x | Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
o | Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Maryland | 13-3717318 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
One Penn Plaza – Suite 4015 New York, NY | 10119 |
(Address of principal executive offices) | (Zip Code) |
PART I. — FINANCIAL INFORMATION | ||
PART II — OTHER INFORMATION | ||
June 30, 2013 (unaudited) | December 31, 2012 | ||||||
Assets: | |||||||
Real estate, at cost | $ | 3,616,618 | $ | 3,564,466 | |||
Real estate - intangible assets | 694,557 | 685,914 | |||||
Investments in real estate under construction | 23,099 | 65,122 | |||||
4,334,274 | 4,315,502 | ||||||
Less: accumulated depreciation and amortization | 1,197,732 | 1,150,417 | |||||
3,136,542 | 3,165,085 | ||||||
Cash and cash equivalents | 74,278 | 34,024 | |||||
Restricted cash | 20,521 | 26,741 | |||||
Investment in and advances to non-consolidated entities | 11,224 | 27,129 | |||||
Deferred expenses, net | 63,679 | 57,549 | |||||
Loans receivable, net | 88,994 | 72,540 | |||||
Rent receivable – current | 8,505 | 7,355 | |||||
Rent receivable – deferred | 1,965 | — | |||||
Other assets | 38,566 | 27,780 | |||||
Total assets | $ | 3,444,274 | $ | 3,418,203 | |||
Liabilities and Equity: | |||||||
Liabilities: | |||||||
Mortgages and notes payable | $ | 1,043,934 | $ | 1,415,961 | |||
Term loans payable | 319,000 | 255,000 | |||||
Senior notes payable | 247,585 | — | |||||
Convertible notes payable | 38,666 | 78,127 | |||||
Trust preferred securities | 129,120 | 129,120 | |||||
Dividends payable | 33,990 | 31,351 | |||||
Accounts payable and other liabilities | 56,891 | 70,367 | |||||
Accrued interest payable | 9,942 | 11,980 | |||||
Deferred revenue - including below market leases, net | 71,205 | 79,908 | |||||
Prepaid rent | 18,394 | 13,224 | |||||
Total liabilities | 1,968,727 | 2,085,038 | |||||
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 | |||||
Series D Cumulative Redeemable Preferred, liquidation preference $155,000; 6,200,000 shares issued and outstanding in 2012 | — | 149,774 | |||||
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 214,234,685 and 178,616,664 shares issued and outstanding in 2013 and 2012, respectively | 21 | 18 | |||||
Additional paid-in-capital | 2,568,198 | 2,212,949 | |||||
Accumulated distributions in excess of net income | (1,215,793 | ) | (1,143,803 | ) | |||
Accumulated other comprehensive income (loss) | 3,912 | (6,224 | ) | ||||
Total shareholders’ equity | 1,450,354 | 1,306,730 | |||||
Noncontrolling interests | 25,193 | 26,435 | |||||
Total equity | 1,475,547 | 1,333,165 | |||||
Total liabilities and equity | $ | 3,444,274 | $ | 3,418,203 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Gross revenues: | |||||||||||||||
Rental | $ | 91,251 | $ | 72,914 | $ | 178,749 | $ | 142,857 | |||||||
Advisory and incentive fees | 154 | 765 | 328 | 1,088 | |||||||||||
Tenant reimbursements | 8,008 | 7,150 | 15,866 | 14,300 | |||||||||||
Total gross revenues | 99,413 | 80,829 | 194,943 | 158,245 | |||||||||||
Expense applicable to revenues: | |||||||||||||||
Depreciation and amortization | (45,098 | ) | (37,339 | ) | (89,580 | ) | (74,084 | ) | |||||||
Property operating | (15,924 | ) | (13,962 | ) | (31,533 | ) | (27,313 | ) | |||||||
General and administrative | (6,596 | ) | (6,189 | ) | (13,759 | ) | (11,559 | ) | |||||||
Non-operating income | 1,470 | 1,626 | 3,431 | 4,245 | |||||||||||
Interest and amortization expense | (22,662 | ) | (23,469 | ) | (46,267 | ) | (47,261 | ) | |||||||
Debt satisfaction charges, net | (11,726 | ) | (2 | ) | (22,722 | ) | (1,651 | ) | |||||||
Litigation reserve | — | (2,800 | ) | — | (2,800 | ) | |||||||||
Impairment charges | — | — | (2,413 | ) | — | ||||||||||
Loss before provision for income taxes, equity in earnings of non-consolidated entities and discontinued operations | (1,123 | ) | (1,306 | ) | (7,900 | ) | (2,178 | ) | |||||||
Provision for income taxes | (160 | ) | (324 | ) | (561 | ) | (505 | ) | |||||||
Equity in earnings of non-consolidated entities | 204 | 10,277 | 339 | 17,670 | |||||||||||
Income (loss) from continuing operations | (1,079 | ) | 8,647 | (8,122 | ) | 14,987 | |||||||||
Discontinued operations: | |||||||||||||||
Income (loss) from discontinued operations | (47 | ) | (2,557 | ) | 1,672 | (2,581 | ) | ||||||||
Provision for income taxes | (1,158 | ) | (6 | ) | (1,162 | ) | (11 | ) | |||||||
Debt satisfaction gains (charges), net | (1,299 | ) | — | 9,250 | 1,728 | ||||||||||
Gains on sales of properties | 12,806 | 2,671 | 12,806 | 2,671 | |||||||||||
Impairment charges | (1,391 | ) | (3,129 | ) | (8,735 | ) | (5,690 | ) | |||||||
Total discontinued operations | 8,911 | (3,021 | ) | 13,831 | (3,883 | ) | |||||||||
Net income | 7,832 | 5,626 | 5,709 | 11,104 | |||||||||||
Less net income attributable to noncontrolling interests | (1,100 | ) | (1,116 | ) | (1,597 | ) | (2,983 | ) | |||||||
Net income attributable to Lexington Realty Trust shareholders | 6,732 | 4,510 | 4,112 | 8,121 | |||||||||||
Dividends attributable to preferred shares – Series B | — | (919 | ) | — | (2,298 | ) | |||||||||
Dividends attributable to preferred shares – Series C | (1,573 | ) | (1,573 | ) | (3,145 | ) | (3,145 | ) | |||||||
Dividends attributable to preferred shares – Series D | (617 | ) | (2,925 | ) | (3,543 | ) | (5,851 | ) | |||||||
Allocation to participating securities | (161 | ) | (139 | ) | (338 | ) | (289 | ) | |||||||
Deemed dividend – Series B | — | (2,346 | ) | — | (2,346 | ) | |||||||||
Redemption discount – Series C | — | — | — | 229 | |||||||||||
Deemed dividend – Series D | (5,230 | ) | — | (5,230 | ) | — | |||||||||
Net loss attributable to common shareholders | $ | (849 | ) | $ | (3,392 | ) | $ | (8,144 | ) | $ | (5,579 | ) | |||
Income (loss) per common share – basic: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.04 | ) | $ | — | $ | (0.11 | ) | $ | — | |||||
Income (loss) from discontinued operations | 0.04 | (0.02 | ) | 0.07 | (0.04 | ) | |||||||||
Net loss attributable to common shareholders | $ | — | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||
Weighted-average common shares outstanding – basic | 211,619,288 | 154,558,380 | 200,487,623 | 154,353,707 | |||||||||||
Income (loss) per common share – diluted: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.04 | ) | $ | — | $ | (0.11 | ) | $ | — | |||||
Income (loss) from discontinued operations | 0.04 | (0.02 | ) | 0.07 | (0.04 | ) | |||||||||
Net loss attributable to common shareholders | $ | — | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||
Weighted-average common shares outstanding – diluted | 211,619,288 | 154,797,485 | 200,487,623 | 154,353,707 | |||||||||||
Amounts attributable to common shareholders: | |||||||||||||||
Income (loss) from continuing operations | $ | (9,259 | ) | $ | 222 | $ | (21,484 | ) | $ | (78 | ) | ||||
Income (loss) from discontinued operations | 8,410 | (3,614 | ) | 13,340 | (5,501 | ) | |||||||||
Net loss attributable to common shareholders | $ | (849 | ) | $ | (3,392 | ) | $ | (8,144 | ) | $ | (5,579 | ) |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Net income | $ | 7,832 | $ | 5,626 | $ | 5,709 | $ | 11,104 | |||||||
Other comprehensive income (loss): | |||||||||||||||
Change in unrealized gain (loss) on interest rate swaps, net | 9,434 | (5,503 | ) | 10,136 | (5,559 | ) | |||||||||
Other comprehensive income (loss) | 9,434 | (5,503 | ) | 10,136 | (5,559 | ) | |||||||||
Comprehensive income | 17,266 | 123 | 15,845 | 5,545 | |||||||||||
Comprehensive income attributable to noncontrolling interests | (1,100 | ) | (1,116 | ) | (1,597 | ) | (2,983 | ) | |||||||
Comprehensive income (loss) attributable to Lexington Realty Trust shareholders | $ | 16,166 | $ | (993 | ) | $ | 14,248 | $ | 2,562 |
Six Months ended June 30, 2013 | Lexington Realty Trust Shareholders | ||||||||||||||||||||||||||
Total | Preferred Shares | Common Shares | Additional Paid-in-Capital | Accumulated Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | |||||||||||||||||||||
Balance December 31, 2012 | $ | 1,333,165 | $ | 243,790 | $ | 18 | $ | 2,212,949 | $ | (1,143,803 | ) | $ | (6,224 | ) | $ | 26,435 | |||||||||||
Redemption of noncontrolling OP units for common shares | — | — | — | 861 | — | — | (861 | ) | |||||||||||||||||||
Repurchase of preferred shares | (155,004 | ) | (149,774 | ) | — | — | (5,230 | ) | — | — | |||||||||||||||||
Issuance of common shares upon conversion of convertible notes | 47,128 | — | — | 47,128 | — | — | — | ||||||||||||||||||||
Issuance of common shares and deferred compensation amortization, net | 307,263 | — | 3 | 307,260 | — | — | — | ||||||||||||||||||||
Dividends/distributions | (72,850 | ) | — | — | — | (70,872 | ) | — | (1,978 | ) | |||||||||||||||||
Net income | 5,709 | — | — | — | 4,112 | — | 1,597 | ||||||||||||||||||||
Other comprehensive income | 10,136 | — | — | — | — | 10,136 | — | ||||||||||||||||||||
Balance June 30, 2013 | $ | 1,475,547 | $ | 94,016 | $ | 21 | $ | 2,568,198 | $ | (1,215,793 | ) | $ | 3,912 | $ | 25,193 |
Six Months ended June 30, 2012 | Lexington Realty Trust Shareholders | ||||||||||||||||||||||||||
Total | Preferred Shares | Common Shares | Additional Paid-in-Capital | Accumulated Distributions in Excess of Net Income | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | |||||||||||||||||||||
Balance December 31, 2011 | $ | 1,170,203 | $ | 311,673 | $ | 15 | $ | 2,010,850 | $ | (1,212,630 | ) | $ | 1,938 | $ | 58,357 | ||||||||||||
Redemption of noncontrolling OP units for common shares | — | — | — | 353 | — | — | (353 | ) | |||||||||||||||||||
Repurchase of preferred shares | (70,000 | ) | (67,883 | ) | — | — | (2,117 | ) | — | — | |||||||||||||||||
Issuance of common shares and deferred compensation amortization, net | 6,361 | — | 1 | 6,360 | — | — | — | ||||||||||||||||||||
Contributions from noncontrolling interests | 889 | — | — | — | — | — | 889 | ||||||||||||||||||||
Dividends/distributions | (83,698 | ) | — | — | — | (50,164 | ) | — | (33,534 | ) | |||||||||||||||||
Net income | 11,104 | — | — | — | 8,121 | — | 2,983 | ||||||||||||||||||||
Other comprehensive loss | (5,559 | ) | — | — | — | — | (5,559 | ) | — | ||||||||||||||||||
Balance June 30, 2012 | $ | 1,029,300 | $ | 243,790 | $ | 16 | $ | 2,017,563 | $ | (1,256,790 | ) | $ | (3,621 | ) | $ | 28,342 |
Six months ended June 30, | |||||||
2013 | 2012 | ||||||
Net cash provided by operating activities: | $ | 95,158 | $ | 80,851 | |||
Cash flows from investing activities: | |||||||
Acquisition of real estate, including intangible assets | (81,535 | ) | (23,000 | ) | |||
Investment in real estate under construction | (34,808 | ) | (52,238 | ) | |||
Capital expenditures | (33,532 | ) | (16,271 | ) | |||
Net proceeds from sale of properties | 47,236 | 72,561 | |||||
Principal payments received on loans receivable | 1,194 | 1,788 | |||||
Investment in loans receivable | (16,967 | ) | (5,829 | ) | |||
Investments in non-consolidated entities | — | (1,920 | ) | ||||
Distributions from non-consolidated entities in excess of accumulated earnings | 15,440 | — | |||||
Sale of interest in non-consolidated entity | — | 7,000 | |||||
Increase in deferred leasing costs | (4,919 | ) | (3,631 | ) | |||
Change in escrow deposits and restricted cash | (2,337 | ) | 4,677 | ||||
Real estate deposits | (1,259 | ) | (49 | ) | |||
Net cash used in investing activities | (111,487 | ) | (16,912 | ) | |||
Cash flows from financing activities: | |||||||
Dividends to common and preferred shareholders | (68,233 | ) | (51,450 | ) | |||
Repurchase of exchangeable notes | — | (62,150 | ) | ||||
Conversion of convertible notes | (2,663 | ) | — | ||||
Principal amortization payments | (23,442 | ) | (19,588 | ) | |||
Principal payments on debt, excluding normal amortization | (338,537 | ) | (139,283 | ) | |||
Change in revolving credit facility borrowings, net | — | 35,000 | |||||
Proceeds from senior notes | 247,565 | — | |||||
Proceeds from term loans | 64,000 | 206,000 | |||||
Increase in deferred financing costs | (6,539 | ) | (4,638 | ) | |||
Proceeds of mortgages and notes payable | 40,000 | 61,500 | |||||
Change in restricted cash | (1,573 | ) | (4,498 | ) | |||
Cash distributions to noncontrolling interests | (1,978 | ) | (33,534 | ) | |||
Contributions from noncontrolling interests | — | 889 | |||||
Repurchase of preferred shares | (155,004 | ) | (70,000 | ) | |||
Issuance of common shares, net | 302,987 | 4,291 | |||||
Net cash provided by (used in) financing activities | 56,583 | (77,461 | ) | ||||
Change in cash and cash equivalents | 40,254 | (13,522 | ) | ||||
Cash and cash equivalents, at beginning of period | 34,024 | 63,711 | |||||
Cash and cash equivalents, at end of period | $ | 74,278 | $ | 50,189 |
(1) | The Company and Financial Statement Presentation |
(2) | Earnings Per Share |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
BASIC | |||||||||||||||
Income (loss) from continuing operations attributable to common shareholders | $ | (9,259 | ) | $ | 222 | $ | (21,484 | ) | $ | (78 | ) | ||||
Income (loss) from discontinued operations attributable to common shareholders | 8,410 | (3,614 | ) | 13,340 | (5,501 | ) | |||||||||
Net loss attributable to common shareholders | $ | (849 | ) | $ | (3,392 | ) | $ | (8,144 | ) | $ | (5,579 | ) | |||
Weighted-average number of common shares outstanding | 211,619,288 | 154,558,380 | 200,487,623 | 154,353,707 | |||||||||||
Income (loss) per common share: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.04 | ) | $ | — | $ | (0.11 | ) | $ | — | |||||
Income (loss) from discontinued operations | 0.04 | (0.02 | ) | 0.07 | (0.04 | ) | |||||||||
Net loss attributable to common shareholders | $ | — | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.04 | ) | ||||
DILUTED | |||||||||||||||
Income (loss) from continuing operations attributable to common shareholders | $ | (9,259 | ) | $ | 222 | $ | (21,484 | ) | $ | (78 | ) | ||||
Impact of assumed conversions: | |||||||||||||||
Share options | — | — | — | — | |||||||||||
Income (loss) from continuing operations attributable to common shareholders | (9,259 | ) | 222 | (21,484 | ) | (78 | ) | ||||||||
Income (loss) from discontinued operations attributable to common shareholders | 8,410 | (3,614 | ) | 13,340 | (5,501 | ) | |||||||||
Net loss attributable to common shareholders | $ | (849 | ) | $ | (3,392 | ) | $ | (8,144 | ) | $ | (5,579 | ) | |||
Weighted-average common shares outstanding - basic | 211,619,288 | 154,558,380 | 200,487,623 | 154,353,707 | |||||||||||
Effect of dilutive securities: | |||||||||||||||
Share options | — | 239,105 | — | — | |||||||||||
Weighted-average common shares outstanding | 211,619,288 | 154,797,485 | 200,487,623 | 154,353,707 | |||||||||||
Income (loss) per common share: | |||||||||||||||
Income (loss) from continuing operations | $ | (0.04 | ) | $ | — | $ | (0.11 | ) | $ | — | |||||
Income (loss) from discontinued operations | 0.04 | (0.02 | ) | 0.07 | (0.04 | ) | |||||||||
Net loss attributable to common shareholders | $ | — | $ | (0.02 | ) | $ | (0.04 | ) | $ | (0.04 | ) |
(3) | Investments in Real Estate and Real Estate Under Construction |
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(1) | February 2013 | $ | 42,124 | 03/2028 | $ | — | $ | 42,124 | $ | — | ||||||
Industrial | Houston, TX | March 2013 | $ | 81,400 | 03/2038 | $ | 15,055 | $ | 57,949 | $ | 8,396 | ||||||
Office | Denver, CO(2) | April 2013 | $ | 34,547 | 04/2028 | $ | 2,207 | $ | 26,724 | $ | 5,616 | ||||||
Retail | Tuscaloosa, AL(3) | May 2013 | $ | 8,397 | 05/2028 | $ | 2,793 | $ | 5,604 | $ | — | ||||||
$ | 166,468 | $ | 20,055 | $ | 132,401 | $ | 14,012 |
(1) | The Company’s consolidated partnership, which owns the Long Island City, New York property, provided as of June 30, 2013 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. Subsequent to June 30, 2013, the Company acquired its joint venture partners’ interest in the partnership. |
(2) | The Company incurred additional initial costs of $3,825 which are included in “Other assets” in the accompanying unaudited condensed consolidated balance sheet. |
(3) | The Company incurred leasing costs of $323. |
Location | Property Type | Square Feet | Expected Maximum Commitment/Contribution ($ millions) | Lease Term (Years) | Estimated Completion Date | ||||||
Rantoul, IL | Industrial | 813,000 | $ | 42.6 | 20 | 4Q 13 | |||||
Bingen, WA | Industrial | 124,000 | $ | 18.9 | 12 | 2Q 14 | |||||
Las Vegas, NV(1) | Industrial | 180,000 | $ | 29.6 | 20 | 3Q 14 | |||||
Albany, GA | Retail | 46,000 | $ | 7.5 | 15 | 4Q 13 | |||||
1,163,000 | $ | 98.6 |
(1) | At June 30, 2013, the Company's commitment could have been terminated by the Company due to an outstanding contingency, thus costs incurred through June 30, 2013 of $1,191 are recognized as pre-development costs and included in “Other assets” in the accompanying unaudited condensed consolidated balance sheet. Subsequent to June 30, 2013, the termination right expired. |
Three Months Ended June 30, 2012 | Six Months Ended June 30, 2012 | |||||||
Gross revenues | $ | 92,795 | $ | 181,650 | ||||
Net income (loss) attributable to Lexington Realty Trust shareholders | $ | 7 | $ | (4,837 | ) | |||
Net loss attributable to common shareholders | $ | (7,896 | ) | $ | (18,538 | ) | ||
Net loss per common share - basic and diluted | $ | (0.05 | ) | $ | (0.12 | ) |
(4) | Discontinued Operations and Real Estate Impairment |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||
Total gross revenues | $ | 876 | $ | 4,833 | $ | 2,408 | $ | 10,151 | |||||||
Pre-tax income (loss) | $ | 10,069 | $ | (3,015 | ) | $ | 14,993 | $ | (3,872 | ) |
(5) | Loans Receivable |
Loan carrying-value(1) | |||||||||||||
Loan | 6/30/2013 | 12/31/2012 | Interest Rate | Maturity Date | |||||||||
Norwalk, CT(2) | $ | 20,262 | $ | 3,479 | 7.50 | % | 11/2014 | ||||||
Homestead, FL(3) | 8,646 | 8,036 | 7.50 | % | 08/2014 | ||||||||
Schaumburg, IL(4) | 21,579 | 21,885 | 20.00 | % | 01/2012 | ||||||||
Westmont, IL | 26,721 | 26,902 | 6.45 | % | 10/2015 | ||||||||
Southfield, MI | 6,994 | 7,364 | 4.55 | % | 02/2015 | ||||||||
Austin, TX | 2,206 | 2,038 | 16.00 | % | 10/2018 | ||||||||
Other | 2,586 | 2,836 | 8.00 | % | 2021-2022 | ||||||||
$ | 88,994 | $ | 72,540 |
(1) | Loan carrying value includes accrued interest and is net of origination costs and fee eliminations, if any. |
(2) | The Company is committed to lend up to $32,600. |
(3) | The Company is committed to lend up to $10,660. |
(4) | Loan is in default. The Company has obtained a foreclosure judgment but has not foreclosed as of June 30, 2013. The Company did not record interest income of $1,911 and $2,647 during the six months ended June 30, 2013 and the year ended December 31, 2012, respectively. The Company believes the office property collateral has an estimated fair value in excess of the Company's investment. |
(6) | Fair Value Measurements |
Balance | Fair Value Measurements Using | ||||||||||||||
Description | June 30, 2013 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Interest rate swap asset | $ | 3,912 | $ | — | $ | 3,912 | $ | — | |||||||
Impaired real estate assets* | $ | 4,277 | $ | — | $ | — | $ | 4,277 |
Balance | Fair Value Measurements Using | ||||||||||||||
Description | December 31, 2012 | (Level 1) | (Level 2) | (Level 3) | |||||||||||
Interest rate swap liability | $ | (6,556 | ) | $ | — | $ | (6,556 | ) | $ | — | |||||
Impaired real estate assets* | $ | 3,327 | $ | — | $ | — | $ | 3,327 |
As of June 30, 2013 | As of December 31, 2012 | ||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||
Assets | |||||||||||||||
Loans Receivable | $ | 88,994 | $ | 78,375 | $ | 72,540 | $ | 61,734 | |||||||
Liabilities | |||||||||||||||
Debt | $ | 1,778,305 | $ | 1,766,215 | $ | 1,878,208 | $ | 1,835,157 |
(7) | Investment in and Advances to Non-Consolidated Entities |
(8) | Debt |
6.00% Convertible Guaranteed Notes | |||||||
Balance Sheets: | June 30, 2013 | December 31, 2012 | |||||
Principal amount of debt component | $ | 41,146 | $ | 83,896 | |||
Unamortized discount | (2,480 | ) | (5,769 | ) | |||
Carrying amount of debt component | $ | 38,666 | $ | 78,127 | |||
Carrying amount of equity component | $ | (16,677 | ) | $ | 3,654 | ||
Effective interest rate | 8.1 | % | 8.1 | % | |||
Period through which discount is being amortized, put date | 01/2017 | 01/2017 | |||||
Aggregate if-converted value in excess of aggregate principal amount | $ | 29,135 | $ | 42,579 |
Three months ended June 30, | Six months ended June 30, | ||||||||||||||
Statements of Operations: | 2013 | 2012 | 2013 | 2012 | |||||||||||
6.00% Convertible Guaranteed Notes | |||||||||||||||
Coupon interest | $ | 610 | $ | 1,725 | $ | 1,398 | $ | 3,450 | |||||||
Discount amortization | 175 | 484 | 398 | 969 | |||||||||||
$ | 785 | $ | 2,209 | $ | 1,796 | $ | 4,419 |
(9) | Derivatives and Hedging Activities |
Interest Rate Derivative | Number of Instruments | Notional |
Interest Rate Swaps | 6 | $319,000 |
As of June 30, 2013 | As of December 31, 2012 | ||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Derivatives designated as hedging instruments | |||||||||||
Interest Rate Swap Asset (Liability) | Other Assets | $ | 3,912 | Accounts Payable and Other Liabilities | $ | (6,556 | ) |
Derivatives in Cash Flow | Amount of Gain (Loss) Recognized in OCI on Derivatives (Effective Portion) June 30, | Location of Loss Reclassified from Accumulated OCI into Income (Effective Portion) | Amount of Loss Reclassified from Accumulated OCI into Income (Effective Portion) June 30, | ||||||||||||||||
Hedging Relationships | 2013 | 2012 | 2013 | 2012 | |||||||||||||||
Interest Rate Swaps | $ | 8,851 | $ | (5,701 | ) | Interest expense | $ | 1,285 | $ | 142 |
(10) | Concentration of Risk |
(11) | Equity |
Six months ended June 30, | ||||||||
2013 | 2012 | |||||||
8.05% Series B Cumulative Redeemable Preferred Stock: | ||||||||
Shares redeemed and retired | — | 2,740,874 | ||||||
Redemption cost(1) | $ | — | $ | 69,459 | ||||
Deemed dividend(2) | $ | — | $ | 2,346 | ||||
6.50% Series C Cumulative Convertible Preferred Stock: | ||||||||
Shares repurchased and retired | — | 34,800 | ||||||
Repurchase cost | $ | — | $ | 1,462 | ||||
Discount (Deemed negative dividend)(2) | $ | — | $ | (229 | ) | |||
7.55% Series D Cumulative Redeemable Preferred Stock: | ||||||||
Shares redeemed and retired | 6,200,000 | — | ||||||
Redemption cost(1) | $ | 155,621 | $ | — | ||||
Deemed dividend(2) | $ | 5,230 | $ | — |
Gains and Losses on Cash Flow Hedges | ||||
Balance December 31, 2012 | $ | (6,224 | ) | |
Other comprehensive income before reclassifications | 8,851 | |||
Amounts of loss reclassified from accumulated other comprehensive loss to interest expense | 1,285 | |||
Balance June 30, 2013 | $ | 3,912 |
Net Income Attributable to Shareholders and Transfers from Noncontrolling Interests | |||||||
Six Months ended June 30, | |||||||
2013 | 2012 | ||||||
Net income attributable to Lexington Realty Trust shareholders | $ | 4,112 | $ | 8,121 | |||
Transfers from noncontrolling interests: | |||||||
Increase in additional paid-in-capital for redemption of noncontrolling OP units | 861 | 353 | |||||
Change from net income attributable to shareholders and transfers from noncontrolling interests | $ | 4,973 | $ | 8,474 |
(12) | Related Party Transactions |
(13) | Commitments and Contingencies |
(14) | Supplemental Disclosure of Statement of Cash Flow Information |
(15) | Subsequent Events |
• | converted $12,155 original principal amount of 6.00% Convertible Guaranteed Notes due 2030 for 1,777,562 common shares and a cash payment of $608; |
• | acquired its joint venture partner's interest in an industrial facility in Long Island City, New York for $8,662; and |
• | borrowed $10,000 on its unsecured revolving credit facility. |
• | Completed the 167,000 square foot build-to-suit office property in Denver, Colorado, for a capitalized cost of $38.4 million. The property is net leased for a 15-year term. |
• | Entered into a $29.6 million build-to-suit lease commitment to construct an 180,000 square foot industrial property in Las Vegas, Nevada. Upon completion of construction, a net lease for a 20-year term will commence. |
• | Acquired a 4.42 acre-site in Albany, Georgia and entered into a 15-year net-lease. We are obligated to the construction of a 46,000 square foot retail property for a maximum price of $7.5 million and the lease will commence upon completion. |
• | Completed the 42,000 square foot build-to-suit retail property in Tuscaloosa, Alabama, for a capitalized cost of $8.7 million. The property is net-leased for a 15-year term. |
• | Disposed of our interests in (1) three properties, (2) a retail parcel and parking facility at a property and (3) a land parcel to unaffiliated third parties for an aggregate gross sales price of $46.6 million. |
• | Conveyed our properties in Farmington Hills, Michigan, and Indianapolis, Indiana, for full satisfaction of the related $26.2 million aggregate non-recourse mortgage loans. |
• | Issued $250.0 million aggregate principal amount of 4.25% Senior Notes due 2023, which are unsecured and rated investment-grade by Moody’s and S&P. |
• | Increased our revolving credit facility availability from $300.0 million to $400.0 million. |
• | Satisfied $193.2 million of non-recourse mortgage debt which had a weighted-average interest rate of 6.0% and incurred yield maintenance costs of $11.8 million. |
• | Swapped the LIBOR component on $64.0 million of five-year unsecured term loan borrowings at 0.73% for a current fixed rate of 2.08%. |
• | Redeemed, at par, all $155.0 million outstanding shares of 7.55% Series D Cumulative Redeemable Preferred Stock. |
• | See note 15 to our unaudited condensed consolidated financial statements contained in this Quarterly Report. |
Location | Property Type | Square Feet (000's) | Capitalized Cost (millions) | Date Acquired | Approximate Lease Term (Years) | Capitalized Cost per Square Foot | |||||||||||
Long Island City, NY(1) | Industrial | 140 | $ | 42.1 | February 2013 | 15 | $ | 300.18 | |||||||||
Houston, TX | Industrial | 132 | $ | 81.4 | March 2013 | 25 | $ | (2 | ) | ||||||||
Denver, CO(3) | Office | 167 | $ | 38.4 | April 2013 | 15 | $ | 229.89 | |||||||||
Tuscaloosa, AL(4) | Retail | 42 | $ | 8.7 | May 2013 | 15 | $ | 206.10 | |||||||||
481 | $ | 170.6 |
(1) | Joint venture investment. Subsequent to June 30, 2013, we acquired our joint venture partners' interest in the joint venture. |
(2) | Asset consists of a deep-water intermodal industrial terminal and existing structures on approximately 90 acres ($897.46 capitalized cost per acre). |
(3) | Includes $3.8 million of tenant related costs. |
(4) | Includes leasing costs of $0.3 million. |
Location | Property Type | Square Feet (000's) | Capitalized Cost/Maximum Commitment (millions) | Estimated Completion Date | Costs Incurred as of 6/30/13(1) (millions) | |||||||||
Rantoul, IL | Industrial | 813 | $ | 42.6 | 4Q 2013 | $ | 21.3 | |||||||
Bingen, WA | Industrial | 124 | $ | 18.9 | 2Q 2014 | $ | 0.9 | |||||||
Las Vegas, NV | Industrial | 180 | $ | 29.6 | 3Q 2014 | $ | 1.2 | |||||||
Albany, GA | Retail | 46 | $ | 7.5 | 4Q 2013 | $ | 1.8 | |||||||
1,163 | $ | 98.6 | $ | 25.2 |
2013 | 2012 | ||||||
Total base rent | $ | 141,617 | $ | 142,595 | |||
Tenant reimbursements | 14,757 | 14,225 | |||||
Property operating expenses | (29,603 | ) | (26,856 | ) | |||
Same-store NOI | $ | 126,771 | $ | 129,964 |
Three Months ended June 30, | Six Months ended June 30, | |||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||
FUNDS FROM OPERATIONS: | ||||||||||||||||||
Basic and Diluted: | ||||||||||||||||||
Net income attributable to Lexington Realty Trust shareholders | $ | 6,732 | $ | 4,510 | $ | 4,112 | $ | 8,121 | ||||||||||
Adjustments: | ||||||||||||||||||
Depreciation and amortization | 44,160 | 41,318 | 88,116 | 79,619 | ||||||||||||||
Impairment charges - real estate | 1,391 | 3,129 | 11,148 | 5,690 | ||||||||||||||
Noncontrolling interests - OP units | 837 | 78 | 1,084 | 438 | ||||||||||||||
Amortization of leasing commissions | 1,351 | 1,211 | 2,679 | 2,298 | ||||||||||||||
Joint venture and noncontrolling interest adjustment | 545 | 2,047 | 1,121 | 926 | ||||||||||||||
Preferred dividends - Series B & D | (617 | ) | (3,844 | ) | (3,543 | ) | (8,149 | ) | ||||||||||
Gains on sales of properties, net of tax | (11,881 | ) | (2,671 | ) | (11,881 | ) | (2,671 | ) | ||||||||||
Gain on sale - joint venture investment | — | (7,000 | ) | — | (7,000 | ) | ||||||||||||
Interest and amortization on 6.00% Convertible Guaranteed Notes | 828 | 2,326 | 1,892 | 4,653 | ||||||||||||||
Reported Company FFO | 43,346 | 41,104 | 94,728 | 83,925 | ||||||||||||||
Debt satisfaction charges (gains), net | 13,025 | 2 | 13,472 | (77 | ) | |||||||||||||
Litigation reserve | — | 2,800 | — | 2,800 | ||||||||||||||
Other | 76 | 332 | 195 | 322 | ||||||||||||||
Company FFO, as adjusted | $ | 56,447 | $ | 44,238 | $ | 108,395 | $ | 86,970 |
Per Share Amounts | ||||||||||||||||
Basic: | ||||||||||||||||
Reported Company FFO | $ | 0.19 | $ | 0.23 | $ | 0.44 | $ | 0.47 | ||||||||
Company FFO, as adjusted | $ | 0.25 | $ | 0.25 | $ | 0.50 | $ | 0.48 | ||||||||
Diluted: | ||||||||||||||||
Reported Company FFO | $ | 0.19 | $ | 0.23 | $ | 0.44 | $ | 0.47 | ||||||||
Company FFO, as adjusted | $ | 0.25 | $ | 0.24 | $ | 0.50 | $ | 0.48 |
Three Months ended June 30, | Six Months ended June 30, | ||||||||||||
Basic: | 2013 | 2012 | 2013 | 2012 | |||||||||
Weighted-average common shares outstanding - EPS basic | 211,619,288 | 154,558,380 | 200,487,623 | 154,353,707 | |||||||||
6.00% Convertible Guaranteed Notes | 5,937,510 | 16,409,546 | 6,712,713 | 16,409,546 | |||||||||
Non-vested share-based payment awards | 564,540 | 199,202 | 496,692 | 201,099 | |||||||||
Operating Partnership Units | 4,167,712 | 4,505,457 | 4,193,121 | 4,519,416 | |||||||||
Preferred Shares - Series C | 4,710,570 | 4,710,570 | 4,710,570 | 4,714,293 | |||||||||
Weighted-average common shares outstanding - basic | 226,999,620 | 180,383,155 | 216,600,719 | 180,198,061 | |||||||||
Diluted: | |||||||||||||
Weighted-average common shares outstanding - basic | 226,999,620 | 180,383,155 | 216,600,719 | 180,198,061 | |||||||||
Options - Incremental shares | 802,777 | 239,105 | 935,331 | 243,659 | |||||||||
Weighted-average common shares outstanding - diluted | 227,802,397 | 180,622,260 | 217,536,050 | 180,441,720 |
ITEM 1. | Legal Proceedings. |
ITEM 1A. | Risk Factors. |
ITEM 2. | Unregistered Sales of Equity Securities and Use of Proceeds. |
Issuer Purchases of Equity Securities | |||||||||||||
Period | (a) Total number of Shares/ Units Purchased | (b) Average Price Paid Per Share/ Units | (c) Total Number of Shares/Units Purchased as Part of Publicly Announced Plans or Programs(1) | (d) Maximum Number of Shares/Units That May Yet Be Purchased Under the Plans or Programs(1) | |||||||||
April 1 - 30, 2013 | — | $ | — | — | 1,056,731 | ||||||||
May 1 - 31, 2013 | — | $ | — | — | 1,056,731 | ||||||||
June 1 - 30, 2013 | — | $ | — | — | 1,056,731 | ||||||||
Second quarter 2013 | — | $ | — | — | 1,056,731 |
(1) | Share repurchase plan most recently announced on December 17, 2007, which has no expiration date. |
ITEM 3. | Defaults Upon Senior Securities - not applicable. |
ITEM 4. | Mine Safety Disclosures - not applicable. |
ITEM 5. | Other Information - not applicable. |
ITEM 6. | Exhibits. |
Exhibit No. | Description | |||
3.1 | — | Articles of Merger and Amended and Restated Declaration of Trust of the Company, dated December 31, 2006 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed January 8, 2007 (the “01/08/07 8-K”))(1) | ||
3.2 | — | Articles Supplementary Relating to the 7.55% Series D Cumulative Redeemable Preferred Stock, par value $.0001 per share (filed as Exhibit 3.3 to the Company’s Registration Statement on Form 8A filed February 14, 2007 (the “02/14/07 Registration Statement”))(1) | ||
3.3 | — | Amended and Restated By-laws of the Company (filed as Exhibit 3.2 to the 01/08/07 8-K)(1) | ||
3.4 | — | First Amendment to Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed November 20, 2009)(1) | ||
3.5 | — | Fifth Amended and Restated Agreement of Limited Partnership of Lepercq Corporate Income Fund L.P. (“LCIF”), dated as of December 31, 1996, as supplemented (the “LCIF Partnership Agreement”) (filed as Exhibit 3.3 to the Company’s Registration Statement on Form S-3/A filed September 10, 1999 (the “09/10/99 Registration Statement”))(1) | ||
3.6 | — | Amendment No. 1 to the LCIF Partnership Agreement dated as of December 31, 2000 (filed as Exhibit 3.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, filed February 26, 2004 (the “2003 10-K”))(1) | ||
3.7 | — | First Amendment to the LCIF Partnership Agreement effective as of June 19, 2003 (filed as Exhibit 3.12 to the 2003 10-K)(1) | ||
3.8 | — | Second Amendment to the LCIF Partnership Agreement effective as of June 30, 2003 (filed as Exhibit 3.13 to the 2003 10-K)(1) | ||
3.9 | — | Third Amendment to the LCIF Partnership Agreement effective as of December 31, 2003 (filed as Exhibit 3.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, filed on March 16, 2005 (the “2004 10-K”))(1) | ||
3.10 | — | Fourth Amendment to the LCIF Partnership Agreement effective as of October 28, 2004 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 4, 2004)(1) | ||
3.11 | — | Fifth Amendment to the LCIF Partnership Agreement effective as of December 8, 2004 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 14, 2004 (the “12/14/04 8-K”))(1) | ||
3.12 | — | Sixth Amendment to the LCIF Partnership Agreement effective as of June 30, 2003 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed January 3, 2005 (the “01/03/05 8-K”))(1) | ||
3.13 | — | Seventh Amendment to the LCIF Partnership Agreement (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 3, 2005)(1) | ||
3.14 | — | Eighth Amendment to the LCIF Partnership Agreement effective as of March 26, 2009 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed April 27, 2009 (the “4/27/09 8-K”)(1) | ||
3.15 | — | Second Amended and Restated Agreement of Limited Partnership of Lepercq Corporate Income Fund II L.P. (“LCIF II”), dated as of August 27, 1998 the (“LCIF II Partnership Agreement”) (filed as Exhibit 3.4 to the 09/10/99 Registration Statement)(1) | ||
3.16 | — | First Amendment to the LCIF II Partnership Agreement effective as of June 19, 2003 (filed as Exhibit 3.14 to the 2003 10-K)(1) | ||
3.17 | — | Second Amendment to the LCIF II Partnership Agreement effective as of June 30, 2003 (filed as Exhibit 3.15 to the 2003 10-K)(1) | ||
3.18 | — | Third Amendment to the LCIF II Partnership Agreement effective as of December 8, 2004 (filed as Exhibit 10.2 to the 12/14/04 8-K)(1) | ||
3.19 | — | Fourth Amendment to the LCIF II Partnership Agreement effective as of January 3, 2005 (filed as Exhibit 10.2 to the 01/03/05 8-K)(1) | ||
3.20 | — | Fifth Amendment to the LCIF II Partnership Agreement effective as of July 23, 2006 (filed as Exhibit 99.5 to the Company’s Current Report on Form 8-K filed July 24, 2006)(1) | ||
3.21 | — | Sixth Amendment to the LCIF II Partnership Agreement effective as of December 20, 2006 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 22, 2006)(1) | ||
3.22 | — | Seventh Amendment to the LCIF II Partnership Agreement effective as of March 26, 2009 (filed as Exhibit 10.2 to the 4/27/09 8-K)(1) | ||
4.1 | — | Specimen of Common Shares Certificate of the Company (filed as Exhibit 4.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2006)(1) |
4.2 | — | Form of 6.50% Series C Cumulative Convertible Preferred Stock certificate (filed as Exhibit 4.1 to the Company’s Registration Statement on Form 8A filed December 8, 2004)(1) | ||
4.3 | — | Form of 7.55% Series D Cumulative Redeemable Preferred Stock certificate (filed as Exhibit 4.1 to the 02/14/07 Registration Statement)(1) | ||
4.4 | — | Indenture, dated as of January 29, 2007, among the Company (as successor by merger), the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 29, 2007 (the “01/29/07 8-K”))(1) | ||
4.5 | — | Amended and Restated Trust Agreement, dated March 21, 2007, among the Company, The Bank of New York Trust Company, National Association, The Bank of New York (Delaware), the Administrative Trustees (as named therein) and the several holders of the Preferred Securities from time to time (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed March 27, 2007 (the “03/27/2007 8-K”))(1) | ||
4.6 | — | Junior Subordinated Indenture, dated as of March 21, 2007, between Lexington Realty Trust and The Bank of New York Trust Company, National Association (filed as Exhibit 4.2 to the 03/27/07 8-K)(1) | ||
4.7 | — | Fourth Supplemental Indenture, dated as of December 31, 2008, among the Company, the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 2, 2009)(1) | ||
4.8 | — | Fifth Supplemental Indenture, dated as of June 9, 2009, among the Company (as successor to the MLP), the other guarantors named therein and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed June 15, 2009)(1) | ||
4.9 | — | Sixth Supplemental Indenture, dated as of January 26, 2010 among the Company, the guarantors named therein and U.S. Bank National Association, as trustee, including the Form of 6.00% Convertible Guaranteed Notes due 2030 (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 26, 2010)(1) | ||
4.10 | — | Seventh Supplemental Indenture, dated as of September 28, 2012, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed October 3, 2012)(1) | ||
4.11 | — | Eight Supplemental Indenture, dated as of February 13, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed February 13, 2013 (the “02/13/13 8-K”))(1) | ||
4.12 | — | Ninth Supplemental Indenture, dated as of May 6, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 8, 2013)(1) | ||
4.13 | — | Indenture, dated as of June 10, 2013, among the Company, the subsidiary guarantors named therein, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed June 13, 2013 (the "06/13/2013 8-K"))(1) | ||
4.14 | — | Registration Rights Agreement, dated as of June 10, 2013, among the Company, the subsidiary guarantors named therein, on the one hand, and Wells Fargo Securities, LLC and J.P. Morgan Securities LLC, as representatives of the several initial purchasers, on the other hand (filed as Exhibit 4.2 to the 06/13/2013 8-K)(1) | ||
4.15 | — | Tenth Supplemental Indenture, dated as of June 13, 2013, among the Company, the subsidiary guarantors named therein, and U.S. Bank National Association, as trustee (filed as Exhibit 4.3 to the 06/13/2013 8-K)(1) | ||
31.1 | — | Certification of Chief Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2) | ||
31.2 | — | Certification of Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2) | ||
32.1 | — | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3) | ||
32.2 | — | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3) | ||
101.INS | — | XBRL Instance Document (2, 5) | ||
101.SCH | — | XBRL Taxonomy Extension Schema (2, 5) | ||
101.CAL | — | XBRL Taxonomy Extension Calculation Linkbase (2, 5) | ||
101.DEF | — | XBRL Taxonomy Extension Definition Linkbase Document (2, 5) | ||
101.LAB | — | XBRL Taxonomy Extension Label Linkbase Document (2, 5) | ||
101.PRE | — | XBRL Taxonomy Extension Presentation Linkbase Document (2, 5) |
(1) | Incorporated by reference. |
(2) | Filed herewith. |
(3) | This exhibit shall not be deemed "filed" for purposes of Section 11 or 12 of the Securities Act of 1933, as amended (the "Securities Act"), or Section 18 of the Securities Exchanges Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of those sections, and shall not be part of any registration statement to which it may relate, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing or document. |
(4) | Management contract or compensatory plan or arrangement. |
(5) | The following materials are formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at June 30, 2013 and December 31, 2012; (ii) the Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2013 and 2012; (iii) the Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) for the three and six months ended June 30, 2013 and 2012; (iv) the Unaudited Condensed Consolidated Statements of Changes in Equity for the six months ended June 30, 2013 and 2012; (v) the Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2013 and 2012; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements, detailed tagged. |
Lexington Realty Trust | |||
Date: | August 8, 2013 | By: | /s/ T. Wilson Eglin |
T. Wilson Eglin | |||
Chief Executive Officer and President | |||
(principal executive officer) | |||
Date: | August 8, 2013 | By: | /s/ Patrick Carroll |
Patrick Carroll | |||
Chief Financial Officer, Executive Vice President and Treasurer | |||
(principal financial officer and principal accounting officer) |
1. | I have reviewed this report on Form 10-Q of Lexington Realty Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
August 8, 2013 |
/s/ T. Wilson Eglin |
T. Wilson Eglin Chief Executive Officer |
1. | I have reviewed this report on Form 10-Q of Lexington Realty Trust; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. |
August 8, 2013 |
/s/ Patrick Carroll |
Patrick Carroll |
Chief Financial Officer |
/s/ T. Wilson Eglin |
T. Wilson Eglin Chief Executive Officer |
August 8, 2013 |
/s/ Patrick Carroll |
Patrick Carroll |
Chief Financial Officer |
August 8, 2013 |
Concentration of Risk
|
6 Months Ended |
---|---|
Jun. 30, 2013
|
|
Concentration of Risk [Abstract] | |
Concentration of Risk | Concentration of Risk The Company seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the six months ended June 30, 2013 and 2012, no single tenant represented greater than 10% of rental revenues. Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions. |
Investments in Real Estate and Real Estate Under Construction
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Jun. 30, 2013
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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 six months ended June 30, 2013:
The Company recognized aggregate acquisition expenses of $250 and $380 for the six months ended June 30, 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 June 30, 2013, the Company had the following development arrangements outstanding:
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 June 30, 2013 and December 31, 2012, the Company's aggregate investment in development arrangements, excluding the Las Vegas, Nevada property, was $23,099 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 $1,116 and $1,046 during the six months ended June 30, 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 $21,505 and a net loss of $(3,542) from NLS properties during the six months ended June 30, 2013. The Company recognized $9,306 of equity in earnings relating to NLS during the six months ended June 30, 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:
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Earnings Per Share (Tables)
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Jun. 30, 2013
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share Reconciliation [Table Text Block] | The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and six months ended June 30, 2013 and 2012:
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Equity
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Jun. 30, 2013
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Shareholders' Equity. During the six months ended June 30, 2013 and 2012, the Company issued 690,873 and 563,639 common shares, respectively, under its direct share purchase plan, raising net proceeds of $7,466 and $4,291, respectively. During the six months ended June 30, 2013, the Company implemented an At-The-Market offering program under which the Company may issue up to $100,000 in common shares over the term of this program. The Company issued 3,409,927 common shares under this program during the six months ended June 30, 2013 and generated aggregate gross proceeds of $36,884. In addition, in March 2013, the Company issued 23,000,000 common shares in a public offering raising gross proceeds of $258,336. The net proceeds from these offerings of $293,934 were used to repay borrowings under the Company's unsecured revolving credit facility and the balance for general corporate purposes, including acquisitions. The Company issued 1,325,000 non-vested common shares to certain officers with a grant date fair value of $14,098 during the six months ended June 30, 2013. The non-vested common shares are subject to long-term retention non-vested share agreements and vest from 2018 to 2022 in accordance with the agreements. In addition, the Company issued 37,500 fully vested common shares to the non-management members of the Company's Board of Trustees with a grant date fair value of $399. During the six months ended June 30, 2013 and 2012, the Company repurchased/redeemed and retired the following shares of its preferred stock:
(1) Includes accrued and unpaid dividends. (2) Represents the difference between the redemption/repurchase cost and historical GAAP cost. Accordingly, net income was adjusted for the deemed dividends/deemed negative dividends to arrive at net loss attributable to common shareholders. Accumulated other comprehensive income (loss) as of June 30, 2013 and December 31, 2012 represented $3,912 and $(6,224), respectively, of unrealized gain (loss) on interest rate swaps, net. Changes in Accumulated Other Comprehensive Income (Loss)
Noncontrolling Interests. In conjunction with several of the Company's acquisitions in prior years, sellers were issued OP units as a form of consideration. All OP units, other than OP units owned by the Company, are redeemable for common shares at certain times, at the option of the holders, and are generally not otherwise mandatorily redeemable by the Company. The OP units are classified as a component of permanent equity as the Company has determined that the OP units are not redeemable securities as defined by GAAP. Each OP unit is currently redeemable for approximately 1.13 common shares, subject to future adjustments. During the six months ended June 30, 2013 and 2012, 164,596 and 66,652 common shares, respectively, were issued by the Company, in connection with OP unit redemptions, for an aggregate value of $861 and $353, respectively. As of June 30, 2013, there were approximately 3,651,000 OP units outstanding other than OP units owned by the Company. All OP units receive distributions in accordance with their respective partnership agreements. To the extent that the Company's dividend per common share is less than the stated distribution per OP unit per the applicable partnership agreement, the distributions per OP unit are reduced by the percentage reduction in the Company's dividend per common share. No OP units have a liquidation preference. The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests:
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Equity Stock Redeemed and Retired (Details) (USD $)
In Thousands, except Share data, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||||||||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Class of Stock [Line Items] | ||||||||||
Discount (Deemed negative dividend) | $ 0 | $ 0 | $ 0 | $ 229 | ||||||
8.05% Series B Cumulative Redeemable Preferred Stock [Member]
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Class of Stock [Line Items] | ||||||||||
Shares redeemed and retired | 0 | 2,740,874 | ||||||||
Redemption and Repurchase Costs | 0 | [1] | 69,459 | [1] | ||||||
Deemed dividend | 0 | 2,346 | 0 | [2] | 2,346 | [2] | ||||
6.50% Series C Cumulative Convertible Preferred Stock [Member]
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Class of Stock [Line Items] | ||||||||||
Shares repurchased and retired | 0 | 34,800 | ||||||||
Redemption and Repurchase Costs | 0 | 1,462 | ||||||||
Discount (Deemed negative dividend) | 0 | [2] | (229) | [2] | ||||||
7.55% Series D Cumulative Redeemable Preferred Stock [Member]
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Class of Stock [Line Items] | ||||||||||
Shares redeemed and retired | 6,200,000 | 0 | ||||||||
Redemption and Repurchase Costs | 155,621 | [1] | 0 | [1] | ||||||
Deemed dividend | $ 5,230 | $ 0 | $ 5,230 | [2] | $ 0 | [2] | ||||
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Discontinued Operations and Real Estate Impairment (Details) (USD $)
In Thousands, unless otherwise specified |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2013
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Jun. 30, 2012
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Jun. 30, 2013
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Jun. 30, 2012
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Real Estate Properties [Line Items] | ||||
Gains (Losses) on Sales of Investment Real Estate | $ 12,806 | $ 2,671 | ||
Debt satisfaction charges, net | (11,726) | (2) | (22,722) | (1,651) |
Total gross revenues | 876 | 4,833 | 2,408 | 10,151 |
Pre-tax income (loss) | 10,069 | (3,015) | 14,993 | (3,872) |
Discontinued Operation Asset Impairment Charges | 1,391 | 3,129 | 8,735 | 5,690 |
Impairment of Real Estate | 2,413 | |||
Sold Properties [Member]
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Real Estate Properties [Line Items] | ||||
Aggregate Gross Disposition Price | 48,466 | 74,815 | ||
Transferred Property [Member]
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Real Estate Properties [Line Items] | ||||
Transfer of Real Estate | 49,509 | 7,119 | ||
Debt satisfaction charges, net | $ 9,250 | $ 1,728 |
Loans Receivable (Tables)
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Jun. 30, 2013
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Loans Receivable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | The following is a summary of our loans receivable as of June 30, 2013 and December 31, 2012:
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Discontinued Operations and Real Estate Impairment (Tables)
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6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Real Estate and Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Disposal Groups, Including Discontinued Operations, Income Statement, Balance Sheet and Additional Disclosures [Table Text Block] | The following presents the operating results for the properties sold for the applicable periods:
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Concentration of Risk (Details)
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6 Months Ended | |
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Jun. 30, 2013
tenants
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Jun. 30, 2012
tenants
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Concentration Risk [Line Items] | ||
Number of tenents representing more than 10% of rental revenue | 0 | 0 |
Maximum [Member] | Tenant Concentration Risk [Member]
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Concentration Risk [Line Items] | ||
Concentration Risk, Percentage | 10.00% | 10.00% |
Investments in Real Estate and Real Estate Under Construction Summary of acquisitions and build-to-suit transactions (Details) (USD $)
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6 Months Ended | ||
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Jun. 30, 2013
sqft
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Jun. 30, 2012
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Dec. 31, 2012
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Investments in Real Estate and Real Estate Under Construction [Line Items] | |||
Initial Cost Basis | $ 166,468,000 | ||
Land | 20,055,000 | ||
Building and Improvements | 132,401,000 | ||
Lease in-place Value | 14,012,000 | ||
Aggregate aquisition expenses | 250,000 | 380,000 | |
Square Feet | 1,163,000 | ||
Expected Maximum Commitment/Contribution | 98,600,000 | ||
Development in Process | 23,099,000 | 65,122,000 | |
Long Island City New York [Member]
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Investments in Real Estate and Real Estate Under Construction [Line Items] | |||
Real Estate Investments, Invested Capital Threshold for Distribution | 25,000,000 | ||
Industrial Property [Member] | Long Island City New York [Member]
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Investments in Real Estate and Real Estate Under Construction [Line Items] | |||
Initial Cost Basis | 42,124,000 | ||
Land | 0 | ||
Building and Improvements | 42,124,000 | ||
Lease in-place Value | 0 | ||
Industrial Property [Member] | Houston, Texas [Member]
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Investments in Real Estate and Real Estate Under Construction [Line Items] | |||
Initial Cost Basis | 81,400,000 | ||
Land | 15,055,000 | ||
Building and Improvements | 57,949,000 | ||
Lease in-place Value | 8,396,000 | ||
Office Property [Member] | Denver Colorado [Member]
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Investments in Real Estate and Real Estate Under Construction [Line Items] | |||
Initial Cost Basis | 34,547,000 | ||
Land | 2,207,000 | ||
Building and Improvements | 26,724,000 | ||
Lease in-place Value | 5,616,000 | ||
Business Combination, Additional Consideration Transferred | 3,825,000 | ||
Retail Property [Member] | Tuscaloosa Alabama [Member]
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Investments in Real Estate and Real Estate Under Construction [Line Items] | |||
Initial Cost Basis | 8,397,000 | ||
Land | 2,793,000 | ||
Building and Improvements | 5,604,000 | ||
Lease in-place Value | 0 | ||
Payments for Leasing Costs | $ 323,000 | ||
Up to $25,000 [Member] | Long Island City New York [Member]
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Investments in Real Estate and Real Estate Under Construction [Line Items] | |||
Real Estate Investments, Distribution Percentage | 6.30% | ||
In excess of $25,000 [Member] | Long Island City New York [Member]
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Investments in Real Estate and Real Estate Under Construction [Line Items] | |||
Real Estate Investments, Distribution Percentage | 11.00% | ||
Any Excess Return [Member] | Long Island City New York [Member]
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Investments in Real Estate and Real Estate Under Construction [Line Items] | |||
Real Estate Investments, Distribution Percentage | 50.00% |
Fair Value Measurements (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
Dec. 31, 2012
|
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Fair Value, Measurements, Recurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate swap asset | $ 3,912 | |||||
Interest rate swap liability | (6,556) | |||||
Fair Value, Measurements, Recurring [Member] | Fair Value Measurements Using Level 1 [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate swap asset | 0 | |||||
Interest rate swap liability | 0 | |||||
Fair Value, Measurements, Recurring [Member] | Fair Value Measurements Using Level 2 [Member]
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||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate swap asset | 3,912 | |||||
Interest rate swap liability | (6,556) | |||||
Fair Value, Measurements, Recurring [Member] | Fair Value Measurements Using Level 3 [Member]
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||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Interest rate swap asset | 0 | |||||
Interest rate swap liability | 0 | |||||
Fair Value, Measurements, Nonrecurring [Member] | Estimate of Fair Value, Fair Value Disclosure [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impaired real estate assets | 4,277 | [1] | 3,327 | [1] | ||
Fair Value, Measurements, Nonrecurring [Member] | Fair Value Measurements Using Level 1 [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impaired real estate assets | 0 | [1] | 0 | [1] | ||
Fair Value, Measurements, Nonrecurring [Member] | Fair Value Measurements Using Level 2 [Member]
|
||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impaired real estate assets | 0 | [1] | 0 | [1] | ||
Fair Value, Measurements, Nonrecurring [Member] | Fair Value Measurements Using Level 3 [Member]
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||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||||
Impaired real estate assets | $ 4,277 | [1] | $ 3,327 | [1] | ||
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Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 30, 2013
|
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Base Building Improvements [Member]
|
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Commitments and Contingencies [Line Items] | |
Other Commitment | $ 3,694 |
Tenant Improvement [Member]
|
|
Commitments and Contingencies [Line Items] | |
Other Commitment | $ 596 |
Equity (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock Redemptions and Retirements | During the six months ended June 30, 2013 and 2012, the Company repurchased/redeemed and retired the following shares of its preferred stock:
(1) Includes accrued and unpaid dividends. (2) Represents the difference between the redemption/repurchase cost and historical GAAP cost. |
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Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block] | Accumulated other comprehensive income (loss) as of June 30, 2013 and December 31, 2012 represented $3,912 and $(6,224), respectively, of unrealized gain (loss) on interest rate swaps, net. Changes in Accumulated Other Comprehensive Income (Loss)
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Effects of Changes in the Company's Ownership Interests in Noncontrolling Interests [Table Text Block] | The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests:
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Debt (Details) (USD $)
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6 Months Ended | 132 Months Ended | 1 Months Ended | 1 Months Ended | 6 Months Ended | 132 Months Ended | 6 Months Ended | 0 Months Ended | 0 Months Ended | 6 Months Ended | 6 Months Ended | 6 Months Ended | 0 Months Ended | 6 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||
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Jun. 30, 2013
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Dec. 31, 2020
|
Dec. 31, 2012
|
Jun. 30, 2013
Line of Credit [Member]
|
Dec. 31, 2012
Secured Term Loan [Member]
|
Jan. 31, 2012
Five Percent Exchangeable Guaranteed Note [Member]
|
Dec. 31, 2012
Five Percent Exchangeable Guaranteed Note [Member]
|
Dec. 31, 2007
Five Percent Exchangeable Guaranteed Note [Member]
|
Jan. 31, 2012
Secured Term Loan 1 [Member]
|
Jan. 31, 2012
Secured Term Loan 2 [Member]
|
Jun. 30, 2013
6% Convertible Guaranteed Note [Member]
|
Dec. 31, 2020
6% Convertible Guaranteed Note [Member]
|
Dec. 31, 2012
6% Convertible Guaranteed Note [Member]
|
Dec. 31, 2010
6% Convertible Guaranteed Note [Member]
|
Jun. 30, 2013
Other Debt Obligations [Member]
|
Jun. 30, 2012
Other Debt Obligations [Member]
|
Jun. 30, 2013
Minimum [Member]
|
Feb. 12, 2013
Minimum [Member]
Unsecured Revolving Credit Facility [Member]
|
Feb. 12, 2013
Minimum [Member]
Unsecured Term Loan [Member]
|
Jun. 30, 2013
Maximum [Member]
|
Feb. 12, 2013
Maximum [Member]
Unsecured Revolving Credit Facility [Member]
|
Feb. 12, 2013
Maximum [Member]
Unsecured Term Loan [Member]
|
Jun. 30, 2013
Senior Notes Due 2023 [Member]
Senior Notes [Member]
|
Feb. 12, 2013
Secured Revolving Credit Facility, Expiring January 2015 [Member]
Secured Revolving Credit Facility [Member]
|
Jun. 30, 2013
Unsecured Revolving Credit Facility, Expiring February 2018 [Member]
|
Jun. 30, 2013
Unsecured Revolving Credit Facility, Expiring February 2018 [Member]
Unsecured Revolving Credit Facility [Member]
|
Feb. 12, 2013
Unsecured Revolving Credit Facility, Expiring February 2018 [Member]
Unsecured Revolving Credit Facility [Member]
|
Jun. 30, 2013
Unsecured Revolving Credit Facility, Expiring February 2018 [Member]
Minimum [Member]
|
Jun. 30, 2013
Unsecured Revolving Credit Facility, Expiring February 2018 [Member]
Maximum [Member]
|
Jun. 30, 2013
Unsecured Revolving Credit Facility, Expiring January 2019 [Member]
Secured Term Loan [Member]
|
Jun. 30, 2013
Unsecured Revolving Credit Facility, Expiring January 2019 [Member]
Minimum [Member]
Secured Term Loan [Member]
|
Jun. 30, 2013
Unsecured Revolving Credit Facility, Expiring January 2019 [Member]
Maximum [Member]
Secured Term Loan [Member]
|
Jun. 30, 2013
Term Loan Facility from Key Bank [Member]
|
Feb. 12, 2013
Term Loan Facility from Key Bank [Member]
Unsecured Term Loan [Member]
|
Jun. 30, 2013
Term Loan Facility from Key Bank [Member]
Minimum [Member]
|
Jun. 30, 2013
Term Loan Facility from Key Bank [Member]
Maximum [Member]
|
Jun. 30, 2013
Convertible Debt [Member]
|
Dec. 31, 2012
Condition One [Member]
Secured Term Loan [Member]
|
Dec. 31, 2012
Condition Four [Member]
Secured Term Loan [Member]
|
Jun. 30, 2013
Interest Rate Contract [Member]
|
Jun. 30, 2013
Interest Rate Swap [Member]
|
|
Debt Instrument [Line Items] | |||||||||||||||||||||||||||||||||||||||||
Mortgages and notes payable | $ 1,043,934,000 | $ 1,415,961,000 | |||||||||||||||||||||||||||||||||||||||
Effective interest rate | 8.10% | 8.10% | 3.60% | 8.50% | |||||||||||||||||||||||||||||||||||||
Debt, Weighted Average Interest Rate | 5.40% | 5.60% | |||||||||||||||||||||||||||||||||||||||
Debt Instrument, Interest Rate, Stated Percentage | 5.45% | 6.00% | 4.25% | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, Percentage of Issuance Price | 99.026% | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Unamortized Discount (Premium), Net | 2,480,000 | 5,769,000 | 2,435,000 | ||||||||||||||||||||||||||||||||||||||
Debt Instrument, Face Amount | 255,000,000 | 450,000,000 | 25,000,000 | 35,551,000 | 41,146,000 | 83,896,000 | 115,000,000 | 250,000,000 | 300,000,000 | 400,000,000 | 300,000,000 | 250,000,000 | |||||||||||||||||||||||||||||
Letters of Credit Outstanding, Amount | 7,644,000 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable Rate | 1.50% | 1.45% | 2.05% | 2.00% | 1.15% | 0.95% | 1.725% | 1.50% | 2.25% | 1.10% | 2.10% | 2.00% | 2.85% | ||||||||||||||||||||||||||||
Debt Instrument, Basis Spread on Variable at the End of the Period | 1.75% | 1.35% | |||||||||||||||||||||||||||||||||||||||
Line of Credit Facility, Remaining Borrowing Capacity | 392,356,000 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Term | 5 years | ||||||||||||||||||||||||||||||||||||||||
Derivative, Fixed Interest Rate | 0.73% | ||||||||||||||||||||||||||||||||||||||||
Long-term Debt, Gross | 64,000,000 | ||||||||||||||||||||||||||||||||||||||||
Derivative, Average Variable Interest Rate | 1.42% | ||||||||||||||||||||||||||||||||||||||||
Derivative, Notional Amount | 255,000,000 | ||||||||||||||||||||||||||||||||||||||||
Gains (Losses) on Extinguishment of Debt From Continuing Operations | 44,000 | 1,578,000 | |||||||||||||||||||||||||||||||||||||||
Debt Instrument, Maturity Date | Jan. 31, 2030 | ||||||||||||||||||||||||||||||||||||||||
Percent Of Notes Required To Be Repurchased At The Option Of The Holders On Set Dates | 100.00% | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Ratio | 146.2412 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Convertible, Conversion Price (dollars per share) | $ 6.84 | ||||||||||||||||||||||||||||||||||||||||
Convertible notes payable | 42,750,000 | ||||||||||||||||||||||||||||||||||||||||
Debt Conversion, Converted Instrument, Shares Issued | 6,167,111 | ||||||||||||||||||||||||||||||||||||||||
Covertible Debt Cash Payments | 2,663,000 | ||||||||||||||||||||||||||||||||||||||||
Debt Satisfaction Charges | 10,633,000 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Prepaid Amount | 387,850,000 | ||||||||||||||||||||||||||||||||||||||||
Debt Instrument, Repurchased and Satisfied Amount | 62,150,000 | ||||||||||||||||||||||||||||||||||||||||
Extinguishment of Debt, Gain (Loss), Net of Tax | $ 12,089,000 | $ 29,000 |
Investments in Real Estate and Real Estate Under Construction (Tables)
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
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Investments in Real Estate and Real Estate Under Construction [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Properties [Table Text Block] | The Company, through property owner subsidiaries, completed the following acquisition and build-to-suit transactions during the six months ended June 30, 2013:
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Schedule of Acquisition Development and Construction Arrangements Outstanding [Table Text Block] | As of June 30, 2013, the Company had the following development arrangements outstanding:
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Business Acquisition, Pro Forma Information [Table Text Block] | 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:
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CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (Unaudited) (USD $)
In Thousands, unless otherwise specified |
Total
|
Preferred Shares [Member]
|
Common Shares [Member]
|
Additional Paid-in-Capital [Member]
|
Accumulated Distributions in Excess of Net Income [Member]
|
Accumulated Other Comprehensive Income (Loss) [Member]
|
Non-controlling Interests [Member]
|
---|---|---|---|---|---|---|---|
Balance at Dec. 31, 2011 | $ 1,170,203 | $ 311,673 | $ 15 | $ 2,010,850 | $ (1,212,630) | $ 1,938 | $ 58,357 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Redemption of noncontrolling OP units for common shares | 0 | 0 | 0 | 353 | 0 | 0 | (353) |
Repurchase Of Preferred Shares | (70,000) | (67,883) | 0 | 0 | (2,117) | 0 | 0 |
Issuance of common shares and deferred compensation amortization, net | 6,361 | 0 | 1 | 6,360 | 0 | 0 | 0 |
Contributions from noncontrolling interests | 889 | 0 | 0 | 0 | 0 | 0 | 889 |
Dividends/distributions | (83,698) | 0 | 0 | 0 | (50,164) | 0 | (33,534) |
Net income | 11,104 | 0 | 0 | 0 | 8,121 | 0 | 2,983 |
Other comprehensive income (loss) | (5,559) | 0 | 0 | 0 | 0 | (5,559) | 0 |
Balance at Jun. 30, 2012 | 1,029,300 | 243,790 | 16 | 2,017,563 | (1,256,790) | (3,621) | 28,342 |
Balance at Dec. 31, 2012 | 1,333,165 | 243,790 | 18 | 2,212,949 | (1,143,803) | (6,224) | 26,435 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Redemption of noncontrolling OP units for common shares | 0 | 0 | 0 | 861 | 0 | 0 | (861) |
Repurchase Of Preferred Shares | (155,004) | (149,774) | 0 | 0 | (5,230) | 0 | 0 |
Issuance of common shares upon conversion of convertible notes | 47,128 | 0 | 0 | 47,128 | 0 | 0 | 0 |
Issuance of common shares and deferred compensation amortization, net | 307,263 | 0 | 3 | 307,260 | 0 | 0 | 0 |
Dividends/distributions | (72,850) | 0 | 0 | 0 | (70,872) | 0 | (1,978) |
Net income | 5,709 | 0 | 0 | 0 | 4,112 | 0 | 1,597 |
Other comprehensive income (loss) | 10,136 | 0 | 0 | 0 | 0 | 10,136 | 0 |
Balance at Jun. 30, 2013 | $ 1,475,547 | $ 94,016 | $ 21 | $ 2,568,198 | $ (1,215,793) | $ 3,912 | $ 25,193 |
The Company and Financial Statement Presentation
|
6 Months Ended |
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Jun. 30, 2013
|
|
The Company and Financial Statement Presentation [Abstract] | |
The Company and Financial Statement Presentation | The Company and Financial Statement Presentation Lexington Realty Trust (the “Company”) is a self-managed and self-administered Maryland statutory real estate investment trust (“REIT”) that invests in and acquires, owns, finances and manages a geographically diversified portfolio of predominately single-tenant office, industrial and retail properties. The Company also provides investment advisory and asset management services to investors in the single-tenant area. As of June 30, 2013, the Company had equity ownership interests in approximately 215 consolidated properties in 41 states. A majority of the real properties in which the Company has an equity ownership interest are generally subject to net or similar leases where the tenant bears all or substantially all of the cost, including cost increases, for real estate taxes, insurance, utilities and ordinary maintenance of the property. However, certain leases provide that the landlord is responsible for certain or all operating expenses. In addition, we acquire, originate and hold investments in loan assets related to single-tenant real estate. The Company believes it has qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain activities in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS are subject to federal income taxes on the income from these activities. The Company conducts its operations either directly or indirectly through (1) property owner subsidiaries and lender subsidiaries, (2) operating partnerships in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests (“OP units”), (3) a wholly-owned TRS, or (4) investments in joint ventures. Property owner subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan agreements secured by properties in which the Company has an investment and lender subsidiaries are lenders under loan agreements where the Company made an investment in a loan asset, but in all cases are separate and distinct legal entities. Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). The financial statements reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates its wholly-owned subsidiaries and its partnerships and joint ventures which it controls (1) through voting rights or similar rights or (2) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not the primary beneficiary are accounted for under appropriate GAAP. The financial statements contained herein have been prepared by the Company in accordance with GAAP for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of the periods presented. The results of operations for the three and six months ended June 30, 2013 and 2012, are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Form 10-K for the year ended December 31, 2012 filed with the SEC on February 25, 2013 (“Annual Report”). Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. The current economic environment has increased the degree of uncertainty inherent in these estimates and assumptions. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets, loans receivable and equity method investments, the valuation of derivative financial instruments and the useful lives of long-lived assets. Actual results could differ materially from those estimates. Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board Accounting Standards Codification Topic 820, Fair Value Measurements and Disclosures, as amended (“Topic 820”), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements. Acquisition, Development and Construction Arrangements. The Company evaluates loans receivable where the Company participates in residual profits through loan provisions or other contracts to ascertain whether the Company has the same risks and rewards as an owner or a joint venture partner. Where the Company concludes that such arrangements are more appropriately treated as an investment in real estate, the Company reflects such loan receivable as an equity investment in real estate under construction in the unaudited condensed consolidated balance sheets. In these cases, no interest income is recorded on the loan receivable and the Company records capitalized interest during the construction period. In arrangements where the Company engages a developer to construct a property or provides funds to a tenant to develop a property, the Company will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period. Reclassifications. Certain amounts included in the 2012 unaudited condensed consolidated financial statements have been reclassified, primarily relating to discontinued operations, to conform to the 2013 presentation. Recently Issued Accounting Guidance. In February 2013, the Financial Accounting Standards Board issued Accounting Standards Update No. 2013-02: Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income, to improve the transparency of reporting the reclassifications of significant amounts out of accumulated other comprehensive income. This guidance requires entities to present the effects on the line items of net income of significant reclasses from accumulated other comprehensive income, either where net income is presented or in the notes, as well as cross-reference to other disclosures currently required under GAAP for other reclassification items (that are not required under GAAP) to be reclassified directly to net income in their entirety in the same reporting period. The new disclosure requirements are effective for annual reporting periods beginning after December 15, 2012. The new disclosures are required for both interim and annual reporting. The implementation of this guidance did not have an impact on the Company's financial position, results of operations or cash flows. |
Discontinued Operations and Real Estate Impairment
|
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2013
|
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Real Estate and Discontinued Operations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate and Discontinued Operations | Discontinued Operations and Real Estate Impairment During the six months ended June 30, 2013, the Company disposed of its interests in certain properties to unrelated third parties for an aggregate gross disposition price of $48,466. In addition, the Company conveyed certain properties along with the respective escrow deposits in satisfaction of an aggregate $49,509 of non-recourse secured mortgage loans and recognized aggregate net gains on debt satisfaction of $9,250. These dispositions resulted in an aggregate gain on sales of properties of $12,806. During the six months ended June 30, 2012, the Company disposed of its interests in certain properties to unrelated third parties for an aggregate gross disposition price of $74,815 and recognized an aggregate gain on sales of properties of $2,671. In addition, the Company conveyed a property in satisfaction of the $7,119 non-recourse secured mortgage loan and recognized a net gain on debt satisfaction of $1,728. As of June 30, 2013 and 2012, the Company had no properties classified as held for sale. The following presents the operating results for the properties sold for the applicable periods:
The Company assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant reduction in utilization of a property, tenant financial instability and the potential sale of the property in the near future. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value. During the six months ended June 30, 2013 and 2012, the Company recognized $8,735 and $5,690, respectively, of impairment charges in discontinued operations, relating to real estate assets that were disposed below their carrying value. In addition, the Company recognized an impairment charge of $2,413 in continuing operations during the six months ended June 30, 2013. The Company explored the possible disposition of a non-core retail property and determined that the expected undiscounted cash flows based upon a revised estimated holding period of the property was below the current carrying value. Accordingly, the Company reduced the carrying value of this property to its estimated fair value. |
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