Lexington Realty Trust TRADED: NYSE: LXP |
| One Penn Plaza, Suite 4015 |
| New York NY 10119-4015 |
Contact:
Investor or Media Inquiries, T. Wilson Eglin, CEO
Lexington Realty Trust
Phone: (212) 692-7200 E-mail: tweglin@lxp.com
FOR IMMEDIATE RELEASE
January 8, 2010
LEXINGTON REALTY TRUST ANNOUNCES FOURTH QUARTER ACTIVITY
New York, NY – January 8, 2010 – Lexington Realty Trust (“Lexington”) (NYSE: LXP), a real estate investment trust (REIT) focused on single-tenant real estate investments, announced the following update on fourth quarter and recent transaction activity, some of which was previously announced:
Leasing
During the fourth quarter of 2009, Lexington executed 19 new and extended leases for approximately 1.0 million square feet and ended the year with portfolio occupancy of approximately 92%.
Leasing activity for the quarter included the following new leases:
| | | Tenants/Guarantors | | Location | | Lease Expiration Date | | | Sq. Ft. | | | New Cash Rent Per Annum ($000) | | | New GAAP Rent Per Annum ($000) | |
| | | | | | | | | | | | | | | | | | |
| | | Office | | | | | | | | | | | | | | | |
| 1 | | Brown Mackie College-Phoenix (1) | | Phoenix | AZ | | | 09/2019 | | | | 4,747 | | | $ | 85 | | | $ | 85 | |
| 2 | | Leetex Construction (1) | | Dallas | TX | | | 07/2012 | | | | 554 | | | $ | 9 | | | $ | 9 | |
| 3 | | Neighborhood Assistance Corporation of America | | Decatur | GA | | | 05/2017 | | | | 6,994 | | | $ | 138 | | | $ | 138 | |
| 4 | | Patient Advocate Foundation | | Hampton | VA | | | 12/2019 | | | | 36,484 | | | $ | 602 | | | $ | 602 | |
| 5 | | STIA, LLC | | Dallas | TX | | | 01/2013 | | | | 1,288 | | | $ | 18 | | | $ | 18 | |
| 5 | | Total office new leases | | | | | | | | | | 50,067 | | | $ | 852 | | | $ | 852 | |
| | | | | | | | | | | | | | | | | | | | | | |
| | | Industrial | | | | | | | | | | | | | | | | | | | |
| 1 | | Ozburn-Hessey Logistics | | Statesville | NC | | | 05/2013 | | | | 471,000 | | | $ | 1,313 | | | $ | 1,313 | |
| 2 | | Cardinal Unijax, LLC and Camelot Drive Holdings, LLC (2) | | Jacksonville | FL | | | 03/2010 | | | | 58,589 | | | $ | 148 | | | $ | 148 | |
| 2 | | Total industrial new leases | | | | | | | | | | 529,589 | | | $ | 1,461 | | | $ | 1,461 | |
| | | | | | | | | | | | | | | | | | | | | | |
| 7 | | TOTAL NEW LEASES | | | | | | | | | | 579,656 | | | $ | 2,313 | | | $ | 2,313 | |
Footnotes
(1) Represents expansion portion of existing lease.
(2) Held as an investment in Net Lease Strategic Assets Fund.
Leasing activity for the quarter also included the following lease extensions:
| | | Tenants/Guarantors | | Location | | Prior Term | | | Lease Expiration Date | | | Sq. Ft. | | | New Cash Rent Per Annum ($000) | | | Prior Cash Rent Per Annum ($000) | | | New GAAP Rent Per Annum ($000) | | | Prior GAAP Rent Per Annum ($000) | |
| | | Office | | | | | | | | | | | | | | | | | | | | | | | | |
| 1 | | Alice H. Vinton, d/b/a Vinton Realty | | Honolulu | HI | | | 10/2009 | | | | 02/2013 | | | | 308 | | | $ | 4 | | | $ | 7 | | | $ | 4 | | | $ | 7 | |
| 2 | | Capital One Services, LLC | | Glenn Allen | VA | | | 03/2010 | | | | 03/2012 | | | | 77,045 | | | $ | 732 | | | $ | 1,019 | | | $ | 785 | | | $ | 1,010 | |
| 3 | | City National Bank of NJ (2) | | Philadelphia | PA | | | 12/2009 | | | | 12/2010 | | | | 5,315 | | | $ | 239 | | | $ | 213 | | | $ | 239 | | | $ | 213 | |
| 4 | | Cityspace Real Estate, Inc. | | Dallas | TX | | | 11/2009 | | | | 11/2012 | | | | 1,161 | | | $ | 16 | | | $ | 17 | | | $ | 16 | | | $ | 17 | |
| 5 | | Dallas MTA, L.P., d/b/a Verizon Wireless | | Dallas | TX | | | 09/2009 | | | | 09/2014 | | | | 265 | | | $ | 25 | | | $ | 18 | | | $ | 25 | | | $ | 18 | |
| 6 | | Entergy Arkansas, Inc. | | Little Rock | AR | | | 10/2010 | | | | 10/2015 | | | | 36,311 | | | $ | 237 | | | $ | 237 | | | $ | 237 | | | $ | 237 | |
| 7 | | Entergy Services, Inc. (1) | | Pine Bluff | AR | | | 10/2010 | | | | 10/2015 | | | | 27,189 | | | $ | 192 | | | $ | 192 | | | $ | 192 | | | $ | 192 | |
| 8 | | HSBC Card Services, Inc. | | Tulsa | OK | | | 01/2010 | | | | 01/2011 | | | | 101,100 | | | $ | 1,446 | | | $ | 1,307 | | | $ | 1,446 | | | $ | 1,307 | |
| 9 | | John Michelli | | Baltimore | MD | | | 09/2009 | | | | 12/2015 | | | | 543 | | | $ | 4 | | | $ | 3 | | | $ | 4 | | | $ | 3 | |
| 10 | | Money Management International (4) | | Phoenix | AZ | | | 03/2016 | | | | 07/2018 | | | | 48,831 | | | $ | 1,099 | | | $ | 646 | | | $ | 1,107 | | | $ | 627 | |
| 11 | | United HealthCare Services, Inc. | | San Antonio | TX | | | 11/2010 | | | | 11/2017 | | | | 142,500 | | | $ | 1,781 | | | $ | 1,640 | | | $ | 1,866 | | | $ | 1,621 | |
12 | | Windell Investments, Inc. (3) | | Irvine | CA | | | 02/2010 | | | | 08/2015 | | | | 6,725 | | | $ | 160 | | | $ | 129 | | | $ | 160 | | | $ | 129 | |
12 | | Total office lease extensions | | | | | | | | | | | | | | 447,293 | | | $ | 5,935 | | | $ | 5,428 | | | $ | 6,081 | | | $ | 5,381 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
19 | | TOTAL NEW AND EXTENDED LEASES | | | | | | | | | | | | | | 1,026,949 | | | $ | 8,248 | | | $ | 5,428 | | | $ | 8,394 | | | $ | 5,381 | |
Footnotes
(1) Held as an investment in Net Lease Strategic Assets Fund.
(2) Consolidated joint venture property, Lexington’s ownership is 80.50%.
(3) Consolidated joint venture property, Lexington’s ownership is 64.35%.
(4) New cash and GAAP rents represent full occupancy, prior cash and GAAP rents for 28,710 square feet.
Balance Sheet
Lexington reduced its consolidated debt (exclusive of normal amortization) during the fourth quarter by approximately $66.4 million, including approximately $17.6 million original principal amount of Exchangeable Notes. During 2009, Lexington reduced the amount of Exchangeable Notes outstanding from $211.0 million to approximately $87.7 million. At year-end, Lexington had $7.0 million outstanding on the $125.0 million revolving loan portion of its secured credit facility.
Common Share Dividend
Lexington returned to paying its quarterly common share dividend in cash. On November 18, 2009, Lexington announced that it declared a regular common share dividend for the quarter ending December 31, 2009 of $0.10 per common share payable in cash on January 15, 2010 to common shareholders of record on December 31, 2009.
Dispositions
During the fourth quarter of 2009, Lexington sold or disposed of its interests in eight properties to unrelated parties for an aggregate disposition price of approximately $45.7 million. Prior to disposition, the properties generated annualized net operating income of approximately $1.7 million or 3.7% of the aggregate disposition price. In addition, Lexington sold its interest in two joint venture investments generating approximately $12.6 million in net proceeds.
Lexington’s disposition activity for the quarter included the following dispositions(1):
| | | Tenants/Guarantors | | Location | | Property Type | | Gross Sale Price ($000) | | Month of Disposition |
| 1 | | Compass Bank | | Beaumont | TX | | Office | | $ | 3,200 | | Nov |
| 2 | | Kohl's Department Stores, Inc. | | Eau Claire | WI | | Retail | | $ | 5,000 | | Dec |
| 3 | | Multi-tenant | | Dallas | TX | | Office | | $ | 7,750 | | Dec |
| 4 | | Rock Falls Country Market, LLC (Rock Island Country Market, LLC) | | Rock Falls | IL | | Retail | | $ | 650 | | Nov |
| 5 | | Staples, Inc. | | Baton Rouge | LA | | Industrial | | $ | 5,000 | | Dec |
| 6 | | Vacant (2) | | Plymouth | MI | | Industrial | | $ | 4,335 | | Dec |
| 7 | | Vacant (2) | | Houston | TX | | Office | | $ | 18,229 | | Dec |
| 8 | | Vacant | | Grand Prairie | TX | | Retail | | $ | 1,525 | | Nov |
| 8 | | TOTAL DISPOSITIONS | | | | | | | $ | 45,689 | | |
Footnotes
(1) Lexington also sold its investment in two joint ventures for an aggregate gross sales price of $36,560. Lexington’s share of gross sales price was $14,660 and net proceeds were $12,573.
(2) Gross sale price represents mortgage debt balance at foreclosure or other disposition.
Acquisitions
On December 31, 2009, Lexington acquired a property in Greenville, South Carolina for $10.5 million, consisting of a three-story 106,306 square foot office building and a one-story 21,735 square foot annex building on an approximately 8.0 acre parcel. At closing, the property was net-leased to Canal Insurance Company for 20 years at an initial capitalization rate of 8.60%, with 2.35% rent increases annually during the first ten years and CPI rent increases subject to a floor of 2.0% and a ceiling of 4.0% during the remainder of the term. Canal Insurance Company has an option to purchase the property on the fifth anniversary of the lease commencement at fair market value, but not less than $10.7 million and no greater than $11.6 million. If Canal Insurance Company fails to exercise its purchase option, Lexington has the right to require Canal Insurance Company to purchase the property for approximately $10.7 million.
Canal Insurance Company is an underwriter and provider of property/casualty insurance, primarily for the commercial trucking industry. Canal Insurance Company is rated A(PI) by Standard & Poor’s and A+ by A.M. Best.
Comments from Management
T. Wilson Eglin, Chief Executive Officer of Lexington Realty Trust, commented, “Our fourth quarter leasing activity was robust and we are pleased to have finished 2009 with portfolio occupancy of approximately 92%. We believe our disposition efforts continue to strengthen our balance sheet and liquidity and fourth quarter dispositions volume brought our total for 2009 to approximately $190.0 million, or approximately $40.0 million above our objectives. We have used the majority of proceeds to reduce our indebtedness. Our strategy for 2010 will be to continue selling our non-core holdings, specifically our multi-tenant and retail properties with the objective of reducing our recourse leverage, while selectively taking advantage of growth opportunities in single-tenant office and industrial properties.”
ABOUT LEXINGTON REALTY TRUST
Lexington Realty Trust is a real estate investment trust that owns, invests in and manages office, industrial and retail properties primarily net-leased to major corporations throughout the United States and provides investment advisory and asset management services to investors in the net lease area. Lexington shares are traded on the New York Stock Exchange under the symbol “LXP”. Additional information about Lexington is available on-line at www.lxp.com or by contacting Lexington Realty Trust, Investor Relations, One Penn Plaza, Suite 4015, New York, New York 10119-4015.
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