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): November 5, 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 November 5, 2020, we issued a press release announcing our financial results for the quarter ended September 30, 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 November 5, 2020, we made available supplemental information, which we refer to as the “Quarterly Supplemental Information, Third Quarter 2020,” a copy of which is furnished herewith as Exhibit 99.1.

On November 5, 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, Third Quarter 2020.
99.2	November 5, 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: November 6, 2020	By:	/s/ Beth Boulerice
		Beth Boulerice
		Chief Financial Officer

EX-99.1

Exhibit 99.1

 

LEXINGTON REALTY TRUST

QUARTERLY SUPPLEMENTAL INFORMATION

September 30, 2020

Table of Contents

Section	Page
Third Quarter 2020 Earnings Press Release	3
Portfolio Data
Investments / Capital Recycling Summary	14
Development Projects	15
Financing Summary	16
Leasing Summary	17
Other Revenue Data	18
Portfolio Detail by Asset Class	20
Portfolio Composition	21
Components of Net Asset Value	22
Portfolio Concentration	23
Tenant Industry Diversification	25
Top 15 Tenants	26
Lease Rollover Schedules	27
Property Leases and Vacancies	29
Select Credit Metrics Summary	39
Financial Covenants	40
Mortgages and Notes Payable	41
Debt Maturity Schedule	42
Selected Balance Sheet Account Data	43
Non-GAAP Measures – Definitions	44
Reconciliation of Non-GAAP Measures	46
Investor Information	50

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 December 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 THIRD QUARTER 2020 RESULTS

AND ANNOUNCES DIVIDEND INCREASE

New York, NY - November 5, 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 third quarter ended September 30, 2020.

Third Quarter 2020 Highlights

● Recorded Net Income attributable to common shareholders of $40.3 million, or $0.15 per diluted common share.

● Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted (“Adjusted Company FFO”) of $53.8 million, or $0.19 per diluted common share.

● Collected 99.9% of Cash Base Rents due during the third quarter.

● Acquired two industrial properties for an aggregate cost of $70.1 million.

● Disposed of three properties for an aggregate gross disposition price of $66.5 million.

● Increased industrial portfolio to 88.5% of gross book value of real estate assets, excluding held for sale assets.

● Issued $400.0 million aggregate principal amount of 2.70% Senior Notes due 2030 at an issuance price of 99.233% of the principal amount.

● Repurchased $61.2 million and $51.1 million aggregate principal amount of outstanding 4.25% Senior Notes due 2023 and 4.40% Senior Notes due 2024, respectively.

● Repaid the full outstanding balance of $40.0 million on the revolving credit facility.

● Raised net proceeds of approximately $6.7 million through the ATM program.

● Entered into forward sales transactions through the ATM program for 3.9 million common shares at an initial weighted-average price of $11.23 per common share.

● Completed 1.3 million square feet of new leases and lease extensions.

Subsequent Events

● Disposed of three properties for an aggregate gross disposition price of $39.6 million.

● Entered into an agreement to fund a build-to-suit industrial property in the Phoenix, Arizona market for an estimated cost of $72.0 million, which will be subject to a 15-year net lease.

● Declared quarterly common share/unit dividend/distribution of $0.1075 per share/unit, an increase of 2.4%.

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.

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T. Wilson Eglin, Chairman and Chief Executive Officer of Lexington Realty Trust, commented, “Our operations continued to produce strong results in the third quarter. We collected nearly 100% of Cash Base Rent and increased our percentage leased to 98.9%. To-date, we have added $429.8 million of high-quality industrial assets to our portfolio. We have made significant progress toward our goal of transitioning to a 100% industrial REIT, with industrial exposure representing 88.5% of total gross real estate assets, excluding held-for-sale assets, at quarter end. Given our strong results and continued progress, we are increasing our annualized common share dividend by 2.4% to $0.43 per common share.”

FINANCIAL RESULTS

Revenues

For the quarter ended September 30, 2020, total gross revenues were $84.5 million, compared with total gross revenues of $81.6 million for the quarter ended September 30, 2019. The increase is primarily attributable to acquisitions, partially offset by property sales and a decrease in fee income.

Net Income Attributable to Common Shareholders

For the quarter ended September 30, 2020, net income attributable to common shareholders was $40.3 million, or $0.15 per diluted share, compared with net income attributable to common shareholders for the quarter ended September 30, 2019 of $141.6 million, or $0.59 per diluted share.

Adjusted Company FFO

For the quarter ended September 30, 2020, Lexington generated Adjusted Company FFO of $53.8 million, or $0.19 per diluted share, compared to Adjusted Company FFO for the quarter ended September 30, 2019 of $48.7 million, or $0.20 per diluted share.

Dividends/Distributions

As previously announced, during the third quarter of 2020, Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended September 30, 2020 of $0.1050 per common share/unit, which was paid on October 15, 2020 to common shareholders/unitholders of record as of September 30, 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 September 30, 2020, which is expected to be paid on November 16, 2020 to Series C Preferred Shareholders of record as of October 30, 2020.

Today, Lexington announced that it declared a regular quarterly common share/unit dividend/distribution for the quarter ending December 31, 2020 of $0.1075 per common share/unit payable on January 15, 2021 to common shareholders/unitholders of record as of December 31, 2020. This represents an increase of 2.4% from the previous quarterly per common share/unit dividend/distribution and equates to an annualized increase of $0.01 per common share/unit and an annualized dividend/distribution of $0.43 per common share/unit, subject to and assuming future declarations.

Lexington also announced that it declared a cash dividend of $0.8125 per share of Series C Preferred for the quarter ending December 31, 2020, which is expected to be paid on February 16, 2021 to shareholders of record as of January 29, 2021.

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TRANSACTION ACTIVITY

ACQUISITION TRANSACTIONS
Property Type	Market	Sq. Ft.		Initial Basis ($000)		Approximate Lease Term (Yrs)
Industrial-Warehouse/distribution	DC/Baltimore, MD		324,535	$	29,143	4
Industrial-Warehouse/distribution	Savannah, GA		419,667		40,908	6
			744,202	$	70,051

The above properties were acquired at aggregate weighted-average GAAP and Cash capitalization rates of 5.7% and 5.3%, respectively. Year to date total 2020 acquisition activity was $429.8 million at aggregate weighted-average GAAP and Cash capitalization rates of 5.5% and 5.1%, respectively.

DEVELOPMENT PROJECTS
Project (% owned)	Market	Property Type	Estimated Sq. Ft.		Estimated Project Cost ($000)		GAAP Investment Balance as of 9/30/2020 ($000)(1)		Lexington Amount Funded as of 9/30/2020 ($000)		Estimated Completion Date
Consolidated:
Fairburn (90%)	Atlanta, GA	Industrial		910,000	$	53,812	$	30,638	$	22,543		1Q 2021
Rickenbacker (100%)	Columbus, OH	Industrial		320,000		20,300		11,310		8,233		4Q 2020
					$	74,112	$	41,948	$	30,776
Non-consolidated:
ETNA Park 70 (90%)(2)	Columbus, OH	Industrial		TBD		TBD	$	11,352	$	11,714		TBD
ETNA Park 70 East (90%)(2)	Columbus, OH	Industrial		TBD		TBD		7,391		7,431		TBD
							$	18,743	$	19,145

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
Primary Tenant	Location	Property Type	Gross Disposition Price ($000)		Annualized Net Income(1) ($000)			Annualized NOI(1) ($000)			Month of Disposition		% Leased
Quest Diagnostics	Lenexa, KS	Office	$	14,351	$	883		$	(4	)		July		100	%
Wal-Mart	Moody, AL	Industrial		20,046		386			478			July		26	%
Vacant(2)	Overland Park, KS	Office		32,112		(3,269	)		(998	)		July		0	%
			$	66,509	$	(2,000	)	$	(524	)

1. Generally, quarterly period prior to sale, annualized.

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

As of September 30, 2020, total consolidated property disposition volume was $140.6 million at weighted-average GAAP and Cash capitalization rates of 4.3% and 3.8%, respectively.

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LEASING
	LEASE EXTENSIONS
	Location		Primary Tenant/Guarantor(1)	Prior Term	Lease Expiration Date	Sq. Ft.
	Industrial
1	Hebron	OH	Owens Corning	12/2021	03/2022	250,410
2	Hebron	OH	Owens Corning	12/2021	03/2022	400,522
3	Orlando	FL	Walgreen Co.	03/2021	03/2026	205,016
3	Total industrial lease extensions					855,948

	NEW LEASES
	Location		Primary Tenant/Guarantor(1)	Lease Expiration Date	Sq. Ft.
	Industrial/Multi-tenant
1	Chillicothe	OH	Ernie Green Industries	12/2021	42,264
2	Chillicothe	OH	Pegasus Industries	06/2026	276,112
3	Henderson	NC	Select Tissue	02/2034	147,448
3	Total industrial/multi-tenant leases				465,824
3	Total New Leases				465,824
6	TOTAL NEW AND EXTENDED LEASES				1,321,772

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

As of September 30, 2020, Lexington’s portfolio was 98.9% leased.

BALANCE SHEET/CAPITAL MARKETS

During the third quarter of 2020, Lexington issued $400.0 million aggregate principal amount of 2.70% Senior Notes due in 2030 at 99.233% of the principal amount. Lexington used a portion of the proceeds to repurchase $61.2 million and $51.1 million aggregate principal amount of outstanding 4.25% Senior Notes due 2023 and 4.40% Senior Notes due 2024, respectively.

During the third quarter of 2020, Lexington issued 0.6 million common shares through its ATM program raising net proceeds of approximately $6.7 million. Also, the Company entered into forward sales transactions for 3.9 million common shares at an initial weighted-average price of $11.23 per common share, which is subject to adjustment in accordance to the forward sales contract.

During the third quarter, Lexington repaid $40.0 million on its unsecured revolving credit facility. As of the date of this earnings release, Lexington has $600 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 $0.62 to $0.64 per diluted common share.

Additionally, Lexington affirms its Adjusted Company FFO guidance for the year ended December 31, 2020 to be within a range of $0.74 to $0.76 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.

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THIRD QUARTER 2020 CONFERENCE CALL

Lexington will host a conference call today, November 5, 2020, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended September 30, 2020. Interested parties may participate in this conference call by dialing1-844-825-9783 (U.S.), 1-412-317-5163 (International) or 1-855-669-9657 (Canada). A replay of the call will be available through February 5, 2021, 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 10148898. A link to a live webcast of the conference call is available at www.lxp.com within the Investors section.

Lexington Realty Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) that owns a portfolio of real estate assets consisting primarily of equity investments in single-tenant net-leased industrial 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.

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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.

# # #

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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

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

	Three months ended September 30,						Nine months ended September 30,
	2020			2019			2020			2019
Gross revenues:
Rental revenue	$	83,592		$	80,325		$	243,421		$	239,058
Other revenue		922			1,225			3,712			3,875
Total gross revenues		84,514			81,550			247,133			242,933
Expense applicable to revenues:
Depreciation and amortization		(40,555	)		(37,211	)		(120,869	)		(111,617	)
Property operating		(11,343	)		(10,611	)		(31,895	)		(30,966	)
General and administrative		(7,232	)		(7,791	)		(22,612	)		(23,652	)
Non-operating income		40			532			314			1,927
Interest and amortization expense		(13,649	)		(16,481	)		(42,610	)		(50,715	)
Debt satisfaction gains (charges), net		17,557			(4,424	)		18,950			(4,527	)
Impairment charges		(6,175	)		(673	)		(7,792	)		(2,355	)
Gains on sales of properties		20,878			140,461			41,876			176,662
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities		44,035			145,352			82,495			197,690
Provision for income taxes		(286	)		(241	)		(1,361	)		(1,108	)
Equity in earnings (losses) of non-consolidated entities		(131	)		2,710			35			3,288
Net income		43,618			147,821			81,169			199,870
Less net income attributable to noncontrolling interests		(1,714	)		(4,502	)		(2,245	)		(5,191	)
Net income attributable to Lexington Realty Trust shareholders		41,904			143,319			78,924			194,679
Dividends attributable to preferred shares – Series C		(1,573	)		(1,573	)		(4,718	)		(4,718	)
Allocation to participating securities		(46	)		(186	)		(118	)		(304	)
Net income attributable to common shareholders	$	40,285		$	141,560		$	74,088		$	189,657
Net income attributable to common shareholders - per common share basic	$	0.15		$	0.60		$	0.28		$	0.81
Weighted-average common shares outstanding – basic		274,696,046			236,285,216			264,211,668			233,833,340
Net income attributable to common shareholders - per common share diluted	$	0.15		$	0.59		$	0.28		$	0.81
Weighted-average common shares outstanding – diluted		276,022,762			241,355,289			265,446,221			234,011,643

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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

	September 30, 2020			December 31, 2019
		(unaudited)
Assets:
Real estate, at cost	$	3,439,314		$	3,320,574
Real estate - intangible assets		413,208			409,756
Investments in real estate under construction		41,948			13,313
Real estate, gross		3,894,470			3,743,643
Less: accumulated depreciation and amortization		906,789			887,629
Real estate, net		2,987,681			2,856,014
Assets held for sale		159,210			—
Operating lease right-of-use assets, net		36,034			38,133
Cash and cash equivalents		287,920			122,666
Restricted cash		1,697			6,644
Investments in non-consolidated entities		56,489			57,168
Deferred expenses, net		16,428			18,404
Rent receivable – current		2,310			3,229
Rent receivable – deferred		66,383			66,294
Other assets		7,699			11,708
Total assets	$	3,621,851		$	3,180,260
Liabilities and Equity:
Liabilities:
Mortgages and notes payable, net	$	157,723		$	390,272
Term loan payable, net		297,817			297,439
Senior notes payable, net		778,943			496,870
Trust preferred securities, net		127,470			127,396
Dividends payable		34,463			32,432
Liabilities held for sale		179,052			—
Operating lease liabilities		37,338			39,442
Accounts payable and other liabilities		52,819			29,925
Accrued interest payable		9,083			7,897
Deferred revenue - including below market leases, net		18,054			20,350
Prepaid rent		14,740			13,518
Total liabilities		1,707,502			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,
276,941,239 and 254,770,719 shares issued and outstanding in 2020 and 2019, respectively		28			25
Additional paid-in-capital		3,193,751			2,976,670
Accumulated distributions in excess of net income		(1,374,748	)		(1,363,676	)
Accumulated other comprehensive loss		(19,687	)		(1,928	)
Total shareholders’ equity		1,893,360			1,705,107
Noncontrolling interests		20,989			19,612
Total equity		1,914,349			1,724,719
Total liabilities and equity	$	3,621,851		$	3,180,260

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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES

EARNINGS PER SHARE

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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
EARNINGS PER SHARE:
Basic:
Net income attributable to common shareholders	$	40,285	$	141,560	$	74,088	$	189,657
Weighted-average number of common shares outstanding - basic		274,696,046		236,285,216		264,211,668		233,833,340
Net income  attributable to common shareholders - per common share basic	$	0.15	$	0.60	$	0.28	$	0.81
Diluted:
Net income attributable to common shareholders - basic	$	40,285	$	141,560	$	74,088	$	189,657
Impact of assumed conversions		—		1,573		—		—
Net income attributable to common shareholders	$	40,285	$	143,133	$	74,088	$	189,657
Weighted-average common shares outstanding - basic		274,696,046		236,285,216		264,211,668		233,833,340
Effect of dilutive securities:
Unvested share-based payment awards and options		1,326,716		359,503		1,234,553		178,303
Preferred shares - Series C		—		4,710,570		—		—
Weighted-average common shares outstanding - diluted		276,022,762		241,355,289		265,446,221		234,011,643
Net income attributable to common shareholders - per common share diluted	$	0.15	$	0.59	$	0.28	$	0.81

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						Nine Months Ended
	September 30,						September 30,
	2020			2019			2020			2019
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income attributable to common shareholders	$	40,285		$	141,560		$	74,088		$	189,657
Adjustments:
Depreciation and amortization		39,858			36,537			118,605			109,469
Impairment charges - real estate		6,175			673			7,792			2,355
Noncontrolling interests - OP units		1,518			4,244			1,702			4,410
Amortization of leasing commissions		697			674			2,264			2,148
Joint venture and noncontrolling interest adjustment		2,094			2,267			6,463			7,200
Gains on sales of properties, including non-consolidated entities		(20,886	)		(143,719	)		(42,433	)		(180,837	)
FFO available to common shareholders and unitholders - basic		69,741			42,236			168,481			134,402
Preferred dividends		1,573			1,573			4,718			4,718
Amount allocated to participating securities		46			186			118			304
FFO available to all equityholders and unitholders - diluted		71,360			43,995			173,317			139,424
Transaction costs		1			—			81			—
Debt satisfaction (gains) charges, net, including non-consolidated entities		(17,522	)		4,679			(18,894	)		4,782
Adjusted Company FFO available to all equityholders and unitholders - diluted		53,839			48,674			154,504			144,206
FUNDS AVAILABLE FOR DISTRIBUTION:
Adjustments:
Straight-line adjustments		(3,995	)		(4,161	)		(10,224	)		(10,846	)
Lease incentives		214			318			732			898
Amortization of above/below market leases		(435	)		(142	)		(1,110	)		(174	)
Lease termination payments, net		(211	)		(120	)		70			(1,120	)
Non-cash interest, net		293			567			1,081			2,146
Non-cash charges, net		1,663			1,554			4,984			4,833
Tenant improvements		(2,332	)		(1,380	)		(9,453	)		(4,932	)
Lease costs		(550	)		(5,951	)		(4,969	)		(10,624	)
Joint venture and noncontrolling interest adjustment		(146	)		(3,095	)		(330	)		(3,731	)
Company Funds Available for Distribution	$	48,340		$	36,264		$	135,285		$	120,656
Per Common Share and Unit Amounts
Basic:
FFO	$	0.25		$	0.18		$	0.63		$	0.57
Diluted:
FFO	$	0.25		$	0.18		$	0.63		$	0.58
Adjusted Company FFO	$	0.19		$	0.20		$	0.57		$	0.60
Basic:
Weighted-average common shares outstanding - basic EPS		274,696,046			236,285,216			264,211,668			233,833,340
Operating partnership units(1)		3,060,436			3,520,643			3,100,309			3,535,207
Weighted-average common shares outstanding - basic FFO		277,756,482			239,805,859			267,311,977			237,368,547
Diluted:
Weighted-average common shares outstanding - diluted EPS		276,022,762			241,355,289			265,446,221			234,011,643
Operating partnership units(1)		3,060,436			3,520,643			3,100,309			3,535,207
Unvested share-based payment awards		19,261			25,090			19,813			20,169
Preferred shares - Series C		4,710,570			—			4,710,570			4,710,570
Weighted-average common shares outstanding - diluted FFO		283,813,029			244,901,022			273,276,913			242,277,589

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

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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)	$	0.62		$	0.64
Depreciation and amortization		0.62			0.62
Impact of capital transactions		(0.50	)		(0.50	)
Estimated Adjusted Company FFO per diluted common share	$	0.74		$	0.76

(1)       Assumes all convertible securities are dilutive.

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LEXINGTON REALTY TRUST

2020 Third Quarter Investments / Capital Recycling Summary

PROPERTY INVESTMENTS
	Property Type	Market		Square Feet	Initial Basis ($000)		Month Closed	Primary Lease Expiration
1	Industrial - Warehouse/distribution	DC/Baltimore	MD	324,535	$	29,143	September	11/2024
2	Industrial - Warehouse/distribution	Savannah	GA	419,667		40,908	September	07/2026
2	TOTAL PROPERTY INVESTMENTS			744,202	$	70,051

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	Quest Diagnostics	Lenexa	KS	Office	$	14,351	$	883		$	(4	)	July	100%	$	185.20
2	Wal-Mart	Moody	AL	Industrial		20,046		386			478		July	26%		33.67
3	Vacant (3)	Overland Park	KS	Office		32,112		(3,269	)		(998	)	July	0%		100.29
3	TOTAL PROPERTY DISPOSITIONS				$	66,509	$	(2,000	)	$	(524	)

Footnotes
(1)	Generally, 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 a foreclosure sale. Disposition price reflects non-recourse debt balance.

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LEXINGTON REALTY TRUST

DEVELOPMENT PROJECTS

9/30/2020

DEVELOPMENT PROJECTS
	Project (% owned)	Market	Property Type	Estimated Sq. Ft.		Estimated Project Cost ($000)		GAAP Investment Balance as of 9/30/2020 ($000) (1)		Lexington Amount Funded as of 9/30/2020 ($000)	Estimated Completion Date
Consolidated
1	Fairburn (90%)	Atlanta, GA	Industrial	910,000	$	53,812	$	30,638	$	22,543	1Q 2021
2	Rickenbacker (100%)	Columbus, OH	Industrial	320,000		20,300		11,310		8,233	4Q 2020
2	Total Consolidated Development				$	74,112	$	41,948	$	30,776
Non - Consolidated
1	Etna Park 70 (90%) (2)	Columbus, OH	Industrial	TBD		TBD	$	11,352	$	11,714	TBD
2	Etna Park 70 East (90%) (2)	Columbus, OH	Industrial	TBD		TBD		7,391		7,431	TBD
2	Total Non-Consolidated Development						$	18,743	$	19,145
4	Total Development Projects						$	60,691	$	49,921

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.

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LEXINGTON REALTY TRUST

2020 Third Quarter Financing Summary

DEBT RETIRED
Location	Tenant	Property Type	Face / Satisfaction ($000)		Rate		Maturity Date
Consolidated Mortgage Debt (1)
Overland Park, KS	Vacant	Office	$	32,112		5.891%		05/2019
Non-Consolidated Mortgage Debt (2)
Las Vegas, NV	Nevada Power	Office	$	27,840		LIBOR + 200 bps		09/2021

CORPORATE LEVEL FINANCING
Debt Retired
Type		Face / Satisfaction ($000)	Current Interest Rate	Maturity Date
Revolving Credit Facility	$	40,000	LIBOR + 90 bps	02/2023
Senior Unsecured Notes		61,244	4.25%	06/2023
Senior Unsecured Notes		51,068	4.40%	06/2024
	$	152,312

New Financing
Type	Amount ($000)		Current Interest Rate		Maturity Date
Senior Unsecured Notes	$	400,000		2.70%		09/2030

Footnotes
(1)	Satisfied in a foreclosure sale.
(2)	Lexington has a 20% interest in the joint venture that disposed of this property. Satisfaction reflects a portion of the joint venture’s cross-collateralized debt.

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LEXINGTON REALTY TRUST

2020 Third Quarter Leasing Summary

LEASE EXTENSIONS
	Tenant/Guarantor (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)
	Industrial
1	Owen Corning	Hebron	OH	12/2021	03/2022	250,410	$	641	$	584	$	641	$	584
2	Owen Corning	Hebron	OH	12/2021	03/2022	400,522		1,025		934		1,025		934
3	Walgreen Co.	Orlando	FL	03/2021	03/2026	205,016		786		786		508		508
3	Total Industrial Lease Extensions					855,948	$	2,452	$	2,304	$	2,174	$	2,026
3	TOTAL EXTENDED LEASES					855,948	$	2,452	$	2,304	$	2,174	$	2,026

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/Multi-tenant
1	Ernie Green Industries	Chillicothe	OH	12/2021	42,264	$	213	$	213
2	Pegasus Industries	Chillicothe	OH	06/2026	276,112		1,281		1,267
3	Select Tissue	Henderson	NC	02/2034	147,448		548		490
3	Total Industrial New Leases				465,824	$	2,042	$	1,970
3	TOTAL NEW LEASES				465,824	$	2,042	$	1,970
6	TOTAL NEW AND EXTENDED LEASES				1,321,772	$	4,494	$	4,144

Footnotes
(1)	Leases greater than 10,000 square feet.
(2)	Assumes twelve months rent from the later of 10/1/20 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.

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LEXINGTON REALTY TRUST

Other Revenue Data

9/30/2020

($000)

Other Revenue Data

	Base Rent
Asset Class	Nine months ended
		9/30/2020(1)	9/30/2020 Percentage		9/30/2019 Percentage
Industrial	$	175,264	80.9	%	70.7	%
Office/Other		41,380	19.1	%	29.3	%
	$	216,644	100.0	%	100.0	%

	Base Rent
Credit Ratings  (2)	Nine months ended
		9/30/2020(1)	9/30/2020 Percentage		9/30/2019 Percentage
Investment Grade	$	113,041	52.2	%	48.0	%
Non-Investment Grade		44,964	20.7	%	24.0	%
Unrated		58,639	27.1	%	28.0	%
	$	216,644	100.0	%	100.0	%

Weighted-Average Lease Term - Cash Basis	As of 9/30/2020	As of 9/30/2019
	7.8	8.0

Rent Estimates for Current Assets

Year	Base Rent  (3)		Cash Base Rent (3)		Difference
2020 - remaining	$	74,992	$	71,038	$	(3,954	)
2021		288,876		277,111		(11,765	)

Footnotes

(1) Nine months ended 9/30/2020 Base Rent recognized for consolidated properties owned as of 9/30/2020.

(2) Credit ratings are based upon either tenant, guarantor or parent/ultimate parent.

(3) Amounts assume (i) lease terms for non-cancellable periods only, (ii) no new or renegotiated leases are entered into after 9/30/2020, and (iii) no properties are sold or acquired after 9/30/2020.

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LEXINGTON REALTY TRUST

Other Revenue Data (Continued)

9/30/2020

($000)

Same-Store NOI ⁽¹⁾

	Nine months ended September 30,
	2020			2019
Total Cash Base Rent	$	168,347		$	165,254
Tenant Reimbursements		18,494			18,027
Property Operating Expenses		(24,007	)		(22,380	)
Same-Store NOI	$	162,834		$	160,901
Change in Same-Store NOI (2)		1.2	%

Same-Store Percent Leased (3)	As of 9/30/2020	As of 9/30/2019
	98.9%	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 September 30, 2020.

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

(2) Change in Same-Store NOI was 1.3% excluding single-tenant property vacancies.

(3) Excludes properties acquired or sold in 2020 and 2019 and properties subject to mortgage loans in default at September 30, 2020.

(4) Based on nine months consolidated Cash Base Rents for single-tenant leases (properties greater than 50% leased to a single tenant) owned as of September 30, 2020. Excludes parking operations and rents from prior tenants.

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LEXINGTON REALTY TRUST

Portfolio Detail By Asset Class

9/30/2020 

($000, except square footage)

Asset Class	YE 2017 (1)			YE 2018 (1)(2)			YE 2019			Q3 2020
Industrial
% of Cost (3)		49.3	%		71.2	%		81.5	%		88.5	%
% of ABR (4)		44.3	%		65.4	%		75.5	%		80.9	%
% Leased		99.9	%		96.3	%		97.9	%		99.5	%
Wtd. Avg. Lease Term (5)		10.5			9.7			8.3			7.5
Mortgage Debt	$	193,529		$	206,006		$	109,939		$	106,566
% Investment Grade (4)		28.4	%		31.6	%		45.9	%		50.6	%
Square Feet		36,071,422			41,447,962			48,742,014			53,163,680
Office/Other
% of Cost (3)		50.7	%		28.8	%		18.5	%		11.5	%
% of ABR (4)(6)		55.7	%		34.6	%		24.5	%		19.1	%
% Leased		96.0	%		87.1	%		85.8	%		89.9	%
Wtd. Avg. Lease Term (5)		7.9			7.2			8.5			9.2
Mortgage Debt	$	503,539		$	369,508		$	283,933		$	232,230
% Investment Grade (4)		49.4	%		53.2	%		57.3	%		58.9	%
Square Feet		12,542,640			6,111,588			3,876,294			3,134,103
Construction in progress (7)	$	4,219		$	1,840		$	15,208		$	46,559

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

9/30/2020

As a Percent of Gross Book Value ⁽¹⁾

Portfolio Composition ⁽²⁾

Footnotes

(1) Based on gross book value of real estate assets as of 9/30/2020, excludes held for sale assets.

(2) Based on gross book value of real estate assets as of 9/30/2020, 12/31/2019, 12/31/2018 and 12/31/2017, as applicable and excludes held for sale assets.

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LEXINGTON REALTY TRUST

Components of Net Asset Value

9/30/2020

($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 nine month net operating income (NOI) (1)
Industrial	$	152,398
Office/Other		28,004
Total Net Operating Income	$	180,402
Lexington’s share of non-consolidated nine month NOI (1)
NNN OFFICE JV
Office	$	7,190
OTHER JV
Other	$	1,137
Other income
Advisory fees	$	2,311
In service assets not fairly valued by capitalized NOI method (1)
Wholly-owned assets acquired in 2020	$	421,372
Wholly-owned assets less than 70% leased	$	22,261
Add other assets:
Assets held for sale - consolidated	$	159,210
Construction in progress		4,611
Developable land		19,145
Development investment at cost incurred		30,776
Cash and cash equivalents		287,920
Restricted cash		1,697
Accounts receivable		2,310
Other assets		7,699
Total other assets	$	513,368
Liabilities:
Corporate level debt (face amount)	$	1,216,808
Mortgages and notes payable (face amount)		159,686
Dividends payable		34,463
Liabilities held for sale - consolidated		179,052
Accounts payable, accrued expenses and other liabilities		76,642
Preferred stock, at liquidation value		96,770
Lexington’s share of non-consolidated mortgages (face amount)		81,817
Total deductions	$	1,845,238
Common shares & OP units at 9/30/2020		279,993,873

Footnotes

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

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LEXINGTON REALTY TRUST

Portfolio Concentration - Industrial

9/30/2020

	Markets (1)	Percent of Base Rent as of 9/30/2020  (2)
1	Memphis, TN	8.6	%
2	Greenville/Spartanburg, SC	7.1	%
3	Houston, TX	6.4	%
4	Atlanta, GA	5.9	%
5	Chicago, IL	5.3	%
6	Cincinnati/Dayton, OH	5.3	%
7	Nashville, TN	4.9	%
8	Detroit, MI	4.4	%
9	Dallas/Fort Worth, TX	4.0	%
10	Phoenix, AZ	3.7	%
11	Charlotte, NC	3.0	%
12	Jackson, MS	2.7	%
13	St. Louis, MO	2.6	%
14	Columbus, OH	2.6	%
15	New York/New Jersey	2.2	%
16	Cleveland, OH	2.1	%
17	Champaign-Urbana, IL	1.8	%
18	DC/Baltimore, MD	1.8	%
19	Jackson, TN	1.7	%
20	Richmond, VA	1.6	%
	Total Industrial Portfolio Concentration (3)	77.5	%

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) Nine months ended 9/30/2020 Base Rent recognized for consolidated industrial properties owned as of 9/30/2020.

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

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LEXINGTON REALTY TRUST 

Portfolio Concentration - Office/Other 

9/30/2020

	Markets (1)	Percent of Base Rent as of 9/30/2020  (2)
1	Houston, TX	26.9	%
2	South Bay/San Jose, CA	12.0	%
3	Philadelphia, PA	10.2	%
4	New York/New Jersey	10.1	%
5	Charlotte, NC	7.4	%
6	Dallas/Fort Worth, TX	7.3	%
7	DC/Baltimore, MD	6.8	%
8	Phoenix, AZ	5.1	%
9	Tampa/St. Petersburg, FL	3.5	%
10	Baton Rouge, LA	2.0	%
11	McAllen/Edinburg/Pharr,TX	1.9	%
12	Orlando, FL	1.6	%
13	Atlanta, GA	1.6	%
14	Florence, SC	1.0	%
15	Tucson, AZ	1.0	%
16	Hawaii	1.0	%
17	South Florida	0.7	%
	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) Nine months ended 9/30/2020 Base Rent recognized for consolidated office/other properties owned as of 9/30/2020.

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

24 

LEXINGTON REALTY TRUST

Tenant Industry Diversification - Industrial Assets ⁽¹⁾

9/30/2020

 

Footnotes

(1) Nine months ended 9/30/2020 Base Rent recognized for consolidated properties owned as of 9/30/2020

25 

LEXINGTON REALTY TRUST

Top 15 Tenants

9/30/2020

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 9/30/2020 ($000)		Percent of Base Rent as of 9/30/2020 ($000) (2)(4)
Dow	Office	2036		1		664,100		1.2	%	$	11,137		5.2	%
Nissan	Industrial	2027		2		2,971,000		5.3	%		9,570		4.4	%
Amazon	Industrial	2026-2030		4		3,132,547		5.6	%		7,591		3.5	%
Dana	Industrial	2021-2026		7		2,053,359		3.7	%		7,456		3.5	%
Kellogg	Industrial	2027-2029		3		2,801,916		5.0	%		7,291		3.4	%
Undisclosed (5)	Industrial	2031-2035		3		1,090,383		2.0	%		5,355		2.5	%
Watco	Industrial	2038		1		132,449		0.2	%		5,080		2.4	%
Xerox	Office	2023		1		202,000		0.4	%		4,981		2.3	%
FedEx	Industrial	2023 & 2028		2		292,021		0.5	%		4,289		2.0	%
Wal-Mart	Industrial	2023-2027		2		1,335,673		2.4	%		4,213		2.0	%
Undisclosed (5)	Industrial	2034		1		1,318,680		2.4	%		4,158		1.9	%
Morgan Lewis (6)	Office	2024		1		289,432		0.5	%		3,723		1.7	%
Mars Wrigley	Industrial	2025		1		604,852		1.1	%		3,304		1.5	%
Asics	Industrial	2030		1		855,878		1.5	%		3,291		1.5	%
Spitzer	Industrial	2035		2		449,895		0.8	%		3,259		1.5	%
				32		18,194,185		32.7	%	$	84,698		39.2	%

Footnotes

(1) Tenant, guarantor or parent.

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

(3) Excludes vacant square feet.

(4) Nine months ended 9/30/2020 Base Rent recognized for consolidated properties owned as of 9/30/2020, excluding rent from prior tenants.

(5) Lease restricts certain disclosures.

(6) Includes parking operations.

26 

LEXINGTON REALTY TRUST

Lease Rollover Schedule - Consolidated Industrial Properties

9/30/2020 

($000)

Year	Number of Leases Expiring		Base Rent as of 9/30/2020		Percent of Base Rent as of 9/30/2020			Percent of Base Rent as of 9/30/2019
2020 - remaining		1	$	1,870		1.1	%		2.1	%
2021		11		10,849		6.2	%		7.5	%
2022		4		2,860		1.6	%		0.9	%
2023		8		6,796		3.9	%		3.1	%
2024		16		16,657		9.5	%		9.5	%
2025		18		18,593		10.6	%		7.3	%
2026		17		16,806		9.6	%		9.6	%
2027		10		22,365		12.8	%		13.2	%
2028		4		8,891		5.1	%		6.3	%
2029		6		11,855		6.8	%		2.4	%
Thereafter		27		57,348		32.8	%		33.3	%
Total (1)		122	$	174,890		100.0	%

 

Footnotes

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

27 

LEXINGTON REALTY TRUST 

Lease Rollover Schedule - Consolidated Office/Other Properties  

9/30/2020 

($000)

Year	Number of Leases Expiring		Base Rent as of 9/30/2020		Percent of Base Rent as of 9/30/2020			Percent of Base Rent as of 9/30/2019
2020 - remaining		27	$	826		2.0	%		0.0	%
2021		8		2,778		6.9	%		10.4	%
2022		2		2,760		6.8	%		6.3	%
2023		3		5,455		13.5	%		9.4	%
2024		6		6,874		17.0	%		16.9	%
2025		5		2,719		6.7	%		5.4	%
2026		0		-		0.0	%		0.0	%
2027		1		54		0.1	%		2.5	%
2028		0		661		0.0	%		1.7	%
2029		1		-		1.6	%		6.2	%
Thereafter		7		18,328		45.3	%		30.3	%
Total (1)		60	$	40,455		100.0	%

 

Footnotes

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

28 

LEXINGTON REALTY TRUST
Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020 ($000) (2)	Cash Base Rent as of 9/30/2020  ($000) (2)	9/30/2020 Debt Balance ($000)	Debt Maturity
INDUSTRIAL PROPERTIES
Single-tenant
2020	12/31/2020	2203 Sherrill Dr.	Statesville	NC	--	Geodis America	639,800	1,870	1,960	-	-
2021	5/31/2021	101 Michelin Dr.	Laurens	SC	18	Michelin	1,164,000	2,692	2,692	-	-
	6/30/2021	11624 S. Distribution Cv.	Olive Branch	MS	--	Hamilton Beach	1,170,218	2,842	2,531	-	-
	9/30/2021	3820 Micro Dr.	Millington	TN	--	Ingram Micro	701,819	1,359	1,405	-	-
	10/25/2021	6938 Elm Valley Dr.	Kalamazoo	MI	--	Dana	150,945	1,310	1,520	-	-
	11/30/2021	2880 Kenny Biggs Rd.	Lumberton	NC	--	Rubbermaid	423,280	1,017	1,109	-	-
	12/31/2021	3686 South Central Ave.	Rockford	IL	--	Pierce Packaging	93,000	244	244	-	-
2022	3/31/2022	191 Arrowhead Dr.	Hebron	OH	--	Owens Corning	250,410	434	434	-	-
		200 Arrowhead Dr.	Hebron	OH	--	Owens Corning	400,522	694	694	-	-
		5417 Campus Dr.	Shreveport	LA	--	Tire Rack	257,849	1,007	1,052	-	-
	8/31/2022	50 Tyger River Dr.	Duncan	SC	--	Plastic Omnium	221,833	725	767	-	-
2023	2/28/2023	3102 Queen Palm Dr.	Tampa	FL	--	RC Moore	229,605	864	676	-	-
		7670 Hacks Cross Rd.	Olive Branch	MS	--	MAHLE Industries	268,104	679	684	-	-
	5/31/2023	6495 Polk Ln.	Olive Branch	MS	12	Undisclosed	151,691	438	429	-	-
	8/31/2023	10535 Red Bluff Rd.	Pasadena	TX	--	Unis	257,835	923	899	-	-
		3737 Duncanville Rd.	Dallas	TX	--	Owens Corning	510,440	1,285	1,255	-	-
	10/31/2023	493 Westridge Pkwy.	McDonough	GA	--	Carlstar	676,000	1,523	1,481	-	-
	12/31/2023	120 Southeast Pkwy. Dr.	Franklin	TN	--	Raytheon Technologies	289,330	551	551	-	-
		675 Gateway Blvd.	Monroe	OH	--	Blue Buffalo	143,664	533	515	-	-
2024	1/31/2024	1285 W. State Road 32	Lebanon	IN	--	Continental Tire	741,880	1,711	1,816	-	-
		6495 Polk Ln.	Olive Branch	MS	12	Undisclosed	118,211	371	358	-	-
		70 Tyger River Dr.	Duncan	SC	--	BMW	408,000	1,501	1,465	-	-
	3/31/2024	1520 Lauderdale Memorial Hwy.	Cleveland	TN	--	General Electric	851,370	1,993	2,009	-	-
	4/30/2024	113 Wells St.	North Berwick	ME	--	Raytheon	993,685	1,349	1,220	-	-
		11555 Silo Dr.	Olive Branch	MS	--	Olam Cotton	927,742	2,142	2,139	-	-
	5/31/2024	901 East Bingen Point Way	Bingen	WA	--	Boeing	124,539	1,977	1,998	-	-
		7225 Goodson Rd.	Union City	GA	--	Interface Americas	370,000	1,082	1,033	-	-

29 

LEXINGTON REALTY TRUST

Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020   ($000) (2)	Cash Base Rent as of 9/30/2020  ($000) (2)	9/30/2020 Debt Balance ($000)	Debt Maturity
INDUSTRIAL PROPERTIES
2024	7/31/2024	5795 North Blackstock Rd.	Spartanburg	SC	--	Wal-Mart	341,660	1,254	1,260	-	-
		231 Apple Valley Rd.	Duncan	SC	12	Undisclosed	75,320	283	283	-	-
	9/30/2024	1621 Veterans Memorial Pkwy. E	Lafayette	IN	--	Caterpillar	309,400	911	903	-	-
	10/31/2024	43955 Plymouth Oaks Blvd.	Plymouth	MI	--	Tower Automotive	311,612	1,193	1,171	-	-
		2115 East Belt Line Rd.	Carrollton	TX	--	L.E. Klein	58,202	172	175	-	-
	11/30/2024	150 Mercury Way	Winchester	VA	--	Mercury Paper	324,535	138	128	-	-
	12/31/2024	749 Southrock Dr.	Rockford	IL	--	Jacobson Warehouse	150,000	478	461	-	-
2025	4/30/2025	235 Apple Valley Rd.	Duncan	SC	12	Undisclosed	177,320	703	666	-	-
		10565 Red Bluff Rd.	Pasadena	TX	--	Unis	248,240	330	315	-	-
	5/31/2025	7875 White Road SW	Austell	GA	--	Mars Wrigley	604,852	3,304	2,906	-	-
	6/30/2025	10000 Business Blvd.	Dry Ridge	KY	--	Dana	336,350	1,009	1,009	-	-
		1650-1654 Williams Rd.	Columbus	OH	--	ODW Logistics	772,450	1,251	1,214	-	-
		4010 Airpark Dr.	Owensboro	KY	--	Metalsa / Dana	211,598	906	906	-	-
		730 North Black Branch Rd.	Elizabethtown	KY	--	Metalsa / Dana	167,770	403	403	-	-
		750 North Black Branch Rd.	Elizabethtown	KY	--	Metalsa / Dana	539,592	2,129	2,129	-	-
		301 Bill Bryan Blvd.	Hopkinsville	KY	--	Metalsa / Dana	424,904	1,266	1,266	-	-
		1319 Dean Forest Rd.	Savannah	GA	12	Undisclosed	355,527	488	460	-	-
	7/14/2025	590 Ecology Ln.	Chester	SC	--	Boral Limited	420,597	1,373	1,818	5,130	8/1/2025
	7/31/2025	7005 Cochran Rd.	Glenwillow	OH	--	Royal Appliance	458,000	1,546	1,586	-	-
		5352 Performance Way	Whitestown	IN	--	LaCrosse	380,000	958	931	-	-
	8/31/2025	1315 Dean Forest Rd.	Savannah	GA	12	Undisclosed	88,503	162	85	-	-
	12/19/2025	1901 Ragu Dr.	Owensboro	KY	5	Unilever	443,380	1,282	966	-	-
	12/31/2025	1700 47th Ave North	Minneapolis	MN	--	Owens Corning	18,620	440	440	-	-
		4455 N. Cotton Ln.	Goodyear	AZ	--	Ball	160,140	736	688	-	-
2026	1/31/2026	231 Apple Valley Rd.	Duncan	SC	12	Undisclosed	120,680	451	290	-	-
	3/30/2026	121 Technology Dr.	Durham	NH	11	Heidelberg	500,500	1,903	1,853	-	-
	3/31/2026	633 Garrett Pkwy.	Lewisburg	TN	--	Calsonic Kansei	310,000	965	986	-	-
		2455 Premier Row	Orlando	FL	--	Walgreen Co.	205,016	589	381	-	-

30 

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Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020 ($000) (2)	Cash Base Rent as of 9/30/2020  ($000) (2)	9/30/2020 Debt Balance ($000)	Debt Maturity
INDUSTRIAL PROPERTIES
2026	4/30/2026	16811 W. Commerce Dr.	Goodyear	AZ	--	Blue Buffalo	540,349	1,833	1,580	-	-
	5/31/2026	291 Park Center Dr.	Winchester	VA	--	Kraft Heinz	344,700	1,162	1,110	-	-
	7/31/2026	1004 Trade Center Pkwy.	Savannah	GA	--	Dukal Corporation	270,252	24	22	-	-
	8/31/2026	1004 Trade Center Pkwy.	Savannah	GA	--	Sunland Logistics	149,415	14	-	-	-
	9/30/2026	900 Industrial Blvd.	Crossville	TN	--	Dana	222,200	433	433	-	-
		3931 Lakeview Corporate Dr.	Edwardsville	IL	--	Amazon.com	769,500	2,022	1,963	-	-
		9494 W. Buckeye Rd.	Tolleson	AZ	--	CHEP	186,336	832	771	-	-
	10/31/2026	10345 Philipp Pkwy.	Streetsboro	OH	--	L’Oreal USA	649,250	2,162	2,023	-	-
		5001 Greenwood Rd.	Shreveport	LA	14	Libbey	646,000	1,483	1,503	-	-
	11/30/2026	250 Rittenhouse Cir.	Bristol	PA	--	Estée Lauder	241,977	860	903	-	-
		736 Addison Rd.	Erwin	NY	--	Corning	408,000	1,086	1,091	-	-
2027	1/31/2027	27200 West 157th St.	New Century	KS	--	Amazon.com	446,500	930	833	-	-
	2/28/2027	554 Nissan Pkwy.	Canton	MS	--	Nissan	1,466,000	4,650	4,592	-	-
	4/30/2027	16407 Applewhite Rd.	San Antonio	TX	12	Undisclosed	849,275	2,245	2,154	-	-
		200 Sam Griffin Rd.	Smyrna	TN	--	Nissan	1,505,000	4,920	4,794	-	-
	6/30/2027	1501 Nolan Ryan Expy.	Arlington	TX	--	Arrow Electronics	74,739	305	309	-	-
	7/31/2027	335 Morgan Lakes Industrial Blvd.	Pooler	GA	--	Unis	499,500	959	429	-	-
	8/31/2027	600 Gateway Blvd.	Monroe	OH	--	Wal-Mart	994,013	2,959	2,465	-	-
	9/30/2027	1550 Hwy 302	Byhalia	MS	--	McCormick	615,600	1,829	1,824	-	-
	10/31/2027	201 James Lawrence Rd.	Jackson	TN	--	Kellogg	1,062,055	2,958	2,850	-	-
	12/31/2027	10590 Hamilton Ave.	Cincinnati	OH	--	Hillman Group	264,598	610	610	-	-
2028	1/31/2028	490 Westridge Pkwy.	McDonough	GA	--	Georgia-Pacific	1,121,120	2,803	2,657	-	-
	3/31/2028	29-01-Borden Ave./29-10 Hunters Point Ave.	Long Island City	NY	--	FedEx	140,330	3,851	3,846	33,709	3/15/2028
	8/31/2028	1420 Greenwood Rd.	McDonough	GA	--	United States Cold Storage	296,972	1,627	1,633	-	-
	9/30/2028	904 Industrial Rd.	Marshall	MI	--	Tenneco	246,508	610	566	-	-
2029	7/31/2029	8500 Nail Rd.	Olive Branch	MS	--	Sephora	716,080	2,063	1,977	-	-
	8/31/2029	8601 E. Sam Lee Ln.	Northlake	TX	--	Black and Decker	1,214,526	2,643	2,407	-	-
	9/30/2029	6255 E Minooka Rd.	Minooka	IL	--	Kellogg	1,034,200	2,198	2,005	-	-

31 

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Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020 ($000) (2)	Cash Base Rent as of 9/30/2020  ($000) (2)	9/30/2020 Debt Balance ($000)	Debt Maturity
INDUSTRIAL PROPERTIES
2029	11/24/2029	318 Pappy Dunn Blvd.	Anniston	AL	--	IAC Group	276,782	1,305	1,270	-	-
	11/30/2029	1460 Cargo Court	Minooka	IL	--	Kellogg	705,661	2,135	1,975	-	-
	12/31/2029	200 International Pkwy S	Minooka	IL	--	BMW	473,280	1,511	1,348	-	-
2030	3/31/2030	549 Wingo Rd.	Byhalia	MS	--	Asics	855,878	3,291	3,189	-	-
	5/31/2030	359 Gateway Dr.	Lavonia	GA	--	TI Automotive	133,221	599	645	-	-
		4015 Lakeview Corporate Dr.	Edwardsville	IL	--	Spectrum	1,017,780	2,595	2,098	-	-
	6/30/2030	2601 Bermuda Hundred Rd.	Chester	VA	13	Philip Morris	1,034,470	2,888	2,891	-	-
		700 Gateway  Blvd.	Monroe	OH	--	Amazon.com	1,299,492	4,137	3,758	-	-
		1704 S. I-45	Hutchins	TX	--	Mauser Packaging	120,960	212	141	-	-
	8/31/2030	3400 NW 35th St.	Ocala	FL	--	Amazon.com	617,055	502	458	-	-
	9/30/2030	255 143rd Ave.	Goodyear	AZ	12	Undisclosed	801,424	3,000	2,709	41,877	8/1/2031
2031	10/31/2031	1020 W. Airport Rd.	Romeoville	IL	--	ARYZTA	188,166	2,745	2,633	-	-
	12/18/2031	80 Tyson Dr.	Winchester	VA	12	Undisclosed	400,400	1,776	1,614	-	-
2032	4/30/2032	13930 Pike Rd.	Missouri City	TX	--	Vulcan	-	1,592	1,523	-	-
	8/24/2032	16950 Pine Dr.	Romulus	MI	12	Undisclosed	500,023	1,926	1,833	-	-
	10/31/2032	27255 SW 95th Ave.	Wilsonville	OR	--	Campbell’s Soup	508,277	2,340	2,015	-	-
		26700 Bunert Rd.	Warren	MI	--	Lipari	260,243	2,912	2,663	25,850	11/2032
2033	12/31/2033	2115 East Belt Line Rd.	Carrollton	TX	--	Teasdale	298,653	973	791	-	-
2034	2/28/2034	1133 Poplar Creek Rd.	Henderson	NC	--	Select Tissue	147,448	-	-	-	-
	9/30/2034	5625 North Sloan Ln.	North Las Vegas	NV	--	Nicholas	180,235	1,917	1,772	-	-
	10/31/2034	1001 Innovation Rd.	Rantoul	IL	--	Vista Outdoor	813,126	3,147	2,878	-	-
	12/31/2034	27 Inland Pkwy.	Greer	SC	12	Undisclosed	1,318,680	4,158	1,912	-	-
2035	3/31/2035	13863 Industrial Rd.	Houston	TX	--	Spitzer	187,800	1,826	1,649	-	-
		7007 F.M. 362 Rd.	Brookshire	TX	--	Spitzer	262,095	1,433	1,294	-	-
	10/22/2035	2860 Clark St.	Detroit	MI	12	Undisclosed	189,960	1,653	1,653	-	-
2036	5/31/2036	671 Washburn Switch Rd.	Shelby	NC	--	Clearwater Paper	673,425	2,089	1,897	-	-
2037	3/31/2037	4005 E I-30	Grand Prairie	TX	--	O’Neal  Industries	215,000	1,404	1,216	-	-
2038	3/31/2038	13901/14035 Industrial Rd.	Houston	TX	--	Watco	132,449	5,080	4,525	-	-

32 

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Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020 ($000) (2)		Cash Base Rent as of 9/30/2020  ($000) (2)		9/30/2020 Debt Balance ($000)		Debt Maturity
INDUSTRIAL PROPERTIES
2042	5/31/2042	4801 North Park Dr.	Opelika	AL	--	Golden State Enterprises		165,493		2,433		1,977		-		-
2067	12/31/2067	10201 Schuster Way	Pataskala	OH	--	Kohl’s		-		720		335		-		-
SINGLE TENANT INDUSTRIAL TOTAL								51,803,011	$	172,109	$	160,627	$	106,566
Multi-tenant / Vacancy (7)(10)
	Various	6050 Dana Way	Antioch	TN	3, 16 (90%)	Multi-Tenant		674,528		1,779		1,715		-		-
	Various	351 Chamber Dr.	Chillicothe	OH	3, 8, 15 (100%)	Multi-Tenant		478,141		1,376		1,261		-		-
	Vacancy	3301 Stagecoach Rd. NE	Thomson	GA	17	(Available for Lease)		208,000		-		-		-		-
MULTI-TENANT/VACANCY INDUSTRIAL TOTAL								1,360,669	$	3,155	$	2,976	$	-
INDUSTRIAL TOTAL/WEIGHTED AVERAGE						99.5% Leased		53,163,680	$	175,264	$	163,603	$	106,566

33 

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Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020 ($000) (2)		Cash Base Rent as of 9/30/2020 ($000) (2)		9/30/2020 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
Single-tenant
	2020	11/6/2020	4455 American Way	Baton Rouge		LA	--	New Cingular Wireless		46,350		534		579		-		-
	2021	3/31/2021	1701 Market St.	Philadelphia		PA	--	Prime Communications		1,220		47		47		-		-
		6/30/2021	2050 Roanoke Rd.	Westlake		TX	--	Charles Schwab		130,199		1,553		1,691		-		-
		8/31/2021	3500 North Loop Rd.	McDonough		GA	--	Global Payments		62,218		651		651		-		-
		10/31/2021	1401 Nolan Ryan Expy.	Arlington		TX	--	Butler America Aerospace		4,979		67		67		-		-
	2022	5/30/2022	13651 McLearen Rd.	Herndon		VA	--	United States of America		159,664		2,346		2,415		-		-
		7/31/2022	1440 E 15th St.	Tucson		AZ	--	CoxCom		28,591		414		414		-		-
	2023	9/30/2023	1701 Market St.	Philadelphia		PA	--	CBC Restaurant		8,070		182		182		-		-
		11/6/2023	4455 American Way	Baton Rouge		LA	--	New Cingular Wireless		23,750		292		296		-		-
		12/14/2023	3333 Coyote Hill Rd.	Palo Alto		CA	--	Xerox		202,000		4,981		5,303		21,730		12/1/2023
	2024	1/31/2024	1701 Market St.	Philadelphia		PA	--	Morgan Lewis		289,432		3,101		3,485		-		-
		2/14/2024	1362 Celebration Blvd.	Florence		SC	--	Change Healthcare		32,000		430		449		-		-
		5/31/2024	3476 Stateview Blvd.	Fort Mill		SC	--	Wells Fargo		169,083		1,511		1,494		-		-
			3480 Stateview Blvd.	Fort Mill		SC	--	Wells Fargo		169,218		1,566		1,495		-		-
		9/30/2024	1401 Nolan Ryan Expy.	Arlington		TX	--	Arrow Electronics		23,228		-		-		-		-
	2025	1/31/2025	1401 Nolan Ryan Expy.	Arlington		TX	--	Triumph Group		111,409		1,226		1,349		-		-
		2/28/2025	1401 Nolan Ryan Expy.	Arlington		TX	--	Infotech Enterprise		13,590		158		163		-		-
		5/31/2025	1701 Market St.	Philadelphia		PA	--	TruMark Financial		2,641		199		199		-		-
		6/30/2025	3711 San Gabriel	Mission		TX	--	T-Mobile West		75,016		772		776		-		-
	2027	1/31/2027	1701 Market St.	Philadelphia		PA	--	Drybar		1,975		54		28		-		-
	2029	9/30/2029	9200 South Park Center Loop	Orlando		FL	17	CardWorks		59,927		661		764		-		-
	2031	11/30/2031	4 Apollo Drive	Whippany		NJ	--	CAE		123,734		1,539		1,500		11,110		11/1/2021
	2033	12/31/2033	8555 South River Pkwy.	Tempe		AZ	--	Versum		95,133		1,109		996		-		-
	2036	10/31/2036	270 Abner Jackson Pkwy.	Lake Jackson		TX	--	Dow		664,100		11,137		9,654		179,110		10/1/2036
	2037	6/30/2037	1415 Wyckoff Rd.	Wall		NJ	--	NJ Natural Gas		157,511		2,647		2,945		1,867		1/1/2021

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Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020 ($000) (2)		Cash Base Rent as of 9/30/2020 ($000) (2)		9/30/2020 Debt Balance ($000)		Debt Maturity
OFFICE PROPERTIES
	N/A	Vacancy	1701 Market St.	Philadelphia		PA	--	(Available for Lease)		699		-		-		-		-
			1401 Nolan Ryan Expy.	Arlington		TX	--	(Available for Lease)		8,602		-		-		-		-
		5/31/2020	1701 Market St.	Philadelphia		PA	--	Parking Operations		-		622		622		-		-
SINGLE TENANT OFFICE TOTAL										2,664,339	$	37,799	$	37,564	$	213,817
Multi-tenant / Vacancy (7)(10)
		Vacancy	820 Gears Rd.	Houston		TX	--	(Available for Lease)		78,895		-		-		-		-
		Vacancy	5600 Broken Sound Blvd.	Boca Raton		FL	8, 19	(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		1,007		1,100		-		-
MULTI-TENANT/VACANCY OFFICE TOTAL										361,125	$	1,284	$	1,409	$	18,413
OFFICE SUBTOTAL/WEIGHTED AVERAGE								91.1% Leased		3,025,464	$	39,083	$	38,973	$	232,230

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Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020 ($000) (2)		Cash Base Rent as of 9/30/2020  ($000) (2)		9/30/2020 Debt Balance ($000)		Debt Maturity
OTHER PROPERTIES
Single-tenant
Specialty
2048	12/31/2048	30 Light St.	Baltimore	MD	--	30 Charm City		-		233		233		-		-
2055	1/31/2055	499 Derbyshire Dr.	Venice	FL	--	Littlestone Brotherhood		31,180		1,431		1,044		-		-
2112	8/31/2112	201-215 N. Charles St.	Baltimore	MD	--	HCRE 201NCharles, LLC		-		232		232		-		-
SINGLE TENANT OTHER TOTAL								31,180	$	1,896	$	1,509	$	-
Multi-tenant / Vacancy (7)(10)
	Various	King St./1042 Fort St. Mall	Honolulu	HI	3 (39%)	Multi-Tenant		77,459		401		401		-		-
MULTI-TENANT/VACANCY OTHER TOTAL								77,459	$	401	$	401	$	-
OTHER SUBTOTAL/WEIGHTED AVERAGE						57.3% Leased		108,639	$	2,297	$	1,910	$	-
TOTAL OFFICE & OTHER/WEIGHTED AVERAGE						89.9% Leased		3,134,103	$	41,380	$	40,883	$	232,230
TOTAL CONSOLIDATED PORTFOLIO/WEIGHTED AVERAGE						98.9% Leased		56,297,783	$	216,644	$	204,486	$	338,796

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Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020 ($000) (2)		Cash Base Rent as of 9/30/2020  ($000) (2)		9/30/2020 Debt Balance ($000)	Debt Maturity (9)
NON-CONSOLIDATED PROPERTIES
NNN OFFICE JV PROPERTIES
2022	12/31/2022	231 N. Martingale Rd.	Schaumburg	IL	6	Perdoceo Education Corporation	317,198	20%		3,449		3,569		240,480	09/2021
2023	3/31/2023	8900 Freeport Pkwy.	Irving	TX	6	Nissan	268,445	20%		3,695		3,468		-	-
2025	3/14/2025	601 & 701 Experian Pkwy.	Allen	TX	6	Experian Holdings	292,700	20%		2,430		2,305		-	-
	6/30/2025	2500 Patrick Henry Pkwy.	McDonough	GA	6	Georgia Power	111,911	20%		1,221		1,078		-	-
	12/31/2025	4001 International Pkwy.	Carrollton	TX	6	Motel 6	138,443	20%		1,901		1,798		-	-
2026	3/31/2026	500 Olde Worthington Rd.	Westerville	OH	6	Syneos	97,000	20%		1,008		908		-	-
	4/30/2026	800 East Canal St.	Richmond	VA	4	Richmond Belly Ventures	2,568	20%		25		25		-	-
2027	2/28/2027	800 East Canal St.	Richmond	VA	4	Sumitomo	8,503	20%		155		114		-	-
	6/30/2027	3902 Gene Field Rd.	St. Joseph	MO	6	Boehringer Ingelheim USA	98,849	20%		1,587		1,496		-	-
	7/6/2027	2221 Schrock Rd.	Columbus	OH	6	MS Consultants	42,290	20%		513		485		-	-
	8/7/2027	25 Lakeview Dr.	Jessup	PA	6	TMG Health	150,000	20%		1,748		1,651		-	-
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%		5,247		5,373		57,500	02/2031
	9/30/2030	800 East Canal St.	Richmond	VA	4	The Riverstone Group	25,707	20%		578		493		-	-
2031	1/10/2031	810 Gears Rd.	Houston	TX	6	United States of America	68,985	20%		901		1,069		-	-
	3/1/2031	800 East Canal St.	Richmond	VA	4	Towne Bank	26,047	20%		633		545		-	-
	9/30/2031	800 East Canal St.	Richmond	VA	4	Matrix Capital	7,105	20%		-		-		-	-
2032	4/30/2032	1210 AvidXchange Ln.	Charlotte	NC	--	AvidXchange	201,450	20%		4,519		4,073		46,900	12/2022,01/2033
	9/30/2032	10001 Richmond Ave.	Houston	TX	6	Schlumberger	554,385	20%		4,441		4,446		-	-
2035	2/28/2035	6555 Sierra Dr.	Irving	TX	6	TXU	247,254	20%		3,011		2,529		-	-
	4/30/2035	143 Diamond Ave.	Parachute	CO	6	Alenco	49,024	20%		868		884		-	-
2088	8/8/2088	800 East Canal St.	Richmond	VA	4	The City of Richmond, Virginia	-	20%		267		314		-	-
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)	31,607	20%		-		-		-	-
NNN OFFICE JV TOTAL/WEIGHTED AVERAGE						98.6% Leased	2,978,153		$	38,197	$	36,623	$	344,880

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Property Leases and Vacancies - Consolidated Portfolio - 9/30/2020

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 9/30/2020 ($000) (2)		Cash Base Rent as of 9/30/2020  ($000) (2)		9/30/2020 Debt Balance ($000)	Debt Maturity (9)
OTHER NON-CONSOLIDATED PROPERTIES
2036	8/31/2036	2203 North Westgreen Blvd.	Katy	TX	--	British Schools	274,000	25%		5,037		5,037		42,862	12/2022
OTHER NON-CONSOLIDATED TOTAL/WEIGHTED AVERAGE						100% Leased	274,000		$	5,037	$	5,037	$	42,862
NON-CONSOLIDATED TOTAL/WEIGHTED AVERAGE						98.7% Leased	3,252,153		$	43,234	$	41,660	$	387,742

Footnotes
1	Square footage leased or available.
2	Nine months ended 9/30/2020 Base Rent and Cash Base Rent. See definitions of non-GAAP measures and reconciliations to applicable GAAP measures in this document.
3	Represents percent leased as of 9/30/2020.
4	Part of Richmond, Virginia property, which is primarily leased to McGuireWoods LLP.
5	Lexington has a 71.1% interest in this property.
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	Interest rates range from 0.25% to 5.3% at 9/30/2020.
10	The multi-tenanted / vacant properties incurred approximately $2.4 million in operating expenses, net for the nine months ended 9/30/2020.
11	Heidelberg Americas, Inc. lease expires 3/30/2021; however, new tenant (manroland Goss Web Systems America, LLC) lease expires 3/30/2026.
12	Lease restricts certain disclosures.
13	Property includes four warehouses (252,351 square feet each) and one other property (25,066 square feet).
14	Cash basis for revenue recognition effective 3/31/2020.  $1.2 million deferred rent receivable reserved.
15	Prior tenant dissolved. $0.6 million deferred rent receivable written off.
16	Prior tenant terminated. $117 thousand deferred rent rent receivable written off.
17	Subsequent to 9/30/2020, property disposed.
18	Subsequent to 9/30/2020, lease extended to 11/30/2021.
19	Subsequent to 9/30/2020, property disposed of via a foreclosure sale.
20	Property held for sale at 9/30/2020.

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Select Credit Metrics Summary ⁽¹⁾

	9/30/2020
Adjusted Company FFO Payout Ratio		55.3	%
Unencumbered Assets		$3.6 billion
Unencumbered NOI		85.0	%
(Debt + Preferred) / Gross Assets		35.7	%
Debt/Gross Assets		33.6	%
Secured Debt / Gross Assets		7.3	%
Net Debt / Adjusted EBITDA		5.1	x
(Net Debt + Preferred) / Adjusted EBITDA		5.5	x
Credit Facilities Availability (2)		$600.0 million
Unsecured Debt / Unencumbered NOI		5.5	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:	9/30/2020
Bank Loans:
Maximum Leverage	< 60%	36.6	%
Fixed Charge Coverage	> 1.5x	3.0	x
Recourse Secured Indebtedness Ratio	< 10% cap value	0.0	%
Secured Indebtedness Ratio	< 40%	11.2	%
Unsecured Debt Service Coverage	> 2.0x	6.2	x
Unencumbered Leverage	< 60%	28.8	%
Bonds:
Debt to Total Assets	< 60%	34.6	%
Secured Debt to Total Assets	< 40%	7.5	%
Debt Service Coverage	> 1.5x	4.3	x
Unencumbered Assets to Unsecured Debt	> 150%	327.8	%

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 September 30, 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

9/30/2020 

Property	Footnotes	Debt Balance ($000)		Interest Rate (%)			Maturity (a)		Current Estimated Annual Debt Service ($000)  (b)		Balloon Payment ($000)
INDUSTRIAL
Chester, SC		$	5,130		5.380	%		08/2025	$	1,144	$	362
Long Island City, NY			33,709		3.500	%		03/2028		4,879		-
Goodyear, AZ			41,877		4.290	%		08/2031		1,854		33,399
Warren, MI			25,850		5.380	%		11/2032		1,391		22,037
Industrial Subtotal/Wtg. Avg./Years Remaining (c)		$	106,566		4.357	%		9.8	$	9,268	$	55,798
OFFICE
Boca Raton, FL	(e)  (j)	$	18,413		6.470	%		N/A	$	-	$	18,413
Wall, NJ			1,867		6.250	%		01/2021		1,926		-
Whippany, NJ			11,110		6.298	%		11/2021		1,344		10,400
Palo Alto, CA			21,730		3.970	%		12/2023		7,059		-
Lake Jackson, TX	(m)		179,110		4.040	%		10/2036		12,846		11,305
Office Subtotal/Wtg. Avg./Years Remaining (c)		$	232,230		4.352	%		12.7	$	23,175	$	40,118
Subtotal/Wtg. Avg./Years Remaining (c)		$	338,796		4.354	%		11.8	$	32,443	$	95,916
CORPORATE (f)
Revolving Credit Facility	(g)	$	-		1.084	%		02/2023	$	-	$	-
Senior Notes	(k)		188,756		4.250	%		06/2023		8,022		188,756
Senior Notes	(k)		198,932		4.400	%		06/2024		8,753		198,932
Senior Notes	(l)		400,000		2.700	%		09/2030		10,800		400,000
Term Loan	(h)		300,000		2.732	%		01/2025		8,310		300,000
Trust Preferred Notes	(i)		129,120		1.968	%		04/2037		2,576		129,120
Subtotal/Wtg. Avg./Years Remaining (c)		$	1,216,808		3.149	%		3.8	$	38,461	$	1,216,808
Total/Wtg. Avg./Years Remaining (c)	(d)	$	1,555,604		3.689	%		7.3	$	70,904	$	1,312,724

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.
(j)	Subsequent to 9/30/2020, property disposed of via a foreclosure sale.
(k)	Completed a tender offer for $61,244 and $51,068 of the 2023 and 2024 Senior Notes, repectively.
(l)	On August 28, 2020, completed an offering for $400,000 Senior Notes at a coupon of 2.70%, maturing September 15, 2030
(m)	Loan included in liabilities held for sale at 9/30/2020

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Debt Maturity Schedule

9/30/2020

($000) 

Consolidated Properties
Year		Mortgage Scheduled  Amortization		Mortgage Balloon Payments  (1)		Corporate Debt
2020 - remaining	$	4,252	$	18,413	$	-
2021		19,555		10,400		-
2022		18,564		-		-
2023		20,136		-		188,756
2024		13,856		-		198,932
	$	76,363	$	28,813	$	387,688

  

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

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Selected Balance Sheet Account Data

9/30/2020

($000)

Balance Sheet
Other assets	$	7,699
The components of other assets are:
Deposits	$	1,147
Equipment		434
Prepaids		2,268
Other receivables		579
Deferred lease incentives		3,271
Accounts payable and other liabilities
The components of accounts payable and other liabilities are:	$	52,819
Accounts payable and accrued expenses	$	17,835
CIP accruals and other		11,271
Taxes		203
Deferred lease costs		636
Deposits		2,368
Escrows		684
Transaction costs		135
Derivative liability		19,687

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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. Base Rent excludes reserves/write-offs of deferred rent receivable, as applicable. 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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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.

45 

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES

($000) 

	Nine months ended September 30, 2020
Rent Reconciliation:
Rental revenue as reported	$	243,421
Base Rent from sold properties		(2,788	)
Lease termination income		(662	)
Straight-line write-offs/reserves		1,998
Ancillary revenue		634
Reimbursements		(25,959	)
Base Rent per supplement	$	216,644
Adjustments: (1)
Straight-line adjustments	$	(11,583	)
Lease incentives		627
Amortization of above/below market leases		(1,202	)
Cash Base Rent per supplement	$	204,486

Consolidated debt reconciliation September 30, 2020: 

	GAAP Balance		Deferred Loan Costs, net		Discounts		Loan Classified as Held for Sale		Gross Balance
Mortgages and notes payable (2)	$	157,723	$	1,963	$	-	$	179,110	$	338,796
Term loans payable (3)		297,817		2,183		-		-		300,000
Senior notes payable(3)		778,943		5,126		3,619		-		787,688
Trust preferred securities (3)		127,470		1,650		-		-		129,120
Consolidated debt	$	1,361,953	$	10,922	$	3,619	$	179,110	$	1,555,604

Footnotes
(1)	Individual items are adjusted for sold properties, which were previously reflected in the reconciliation.
(2)	Secured.
(3)	Unsecured.

46 

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Same-Store NOI Reconciliation:

	Nine months ended September 30,
	2020			2019
Net income	$	81,169		$	199,870
Interest and amortization expense		42,610			50,715
Provision for income taxes		1,361			1,108
Depreciation and amortization		120,869			111,617
General and administrative		22,612			23,652
Transaction costs		81			-
Non-operating/advisory income		(3,392	)		(4,836	)
Gains on sales of properties		(41,876	)		(176,662	)
Impairment charges		7,792			2,355
Debt satisfaction (gains) charges, net		(18,950	)		4,527
Equity in (earnings) of non-consolidated entities		(35	)		(3,288	)
Lease termination income		(662	)		(1,551	)
Straight-line adjustments		(10,224	)		(10,846	)
Lease incentives		732			898
Amortization of above/below market leases		(1,110	)		(174	)
Net Operating Income - ("NOI")		200,977			197,385
Less NOI:
Acquisitions and dispositions		(38,272	)		(34,627	)
Properties in default		129			(1,857	)
Same-Store NOI	$	162,834		$	160,901

NOI for NAV:
	Nine months ended
	9/30/2020
NOI per above	$	200,977
Less NOI:
Disposed of properties		(2,143	)
Held for sale assets		(10,662	)
Assets acquired in 2020		(8,539	)
Assets less than 70% leased / Other		769
NOI for NAV	$	180,402

47 

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000) 

Reconciliation to Adjusted EBITDA: 

	Three months ended
	9/30/2020			6/30/2020			3/31/2020			12/31/2019			Trailing 12 Months
Net income attributable to
Lexington Realty Trust shareholders	$	41,904		$	18,866		$	18,154		$	85,231		$	164,155
Interest and amortization expense		13,649			14,166			14,795			14,380			56,990
Provision for income taxes		286			422			653			271			1,632
Depreciation and amortization		40,555			39,805			40,509			35,977			156,846
Straight-line adjustments		(3,995	)		(4,810	)		(1,419	)		(3,656	)		(13,880	)
Lease incentives		214			249			269			293			1,025
Amortization of above/below market leases		(435	)		(380	)		(295	)		(269	)		(1,379	)
Gains on sales of properties		(20,878	)		(11,193	)		(9,805	)		(74,227	)		(116,103	)
Impairment charges		6,175			1,617			-			2,974			10,766
Debt satisfaction gains, net		(17,557	)		-			(1,393	)		(10	)		(18,960	)
Non-cash charges, net		1,663			1,663			1,658			1,577			6,561
Pro-rata share adjustments:
Non-consolidated entities adjustment		2,825			2,928			2,607			3,243			11,603
Noncontrolling interests adjustment		1,485			52			101			(41	)		1,597
Adjusted EBITDA	$	65,891		$	63,385		$	65,834		$	65,743		$	260,853

48 

LEXINGTON REALTY TRUST

RECONCILIATION OF NON-GAAP MEASURES (CONTINUED)

($000)

Reconciliation of Select Credit Metrics: 

Adjusted Company FFO Payout:	Nine months ended September 30, 2020			(Debt + Preferred) / Gross Assets:	Nine months ended September 30, 2020
Common share dividends per share	$	0.315		Consolidated debt	$	1,361,953
Adjusted Company FFO per diluted share		0.57		Held for sale debt		177,784
Adjusted Company FFO payout ratio		55.3	%	Preferred shares liquidation preference		96,770
				Debt and preferred	$	1,636,507
Unencumbered Assets:
Real estate, at cost	$	3,894,470		Total assets	$	3,621,851
held for sale real estate, at cost		186,342		Plus depreciation and amortization:
less encumbered real estate, at cost		(447,524	)	Real estate		906,789
Unencumbered assets	$	3,633,288		Deferred lease costs		15,529
				Held for sale assets		38,566
Unencumbered NOI:
NOI	$	200,977		Gross assets	$	4,582,735
Disposed of properties NOI		(2,143	)
Adjusted NOI		198,834		(Debt + Preferred) / Gross Assets		35.7	%
less encumbered adjusted NOI		(29,898	)
Unencumbered adjusted NOI	$	168,936		Debt  / Gross Assets:
Unencumbered NOI %		85.0	%	Consolidated debt and held for sale debt	$	1,539,737
Net Debt  / Adjusted EBITDA:				Gross assets	$	4,582,735
Adjusted EBITDA	$	260,853
				Debt / Gross assets		33.6	%
Consolidated debt	$	1,361,953
Held for sale debt		177,784		Secured Debt  / Gross Assets:
less consolidated cash and cash equivalents		(287,920	)	Mortgages and notes payable	$	157,723
Non-consolidated debt, net		80,380		held for sale debt		177,784
Net debt	$	1,332,197		Total Secure Debt	$	335,507
Net debt / Adjusted EBITDA		5.1	x	Gross assets	$	4,582,735
(Net Debt + Preferred)  / Adjusted EBITDA:				Secured Debt / Gross Assets		7.3	%
Adjusted EBITDA	$	260,853
				Unsecured Debt / Unencumbered NOI:
Net debt	$	1,332,197		Consolidated debt	$	1,361,953
Preferred shares liquidation preference		96,770		less mortgages and notes payable		(157,723	)
Net debt + preferred	$	1,428,967		Unsecured Debt	$	1,204,230
(Net Debt + Preferred) / Adjusted EBITDA		5.5	x	Unencumbered adjusted NOI (Annual)	$	220,486
				Unsecured Debt / Unencumbered NOI		5.5	x

49 

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		Wells Fargo Securities, LLC
Anthony Paolone	(212) 622-6682	Todd J. Stender	(562) 637-1371
Jeffries & Company, Inc.
Jon Peterson	(212) 284-1705

50 

 

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

Q3 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 and Chief Investment Officer

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 Third 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 Second 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. CIO Brendan Mullinix and Executive Vice Presidents 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.

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T. Wilson Eglin:

Thanks, Heather. Good morning everyone. We posted strong third quarter results and we continue to have success within all areas of our business. Notably, our portfolio operations remain resilient with an average of 99.9% of Cash Base rents collected during the third quarter, and as of today, we have collected 99.8% of October Cash Base rents. Our asset management team continues to do an excellent job, maintaining high levels of occupancy and capitalizing on opportunities to preserve and enhance value. At quarter end, our overall portfolio was nearly 99% leased, representing an increase of 160 basis points compared to second quarter. We executed 1.3 million square feet of new leases and lease extensions during the quarter, with overall cash renewal rents increasing 7%.

Strong fundamentals in the industrial sector and declining borrowing costs continue to put downward pressure on cap rates. For the most part, industrial asset values have increased overall during the pandemic, and while the landscape remains competitive, our acquisitions team continues to source targeted growth opportunities that enhance our portfolio and complement our multi-faceted investment strategy. Through quarter end, we have purchased $430 million dollars of new industrial product, including $70 million dollars that closed during the third quarter, at average GAAP and cash cap rates of 5.5% and 5.1%, respectively.

Subsequent to quarter end, we closed on and began funding a build-to-suit located in a Phoenix logistics submarket, which is scheduled for completion in the third quarter of 2021. We have two properties under contract with an aggregate value of $106 million dollars that are expected to close later this month, and we currently anticipate an additional $44 million dollars of acquisitions could close before the end of the year.

At the moment, our spec development pipeline includes two, single-building projects that are underway, one in Atlanta and the other in Columbus, with an estimated cost of $74 million dollars, of which $31 million dollars has been funded. We have begun preliminary lease negotiations with a full building user for our 320,000 square foot Columbus project. Our two multi-building sites in Columbus are currently in their infrastructure phase. We are in early discussions with other developers for potential additional sites as we work towards growing this line of our business.

At quarter-end, our industrial portfolio represented 88.5% of our gross real estate assets, excluding held for sale assets. Credit quality continues to be strong with investment grade credits representing 51% of our industrial revenue at quarter-end. We have maintained high levels of occupancy, a healthy weighted-average lease term, and the average age of our industrial portfolio, currently about 12 years, continues to decrease with the addition of more recently constructed properties. Further, 84% of our industrial revenue is derived from leases with escalations, which bodes well for growing cash flow.

The office sales market continues to be impacted by the pandemic, with fewer investors targeting office as risk around leasing remains hard to underwrite. Despite the slowdown, we anticipate 2020 disposition volume could exceed $425 million dollars at estimated GAAP and cash cap rates of approximately 5.8% and 5.2%, respectively. Through the third quarter, we have disposed of $141 million dollars of consolidated non-core assets, including $67 million dollars sold during the

2 

quarter. Subsequent to quarter end, we have disposed of $40 million dollars of non-core assets, and there are an additional $250 million dollars of assets we are working on selling by year-end. This includes the potential sale of our Dow Chemical office property in Houston, which is currently under contract and was considered held for sale at quarter end. Fourth quarter sales, including the Dow property, combined with current acquisitions in our pipeline, would push our industrial exposure to over 90% by year-end.

As we move forward with our capital recycling strategy, our principal focus is disposing of our remaining 22 consolidated non-industrial assets, which includes held-for-sale assets, by year-end 2022. These assets generated approximately $37 million dollars of net operating income as of September 30, 2020. Anticipated fourth quarter sales would reduce this portfolio to 18 assets that generated NOI of $25 million dollars as of September 30, 2020.

Our balance sheet continues to be in very good shape. After accessing the bond market in August for the first time since 2014, we had $288 million dollars of cash at quarter-end. We currently expect to deploy approximately $215 million dollars in the fourth quarter into new investments. To augment our liquidity during the quarter, we sold approximately 600,000 common shares through our ATM program at a weighted average price of $10.83 per share and sold an additional 3.9 million common shares at an initial weighted average price of $11.23 per share under the forward delivery feature. This feature will allow us to draw down those funds as we invest in our pipeline of growth opportunities. Liquidity will continue to be supplemented by our disposition program as we complete our transition to an industrial pure play REIT.

Overall, we are extremely pleased with our third quarter results and consistent progress year-to-date, and we believe we are well-positioned across our various business lines as we move forward. As a result, our board of trustees approved a common share dividend increase of 2.4% to an annualized dividend of $0.43 per share, effective with the quarterly dividend to be paid in January 2021.

With that, I’ll turn the call over to Beth to discuss financial results.

Beth Boulerice:

Thanks, Will. Adjusted Company FFO for the third quarter was approximately $54 million dollars, or $0.19 cents per diluted common share. We reaffirmed our 2020 Adjusted Company FFO guidance this morning maintaining a range of $0.74 to $0.76 cents per diluted common share. Our Adjusted Company FFO payout ratio of 55.3% remains conservative and allows for ample retained cash flow.

Revenues of $84.5 million dollars in the third quarter represented a 3.6% increase compared to the same time period in 2019. This increase was primarily the result of new acquisitions, while partially offset by property sales.

Property operating expenses were approximately $11 million dollars during the quarter with roughly 82% of this attributable to tenant reimbursements. G&A expenses of $7.2 million dollars during the quarter have decreased over half a million dollars when compared to the third quarter

3 

of 2019 and are further trending down over $1.0 million dollars as of third quarter 2020 compared to the same time period in 2019. We expect total 2020 G&A to be lower than we had originally anticipated, now within a range of $30 to $31 million dollars.

Year-over-year, our same-store percent leased portfolio was up 40 basis points to 98.9% and same-store NOI was up 1.2%. Approximately 81% of our current portfolio has escalations on average of 2.1%, contributing to same-store growth.

Cash Base rental collections continue to be exceptionally strong and we have still only granted two rent relief requests to-date in our consolidated portfolio, one that resulted in a longer lease extension and one for a small retail tenant in which a $20 thousand dollar rent deferral was granted to be paid by January 2021. We incurred $160 thousand dollars of bad debt expense this quarter primarily associated with some smaller tenants in our multi-tenant office and other portfolio.

Looking at the balance sheet, leverage is conservative at 5.1 times net debt to adjusted EBITDA and we have substantial cash and borrowing capacity to fund future growth opportunities. In August, we successfully issued $400 million dollars of 2.70% Senior Notes due in 2030. Some of the net proceeds were used to repurchase a portion of our higher interest-bearing notes maturing in 2023 and 2024. Additionally, we repaid the balance of $40 million dollars on our $600 million dollar unsecured revolving credit facility, and we currently have no amounts outstanding. As Will mentioned, our cash position was $288 million dollars at quarter end, primarily as a result of the bond offering.

Our debt maturity profile remains attractive. Unsecured debt to unencumbered NOI is 5.5 times and unencumbered NOI represented about 85% of our portfolio at quarter end. At quarter end, our consolidated debt outstanding was approximately $1.6 billion dollars with a weighted-average interest rate of approximately 3.7% and a weighted-average term of 7.3 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 the question and answer portion of this call.

Operator:

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

Our first question comes from James Feldman with BofA. Please go ahead.

Elvis Rodriguez:

Hi, good morning, this is Elvis on for Jamie. Thank you for the update and congrats on the quarter. Just a quick question. So how is 2021, say, I know it's probably a little too early to talk about 2021 but how is 2021 setting off from a growth perspective given your update on asset sales for fourth quarter. Just to start to get your early thoughts on that.

T. Wilson Eglin:

4 

Well, it's a little early, but the balance sheet is in good shape, and we expect to make considerable progress in sales over the balance of the year. So we are deploying a good portion of our cash into investments in the fourth quarter, but the sale activity should add another $90 million or so of liquidity. So, between that and retain cash flow next year and the forward equity, we feel like we had in the next year with a fair amount of dry powder. Yeah, you know that said, we've been in an environment where cap rates have been compressing in the acquisition market, so I think what's left to be determined is what's the mix between purchases is build-to-suits and some spec development opportunities that we're working on.

Elvis Rodriguez:

Thanks and then you mentioned cap rates have compressed during the pandemic, can you give us an update on how much cap rates have compressed for the product that you own, and then when you, when you think about that who exactly are you competing with on the ground. Is it more local developers? Is it the public reach? Is it pension funds? Any update you can share there.

T. Wilson Eglin:

Yeah, we don't view ourselves as competing for that often with public REITs. But there is a fair amount of institutional money that's interested in the assets that we're targeting for very high quality, newly constructed industrial with lease term and good credit if you're thinking about things like Amazon and Home Depot and Walmart, in some cases we've seen cap rates compressed as much to sit 50 to 75 basis points and in the balance of the opportunity set less, maybe it's in or like the 25 basis point area. So we think the acquisition market is probably in the 4.5 to 5 cap area for us. I mean there are exceptions on either side, and we would have probably pegged that more in the 4-3/4 to 5-1/4 area at the beginning of the year.

Elvis Rodriguez:

And is it too early to share sort of where pricing will shake out on the Dow Chemical transaction or any of the office transactions? I know you gave an overall but maybe specifically just on the office product sort of what kind of interest. Are you seeing and how many parties are you seeing that are interested in that product?

T. Wilson Eglin:

Yeah, I think, in the case of Dow, that is fully leverage marketplace, you're sort of in the 6 to 7 points above the debt that kind of area that's a little bit compressed compared to the beginning of the year. If we can get through our fourth quarter disposition plan with what's left in the sale portfolio, we would sort of peg that in sort of $300 million area in terms of total value, sort of plus or minus 5% of that. So for that final piece, that's a cap rate that's going to be above, a little bit above 10% in all likelihood, but it's a relatively small piece of the puzzle. So we do want to try to get that dilution behind us as quickly as we can, even though investor interest in office is considerably less than it was at the beginning of the year.

Elvis Rodriguez:

Thank you. I appreciate the updates.

Operator:

5 

Your next question comes from Craig Mailman with KeyBanc Capital Market. Please go ahead.

Craig Mailman:

Hey, Good Morning. Will helpful the range of cap rates you gave, can you just kind of give a, give us a sense of where developments are being priced today and whether you're getting paid enough to take the lease up risk if it's not a build-to-suit?

T. Wilson Eglin:

Yeah, correct. We view the development opportunities has been comfortably above 5.5, and there is risk in building obviously, but we'd rather take that risk and focus on asset quality and market and location within the market versus taking credit risk or special purpose asset risk, which you see in the sale leaseback market and often in the build-to-suit market. So we prefer that business to build-to-suit, although we're active and build-to-suit, it's just we don't want to end up getting into real estate, sometimes you end up at very high basis and some of that product and you just have to be a little bit careful.

Craig Mailman:

Got you. And then you guys raise a little bit of equity here, you get some cash in from, from dispositions, as you guys think about the balance sheet going forward, you've done a nice job, kind of keeping leverage in check, but as cap rates continue to fall for your asset class, equity is still, you know, probably about 6% on an implied cap rate basis kind of, how do you balance the equity here versus low cost debt and then kind of the pressure from the cap rate compression just on leverage that naturally braces up kind of, do you guys have to rethink where you want leverage to be and where you feel comfortable leverage to be or has that not changed at all?

T. Wilson Eglin:

No, our view around leverage is the same. I think that we would prefer to be much more focused on disposition activity at the moment compared to sneaking around equity in our share price has not performed well in the last few months, and I think we need to redouble our efforts to shrink the office portfolio and turn that into cash and finished the work we're doing in transforming the company.

Craig Mailman:

Okay. And then just on the take-down of the forward ATM, what do you think the cadence there is? In terms of --

T. Wilson Eglin:

In terms of the overall timing.

Craig Mailman:

Yeah, what do you think -- what do you think it is?

Beth Boulerice:

6 

Hey, Craig. So we have up until August of next year to draw down on that. So it will all depend on how our acquisitions are flowing and when we would need to tap that cash, but probably not until next year.

Craig Mailman:

Okay and then just one last one from me. The Dow building, I think you guys have kind of indicated mid-six's, is that still a good place to think about the GAAP cap rate on exit there. I know you said 10% overall in the $300 million. I just want to, that's a pretty good 2/3rd of it.

T. Wilson Eglin:

No, the $300 million is after Dow, Craig.

Craig Mailman:

I got you. Okay.

T. Wilson Eglin:

So we have Dow in our fourth quarter estimate.

Craig Mailman:

And what's the fourth quarter blended cap rate on disposals?

T. Wilson Eglin:

Lara, you want to jump in on that.

Lara Johnson

Sure. So for the remaining, we've closed some assets, obviously Craig, $40 million thus far and obviously anticipate to close a number of other assets. So from a cash cap rate point of view, we expect the fourth quarter to be around 6%.

Craig Mailman:

On a GAAP basis where does it come in?

Lara Johnson:

A little bit higher, about 6.7.

Craig Mailman:

Okay, great. Thank you.

Operator:

Your next question comes from Jon Petersen with Jefferies. Please go ahead.

Jonathan Michael Petersen:

Thanks, good morning. Just a few like kind of specific questions, kind of just peak my curiosity here. So you sold this Walmart building in Moody, Alabama, the industrial one. I see it was only 26% leased. I'm just kind of curious for some more context on why to sell that building and I

7 

assume, because of the vacancy there. But how should we think about, how, decision-making around selling industrial properties and what kind of triggers that those decisions.

T. Wilson Eglin:

Well, that that market is one where we had a very small presence and it's not targeted for growth. And it's not a market that's characterized by having large users. So we felt like getting Walmart in; therefore, a part of the building would set up help the sale, we would have sold it empty if we could have made any leasing progress. So what you'll see as we move forward is opportunistically. We're trying to shrink that piece of our portfolio that is in smaller markets and really be more focused on the top 50 and top with a heavier weight into the top 25 markets.

Jonathan Michael Petersen:

Okay, all right, that's helpful. And then on the lease extensions, Owens Corning, looks like you just extended that by a quarter. I assume that means they're moving out at the end.

James Dudley:

That's not, we're going to encourage in yet. Yeah. There they're evaluating a couple of different options and a couple of different options with us. So is there a higher probability of move out now. Yeah, there probably is, but it's not 100%. It's probably like 60% as they evaluate their options.

Jonathan Michael Petersen:

Got it. And then the other lease extension with Walgreens, it looks like that was a flat lease term. But you added five years there, I just maybe some thoughts on pricing in the markets today, and how you think leasing spreads are going to trend. And then just say in general, I don't know if you're tenants are approaching you or asking for things in any different way given coronavirus, given commerce demand, if any of those negotiations changed in the last six months.

T. Wilson Eglin:

Yeah, sure. So from a leasing spread perspective, we've had two really strong quarters 22% in the second quarter and 7% in this quarter and I believe overall, our rents from our portfolio are below market in our warehouse space is like a $3.77, and the overall portfolio is a little above $4 and if you look at a national average being 6.25. I think we have some room for growth on our, on our renewals. That being said, it is a little bit of a mixed bag as we renew the negotiate on some of our more generic warehouse space. I think we'll continue to see pretty strong rent growth. I think the wildcard that may temper that on an overall portfolio basis is what the warehouse or not warehouse, but the manufacturing space and that doing. So we have some of those coming up. And you mentioned, Walgreens, Walgreens had a flat renewal option. So there is still a few of those in play. So when you look at the kind of near term through 2021, I think it averages out to around 3%.

Jonathan Michael Petersen:

All right, that's helpful. Thank you.

T. Wilson Eglin:

8 

Thanks, Jon.

Operator:

[Operator instructions] Your next question is a follow-up question from James Feldman with BOA. Please go ahead.

Elvis Rodriguez:

Just one more, sorry if I missed this, but can you share an update on the Geodis lease, and where that stands today?

James Dudley:

Yeah, sure. So, in typical 3PL fashion, they told us that they were for sure moving out and now we're having discussions with them about the potential of them needing to stay for some period of time, for some of their clients and then they are looking for additional clients to backfill the space. So it's still looks like it's more than likely a move out. However, it may leak into 2021 in some capacity, and there still is the possibility with some of the other clientele, but that they have that there may be additional need for that space from them. In addition to that we have it in the market and we've got varying degrees of interest from a number of different tenants.

Elvis Rodriguez:

If you had to release that space, are you able to share where you think spreads would be on a new lease?

James Dudley:

I think it's going to depend on if it's multi-tenant or if it's single-tenant and credit and duration. I think if you were to re-lease it to a single tenant, you're probably in the high three's, depending on credit in duration, if you do a multi-tenant, we ought to be able to keep it flat or maybe even pump the rent from where it is. We had a really strong rental rate with Geodis because of the short-term nature of the extension last time.

Elvis Rodriguez:

Great, thank you. That's all from me. Appreciate.

Operator:

[Operator instructions]. We will now pause the short moment to allow questioners to enter the queue. Queue.

There are no further questions at this time, this concludes our question-and-answer session. I would like to turn the conference back over to Mr. Eglin for any closing remarks.

T. Wilson Eglin:

Thanks to everyone for joining the call this morning. If you'd like to visit our website for additional information about the company. I hope you will. And as always, you can contact me or the other members of our senior management team with any questions. Thanks again and have a great day.

9 

Operator:

The conference has now concluded.

10 

XML

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Schedule of Capitalization, Equity [Line Items]
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