SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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): August 10, 2007
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 Number) |
THE LEXINGTON MASTER LIMITED PARTNERSHIP | ||
| (Exact Name of Registrant as Specified in Its Charter) | ||
Delaware | 0-50268 | 11-3636084 |
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
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)
(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 obligations of the registrant under any of the following provisions
___ Written communications pursuant to Rule 425 under the Securities Act (17 CFT|R 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))
Item 1.01. Entry into a Material Definitive Agreement.
On August 10, 2007, Lexington Realty Trust (the “Trust”), through The Lexington Master Limited Partnership (the “Partnership”) and LMLP GP LLC, a wholly-owned subsidiary of the Partnership (“LMLP GP”), entered into a limited partnership agreement of Net Lease Strategic Assets Fund L.P. (the “Co-Investment Program”), dated as of August 10, 2007 (the “Partnership Agreement”), among LMLP GP, as the general partner, the Partnership, as a limited partner, and Inland American (Net Lease) Sub, LLC (“Inland”), a wholly-owned subsidiary of Inland American Real Estate Trust, Inc.
The Co-Investment Program was formed to invest in specialty single-tenant net leased assets in the United States.
In connection with the formation of the Co-Investment Program, the Partnership agreed to contribute six single tenant net leased assets to the Co-Investment Program pursuant to a contribution agreement, dated as of August 10, 2007 (the “Contribution Agreement”).
Also, in connection with the formation of the Co-Investment Program, the Trust and certain of its subsidiaries agreed to sell and the Co-Investment Program agreed to purchase, 47 primarily single tenant net leased assets pursuant to a purchase and sale agreement, dated as of August 10, 2007 (the “Purchase Agreement”).
The contribution of the six assets and the purchase and sale of the 47 assets, values the 53 assets at approximately $940.0 million. The table below contains selected information about the 53 assets. Upon the closing of the acquisition of the 53 assets, the Partnership and Inland will make initial capital contributions to the Co-Investment Program, with the Partnership’s initial capital contribution consisting of cash and the six previously mentioned assets, so that the Partnership and Inland will have percentage interests in the Co-Investment Program of 15% and 85%, respectively.
The acquisition of each of the 53 assets by the Co-Investment Program is subject to satisfaction of conditions precedent to closing, including obtaining financing on certain terms, obtaining certain consents and waivers, the continuing financial solvency of the tenants, certain other customary conditions, and, in the case of one asset, the acquisition of the asset by the Trust. Accordingly, neither the Trust nor the Partnership can provide any assurance that the acquisition by the Co-Investment Program will be completed. In the event that the Co-Investment Program does not acquire any of the 53 assets by March 1, 2008, the Co-Investment Program will be terminated.
In addition to the initial capital contributions, the Partnership and Inland intend to invest an additional $22.5 million and $127.5 million, respectively, in the Co-Investment Program to acquire additional specialty single-tenant net leased assets. Assuming mortgage financing of 70% of acquisition cost, the Co-Investment Program will acquire up to $1.4 billion of assets when, and if, fully funded.
Inland and the Partnership are entitled to a return on their respective investments equal to 9% per annum, with Inland’s return having a priority over the Partnership’s return. Following, the 9%
per annum, Inland and the Partnership are entitled to a return of the capital each invested, with Inland’s return of capital having a priority over the Partnership’s return of capital. Once all capital has been returned, the Partnership will receive certain incentive distributions.
The Partnership Agreement provides each partner with a right of first offer for transfers if either the Partnership or Inland desires to sell its interest in the Co-Investment Program or cause the Co-Investment Program to sell a certain asset. In addition, the Partnership Agreement contains a buy/sell arrangement in the event either the Partnership or Inland desires to buy the other partner’s interest in the Co-Investment Program or sell its interest in the Co-Investment Program.
The Trust’s wholly-owned taxable real estate investment trust subsidiary, Lexington Realty Advisors, Inc. (“LRA”), has entered into a management agreement with the Co-Investment Program whereby LRA will receive (1) a partnership management fee of 0.375% of the equity capital, (2) a property management fee of up to 3.0% of actual gross revenues from certain assets for which the landlord is obligated to provide property management services (contingent upon the recoverability under the applicable lease), and (3) an acquisition fee of 0.5% of the gross purchase price of each acquired asset by the Co-Investment Program under the terms of the Partnership Agreement.
The foregoing description is qualified in its entirety by reference to the Partnership Agreement, the Contribution Agreement, the Purchase Agreement and the Management Agreement, which are respectively attached as Exhibit 10.1, 10.2 and 10.3 to this Current Report on Form 8-K.
Property Location | Tenant/(Guarantor) | Net Rentable Square Feet | Current Term Lease Expiration | Estimated 2008 Cash Rent, Base (000s) | Mortgage Balance at June 30, 2007 (000s) |
5201 W. Barraque Street Pine Bluff, Arkansas | Entergy Services, Inc. | 27,189 | 10/31/2010 | $192 | -- |
19019 North 59th Avenue Glendale, Arizona | Honeywell, Inc. | 252,300 | 07/15/2011 | 2,452 | $14,179 |
8555 South River Parkway Tempe, Arizona | ASM Lithography Holding NV | 95,133 | 06/30/2013 | 2,242 | 13,430 |
2005 East Technology Circle Tempe, Arizona | (i)Structure, LLC (Infocrossing, Inc.) | 60,000 | 12/31/2025 | 1,128 | 8,367 |
1440 East 15th Street Tucson, Arizona | Cox Communications, Inc. | 28,591 | 09/30/2016 | 465 | 2,280 |
10419 North 30th Street Tampa, Florida | Time Customer Service, Inc. (Time, Inc.) | 132,981 | 07/31/2010 | 1,573 | 7,997 |
2500 Patrick Henry Parkway McDonough, Georgia | Georgia Power Company | 111,911 | 06/30/2015 | 1,464 | 12,288 |
Westbridge Business Park McDonough, Georgia (1) | Litton Loan Servicing LP (Credit—Based Asset Servicing and Securitization LLC) | 62,000 | 08/31/2017 | 1,100 | -- |
3265 East Goldstone Drive Meridian, Idaho | Voicestream PCS II Corporation (T-Mobile USA, Inc.) | 77,484 | 06/28/2019 | 1,227 | 10,156 |
9601 Renner Boulevard Lenexa, Kansas | Voicestream PCS II Corporation (T-Mobile USA, Inc.) | 77,484 | 11/01/2019 | 1,248 | 10,391 |
70 Mechanic Street Foxboro, Massachusetts | Invensys Systems, Inc. (Siebe, Inc.) | 251,914 | 07/01/2014 | 2,991 | 14,182 |
First Park Drive Oakland, Maine | Omnipoint Holdings, Inc. (T-Mobile USA, Inc.) | 78,610 | 08/31/2020 | 1,240 | 10,300 |
12000 & 12025 Tech Center Dr. Livonia, Michigan | (Kelsey-Hayes Company | 180,230 | 04/30/2014 | 1,957 | 10,532 |
3943 Denny Avenue Pascagoula, Mississippi | Northrop Grumman Systems Corporation | 94,841 | 10/31/2013 | 655 | -- |
11707 Miracle Hills Drive Omaha, Nebraska | (i)Structure, LLC (Infocrossing, Inc.) | 86,800 | 11/30/2025 | 1,167 | 8,859 |
29 South Jefferson Road Whippany, New Jersey | CAE SimuFlite, Inc. | 76,363 | 11/30/2021 | 2,291 | 16,764 |
3201 Quail Springs Pkwy. Oklahoma City, Oklahoma (2) | AT&T Wireless Services, Inc./ Jordan Associates | 128,500 | 11/30/2010 | 685 | 14,749 |
2999 SW 6th Street Redmond, Oregon | Voicestream PCS I LLC (T-Mobile USA, Inc.) | 77,484 | 01/31/2019 | 1,435 | 9,678 |
265 Lehigh Street Allentown, Pennsylvania | Wachovia | 71,230 | 10/31/2010 | 248 | -- |
420 Riverport Road Kingsport, Tennessee | American Electric Power | 42,770 | 06/30/2013 | 390 | -- |
2401 Cherahala Boulevard Knoxville, Tennessee | Advance PCS, Inc. | 59,748 | 05/31/2013 | 900 | 5,054 |
1401 & 1501 Nolan Ryan Pkwy. Arlington, Texas | Siemens Dematic Postal Automation, L.P. | 236,547 | 01/31/2014 | 2,385 | 21,012 |
601 & 701 Experian Pkwy. Allen, Texas | Experian Information Solutions, Inc. (TRW Inc.) | 292,700 | 10/15/2010 | 3,624 | 30,582 |
1200 Jupiter Road Garland, Texas (3) | Raytheon Company | 278,759 | 05/31/2011 | 911 | -- |
2529 West Thorne Drive Houston, Texas | Baker Hughes, Inc. | 65,500 | 09/27/2015 | 810 | 7,218 |
26410 McDonald Road The Woodlands, Texas | Montgomery County Management Company LLC | 41,000 | 10/31/2019 | 718 | 7,500 |
3711 San Gabirel Mission, Texas | Voicestream PCS II Corporation (T-Mobile USA, Inc.) | 75,016 | 06/30/2015 | 900 | 6,359 |
12645 W. Airport Road Sugar Land, Texas | Baker Hughes, Inc. | 165,836 | 09/27/2015 | 1,952 | 16,372 |
11555 University Blvd. Sugar Land, Texas | KS Management Services, LLP (St. Luke’s Episcopal Health System Corporation) | 72,683 | 11/30/2020 | 1,114 | 9,812 |
1600 Eberhardt Road Temple, Texas | Nextel of Texas | 108,800 | 01/31/2016 | 1,523 | 8,820 |
6455 State Hwy 303 NE Bremerton, Washington | Nextel West Corporation | 60,200 | 05/14/2016 | 1,085 | 6,519 |
109 Stevens Street Jacksonville, Florida | Unisource Worldwide, Inc. | 168,800 | 09/30/2009 | 624 | -- |
359 Gateway Drive Lavonia, Georgia | TI Group Automotive Systems, LLC | 133,221 | 05/31/2000 | 1,200 | 9,798 |
3600 Army Post Rd. Des Moines, Iowa | EDS Information Services LLC (Electronic Data Systems Corporation) | 405,000 | 04/30/2012 | 2,825 | 22,510 |
3600 Southgate Drive Danville, Illinois (4) | Sygma Network, Inc. (Sysco Corporation) | 205,150 | 10/31/2022 | 1,745 | 6,228 |
2935 Van Vactor Drive Plymouth, Indiana | Bay Valley Foods, LLC | 300,500 | 06/30/2015 | 777 | 6,615 |
10000 Business Boulevard Dry Ridge, Kentucky | Dana Corporation | 336,350 | 06/30/2025 | 1,346 | 10,910 |
730 N. Black Branch Road Elizabethtown, Kentucky | Dana Corporation | 167,770 | 06/30/2025 | 537 | 4,312 |
750 N. Black Branch Road Elizabethtown, Kentucky | Dana Corporation | 539,592 | 06/30/2025 | 2,838 | 23,029 |
301 Bill Bryan Boulevard Hopkinsville, Kentucky | Dana Corporation | 424,904 | 06/30/2025 | 1,687 | 13,606 |
4010 Airpark Drive Owensboro, Kentucky | Dana Corporation | 251,041 | 06/30/2025 | 1,208 | 9,925 |
6938 Elm Valley Drive Kalamazoo, Michigan | Dana Corporation | 150,945 | 10/31/2021 | 1,843 | 17,359 |
904 Industrial Road Marshall, Michigan | Tenneco Automotive Operating Company, Inc. (Tenneco Automotive, Inc.) | 195,640 | 08/17/2010 | 619 | -- |
1901 49th Avenue Minneapolis, Minnesota | Owens Corning Roofing and Asphalt, LLC | 18,620 | 06/30/2015 | 583 | -- |
324 Industrial Park Road Franklin, North Carolina | SKF USA, Inc. | 72,868 | 12/31/2014 | 395 | 1,532 |
736 Addison Road Erwin, New York | Corning, Inc. | 408,000 | 11/30/2016 | 1,095 | 9,548 |
590 Ecology Lane Chester, South Carolina | Owens Corning | 420,597 | 07/14/2025 | 2,185 | 13,232 |
120 S.E. Parkway Drive Franklin, Tennessee | United Technologies Corp. | 289,330 | 12/31/2008 | 1,474 | -- |
9220 Grogans Mill Road The Woodlands, Texas | Baker Hughes, Inc. | 275,750 | 09/27/2015 | 2,934 | 25,608 |
2424 Alpine Road Eau Claire, Wisconsin | Silver Spring Gardens, Inc. (Huntsinger Farms, Inc.) | 159,000 | 03/31/2027 | 930 | -- |
101 Creger Drive Ft. Collins, Colorado | Lithia Motors | 10,000 | 05/31/2012 | 275 | -- |
11411 N. Kelly Avenue Oklahoma City, Oklahoma | American Golf Corporation | 13,924 | 12/31/2017 | 475 | -- |
25500 State Hwy 249 Tomball, Texas | Parkway Chevrolet, Inc. | 77,076 | 08/31/2026 | 1,258 | 9,354 |
Total | 8,494,682 | $70,925 | $466,966 |
_________________
| (1) | The Trust is currently under contract to purchase this asset. Neither the Trust nor the Partnership can provide any assurance that the Trust will acquire this asset and subsequently sell this asset to the Co-Investment Program. |
| (2) | The Trust is selling its 40% tenancy-in-common interest in this asset. Estimated 2008 rent and mortgage balance represent the Trust’s proportionate share. |
| (3) | The Partnership is contributing its 60.5% interest in this asset. Estimated 2008 rent and mortgage balance represent the Partnership’s proportionate share. |
| (4) | Reflects expansion which is expected to be completed by December 31, 2007. |
Item 8.01. Other Events.
On August 13, 2007, the Trust issued a press release announcing the formation of the Co-Investment Program. A copy of the press release issued August 13, 2007, is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
10.1 | Limited Partnership Agreement, dated as of August 10, 2007, among LMLP GP LLC, The Lexington Master Limited Partnership and Inland American (Net Lease) Sub, LLC |
| 10.2 | Contribution Agreement, dated as of August 10, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P. |
| 10.3 | Purchase and Sale Agreement, dated as of August 10, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P. |
| 10.4 | Management Agreement, dated as of August 10, 2007, between Net Lease Strategic Assets Fund L.P. and Lexington Realty Advisors, Inc. |
| 99.1 | Press Release issued August 13, 2007 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Lexington Realty Trust | |||
| Date: August 16, 2007 | |||
| By: | /s/ T. Wilson Eglin | ||
| T. Wilson Eglin | |||
| Chief Executive Officer | |||
| The Lexington Master Limited Partnership | |||
| By: Lex GP-1 Trust, its general partner | |||
| Date: August 16, 2007 | |||
| By: | /s/ T. Wilson Eglin | ||
| T. Wilson Eglin | |||
| President | |||
Exhibit Index
10.1 | Limited Partnership Agreement, dated as of August 10, 2007, among LMLP GP LLC, The Lexington Master Limited Partnership and Inland American (Net Lease) Sub, LLC |
| 10.2 | Contribution Agreement, dated as of August 10, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P. |
| 10.3 | Purchase and Sale Agreement, dated as of August 10, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P. |
| 10.4 | Management Agreement, dated as of August 10, 2007, between Net Lease Strategic Assets Fund L.P. and Lexington Realty Advisors, Inc. |
| 99.1 | Press Release issued August 13, 2007 |