Investments in Real Estate and Real Estate Under Construction

3 Months Ended

Mar. 31, 2013

Investments in Real Estate and Real Estate Under Construction [Abstract]

Investments in Real Estate and Real Estate Under Construction

Investments in Real Estate and Real Estate Under Construction

The Company, through property owner subsidiaries, completed the following acquisition and build-to-suit transactions during the three months ended March 31, 2013:

Property Type	Location	Acquisition/Completion Date	Initial Cost Basis		Lease Expiration	Land and Land Estate		Building and Improvements		Lease in-place Value Intangible
Industrial	Long Island City, NY	February 2013	$	41,872	03/2028	$	—	$	41,872	$	—
Industrial	Houston, TX	March 2013	$	81,400	03/2038	$	15,055	$	57,949	$	8,396
			$	123,272		$	15,055	$	99,821	$	8,396

The Company's consolidated partnership, which owns the Long Island City, New York property, currently provides for the Company to receive distributions of operating cash flows as follows: (1) a 6.3% priority return on its invested capital up to $25,000, (2) an 11% priority return on its invested capital in excess of $25,000 and (3) approximately 50% of any excess return.

The Company recognized aggregate acquisition expenses of $193 and $3 for the three months ended March 31, 2013 and 2012, respectively, which are included as operating expenses within the Company's unaudited condensed consolidated statements of operations.

The Company is engaged in various forms of build-to-suit development activities. The Company, through lender subsidiaries and property owner subsidiaries, may enter into the following acquisition, development and construction arrangements: (1) lend funds to construct build-to-suit projects subject to a single-tenant lease and agree to purchase the properties upon completion of construction and commencement of a single-tenant lease, (2) hire developers to construct built-to-suit projects on owned properties leased to single tenants, (3) fund the construction of build-to-suit projects on owned properties pursuant to the terms in single-tenant lease agreements or (4) enter into purchase and sale agreements with developers to acquire single-tenant build-to-suit properties upon completion.

As of March 31, 2013, the Company had the following development arrangements outstanding:

Location	Property Type	Square Feet	Expected Maximum Commitment/Contribution ($ millions)		Lease Term (Years)	Estimated Completion Date
Denver, CO	Office	167,000	$	39.0	15	2Q 13
Tuscaloosa, AL	Retail	42,000	$	8.8	15	3Q 13
Rantoul, IL	Industrial	813,000	$	42.6	20	4Q 13
Bingen, WA(1)	Industrial	124,000	$	20.8	10-20	2Q 14
		1,146,000	$	111.2

(1) Commitment may be terminated by the tenant prior to the commencement of construction.

The Company has variable interests in certain developer entities constructing the facilities but is not the primary beneficiary of the entities as the Company does not have a controlling financial interest. As of March 31, 2013 and December 31, 2012, the Company's aggregate investment in development arrangements was $47,041 and $65,122, respectively, and are presented as investments in real estate under construction in the accompanying unaudited condensed consolidated balance sheets. The Company capitalized interest of $833 and $435 during the three months ended March 31, 2013 and 2012, respectively, relating to build-to-suit activities.

In addition, the Company has committed to acquire, upon its completion, an office property in Omaha, Nebraska for $39,125, which is subject to a net lease that will have a 20-year term upon completion. Construction is expected to be completed in the fourth quarter of 2013. The Company can give no assurances that any of these acquisitions under contract or build-to-suit transactions will be consummated.

On September 1, 2012, the Company, together with an operating partnership subsidiary, acquired the remaining common equity interest in Net Lease Strategic Assets Fund L.P. ("NLS") from Inland American (Net Lease) Sub, LLC that the Company did not already own for a cash payment of $9,438 and the assumption of all outstanding liabilities. Immediately prior to the acquisition, the Company owned 15% of NLS's common equity and 100% of NLS's preferred equity. At the date of acquisition, NLS owned 41 properties totaling 5.8 million square feet in 23 states, plus a 40% tenant-in-common interest in an office property.  The Company's investment in NLS had previously been accounted for under the equity method and is now consolidated.

The Company recognized gross revenues from continuing operations of $10,778 and a net loss of $(1,395) from NLS properties during the three months ended March 31, 2013. The Company recognized $6,383 of equity in earnings relating to NLS during the three months ended March 31, 2012.

The following unaudited condensed consolidated pro forma information is presented as if the Company acquired the remaining equity in NLS on January 1, 2012. The information presented below is not necessarily indicative of what the actual results of operations would have been had the transaction been completed on January 1, 2012, nor does it purport to represent the Company's future operations:

	Three Months Ended March 31, 2012
Gross revenues	$	89,674
Net loss attributable to Lexington Realty Trust shareholders	$	(4,844	)
Net loss attributable to common shareholders	$	(10,642	)
Net loss per common share - basic and diluted	$	(0.07	)