Cover
Cover - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 03, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period Ended Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 1-12386 | |
Entity Registrant Name | LEXINGTON REALTY TRUST | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 13-3717318 | |
Entity Address, Address Line One | One Penn Plaza, Suite 4015 | |
Entity Address, City or Town | New York | |
Entity Address, State or Province | NY | |
Entity Address, Postal Zip Code | 10119-4015 | |
City Area Code | 212 | |
Local Phone Number | 692-7200 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 276,952,514 | |
Entity Central Index Key | 0000910108 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Shares | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Shares of beneficial interest, par value $0.0001 per share, classified as Common Stock | |
Trading Symbol | LXP | |
Security Exchange Name | NYSE | |
Series C Cumulative Convertible Preferred Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share | |
Trading Symbol | LXPPRC | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
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 | 0 |
Operating 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: | ||
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 | 0 |
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: | ||
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 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Equity: | ||
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred shares, authorized shares (in shares) | 100,000,000 | 100,000,000 |
Series C Cumulative Convertible Preferred, liquidation preference | $ 96,770 | $ 96,770 |
Series C Cumulative Convertible Preferred, shares issued (in shares) | 1,935,400 | 1,935,400 |
Series C Cumulative Convertible Preferred, shares outstanding (in shares) | 1,935,400 | 1,935,400 |
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common shares, authorized shares (in shares) | 400,000,000 | 400,000,000 |
Common shares, shares issued (in shares) | 276,941,239 | 254,770,719 |
Common shares, outstanding (in shares) | 276,941,239 | 254,770,719 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Gross revenues: | ||||
Rental revenue | $ 83,592 | $ 80,325 | $ 243,421 | $ 239,058 |
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) |
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 |
Allocation to participating securities | (46) | (186) | (118) | (304) |
Net income attributable to common shareholders | $ 40,285 | $ 141,560 | $ 74,088 | $ 189,657 |
Net income (loss) attributable to common shareholders - per common share basic (in dollars per share) | $ 0.15 | $ 0.60 | $ 0.28 | $ 0.81 |
Weighted-average common shares outstanding – basic (in shares) | 274,696,046 | 236,285,216 | 264,211,668 | 233,833,340 |
Net income (loss) attributable to common shareholders – per common share diluted (in dollars per share) | $ 0.15 | $ 0.59 | $ 0.28 | $ 0.81 |
Weighted-average common shares outstanding – diluted (in shares) | 276,022,762 | 241,355,289 | 265,446,221 | 234,011,643 |
Series C | ||||
Expense applicable to revenues: | ||||
Dividends attributable to preferred shares – Series C | $ (1,573) | $ (1,573) | $ (4,718) | $ (4,718) |
Other revenue | ||||
Gross revenues: | ||||
Other revenue | 922 | 1,225 | 3,712 | 3,875 |
Property operating | ||||
Expense applicable to revenues: | ||||
Property operating | $ (11,343) | $ (10,611) | $ (31,895) | $ (30,966) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 43,618 | $ 147,821 | $ 81,169 | $ 199,870 |
Other comprehensive income (loss): | ||||
Change in unrealized income (loss) on interest rate swaps, net | 1,043 | (5,549) | (17,759) | (5,625) |
Other comprehensive income (loss) | 1,043 | (5,549) | (17,759) | (5,625) |
Comprehensive income | 44,661 | 142,272 | 63,410 | 194,245 |
Comprehensive income attributable to noncontrolling interests | (1,714) | (4,502) | (2,245) | (5,191) |
Comprehensive income attributable to Lexington Realty Trust shareholders | $ 42,947 | $ 137,770 | $ 61,165 | $ 189,054 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($) $ in Thousands | Total | Preferred Shares | Common Shares | Additional Paid-in-Capital | Accumulated Distributions in Excess of Net Income | Accumulated Other Comprehensive Loss | Noncontrolling Interests |
Beginning Balance at Dec. 31, 2018 | $ 1,346,678 | $ 94,016 | $ 24 | $ 2,772,855 | $ (1,537,100) | $ 76 | $ 16,807 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Redemption of noncontrolling OP units for common shares | 504 | (504) | |||||
Issuance of common shares and deferred compensation amortization, net | 136,585 | 2 | 136,583 | ||||
Repurchase of common shares | (958) | (958) | |||||
Repurchase of common shares to settle tax obligations | (5,281) | (1) | (5,280) | ||||
Forfeiture of employee common shares | 15 | 15 | |||||
Dividends/distributions | (80,249) | (78,053) | (2,196) | ||||
Net income | 199,870 | 194,679 | 5,191 | ||||
Other comprehensive loss | (5,625) | (5,625) | |||||
Ending Balance at Sep. 30, 2019 | 1,591,035 | 94,016 | 25 | 2,903,704 | (1,420,459) | (5,549) | 19,298 |
Beginning Balance at Jun. 30, 2019 | 1,344,174 | 94,016 | 23 | 2,771,213 | (1,536,752) | 15,674 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Redemption of noncontrolling OP units for common shares | 0 | 343 | (343) | ||||
Issuance of common shares and deferred compensation amortization, net | 133,489 | 2 | 133,487 | ||||
Repurchase of common shares to settle tax obligations | (1,339) | (1,339) | |||||
Forfeiture of employee common shares | 10 | 10 | |||||
Dividends/distributions | (27,571) | (27,036) | (535) | ||||
Net income | 147,821 | 143,319 | 4,502 | ||||
Other comprehensive loss | (5,549) | (5,549) | |||||
Ending Balance at Sep. 30, 2019 | 1,591,035 | 94,016 | 25 | 2,903,704 | (1,420,459) | (5,549) | 19,298 |
Beginning Balance at Dec. 31, 2019 | 1,724,719 | 94,016 | 25 | 2,976,670 | (1,363,676) | (1,928) | 19,612 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of partnership interest in real estate | 1,285 | 1,285 | |||||
Redemption of noncontrolling OP units for common shares | 632 | (632) | |||||
Issuance of common shares and deferred compensation amortization, net | 230,117 | 3 | 230,114 | ||||
Repurchase of common shares | (11,042) | (11,042) | |||||
Repurchase of common shares to settle tax obligations | (2,623) | (2,623) | |||||
Forfeiture of employee common shares | 1 | 0 | 1 | ||||
Dividends/distributions | (91,518) | (89,997) | (1,521) | ||||
Net income | 81,169 | 78,924 | 2,245 | ||||
Other comprehensive loss | (17,759) | (17,759) | |||||
Ending Balance at Sep. 30, 2020 | 1,914,349 | 94,016 | 28 | 3,193,751 | (1,374,748) | (19,687) | 20,989 |
Beginning Balance at Jun. 30, 2020 | 1,892,186 | 94,016 | 28 | 3,185,458 | (1,386,001) | (20,730) | 19,415 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Issuance of partnership interest in real estate | 398 | 398 | |||||
Redemption of noncontrolling OP units for common shares | 150 | (150) | |||||
Issuance of common shares and deferred compensation amortization, net | 8,143 | 0 | 8,143 | ||||
Dividends/distributions | (31,039) | (30,651) | (388) | ||||
Net income | 43,618 | 41,904 | 1,714 | ||||
Other comprehensive loss | 1,043 | 1,043 | |||||
Ending Balance at Sep. 30, 2020 | $ 1,914,349 | $ 94,016 | $ 28 | $ 3,193,751 | $ (1,374,748) | $ (19,687) | $ 20,989 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net cash provided by operating activities: | $ 152,466 | $ 142,919 |
Cash flows from investing activities: | ||
Acquisition of real estate, including intangible assets | (429,834) | (439,885) |
Investment in real estate under construction | (21,561) | 0 |
Capital expenditures | (15,328) | (12,130) |
Net proceeds from sale of properties | 99,740 | 334,395 |
Investments in non-consolidated entities | (6,152) | (1,776) |
Distributions from non-consolidated entities in excess of accumulated earnings | 6,843 | 14,830 |
Deferred leasing costs | (4,791) | (5,231) |
Change in real estate deposits, net | 461 | (4,936) |
Net cash used in investing activities | (370,622) | (114,733) |
Cash flows from financing activities: | ||
Dividends to common and preferred shareholders | (87,966) | (96,117) |
Principal amortization payments | (16,132) | (20,050) |
Principal payments on debt, excluding normal amortization | 0 | (67,229) |
Revolving credit facility borrowings | 170,000 | 110,000 |
Revolving credit facility payments | (170,000) | (110,000) |
Proceeds from senior notes | 396,932 | 0 |
Repurchase of senior notes | (112,312) | 0 |
Deferred financing costs | (3,803) | (5,456) |
Payment of early extinguishment of debt charges | (9,477) | (3,500) |
Cash contributions from noncontrolling interests | 1,285 | 0 |
Cash distributions to noncontrolling interests | (1,521) | (2,196) |
Repurchases to settle tax obligations | (2,623) | (5,368) |
Issuance of common shares, net | 225,122 | 131,831 |
Repurchase of common shares | (11,042) | (3,598) |
Net cash provided by (used in) financing activities | 378,463 | (71,683) |
Change in cash, cash equivalents and restricted cash | 160,307 | (43,497) |
Cash, cash equivalents and restricted cash, at beginning of period | 129,310 | 177,247 |
Cash, cash equivalents and restricted cash, at end of period | 289,617 | 133,750 |
Reconciliation of cash, cash equivalents and restricted cash: | ||
Cash and cash equivalents at beginning of period | 122,666 | 168,750 |
Restricted cash at beginning of period | 6,644 | 8,497 |
Cash and cash equivalents at end of period | 287,920 | 126,058 |
Restricted cash at end of period | $ 1,697 | $ 7,692 |
The Company and Financial State
The Company and Financial Statement Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
The Company and Financial Statement Presentation | The Company and Financial Statement Presentation Lexington Realty Trust (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Company”) is a Maryland real estate investment trust (“REIT”) that owns a portfolio of equity investments focused on single-tenant industrial properties. As of September 30, 2020, the Company had ownership interests in approximately 135 consolidated real estate properties, located in 29 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries. The Company believes it has qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain activities from which it was previously precluded in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS are subject to federal income taxes on the income from these activities. The Company conducts its operations either directly or indirectly through (1) property owner subsidiaries, which are single purpose entities, (2) an operating partnership, Lepercq Corporate Income Fund L.P. (“LCIF”), in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests, (3) a wholly-owned TRS, Lexington Realty Advisors, Inc. (“LRA”), and (4) investments in joint ventures. References to “OP units” refer to units of limited partner interests in LCIF. Property owner subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan agreements secured by properties in which the Company has an interest. Each property owner subsidiary is a separate legal entity that maintains separate books and records. The assets and credit of each property owner subsidiary 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 property owner subsidiary or any other 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 or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors. The financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three and nine months ended September 30, 2020 have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 20, 2020 (“Annual Report”). Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates the wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP. The Company is the primary beneficiary of certain VIEs as it has a controlling financial interest in these entities. LCIF, which is consolidated and in which the Company has an approximate 97% interest, is a VIE. The Company has a 90% ownership interest in a joint venture with a developer, which acquired a parcel of land in the Atlanta, Georgia market and plans to develop an industrial property. The joint venture is consolidated and is a VIE. The assets of each VIE are only available to satisfy such VIE's respective liabilities. As of September 30, 2020 and December 31, 2019, the VIEs' mortgages and notes payable were non-recourse to the Company. Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Real estate, net $ 599,701 $ 592,372 Total assets $ 676,938 $ 645,623 Mortgages and notes payable, net $ 44,008 $ 82,978 Total liabilities $ 61,802 $ 101,901 In addition, the Company acquires, from time to time, properties using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a "reverse 1031 exchange") and, as such, the properties are in the possession of an Exchange Accommodation Titleholder ("EAT") until the reverse 1031 exchange is completed. The EAT is classified as a VIE as it is a “thinly capitalized” entity. The Company consolidates the EAT because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the EAT's economic performance and can collapse the 1031 exchange structure at any time. The assets of the EAT primarily consist of leased property (net real estate and intangibles). Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the economic uncertainty primarily caused by the recent outbreak of COVID-19. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable and deferred rent receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments, valuation of derivative financial instruments, valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee and the useful lives of long-lived assets. Actual results could differ materially from those estimates. Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("Topic 820"), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements. The Company estimates the fair value of its real estate assets, including non-consolidated real estate assets, by using income and market valuation techniques. The Company may estimate fair values using market information such as recent sale contracts (Level 2 inputs) or recent sale offers or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations. New Accounting Standards Adopted in 2020. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of an allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company analyzed its accounts receivable using an aging methodology and determined that there have been no historical credit losses related to its outstanding accounts receivable. As a result, the Company's adoption of this guidance did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40). This ASU addresses customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company's adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements. This ASU includes additional disclosures requirements for recurring and nonrecurring Level 3 fair value measurements including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income, disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and a narrative description of measurement uncertainty related to Level 3 measurements. This standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements. Recently Issued Accounting Guidance . In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 is optional, applies for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR and may be elected over time as reference rate reform activities occur. As of March 31, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share A portion of the Company's non-vested share-based payment awards are considered participating securities and as such, the Company is required to use the two-class method for the computation of basic and diluted earnings per share. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The non-vested share-based payment awards are not allocated losses as the awards do not have a contractual obligation to share in losses of the Company. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 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 For per common share amounts, all incremental shares are considered anti-dilutive for periods that have a loss from continuing operations attributable to common shareholders. In addition, other common share equivalents may be anti-dilutive in certain periods. |
Investments in Real Estate
Investments in Real Estate | 9 Months Ended |
Sep. 30, 2020 | |
Real Estate [Abstract] | |
Investments in Real Estate | Investments in Real Estate The Company completed the following acquisition transactions during the nine months ended September 30, 2020: Property Market Acquisition Initial Primary Land Building and Improvements Lease in-place Value Intangible Industrial Chicago, IL January 2020 $ 53,642 11/2029 $ 3,681 $ 45,817 $ 4,144 Industrial Phoenix, AZ January 2020 19,164 12/2025 1,614 16,222 1,328 Industrial Chicago, IL January 2020 39,153 12/2029 1,788 34,301 3,064 Industrial Dallas, TX February 2020 83,495 8/2029 4,500 71,635 7,360 Industrial Savannah, GA April 2020 34,753 7/2027 1,689 30,346 2,718 Industrial Dallas, TX May 2020 10,731 6/2030 1,308 8,466 957 Industrial Savannah, GA June 2020 30,448 6/2025 2,560 25,697 2,191 Industrial Savannah, GA June 2020 9,130 8/2025 1,070 7,448 612 Industrial Houston, TX June 2020 20,949 4/2025 2,202 17,101 1,646 Industrial Ocala, FL June 2020 58,283 8/2030 4,113 49,904 4,266 Industrial DC/Baltimore, MD September 2020 29,143 11/2024 2,818 24,423 1,902 Industrial Savannah, GA September 2020 40,908 07/2026 3,775 34,322 2,811 $ 429,799 $ 31,118 $ 365,682 $ 32,999 The Company is engaged in two consolidated development projects. As of September 30, 2020, the Company's aggregate investment in the development arrangements was $41,948, which included capitalized interest of $578 for the nine-month period ended September 30, 2020 and is presented as investments in real estate under construction in the accompanying unaudited condensed consolidated balance sheets. As of September 30, 2020, the details of the development arrangements outstanding are as follows (in $000's, except square feet): Project (% owned) Market Property Type Estimated Sq. Ft. Estimated Project Cost GAAP Investment Balance as of Amount Funded as of Estimated Completion Date 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 |
Dispositions and Impairment
Dispositions and Impairment | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Dispositions and Impairment | Dispositions and Impairment During the nine months ended September 30, 2020 and 2019, the Company disposed of its interests in various properties for an aggregate gross disposition price of $140,573 and $448,900, respectively, and recognized aggregate gains on sales of properties of $41,876 and $176,662, respectively. Included in the 2020 dispositions are two office properties located in Charleston, South Carolina and Overland Park, Kansas which were conveyed to the lenders in forgiveness of the mortgage loan encumbering each property. The balances of the non-recourse mortgage loans were in excess of the value of the property collateral, resulting in an aggregate debt satisfaction gain, net of $29,016. Included in the 2019 dispositions, the Company recognized debt satisfaction charges, net of $4,415 relating to sold properties. As of September 30, 2020, the Company had five properties classified as held for sale because the properties met the criteria included under the held for sale accounting guidance and sales to a third party within the next 12 months were deemed probable. As of December 31, 2019, the Company had no properties that met the held for sale criteria. Assets and liabilities of the held for sale properties as of September 30, 2020 consisted of the following: September 30, 2020 Assets: Real estate, at cost $ 180,981 Real estate, intangible assets 5,361 Accumulated depreciation and amortization (38,405) Rent receivable - deferred 8,066 Other 3,207 $ 159,210 Liabilities: Mortgages and notes payable, net $ 177,784 Accounts payable and other liabilities 680 Accrued interest payable 322 Prepaid rent 266 $ 179,052 The Company assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability, change in the estimated holding period of the asset, the potential sale or transfer of the property in the near future and changes in economic conditions such as the recent economic uncertainty primarily caused by the COVID-19 outbreak. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value and the Company estimates that its cost will not be recovered. During the nine months ended September 30, 2020, the Company recognized aggregate impairment charges on real estate properties of $7,792 comprised of two impairment charges of $1,617 and $6,175 on a vacant office property located in Houston, Texas and an industrial facility located in Kalamazoo, Michigan, respectively. During the nine months ended September 30, 2019, the Company recognized aggregate impairment charges on real estate properties of $2,355 comprised of $2,106 and $249 on unencumbered and vacant retail properties in Watertown, New York and Albany, Georgia, respectively. Both of these properties were sold during 2019. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |
Fair Value Measurements | Fair Value Measurements The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall: Balance Fair Value Measurements Using Description September 30, 2020 (Level 1) (Level 2) (Level 3) Interest rate swap liabilities $ (19,687) $ — $ (19,687) $ — Impaired property held for sale (1) $ 8,742 $ — $ — $ 8,742 (1) Represents a non-recurring fair value measurement. The fair value is calculated as of the date of the impairment. The Company measured these impairment charges based on discounted cash flow analysis, using a hold period of ten years and residual capitalization rates and discount rates ranging from 8.0% to 9.0% and 9.0% to 12.0%, respectively. As significant inputs to the models are unobservable, the Company determined that the value determined for these properties falls within Level 3 of the fair value reporting hierarchy. Balance Fair Value Measurements Using Description December 31, 2019 (Level 1) (Level 2) (Level 3) Interest rate swap liabilities $ (1,928) $ — $ (1,928) $ — Impaired real estate assets (1) $ 4,846 $ — $ — $ 4,846 (1) Represents a non-recurring fair value measurement. The fair value is calculated as of the date of the impairment. The majority of the inputs used to value the Company's interest rate swaps fell within Level 2 of the fair value hierarchy, such as observable market interest rate curves; however, the credit valuation associated with the interest rate swaps utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2020 and December 31, 2019, the Company determined that the credit valuation adjustment relative to the overall fair value of the interest rate swaps was not significant. As a result, the interest rate swaps were classified in Level 2 of the fair value hierarchy. The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments, excluding held for sale assets, as of September 30, 2020 and December 31, 2019: As of September 30, 2020 As of December 31, 2019 Carrying Fair Value Carrying Fair Value Liabilities Debt $ 1,361,953 $ 1,375,415 $ 1,311,977 $ 1,276,589 The fair value of the Company's debt is primarily estimated utilizing Level 3 inputs by using a discounted cash flow analysis, based upon estimates of market interest rates, except for the Company's senior notes payable. The Company determines the fair value of its senior notes payable using market prices. The inputs used in determining the fair value of these notes are categorized as Level 1 due to the fact that the Company uses quoted market rates to value these instruments. However, the inputs used in determining the fair value could be categorized as Level 2 if trading volumes are low. Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts. Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable . The Company estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments. |
Investments in Non-Consolidated
Investments in Non-Consolidated Entities | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Investments in Non-Consolidated Entities | Investments in Non-Consolidated Entities Below is a schedule of the Company's investments in non-consolidated entities: Percentage Ownership at Investment Balance as of Investment September 30, 2020 September 30, 2020 December 31, 2019 NNN Office JV LP ("NNN JV") (1) 20% $ 32,723 $ 39,288 Etna Park 70 LLC (2) 90% 11,352 8,352 Etna Park East LLC (3) 90% 7,391 4,310 Other (4) 25% 5,023 5,218 $ 56,489 $ 57,168 (1) NNN JV is a joint venture formed in 2018 and owns office properties formerly owned by the Company. (2) Joint venture formed in 2017 with a developer entity to acquire a 151-acre parcel of developable land and to pursue industrial build-to-suit opportunities. The Company determined that it is not the primary beneficiary. In December 2018, the parcel was subdivided and the Company received a distribution of an ownership interest in a 57-acre parcel with a historical cost of $3,008. The Company acquired control of the 57-acre parcel via the purchase of the Company's joint venture partners' interests. (3) Joint venture formed in 2019 with a developer entity to acquire a 129.6-acre parcel of land and to pursue industrial build-to-suit opportunities. The Company determined it is not the primary beneficiary. (4) As of September 30, 2020, represents one joint venture investment, which owns a single-tenant, net-leased asset. During the nine months ended September 30, 2020, NNN JV sold two assets and the Company recognized an aggregate gain on the transactions of $557 within equity in earnings (losses) of non-consolidated entities within its unaudited condensed consolidated statement of operations. In conjunction with these property sales, NNN JV received net proceeds of $8,504 after the satisfaction of $40,800 of its non-recourse mortgage indebtedness. During the nine months ended September 30, 2019, NNN JV sold four assets and the Company recognized aggregate gains on the transactions of $3,529 within equity in earnings (losses) of non-consolidated entities in its unaudited condensed consolidated statement of operations. In conjunction with these property sales, NNN JV received aggregate net proceeds of $45,208 after the satisfaction of an aggregate of $101,520 of its non-recourse mortgage indebtedness. |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Debt The Company had the following mortgages and notes payable outstanding as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Mortgages and notes payable $ 159,686 $ 393,872 Unamortized debt issuance costs (1,963) (3,600) $ 157,723 $ 390,272 Interest rates, including imputed rates on mortgages and notes payable, ranged from 3.5% to 6.5%, respectively, at September 30, 2020 and December 31, 2019, and all mortgages and notes payables mature between 2020 and 2032 as of September 30, 2020. The weighted-average interest rate was 4.7% and 4.5% at September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, the Lake Jackson, Texas property, which was held for sale, was encumbered by a $179,110 mortgage that matures in 2036 and bears interest at 4.04% and is not included in the September 30, 2020 table above. As of September 30, 2020, the Company had one non-recourse mortgage loan that was in default with an outstanding principal balance of $18,413. The mortgage loan is secured by a vacant office property in Boca Raton, Florida. The Company had the following senior notes outstanding as of September 30, 2020 and December 31, 2019: Issue Date September 30, 2020 December 31, 2019 Interest Rate Maturity Date Issue Price August 2020 $ 400,000 $ — 2.70 % September 2030 99.233 % May 2014 198,932 250,000 4.40 % June 2024 99.883 % June 2013 188,756 250,000 4.25 % June 2023 99.026 % 787,688 500,000 Unamortized debt discount (3,619) (963) Unamortized debt issuance cost (5,126) (2,167) $ 778,943 $ 496,870 Each series of the senior notes is unsecured and requires payment of interest semi-annually in arrears. The Company may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium. In August 2020, the Company issued $400,000 aggregate principal amount of 2.70% Senior Notes due 2030 ("2030 Senior Notes") at an issuance price of 99.233% of the principal amount. The Company issued the 2030 Senior Notes at an initial discount of $3,068 which is being recognized as additional interest expense over the term of the 2030 Senior Notes. During the three months ended September 30, 2020, the Company used a portion of the net proceeds from the offering of the 2030 Senior Notes to repurchase $61,244 and $51,068 aggregate principal balance of its outstanding 4.25% senior notes due 2023 and 4.40% senior notes due 2024, respectively, through a tender offer. The tender offer consideration included $9,477 in prepayment costs and fees and $1,024 of accrued interest. The Company recognized a $10,066 debt satisfaction charge related to the aggregate repurchases, which included a write-off of the proportionate amount of unamortized discount and debt issuance costs related to the 2023 and 2024 senior notes. The Company has an unsecured credit agreement with KeyBank National Association, as agent. A summary of the significant terms, as of September 30, 2020, is as follows: Current $600,000 Revolving Credit Facility (1) February 2023 LIBOR + 0.90% $300,000 Term Loan (2) January 2025 LIBOR + 1.00% (1) Maturity date of the revolving credit facility can be extended to February 2024 at the Company's option. The interest rate ranges from LIBOR plus 0.775% to 1.45%. At September 30, 2020, the Company had no borrowings outstanding and availability of $600,000, subject to covenant compliance. (2) The LIBOR portion of the interest rate was swapped to obtain a current fixed rate of 2.732% per annum. The aggregate unamortized debt issuance costs for the term loan was $2,183 and $2,561 as of September 30, 2020 and December 31, 2019, respectively. The Company was compliant with all applicable financial covenants contained in its corporate-level debt agreements at September 30, 2020. During 2007, the Company issued $200,000 original principal amount of Trust Preferred Securities. The Trust Preferred Securities, which are classified as debt, are due in 2037, are open for redemption at the Company's option, bore interest at a fixed rate of 6.804% through April 2017 and bear interest at a variable rate of three-month LIBOR plus 170 basis points through maturity. The interest rate at September 30, 2020 was 1.968%. As of September 30, 2020 and December 31, 2019, there was $129,120 original principal amount of Trust Preferred Securities outstanding and $1,650 and $1,724, respectively, of unamortized debt issuance costs. Capitalized interest recorded during the nine months ended September 30, 2020 and 2019 was $1,112 and $251, respectively. |
Derivatives and Hedging Activit
Derivatives and Hedging Activities | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Activities | Derivatives and Hedging Activities Risk Management Objective of Using Derivatives . The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the type, amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash receipts and its known or expected cash payments principally related to the Company's investments and borrowings. Cash Flow Hedges of Interest Rate Risk . The Company's objectives in using interest rate derivatives are to add stability to interest expense, to manage its exposure to interest rate movements and therefore manage its cash outflows as it relates to the underlying debt instruments. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy relating to certain of its variable rate debt instruments. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company did not incur any ineffectiveness during the nine months ended September 30, 2020 and 2019. During July 2019, the Company entered into four interest rate swap agreements with its counterparties. The swaps were designated as cash flow hedges of the risk of variability attributable to changes in the LIBOR swap rates on its $300,000 LIBOR-indexed variable-rate unsecured term loan. Accordingly, changes in fair value of the swaps are recorded in other comprehensive income (loss) and reclassified to earnings as interest becomes receivable or payable. The swaps expire coterminous with the extended maturity of the term loan in January 2025. During the next 12 months ending September 30, 2021, the Company estimates that an additional $4,830 will be reclassified as an increase to interest expense if the swaps remain outstanding. Interest Rate Derivative Number of Instruments Notional Interest Rate Swaps 4 $300,000 The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the condensed consolidated balance sheets: As of September 30, 2020 As of December 31, 2019 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments Interest Rate Swaps Accounts Payable and Other Liabilities $ (19,687) Accounts Payable and Other Liabilities $ (1,928) The table below presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2020 and 2019. Derivatives in Cash Flow Amount of Gain (Loss) Amount of (Income) Loss Hedging Relationships 2020 2019 2020 2019 Interest Rate Swaps $ (19,934) $ (5,326) $ 2,175 $ (299) (1) Amounts reclassified from accumulated other comprehensive income (loss) to interest expense within the unaudited condensed consolidated statement of operations. Total interest expense presented in the unaudited condensed consolidated statements of operations in which the effects of cash flow hedges are recorded was $42,610 and $50,715 for the nine months ended September 30, 2020 and 2019, respectively. The Company's agreements with swap derivatives counterparties contain provisions whereby if the Company defaults on the underlying indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of the swap derivative obligation. As of September 30, 2020, the Company had not posted any collateral related to the agreements. |
Lease Accounting
Lease Accounting | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Lease Accounting | Lease Accounting The following is a summary of the Company's accounting for leases as of and during the nine-month period ended September 30, 2020 and 2019: Lessor Lexington’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased industrial and office real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred. Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before. Accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions. From a lessor perspective, the Company concluded that revenue from lease components are primarily recognized on a straight-line basis over the lease term unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Revenue is recognized on a contractual basis for leases with escalations tied to a Consumer Price Index (CPI) with no floor. If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition commences when the improvements are substantially complete and control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred on the unaudited condensed consolidated balance sheets. The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectable, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. In February 2020, the Company wrote off a deferred rent receivable balance of $615 as a reduction of rental revenue, related to a tenant that dissolved and surrendered its leased premises in an industrial property located in the Columbus, Ohio market. During the nine months ended September 30, 2019, rental revenue was reduced by an aggregate $1,452 for accounts receivable and deferred rent receivable deemed uncollectable. Certain tenants have been experiencing financial difficulties as a result of the COVID-19 pandemic. During the nine months ended September 30, 2020, the Company wrote off or reserved aggregate deferred rent receivable balances of $1,383, as a reduction of rental revenue, related to certain tenants as the deferred rent receivable balances were deemed uncollectable. In addition, during the nine-month period ended September 30, 2020, the Company also wrote off or reserved an aggregate of $177 accounts receivable relating to certain tenants suffering from the current economic conditions. The Company determined that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service is included within rental revenue is CAM services provided as part of the Company’s real estate leases. Topic 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. As of September 30, 2020 and 2019, the Company incurred $67 and $163, respectively, of costs that were not incremental to the execution of leases, which are included in property operating expenses on its unaudited condensed consolidated statements of operations. The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities . The Company does not have residual value guarantees on specific properties. The following table presents the Company’s classification of rental revenue for its operating leases for the three and nine months ended September 30, 2020 and 2019: Three Months Ended Nine Months Ended Classification September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Fixed $ 74,902 $ 73,396 $ 219,542 $ 218,808 Variable (1) 8,690 6,929 23,879 20,250 Total $ 83,592 $ 80,325 $ 243,421 $ 239,058 (1) Primarily comprised of tenant reimbursements. Future fixed rental receipts for leases, assuming no new or re-negotiated leases as of September 30, 2020 were as follows: 2020 - remainder $ 71,930 2021 281,421 2022 270,067 2023 269,224 2024 238,853 2025 212,486 Thereafter 1,280,114 Total $ 2,624,095 Lessee The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2020. The leases have remaining lease terms of up to 43 years, some of which include options to extend the leases in 5 to 10-year increments for up to 53 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. Minimum lease payments for leases that commenced before the date of adoption of ASC 842 were determined based on previous leases guidance under ASC 840. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred. The accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate. The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease. As the Company does not know the rate implicit in the respective leases, the Company used its incremental borrowing rate based on the information available at the transition date for such existing leases. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases. Supplemental information related to operating leases is as follows: Nine Months Ended September 30, 2020 September 30, 2019 Weighted-average remaining lease term Operating leases (years) 12.3 12.4 Weighted-average discount rate Operating leases 4.2 % 4.1 % The components of lease expense for the nine months ended September 30, 2020 and 2019 were as follows: Income Statement Classification Fixed Variable Total 2020: Property operating $ 2,985 $ — $ 2,985 General and administrative 1,012 76 1,088 Total $ 3,997 $ 76 $ 4,073 2019: Property operating $ 2,988 $ — $ 2,988 General and administrative 1,007 85 1,092 Total $ 3,995 $ 85 $ 4,080 The Company recognized sublease income of $2,824 and $2,823 for the nine months ended September 30, 2020 and 2019, respectively. The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2020: Operating Leases 2020 - remainder $ 1,241 2021 5,117 2022 5,211 2023 5,355 2024 5,377 2025 5,377 Thereafter 21,389 Total lease payments $ 49,067 Less: Imputed interest (11,729) Present value of operating lease liabilities $ 37,338 |
Lease Accounting | Lease Accounting The following is a summary of the Company's accounting for leases as of and during the nine-month period ended September 30, 2020 and 2019: Lessor Lexington’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased industrial and office real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred. Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before. Accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions. From a lessor perspective, the Company concluded that revenue from lease components are primarily recognized on a straight-line basis over the lease term unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Revenue is recognized on a contractual basis for leases with escalations tied to a Consumer Price Index (CPI) with no floor. If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition commences when the improvements are substantially complete and control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred on the unaudited condensed consolidated balance sheets. The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectable, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. In February 2020, the Company wrote off a deferred rent receivable balance of $615 as a reduction of rental revenue, related to a tenant that dissolved and surrendered its leased premises in an industrial property located in the Columbus, Ohio market. During the nine months ended September 30, 2019, rental revenue was reduced by an aggregate $1,452 for accounts receivable and deferred rent receivable deemed uncollectable. Certain tenants have been experiencing financial difficulties as a result of the COVID-19 pandemic. During the nine months ended September 30, 2020, the Company wrote off or reserved aggregate deferred rent receivable balances of $1,383, as a reduction of rental revenue, related to certain tenants as the deferred rent receivable balances were deemed uncollectable. In addition, during the nine-month period ended September 30, 2020, the Company also wrote off or reserved an aggregate of $177 accounts receivable relating to certain tenants suffering from the current economic conditions. The Company determined that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service is included within rental revenue is CAM services provided as part of the Company’s real estate leases. Topic 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. As of September 30, 2020 and 2019, the Company incurred $67 and $163, respectively, of costs that were not incremental to the execution of leases, which are included in property operating expenses on its unaudited condensed consolidated statements of operations. The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities . The Company does not have residual value guarantees on specific properties. The following table presents the Company’s classification of rental revenue for its operating leases for the three and nine months ended September 30, 2020 and 2019: Three Months Ended Nine Months Ended Classification September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Fixed $ 74,902 $ 73,396 $ 219,542 $ 218,808 Variable (1) 8,690 6,929 23,879 20,250 Total $ 83,592 $ 80,325 $ 243,421 $ 239,058 (1) Primarily comprised of tenant reimbursements. Future fixed rental receipts for leases, assuming no new or re-negotiated leases as of September 30, 2020 were as follows: 2020 - remainder $ 71,930 2021 281,421 2022 270,067 2023 269,224 2024 238,853 2025 212,486 Thereafter 1,280,114 Total $ 2,624,095 Lessee The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2020. The leases have remaining lease terms of up to 43 years, some of which include options to extend the leases in 5 to 10-year increments for up to 53 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. Minimum lease payments for leases that commenced before the date of adoption of ASC 842 were determined based on previous leases guidance under ASC 840. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred. The accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate. The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease. As the Company does not know the rate implicit in the respective leases, the Company used its incremental borrowing rate based on the information available at the transition date for such existing leases. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases. Supplemental information related to operating leases is as follows: Nine Months Ended September 30, 2020 September 30, 2019 Weighted-average remaining lease term Operating leases (years) 12.3 12.4 Weighted-average discount rate Operating leases 4.2 % 4.1 % The components of lease expense for the nine months ended September 30, 2020 and 2019 were as follows: Income Statement Classification Fixed Variable Total 2020: Property operating $ 2,985 $ — $ 2,985 General and administrative 1,012 76 1,088 Total $ 3,997 $ 76 $ 4,073 2019: Property operating $ 2,988 $ — $ 2,988 General and administrative 1,007 85 1,092 Total $ 3,995 $ 85 $ 4,080 The Company recognized sublease income of $2,824 and $2,823 for the nine months ended September 30, 2020 and 2019, respectively. The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2020: Operating Leases 2020 - remainder $ 1,241 2021 5,117 2022 5,211 2023 5,355 2024 5,377 2025 5,377 Thereafter 21,389 Total lease payments $ 49,067 Less: Imputed interest (11,729) Present value of operating lease liabilities $ 37,338 |
Concentration of Risk
Concentration of Risk | 9 Months Ended |
Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | Concentration of Risk The Company seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, 2020 and 2019, no single tenant represented greater than 10% of rental revenues. Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions. |
Equity
Equity | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Equity | Equity At-The-Market Offering Program. The Company maintains an At-The-Market offering program ("ATM program") under which the Company can issue common shares. The following table summarizes common share issuances under the ATM program for the nine months ended September 30, 2020 and 2019, respectively: Nine months ended September 30, 2020 Shares Sold Net Proceeds 2020 ATM Issuances 5,950,882 $61,032 Nine months ended September 30, 2019 Shares Sold Net Proceeds 2019 ATM Issuances 3,020,190 $31,083 Under the ATM program, the Company may also enter into forward sales agreements. The Company entered into a forward sales transaction for the sale of 3,875,751 common shares during the nine months ended September 30, 2020 that have not yet been settled. Subject to the Company's right to elect cash or net share settlement, the Company expects to settle the forward sales transaction by the maturity date of August 2021. The shares have an initial weighted-average sales price of $11.23 per common share, which is subject to adjustment in accordance with the forward sales contract. As of September 30, 2020, common shares with an aggregate value of $189,584 remain available for issuance under the ATM program. Underwritten Common Stock Offerings. During 2020, the Company issued 17,250,000 common shares at a public offering price of $9.60 per common share in an underwritten offering and generated net proceeds of approximately $164,000. The proceeds have and will be used for general corporate purposes, including acquisitions, and pending the application of the proceeds, were used to pay down all of the then outstanding balance under the Company's revolving credit facility. During the nine months ended September 30, 2019, the Company issued 10,000,000 common shares at $10.09 per common share in an underwritten offering and generated net proceeds of $100,749. The net proceeds were used for working capital and for general corporate purposes, including acquisitions. Nonemployee Stock Based Compensation. In addition, during the nine months ended September 30, 2020 and 2019, the Company issued 35,880 and 54,726, respectively, of fully vested common shares to non-management members of the Company's Board of Trustees with a fair value of $375 and $470, respectively. Share Repurchase Program. In July 2015, the Company's Board of Trustees authorized the repurchase of up to 10,000,000 common shares and increased this authorization by 10,000,000 in 2018. This share repurchase program has no expiration date. During the nine months ended September 30, 2020 and 2019, the Company repurchased and retired 1,329,940 and 441,581 common shares, respectively, at an average price of $8.28 and $8.13, respectively, per common share under the share repurchase program. As of September 30, 2020, 8,976,315 common shares remain available for repurchase under this authorization. The Company records a liability for repurchases that have not yet been settled as of the period end. There were no unsettled repurchases as of September 30, 2020. A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows: Nine Months Ended September 30, 2020 2019 Balance at beginning of period $ (1,928) $ 76 Other comprehensive loss before reclassifications (19,934) (5,326) Amounts of (income) loss reclassified from accumulated other comprehensive income to interest expense 2,175 (299) Balance at end of period $ (19,687) $ (5,549) Noncontrolling Interests. In conjunction with several of the Company's acquisitions in prior years, sellers were issued OP units as a form of consideration. All OP units, other than OP units owned by the Company, are redeemable for common shares at certain times, at the option of the holders, and are generally not otherwise mandatorily redeemable by the Company. The OP units are classified as a component of permanent equity as the Company has determined that the OP units are not redeemable securities as defined by GAAP. Each OP unit is currently redeemable at the holder's option for approximately 1.13 common shares, subject to future adjustments. As of September 30, 2020, there were approximately 2,711,000 OP units outstanding other than OP units owned by the Company. All OP units receive distributions in accordance with the LCIF partnership agreement. To the extent that the Company's dividend per common share is less than the stated distribution per OP unit per the LCIF partnership agreement, the distributions per OP unit are reduced by the percentage reduction in the Company's dividend per common share. No OP units have a liquidation preference. The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests: Net Income Attributable to Nine Months Ended September 30, 2020 2019 Net income attributable to Lexington Realty Trust shareholders $ 78,924 $ 194,679 Transfers from noncontrolling interests: Increase in additional paid-in-capital for redemption of noncontrolling OP units 632 504 Change from net income attributable to shareholders and transfers from noncontrolling interests $ 79,556 $ 195,183 |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsThere were no related party transactions other than those disclosed elsewhere in this Quarterly Report and the audited consolidated financial statements in the Annual Report. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In addition to the commitments and contingencies disclosed elsewhere and previously disclosed, the Company has the following commitments and contingencies. The Company is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Company, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries. The Company and LCIF are parties to a funding agreement under which the Company may be required to fund distributions made on account of LCIF's OP units. Pursuant to the funding agreement, the parties agreed that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, Lexington will fund the shortfall. Payments under the agreement will be made in the form of loans to LCIF and will bear interest at prevailing rates as determined by the Company in its discretion, but no less than the applicable federal rate. LCIF's right to receive these loans will expire if no OP units remain outstanding and all such loans are repaid. No amounts have been advanced under this agreement. From time to time, the Company is, directly and indirectly, involved in legal proceedings arising in the ordinary course of business. Management believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's business, financial condition and results of operations. |
Supplemental Disclosure of Stat
Supplemental Disclosure of Statement of Cash Flow Information | 9 Months Ended |
Sep. 30, 2020 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosure of Statement of Cash Flow Information | Supplemental Disclosure of Statement of Cash Flow Information In addition to disclosures discussed elsewhere, during the nine months ended September 30, 2020 and 2019, the Company paid $34,818 and $40,798, respectively, for interest and $1,525 and $1,321, respectively, for income taxes. As a result of the foreclosure of two office properties located in South Carolina and Kansas, during the nine months ended September 30, 2020, there was an aggregate non-cash charge of $38,942 and $14,188 in mortgages and notes payable, net, and real estate, net, respectively. During the nine months ended September 30, 2020, the Company exercised extension options on two ground leases related to parcels of land located in Owensboro, Kentucky and Orlando, Florida. The extensions of the ground lease terms resulted in an aggregate non-cash increase of $719 to the related operating lease liabilities and right of use assets. During the nine months ended September 30, 2019, the Company sold its Richland, Washington property, which included the assumption by the buyer of the related non-recourse mortgage debt in the amount of $110,000. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Subsequent to September 30, 2020, the Company: • disposed of three properties for an aggregate gross disposition price of approximately $39,634; • entered into an agreement to fund a build-to-suit industrial property in the Phoenix, Arizona market for an estimated cost of $72,000, which will be subject to a 15-year net lease; • entered into forward sales transactions under the ATM program for the sale of 153,441 common shares that have not yet been settled. The shares have an initial weighted-average sales price of $11.03 per common share, which is subject to adjustment in accordance with the sales contract; and • declared a common share/unit dividend/distribution of $0.1075 per share/unit, an increase of 2.4%. |
The Company and Financial Sta_2
The Company and Financial Statement Presentation (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. |
Variable Interest Entity | The Company consolidates the wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP. |
Use of Estimates | Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the economic uncertainty primarily caused by the recent outbreak of COVID-19. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable and deferred rent receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments, valuation of derivative financial instruments, valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee and the useful lives of long-lived assets. Actual results could differ materially from those estimates. |
Fair Value Measurements | Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("Topic 820"), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements. |
New Accounting Standards Adopted in 2020 | New Accounting Standards Adopted in 2020. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of an allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company analyzed its accounts receivable using an aging methodology and determined that there have been no historical credit losses related to its outstanding accounts receivable. As a result, the Company's adoption of this guidance did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40). This ASU addresses customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company's adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements. In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements. This ASU includes additional disclosures requirements for recurring and nonrecurring Level 3 fair value measurements including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income, disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and a narrative description of measurement uncertainty related to Level 3 measurements. This standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements. |
Lessor | Lessor Lexington’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased industrial and office real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred. Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before. Accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions. From a lessor perspective, the Company concluded that revenue from lease components are primarily recognized on a straight-line basis over the lease term unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Revenue is recognized on a contractual basis for leases with escalations tied to a Consumer Price Index (CPI) with no floor. If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition commences when the improvements are substantially complete and control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred on the unaudited condensed consolidated balance sheets. The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectable, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. In February 2020, the Company wrote off a deferred rent receivable balance of $615 as a reduction of rental revenue, related to a tenant that dissolved and surrendered its leased premises in an industrial property located in the Columbus, Ohio market. During the nine months ended September 30, 2019, rental revenue was reduced by an aggregate $1,452 for accounts receivable and deferred rent receivable deemed uncollectable. Certain tenants have been experiencing financial difficulties as a result of the COVID-19 pandemic. During the nine months ended September 30, 2020, the Company wrote off or reserved aggregate deferred rent receivable balances of $1,383, as a reduction of rental revenue, related to certain tenants as the deferred rent receivable balances were deemed uncollectable. In addition, during the nine-month period ended September 30, 2020, the Company also wrote off or reserved an aggregate of $177 accounts receivable relating to certain tenants suffering from the current economic conditions. The Company determined that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service is included within rental revenue is CAM services provided as part of the Company’s real estate leases. Topic 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. As of September 30, 2020 and 2019, the Company incurred $67 and $163, respectively, of costs that were not incremental to the execution of leases, which are included in property operating expenses on its unaudited condensed consolidated statements of operations. The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities . The Company does not have residual value guarantees on specific properties. |
Lessee | Lessee The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2020. The leases have remaining lease terms of up to 43 years, some of which include options to extend the leases in 5 to 10-year increments for up to 53 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. Minimum lease payments for leases that commenced before the date of adoption of ASC 842 were determined based on previous leases guidance under ASC 840. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred. The accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate. The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease. As the Company does not know the rate implicit in the respective leases, the Company used its incremental borrowing rate based on the information available at the transition date for such existing leases. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases. |
The Company and Financial Sta_3
The Company and Financial Statement Presentation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Variable Interest Entities | Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Real estate, net $ 599,701 $ 592,372 Total assets $ 676,938 $ 645,623 Mortgages and notes payable, net $ 44,008 $ 82,978 Total liabilities $ 61,802 $ 101,901 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Reconciliation | The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2020 and 2019: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 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 |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Real Estate [Abstract] | |
Schedule of Acquired Properties | The Company completed the following acquisition transactions during the nine months ended September 30, 2020: Property Market Acquisition Initial Primary Land Building and Improvements Lease in-place Value Intangible Industrial Chicago, IL January 2020 $ 53,642 11/2029 $ 3,681 $ 45,817 $ 4,144 Industrial Phoenix, AZ January 2020 19,164 12/2025 1,614 16,222 1,328 Industrial Chicago, IL January 2020 39,153 12/2029 1,788 34,301 3,064 Industrial Dallas, TX February 2020 83,495 8/2029 4,500 71,635 7,360 Industrial Savannah, GA April 2020 34,753 7/2027 1,689 30,346 2,718 Industrial Dallas, TX May 2020 10,731 6/2030 1,308 8,466 957 Industrial Savannah, GA June 2020 30,448 6/2025 2,560 25,697 2,191 Industrial Savannah, GA June 2020 9,130 8/2025 1,070 7,448 612 Industrial Houston, TX June 2020 20,949 4/2025 2,202 17,101 1,646 Industrial Ocala, FL June 2020 58,283 8/2030 4,113 49,904 4,266 Industrial DC/Baltimore, MD September 2020 29,143 11/2024 2,818 24,423 1,902 Industrial Savannah, GA September 2020 40,908 07/2026 3,775 34,322 2,811 $ 429,799 $ 31,118 $ 365,682 $ 32,999 |
Schedule of Real Estate Properties Development | As of September 30, 2020, the details of the development arrangements outstanding are as follows (in $000's, except square feet): Project (% owned) Market Property Type Estimated Sq. Ft. Estimated Project Cost GAAP Investment Balance as of Amount Funded as of Estimated Completion Date 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 |
Disposition and Impairment (Tab
Disposition and Impairment (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Disposal Groups, Including Discontinued Operations | Assets and liabilities of the held for sale properties as of September 30, 2020 consisted of the following: September 30, 2020 Assets: Real estate, at cost $ 180,981 Real estate, intangible assets 5,361 Accumulated depreciation and amortization (38,405) Rent receivable - deferred 8,066 Other 3,207 $ 159,210 Liabilities: Mortgages and notes payable, net $ 177,784 Accounts payable and other liabilities 680 Accrued interest payable 322 Prepaid rent 266 $ 179,052 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | |
Schedule of Fair Value Measurement Inputs | The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall: Balance Fair Value Measurements Using Description September 30, 2020 (Level 1) (Level 2) (Level 3) Interest rate swap liabilities $ (19,687) $ — $ (19,687) $ — Impaired property held for sale (1) $ 8,742 $ — $ — $ 8,742 (1) Represents a non-recurring fair value measurement. The fair value is calculated as of the date of the impairment. The Company measured these impairment charges based on discounted cash flow analysis, using a hold period of ten years and residual capitalization rates and discount rates ranging from 8.0% to 9.0% and 9.0% to 12.0%, respectively. As significant inputs to the models are unobservable, the Company determined that the value determined for these properties falls within Level 3 of the fair value reporting hierarchy. Balance Fair Value Measurements Using Description December 31, 2019 (Level 1) (Level 2) (Level 3) Interest rate swap liabilities $ (1,928) $ — $ (1,928) $ — Impaired real estate assets (1) $ 4,846 $ — $ — $ 4,846 |
Schedule of Carrying Amounts and Fair Value of Financial Instruments | The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments, excluding held for sale assets, as of September 30, 2020 and December 31, 2019: As of September 30, 2020 As of December 31, 2019 Carrying Fair Value Carrying Fair Value Liabilities Debt $ 1,361,953 $ 1,375,415 $ 1,311,977 $ 1,276,589 |
Investments in Non-Consolidat_2
Investments in Non-Consolidated Entities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Investments in and Advances to Affiliates | Below is a schedule of the Company's investments in non-consolidated entities: Percentage Ownership at Investment Balance as of Investment September 30, 2020 September 30, 2020 December 31, 2019 NNN Office JV LP ("NNN JV") (1) 20% $ 32,723 $ 39,288 Etna Park 70 LLC (2) 90% 11,352 8,352 Etna Park East LLC (3) 90% 7,391 4,310 Other (4) 25% 5,023 5,218 $ 56,489 $ 57,168 (1) NNN JV is a joint venture formed in 2018 and owns office properties formerly owned by the Company. (2) Joint venture formed in 2017 with a developer entity to acquire a 151-acre parcel of developable land and to pursue industrial build-to-suit opportunities. The Company determined that it is not the primary beneficiary. In December 2018, the parcel was subdivided and the Company received a distribution of an ownership interest in a 57-acre parcel with a historical cost of $3,008. The Company acquired control of the 57-acre parcel via the purchase of the Company's joint venture partners' interests. (3) Joint venture formed in 2019 with a developer entity to acquire a 129.6-acre parcel of land and to pursue industrial build-to-suit opportunities. The Company determined it is not the primary beneficiary. |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-term Debt Instruments | The Company had the following mortgages and notes payable outstanding as of September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Mortgages and notes payable $ 159,686 $ 393,872 Unamortized debt issuance costs (1,963) (3,600) $ 157,723 $ 390,272 |
Debt Instrument Redemption | The Company had the following senior notes outstanding as of September 30, 2020 and December 31, 2019: Issue Date September 30, 2020 December 31, 2019 Interest Rate Maturity Date Issue Price August 2020 $ 400,000 $ — 2.70 % September 2030 99.233 % May 2014 198,932 250,000 4.40 % June 2024 99.883 % June 2013 188,756 250,000 4.25 % June 2023 99.026 % 787,688 500,000 Unamortized debt discount (3,619) (963) Unamortized debt issuance cost (5,126) (2,167) $ 778,943 $ 496,870 |
Schedule of Line of Credit Facilities | A summary of the significant terms, as of September 30, 2020, is as follows: Current $600,000 Revolving Credit Facility (1) February 2023 LIBOR + 0.90% $300,000 Term Loan (2) January 2025 LIBOR + 1.00% (1) Maturity date of the revolving credit facility can be extended to February 2024 at the Company's option. The interest rate ranges from LIBOR plus 0.775% to 1.45%. At September 30, 2020, the Company had no borrowings outstanding and availability of $600,000, subject to covenant compliance. (2) The LIBOR portion of the interest rate was swapped to obtain a current fixed rate of 2.732% per annum. The aggregate unamortized debt issuance costs for the term loan was $2,183 and $2,561 as of September 30, 2020 and December 31, 2019, respectively. |
Derivatives and Hedging Activ_2
Derivatives and Hedging Activities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments | Interest Rate Derivative Number of Instruments Notional Interest Rate Swaps 4 $300,000 |
Fair Value of the Company's Derivative Financial Instruments and Classification on the Balance Sheets | The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the condensed consolidated balance sheets: As of September 30, 2020 As of December 31, 2019 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives designated as hedging instruments Interest Rate Swaps Accounts Payable and Other Liabilities $ (19,687) Accounts Payable and Other Liabilities $ (1,928) |
Effect of the Company's Derivative Financial Instruments on the Statements of Operation | The table below presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2020 and 2019. Derivatives in Cash Flow Amount of Gain (Loss) Amount of (Income) Loss Hedging Relationships 2020 2019 2020 2019 Interest Rate Swaps $ (19,934) $ (5,326) $ 2,175 $ (299) (1) Amounts reclassified from accumulated other comprehensive income (loss) to interest expense within the unaudited condensed consolidated statement of operations. |
Lease Accounting (Tables)
Lease Accounting (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Leases [Abstract] | |
Operating Lease, Lease Income | The following table presents the Company’s classification of rental revenue for its operating leases for the three and nine months ended September 30, 2020 and 2019: Three Months Ended Nine Months Ended Classification September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Fixed $ 74,902 $ 73,396 $ 219,542 $ 218,808 Variable (1) 8,690 6,929 23,879 20,250 Total $ 83,592 $ 80,325 $ 243,421 $ 239,058 (1) Primarily comprised of tenant reimbursements. |
Lessor, Operating Lease, Payments to be Received, Maturity | Future fixed rental receipts for leases, assuming no new or re-negotiated leases as of September 30, 2020 were as follows: 2020 - remainder $ 71,930 2021 281,421 2022 270,067 2023 269,224 2024 238,853 2025 212,486 Thereafter 1,280,114 Total $ 2,624,095 |
Assets and Liabilities, Lessee | Supplemental information related to operating leases is as follows: Nine Months Ended September 30, 2020 September 30, 2019 Weighted-average remaining lease term Operating leases (years) 12.3 12.4 Weighted-average discount rate Operating leases 4.2 % 4.1 % |
Lease, Cost | The components of lease expense for the nine months ended September 30, 2020 and 2019 were as follows: Income Statement Classification Fixed Variable Total 2020: Property operating $ 2,985 $ — $ 2,985 General and administrative 1,012 76 1,088 Total $ 3,997 $ 76 $ 4,073 2019: Property operating $ 2,988 $ — $ 2,988 General and administrative 1,007 85 1,092 Total $ 3,995 $ 85 $ 4,080 |
Lessee, Operating Lease, Liability, Maturity | The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2020: Operating Leases 2020 - remainder $ 1,241 2021 5,117 2022 5,211 2023 5,355 2024 5,377 2025 5,377 Thereafter 21,389 Total lease payments $ 49,067 Less: Imputed interest (11,729) Present value of operating lease liabilities $ 37,338 |
Equity (Tables)
Equity (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of common share issuance | The following table summarizes common share issuances under the ATM program for the nine months ended September 30, 2020 and 2019, respectively: Nine months ended September 30, 2020 Shares Sold Net Proceeds 2020 ATM Issuances 5,950,882 $61,032 Nine months ended September 30, 2019 Shares Sold Net Proceeds 2019 ATM Issuances 3,020,190 $31,083 |
Schedule of Accumulated Other Comprehensive Income (Loss) | A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows: Nine Months Ended September 30, 2020 2019 Balance at beginning of period $ (1,928) $ 76 Other comprehensive loss before reclassifications (19,934) (5,326) Amounts of (income) loss reclassified from accumulated other comprehensive income to interest expense 2,175 (299) Balance at end of period $ (19,687) $ (5,549) |
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net | The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests: Net Income Attributable to Nine Months Ended September 30, 2020 2019 Net income attributable to Lexington Realty Trust shareholders $ 78,924 $ 194,679 Transfers from noncontrolling interests: Increase in additional paid-in-capital for redemption of noncontrolling OP units 632 504 Change from net income attributable to shareholders and transfers from noncontrolling interests $ 79,556 $ 195,183 |
The Company and Financial Sta_4
The Company and Financial Statement Presentation - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020termstate | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of properties | term | 135 |
Number of states in which entity has interests | state | 29 |
Variable Interest Entity, Primary Beneficiary | NNN Office Joint Venture | |
Variable Interest Entity [Line Items] | |
VIE, ownership percentage | 90.00% |
LCIF | Variable Interest Entity, Primary Beneficiary | |
Variable Interest Entity [Line Items] | |
VIE, ownership percentage | 97.00% |
The Company and Financial Sta_5
The Company and Financial Statement Presentation - Schedule of Variable Interest Entities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Variable Interest Entity [Line Items] | ||
Real estate, net | $ 2,987,681 | $ 2,856,014 |
Total assets | 3,621,851 | 3,180,260 |
Total liabilities | 1,707,502 | 1,455,541 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Real estate, net | 599,701 | 592,372 |
Total assets | 676,938 | 645,623 |
Mortgages and notes payable, net | 44,008 | 82,978 |
Total liabilities | $ 61,802 | $ 101,901 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
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 (loss) attributable to common shares outstanding - basic (in dollars per share) | $ 0.15 | $ 0.60 | $ 0.28 | $ 0.81 |
DILUTED | ||||
Impact of assumed conversions | $ 0 | $ 1,573 | $ 0 | $ 0 |
Net income attributable to common shareholders | $ 40,285 | $ 143,133 | $ 74,088 | $ 189,657 |
Effect of dilutive securities: | ||||
Unvested share-based payment awards (in shares) | 1,326,716 | 359,503 | 1,234,553 | 178,303 |
Preferred shares - Series C (in shares) | 0 | 4,710,570 | 0 | 0 |
Weighted-average common shares outstanding - diluted (in shares) | 276,022,762 | 241,355,289 | 265,446,221 | 234,011,643 |
Net income (loss) attributable to common shareholders - per common share diluted (in dollars per share) | $ 0.15 | $ 0.59 | $ 0.28 | $ 0.81 |
Investments in Real Estate - Sc
Investments in Real Estate - Schedule of Real Estate Acquisitions (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Real Estate [Line Items] | ||
Initial Cost Basis | $ 429,799 | |
Land | 31,118 | |
Building and Improvements | 365,682 | |
Lease in-place Value Intangible | 32,999 | |
Investments in real estate under construction | 41,948 | $ 13,313 |
Capitalized interest | 578 | |
Chicago, IL | Industrial Property | Chicago, Illinois, Industrial Property Expiring November 2029 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 53,642 | |
Land | 3,681 | |
Building and Improvements | 45,817 | |
Lease in-place Value Intangible | 4,144 | |
Chicago, IL | Industrial Property | Chicago, Illinois, Industrial Property Expiring December 2029 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 39,153 | |
Land | 1,788 | |
Building and Improvements | 34,301 | |
Lease in-place Value Intangible | 3,064 | |
Phoenix, AZ | Industrial Property | Phoenix, Arizona, Industrial Property Expiring December 2025 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 19,164 | |
Land | 1,614 | |
Building and Improvements | 16,222 | |
Lease in-place Value Intangible | 1,328 | |
Dallas, TX | Industrial Property | Dallas, Texas, Industrial Property Expiring August 2029 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 83,495 | |
Land | 4,500 | |
Building and Improvements | 71,635 | |
Lease in-place Value Intangible | 7,360 | |
Dallas, TX | Industrial Property | Dallas, Texas, Industrial Property Expiring June 2030 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 10,731 | |
Land | 1,308 | |
Building and Improvements | 8,466 | |
Lease in-place Value Intangible | 957 | |
Savannah, GA | Industrial Property | Savannah, Georgia, Industrial Property Expiring July 2027 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 34,753 | |
Land | 1,689 | |
Building and Improvements | 30,346 | |
Lease in-place Value Intangible | 2,718 | |
Savannah, GA | Industrial Property | Savannah, Georgia, Industrial Property Expiring June 2025 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 30,448 | |
Land | 2,560 | |
Building and Improvements | 25,697 | |
Lease in-place Value Intangible | 2,191 | |
Savannah, GA | Industrial Property | Savannah, Georgia, Industrial Property Expiring August 2025 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 9,130 | |
Land | 1,070 | |
Building and Improvements | 7,448 | |
Lease in-place Value Intangible | 612 | |
Savannah, GA | Industrial Property | Savannah, Georgia, Industrial Property Expiring July 2026 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 40,908 | |
Land | 3,775 | |
Building and Improvements | 34,322 | |
Lease in-place Value Intangible | 2,811 | |
Houston, TX | Industrial Property | Houston, Texas, Industrial Property Expiring April 2025 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 20,949 | |
Land | 2,202 | |
Building and Improvements | 17,101 | |
Lease in-place Value Intangible | 1,646 | |
Ocala, FL | Industrial Property | Ocala, Florida, Industrial Property Expiring Aug 2030 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 58,283 | |
Land | 4,113 | |
Building and Improvements | 49,904 | |
Lease in-place Value Intangible | 4,266 | |
DC/Baltimore, MD | Industrial Property | DC/Baltimore, Industrial Property Expiring Nov 2024 | ||
Real Estate [Line Items] | ||
Initial Cost Basis | 29,143 | |
Land | 2,818 | |
Building and Improvements | 24,423 | |
Lease in-place Value Intangible | $ 1,902 |
Investments in Real Estate - _2
Investments in Real Estate - Schedule of Real Estate Properties Development (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)ft² | Dec. 31, 2019USD ($) | |
Real Estate [Line Items] | ||
Estimated Project Cost | $ 3,439,314 | $ 3,320,574 |
GAAP Investment Balance as of 9/30/2020 | 41,948 | $ 13,313 |
Real Estate Investment | ||
Real Estate [Line Items] | ||
Estimated Project Cost | 74,112 | |
GAAP Investment Balance as of 9/30/2020 | 41,948 | |
Amount Funded as of 9/30/2020 | $ 30,776 | |
Atlanta, Georgia | ||
Real Estate [Line Items] | ||
Project ownership percentage | 90.00% | |
Atlanta, Georgia | Real Estate Investment | ||
Real Estate [Line Items] | ||
Estimated Sq. Ft. | ft² | 910,000 | |
Estimated Project Cost | $ 53,812 | |
GAAP Investment Balance as of 9/30/2020 | 30,638 | |
Amount Funded as of 9/30/2020 | $ 22,543 | |
Columbus, Ohio | ||
Real Estate [Line Items] | ||
Project ownership percentage | 100.00% | |
Columbus, Ohio | Real Estate Investment | ||
Real Estate [Line Items] | ||
Estimated Sq. Ft. | ft² | 320,000 | |
Estimated Project Cost | $ 20,300 | |
GAAP Investment Balance as of 9/30/2020 | 11,310 | |
Amount Funded as of 9/30/2020 | $ 8,233 |
Dispositions and Impairment - A
Dispositions and Impairment - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($)termproperty | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)impairment_chargetermproperty | Sep. 30, 2019USD ($) | Dec. 31, 2019property | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of properties disposed | term | 135 | 135 | |||
Debt satisfaction gain | $ 29,016 | $ 4,415 | |||
Number of real estate properties held for sale | property | 5 | 5 | 0 | ||
Number of impairment charges | impairment_charge | 2 | ||||
Asset impairment charges | $ 6,175 | $ 673 | $ 7,792 | 2,355 | |
Properties in Charleston, SC and Overland Park, KS | Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of properties disposed | property | 2 | 2 | |||
Transferred Property | Office Building | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Aggregate gross disposition price | $ 140,573 | 448,900 | |||
Sold Properties | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Gain on sale of properties | 41,876 | 176,662 | |||
Houston, TX | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Asset impairment charges | 1,617 | ||||
Watertown, New York | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Asset impairment charges | 2,106 | ||||
Albany, Georgia | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Asset impairment charges | $ 249 | ||||
Kalamazoo, Michigan | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Asset impairment charges | $ 6,175 |
Dispositions and Impairment - S
Dispositions and Impairment - Schedule of Properties Held for Sale (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Liabilities: | ||
Liabilities held for sale | $ 179,052 | $ 0 |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Assets: | ||
Real estate, at cost | 180,981 | |
Real estate, intangible assets | 5,361 | |
Accumulated depreciation and amortization | (38,405) | |
Rent receivable - deferred | 8,066 | |
Other | 3,207 | |
Assets held for sale | 159,210 | |
Liabilities: | ||
Mortgages and notes payable, net | 177,784 | |
Accounts payable and other liabilities | 680 | |
Accrued interest payable | 322 | |
Prepaid rent | 266 | |
Liabilities held for sale | $ 179,052 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule Fair Value Measurements Inputs (Details) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) |
Holding Period | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Property held-for-sale, measurement input | 10 | |
Capitalization Rates | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Property held-for-sale, measurement input | 0.080 | |
Capitalization Rates | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Property held-for-sale, measurement input | 0.090 | |
Discount Rates | Minimum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Property held-for-sale, measurement input | 0.090 | |
Discount Rates | Maximum | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Property held-for-sale, measurement input | 0.120 | |
Fair Value, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap liabilities | $ (19,687,000) | $ (1,928,000) |
Fair Value, Recurring | Fair Value Measurements Using Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap liabilities | 0 | 0 |
Fair Value, Recurring | Fair Value Measurements Using Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap liabilities | (19,687,000) | (1,928,000) |
Fair Value, Recurring | Fair Value Measurements Using Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap liabilities | 0 | 0 |
Fair Value, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired property held for sale | 8,742,000 | |
Impaired real estate assets | 4,846,000 | |
Fair Value, Nonrecurring | Fair Value Measurements Using Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired property held for sale | 0 | |
Impaired real estate assets | 0 | |
Fair Value, Nonrecurring | Fair Value Measurements Using Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired property held for sale | 0 | |
Impaired real estate assets | 0 | |
Fair Value, Nonrecurring | Fair Value Measurements Using Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Impaired property held for sale | $ 8,742,000 | |
Impaired real estate assets | $ 4,846,000 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value by Balance Sheet Grouping (Details) - Fair Value Measurements Using Level 3 - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying Amount | ||
Liabilities | ||
Carrying value of debt | $ 1,361,953 | $ 1,311,977 |
Fair Value | ||
Liabilities | ||
Fair value of debt | $ 1,375,415 | $ 1,276,589 |
Investments in Non-Consolidat_3
Investments in Non-Consolidated Entities - Schedule of Investment in Non-Consolidated Entities (Details) $ in Thousands | 1 Months Ended | 9 Months Ended | ||||
Feb. 28, 2019USD ($) | Dec. 31, 2018USD ($)a | Sep. 30, 2020USD ($)partnershipofficeAsset | Sep. 30, 2019USD ($)officeAsset | Dec. 31, 2019USD ($)a | Dec. 31, 2017a | |
Investments in and Advances to Affiliates [Line Items] | ||||||
Investment balance | $ 56,489 | $ 57,168 | ||||
Number of joint venture interests | partnership | 1 | |||||
Non-consolidated Real Estate Entity | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Ownership percentage | 15.00% | |||||
NNN Office JV LP | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Ownership percentage | 20.00% | |||||
Investment balance | $ 32,723 | 39,288 | ||||
Etna Park 70 LLC | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Ownership percentage | 90.00% | |||||
Investment balance | $ 11,352 | 8,352 | ||||
Area of land (in acres) | a | 57 | 151 | ||||
Payments to acquire interest in joint venture | $ 3,008 | |||||
Etna Park East LLC | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Ownership percentage | 90.00% | |||||
Investment balance | $ 7,391 | $ 4,310 | ||||
Area of land (in acres) | a | 129.6 | |||||
Other Joint Ventures | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Ownership percentage | 25.00% | |||||
Investment balance | $ 5,023 | $ 5,218 | ||||
Mortgages | NNN Office JV LP | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Non-recourse mortgage loan | $ 40,800 | $ 101,520 | ||||
NNN Office Joint Venture Properties | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Aggregate gain on sale of properties | $ 824 | |||||
NNN Office Joint Venture Properties | NNN Office JV LP | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Number of properties sold | officeAsset | 2 | 4 | ||||
Aggregate gain on sale of properties | $ 557 | $ 3,529 | ||||
Aggregate gross disposition price | $ 8,504 | $ 45,208 | ||||
Office Building | ||||||
Investments in and Advances to Affiliates [Line Items] | ||||||
Proceeds from sale of joint venture | $ 2,317 |
Debt - Schedule of Mortgages an
Debt - Schedule of Mortgages and Notes Payable (Details) - Mortgages and Notes Payable - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Mortgages and notes payable | $ 159,686 | $ 393,872 |
Unamortized debt issuance costs | (1,963) | (3,600) |
Long-term debt | $ 157,723 | $ 390,272 |
Debt - Additional Information (
Debt - Additional Information (Details) | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($)loan | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)loan | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2007USD ($) | |
Debt Instrument [Line Items] | ||||||
Debt default, number of loans | loan | 1 | 1 | ||||
Debt default, amount | $ 18,413,000 | $ 18,413,000 | ||||
Gain (loss) on extinguishment of debt | 17,557,000 | $ (4,424,000) | 18,950,000 | $ (4,527,000) | ||
Capitalized interest | $ 1,112,000 | $ 251,000 | ||||
Senior Notes Due 2023 | ||||||
Debt Instrument [Line Items] | ||||||
Repurchase of debt | 61,244,000 | |||||
Senior Notes Due 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Repurchase of debt | 51,068,000 | |||||
Senior Notes Due 2023 and 2024 | ||||||
Debt Instrument [Line Items] | ||||||
Prepayment penalties | 9,477,000 | |||||
Accrued interest | 1,024,000 | |||||
Gain (loss) on extinguishment of debt | $ 10,066,000 | |||||
Mortgages and Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average interest rate | 4.70% | 4.70% | 4.50% | |||
Mortgages and notes payable | $ 159,686,000 | $ 159,686,000 | $ 393,872,000 | |||
Mortgages and Notes Payable | Lake Jackson, Texas Property, Mortgages and Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 4.04% | 4.04% | ||||
Mortgages and notes payable | $ 179,110,000 | $ 179,110,000 | ||||
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Mortgages and notes payable | 787,688,000 | 787,688,000 | 500,000,000 | |||
Unamortized debt discount | $ 3,619,000 | $ 3,619,000 | 963,000 | |||
Senior Notes | Senior Notes Due 2030 | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 2.70% | 2.70% | ||||
Mortgages and notes payable | $ 400,000,000 | $ 400,000,000 | 0 | |||
Percentage of issuance price | 99.233% | 99.233% | ||||
Unamortized debt discount | $ 3,068,000 | $ 3,068,000 | ||||
Trust Preferred Securities | 6.804% Trust Preferred Securities | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 6.804% | |||||
Face amount of debt instrument | $ 200,000,000 | |||||
Interest rate, effective percentage | 1.968% | 1.968% | ||||
Principal amount outstanding | $ 129,120,000 | $ 129,120,000 | 129,120,000 | |||
Unamortized debt issuance costs | $ 1,650,000 | $ 1,650,000 | $ 1,724,000 | |||
Trust Preferred Securities | London Interbank Offered Rate (LIBOR) | 6.804% Trust Preferred Securities | ||||||
Debt Instrument [Line Items] | ||||||
Basis spread on variable rate | 1.70% | |||||
Minimum | Mortgages and Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 3.50% | 3.50% | 3.50% | |||
Maximum | Mortgages and Notes Payable | ||||||
Debt Instrument [Line Items] | ||||||
Stated interest rate | 6.50% | 6.50% | 6.50% |
Debt - Schedule of Debt Instrum
Debt - Schedule of Debt Instrument Redemption (Details) - Senior Notes - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Face amount of senior notes | $ 787,688,000 | $ 500,000,000 |
Unamortized debt discount | (3,619,000) | (963,000) |
Unamortized debt issuance costs | (5,126,000) | (2,167,000) |
Long-term debt | 778,943,000 | 496,870,000 |
Senior Notes Due 2030 | ||
Debt Instrument [Line Items] | ||
Face amount of senior notes | $ 400,000,000 | 0 |
Stated interest rate | 2.70% | |
Percentage of issuance price | 99.233% | |
Unamortized debt discount | $ (3,068,000) | |
Senior Notes Due 2024 | ||
Debt Instrument [Line Items] | ||
Face amount of senior notes | $ 198,932,000 | 250,000,000 |
Stated interest rate | 4.40% | |
Percentage of issuance price | 99.883% | |
Senior Notes Due 2023 | ||
Debt Instrument [Line Items] | ||
Face amount of senior notes | $ 188,756,000 | $ 250,000,000 |
Stated interest rate | 4.25% | |
Percentage of issuance price | 99.026% |
Debt - Schedule of Credit Agree
Debt - Schedule of Credit Agreement Terms (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Jul. 31, 2019 | Feb. 28, 2019 | |
Unsecured Term Loan | ||||
Debt Instrument [Line Items] | ||||
Unamortized debt issuance costs | $ 2,183,000 | $ 2,561,000 | ||
Unsecured Revolving Credit Facility, Expiring February 2023 | Unsecured Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Maximum borrowing capacity | $ 600,000,000 | |||
Revolving credit facility borrowings | 0 | |||
Remaining borrowing capacity | 600,000,000 | |||
Unsecured Term Loan, Expiring January 2025 | Unsecured Term Loan | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt instrument | $ 300,000,000 | |||
Stated interest rate | 2.732% | |||
London Interbank Offered Rate (LIBOR) | Unsecured Revolving Credit Facility, Expiring February 2023 | Unsecured Revolving Credit Facility | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.90% | |||
London Interbank Offered Rate (LIBOR) | Unsecured Revolving Credit Facility, Expiring February 2023 | Unsecured Revolving Credit Facility | Minimum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 0.775% | |||
London Interbank Offered Rate (LIBOR) | Unsecured Revolving Credit Facility, Expiring February 2023 | Unsecured Revolving Credit Facility | Maximum | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.45% | |||
London Interbank Offered Rate (LIBOR) | Unsecured Term Loan, Expiring January 2025 | Unsecured Term Loan | ||||
Debt Instrument [Line Items] | ||||
Basis spread on variable rate | 1.00% |
Derivatives and Hedging Activ_3
Derivatives and Hedging Activities (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Jul. 31, 2019USD ($)instrument | |
Derivative [Line Items] | ||||||
Gain (loss) to be reclassified during next 12 months | $ 4,830 | $ 4,830 | ||||
Interest expense | 13,649 | $ 16,481 | 42,610 | $ 50,715 | ||
Interest Rate Swap | Designated as Hedging Instrument | Accounts Payable and Other Liabilities | ||||||
Derivative [Line Items] | ||||||
Derivative liability | $ (19,687) | (19,687) | $ (1,928) | |||
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging | ||||||
Derivative [Line Items] | ||||||
Number of instruments | instrument | 4 | |||||
Notional amount | $ 300,000 | |||||
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging | Interest Expense | ||||||
Derivative [Line Items] | ||||||
Amount of gain (loss) recognized in OCI on derivatives | (19,934) | (5,326) | ||||
Amount of (income) loss reclassified from accumulated OCI into income | $ 2,175 | $ (299) |
Lease Accounting - Additional I
Lease Accounting - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 9 Months Ended | |
Feb. 29, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | |
Lessee, Lease, Description [Line Items] | |||
Receivable deemed uncollectable | $ 1,452 | ||
Lease execution costs | $ 67 | 163 | |
Remaining lease term | 43 years | ||
Renewal term | 53 years | ||
Sublease income | $ 2,824 | $ 2,823 | |
COVID-19 Pandemic | |||
Lessee, Lease, Description [Line Items] | |||
Receivables writeoff | 1,383 | ||
Receivable deemed uncollectable | $ 177 | ||
Columbus, Ohio | |||
Lessee, Lease, Description [Line Items] | |||
Receivables writeoff | $ 615 | ||
Minimum | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 5 years | ||
Maximum | |||
Lessee, Lease, Description [Line Items] | |||
Renewal term | 10 years |
Lease Accounting - Lease Income
Lease Accounting - Lease Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Leases [Abstract] | ||||
Fixed | $ 74,902 | $ 73,396 | $ 219,542 | $ 218,808 |
Variable | 8,690 | 6,929 | 23,879 | 20,250 |
Total | $ 83,592 | $ 80,325 | $ 243,421 | $ 239,058 |
Lease Accounting - Future Fixed
Lease Accounting - Future Fixed Rental Receipts (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Leases [Abstract] | |
2020 - remainder | $ 71,930 |
2021 | 281,421 |
2022 | 270,067 |
2023 | 269,224 |
2024 | 238,853 |
2025 | 212,486 |
Thereafter | 1,280,114 |
Total | $ 2,624,095 |
Lease Accounting - Supplemental
Lease Accounting - Supplemental Balance Sheet Information (Details) | Sep. 30, 2020 | Sep. 30, 2019 |
Leases [Abstract] | ||
Weighted-average remaining lease term, operating leases (years) | 12 years 3 months 18 days | 12 years 4 months 24 days |
Weighted-average discount rate, operating leases | 4.20% | 4.10% |
Lease Accounting - Components o
Lease Accounting - Components of Lease Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Lessee, Lease, Description [Line Items] | ||
Fixed | $ 3,997 | $ 3,995 |
Variable | 76 | 85 |
Total | 4,073 | 4,080 |
Property Operating Expense | ||
Lessee, Lease, Description [Line Items] | ||
Fixed | 2,985 | 2,988 |
Variable | 0 | 0 |
Total | 2,985 | 2,988 |
General and Administrative Expense | ||
Lessee, Lease, Description [Line Items] | ||
Fixed | 1,012 | 1,007 |
Variable | 76 | 85 |
Total | $ 1,088 | $ 1,092 |
Lease Accounting - Operating Le
Lease Accounting - Operating Lease Liabilities Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
2020 - remainder | $ 1,241 | |
2021 | 5,117 | |
2022 | 5,211 | |
2023 | 5,355 | |
2024 | 5,377 | |
2025 | 5,377 | |
Thereafter | 21,389 | |
Total lease payments | 49,067 | |
Less: Imputed interest | (11,729) | |
Present value of operating lease liabilities | $ 37,338 | $ 39,442 |
Equity - Additional Information
Equity - Additional Information (Details) $ / shares in Units, $ in Thousands | 9 Months Ended | |||
Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($)$ / sharesshares | Dec. 31, 2018shares | Jul. 31, 2015shares | |
Equity [Line Items] | ||||
Authorized amount (in shares) | 10,000,000 | 10,000,000 | ||
Treasury stock acquired (in shares) | 1,329,940 | 441,581 | ||
Treasury stock acquired, average cost (in dollars per share) | $ / shares | $ 8.28 | $ 8.13 | ||
Shares remaining available for repurchase (in shares) | 8,976,315 | |||
OP unit equivalent in common shares | 1.13 | |||
Partners' capital account (in units) | 2,711,000 | |||
Share-based Payment Arrangement | ||||
Equity [Line Items] | ||||
Shares granted (in shares) | 35,880 | 54,726 | ||
Grant date fair value | $ | $ 375 | $ 470 | ||
At-The-Market Program | ||||
Equity [Line Items] | ||||
Common shares amount available for issuance | $ | $ 189,584 | |||
Number of shares sold | 5,950,882 | 3,020,190 | ||
Proceeds from sale of stock | $ | $ 61,032 | $ 31,083 | ||
At-The-Market Program | Forward Contracts | ||||
Equity [Line Items] | ||||
Number of shares to be settled on a forward basis (in shares) | 3,875,751 | |||
Weighted average forward contract price | $ / shares | $ 11.23 | |||
Underwritten Offering | ||||
Equity [Line Items] | ||||
Number of shares sold | 17,250,000 | 10,000,000 | ||
Sale of stock (in dollars per share) | $ / shares | $ 9.60 | $ 10.09 | ||
Proceeds from sale of stock | $ | $ 164,000 | $ 100,749 |
Equity - Changes in Other Compr
Equity - Changes in Other Comprehensive Income (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | $ 1,724,719 | $ 1,346,678 |
Ending Balance | 1,914,349 | 1,591,035 |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning Balance | (1,928) | 76 |
Ending Balance | (19,687) | (5,549) |
Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Other comprehensive loss before reclassifications | (19,934) | (5,326) |
Amounts of (income) loss reclassified from accumulated other comprehensive income to interest expense | $ 2,175 | $ (299) |
Equity - Effects of Changes in
Equity - Effects of Changes in Noncontrolling Interests (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Equity [Abstract] | ||||
Net income attributable to Lexington Realty Trust shareholders | $ 41,904 | $ 143,319 | $ 78,924 | $ 194,679 |
Transfers from noncontrolling interests: | ||||
Increase in additional paid-in-capital for redemption of noncontrolling OP units | 632 | 504 | ||
Change from net income attributable to shareholders and transfers from noncontrolling interests | $ 79,556 | $ 195,183 |
Supplemental Disclosure of St_2
Supplemental Disclosure of Statement of Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Other Significant Noncash Transactions [Line Items] | ||
Interest paid | $ 34,818 | $ 40,798 |
Income taxes paid, net | 1,525 | 1,321 |
South Carolina and Kansas | ||
Other Significant Noncash Transactions [Line Items] | ||
Non-cash charge in mortgage | 38,942 | |
Non-cash charge in notes payable and real estate | 14,188 | |
Owensboro, Kentucky and Orlando, Florida | ||
Other Significant Noncash Transactions [Line Items] | ||
Lease obligation incurred | 719 | |
Right-of-use asset obtained | $ 719 | |
Richland, Washington | ||
Other Significant Noncash Transactions [Line Items] | ||
Non-recourse mortgage loan | $ 110,000 |
Subsequent Events Additional In
Subsequent Events Additional Information (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 9 Months Ended |
Nov. 05, 2020USD ($)property$ / sharesshares | Sep. 30, 2020$ / sharesshares | |
Forward Contracts | At-The-Market Program | ||
Subsequent Event [Line Items] | ||
Number of shares to be settled on a forward basis (in shares) | shares | 3,875,751 | |
Weighted average forward contract price | $ 11.23 | |
Subsequent Event | ||
Subsequent Event [Line Items] | ||
Number of properties disposed | property | 3 | |
Proceeds from sale of properties | $ | $ 39,634 | |
Dividends declared (in dollars per share/unit) | $ 0.1075 | |
Increase in dividends declared per share/unit (in percentage) | 0.024 | |
Subsequent Event | Forward Contracts | At-The-Market Program | ||
Subsequent Event [Line Items] | ||
Number of shares to be settled on a forward basis (in shares) | shares | 153,441 | |
Weighted average forward contract price | $ 11.03 | |
Subsequent Event | Phoenix, AZ | ||
Subsequent Event [Line Items] | ||
Real estate investment property, estimated cost | $ | $ 72,000 | |
Lease term | 15 years |