on our first quarter call. This property is located in 2 different parks. And a core industrial submarket in Memphis are net leased to Sephora and Hamilton Beach for a weighted average lease term of approximately 7 years. Additionally, we purchased a 1 million square foot Class A industrial facility in Edwardsville, Illinois, net leased to Spectrum Brands Pet Group, for approximately 12 years. As we think about future investments, we continue to be interested in good quality, well-located industrial assets in primary and secondary markets, but we remain disciplined in our underwriting. Our pipeline includes a number of new industrial investments we are currently reviewing for purchase.

2

Regarding our Etna, Ohio joint venture, the infrastructure buildout is still in process. The Columbus bulk distribution continues to attract interest from large users looking at the market for potential build-to-suit, and we believe our project is well positioned to compete in the Columbus market.

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

Lara Johnson:

Thanks, Brendan. During the quarter, we sold $66 million of assets at average GAAP and cash cap rates of 7.2% and 6.2%, respectively. Consistent with our strategy of disposing of non-core assets, these sales included an office asset and 2 retail assets, one of which was vacant. Year-to-date, we've sold approximately $175 million of properties at average GAAP and cast cap rates of 7.7% and 7.2%, respectively.

We have good visibility on dispositions that will potentially close in the next few months, pending further buyer due diligence and customary closing conditions, that would place us at the high end of our announced $250 million to $300 million disposition plan for the year. The market remains favorable for sale, and we continue to work on other transactions that would allow us to surpass our dispositions guidance for the year. These dispositions are expected to include the sale of both short- and long-term lease office properties. We believe that by significantly reducing our office exposure and focusing on high-quality industrial investments, we are positioning the portfolio for improved total returns to shareholders over the long term. As we gain more certainty on future transactions, we will provide updates to you.

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

James Dudley:

Thanks, Laura. We leased approximately 330,000 square feet of space during the quarter, which included 2 office extensions and 3 new office leases. Our portfolio was 97.3% leased at quarter-end with a weighted average lease term of 8.8 years. On the extensions, GAAP rents increased by $53,000 and cash rents were down $117,000. This reduction in cash rents was a result of our negotiation for an 11.5-year extension with Versum Materials in our Tempe, Arizona property in exchange for a slightly lower rent. We also signed a 5-year office lease extension with Huntington Ingalls in Pascagoula, Mississippi, in which GAAP and cash rents stayed the same. No TI dollars were given on either lease extension.

During the quarter, we signed a new lease with Nissan for the additional office space in our Irving, Texas office property. Nissan now occupies the full 268,000 square feet of space. We also signed a new 10-year lease to commence in February 2019 with Consumer Cellular at our
Redmond, Oregon office property. The space is currently leased to T-Mobile through January 2019. There will be a step-down in both GAAP and cash rents of approximately 500,000 and 900,000, respectively when Consumer Cellular takes over the space in February 2019.

3

Subsequent to quarter-end, Honeywell exercised a 5-year extension for their lease expiring in 2019 in our 252,000 square foot office space in Glendale, Arizona. This extension included a 2% increase in cash rent with no TIs, leasing or other transaction costs.

Now that we have resolved the majority of the 2018 lease expirations, we are proactively addressing both office and industrial lease expirations in 2019 and beyond, while working to lease other properties where we have no move-outs.

On the office side, we continue to market for sale or lease our recently vacated property in Wallingford, Connecticut and our Overland Park, Kansas property currently leased to Swiss Re through the end of 2018, which is likely to be conveyed to the lender at maturity if we cannot find a tenant or buyer.

Looking ahead, following the Honeywell lease extension, we have 7 substitutive office lease expirations remaining in 2019. As discussed on previous calls, we continue to market for sale or lease our other Swiss Re property in Kansas City, Missouri, which is also likely to be conveyed to the lender at maturity if we cannot find a tenant or buyer. And 2 other properties are expected to be sold to their tenants.

We are actively working on the remaining 4 expirations. Of the 4 properties, we have one known move-out at this time. Ricoh, our current tenant in the 79,000 square foot Houston, Texas property, has indicated that they will not be renewing their lease in January 2019, and we have begun marketing the property for lease.

Regarding our 2018 industrial lease expirations, we are in active discussions for a lease renewal with our tenant, Jacobson Warehouse, whose lease expires at the end of 2018 at our Rockford, Illinois property.

As discussed on previous calls, known move-outs near the end of the year include our facilities in Duncan, South Carolina, Henderson, North Carolina and Plymouth, Indiana. We remain optimistic about capturing potential value in each of these cases as we continue to market all 3 properties for lease or sale, particularly given the strong demand that continues for industrial properties.

Looking to 2019, we have begun discussions with L'Oreal, whose lease expires in October of 2019, for renewal of our 649,000 square foot facility in Streetsboro, Ohio.

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

Patrick Carroll:

Thanks, James. For the second quarter, gross revenues were approximately $105 million compared with gross revenues of $96 million for the same time period in 2017. The increase in revenue was primarily a result of revenue generated from 2017 and 2018 property acquisitions, new leases and $3.5 million due to the acceleration of below-market leases for certain properties, in which the tenant's renewal option expired, offset by sales.

We had a net loss attributable to common shareholders for the second quarter of approximately $3 million or $0.01 per diluted common share compared to net income attributable to common shareholders of approximately $6 million or $0.02 per diluted common share for the same time period in 2017. The difference relates primarily to the timing of gains on sales and impairment charges recognized on properties. We expect the net income attributable to common shareholders guidance range to be $0.24 to $0.27 per diluted common share in 2018. This range is always subject to change.

4

Adjusted company FFO for the quarter was approximately $62 million or $0.25 per diluted common share compared to $57 million or $0.23 per diluted common share for the same time period in 2017. The increase relates to new property acquisitions and new leases. At quarter-end, our adjusted company FFO payout ratio was 71%. Same-store NOI for the 6 months ended June 30, 2018 was approximately $148 million, up 0.6% when compared to the first 6 months of 2017.

Same-store percentage lease at the end of the quarter was 96.4% compared to 98.7% for the same time period in 2017. The decrease in the percentage lease was primarily the result of the vacancy of our 780,000 square foot Memphis industrial facility.

Dispositions during the quarter resulted in a gain on sale of approximately $14 million. As Will discussed earlier, we conducted a detailed impairment analysis of our nonindustrial properties during the quarter, given our interest in accelerating our disposition efforts. This resulted in $35 million of impairment charges, comprising $21 million of recognized charges before office assets and $14 million for 8 retail assets.

Two of the retail assets were sold during the quarter. More specifically, the office impairment charges included $11 million for 2 properties currently under contract to sell, $4.7 million on a property currently being marketed for sale and $5.6 million on the Kansas City, Missouri Swiss Re property that has a $15.2 million nonrecourse mortgage balloon payment due in May 2019. We wrote the Swiss Re asset down to the estimated fair value of $9.4 million, approximately $5.8 million less than the mortgage balance.

The retail impairment charges relate primarily to the 5 Kmart assets, whose leases expire in January 2019. Property operating expenses were $11 million for the quarter, approximately $2 million or 16% lower than for the same time period in 2017. The reduction relates primarily to the sale of properties and operating responsibilities, including vacant properties.

Leasing costs and tenant improvements were approximately $1.9 million in the second quarter. We have budgeted approximately $11 million in TIs and leasing costs for the remainder of 2018, although this is subject to change as we address future lease expirations and dispositions.

G&A expenses were approximately $7.4 million in the second quarter of 2018, a decrease of approximately $700,000 compared to the second quarter of 2017. This was primarily the result of reduced professional fees. We expect our 2018 G&A budget to be approximately $32 million.

Our goal remains to simplify operations, with a focus on lowering operating costs.

Taking a look at the balance sheet. At quarter-end, we had $147 million of cash, including cash classified as restricted, which primarily is cash held at 1031 exchanges. We had $172 million of assets held for sale at the end of the quarter due to our increased sales efforts. At quarter-end, our consolidated debt outstanding was approximately $2.1 billion, with a weighted average interest rate of approximately 3.9% and a weighted average term of 6.5 years. Fixed charge coverage was approximately 2.8x, and leverage was 6.2x net debt to adjusted EBITDA at the end of the second quarter. We remain very comfortable with current leverage levels.

5

During the quarter, we borrowed $95 million on a revolving credit facility to end the quarter with a total of $310 million available. Borrowings we used primarily to fund acquisitions during the quarter.

We financed an industrial freezer facility in Warren, Michigan during the quarter, which resulted in approximately $26 million in gross proceeds. The loan matures in November 2032 with a fixed interest rate of 5.4%. This brought our outstanding mortgage debt at quarter-end to $709 million at a weighted average interest rate of 4.6% and a weighted average term of slightly over 10 years.

Our unencumbered asset base was approximately $3.4 billion at the end of the quarter, representing approximately 73% of our NOI as of June 30, 2018.

Also, during the quarter, we repurchased 130,000 common shares at an average price of $0.per share. As of June 30, 2018, we had approximately 5.7 million common shares remaining under our authorization.

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) Our first question comes from Craig Mailman of KeyBanc Capital Markets.

Craig Mailman:

Good morning guys. Just wanted to start on the 3 industrial acquisitions this quarter. Just curious if you could give us kind of a breakdown of the cash cap rates for the 2 longer-term assets versus the one with 3 years of term loan, and maybe, just more broadly, provide us some thoughts on how you guys look at industrial acquisitions and what the price differential maybe should be for deals with term on it versus maybe something with a shorter fuse.

Brendan Mullinix:

Sure. The 2 assets in the Memphis market that we acquired earlier in the year, unfortunately, the contract terms requires confidentiality from us. But I can speak more specifically to the Spectrum Brands property in Edwardsville, which was a 6.12% going in cap rate. And then in terms of the longer term versus shorter term, it's really kind of hard to generalize. I guess, I'd say that, that cap rate is not our sole investment consideration. When we see other opportunities for better long-term investment returns, we'll consider it, such as in the Hamilton Beach investment.

6

T. Wilson Eglin:

Yes. Craig, it's really situation-specific. On a shorter lease, the rent is below market. The cap rate may be comparable to a longer lease asset. So very, very hard to draw a general conclusion.

Brendan Mullinix:

Right. And the Hamilton Beach transaction, the rent was $2.55 a foot. It increased in July by 4%, and it increases next July by about 6% and about 9% in the following year. So that shorter-term lease, in addition to an attractive going-in basis, had very substantial annual escalation.

Craig Mailman:

What do you think market rent is in that market for that asset?

Brendan Mullinix:

I would say that it's closer to $3 or low $3s.

Craig Mailman:

Okay, that's helpful. Then, I guess, just bigger picture. Will, I know we've talked in the past about the accelerated sales and maybe looking to rip the band aid off and selling a substantial portfolio of your longer-term lease offers assets. I'm just curious kind of where you guys are in that thinking, and more broadly kind of just accelerating the toll repositioning, and maybe doing a review of the dividend at the same time.

T. Wilson Eglin:

Well, as we've said, we are working on transitioning the portfolio toward being close to a pure play on single tenant industrial net lease real estate. Our disclosure policies are simply based on what we have visibility on, in contracts we want to sell. So we're going to be cautious and conservative until we have transactions under contract. But we are working very hard on accelerating the volume of office dispositions. And as soon as we have more clarity on that, we'll update everyone. Clearly, selling out of office and either deleveraging or reinvesting in industrial is dilutive. So far, by proceeding cautiously, we've been able to manage that dilution. But transitioning more quickly is not just a function of wanting to transition all the way to one asset class, but it also recognizes that, right now, it happens to be a very good sellers market, and there is a public to private arbitrage that's being driven by the financing available to private buyers. So you're right to point out the dilutive effect of that transition. But let's face. We traded a multiple of 9x, and a net lease industrial read should probably trade somewhere in the mid-teens. And we think that there's value in taking that dilution for the multiple expansion.

Craig Mailman:

No, I agree. And that's kind of my point, is why not just rip band-aid off quicker, do the dividend cut? You guys are already trading at a substantial discount. I don't know what the market reaction to the downside would be from here. I'm just curious as, have you guys kind of hired someone to market a bigger package? Have you guys kind of formally gone down that road? Or is it just you're evaluating the market, you'll let us know if we get there? I'm just kind of curious where you guys are in the process, and how -- what the probability is of a bigger transaction coming to fruition.

7

T. Wilson Eglin:

We have assets in the market right now that are well in excess of the guidance that we've given. And we agree with what you've said about the strategy and the value of accelerating the transition. But again, we want to deal in absolutes. And as soon as we have transactions that are disclosable, we'll disclose them.

Craig Mailman:

Okay great, thank you.

Operator:

Our next question comes from Sheila McGrath of Evercore.

Sheila McGrath:

Yes. Will, for the quarter, you were pretty active on lease extensions and longer new leases, 5 to 11 years. I imagine that's pretty value-enhancing for office sales. Are all those assets that you had leased extensions on, are they part of the portfolio that you're marketing for sale?

T. Wilson Eglin

No, that was -- if we were looking at those particular properties, sometimes getting a lease extension is a gating item for putting a property on the market for sale. One of the challenges for us in terms of monetizing the value in our shorter-lease office portfolio is that if you have a 3- or 4-year lease, and you think you might get a renewal, you shouldn't sell the building to an investor who's going to think you have a vacancy in 4 years. So you're right as we work through the process on the shorter-lease up, when we get a renewal, that might -- as I say, a gating item toward marketing an asset for disposition on a one-off basis.

Sheila McGrath:

Okay. That's helpful. Just you've mentioned in your prepared remarks some of the office buildings. You may just refinance some rather than sell them. What drives that decision? Is it pricing, tax situation? Or when does it make more sense to refinance the building?

T. Wilson Eglin:

We did one stand-alone mortgage in the quarter on a cold storage facility in our industrial portfolio. So we really use secured financing when we have an asset where the basis is high on a per foot basis and where, in that case, where we could get 15-year match funded financing against the lease term. Earlier this year, we were in the market to look at financing some office buildings. And we essentially changed our strategy. We thought the debt quotes were so good that it would support greater disposition activity as opposed to just financing the assets than continuing to hold them. So we've only done 3 office investments in the last few years. Two of them were 15-year leases, where we did match-funded financing. We think that, that likely supports a higher asset valuation on the disposition side. And then the third one was the Dow Chemical transaction, where we were in the asset for also $166 million roughly in finance staff with a 20- year mortgage of $197 million. So that's an asset now that, next year, at some point, we will held that asset for 2 years. So there may be an opportunity to sell that and drive a lot of leverage off the balance sheet.

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Sheila McGrath:

Okay. And last question on, are there any metrics that you could give us on how the capital expenditure profile would change for Lexington shifting from a mix of office and industrial, and then, looking forward, being more pure-play industrial? Any like kind of data points that you could point to how that changes?

Patrick Carroll:

Yes. Sheila, it's Pat. If you look -- if want to look historically, what we've done in the first 6 months of the year, the cash outlay, the TIs and leasing commissions, about $9 million of them relate to office, and only about $187,000 relate to industrial. So this distinction between office and industrial is significant. And in my prepared remarks, when I said $11 million, again, an exceedingly amount of that money relates to our office assets. So the cost of re-tenanting and doing tenant improvements into the industrial portfolio is so much cheaper than the office.

Sheila McGrath:

Okay, great. Thank you.

Operator:

Our next question comes from Todd Stender of Wells Fargo.

Todd Stender:

Okay, thanks. This probably goes back to Brendan. With the Hamilton Beach asset, can you go through those rents again? It sounds like there were some above-market rent bumps of going into lease expirations. So maybe what the rents were, and then with the market rent. I'm sorry I didn't catch that.

Brendan P. Mullinix:

Sure. When we initially acquired the asset in April, the in-place rent were $2.55 a foot, and beginning this July going to a $0.10 increase. Next July, there's a $0.15 increase. And the following, there's a $0.25 increase. So that worked out to be roughly 4%, 6% and 9% over those 3 years. So yes, we would agree. They're above-market escalations. And that just had to do with the original structuring o the lease, where the escalations were back-ended. In terms of where we think market would be for a facility like that today, we would take it at somewhere around $3 to low $3s.

Todd Stender:

Was that a shorter-term lease that they re-signed in the last couple of years? Or this was a long-term lease that just have these back-ended bumps?

Brendan P. Mullinix:

Yes. It was originally a longer-term lease. That was signed in 2010, in a week market.

Todd Stender:

And then the lease extension you had with Versum Materials, that one wasn't coming due until 2022, but it looks like the cash rent rolled down. I just want to see what went on there.

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James Dudley:

Yes. It was a slight rent roll-down for the longer-term extension. It was also paired with their ability to expand the facility. So it was adding an expansion option and getting a longer-term lease on what's somewhat of a specialized facility. They have a lot of allowed space there. So we thought that getting a longer-term lease with a minimal roll-down was a good strategy just to solidify the asset.

Todd Stender:

And just staying on that theme, the Honeywell lease renewed, it sounds like the rental rate stepped up, how much more lease term did you get?

James Dudley:

We got an additional 5 years.

Todd Stender:

And then, Pat, the LT -- what's the LTV on the mortgage you've put on the Warren, Michigan asset? It looks like a pretty good amount of proceeds in $26 million. How did that look?

Patrick Carroll:

Yes. It was about like 65%. The balloon is about -- is close -- well, right now, it's about $100 a foot. But it's about 65% LTV.

Todd Stender:

All right. So interest only for several years, and then okay.

Operator:

Our next question comes from John Guinee of Stifel.

John Guinee:

Great, great. Okay. So shifting from a finance rate to an industrial rate, sort of ripping off the band-aid, most likely it takes you -- maybe you need to get to about 85% industrial, 15% other in order to claim victory. Is that a fair number? Or -- and when do you think you can get there, sort of 85%, 15% flip?

T. Wilson Eglin:

That's a fair number, John. I think we would feel kind of like it would be a success if we could be there by year-end next year. I think that would -- we would feel like we have a lot of success in the transition. In the office portfolio, about 60% of it is a relatively long weighted average lease term, and there's quite a liquid market for that asset type right now. Balance of the portfolio is where we have weighted average lease term of sort of roughly 4 years, and that's where the binary outcome at the end of the lease term determine so much of the value. So like I said, monetizing the longer-lease assets, it's relatively easy compared to maximize value in the balance of the portfolio. So in that shorter-lease portfolio, that's where we still want to make sure that we're doing the work and proceeding in a way that maximizes the value of each of those assets. But we think we can accomplish a lot in that portfolio through year-end next year.

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John Guinee:

Got you. Okay. So that's impressive, ripping off the band-aid aggressively. So then to kind of go to the -- maybe this is a little bit early, but when do you become vertically integrated with a development platform clearly if you're in the build-to-suit business? You want to also be in the development business. When do you overhaul your board so your board is much more industrial-focused? When do you have a different location than maybe Penn Station, which is a finance REIT-type location versus where an industrial REIT might be headquartered?

T. Wilson Eglin:

Well, we have an exceptional board, I must say, with a wide variety of skill sets to help us implement our business strategy and support our overall objectives. So I don't contemplate any change there, for sure. We do have our asset management group located in Dallas, Texas, and we've been adding personnel there over the years. And it may be that we have more personnel there going forward. Having a New York footprint is expensive, and we are mindful of trying to shrink our G&A. I mean, clearly, New York is an expensive place to be headquartered, but it's also an important place to be headquartered from -- certainly from a capital market standpoint. And having a principal part of our deal team here is also important to us.

John Guinee:

Great.

T. Wilson Eglin:

The transition, we're committed to it, John. We understand that everyone on the call would like us to come out and say we promise to do X, Y and Z. But we just prefer to have transactions under contract before speaking publicly about them.

John Guinee:

Do you think the -- if you're looking for a role model, would it be up STAG or Duke or Rexford? Or who do you think a good role model would be where you ascribe to be in a couple of years?

T. Wilson Eglin:

There are many good industrial companies out there, John. I wouldn't rather pick one.

John Guinee:

Okay, thanks.

Operator:

[Operator Instructions] Our next question comes from William Segal of Development Association.

William Segal:

It may be to Brendan and James. As you are moving to industrial, you've got some older industrial, newer and, I guess, build-to-suit. What trends are you seeing in the type of building and properties that you're building as opposed to maybe a 20-year-old industrial building, higher ceiling heights? Anything else that you're doing to -- in the modern industrial world?

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Brendan P. Mullinix:

This is Brendan. Well, I mean, I think one of the things that you can probably take from our recent acquisitions is that we continue to see a lot of demand from larger bulk distribution users. So we're certainly seeing larger facilities. And then in terms of building specs, there are many specs that go along with larger buildings. As you referenced, 36-foot clear height, certainly. And then significant -- it depends on the user. E-commerce has high employee parking requirements. Really, it's all over the board. Trailer park, significantly more trailer parking for certain types of users. So there's a variety of Class A standards that are pretty well understood for modern Class A bulk distribution.

William Segal:

Thank you very much.

Operator:

Our next question comes from -- is a follow-up from Sheila McGrath of Evercore

Sheila McGrath:

Yes. I just wanted to clarify, many of the other industrial REITS out there that John mentioned due are multi-tenant and require much more intensive asset management and focus on the market. Is Lexington still going to be focused more on acquisition of the longer-term net lease industrial assets? I just want to confirm that strategy.

T. Wilson Eglin:

Yes. No. We're going to stick with our knitting. We're going to stay focused on single tenant net leased industrial. Right now, we have a weighted average lease term in our portfolio of 10 years. And industrial companies with shorter weighted average lease term trade better, but we're not going to meaningfully change our strategy from that standpoint. The question that John asked about when do we become a developer is sort of an interesting one. I think the thing that we're primarily focused on is transitioning away from office to more single kind of industrial. And our clients are private merchant builders. So, we would have to weigh the value of becoming a competitor with them versus continuing to execute our strategy, which has been to provide capital to them. So, no, Sheila, our focus is on, just to be clear, single tenant net leased industrial. We're not -- it may be that every once in a while, we purchase a building with one tenant for 80% of the space, and maybe a smaller tenant for another one. But no radical change away from our net lease orientation.

Sheila McGrath:

Okay. And one more question. Maybe this is for Pat. When you contemplate the office sales, how will it be determined if the proceeds will be mostly 1031 into industrial assets? Or will it be to pay down debt? Are there some tax considerations that you have to consider as well?

Patrick Carroll:

Well, we always consider the tax implications of anything that we do. To the extent that we feel we need to 1031 the money, it will be 1031. To the extent that we don't, we will pay down the shorter term, like the revolver, and then go from there. But it's on a case-by-case basis, Sheila.

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Sheila McGrath:

But would it if -- are you going to try to avoid having a special dividend, I guess, is a better way to ask it?

Patrick Carroll:

Well, right now, we're not contemplating a special dividend.

Operator:

Our next question comes from John Massocca of Ladenburg Thalmann.

Brandon Travis:

This is Brandon Travis on for John. The expected TI and leasing commissions still going to be $19 million, just given the relative amount of spending? Or was that related to the $11 million update earlier?

Patrick Carroll:

Well, we have projected for the remainder of the year is $11 million, which would be $19 million in total.

Brandon Travis:

Okay. And I'm not sure if you commented on the One World Technologies asset and held for sale bucket. But as a long term -- a long lease term industrial asset, is that necessarily a core investment for you, guys?

Patrick Carroll:

It is a long-term industrial asset. It's a large square footage asset. However, we've been in discussion and got a price that we're very comfortable with. So we've put it as held for sale.

Brandon Travis:

Okay. Thank you.

Operator:

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

T. Wilson Eglin:

Thank you, everyone, for joining us this morning. Please visit our website or contact Heather Gentry if you would like to receive our quarterly materials. In addition, you may contact me or the other members of senior management with any questions. Thank you, and have a great day, everyone.

Operator:

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

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