8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report Pursuant

to Section 13 OR 15(d) of The

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 7, 2020

LEXINGTON REALTY TRUST

(Exact name of registrant as specified in its charter)

Maryland	1-12386	13-3717318
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

One Penn Plaza, Suite 4015, New York, New York 10119-4015

(Address of principal executive offices) (Zip Code)

(212) 692-7200

(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Shares of beneficial interest, par value $0.0001 per share, classified as Common Stock	LXP	New York Stock Exchange
6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share	LXPPRC	New York Stock Exchange

Item 2.02.        Results of Operations and Financial Condition.

On May 7, 2020, we issued a press release announcing our financial results for the quarter ended March 31, 2020. A copy of the press release is furnished herewith as part of Exhibit 99.1.

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

Item 7.01.        Regulation FD Disclosure.

On May 7, 2020, we made available supplemental information, which we refer to as the “Quarterly Supplemental Information, First Quarter 2020,” a copy of which is furnished herewith as Exhibit 99.1.

On May 7, 2020, our management discussed our financial results and certain aspects of our business plan on a conference call with analysts and investors. A transcript of the conference call is furnished herewith as Exhibit 99.2.

The information furnished pursuant to this “Item 7.01 - Regulation FD Disclosure”, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and shall not be deemed to be incorporated by reference into any filing made by us under the Exchange Act or the Securities Act, regardless of any general incorporation language in any such filing, except as shall be expressly set forth by specific reference in such a filing. Information contained on our web site is not incorporated by reference into this Current Report on Form 8-K.

Item 9.01.        Financial Statements and Exhibits.

(d)      Exhibits
99.1	Quarterly Supplemental Information, First Quarter 2020.
99.2	May 7, 2020 Conference Call Transcript.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Lexington Realty Trust
Date: May 8, 2020	By:	/s/ Beth Boulerice
		Beth Boulerice
		Chief Financial Officer

EX-99.1

Exhibit 99.1

LEXINGTON REALTY TRUST

QUARTERLY SUPPLEMENTAL INFORMATION

March 31, 2020

Table of Contents

Section	Page
First Quarter 2020 Earnings Press Release	3
Portfolio Data
Investments / Capital Recycling Summary	14
Development Projects	15
Financing Summary	16
Leasing Summary	18
Other Revenue Data	19
Portfolio Detail by Asset Class	21
Portfolio Composition	22
Components of Net Asset Value	23
Portfolio Concentration	24
Tenant Industry Diversification	27
Top 15 Tenants	29
Lease Rollover Schedules	30
Property Leases and Vacancies	31
Select Credit Metrics Summary	42
Financial Covenants	43
Mortgages and Notes Payable	44
Debt Maturity Schedule	45
Selected Balance Sheet Account Data	46
Non-GAAP Measures – Definitions	47
Reconciliation of Non-GAAP Measures	50
Investor Information	53

This Quarterly Earnings Press Release and Quarterly Supplemental Information contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under the control of Lexington Realty Trust (“Lexington”), which may cause actual results, performance or achievements of Lexington and its subsidiaries to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Lexington’s periodic reports filed with the Securities and Exchange Commission, including, but not limited to, risks related to:  (1) the potential adverse impact on Lexington or its tenants from the novel coronavirus (COVID-19), (2) the authorization of Lexington’s Board of Trustees of future dividend declarations, (3) Lexington’s ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO available to all equity holders and unitholders – diluted  for the year ending March 31,2020, (4) the successful consummation of any lease, acquisition, build-to-suit, development project, disposition, financing or other transaction on the terms described herein or at all, (5) the failure to continue to qualify as a real estate investment trust, (6) changes in general business and economic conditions, including the impact of any new legislation, (7) competition, (8) increases in real estate construction costs, (9) changes in interest rates, (10) changes in accessibility of debt and equity capital markets, and (11) future impairment charges. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington’s web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington’s future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects,” may,” “plans,” “predicts,” “will,” “will likely result,” “is optimistic,” “goal,” “objective” or similar expressions. Except as required by law, Lexington undertakes no obligation to revise those forward-looking statements to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington’s expectations will be realized.

Lexington Realty Trust

TRADED: NYSE: LXP

One Penn Plaza, Suite 4015

New York, NY 10119-4015

FOR IMMEDIATE RELEASE

LEXINGTON REALTY TRUST REPORTS FIRST QUARTER 2020 RESULTS

New York, NY - May 7, 2020 - Lexington Realty Trust (“Lexington”) (NYSE:LXP), a real estate investment trust focused on single-tenant industrial real estate investments, today announced results for the first quarter ended March 31, 2020.

First Quarter 2020 Highlights

● Recorded Net Income attributable to common shareholders of $16.5 million, or $0.06 per diluted common share.

● Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $49.3 million, or $0.19 per diluted common share.

● Acquired four industrial properties for an aggregate cost of $195.5 million.

● Disposed of two office properties for an aggregate gross price of $29.6 million.

● Raised net proceeds of $17.3 million by issuing approximately 1.6 million common shares through the ATM program at an average price of $11.24 per share.

● Repurchased 1.3 million common shares at an average price of $8.28 per share.

● Completed 337 thousand square feet of new lease and lease extensions.

● Increased industrial portfolio to 83.2% of gross real estate assets.

Subsequent Events

● Collected 99.8% of April 2020 Cash Base Rents.

● Raised net proceeds of $37.1 million by issuing approximately 3.8 million common shares through the ATM program.

● Acquired one industrial asset for a cost of approximately $34.7 million.

● Sold one office property for a gross sales price of $10.7 million.

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

T. Wilson Eglin, Chairman and Chief Executive Officer of Lexington Realty Trust, commented, “Our portfolio has performed well during the Covid-19 pandemic, demonstrating resilience that is a hallmark of our investment strategy. In this environment, we believe investment opportunities are likely to be more favorable than they have been in the recent past and we plan to use disposition proceeds, retained cash flow, our balance sheet flexibility and access to capital to grow our industrial portfolio. Furthermore, the pandemic has accelerated e-commerce growth, demonstrated the value of more resilient supply chains, and increased the possibility of greater domestic production of goods going forward. These trends bode well for our industrial growth strategy.”

3 

COVID-19 RENT UPDATE

As of May 6, 2020, 99.8% of April Cash Base Rents have been paid. Information regarding historical collections should not be considered an indication of expected future collections.

Lexington has received rent relief requests from certain tenants. The amount of rent relief requests Lexington has received represented 5.5% of its 2019 annual Cash Base rents. Lexington estimates the portion of tenants warranting relief represented less than 1% of its 2019 annual Cash Base Rents. Lexington is currently evaluating these requests, but, absent material tenant defaults, Lexington does not expect any material impact to its rental revenues resulting from rent relief requests. However, Lexington can give no assurances on the outcomes of the negotiation of rent relief requests, the success of any tenant’s financial prospects or the amount of relief requests that it will ultimately receive or grant.

FINANCIAL RESULTS

Revenues

For the quarter ended March 31, 2020, total gross revenues were $80.8 million, compared with total gross revenues of $81.2 million for the quarter ended March 31, 2019. The decrease is primarily attributable to sales, partially offset by property acquisitions and higher fee income.

Net Income Attributable to Common Shareholders

For the quarter ended March 31, 2020, net income attributable to common shareholders was $16.5 million, or $0.06 per diluted share, compared with net income attributable to common shareholders for the quarter ended March 31, 2019 of $26.4 million, or $0.11 per diluted share.

Adjusted Company FFO

For the quarter ended March 31, 2020, Lexington generated Adjusted Company FFO of $49.3 million, or $0.19 per diluted share, compared to Adjusted Company FFO for the quarter ended March 31, 2019 of $47.2 million, or $0.20 per diluted share.

Dividends/Distributions

As previously announced, during the first quarter of 2020, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended March 31, 2020 of $0.1050 per common share/unit, which was paid on April 15, 2020 to common shareholders/unitholders of record as of March 31, 2020. Lexington also declared a cash dividend of $0.8125 per share on its Series C Cumulative Convertible Preferred Stock (“Series C Preferred”) for the quarter ended March 31, 2020, which is expected to be paid on May 15, 2020 to Series C Preferred Shareholders of record as of April 30, 2020.

4 

TRANSACTION ACTIVITY

ACQUISITION TRANSACTIONS

Property Type	Market	Sq. Ft.	Initial Basis ($000)		Approximate Lease Term (Yrs)
Industrial-warehouse/distribution	Chicago, IL	705,661	$	53,642	10
Industrial-warehouse/distribution	Phoenix, AZ	160,140	19,164		6
Industrial-warehouse/distribution	Chicago, IL	473,280	39,153		10
Industrial-warehouse/distribution	Dallas, TX	1,214,526	83,495		10
		2,553,607	$	195,454

The above properties were acquired at aggregate weighted-average GAAP and cash capitalization rates of 5.3% and 4.8%, respectively.

DEVELOPMENT PROJECTS

Project (% owned)	Market	Property Type	Estimated Sq. Ft.	Estimated Project Cost ($000)		GAAP Investment Balance as of 03/31/2020 ($000)(1)		Lexington Amount Funded as of 3/31/2020 ($000)		Estimated Completion Date
Consolidated:
Fairburn (90%)	Atlanta, GA	Industrial	910,000	$	53,812	$	14,641	$	11,474	4Q 20
Rickenbacker (100%)	Columbus, OH	Industrial	320,000	20,300		3,657		3,421		1Q 21
				$	74,112	$	18,298	$	14,895
Non-consolidated:
ETNA Park 90 (90%)(2)	Columbus, OH	Industrial	TBD	TBD		$	8,670	$	8,984	TBD
ETNA Park 70 East (90%)(2)	Columbus, OH	Industrial	TBD	TBD		5,058		5,089		TBD
						$	13,728	$	14,073

1. GAAP investment balance is in real estate under construction for consolidated projects and investments in non-consolidated entities for non-consolidated projects.

2. Plans and specifications have not been completed and the estimated square footage, project cost and completion date cannot be determined.

PROPERTY DISPOSITIONS⁽¹⁾

Primary Tenant	Location	Property Type	Gross Disposition Price ($000)		Annualized Net Income(2) ($000)		Annualized NOI(2) ($000)		Month of Disposition	% Leased
Multi-Tenant (3)	Charleston, SC	Office	$	6,830	$	(1,142)	$	17	March	23	%
Burns & McDonnell Engineering	Kansas City, MO	Office	22,775		1,277		1,589		March	100	%
			$	29,605	$	135	$	1,606

1. In addition, a joint venture, in which Lexington has a 20% interest, disposed of one office property for $16.9 million and satisfied $13.0 million of non-recourse debt.

2. Quarterly period prior to sale, annualized.

3. Sold in a foreclosure sale. Disposition price reflects non-recourse debt balance.

The consolidated 2020 property dispositions resulted in weighted-average GAAP and Cash capitalization rates of  5.9% and 5.4%, respectively.

5 

LEASING

	LEASE EXTENSIONS
	Location		Primary Tenant(1)	Prior Term	Lease Expiration Date	Sq. Ft.
	Office
1	Wall	NJ	NJ Natural Gas	06/2021	06/2037	157,511
2	Baton Rouge	LA	New Cingular Wireless(2)	10/2022	11/2023	23,750
2	Total office lease extensions					181,261

	NEW LEASES
	Location			Lease Expiration Date	Sq. Ft.
	Industrial
1	Moody	AL	Wal-Mart	02/2023	155,766
1	Total industrial leases				155,766
3	TOTAL NEW AND EXTENDED LEASES				337,027

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

(2)    Effective November 7, 2020, the square footage leased by the tenant will be reduced from 70,100 square feet to 23,750 square feet.

As of March 31, 2020, Lexington’s portfolio was 97.2% leased.

BALANCE SHEET/CAPITAL MARKETS

During the first quarter of 2020, Lexington issued 1.6 million common shares under its ATM program raising net proceeds of $17.3 million.  During the second quarter of 2020, Lexington issued an additional 3.8 million common shares under its ATM program raising net proceeds of $37.1 million.

In the first quarter of 2020, Lexington repurchased 1.3 million common shares at an average price of $8.28 per share under its share repurchase authorization. As of March 31, 2020, there were approximately 9.0 million common shares remaining to be repurchased under the authorization.

Year to date, Lexington has issued approximately 4.0 million common shares, net, at an average price of $11.06 per share.

During the first quarter, Lexington borrowed $130.0 million on its unsecured revolving credit facility. As of the date of this earnings release, Lexington has $470.0 million of availability under its unsecured revolving credit facility subject to covenant compliance.

2020 EARNINGS GUIDANCE

Lexington now estimates that its net income attributable to common shareholders for the year ended December 31, 2020 will be within an expected range of $0.77 to $0.80 per diluted common share.

Additionally, Lexington is reaffirming that its Adjusted Company FFO for the year ended December 31, 2020 is expected to be within a range of $0.74 to $0.77 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

6 

FIRST QUARTER 2020 CONFERENCE CALL

Lexington will host a conference call today, May 7, 2020, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended March 31, 2020. Interested parties may participate in this conference call by dialing 1-844-825-9783 (U.S.), 1-412-317-5163 (International) or 1-855-669-9657 (Canada). A replay of the call will be available through August 7, 2020, at 1-877-344-7529 (U.S.), 1-412-317-0088 (International) or 1-855-669-9658 (Canada), pin code for all replay numbers is 10142063. A link to a live webcast of the conference call is available at www.lxp.com within the Investors section.

ABOUT LEXINGTON REALTY TRUST 

Lexington Realty Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) that owns a diversified portfolio of real estate assets consisting primarily of equity investments in single-tenant net-leased commercial properties across the United States. Lexington seeks to expand its industrial portfolio through build-to-suit transactions, sale-leaseback transactions and other transactions, including acquisitions. For more information, including Lexington’s Quarterly Supplemental Information package, or to follow Lexington on social media, visit www.lxp.com.

Contact: 

Investor or Media Inquiries for Lexington Realty Trust: 

Heather Gentry, Senior Vice President of Investor Relations 

Lexington Realty Trust 

Phone: (212) 692-7200 E-mail: hgentry@lxp.com

This release contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under Lexington’s control which may cause actual results, performance or achievements of Lexington to be materially different from the results, performance, or other expectations implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed under the headings “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” in Lexington’s periodic reports filed with the Securities and Exchange Commission, including risks related to: (1) the potential adverse impact on Lexington or its tenants from the novel coronavirus (COVID-19); (2) the authorization by Lexington’s Board of Trustees of future dividend declarations, (3) Lexington’s ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO for the year ending December 31, 2020, (4) the successful consummation of any lease, acquisition, build-to-suit, disposition, financing or other transaction, (5) the failure to continue to qualify as a real estate investment trust, (6) changes in general business and economic conditions, including the impact of any legislation, (7) competition, (8) increases in real estate construction costs, (9) changes in interest rates, (10) changes in accessibility of debt and equity capital markets, and (11) future impairment charges. Copies of the periodic reports Lexington files with the Securities and Exchange Commission are available on Lexington’s web site at www.lxp.com. Forward-looking statements, which are based on certain assumptions and describe Lexington’s future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects”, “may,” “plans,” “predicts,” “will,” “will likely result,” “is optimistic,” “goal,” “objective” or similar expressions. Except as required by law, Lexington undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington’s expectations will be realized.

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

7 

Non-GAAP Financial Measures - Definitions

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

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

Cash Base Rent: Cash Base Rent is calculated by making adjustments to GAAP rental revenue to remove the impact of GAAP required adjustments to rental income such as adjustments for straight-line rents related to free rent periods and contractual rent increases. Cash Base Rent excludes billed tenant reimbursements and lease termination income and includes ancillary income. Lexington believes Cash Base Rent provides a meaningful indication of an investments ability to fund cash needs.

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

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

The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sales of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO.” FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.

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

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

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

# # #

8 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Three months ended March 31,
	2020			2019
Gross revenues:
Rental revenue	$	78,735		$	79,975
Other revenue		2,092			1,273
Total gross revenues		80,827			81,248
Expense applicable to revenues:
Depreciation and amortization		(40,509	)		(37,595	)
Property operating		(10,276	)		(10,567	)
General and administrative		(7,825	)		(8,527	)
Non-operating income		190			481
Interest and amortization expense		(14,795	)		(17,208	)
Debt satisfaction gains (charges), net		1,393			(103	)
Impairment charges		—			(588	)
Gains on sales of properties		9,805			20,957
Income before provision for income taxes and equity in earnings of non-consolidated entities		18,810			28,098
Provision for income taxes		(653	)		(437	)
Equity in earnings of non-consolidated entities		263			619
Net income		18,420			28,280
Less net income attributable to noncontrolling interests		(266	)		(253	)
Net income attributable to Lexington Realty Trust shareholders		18,154			28,027
Dividends attributable to preferred shares – Series C		(1,572	)		(1,572	)
Allocation to participating securities		(46	)		(50	)
Net income attributable to common shareholders	$	16,536		$	26,405
Net income attributable to common shareholders - per common share basic	$	0.07		$	0.11
Weighted-average common shares outstanding – basic		253,038,161			232,538,495
Net income attributable to common shareholders - per common share diluted	$	0.06		$	0.11
Weighted-average common shares outstanding – diluted		257,347,277			236,142,143

9 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	March 31, 2020			December 31, 2019
	(unaudited)
Assets:
Real estate, at cost	$	3,473,384		$	3,320,574
Real estate - intangible assets		420,843			409,756
Investments in real estate under construction		18,298			13,313
Real estate, gross		3,912,525			3,743,643
Less: accumulated depreciation and amortization		914,600			887,629
Real estate, net		2,997,925			2,856,014
Assets held for sale		7,873			—
Operating lease right-of-use assets, net		37,201			38,133
Cash and cash equivalents		83,525			122,666
Restricted cash		6,533			6,644
Investment in non-consolidated entities		57,210			57,168
Deferred expenses, net		19,749			18,404
Rent receivable – current		3,646			3,229
Rent receivable – deferred		67,205			66,294
Other assets		12,585			11,708
Total assets	$	3,293,452		$	3,180,260
Liabilities and Equity:
Liabilities:
Mortgages and notes payable, net	$	377,703		$	390,272
Revolving credit facility borrowings		130,000			—
Term loan payable, net		297,565			297,439
Senior notes payable, net		497,079			496,870
Trust preferred securities, net		127,421			127,396
Dividends payable		31,720			32,432
Liabilities held for sale		18			—
Operating lease liabilities		38,293			39,442
Accounts payable and other liabilities		42,479			29,925
Accrued interest payable		13,992			7,897
Deferred revenue - including below market leases, net		19,446			20,350
Prepaid rent		15,066			13,518
Total liabilities		1,590,782			1,455,541
Commitments and contingencies
Equity:
Preferred shares, par value $0.0001 per share; authorized 100,000,000 shares:
Series C Cumulative Convertible Preferred, liquidation preference $96,770; 1,935,400 shares issued and outstanding		94,016			94,016
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 255,232,130 and 254,770,719 shares issued and outstanding in 2020 and 2019, respectively		26			25
Additional paid-in-capital		2,982,363			2,976,670
Accumulated distributions in excess of net income		(1,374,286	)		(1,363,676	)
Accumulated other comprehensive loss		(18,924	)		(1,928	)
Total shareholders’ equity		1,683,195			1,705,107
Noncontrolling interests		19,475			19,612
Total equity		1,702,670			1,724,719
Total liabilities and equity	$	3,293,452		$	3,180,260

10 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

EARNINGS PER SHARE

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

	Three Months Ended March 31,
	2020		2019
EARNINGS PER SHARE:
Basic:
Net income attributable to common shareholders	$	16,536	$	26,405
Weighted-average number of common shares outstanding - basic		253,038,161		232,538,495
Net income  attributable to common shareholders - per common share basic	$	0.07	$	0.11
Diluted:
Net income attributable to common shareholders - basic	$	16,536	$	26,405
Impact of assumed conversions		107		1
Net income attributable to common shareholders	$	16,643	$	26,406
Weighted-average common shares outstanding - basic		253,038,161		232,538,495
Effect of dilutive securities:
Unvested share-based payment awards and options		1,160,994		53,274
Operating partnership units		3,148,122		3,550,374
Weighted-average common shares outstanding - diluted		257,347,277		236,142,143
Net income attributable to common shareholders - per common share diluted	$	0.06	$	0.11

11 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

ADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS AVAILABLE FOR DISTRIBUTION

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

	Three Months Ended
	March 31,
	2020			2019
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income attributable to common shareholders	$	16,536		$	26,405
Adjustments:
Depreciation and amortization		39,717			36,867
Impairment charges - real estate		—			588
Noncontrolling interests - OP units		107			1
Amortization of leasing commissions		792			728
Joint venture and noncontrolling interest adjustment		2,214			2,533
Gains on sales of properties, including non-consolidated entities		(10,354	)		(21,605	)
FFO available to common shareholders and unitholders - basic		49,012			45,517
Preferred dividends		1,572			1,572
Amount allocated to participating securities		46			50
FFO available to all equityholders and unitholders - diluted		50,630			47,139
Transaction costs		21			—
Debt satisfaction (gains) charges, net, including non-consolidated entities		(1,372	)		103
Adjusted Company FFO available to all equityholders and unitholders - diluted		49,279			47,242
FUNDS AVAILABLE FOR DISTRIBUTION:
Adjustments:
Straight-line adjustments		(1,419	)		(2,330	)
Lease incentives		269			273
Amortization of above/below market leases		(295	)		(6	)
Lease termination payments, net		492			(744	)
Non-cash interest, net		428			806
Non-cash charges, net		1,658			1,727
Tenant improvements		(1,492	)		(995	)
Lease costs		(3,951	)		(1,124	)
Joint venture and noncontrolling interest adjustment		(111	)		(176	)
Company Funds Available for Distribution	$	44,858		$	44,673
Per Common Share and Unit Amounts
Basic:
FFO	$	0.19		$	0.19
Diluted:
FFO	$	0.19		$	0.20
Adjusted Company FFO	$	0.19		$	0.20
Basic:
Weighted-average common shares outstanding - basic EPS		253,038,161			232,538,495
Operating partnership units(1)		3,148,122			3,550,374
Weighted-average common shares outstanding - basic FFO		256,186,283			236,088,869
Diluted:
Weighted-average common shares outstanding - diluted EPS		257,347,277			236,142,143
Unvested share-based payment awards and options		24,799			16,499
Preferred shares - Series C		4,710,570			4,710,570
Weighted-average common shares outstanding - diluted FFO		262,082,646			240,869,212

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

12 

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

RECONCILIATION OF NON-GAAP MEASURES

2020 EARNINGS GUIDANCE

	Twelve Months Ended December 31, 2020
	Range
Estimated:
Net income attributable to common shareholders per diluted common share(1)	$	0.77		$	0.80
Depreciation and amortization		0.62			0.62
Impact of capital transactions		(0.65	)		(0.65	)
Estimated Adjusted Company FFO per diluted common share	$	0.74		$	0.77

(1)   Assumes all convertible securities are dilutive.

13 

LEXINGTON REALTY TRUST 

2020 First Quarter Investments / Capital Recycling Summary

PROPERTY INVESTMENTS

	Property Type	Market		Square Feet		Initial Basis ($000)		Month Closed		Primary Lease Expiration
1	Industrial - Warehouse/distribution	Chicago	IL		705,661	$	53,642		January		11/2029
2	Industrial - Warehouse/distribution	Phoenix	AZ		160,140		19,164		January		12/2025
3	Industrial - Warehouse/distribution	Chicago	IL		473,280		39,153		January		12/2029
4	Industrial - Warehouse/distribution	Dallas	TX		1,214,526		83,495		February		08/2029
4	TOTAL PROPERTY INVESTMENTS				2,553,607	$	195,454

CAPITAL RECYCLING

CONSOLIDATED PROPERTY DISPOSITIONS

	Primary Tenant	Location		Property Type	Gross Disposition Price ($000)		Annualized Net Income ($000) (1)			Annualized NOI ($000)(1)(2)		Month of Disposition	% Leased	Gross Disposition Price PSF
1	Multi-Tenant (3)	Charleston	SC	Office	$	6,830	$	(1,142	)	$	17	March	23%	$	135.93
2	Burns & McDonnell Engineering	Kansas City	MO	Office		22,775		1,277			1,589	March	100%		146.07
2	TOTAL PROPERTY DISPOSITIONS				$	29,605	$	135		$	1,606

NON-CONSOLIDATED PROPERTY DISPOSITIONS ⁽⁴⁾

	Primary Tenant	Location		Property Type	Gross Disposition Price ($000)		Annualized Net Income ($000) (1)		Annualized NOI ($000)(1)(2)		Month of Disposition	% Leased	Gross Disposition Price PSF
1	Amazon	Huntington	WV	Office	$	16,852	$	483	$	1,158	March	100%	$	245.32

  Footnotes

(1) Quarterly period prior to sale annualized.

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

(3) Sold in foreclosure sale. Disposition price reflects non-recourse debt balance.

(4) Lexington has a 20% interest in the joint venture that disposed of this property.

14 

LEXINGTON REALTY TRUST
DEVELOPMENT PROJECTS 

3/31/2020

DEVELOPMENT PROJECTS

	Project (% owned)	Market	Property Type	Estimated Sq. Ft.	Estimated Project Cost ($000)		GAAP Investment Balance as of 3/31/2020 ($000) (1)		Lexington Amount Funded as of 3/31/2020 ($000)		Estimated Completion Date
	Consolidated
1	Fairburn (90%)	Atlanta, GA	Industrial	910,000	$	53,812	$	14,641	$	11,474	4Q 2020
2	Rickenbacker (100%)	Columbus, OH	Industrial	320,000		20,300		3,657		3,421	1Q 2021
2	Total Consolidated Development				$	74,112	$	18,298	$	14,895
	Non - Consolidated
1	Etna Park 70 (90%) (2)	Columbus, OH	Industrial	TBD		TBD	$	8,670	$	8,984	TBD
2	Etna Park 70 East (90%) (2)	Columbus, OH	Industrial	TBD		TBD		5,058		5,089	TBD
2	Total Non-Consolidated Development						$	13,728	$	14,073
4	Total Development Projects						$	32,026	$	28,968

Footnotes
(1)	GAAP  investment balance is in real estate under construction for consolidated projects and in investments in non-consolidated entities for non-consolidated projects.
(2)	Plans and specifications for completion have not been completed and the estimated square footage, project cost and completion date cannot be determined.

15 

LEXINGTON REALTY TRUST
2020 First Quarter Financing Summary

DEBT RETIRED

Location	Tenant	Property Type	Face / Satisfaction ($000)		Rate	Maturity Date
Consolidated Mortgage Debt (1)
Charleston, SC	Multi-Tenant	Office	$	6,830	5.850%	02/2021
Non-Consolidated Mortgage Debt (2)
Huntington, WV	Amazon	Office	$	12,960	LIBOR + 200 bps	09/2021

CORPORATE LEVEL FINANCING ⁽³⁾

Type	Amount ($000)		Current Interest Rate	Maturity Date
Revolving Credit Facility	$	130,000	LIBOR + 90 bps	02/2023

  Footnotes

(1) Satisfied in foreclosure sale.

(2) Lexington has a 20% interest in the joint venture that disposed of this property. Satisfaction reflects release amount of the joint venture's cross-collateralized debt.

(3) Also, a 20% owned joint venture incurred an additional $3.7 million of secured debt.

16 

LEXINGTON REALTY TRUST
2020 First Quarter Leasing Summary

LEASE EXTENSIONS

	Tenant (1)	Location		Prior Term	Lease Expiration Date	Sq. Ft.	New Base Rent Per Annum ($000)(2)(3)		Prior Base Rent Per Annum ($000)		New Cash Base Rent Per Annum ($000)(2)(3)		Prior Cash Base Rent Per Annum ($000)(3)
	Office
1	NJ Natural Gas	Wall	NJ	06/2021	06/2037	157,511	$	3,491	$	4,234	$	3,068	$	4,234
2	New Cingular Wireless (4)	Baton Rouge	LA	10/2022	11/2023	23,750		413		395		420		411
2	Total office lease extensions					181,261	$	3,904	$	4,629	$	3,488	$	4,645
2	TOTAL EXTENDED LEASES					181,261	$	3,904	$	4,629	$	3,488	$	4,645

NEW LEASES

	Tenant (1)	Location		Lease Expiration  Date	Sq. Ft.		New Base Rent Per Annum ($000)(2)(3)		New Cash Base Rent Per Annum ($000)(2)(3)
	Industrial
1	Wal-Mart	Moody	AL	02/2023		155,766	$	746	$	746
1	Total Industrial New Leases					155,766	$	746	$	746
1	TOTAL NEW LEASES					155,766	$	746	$	746
3	TOTAL NEW AND EXTENDED LEASES					337,027	$	4,650	$	4,234

17 

LEXINGTON REALTY TRUST
2020 First Quarter Leasing Summary

NEW VACANCY ⁽⁵⁾

			Prior Lease			2019		2019
			Expiration			Base Rent		Cash Rent
Former Tenant	Location		Date	Sq. Ft.		($000)(3)		($000)(3)
Office
Oce - USA Holding (6)	Boca Raton	FL	02/2020		143,290	$	2,244	$	2,500

  Footnotes

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

(2) Assumes twelve months rent from the later of 4/1/20 or lease commencement/extension, excluding free rent periods as applicable.

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

(4) Effective 11/7/2020, the square footage leased by tenant is reduced from 70,100 sqft to 23,750.

(5) Excludes multi-tenant properties, disposed properties and non-consolidated investments.

(6) In receivership.

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LEXINGTON REALTY TRUST

Other Revenue Data 

03/31/2020

($000)

Other Revenue Data

	Base Rent
Asset Class	Three months ended
		3/31/2020(1)	3/31/2020  Percentage		3/31/2019 Percentage
Industrial	$	57,280	79.3	%	68.2	%
Office/Other		14,915	20.7	%	31.8	%
	$	72,195	100.0	%	100.0	%

		Base Rent
Credit Ratings  (2)		Three months ended
		3/31/2020(1)	3/31/2020  Percentage		3/31/2019  Percentage
Investment Grade	$	37,274	51.6	%	40.8	%
Non-Investment Grade		15,959	22.1	%	19.5	%
Unrated		18,962	26.3	%	39.7	%
	$	72,195	100.0	%	100.0	%
Weighted-Average Lease Term - Cash Basis			As of 3/31/2020		As of 3/31/2019
			8.3 years		9.0 years
Rent Estimates for Current Assets

Year		Base Rent  (3)	Cash Base Rent (3)			Difference
2020 - remaining	$	215,553	$	203,921	$	(11,632	)
2021		269,259		258,603		(10,656	)

Footnotes 

(1) Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020.

(2) Credit ratings are based upon either tenant, guarantor or parent/ultimate parent. Historical comparison was not adjusted for subsequent tenant entity changes and multi-tenant was generally reflected as unrated.

(3) Amounts assume (1) lease terms for non-cancellable periods only, (2) no new or renegotiated leases are entered into after 3/31/2020, and (3) no properties are sold or acquired after 3/31/2020.

19 

LEXINGTON REALTY TRUST

Other Revenue Data (Continued)

03/31/2020

($000)

Same-Store NOI ⁽¹⁾      

	Three months ended March 31,
	2020			2019
Total Cash Base Rent	$	58,108		$	58,179
Tenant Reimbursements		6,121			6,113
Property Operating Expenses		(7,692	)		(7,616	)
Same-Store NOI	$	56,537		$	56,676
Change in Same-Store NOI (2)		(0.2	%)

Same-Store Percent Leased (3)	As of 3/31/2020			As of 3/31/2019
		97.4	%		98.5	%
Lease Escalation Data (4)

 

Footnotes

(1)	NOI is on a consolidated cash basis excluding properties acquired and sold in 2020 and 2019 and properties subject to mortgage loans in default at March 31, 2020.
	See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

(2) Change in Same-Store NOI was 0.5% excluding single-tenant property vacancies.

(3) Excludes properties acquired or sold in 2020 and 2019 and properties subject to mortgage loans in default at March 31, 2020.

(4) Based on three months consolidated Cash Base Rents for single-tenant leases (properties greater than 50% leased to a single tenant) owned as of March 31, 2020. Excludes parking operations and rents from prior tenants.

20 

LEXINGTON REALTY TRUST

Portfolio Detail By Asset Class

03/31/2020

($000, except square footage)

Asset Class	YE 2017 (1)			YE 2018 (1)(2)			YE 2019			Q1 2020
Industrial
% of Cost (3)		49.3	%		71.2	%		81.5	%		83.2	%
% of ABR (4)		44.3	%		65.4	%		75.5	%		79.3	%
% Leased		99.9	%		96.3	%		97.9	%		98.3	%
Wtd. Avg. Lease Term (5)		10.5			9.7			8.3			8.0
Mortgage Debt	$	193,529		$	206,006		$	109,939		$	108,825
% Investment Grade (4)		28.4	%		31.6	%		45.9	%		49.7	%
Square Feet		36,071,422			41,447,962			48,742,014			51,295,621
Office/Other
% of Cost (3)		50.7	%		28.8	%		18.5	%		16.8	%
% of ABR (4)(6)		55.7	%		34.6	%		24.5	%		20.7	%
% Leased		96.0	%		87.1	%		85.8	%		82.1	%
Wtd. Avg. Lease Term (5)		7.9			7.2			8.5			9.6
Mortgage Debt	$	503,539		$	369,508		$	283,933		$	272,368
% Investment Grade (4)		49.4	%		53.2	%		57.3	%		59.0	%
Square Feet		12,542,640			6,111,588			3,876,294			3,670,123
Construction in progress (7)	$	4,219		$	1,840		$	15,208		$	24,424

Footnotes

(1) Office and Other properties combined.

(2) Pataskala, Ohio property reclassed to Industrial from Office/Other.

(3) Based on gross book value of real estate assets; excludes held for sale assets.

(4) Percentage of Base Rent, for consolidated properties owned as of each respective period.

(5) Cash basis.

(6) YE 2018 excludes the acceleration of below-market lease intangible accretion on one Kmart asset.

(7) Includes development classified as real estate under construction on a consolidated basis.

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LEXINGTON REALTY TRUST

Portfolio Composition

03/31/2020

As a Percent of Gross Book Value ⁽¹⁾

 

Portfolio Composition ⁽²⁾

 

Footnotes

(1) Based on gross book value of real estate assets as of 3/31/2020, exclude held for sale assets.

(2) Based on gross book value of real estate assets as of 3/31/2020, 12/31/2019, 12/31/2018 and 12/31/2017, as applicable and excludes held for sale assets.

22 

LEXINGTON REALTY TRUST

Components of Net Asset Value 

3/31/2020 

($000)

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

Consolidated properties three month net operating income (NOI) (1)
Industrial	$	52,364
Office/Other		13,148
Total Net Operating Income	$	65,512
Lexington’s share of non-consolidated three month NOI (1)
NNN OFFICE JV
Office	$	2,543
OTHER JV
Other	$	379
Other income
Advisory fees	$	931
In service assets not fairly valued by capitalized NOI method (1)
Wholly-owned assets acquired in 2020	$	194,036
Wholly-owned assets less than 70% leased	$	50,835
Add other assets:
Assets held for sale - consolidated	$	7,873
Construction in progress		6,126
Developable land		14,073
Development investment at cost incurred		14,895
Cash and cash equivalents		83,525
Restricted cash		6,533
Accounts receivable		3,646
Other assets		12,585
Total other assets	$	149,256
Liabilities:
Corporate level debt (face amount)	$	1,059,120
Mortgages and notes payable (face amount)		381,193
Dividends payable		31,720
Liabilities held for sale - consolidated		18
Accounts payable, accrued expenses and other liabilities		71,537
Preferred stock, at liquidation value		96,770
Lexington’s share of non-consolidated mortgages (face amount)		87,505
Total deductions	$	1,727,863
Common shares & OP units at 3/31/2020		258,328,452

Footnotes

(1) NOI for the existing property portfolio at March 31, 2020, excludes NOI related to assets undervalued by a capitalized NOI method and assets held for sale. Assets undervalued by a capitalized NOI method are identified generally by occupancies under 70% and assets acquired in 2020. For assets in this category an NOI capitalization approach is not appropriate, and accordingly, Lexington’s net book value has been used. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.

23 

LEXINGTON REALTY TRUST 

Consolidated Portfolio Concentration 

3/31/2020

	Markets (1)	Percent of Base Rent as of 3/31/2020  (2)
1	Houston, TX		10.2	%
2	Memphis, TN		6.9	%
3	Greenville/Spartanburg, SC		5.7	%
4	Atlanta, GA		5.1	%
5	Cincinnati/Dayton, OH		4.3	%
6	Chicago, IL		4.2	%
7	Dallas/Fort Worth, TX		4.0	%
8	Nashville, TN		4.0	%
9	Phoenix, AZ		3.9	%
10	Charlotte, NC		3.9	%
11	New York/New Jersey		3.7	%
12	Detroit, MI		3.5	%
13	DC/Baltimore, MD		2.6	%
14	Philadelphia, PA		2.6	%
15	South Bay/San Jose, CA		2.3	%
16	Jackson, MS		2.1	%
17	St. Louis, MO		2.1	%
18	Cleveland, OH		1.7	%
19	Columbus, OH		1.7	%
20	Champaign-Urbana, IL		1.5	%
	Total Consolidated Portfolio Concentration (3)		76.0	%

Footnotes

(1)	Markets are based on geographic boundaries defined by CoStar.com. They serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations.
(2)	Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020.
(3)	Total shown may differ from detailed amounts due to rounding.

24 

LEXINGTON REALTY TRUST 

Portfolio Concentration - Industrial 

3/31/2020

	Markets (1)	Percent of Base Rent as of 3/31/2020 (2)
1	Memphis, TN		8.7	%
2	Greenville/Spartanburg, SC		7.1	%
3	Houston, TX		6.3	%
4	Atlanta, GA		6.0	%
5	Cincinnati/Dayton, OH		5.4	%
6	Chicago, IL		5.3	%
7	Nashville, TN		5.0	%
8	Detroit, MI		4.5	%
9	Phoenix, AZ		3.7	%
10	Dallas/Fort Worth, TX		3.3	%
11	Charlotte, NC		3.1	%
12	Jackson, MS		2.7	%
13	St. Louis, MO		2.7	%
14	New York/New Jersey		2.2	%
15	Cleveland, OH		2.2	%
16	Columbus, OH		2.1	%
17	Champaign-Urbana, IL		1.8	%
18	Jackson, TN		1.7	%
19	Richmond, VA		1.7	%
20	DC/Baltimore, MD		1.7	%
	Total Industrial Portfolio Concentration (3)		77.3	%

Footnotes

(1)	Markets are based on geographic boundaries defined by CoStar.com. They serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations.
(2)	Three months ended 3/31/2020 Base Rent recognized for consolidated industrial properties owned as of 3/31/2020.
(3)	Total shown may differ from detailed amounts due to rounding.

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LEXINGTON REALTY TRUST 

Portfolio Concentration - Office/Other 

3/31/2020

	Markets (1)	Percent of Base Rent as of 3/31/2020 (2)
1	Houston, TX		24.9	%
2	South Bay/San Jose, CA		11.1	%
3	Philadelphia, PA		10.7	%
4	New York/New Jersey		9.5	%
5	Charlotte, NC		6.9	%
6	Dallas/Fort Worth, TX		6.8	%
7	DC/Baltimore, MD		6.3	%
8	Phoenix, AZ		4.9	%
9	Tampa/St. Petersburg, FL		3.2	%
10	Baton Rouge, LA		1.9	%
11	South Florida		1.9	%
12	McAllen/Edinburg/Pharr,TX		1.7	%
13	Kansas City, MO		1.7	%
14	Oakland, ME		1.5	%
15	Orlando, FL		1.5	%
16	Knoxville, TN		1.5	%
17	Atlanta, GA		1.4	%
18	Florence, SC		1.0	%
19	Tucson, AZ		0.9	%
20	Hawaii		0.9	%
	Total Office/Other Portfolio Concentration (3)		100.0	%

Footnotes

(1)	Markets are based on geographic boundaries defined by CoStar.com. They serve to delineate core areas that are competitive with each other and constitute a generally accepted primary competitive set of areas. Markets are building-type specific, and are non-overlapping contiguous geographic designations.
(2)	Three months ended 3/31/2020 Base Rent recognized for consolidated office/other properties owned as of 3/31/2020.
(3)	Total shown may differ from detailed amounts due to rounding.

26 

LEXINGTON REALTY TRUST 

Tenant Industry Diversification - Industrial Assets ⁽¹⁾ 

3/31/2020

Footnotes

(1) Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020.

27 

LEXINGTON REALTY TRUST 

Tenant Industry Diversification - Office/Other Assets ⁽¹⁾ 

3/31/2020

Footnotes

(1) Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020.

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LEXINGTON REALTY TRUST

Top 15 Tenants

03/31/2020

Top 15 Tenants

Tenants (1)	Property Type	Lease Expirations	Number of Leases	Sq. Ft. Leased		Sq. Ft. Leased as a Percent of Consolidated Portfolio (2)(3)			Base Rent as of 3/31/2020 ($000)		Percent of Base Rent as of 3/31/2020 ($000) (2)(4)
Dow	Office	2036	1		664,100		1.2	%	$	3,712		5.2	%
Nissan	Industrial	2027	2		2,971,000		5.6	%		3,190		4.4	%
Dana	Industrial	2021-2026	7		2,053,359		3.8	%		2,485		3.5	%
Kellogg	Industrial	2027-2029	3		2,801,916		5.2	%		2,426		3.4	%
Amazon	Industrial	2026-2030	3		2,515,492		4.7	%		2,363		3.3	%
Undisclosed (5)	Industrial	2031-2035	3		1,090,383		2.0	%		1,785		2.5	%
Watco	Industrial	2038	1		132,449		0.2	%		1,693		2.4	%
Xerox	Office	2023	1		202,000		0.4	%		1,660		2.3	%
Wal-Mart	Industrial	2023-2027	3		1,491,439		2.8	%		1,466		2.0	%
FedEx	Industrial	2023 & 2028	2		292,021		0.5	%		1,430		2.0	%
Morgan Lewis (6)	Office	2024	1		289,432		0.5	%		1,414		2.0	%
Undisclosed (5)	Industrial	2034	1		1,318,680		2.5	%		1,386		1.9	%
Mars Wrigley	Industrial	2025	1		604,852		1.1	%		1,101		1.5	%
Asics	Industrial	2030	1		855,878		1.6	%		1,097		1.5	%
Spitzer	Industrial	2035	2		449,895		0.8	%		1,087		1.5	%
			32		17,732,896		33.2	%	$	28,295		39.5	%

Footnotes

(1)	Tenant, guarantor or parent.
(2)	Total shown may differ from detailed amounts due to rounding.
(3)	Excludes vacant square feet.
(4)	Three months ended 3/31/2020 Base Rent recognized for consolidated properties owned as of 3/31/2020, excluding rent from prior tenants.
(5)	Lease restricts certain disclosures.
(6)	Includes parking operations.

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 Lease Rollover Schedule - Consolidated Industrial Properties

03/31/2020

($000)

Year	Number of Leases Expiring		Base Rent as of 3/31/2020		Percent of Base Rent as of 3/31/2020			Percent of Base Rent as of 3/31/2019
2020 - remaining		9	$	1,411		2.5	%		4.1	%
2021		13		4,488		7.9	%		7.2	%
2022		2		578		1.0	%		0.7	%
2023		9		2,328		4.1	%		2.0	%
2024		16		5,656		9.9	%		7.6	%
2025		14		5,062		8.9	%		6.9	%
2026		10		4,573		8.0	%		7.9	%
2027		9		7,135		12.5	%		12.5	%
2028		4		2,963		5.2	%		6.0	%
2029		6		3,510		6.1	%		2.3	%
Thereafter		25		19,377		33.9	%		38.8	%
Total (1)		117	$	57,081		100.0	%

Footnotes

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

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 Lease Rollover Schedule - Consolidated Office/Other Properties

03/31/2020

($000)

Year	Number of Leases Expiring		Base Rent as of 3/31/2020		Percent of Base Rent as of 3/31/2020			Percent of Base Rent as of 3/31/2019
2020 - remaining		30	$	290		2.0	%		1.1	%
2021		8		924		6.5	%		16.4	%
2022		2		920		6.5	%		5.4	%
2023		3		1,818		12.8	%		8.9	%
2024		5		2,289		16.1	%		13.7	%
2025		5		935		6.6	%		3.5	%
2026		0		-		0.0	%		1.3	%
2027		3		474		3.3	%		7.9	%
2028		0		-		0.0	%		1.6	%
2029		1		220		1.5	%		6.5	%
Thereafter		8		6,387		44.8	%		24.0	%
Total (1)		65	$	14,257		100.0	%

Footnotes

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

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Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		Base Rent as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020 ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
Single-tenant
2020	6/30/2020	1650-1654 Williams Rd.	Columbus	OH	--	ODW Logistics		772,450		337		336		-		-
	12/19/2020	1901 Ragu Dr.	Owensboro	KY	5	Unilever		443,380		373		322		-		-
	12/31/2020	2203 Sherrill Dr.	Statesville	NC	--	Geodis America		639,800		623		653		-		-
2021	1/31/2021	101 Michelin Dr.	Laurens	SC	18	Michelin		1,164,000		895		895		-		-
	3/31/2021	2455 Premier Row	Orlando	FL	--	Walgreen Co.		205,016		196		127		-		-
	5/31/2021	291 Park Center Dr.	Winchester	VA	--	Kraft Heinz		344,700		355		366		-		-
	6/30/2021	11624 S. Distribution Cv.	Olive Branch	MS	--	Hamilton Beach		1,170,218		947		819		-		-
	9/30/2021	3820 Micro Dr.	Millington	TN	--	Ingram Micro		701,819		453		468		-		-
	10/25/2021	6938 Elm Valley Dr.	Kalamazoo	MI	--	Dana		150,945		437		507		-		-
	11/30/2021	2880 Kenny Biggs Rd.	Lumberton	NC	--	Quickie Manufacturing		423,280		339		370		-		-
	12/31/2021	191 Arrowhead Dr.	Hebron	OH	--	Owens Corning		250,410		145		145		-		-
		200 Arrowhead Dr.	Hebron	OH	--	Owens Corning		400,522		231		231		-		-
		3686 South Central Ave.	Rockford	IL	--	Pierce Packaging		93,000		81		81		-		-
2022	3/31/2022	5417 Campus Dr.	Shreveport	LA	--	Tire Rack		257,849		336		351		-		-
	8/31/2022	50 Tyger River Dr.	Duncan	SC	--	Plastic Omnium		221,833		242		252		-		-
2023	2/28/2023	3102 Queen Palm Dr.	Tampa	FL	--	RC Moore		229,605		288		97		-		-
		7670 Hacks Cross Rd.	Olive Branch	MS	--	MAHLE Industries		268,104		226		227		-		-
	5/31/2023	6495 Polk Ln.	Olive Branch	MS	13	Undisclosed		151,691		146		141		-		-
	8/31/2023	10535 Red Bluff Rd.	Pasadena	TX	--	Unis		257,835		308		300		-		-
		3737 Duncanville Rd.	Dallas	TX	--	Owens Corning		510,440		428		416		-		-
	10/31/2023	493 Westridge Pkwy.	McDonough	GA	--	Carlstar		676,000		508		494		-		-
	12/31/2023	120 Southeast Pkwy. Dr.	Franklin	TN	--	United Technologies		289,330		184		184		-		-
		675 Gateway Blvd.	Monroe	OH	--	Blue Buffalo		143,664		178		172		-		-
2024	1/31/2024	1285 W. State Road 32	Lebanon	IN	--	Continental Tire		741,880		570		603		-		-
		6495 Polk Ln.	Olive Branch	MS	13	Undisclosed		118,211		124		120		-		-
		70 Tyger River Dr.	Duncan	SC	--	BMW		408,000		500		487		-		-
		231 Apple Valley Rd.	Duncan	SC	13	Undisclosed		120,680		151		144		-		-

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Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		Base Rent as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020 ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
2024	3/31/2024	1520 Lauderdale Memorial Hwy.	Cleveland	TN	--	General Electric		851,370		664		664		-		-
	4/30/2024	113 Wells St.	North Berwick	ME	--	United Technologies		993,685		450		407		-		-
		11555 Silo Dr.	Olive Branch	MS	--	Olam Cotton		927,742		714		705		-		-
	5/31/2024	901 East Bingen Point Way	Bingen	WA	--	Boeing		124,539		659		662		-		-
		7225 Goodson Rd.	Union City	GA	--	Interface Americas		370,000		361		338		-		-
	7/31/2024	5795 North Blackstock Rd.	Spartanburg	SC	--	Wal-Mart		341,660		418		417		-		-
		231 Apple Valley Rd.	Duncan	SC	13	Undisclosed		75,320		94		94		-		-
	9/30/2024	1621 Veterans Memorial Pkwy. E	Lafayette	IN	--	Caterpillar		309,400		304		301		-		-
	10/31/2024	43955 Plymouth Oaks Blvd.	Plymouth	MI	--	Tower Automotive		311,612		398		390		-		-
		2115 East Belt Line Rd.	Carrollton	TX	--	L.E. Klein		58,202		57		58		-		-
	12/31/2024	749 Southrock Dr.	Rockford	IL	--	Jacobson Warehouse		150,000		159		154		-		-
2025	4/30/2025	235 Apple Valley Rd.	Duncan	SC	13	Undisclosed		177,320		234		219		-		-
	5/31/2025	7875 White Road SW	Austell	GA	--	Mars Wrigley		604,852		1,101		897		-		-
	6/30/2025	10000 Business Blvd.	Dry Ridge	KY	--	Dana		336,350		336		336		-		-
		4010 Airpark Dr.	Owensboro	KY	--	Metalsa / Dana		211,598		302		302		-		-
		730 North Black Branch Rd.	Elizabethtown	KY	--	Metalsa / Dana		167,770		134		134		-		-
		750 North Black Branch Rd.	Elizabethtown	KY	--	Metalsa / Dana		539,592		710		710		-		-
		301 Bill Bryan Blvd.	Hopkinsville	KY	--	Metalsa / Dana		424,904		422		422		-		-
	7/14/2025	590 Ecology Ln.	Chester	SC	--	Boral Limited		420,597		454		603		5,554		08/2025
	7/31/2025	7005 Cochran Rd.	Glenwillow	OH	--	Royal Appliance		458,000		515		525		-		-
		5352 Performance Way	Whitestown	IN	--	LaCrosse		380,000		319		309		-		-
	12/31/2025	1700 47th Ave North	Minneapolis	MN	--	Owens Corning		18,620		137		137		-		-
		4455 N. Cotton Ln.	Goodyear	AZ	--	Ball		160,140		233		218		-		-
2026	3/30/2026	121 Technology Dr.	Durham	NH	12	Heidelberg		500,500		634		1,811		-		-
	3/31/2026	633 Garrett Pkwy.	Lewisburg	TN	--	Calsonic Kansei		310,000		322		329		-		-
	4/30/2026	16811 W. Commerce Dr.	Goodyear	AZ	--	Blue Buffalo		540,349		611		489		-		-
	9/30/2026	900 Industrial Blvd.	Crossville	TN	--	Dana		222,200		144		144		-		-
		3931 Lakeview Corporate Dr.	Edwardsville	IL	--	Amazon.com		769,500		674		654		-		-

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Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		Base Rent as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020 ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
2026	9/30/2026	9494 W. Buckeye Rd.	Tolleson	AZ	--	CHEP		186,336		277		257		-		-
	10/31/2026	10345 Philipp Pkwy.	Streetsboro	OH	--	L'Oreal USA		649,250		721		674		-		-
		5001 Greenwood Rd.	Shreveport	LA	16	Libbey		646,000		541		562		-		-
	11/30/2026	250 Rittenhouse Cir.	Bristol	PA	--	Estée Lauder		241,977		287		301		-		-
		736 Addison Rd.	Erwin	NY	--	Corning		408,000		362		364		-		-
2027	1/31/2027	27200 West 157th St.	New Century	KS	--	Amazon.com		446,500		310		277		-		-
	2/28/2027	554 Nissan Pkwy.	Canton	MS	--	Nissan		1,466,000		1,550		1,520		-		-
	4/30/2027	16407 Applewhite Rd.	San Antonio	TX	13	Undisclosed		849,275		748		710		-		-
		200 Sam Griffin Rd.	Smyrna	TN	--	Nissan		1,505,000		1,640		1,587		-		-
	6/30/2027	1501 Nolan Ryan Expy.	Arlington	TX	--	Arrow Electronics		74,739		102		102		-		-
	8/31/2027	600 Gateway Blvd.	Monroe	OH	--	Hayneedle		994,013		986		814		-		-
	9/30/2027	1550 Hwy 302	Byhalia	MS	--	McCormick		615,600		610		604		-		-
	10/31/2027	201 James Lawrence Rd.	Jackson	TN	--	Kellogg		1,062,055		986		950		-		-
	12/31/2027	10590 Hamilton Ave.	Cincinnati	OH	--	Hillman Group		264,598		203		203		-		-
2028	1/31/2028	490 Westridge Pkwy.	McDonough	GA	--	Georgia-Pacific		1,121,120		934		881		-		-
	3/31/2028	29-01-Borden Ave./29-10 Hunters Point Ave.	Long Island City	NY	--	FedEx		140,330		1,284		1,282		35,544		03/2028
	8/31/2028	1420 Greenwood Rd.	McDonough	GA	--	United States Cold Storage		296,972		542		543		-		-
	9/30/2028	904 Industrial Rd.	Marshall	MI	--	Tenneco		246,508		203		189		-		-
2029	7/31/2029	8500 Nail Rd.	Olive Branch	MS	--	Sephora		716,080		688		657		-		-
	8/31/2029	8601 E. Sam Lee Ln.	Northlake	TX	--	Black and Decker		1,214,526		504		458		-		-
	9/30/2029	6255 East Minooka Rd.	Minooka	IL	--	Kellogg		1,034,200		733		668		-		-
	11/24/2029	318 Pappy Dunn Blvd.	Anniston	AL	--	IAC Group		276,782		435		423		-		-
	11/30/2029	1460 Cargo Court	Minooka	IL	--	Kellogg		705,661		707		651		-		-
	12/31/2029	200 International Pkwy.	Minooka	IL	--	BMW		473,280		443		395		-		-
2030	3/31/2030	549 Wingo Rd.	Byhalia	MS	--	Asics		855,878		1,097		1,049		-		-
	5/31/2030	359 Gateway Dr.	Lavonia	GA	--	TI Automotive		133,221		172		213		-		-
		4015 Lakeview Corporate Dr.	Edwardsville	IL	--	Spectrum		1,017,780		865		692		-		-
	6/30/2030	2601 Bermuda Hundred Rd.	Chester	VA	14	Philip Morris		1,034,470		963		959		-		-

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Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		Base Rent as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020 ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
2030	6/30/2030	700 Gateway Blvd.	Monroe	OH	--	Amazon.com		1,299,492		1,379		1,244		-		-
	9/30/2030	255 143rd Ave.	Goodyear	AZ	13	Undisclosed		801,424		1,000		902		41,877		08/2031
2031	10/31/2031	1020 W. Airport Rd.	Romeoville	IL	--	ARYZTA		188,166		915		878		-		-
	12/18/2031	80 Tyson Dr.	Winchester	VA	13	Undisclosed		400,400		592		538		-		-
2032	4/30/2032	13930 Pike Rd.	Missouri City	TX	--	Vulcan		-		531		502		-		-
	8/24/2032	16950 Pine Dr.	Romulus	MI	13	Undisclosed		500,023		642		610		-		-
	10/31/2032	27255 SW 95th Ave.	Wilsonville	OR	--	Pacific Natural Foods		508,277		780		672		-		-
		26700 Bunert Rd.	Warren	MI	--	Lipari		260,243		971		888		25,850		11/2032
2033	12/31/2033	2115 East Belt Line Rd.	Carrollton	TX	--	Teasdale		298,653		325		264		-		-
2034	9/30/2034	5625 North Sloan Ln.	North Las Vegas	NV	--	Nicholas		180,235		639		591		-		-
	10/31/2034	1001 Innovation Rd.	Rantoul	IL	--	Vista Outdoor		813,126		1,049		959		-		-
	12/31/2034	27 Inland Pkwy.	Greer	SC	13	Undisclosed		1,318,680		1,386		365		-		-
2035	3/31/2035	13863 Industrial Rd.	Houston	TX	--	Spitzer		187,800		609		542		-		-
		7007 F.M. 362 Rd.	Brookshire	TX	--	Spitzer		262,095		478		426		-		-
	6/30/2035	111 West Oakview Pkwy.	Oak Creek	WI	--	Stella & Chewy's		164,007		525		480		-		-
	10/22/2035	2860 Clark St.	Detroit	MI	13	Undisclosed		189,960		551		551		-		-
2036	5/31/2036	671 Washburn Switch Rd.	Shelby	NC	--	Clearwater Paper		673,425		696		627		-		-
2037	3/31/2037	4005 E I-30	Grand Prairie	TX	--	O'Neal Industries		215,000		468		400		-		-
2038	3/31/2038	13901/14035 Industrial Rd.	Houston	TX	--	Watco		132,449		1,693		1,488		-		-
2042	5/31/2042	4801 North Park Dr.	Opelika	AL	--	Golden State Enterprises		165,493		811		652		-		-
2067	12/31/2067	10201 Schuster Way	Pataskala	OH	--	Kohl's		-		240		112		-		-
SINGLE TENANT INDUSTRIAL TOTAL								49,145,583	$	56,334	$	53,413	$	108,825

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LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		Base Rent as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020 ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
Multi-tenant / Vacancy (7)(11)
	Various	6050 Dana Way	Antioch	TN	3 (97%)	Multi-Tenant		674,528		612		579		-		-
	Various	2415 US Hwy. 78 East	Moody	AL	3 (26%)	Multi-Tenant		595,346		62		62		-		-
	Various	351 Chamber Dr.	Chillicothe	OH	3, 8, 17 (98%)	Multi-Tenant		475,218		272		273		-		-
	Vacancy	1133 Poplar Creek Rd.	Henderson	NC	--	(Available for Lease)		196,946		-		-		-		-
	Vacancy	3301 Stagecoach Rd. NE	Thomson	GA	--	(Available for Lease)		208,000		-		-		-		-
MULTI-TENANT/VACANCY INDUSTRIAL TOTAL								2,150,038	$	946	$	914	$	-
INDUSTRIAL TOTAL/WEIGHTED AVERAGE						98.3% Leased		51,295,621	$	57,280	$	54,327	$	108,825

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LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease  Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		Base Rent as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020  ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
Single-tenant
2020	11/6/2020	4455 American Way	Baton Rouge	LA	--	New Cingular Wireless		46,350		182		193		-		-
2021	3/31/2021	1701 Market St.	Philadelphia	PA	--	Prime Communications		1,220		15		15		-		-
	6/30/2021	2050 Roanoke Rd.	Westlake	TX	--	Charles Schwab		130,199		518		558		-		-
	8/31/2021	3500 North Loop Rd.	McDonough	GA	--	Global Payments		62,218		216		216		-		-
	10/31/2021	1401 Nolan Ryan Expy.	Arlington	TX	--	Butler America Aerospace		4,979		22		22		-		-
2022	5/30/2022	13651 McLearen Rd.	Herndon	VA	--	United States of America		159,644		782		805		-		-
	7/31/2022	1440 E 15th St.	Tucson	AZ	--	CoxCom		28,591		138		138		-		-
2023	9/30/2023	1701 Market St.	Philadelphia	PA	--	CBC Restaurant		8,070		61		61		-		-
	11/06/2023	4455 American Way	Baton Rouge	LA	--	New Cingular Wireless		23,750		97		99		-		-
	12/14/2023	3333 Coyote Hill Rd.	Palo Alto	CA	--	Xerox		202,000		1,660		1,767		24,792		12/2023
2024	1/31/2024	1701 Market St.	Philadelphia	PA	--	Morgan Lewis		289,432		1,033		1,157		-		-
	2/14/2024	1362 Celebration Blvd.	Florence	SC	--	Change Healthcare		32,000		143		148		-		-
	5/31/2024	3476 Stateview Blvd.	Fort Mill	SC	--	Wells Fargo		169,083		504		498		-		-
		3480 Stateview Blvd.	Fort Mill	SC	--	Wells Fargo		169,218		522		498		-		-
2025	1/31/2025	1401 Nolan Ryan Expy.	Arlington	TX	--	Triumph Group		111,409		416		458		-		-
	2/28/2025	1401 Nolan Ryan Expy.	Arlington	TX	--	Infotech Enterprise		13,590		53		54		-		-
	5/31/2025	1701 Market St.	Philadelphia	PA	--	TruMark Financial		2,641		66		66		-		-
	6/30/2025	3711 San Gabriel	Mission	TX	--	T-Mobile West		75,016		257		259		-		-
2027	1/31/2027	1701 Market St.	Philadelphia	PA	--	Drybar		1,975		37		28		-		-
	5/31/2027	2401 Cherahala Blvd.	Knoxville	TN	--	CaremarkPCS		59,748		217		202		-		-
	8/31/2027	133 First Park Dr.	Oakland	ME	15	T-Mobile USA		78,610		220		391		-		-
2029	9/30/2029	9200 South Park Center Loop	Orlando	FL	--	CardWorks		59,927		220		255		-		-
2030	6/30/2030	9601 Renner Blvd.	Lenexa	KS	--	Quest Diagnostics		77,484		253		-		-		-
2031	11/30/2031	4 Apollo Drive	Whippany	NJ	--	CAE		123,734		519		506		11,419		11/2021
2033	12/31/2033	8555 South River Pkwy.	Tempe	AZ	--	Versum		95,133		370		329		-		-
2036	10/31/2036	270 Abner Jackson Pkwy.	Lake Jackson	TX	--	Dow		664,100		3,712		3,218		181,768		10/2036
2037	6/30/2037	1415 Wyckoff Rd.	Wall	NJ	--	NJ Natural Gas		157,511		901		943		3,864		01/2021

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Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease  Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		Base Rent as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020  ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
N/A	N/A	1701 Market St.	Philadelphia	PA	--	Parking Operations		-		381		381		-		-
	Vacancy	1701 Market St.	Philadelphia	PA	--	(Available for Lease)		699		-		-		-		-
		1401 Nolan Ryan Expy.	Arlington	TX	--	(Available for Lease)		31,830		-		-		-		-
SINGLE TENANT OFFICE TOTAL								2,880,161	$	13,515	$	13,265	$	221,843
Multi-tenant / Vacancy (7)(11)
	Vacancy	5200 Metcalf Ave.	Overland Park	KS	--	(Available for Lease)		320,198		-		-		32,112		N/A
	Vacancy	820 Gears Rd.	Houston	TX	--	(Available for Lease)		78,895		-		-		-		-
	Vacancy	5600 Broken Sound Blvd.	Boca Raton	FL	8	(Available for Lease)		143,290		277		309		18,413		N/A
	Various	13430 North Black Canyon Fwy.	Phoenix	AZ	3 (73%)	Multi-Tenant		138,940		355		386		-		-
MULTI-TENANT/VACANCY OFFICE TOTAL								681,323	$	632	$	695	$	50,525
OFFICE SUBTOTAL/WEIGHTED AVERAGE						82.8% Leased		3,561,484	$	14,147	$	13,960	$	272,368

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Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		Base Rent  as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020  ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity
OTHER PROPERTIES
Single-tenant
Specialty
2048	12/31/2048	30 Light St.	Baltimore	MD	--	30 Charm City		-		78		78		-		-
2055	1/31/2055	499 Derbyshire Dr.	Venice	FL	--	Littlestone Brotherhood		31,180		477		347		-		-
2112	8/31/2112	201-215 N. Charles St.	Baltimore	MD	--	HCRE 201NCharles		-		77		77		-		-
SINGLE TENANT OTHER TOTAL								31,180	$	632	$	502	$	-
Multi-tenant / Vacancy (7)(11)
	Various	King St./1042 Fort St. Mall	Honolulu	HI	3 (42%)	Multi-Tenant		77,459		136		136		-		-
MULTI-TENANT/VACANCY OTHER TOTAL								77,459	$	136	$	136	$	-
OTHER SUBTOTAL/WEIGHTED AVERAGE						58.9% Leased		108,639	$	768	$	638	$	-
TOTAL OFFICE & OTHER/WEIGHTED AVERAGE						82.1% Leased		3,670,123	$	14,915	$	14,598	$	272,368
TOTAL CONSOLIDATED PORTFOLIO/WEIGHTED AVERAGE						97.2% Leased		54,965,744	$	72,195	$	68,925	$	381,193

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Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		LXP % Ownership		Base Rent  as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020 ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity (10)
NON-CONSOLIDATED PROPERTIES
NNN OFFICE JV PROPERTIES
2022	12/31/2022	231 N. Martingale Rd.	Schaumburg	IL	6	Career Education Corporation		317,198	20	%		1,150		1,190		268,320	09/2021
2023	3/31/2023	8900 Freeport Pkwy.	Irving	TX	6	Nissan		268,445	20	%		1,231		1,146		-	-
2025	2/28/2025	6555 Sierra Dr.	Irving	TX	6, 9	TXU		247,254	20	%		951		808		-	-
	3/14/2025	601 & 701 Experian Pkwy.	Allen	TX	6	Experian Holdings		292,700	20	%		810		768		-	-
	6/30/2025	2500 Patrick Henry Pkwy.	McDonough	GA	6	Georgia Power		111,911	20	%		407		359		-	-
	12/31/2025	4001 International Pkwy.	Carrollton	TX	6	Motel 6		138,443	20	%		634		599		-	-
2026	3/31/2026	500 Olde Worthington Rd.	Westerville	OH	6	Syneos		97,000	20	%		336		303		-	-
	4/30/2026	800 East Canal St.	Richmond	VA	4	Richmond Belly Ventures		2,568	20	%		20		20		-	-
2027	2/28/2027	800 East Canal St.	Richmond	VA	4	Sumitomo		8,503	20	%		51		37		-	-
	6/30/2027	3902 Gene Field Rd.	St. Joseph	MO	6	Boehringer Ingelheim USA		98,849	20	%		529		495		-	-
	7/06/2027	2221 Schrock Rd.	Columbus	OH	6	MS Consultants		42,290	20	%		171		161		-	-
	8/07/2027	25 Lakeview Dr.	Jessup	PA	6	TMG Health		150,000	20	%		583		548		-	-
2029	1/31/2029	6226 West Sahara Ave.	Las Vegas	NV	6	Nevada Power		282,000	20	%		868		772		-	-
2030	7/31/2030	800 East Canal St.	Richmond	VA	4	Irongate		4,235	20	%		-		-		-	-
	8/31/2030	800 East Canal St.	Richmond	VA	--	McGuireWoods		224,537	20	%		1,749		1,786		57,500	02/2031
	9/30/2030	800 East Canal St.	Richmond	VA	4	The Riverstone Group		25,707	20	%		193		164		-
2031	1/10/2031	810 Gears Rd.	Houston	TX	6	United States of America		68,985	20	%		300		356		-	-
	3/1/2031	800 East Canal St.	Richmond	VA	4	Towne Bank		26,047	20	%		211		179		-	-
2032	4/30/2032	1210 AvidXchange Ln.	Charlotte	NC	--	AvidXchange		201,450	20	%		1,506		1,343		46,900	12/2022; 01/2033
	9/30/2032	10001 Richmond Ave.	Houston	TX	6	Schlumberger		554,385	20	%		1,480		1,482		-	-
2035	4/30/2035	143 Diamond Ave.	Parachute	CO	6	Alenco		49,024	20	%		290		295		-	-
2088	8/8/2088	800 East Canal St.	Richmond	VA	4	The City of Richmond, Virginia		-	20	%		89		105		-	-
N/A	Vacancy	810 Gears Rd.	Houston	TX	6	(Available for Lease)		9,910	20	%		-		-		-	-
		800 East Canal St.	Richmond	VA	4	(Available for Lease)		38,712	20	%		-		-		-	-
NNN OFFICE JV TOTAL/WEIGHTED AVERAGE						98.5% Leased		3,260,153			$	13,559	$	12,916	$	372,720

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Property Leases and Vacancies - Consolidated Portfolio - 3/31/2020

Year of Lease Expiration	Date of Lease Expiration	Property Location	City	State	Note	Primary Tenant, Guarantor, or Parent	Sq. Ft. Leased or Available (1)		LXP % Ownership		Base Rent  as of 3/31/2020 ($000) (2)		Cash Base Rent as of 3/31/2020 ($000) (2)		3/31/2020 Debt Balance ($000)		Debt Maturity (10)
OTHER NON-CONSOLIDATED PROPERTIES
2036	8/31/2036	2203 North Westgreen Blvd.	Katy	TX	--	British Schools		274,000	25	%		1,675		1,675		51,845	12/2022
OTHER NON-CONSOLIDATED TOTAL/WEIGHTED AVERAGE						100% Leased		274,000			$	1,675	$	1,675	$	51,845
NON-CONSOLIDATED TOTAL/WEIGHTED AVERAGE						98.6% Leased		3,534,153			$	15,234	$	14,591	$	424,565

Footnotes
1	Square footage leased or available.
2	Three months ended 3/31/2020 Base Rent and Cash Base Rent. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.
3	Percent represents % leased as of 3/31/2020.
4	Part of Richmond, Virginia property, which is primarily leased to McGuireWoods LLP.
5	Lexington has a 71.1% interest in this property. Subsequent to 3/31/2020, lease extended to 12/19/2025.
6	All debt is cross-collateralized and cross-defaulted.
7	Multi-tenant properties are properties less than 50% leased to a single tenant.
8	Base Rent and Cash Base Rent amounts represent/include prior tenant.
9	Lease extended to 02/2035 upon completion of adjacent parking garage.
10	Interest rates range from 0.25% to 5.3% at 3/31/2020.
11	The multi-tenanted / vacant properties incurred approximately $1.1 million in operating expenses, net for the three months ended 3/31/2020.
12	Heidelberg Americas, Inc. lease expires 3/30/2021; however, new tenant (manroland Goss Web Systems America, LLC) lease expires 3/30/2026.
13	Lease restricts certain disclosures.
14	Property includes four warehouses (252,351 square feet each) and one other property (25,066 square feet).
15	Subsequent to 3/31/2020, property sold.
16	Cash basis for revenue recognition effective 3/31/2020. $1.2 million deferred rent receivable reserved.
17	Prior tenant dissolved. Base Rent excludes $0.6 million deferred rent receivable write off.
18	Subsequent to 3/31/2020, tenant extended its lease to 5/31/2021.

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Select Credit Metrics Summary ⁽¹⁾

	03/31/2020
Adjusted Company FFO Payout Ratio		55.3	%
Unencumbered Assets		$3.5 billion
Unencumbered NOI		85.2	%
(Debt + Preferred) / Gross Assets		36.1	%
Debt/Gross Assets		33.8	%
Secured Debt / Gross Assets		8.9	%
Net Debt / Adjusted EBITDA		5.5	x
(Net Debt + Preferred) / Adjusted EBITDA		5.8	x
Credit Facilities Availability (2)		$470.0 million
Unsecured Debt / Unencumbered NOI		5.1	x

Footnotes

(1) See reconciliations of non-GAAP measures in this document. Lexington believes these credit metrics provide investors with additional information to evaluate its liquidity and performance.

(2) Subject to covenant compliance.

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FINANCIAL COVENANTS ⁽¹⁾

Corporate Level Debt

	Must be:		03/31/2020
Bank Loans:
Maximum Leverage		<60%		38.6	%
Fixed Charge Coverage		>1.5x		3.0	x
Recourse Secured Indebtedness Ratio		<10% cap value		0.0	%
Secured Indebtedness Ratio		<40%		12.3	%
Unsecured Debt Service Coverage		>2.0x		6.0	x
Unencumbered Leverage		<60%		30.0	%
Bonds:
Debt to Total Assets		<60%		34.5	%
Secured Debt to Total Assets		<40%		9.1	%
Debt Service Coverage		>1.5x		4.0	x
Unencumbered Assets to Unsecured Debt		>150%		341.2	%

Footnotes

(1) The following is a summary of the key financial covenants for Lexington’s credit facility and term loan and senior notes, as of March 31, 2020 and as defined and calculated per the terms of the credit facility and term loan and senior notes, as of such date and applicable.  These calculations are presented to show Lexington’s compliance with such covenants only and are not measures of Lexington’s liquidity or performance.

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Consolidated Properties: Mortgages and Notes Payable

03/31/2020

Property	Footnotes		Debt Balance ($000)		Interest Rate (%)			Maturity (a)		Current Estimated Annual Debt Service ($000)  (b)		Balloon Payment ($000)
INDUSTRIAL
Chester, SC			$	5,554		5.380	%		08/2025	$	1,144	$	362
Long Island City, NY				35,544		3.500	%		03/2028		4,879		-
Goodyear, AZ				41,877		4.290	%		08/2031		1,797		33,399
Warren, MI				25,850		5.380	%		11/2032		1,391		22,037
Industrial Subtotal/Wtg. Avg./Years Remaining (c)			$	108,825		4.347	%		10.2	$	9,211	$	55,798
OFFICE
Overland Park, KS		(e)	$	32,112		5.891	%		N/A	$	-	$	32,112
Boca Raton, FL		(e)		18,413		6.470	%		N/A		-		18,413
Wall, NJ				3,864		6.250	%		01/2021		4,042		-
Whippany, NJ				11,419		6.298	%		11/2021		1,344		10,400
Palo Alto, CA				24,792		3.970	%		12/2023		7,059		-
Lake Jackson, TX				181,768		4.040	%		10/2036		12,719		11,305
Office Subtotal/Wtg. Avg./Years Remaining (c)			$	272,368		4.542	%		11.4	$	25,164	$	72,230
Subtotal/Wtg. Avg./Years Remaining (c)			$	381,193		4.486	%		11.1	$	34,375	$	128,028
CORPORATE (f)
Revolving Credit Facility		(g)	$	130,000		1.605	%		02/2023	$	2,115	$	130,000
Senior Notes				250,000		4.250	%		06/2023		10,625		250,000
Senior Notes				250,000		4.400	%		06/2024		11,000		250,000
Term Loan		(h)		300,000		2.732	%		01/2025		8,310		300,000
Trust Preferred Notes		(i)		129,120		3.470	%		04/2037		4,543		129,120
Subtotal/Wtg. Avg./Years Remaining (c)			$	1,059,120		3.436	%		5.5	$	36,593	$	1,059,120
Total/Wtg. Avg./Years Remaining (c)		(d)	$	1,440,313		3.714	%		7.0	$	70,968	$	1,187,148

Footnotes
(a)	Subtotal and total based on weighted-average term to maturity shown in years based on debt balance.
(b)	Remaining payments for debt with less than 12 months to maturity, all others are debt service for next 12 months.
(c)	Total shown may differ from detailed amounts due to rounding.
(d)	See reconciliations of non-GAAP measures in this document.
(e)	Loan is in default.
(f)	Unsecured.
(g)	Rate ranges from LIBOR plus 0.775% to 1.45%
(h)	Rate ranges from LIBOR plus 0.85% to 1.65%. LIBOR rate was fixed at 1.732% through January 2025 via interest rate swap agreements.
(i)	Rate is three month LIBOR plus 170 bps.

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Debt Maturity Schedule

03/31/2020

($000)

Consolidated Properties
Year	Mortgage Scheduled  Amortization		Mortgage Balloon Payments  (1)		Corporate Debt
2020 - remaining	$	14,536	$	50,525	$	-
2021		19,555		10,400		-
2022		18,564		-		-
2023		20,136		-		380,000
2024		13,856		-		250,000
	$	86,647	$	60,925	$	630,000

Footnotes
(1)	Includes mortgage balloons in default
(2)	Percentage denotes weighted-average interest rate.

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LEXINGTON REALTY TRUST

Selected Balance Sheet Account Data

03/31/2020

($000)

Balance Sheet
Other assets	$	12,585
The components of other assets are:
Deposits	$	1,046
Equipment		478
Prepaids		3,801
Other receivables		534
Deferred lease incentives		6,726
Accounts payable and other liabilities
The components of accounts payable and other liabilities are:	$	42,479
Accounts payable and accrued expenses	$	10,454
CIP accruals and other		7,087
Taxes		441
Deferred lease costs		2,799
Deposits		1,629
Escrows		1,047
Transaction costs		98
Derivative liability		18,924

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LEXINGTON REALTY TRUST

 NON-GAAP MEASURES

DEFINITIONS

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

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

Definitions:

Adjusted EBITDA: Adjusted EBITDA represents EBITDA (earnings before interest, taxes, depreciation and amortization) modified to include other adjustments to GAAP net income for gains on sales of properties, impairment charges, debt satisfaction gains (charges), net, non-cash charges, net, straight-line adjustments, non-recurring charges and adjustments for pro-rata share of non-wholly owned entities. Lexington’s calculation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. Lexington believes that net income is the most directly comparable GAAP measure to Adjusted EBITDA.

Base Rent: Base Rent is calculated by making adjustments to GAAP rental revenue to exclude billed tenant reimbursements and lease termination income and to include ancillary income. 2020 Base Rent excludes reserves/write-offs of deferred rent receivable. Lexington believes Base Rent provides a meaningful measure due to the net lease structure of leases in the portfolio.

Cash Base Rent: Cash Base Rent is calculated by making adjustments to GAAP rental revenue to remove the impact of GAAP required adjustments to rental income such as adjustments for straight-line rents related to free rent periods and contractual rent increases. Cash Base Rent excludes billed tenant reimbursements and lease termination income and includes ancillary income. Lexington believes Cash Base Rent provides a meaningful indication of an investments ability to fund cash needs.

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

The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sales of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO.” FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.

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

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

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LEXINGTON REALTY TRUST

 NON-GAAP MEASURES

DEFINITIONS (CONTINUED)

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

Same-Store NOI: Same-Store NOI represents the NOI for consolidated properties that were owned and included in our portfolio for two comparable reporting periods excluding properties encumbered by mortgage loans in default and the revenue associated with the expansion of properties, as applicable. As Same-Store NOI excludes the change in NOI from acquired and disposed of properties, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating Same-Store NOI, and accordingly, Lexington's Same-Store NOI may not be comparable to other REITs. Management believes that Same-Store NOI is a useful supplemental measure of Lexington's operating performance. However, Same-Store NOI should not be viewed as an alternative measure of Lexington 's financial performance since it does not reflect the operations of Lexington's entire portfolio, nor does it reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of Lexington's properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact Lexington's results from operations. Lexington believes that net income is the most directly comparable GAAP measure to Same-Store NOI.

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 RECONCILIATION OF NON-GAAP MEASURES

($000)

	Three months ended March 31, 2020
Rent Reconciliation:
Rental revenue as reported	$	78,735
Base Rent from sold properties		(386	)
Lease termination income		(141	)
Straight-line write-offs/reserves		1,858
Ancillary revenue		392
Reimbursements		(8,263	)
Base Rent per supplement	$	72,195
Adjustments: (1)
Straight-line adjustments	$	(3,244	)
Lease incentives		269
Amortization of above/below market leases		(295	)
Cash Base Rent per supplement	$	68,925

Consolidated debt reconciliation March 31,2020:

	GAAP Balance		Deferred Loan Costs, net		Discounts		Gross Balance
Mortgages and notes payable (2)	$	377,703	$	3,490	$	-	$	381,193
Revolving credit facility borrowings (3)		130,000		-		-		130,000
Term loans payable (3)		297,565		2,435		-		300,000
Senior notes payable(3)		497,079		2,027		894		500,000
Trust preferred securities (3)		127,421		1,699		-		129,120
Consolidated debt	$	1,429,768	$	9,651	$	894	$	1,440,313

Footnotes

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

(2) Secured.

(3) Unsecured.

49 

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Same-Store NOI Reconciliation:

	Three months ended March 31,
	2020			2019
Net income	$	18,420		$	28,280
Interest and amortization expense		14,795			17,208
Provision for income taxes		653			437
Depreciation and amortization		40,509			37,595
General and administrative		7,825			8,527
Transaction costs		21			-
Non-operating/advisory income		(1,889	)		(1,327	)
Gains on sales of properties		(9,805	)		(20,957	)
Impairment charges		-			588
Debt satisfaction (gains) charges, net		(1,393	)		103
Equity in (earnings) of non-consolidated entities		(263	)		(619	)
Lease termination income		(141	)		(1,070	)
Straight-line adjustments		(1,419	)		(2,330	)
Lease incentives		269			273
Amortization of above/below market leases		(295	)		(6	)
Net Operating Income - ("NOI")		67,287			66,702
Less NOI:
Acquisitions and dispositions		(10,830	)		(9,735	)
Properties in default		80			(291	)
Same-Store NOI	$	56,537		$	56,676

NOI for NAV:

	Three months ended March 31, 2020
NOI per above	$	67,287
Less NOI:
Disposed of properties		(280	)
Held for sale assets		(391	)
Assets acquired in 2020		(1,767	)
Assets less than 70% leased / Other		663
NOI for NAV	$	65,512

50 

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Reconciliation to Adjusted EBITDA:
	Three months ended
	3/31/2020			12/31/2019			9/30/2019			6/30/2019			Trailing 12 Months
Net income attributable to
Lexington Realty Trust shareholders	$	18,154		$	85,231		$	143,319		$	23,333		$	270,037
Interest and amortization expense		14,795			14,380			16,481			17,026			62,682
Provision for income taxes		653			271			241			430			1,595
Depreciation and amortization		40,509			35,977			37,211			36,811			150,508
Straight-line adjustments		(1,419	)		(3,656	)		(4,161	)		(4,355	)		(13,591	)
Lease incentives		269			293			318			307			1,187
Amortization of above/below market leases		(295	)		(269	)		(142	)		(26	)		(732	)
Gains on sales of properties		(9,805	)		(74,227	)		(140,461	)		(15,244	)		(239,737	)
Impairment charges		-			2,974			673			1,094			4,741
Debt satisfaction (gains) charges, net		(1,393	)		(10	)		4,424			-			3,021
Non-cash charges, net		1,658			1,577			1,554			1,552			6,341
Pro-rata share adjustments:
Non-consolidated entities adjustment		2,607			3,243			232			3,223			9,305
Noncontrolling interests adjustment		101			(41	)		4,235			160			4,455
Adjusted EBITDA	$	65,834		$	65,743		$	63,924		$	64,311		$	259,812

51 

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Reconciliation of Select Credit Metrics:
Adjusted Company FFO Payout:	Three months ended March 31, 2020			(Debt + Preferred) / Gross Assets:	Three months ended March 31, 2020
Common share dividends per share	$	0.1050		Consolidated debt	$	1,429,768
Adjusted Company FFO per diluted share		0.19		Preferred shares liquidation preference		96,770
Adjusted Company FFO payout ratio		55.3	%	Debt and preferred	$	1,526,538
Unencumbered Assets:				Total assets	$	3,293,452
Real estate, at cost	$	3,912,525		Plus depreciation and amortization:
held for sale real estate, at cost		13,300		Real estate		914,600
less encumbered real estate, at cost		(458,975	)	Deferred lease costs		15,322
Unencumbered assets	$	3,466,850		Held for sale assets		6,510
Unencumbered NOI:				Gross assets	$	4,229,884
NOI	$	67,287
Disposed of properties NOI		(280	)	(Debt + Preferred) / Gross Assets		36.1	%
Adjusted NOI		67,007
less encumbered adjusted NOI		(9,950	)	Debt  / Gross Assets:
Unencumbered adjusted NOI	$	57,057		Consolidated debt	$	1,429,768
Unencumbered NOI %		85.2	%
				Gross assets	$	4,229,884
Net Debt  / Adjusted EBITDA:
Adjusted EBITDA	$	259,812		Debt / Gross assets		33.8	%
Consolidated debt	$	1,429,768		Secured Debt  / Gross Assets:
less consolidated cash and cash equivalents		(83,525	)	Mortgages and notes payable	$	377,703
Non-consolidated debt, net		84,171
Net debt	$	1,430,414		Gross assets	$	4,229,884
Net debt / Adjusted EBITDA		5.5	x	Secured Debt / Gross Assets		8.9	%
(Net Debt + Preferred)  / Adjusted EBITDA:				Unsecured Debt / Unencumbered NOI:
Adjusted EBITDA	$	259,812		Consolidated debt	$	1,429,768
				less mortgages and notes payable		(377,703	)
Net debt	$	1,430,414		Unsecured Debt	$	1,052,065
Preferred shares liquidation preference		96,770
Net debt + preferred	$	1,527,184		Unencumbered adjusted NOI (Annual)	$	207,487
(Net Debt + Preferred) / Adjusted EBITDA		5.8	x	Unsecured Debt / Unencumbered NOI		5.1	x

52 

Investor Information

Transfer Agent

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

Investor Relations

Heather Gentry

Senior Vice President, Investor Relations

Telephone (direct)	(212) 692-7219
E-mail	hgentry@lxp.com

Research Coverage

Bank of America/Merrill Lynch		KeyBanc Capital Markets Inc.
James Feldman	(646) 855-5808	Craig Mailman	(917) 368-2316
Evercore Partners		Ladenburg Thalmann & Co., Inc.
Sheila K. McGrath	(212) 497-0882	John Massocca	(212) 409-2543
J.P. Morgan Chase		Stifel Nicolaus
Anthony Paolone	(212) 622-6682	John W. Guinee	(443) 224-1307
Jeffries & Company, Inc.		Wells Fargo Securities, LLC
Jon Peterson	(212) 284-1705	Todd J. Stender	(562) 637-1371

53 

 

LEXINGTON REALTY TRUST

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

EX-99.2

EXHIBIT 99.2

Lexington Realty Trust – UNEDITED TRANSCRIPT

Q1 2020 Earnings Call

Company Participants:

T. Wilson Eglin, Chairman and Chief Executive Officer

Beth Boulerice, Executive Vice President, Chief Financial Officer and Treasurer

Brendan Mullinix, Executive Vice President

Lara Johnson, Executive Vice President

James Dudley, Executive Vice President and Director of Asset Management

Heather Gentry, Senior Vice President of Investor Relations

Operator:

Good day, and welcome to the Lexington Realty Trust First Quarter 2020 Conference Call and Webcast. (Operator Instructions) Please note, this event is being recorded. I would now like to turn the call over to Heather Gentry of Investor Relations. Please go ahead.

Heather Gentry:

Thank you, operator. Welcome to Lexington Realty Trust’s First Quarter 2020 conference call and webcast. The earnings release was distributed this morning, and both the release and quarterly supplemental are available on our website at www.lxp.com in the Investors section and will be furnished to the SEC on a Form 8-K.

Certain statements made during this conference call regarding future events and expected results may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Lexington believes that these statements are based on reasonable assumptions; however, certain factors and risks, including those included in today’s earnings press release and those described in reports that Lexington files with the SEC from time to time could cause Lexington’s actual results to differ materially from those expressed or implied by such statements. Except as required by law, Lexington does not undertake a duty to update any forward-looking statements.

In the earnings press release and quarterly supplemental disclosure package, Lexington has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure. Any references in these documents to Adjusted Company FFO refer to Adjusted Company Funds from Operations available to all equityholders and unitholders on a fully diluted basis. Operating performance measures of an individual investment are not intended to be viewed as presenting a numerical measure of Lexington's historical or future financial performance, financial position or cash flows.

On today’s call, Will Eglin, Chairman and CEO, and Beth Boulerice, CFO, will provide a recent business update and commentary on first quarter results. Executive Vice Presidents Brendan Mullinix, Lara Johnson, and James Dudley will be available during the question and answer portion of our call. I will now turn the call over to Will.

1

T. Wilson Eglin:

Thanks, Heather. Good morning everyone. First and foremost, we hope you and your families are staying safe and healthy during this unprecedented and challenging time. There are considerable uncertainties facing the global economy and some parts of the REIT industry, and we are working diligently in this environment to mitigate any potential impact on our business and take full advantage of new opportunities that we believe our company is so well-positioned to act upon.

The Covid-19 pandemic has created a few challenges, but our company is operating well, and our portfolio performance has been extremely resilient. We acted early in March to ensure the safety and health of our employees by transitioning to a complete work-from-home arrangement. All in all, it has proven quite effective. In addition to smoothly moving to a virtual work environment, our employees have donated over $100,000 to charities and provided considerable financial assistance to help the family of one of our employees who lost both her father and husband in successive weeks. To me, there are no finer corporate citizens than ours and I could not be prouder.

A significant asset of our company is our long-standing relationships with our tenants, and our communications remain open and active. To date, we have fared extremely well with our consolidated Cash Base rent collections, with 99.8% of April rents collected and May rent collections are higher than at the same date in April.

As expected, we have received rent relief requests from some of our tenants, and we are amenable to deferring rent in the context of negotiating lease modifications that we believe may preserve or enhance value. Every situation is different, with some tenants needing financial assistance and most others, in our view, being opportunistic in their requests.

At quarter end, our overall portfolio was 97.2% leased, up slightly when compared to last quarter, and our weighted-average lease term of 8.3 years is working in our favor in a defensive climate. We have minimal lease expirations for the remainder of 2020, with only 2.4% of our overall revenue subject to renewal, and our outlook on leasing outcomes in 2021 remain largely unchanged at this time. We will provide updates accordingly as the year progresses.

We continue to focus on our core business objectives, and we are pleased to have completed the bulk of our transition to an industrial REIT. While we cannot estimate the full impact that COVID-19 will have on our overall business, we believe our risk is mitigated as a result of this transition and our emphasis on warehouse and distribution facilities has generated strong shareholder returns relative to other sectors. In January and February, we purchased $195 million dollars of high-quality industrial assets with a robust weighted-average lease term of nine years in strong submarkets of Chicago, Phoenix, and Dallas. Subsequent to quarter-end, we acquired an industrial property in Savannah for approximately $35 million, which was match funded through a small equity raise off of our ATM. Fortunately, we did not have substantial investment commitments in place at pre-pandemic valuations and we have capital to invest at higher yields as a result.

We believe we are in a more advantageous investment environment than we have been in recent years, with cap rates having moved 5 to 10% in our favor. Accordingly, we are actively engaged in underwriting new investments, and we are working to add high-quality, well-located acquisitions and build-to-suits to our pipeline with most opportunities at going-in cap rates in the 5.25% to 6% range.

2

In view of our retained cash flow, financial flexibility, anticipated sales proceeds, and access to capital markets, we are quite comfortable with our financial approach to our forward pipeline, although on-going market conditions may change our view in the future. We believe the longer-term industrial opportunity also appears promising as we expect to see a continued shift to e-commerce, more resilient supply chains that accommodate additional inventory, and the potential for more goods to be produced domestically, which bodes well for our business.

We disposed of $43 million dollars of office properties during and subsequent to quarter-end. These assets generated a combined annualized NOI of $3.2 million dollars. Although subject to change given the current environment, our 2020 disposition plan still contemplates disposing of, or marketing for sale, up to $500 million dollars of primarily office properties. While we remain active and engaged, we have witnessed and expect to continue to see a slow down on the dispositions front, at least for the remainder of the first half of the year, with a potential pick-up in the transactions market in the second half of the year. Our focus continues to be on our transition to becoming a 100% industrial REIT by year-end 2022, although our progress this year may be slower than we anticipated when the year began.

We have been active in both issuing and repurchasing common shares in a volatile market. Year-to-date, we have issued approximately four million common shares net, at an average price of $11.06 per share under our ATM program. Depending on our share price, we will continue to access capital markets to fund acquisitions, supplementing our investment needs with retained cash flow, disposition proceeds, and utilizing our credit line as needed.

With a strong balance sheet, favorable liquidity position, healthy weighted-average lease term, and a conservative payout ratio, we believe we are well-positioned for the current environment. At this time, we are maintaining 2020 Adjusted Company FFO guidance in the range of $0.74 to $0.77 per common share, although this is subject to change depending on portfolio performance over the balance of the year. Our business strategy remains largely unchanged, and we will continue to capitalize on favorable market opportunities to grow our industrial portfolio.

With that, I’ll turn the call over to Beth who will provide a financial update.

Beth Boulerice:

Thanks, Will. Starting with first quarter financial results, our Adjusted Company FFO was approximately $0.19 cents per diluted common share, which was in-line with our expectations. Our Adjusted Company FFO payout ratio of 55.3% at quarter end remains extremely conservative, which is particularly important in this current environment.

Property operating expenses of $10 million dollars are down when compared to last quarter, of which 80% was attributable to tenant reimbursements. G&A expenses were under $8 million dollars in the quarter, a decrease of $700 thousand dollars compared to the first quarter of 2019. Our estimated 2020 G&A is still forecasted to fall within a range of $31 to $33 million dollars.

3

During the quarter, the tenant at our Chillicothe, Ohio property dissolved its tenant entity and is no longer paying rent. We were able to backfill the majority of the space and sustain the rent with the subtenants in-place.  However, we recorded a non-cash deferred rent receivable write-off of about $600 thousand dollars relating to the prior tenant.  Additionally, we recorded a $1.2 million deferred rent receivable reserve on one of our properties due to tenant credit concerns.

Year-over-year, same-store occupancy was down a little over 1%, although same-store NOI was down just 0.2%, and up 0.5%, when excluding single-tenant vacancies.

Moving onto rental collections, as Will mentioned, we have done well with our consolidated Cash Base rent collections with all of March and 99.8% of April paid. We have also collected 84% of May rents that were due at the beginning of the month, which is a slightly better collection rate as compared to April for the same time period. Although promising to date, the information regarding historical rent collection should not be considered an indication of expected future rent collections.

As mentioned, we have received rent relief requests from some of our tenants. The amount of rent relief requests we have received represented 5.5% of our 2019 annual Cash Base rents. The majority of these requests were in the form of rent deferral requests over varying periods of time. The amount of rent relief requests from tenants whose operations we believe have been impacted by the current pandemic to the point of needing financial assistance represented less than 1% of our 2019 annual Cash Base rents. Our team continues to work diligently with our tenants as we manage through these unprecedented economic conditions, and while we are in discussions, to-date, we have not yet granted any rent relief.

We evaluate all requests to determine what is the best course of action moving forward. In all these instances, we are requesting specific financial information, including any government assistance requested, to deem if rental relief is warranted. Some tenants have chosen not to provide such information and have continued to pay rent.

We do not expect any material impact to our GAAP rental revenues resulting from rent relief requests at this time, absent any material tenant defaults. However, we can give no assurances on the outcomes of any rent relief requests.

Turning to our estimated 2020 Adjusted Company FFO guidance, we are maintaining current guidance in the range of $0.74 to $0.77 cents per diluted common share. Factors driving this decision include our current outlook on investments and dispositions, minimal 2020 remaining lease expirations, and the potential sale of our Dow Chemical facility later in the second half of the year, among other things. We also have built in approximately 150 basis points of bad debt expense into our guidance for the remainder of the year as we believe it is prudent given the current economic environment. Keep in mind, this guidance range is forward looking and is always subject to change. We will continue to monitor our guidance closely in light of existing and future market conditions.

4

Looking at our balance sheet, we believe we entered the pandemic in a position of strong financial strength with ample liquidity and borrowing capacity. At quarter end, we had approximately $90 million dollars of cash, including restricted cash, with approximately $470 million dollars available on our unsecured revolving credit facility. We remain very comfortable with our leverage of 5.5 times net debt to Adjusted EBITDA at quarter-end and note that our unsecured debt to unencumbered NOI is 5.1 times. Unencumbered NOI represented more than 85% of our portfolio at quarter end. Further, we have no significant debt maturities before 2023. At quarter end, our consolidated debt outstanding was approximately $1.4 billion with a weighted-average interest rate of approximately 3.7% and a weighted-average term of seven years.

With that, I’ll turn the call back over to Will.

T. Wilson Eglin:

Thanks Beth. I will now turn the call over to the operator who will conduct Q&A.

Operator:

Thank you. We will now begin the question and answer session. (Operator Instructions)

And our first question today comes from Jamie Feldman from Bank of America.

Elvis Rodriguez:

This is Elvis on for Jamie. I just had a quick question. So on your commentary and also in the release, you mentioned that today's market conditions are a little bit more favorable and cap rates have widened a bit in your favor in that 5% to 10% range. Can you just elaborate on that? Is that because of COVID-19? And are you seeing any transactions out there that are giving you sort of this perspective?

T. Wilson Eglin:

Yes. I think that that's what we've observed in the market so far. I think quite a bit of it is that debt capital hasn't been readily available. So if anything, our view is that as debt markets recover over the balance of the year, cap rates may very well compress again and this opportunity may be somewhat limited. So we want to try to take full advantage of that. And we do have transactions that we're working on in our pipeline that prove the thesis that cap rates widened out. So we think that's a good opportunity for us.

And the other thing is fewer buyers are able to get through diligence in some transactions, so the buyer pool is a little bit limited from that standpoint.

Elvis Rodriguez:

And would you say these are distressed sellers or sellers that are looking to just exit markets? Like can you, perhaps, give us some indication of the makeup of those sellers that you're seeing lower their pricing?

T. Wilson Eglin:

Yes. I wouldn't think that there will be any real distressed opportunity in our asset class. But generally, we're often buying some merchant builders who've either completed build-to-suits or built spec real estate that's being leased and they have an interest in getting liquidity from their projects to move on to whatever's next. So in these sales, they may be making a little bit less money than they thought a few months ago, but I think it's just a desire for liquidity in the context of their overall strategy more than anything else.

5

Elvis Rodriguez:

Thank you. That's helpful. And then maybe just 1 more. On the office side, has tenant interest or investor interest increased in sort of the suburban second-tier city office buildings as perhaps people start to think about leaving less dense cities? I'm just curious on your thoughts there and any conversations you're having.

T. Wilson Eglin:

I think it's a little early to draw conclusions. But our view is that in many cases with will be good for suburban office as companies look to diversify how they're officing their people. So in terms of the rent relief requests that we got, it was sort of disproportionately small in office, which suggests to me that that thesis may prove out to be true. But it's just a little bit early to have proof of that.

Operator:

Our next question comes from Todd Stender with Wells Fargo.

Todd Stender:

I hope you're well, guys. You've maintained guidance, which is rare right now. We've seen most other REITs withdraw guidance. What's included in yours? You've got a handful of leases still expiring, acquisitions that may close and then dispositions, like you mentioned. Just want to see what's in there.

T. Wilson Eglin:

Yes. I mean, the truth is, Todd, there really haven't been many moving pieces that would have changed our outlook from the beginning of the year. So I think if dispositions slow down, there's, right, less dilution from that this year, that's actually good for funds from operations. So the parts of the model really haven't changed in any way that would have caused us to revisit guidance. We don't have much lease rollover and our expected outcomes on all of that stuff is still consistent with what we thought when the year began. Acquisition activity may be a little less than we thought, but LIBOR's come down. So we'll pick up some interest savings on that side of the equation.

Todd Stender:

And for any deals that you do land, is it fair to say you'll run up your line of credit, at least over the near term, just until maybe debt capital comes back your way?

T. Wilson Eglin:

Yes, we view ourselves as having line capacity. And the disposition market is not shut, it's just slower. But knock on wood, we'll have a handful of office sales in second quarter. We think the transaction market probably functions better in the back half of the year as the debt markets recover. And don't forget that given how low our dividend payout ratio is, we have a lot of retained cash flow as well. But we're not looking at putting any long-term debt on the balance sheet at this time. We think that spreads should tighten over the balance of the year before we think about longer term debt.

6

Todd Stender:

No, that's helpful. How about tenants? Looking through your release and the supplemental, I don't see any tenants mentioned for the acquisitions. Can you disclose who some of those are?

T. Wilson Eglin:

Yes. Brendan, maybe I'll turn that over to you to give a little bit of a sense of who the tenants were in the first quarter acquisitions.

Brendan P. Mullinix:

Sure. Let's see. It was Kellogg's, BMW, Stanley, Black & Decker. So those are all high investment grade-ready credits. And the fourth building was leased to Ball Corporation, which is, I want to say a BB+ credit. So high on investment grade credit.

Todd Stender:

That's helpful. Thank you, Brendan. And then the Phoenix asset had 6 years left on the lease. What cap rate did that go at? I saw there was a 4.8, I guess a blended cash cap rate. How about just that, just because it was on the shorter lease term side?

Brendan P. Mullinix:

That cap rate was in the -- was just a little bit south of 5 cap. It is a brand new Class A, 40-foot clear building. It's about 160,000 square feet. It's located across the street from a brand new manufacturing facility that Ball Corporation constructed. So we think that the likelihood of renewal is extremely high there. And it's just a first-class building in a primary market.

Operator:

Our next question is a follow-up from Jamie Feldman with Bank of America.

Elvis Rodriguez:

So just 1 more for me. Can you give us any sort of -- or any color you can share on the reserve you took in the quarter? That would be helpful to us. Thanks.

T. Wilson Eglin:

Beth, I’ll let you jump in on that one.

Beth Boulerice:

Sure. Yes. So we took a $1.2 million reserve for 1 tenant that we had credit concerns about. Every quarter, we go through all of our deferred rent receivables and any accounts receivable that we have, and we have to assess them for probability of collection. So given this tenant had been downgraded by S&P and was having some operational issues as well due to COVID-19 and their industry was impacted as well for that reason. So given all of these factors and other factors, we thought that it was not probable that we would be able to collect the full deferred rent receivable and we put them now on a cash basis.

7

Elvis Rodriguez:

Are you able to share what industry that tenant is part of? And then also, is it an office or industrial tenant?

Beth Boulerice:

It was in the consumer products industry.

T. Wilson Eglin:

And its industrial.

Elvis Rodriguez:

And then just one more big picture question for me. As I look at your sort of market concentration, Houston is #1 on a consolidated basis, #1 on office and #3 on industrial. Can you just talk about sort of what you're seeing on the ground there, potential lease rolls coming this year and next, and sort of any risks to your assets in that market?

T. Wilson Eglin:

Sure. James, you want to offer your perspective?

James Dudley:

Yes, sure. So our Houston portfolio's comprised of 7 properties, 1.6 million square feet. It's got a weighted average lease term of 15.7 years. So with the exception of 1 small 79,000 square foot office building where we have vacancy, we're really not in the market.

And over the last few years, really going back about 5 years, we've kind of disposed of our direct oil and gas exposure. We do have 1 tenant in 2 buildings that fabricates piping. But other than that, the majority of it is really Dow. So with the long weighted average lease term and the types of tenants that are non-direct oil and gas-related, I think we're well-positioned in Houston.

Operator:

Our next question comes from Jon Petersen with Jefferies.

Jon Petersen:

Just curious if you think there will be a lot of distressed opportunities this time around. You talked about how you expect maybe some better pricing opportunities. But certainly in the last 10 years, it seems like the industrial market especially has become more institutionalized. I was just curious how much money you think's on the sidelines looking for distressed opportunities and whether or not that kind of, I guess prohibits those opportunities coming to market just because there's so much capital out there looking for properties.

8

T. Wilson Eglin:

Yes. I mean, I just don't think that our asset type that we're interested in investing in is going to see a whole lot of distress. So for us, I mean, cap rates have widened out, which is appealing on the investment side. But we're not going to keep capital on the sidelines waiting for distress, I don't see it. So it's time will tell. But I don't see a lot of distressed opportunity coming into our opportunity set.

Jon Petersen:

Got it. And then I guess on the similar line, you guys are still trying to sell some properties. I think you said in your prepared remarks that you still think you can get Dow Chemical done in the second half of the year. I guess, is the pricing on that, you think, similar to what you were thinking a few months ago? And then how do we think about maybe some properties that, I guess had a little more risk on it in terms of nearer term lease maturities like your office building in downtown Philly. What's kind of the market for those sort of buildings right now?

T. Wilson Eglin:

Sure. The situation with Dow is an interesting one. Early in the year when the 10-year Treasury was sort of yielding 1 1/2%, there was a market of investors who could prepay the debt, pay the yield maintenance and refinance and make the math work at valuations that were very good for us. The second buyer that is someone who would want to keep the debt in tact, that's mainly a 1031 exchange in investor universe. Pre-pandemic, we felt like we had a transaction put together, but with an offshore investor who's no longer traveling to the U.S. We're in negotiations with another buyer, but we just can't predict with certainty when that transaction might get done.

And maybe Lara, I'll ask you for your perspective on the balance of the office sale process.

Lara Johnson:

Sure. Thanks, Will. So the sale markets have, needless to say, been impacted by the disruption, primarily in the debt markets and institutions flat-lining themself to a large extent. That being said, there are a number of private buyers who are still very active and looking for opportunities, some 1031 motivated and some not. There have been, among transactions nationally with hard deposits, some price slippage, some deals that have been walked and certainly a slowdown on the timing of transactions.

But there are buyers out there. We've been able to access them on a number of assets we have in the market and we're in active negotiations on a few transactions with private buyers and under contract on a few others. So it's a slimmer group of perspective buyers and transactions are certainly slowed down by the disruption in the debt markets and the logistical issues associated with the pandemic, but we're hoping that will loosen up in the second half of the year, as Will said.

Operator:

Our next question comes from Barry Gertner with City Stables.

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Barry Gertner:

Great quarter, given everything that's going on. Quick question for you. In terms of rental deferral requests, is there any specific process in place as you examine them or things you think about? And then on that same vein, obviously, there are some of your tenants that will be a major beneficiary of the programs initiated by the Fed in the corporate bond market. And when you bifurcate the two going forward, is that something you're taking into consideration from folks asking for the rental deferral?

T. Wilson Eglin:

James, do you want to jump in and answer that one?

James Dudley:

Yes, sure. So we've put together a list of underwriting criteria that we send out to the tenants that have requested relief. We've established a rent relief committee that reviews that criteria as it comes in. Some tenants have been forthcoming with that information, others have chosen not to provide that information and continue to pay rent. And part of the process is definitely evaluating other avenues for which the tenants have relief that may be available to them. So that's definitely part of the process. But we're definitely asking lots of questions and making sure that anything that's granted is a genuine request or advantageous to us from the perspective of getting a lease extension or better credit.

Operator:

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

T. Wilson Eglin:

Thanks, operator. We appreciate everyone joining us this morning and we hope that you'll visit our website or contact Heather Gentry if you would like to receive our quarterly materials. In addition, as always, you may contact me or the other members of senior management with any questions. Thanks again for joining us today, and have a great day.

Operator:

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

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Schedule of Capitalization, Equity [Line Items]
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Schedule of Capitalization, Equity [Line Items]
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