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 nine months ended September 30, 2013:



Property Type	Location	Acquisition/Completion Date	Initial Cost Basis		Lease Expiration	Land and Land Estate		Building and Improvements		Lease in-place Value Intangible
Industrial	Long Island City, NY	February 2013	$	42,124	03/2028	$	—	$	42,124	$	—
Industrial	Houston, TX	March 2013	$	81,400	03/2038	$	15,055	$	57,949	$	8,396
Office	Denver, CO⁽¹⁾	April 2013	$	34,547	04/2028	$	2,207	$	26,724	$	5,616
Retail	Tuscaloosa, AL⁽²⁾	May 2013	$	8,397	05/2028	$	2,793	$	5,604	$	—
			$	166,468		$	20,055	$	132,401	$	14,012


(1)	The Company incurred additional initial costs of $3,825 which are included in “Other assets” in the accompanying unaudited condensed consolidated balance sheet.


(2)	The Company incurred leasing costs of $323. The property was sold in September 2013.

The Company recognized aggregate acquisition expenses of $284 and $786 for the nine months ended September 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 September 30, 2013, the Company had the following development arrangements outstanding:



Location	Property Type	Square Feet	Expected Maximum Commitment/Contribution ($ millions)		Lease Term (Years)	Estimated Completion Date	Capitalization Rate⁽¹⁾
Rantoul, IL	Industrial	813,000	$	42.6	20	4Q 13	8.0	%
Bingen, WA	Industrial	124,000	$	18.9	12	2Q 14	10.7	%
Las Vegas, NV	Industrial	180,000	$	29.6	20	3Q 14	7.3	%
Albany, GA	Retail	46,000	$	7.5	15	4Q 13	9.0	%
Richmond, VA	Office	279,000	$	98.6	15	3Q 15	8.0	%
		1,442,000	$	197.2


(1)	Estimated initial capitalization rate based upon expected maximum commitment/contribution amounts.

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 September 30, 2013 and December 31, 2012, the Company's aggregate investment in development arrangements was $57,561 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 $1,597 and $1,693 during the nine months ended September 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 net cash payment of $1,331 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 was consolidated following the acquisition. The Company recognized a $167,864 gain on acquisition in 2012 relating to the acquisition of the remaining common equity interest in NLS.

The Company recognized gross revenues in continuing operations of $31,755 and a net loss of $(3,339) from NLS properties during the nine months ended September 30, 2013. The Company recognized $12,902 of equity in earnings relating to NLS during the nine months ended September 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:



	Three Months Ended September 30, 2012			Nine Months Ended September 30, 2012
Gross revenues	$	92,035		$	271,258
Net income (loss) attributable to Lexington Realty Trust shareholders	$	916		$	(5,552	)
Net loss attributable to common shareholders	$	(3,737	)	$	(23,906	)
Net loss per common share - basic and diluted	$	(0.02	)	$	(0.15	)