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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
------------------------

FORM 10-K

(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR THE FISCAL YEAR ENDED DECEMBER 31, 1999

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
FOR THE TRANSITION PERIOD FROM TO

COMMISSION FILE NUMBER 1-12386
LEXINGTON CORPORATE PROPERTIES TRUST
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

MARYLAND 13-3717318
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
355 LEXINGTON AVENUE NEW YORK, NY 10017
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (212) 692-7260
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS
- ---------------------------------------------- NAME OF EACH EXCHANGE ON WHICH REGISTERED
----------------------------------------------
COMMON SHARES, PAR VALUE $.0001 NEW YORK STOCK EXCHANGE

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: NONE

Indicate by check mark whether the Registrant: (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K (sec.229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. [X]

The aggregate market value of the voting shares held by non-affiliates of
the Registrant as of February 29, 1999 was $170,753,732.

Number of common shares outstanding as of February 29, 2000 was 17,160,321.

Number of preferred shares outstanding as of February 29, 2000 was
2,000,000.

DOCUMENTS INCORPORATED BY REFERENCE:

The Definitive Proxy Statement for Registrant's 2000 Annual Meeting of
Shareholders is incorporated herein by reference into Part III.
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2

PART I.

FORWARD-LOOKING STATEMENTS

When used in this Form 10-K Annual Report, the words "believes," "expects,"
"estimates" and similar expressions are intended to identify forward-looking
statements. Such statements are subject to certain risks and uncertainties,
which could cause actual results to differ materially. In particular, among the
factors that could cause actual results to differ materially are continued
qualification as a real estate investment trust, general business and economic
conditions, competition, increases in real estate construction costs, interest
rates, accessibility of debt and equity capital markets and other risks inherent
in the real estate business including tenant defaults or financial difficulties,
potential liability relating to environmental matters and illiquidity of real
estate investments. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof. The Company
undertakes no obligation to publicly release the results of any revisions to
these forward-looking statements which may be made to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

ITEM 1. BUSINESS

GENERAL

Lexington Corporate Properties Trust (the "Company"), is a self-managed and
self-administered real estate investment trust that acquires, owns and manages a
geographically diverse portfolio of net leased office, industrial and retail
properties. The Company's predecessor was organized in October 1993 and merged
into the Company on December 31, 1997.

As of December 31, 1999, the Company's real property portfolio consisted of
66 properties (or interests therein) (the "Properties") located in twenty-eight
states, including warehousing, distribution and manufacturing facilities, office
buildings and retail properties containing an aggregate 11.4 million net
rentable square feet of space. The Company's Properties are subject to triple
net leases, which are generally characterized as leases in which the tenant
bears all, or substantially all, of the costs and cost increases for real estate
taxes, insurance and ordinary maintenance.

The Company manages its real estate and credit risk through geographic,
industry, tenant and lease maturity diversification. As of December 31, 1999 the
five largest tenants/guarantors, which occupy twelve Properties, represented
38.1% of annualized revenues:

% OF
RENTAL
TENANT/GUARANTOR REVENUE PROPERTY TYPES
---------------- ------- ---------------------

Kmart Corporation -- 1 property........................ 11.4% Industrial
Northwest Pipeline Corp. -- 1 property................. 10.9% Office
Exel Logistics, Inc. -- 4 properties................... 6.3% Industrial
Honeywell, Inc. -- 3 properties........................ 5.1% Office
Circuit City Stores, Inc. -- 3 properties.............. 4.4% Office (1) Retail (2)
----
38.1%
====

As of December 31, 1998 and 1997 the five largest tenants/guarantors
represented 39.3% and 48.1% of annualized revenues, respectively. Northwest
Pipeline Corp. and Kmart Corporation are the only current tenants that
represented greater than 10% of annualized revenues in 1998 and Northwest
Pipeline Corp. was the only current tenant that represented greater than 10% of
annualized revenue in 1997.

1
3

OBJECTIVES AND STRATEGY

The Company's primary objectives are to increase Funds From Operations,
cash available for distribution per share to its shareholders, and net asset
value per share. In an effort to obtain these objectives management focuses on:

- effectively managing assets through lease extensions, revenue enhancing
property expansions, opportunistic property sales and redeployment of
assets, when advisable;

- acquiring portfolios and individual net lease properties from third
parties, completing sale/leaseback transactions, acquiring build-to-suit
properties and opportunistic use of our operating partnership units;

- refinancing existing indebtedness at lower average interest rates and
increasing the Company's access to capital to finance property
acquisitions and expansions;

- entering into strategic co-investment programs which generate higher
equity returns than direct investments due to acquisition and asset
management fees and in some cases increased leverage levels; and

- strategic repurchase of common shares.

Internal Growth; Effectively Managing Assets

Tenant Relations and Lease Compliance. The Company maintains close contact
with its tenants in order to understand their future real estate needs. The
Company monitors the financial, property maintenance and other lease obligations
of its tenants through a variety of means, including periodic reviews of
financial statements and physical inspections of the Properties. The Company
performs annual inspections of those Properties where it has an ongoing
obligation with respect to the maintenance of the Property and for all
Properties during each of the last three years immediately prior to a scheduled
lease expiration. Biannual physical inspections are undertaken for all other
Properties.

Extending Lease Maturities. The Company seeks to extend its leases in
advance of their expiration in order to maintain a balanced lease rollover
schedule. Since February 1994, the Company has entered into lease extensions of
three years or more on 13 of its Properties.

As of December 31, 1999, the scheduled lease maturities for each of the
next five years are as follows:

NUMBER CURRENT % OF
OF SQUARE ANNUAL ANNUALIZED
LEASES FOOTAGE RENT ($000'S) RENTS
--------- --------- ------------- ----------

2000.................................. 2 249,240 $ 654 0.83%
2001.................................. 3 522,224 2,663 3.40%
2002.................................. 4 653,386 2,833 3.62%
2003.................................. 1 179,280 1,900 2.43%
2004.................................. 2 175,000 789 0.99%
-- --------- ------ -----
12 1,779,130 $8,839 11.27%
== ========= ====== =====

Revenue Enhancing Property Expansions. The Company undertakes expansions
of its Properties based on tenant requirements. The Company believes that
selective property expansions can provide it with attractive rates of return and
actively seeks such opportunities.

Property Sales and Redeployment of Assets. The Company may determine to
sell a Property if it deems such disposition to be in the Company's best
interest. During 1999, the Company sold seven Properties for $63.9 million, at
an average capitalization rate of 8.6% on current rental income, resulting in
$5.1 million in gains.

2
4

Acquisition Strategies

The Company seeks to enhance its net lease property portfolio through
acquisitions of general purpose, efficient, well-located properties in growing
markets. Management has diversified the Company's portfolio by geographical
location, tenant industry segment, lease term expiration and property type with
the intention of providing steady internal growth with low volatility.
Management believes that such diversification should help insulate the Company
from regional recession, industry specific downturns and price fluctuations by
property type. Prior to effecting any acquisitions, management analyzes the (i)
property's design, construction quality, efficiency, functionality and location
with respect to the immediate sub-market, city and region; (ii) lease integrity
with respect to term, rental rate increases, corporate guarantees and property
maintenance provisions; (iii) present and anticipated conditions in the local
real estate market; and (iv) prospects for selling or releasing the property on
favorable terms in the event of a vacancy. Management also evaluates each
potential tenant's financial strength, growth prospects, competitive position
within its respective industry and a property's strategic location and function
within a tenant's operations or distribution systems. Management believes that
its comprehensive underwriting process is critical to the assessment of
long-term profitability of any investment by the Company.

Operating Partnership Structure. The operating partnership structure
enables the Company to acquire properties by issuing to a seller, as a form of
consideration, interests in the Company's operating partnerships ("OP Units").
Management believes that this structure facilitates the Company's ability to
raise capital and to acquire portfolio and individual properties by enabling the
Company to structure transactions which may defer tax gains for a contributor of
property while preserving the Company's available cash for other purposes,
including the payment of dividends and distributions. The Company has used OP
Units as a form of consideration in connection with the acquisition of 22
Properties.

Acquisitions of Portfolio and Individual Net Lease Properties. The Company
seeks to acquire portfolio and individual properties that are leased to
creditworthy tenants under long-term net leases. Management believes there is
significantly less competition for the acquisition of property portfolios
containing a number of net leased properties located in more than one geographic
region. Management also believes that the Company's geographical
diversification, acquisition experience and access to capital will allow it to
compete effectively for the acquisition of such net leased properties.

Joint Venture Co-Investments. The Company entered into a joint venture
agreement with The Comptroller of the State of New York as Trustee of the Common
Retirement Fund ("NYSCRF"). The joint venture entity, Lexington Acquiport
Company, LLC ("LAC"), will acquire high quality office and industrial real
estate properties net leased to investment and non-investment grade single
tenant users. The Company and NYSCRF will make equity contributions to LAC of up
to $50 million and $100 million, respectively. Property acquisitions will be
additionally funded through the use of up to $278 million in non-recourse
mortgages. During 1999, LAC made one investment, an $11 million participating
note, which was used to partially fund the purchase of a 327,325 square foot
office property in Texas for $34.8 million. Subsequent to year-end, LAC
purchased a 221,215 square foot office property in Ohio for $26.9 million. The
purchase was partially financed through a 10 year, $17.8 million first mortgage
note which bears interest at 8.17%.

The Company's affiliate, Lexington Realty Advisors, Inc. ("LRA"), has
entered into a management agreement with LAC whereby LRA will perform certain
services for a fee relating to the acquisition (75 basis points of cost) and
management (2% of rent collected annually) of the LAC investments.

The Company also formed a joint venture to own a property net leased to
Blue Cross/Blue Shield of South Carolina (see Build-to-suit Properties). The
Company has a 40% interest in the joint venture and LRA entered into a
management agreement with similar terms as the management agreement with LAC.

Sale/Leaseback Transactions. The Company seeks to acquire portfolio and
individual net lease properties in sale/leaseback transactions. The Company
selectively pursues sale/leaseback transactions with creditworthy
sellers/tenants with respect to properties that are integral to the
sellers'/tenants' ongoing operations.

3
5

Build-to-suit Properties. The Company may also acquire, after construction
has been completed, "build-to-suit" properties that are entirely pre-leased to
their intended corporate users before construction. As a result, the Company
does not assume the risk associated with the construction phase of a project.
During 1999, the Company acquired a "build-to-suit" property, net leased to Blue
Cross/Blue Shield of South Carolina, for $42.5 million at an average unleveraged
yield of 11.5%. The purchase was partially funded with a 10 year, $25.3 million
mortgage note which bears interest at 7.85%. On December 30, 1999, the Company
sold a 60% joint venture interest in the subsidiary which owns the property for
$10.8 million.

The LCP Group, L.P. ("LCP"), an affiliate of E. Robert Roskind, Chairman of
the Board of Trustees and Co-Chief Executive Officer of the Company, has granted
the Company an option exercisable at any time, to acquire general partnership
interests currently owned by LCP in two limited partnerships, Net 1, L.P. and
Net 2, L.P. (together, the "Net Partnerships"), which own net leased office,
industrial and retail properties. The Net Partnerships own a total of 22
single-tenant properties located in 14 states which contain approximately 2.2
million net rentable square feet. The tenants of such properties include
Hollywood Video, Ameritech Services and Wal-Mart Stores, Inc. Under the terms of
the option, the Company, subject to review of any such transaction by the
independent members of its Board of Trustees, may acquire the general
partnership interests at their fair market value based upon a formula relating
to partnership cash flows, with the Company retaining the option of paying such
fair market value in equity and/or debt securities of the Company, OP Units,
cash or a combination thereof.

Refinancing Existing Indebtedness and Increasing Access to Capital

As a result of the Company's financing activities, the weighted average
interest rate on the Company's outstanding indebtedness has been reduced from
approximately 8.17% as of December 31, 1997 to approximately 7.79% as of
December 31, 1999. In addition, management is constantly pursuing opportunities
to increase the Company's access to public and private capital in order to
achieve maximum operating flexibility. Scheduled balloon payments, excluding the
$70.9 million outstanding on the variable rate unsecured credit facility, over
the next five years are as follows ($000's):

WEIGHTED
AVERAGE
BALLOON AMOUNT INTEREST RATE
-------------- -------------

2000..................................................... $15,066 8.73%
2001..................................................... 1,000 9.50%
2002..................................................... 10,623 7.46%
2003..................................................... -- --
2004..................................................... 25,260 8.00%
------- ----
$51,949 8.13%
======= ====

Subsequent to year end the Company refinanced a $13.1 million, 8.875%
balloon payment due in 2000 with a $17 million, 8.1% mortgage that requires
monthly principal and interest payments of $126,000 with a balloon payment of
$15.2 million due in February, 2010.

The Company's variable rate unsecured credit facility bears interest at
137.5 basis points over the Company's option of 1, 3 or 6 month LIBOR and is
scheduled to mature in July 2001. As of December 31, 1999, the outstanding
borrowings under this facility bore interest at a weighted average rate of
7.52%.

Common Share Repurchase. The Company's Board of Trustees authorized the
repurchase of up to 2 million common shares. As of December 31, 1999, the
Company has repurchased 1,008,239 common shares at an average price of $10.71,
all of which have been retired. Through February 29, 2000, the Company has
repurchased 1,200,897 common shares at a weighted average price of $10.61.

Competition. The real estate business is highly competitive and the
Company competes with numerous established companies having significant
resources and experience.

4
6

Environmental Matters. Under various federal, state and local
environmental laws, statutes, ordinances, rules and regulations, an owner of
real property may be liable for the costs of removal or redemption of certain
hazardous or toxic substances at, on, in or under such property as well as
certain other potential 60 costs relating to hazardous or toxic substances
(including government fines and penalties and damages for injuries to persons
and adjacent property). Such laws often impose liability without regard to
whether the owner knew of, or was responsible for, the presence or disposal of
such substances. Although the Company's tenants are primarily responsible for
any environmental damage and claims related to the leased premises, in the event
of the bankruptcy or inability of the tenant of such premises to satisfy any
obligations with respect thereto, the Company may be required to satisfy such
obligations. In addition, under certain environmental laws, the Company, as the
owner of such properties, may be held directly liable for any such damages or
claims irrespective of the provisions of any lease.

From time to time, in connection with the conduct of the Company's
business, and prior to the acquisition of any property from a third party or as
required by the Company's financing sources, the Company authorizes the
preparation of Phase I environmental reports with respect to its Properties.
Based upon such environmental reports and management's ongoing review of its
Properties, as of the date of this Annual Report, management was not aware of
any environmental condition with respect to any of the Company's Properties
which management believed would be reasonably likely to have a material adverse
effect on the Company. There can be no assurance, however, that (i) the
discovery of environmental conditions, the existence or severity of which were
previously unknown, (ii) changes in law, (iii) the conduct of tenants or (iv)
activities relating to properties in the vicinity of the Company's Properties,
will not expose the Company to material liability in the future. Changes in laws
increasing the potential liability for environmental conditions existing on
properties or increasing the restrictions on discharges or other conditions may
result in significant unanticipated expenditures or may otherwise adversely
affect the operations of the Company's tenants, which would adversely affect the
Company's financial condition and results of operations, including funds from
operations.

Employees. As of December 31, 1999, the Company had twenty-seven
employees.

Industry Segments. The Company operates in one industry segment,
investment in single tenant, net leased real property.

ITEM 2. PROPERTIES

Real Estate Portfolio

As of December 31, 1999, the Company owned or had interests in
approximately 11.4 million square feet of rentable space in 66 office,
industrial and retail properties. The Company's Properties are currently 100%
leased. The number, and percentage of annualized revenues and square footage mix
of the Company's portfolio is as follows:

SQUARE
NUMBER REVENUE FOOTAGE
------ ------- -------

Office................................................... 21 53% 33%
Industrial............................................... 24 34% 54%
Retail................................................... 21 13% 13%
-- --- ---
66 100% 100%
== === ===

The Company's Properties are subject to triple net leases, however, in
certain leases the Company is responsible for roof and structural repairs. In
such situations the Company performs annual inspections of the Properties. The
Company's Property in Palm Beach Gardens, Florida is subject to a lease in which
the Company is responsible for a portion of the real estate taxes and utilities.

The Company's tenants represent a variety of industries including banking,
computer and software services, health and fitness, general purpose retailing,
manufacturing, insurance and warehousing, and have a weighted average credit
strength of investment grade quality.

5
7

A substantial portion of the Company's income consists of base rent under
long-term leases. As of December 31, 1999, the average remaining term under the
Company's leases is approximately 8.5 years. Of the 66 current leases as of
December 31, 1999, 41 contain scheduled rent increases and 5 contain an increase
based upon the Consumer Price Index. In addition, one lease contains a
percentage rent clause.

The Company has 12 Properties accounting for $16.1 million of annualized
rental revenue that are subject to long term ground leases where a third party
owns and has leased the underlying land to the Company. In each of these
situations the rental payments made to the landowner are passed on to the
Company's tenant. At the end of these long-term ground leases, unless extended,
the land together with all improvements thereon revert to the landowner. These
ground leases, including renewal options, expire at various dates through 2074.

The Company has 17 Properties that are subject to lessee purchase options.
As of December 31, 1999, only one purchase option can be exercised. In each case
the Property can be purchased for no less than its current fair market value.

TABLE REGARDING REAL ESTATE HOLDINGS

The table on the following pages sets forth certain information relating to
the Company's real property portfolio as of December 31, 1999 ($000 except per
share data).

6
8

PROPERTY NET
TENANT TYPE/YEAR LAND AREA RENTABLE
PROPERTY LOCATION (GUARANTOR) CONSTRUCTED (ACRES) SQUARE FEET
----------------- ----------------------------- ------------------- --------- -----------

904 Industrial Road Walker Manufacturing Company Industrial 20.00 195,640
Marshall, MI (Tenneco Automotive, Inc.) 1968 & 1972

1601 Pratt Avenue Walker Manufacturing Company Industrial 8.26 53,600
Marshall, MI (Tenneco Automotive, Inc.) 1979

19019 No. 59th Avenue Honeywell, Inc. Research/ 51.79 252,300
Glendale, AZ Development
1985

6950 Greenwood Parkway Allegiance Healthcare Corp. Industrial 10.15 123,924
Bessemer, AL (1) 1990
(Baxter International, Inc.)

567 South Riverside Drive Crown Cork & Seal Co., Inc. Warehouse/ 5.80 146,000
Modesto, CA Manufacturing
1970 & 1976

10419 North 30th Street Time Customer Service, Inc. Office 14.38 132,981
Tampa, FL (Time, Inc.) 1986

3102 Queen Palm Drive Time Customer Service, Inc. Office/Warehouse 15.02 229,605
Tampa, FL (Time, Inc.) 1986

109 Stevens Street Unisource Worldwide, Inc. Warehouse/ 6.97 168,800
Jacksonville, FL Industrial
1958 & 1969

4450 California Street Mervyn's Retail 11.00 122,000
Bakersfield, CA (Dayton Hudson Corp.) 1976

3615 North 27th Avenue Bank One, Arizona, N.A. Office 10.26 179,280
Phoenix, AZ 1960 & 1979

6475 Dobbin Road Hechinger Property Company Retail 2.50 60,000
Columbia, MD 1983

Amigoland Shopping Center Montgomery Ward & Co., Inc. Retail 7.61 115,000
Mexico St. & Palm Blvd. (1) 1973
Brownsville, TX

222 Tappan Drive North The Gerstenslager Company (2) Warehouse/ 26.57 296,720
Mansfield, OH (Worthington Industries) Distribution
1970

2000 2000(E)
BASE LEASE TERM AND MINIMUM STRAIGHT-LINE
ANNUAL RENTS PER NET RENEWAL CASH RENTAL
PROPERTY LOCATION RENTABLE SQUARE FOOT OPTIONS RENT ($000) REVENUE ($000)
----------------- ---------------------------- ------------- ----------- --------------

904 Industrial Road 08/18/87 - 08/17/00 None $ 487 $ 487
Marshall, MI 08/18/97 - 08/17/00: $2.49
1601 Pratt Avenue 08/18/87 - 08/17/00 None $ 167 $ 167
Marshall, MI 08/18/97 - 08/17/00: $3.11
19019 No. 59th Avenue 07/16/86 - 07/15/01 (3) 5 year $ 1,892 $ 1,892
Glendale, AZ 07/16/96 - 07/15/01: $7.50
6950 Greenwood Parkway 09/01/91 - 09/01/01 (2) 5 year $ 472 $ 472
Bessemer, AL 09/01/91 - 09/01/01: $3.81
567 South Riverside Drive 09/26/86 - 09/25/01 (1) 5 year $ 298 $ 298
Modesto, CA 09/26/96 - 09/25/01: $2.04
10419 North 30th Street 04/01/87 - 03/31/02 (4) 5 Year $ 1,313 $ 1,099
Tampa, FL 01/01/00 - 12/31/00: $9.87
01/01/01 - 12/31/01: $10.46
01/01/02 - 03/31/02: $11.09
3102 Queen Palm Drive 08/01/87 - 07/31/02 (1) 5 year $ 955 $ 957
Tampa, FL 08/01/98 - 07/31/01: $4.16
08/01/01 - 07/31/02: $4.39
109 Stevens Street 10/01/87 - 09/30/02 None $ 380 $ 380
Jacksonville, FL 10/01/97 - 09/30/02: $2.25
4450 California Street 02/23/77 - 12/31/02 (5) 5 year $ 407 $ 397
Bakersfield, CA 01/01/78 - 12/31/02: $3.34
3615 North 27th Avenue 11/30/88 - 11/30/03 (1) 5 year $ 1,900 $ 1,900
Phoenix, AZ 12/01/98 - 11/30/03: $10.60
6475 Dobbin Road 08/01/83 - 08/01/04 (5) 5 year $ 620 $ 637
Columbia, MD 01/20/99 - 01/19/00: $10.21
01/20/00 - 01/19/01: $10.34
01/20/01 - 01/19/02: $10.48
01/20/02 - 01/19/03: $10.79
01/20/03 - 01/19/04: $11.08
01/20/04 - 08/01/04: $8.53
Amigoland Shopping Center 11/01/74 - 10/31/04 (3) 5 year $ 153 $ 153
Mexico St. & Palm Blvd. 11/01/74 - 10/31/04: $1.33
Brownsville, TX
222 Tappan Drive North 10/01/99 - 05/31/05 (3) 5 year $ 674 $ 667
Mansfield, OH 10/01/99 - 05/31/05: $2.27

7
9

1301 California Circle Stevens-Arnold, Inc. Office/Research 6.34 100,026
Milpitas, CA (BICC Public Ltd. Co.) & Development
1985

200 Southington Hartford Fire Insurance Co. Office 12.40 153,364
Executive Park 1983
Southington, CT

24100 Laguna Hills Mall Federated Department Stores, Retail 11.00 160,000
Laguna Hills, CA Inc. (1) 1974

7111 Westlake Terrace The Home Depot USA, Inc. (1) Retail 7.61 95,000
Bethesda, MD 1980

6910 S. Memorial Highway Toys "R" Us, Inc. (1) Retail 4.44 43,123
Tulsa, OK 1981

12535 SE 82nd Avenue Toys "R" Us, Inc. (1) Retail 5.85 42,842
Clackamas, OR 1981

18601 Alderwood Mall Blvd. Toys "R" Us, Inc. (1) Retail 3.64 43,105
Lynnwood, WA 1981

4425 Purks Road Lear Technologies, LLC Industrial 12.00 183,717
Auburn Hills, MI (Lear Corporation) 1989 & 1998
(General Motors Corp.)

West Wingfoot Road Toys "R" Us, Inc. (1) Industrial 7.56 123,293
Houston, TX 1981

245 Salem Church Road Exel Logistics Inc. Warehouse 12.52 252,000
Mechanicsburg, PA (NFC plc) 1985

6 Doughton Road Exel Logistics Inc. Warehouse 24.38 330,000
New Kingston, PA (NFC plc) 1989

34 East Main Street Exel Logistics Inc. Warehouse 9.66 179,200
New Kingston, PA (NFC plc) 1981

401 Elm Street Lockheed Martin Corp. Office/Research 36.94 126,000
Marlborough, MA (Honeywell, Inc.) & Development
1960 & 1988

1301 California Circle 12/10/85 - 12/10/05 (9) 5 year $ 2,291 $ 2,548
Milpitas, CA 06/01/98 - 11/30/00: $22.68
12/01/00 - 05/31/03: $25.56
06/01/03 - 12/10/05: $28.92
200 Southington 09/01/91 - 12/31/05 (1) 5 year $ 2,166 $ 2,158
Executive Park 01/01/95 - 12/31/05: $14.12
Southington, CT
24100 Laguna Hills Mall 02/01/76 - 01/31/06 (1) 8 year $ 677 $ 673
Laguna Hills, CA 02/01/80 - 01/31/06: $4.23 (2) 15 year
(1) 6 year
7111 Westlake Terrace 05/01/81 - 04/30/06 (1) 10 year $ 772 $ 648
Bethesda, MD 05/01/96 - 04/30/06: $8.13 (3) 5 year
6910 S. Memorial Highway 06/01/81 - 05/31/06 (5) 5 year $ 356 $ 356
Tulsa, OK 02/01/98 - 05/31/01: $8.26
06/01/01 - 05/31/06: $8.40
12535 SE 82nd Avenue 06/01/81 - 05/31/06 (5) 5 year $ 417 $ 417
Clackamas, OR 02/01/98 - 05/31/01: $9.74
06/01/01 - 05/31/06: $9.91
18601 Alderwood Mall Blvd. 06/01/81 - 05/31/06 (5) 5 year $ 389 $ 389
Lynnwood, WA 02/01/98 - 05/31/01: $9.03
06/01/01 - 05/31/06: $9.18
4425 Purks Road 07/23/98 - 07/22/06 none $ 1,325 $ 1,365
Auburn Hills, MI 07/23/98 - 07/22/02: $7.21
07/23/02 - 07/22/06: $7.63
West Wingfoot Road 09/01/81 - 08/31/06 (5) 5 year $ 491 $ 478
Houston, TX 05/01/98 - 08/31/06: $3.98
245 Salem Church Road 11/15/91 - 11/30/06 (2) 5 year $ 932 $ 1,000
Mechanicsburg, PA 12/01/97 - 11/30/00: $3.67
12/01/00 - 11/30/03: $4.01
12/01/03 - 11/30/06: $4.38
6 Doughton Road 11/15/91 - 11/30/06 (2) 5 year $ 1,254 $ 1,349
New Kingston, PA 12/01/97 - 11/30/00: $3.77
12/01/00 - 11/30/03: $4.12
12/01/03 - 11/30/06: $4.51
34 East Main Street 11/15/91 - 11/30/06 (2) 5 year $ 609 $ 654
New Kingston, PA 12/01/97 - 11/30/00: $3.37
12/01/00 - 11/30/03: $3.68
12/01/03 - 11/30/06: $4.02
401 Elm Street 07/22/97 - 12/17/06 (6) 5 year $ 1,671 $ 1,671
Marlborough, MA 07/22/97 - 12/17/01: $13.26
12/18/01 - 12/17/06:
75% of cumulative increase
in CPI

8
10

46600 Port Street Plymouth, Johnson Controls, Inc. Industrial 24.00 134,160
MI 1996

450 Stern Street Johnson Controls, Inc. Industrial 20.10 111,160
Oberlin, OH 1996

12000 Tech Center Drive Kelsey-Hayes (Tech I) Office 5.72 80,230
Livonia, MI 1987 & 1988

12025 Tech Center Drive Kelsey-Hayes (Tech II) Research/ 9.18 100,000
Livonia, MI Development
1987 & 1988

2300 Litton Lane Fidelity Corporate Office 24.00 81,744
Hebron, KY Real Estate, LLC (3) 1987

5917 S. La Grange Road Bally Total Fitness Corp. Retail/Health Club 2.73 25,250
Countryside, IL 1987

1160 White Horse Road Physical Fitness Centers of Retail/Health Club 2.87 31,750
Voorhees, NJ Philadelphia, Inc. 1987
(Bally Total Fitness Corp.)

5801 Bridge Street Champion Fitness IV, Inc. Retail/Health Club 3.66 24,990
DeWitt, NY (Bally Total Fitness Corp.) 1977 & 1987

One Spricer Drive Dana Corp. Industrial 20.95 148,000
Gordonsville, TN 1983 & 1985

541 Perkins Jones Road Kmart Corp. Warehouse/ 103.00 1,700,000
Warren, OH Distribution
1982

160 Clairemont Avenue Allied Holdings, Inc. Office 2.98 112,248
Decatur, GA 1983

2655 Shasta Way Fred Meyer, Inc. Retail 13.90 178,204
Klamath Falls, OR 1986

46600 Port Street Plymouth, 12/23/96 - 12/22/06 (2) 5 year $ 741 $ 741
MI 12/23/99 - 12/22/00: $5.52
12/23/00 - 12/22/06:
Annual increase of 3x CPI,
but not more than 4.5%
450 Stern Street 12/23/96 - 12/22/06 (2) 5 year $ 560 $ 560
Oberlin, OH 12/23/99 - 12/22/00: $5.04
12/23/00 - 12/22/06:
Annual increase of 3x CPI,
but not more than 4.5%
12000 Tech Center Drive 05/01/97 - 04/30/07 (2) 5 year $ 635 $ 679
Livonia, MI 05/01/99 - 04/30/02: $7.91
05/01/02 - 04/30/05: $8.75
05/01/05 - 04/30/07: $9.25
12025 Tech Center Drive 05/01/97 - 04/30/07 (2) 5 year $ 916 $ 958
Livonia, MI 05/01/99 - 04/30/02: $9.16
05/01/02 - 04/30/05: $9.75
05/01/05 - 04/30/07: $10.25
2300 Litton Lane 05/01/97 - 04/30/07 (2) 5 year $ 777 $ 817
Hebron, KY 05/01/97 - 04/30/02: $9.50
05/01/02 - 04/30/07: $11.00
5917 S. La Grange Road 07/13/87 - 07/12/07 (2) 5 year $ 574 $ 542
Countryside, IL 07/13/97 - 07/12/02: $22.73
07/13/02 - 07/12/07: $26.14
1160 White Horse Road 07/14/87 - 07/13/07 (2) 5 year $ 713 $ 673
Voorhees, NJ 07/14/97 - 07/13/02: $22.45
07/14/02 - 07/13/07: $25.82
5801 Bridge Street 08/19/87 - 08/18/07 (2) 5 year $ 444 $ 419
DeWitt, NY 08/19/97 - 08/18/02: $17.78
08/19/02 - 08/18/07: $20.45
One Spricer Drive 01/01/84 - 08/31/07 (2) 5 year $ 334 $ 341
Gordonsville, TN 08/01/99 - 07/31/02: $2.26 (1) 4 year,
08/01/02 - 07/31/05: $2.33 11 months
08/01/05 - 08/31/07: $2.40
541 Perkins Jones Road 10/01/82 - 09/30/07 (10) 5 year $ 8,409 $ 8,932
Warren, OH 10/01/98 - 09/30/02: $4.95
10/01/02 - 09/30/07: $5.51
160 Clairemont Avenue 01/01/98 - 12/31/07 (2) 5 year $ 1,425 $ 1,530
Decatur, GA 01/01/00 - 12/31/07: $12.70
Rent increases 2.75%
annually
2655 Shasta Way 03/10/88 - 03/31/08 (3) 10 year $ 1,009 $ 1,009
Klamath Falls, OR 03/10/88 - 03/31/08: $5.66

9
11

13651 McLearen Road Boeing Services Corp. Office 10.39 159,664
Herndon, VA 1987

2210 Enterprise Drive Fleet Mortgage Group, Inc. Office 16.53 177,747
Florence, SC 1998

7272 55th Street Circuit City Stores, Inc. Retail 3.93 45,308
Sacramento, CA 1988

6405 South Viriginia St. Comp USA, Inc. Retail 2.72 31,400
Reno, NV 1988

5055 West Sahara Avenue Circuit City Stores, Inc. Retail 2.57 36,053
Las Vegas, NV 1988

4733 Hills & Dales Road Scandinavian Health Spa, Inc. Retail/Health Club 3.32 37,214
Canton, OH (Bally Total Fitness Holding 1987
Corp.)

14040 Park Center Road NEC America, Inc. Office 13.30 108,000
Herndon, VA 1987

295 Chipeta Way Northwest Pipeline Corp. (1) Office 19.79 295,000
Salt Lake City, UT 1982

Fort Street Mall Liberty House, Inc. (1) Retail 1.22 85,610
King St. 1980
Honolulu, HI

3350 Miac Cove Road Mimeo.com, Inc. (4) Office/Industrial 10.92 141,359
Memphis, TN 1987

13651 McLearen Road 05/31/99 - 05/30/08 (2) 5 year $ 2,171 $ 2,585
Herndon, VA 05/31/99 - 05/30/00: $13.40
05/31/00 - 05/30/01: $13.74
05/31/01 - 05/30/02: $15.50
05/31/02 - 05/30/03: $15.89
05/31/03 - 05/30/04: $16.28
05/31/04 - 05/30/05: $16.69
05/31/05 - 05/30/06: $17.11
05/31/06 - 05/30/07: $17.54
05/31/07 - 05/30/08: $17.98
2210 Enterprise Drive 06/10/98 - 06/30/08 (2) 5 year $ 1,520 $ 1,635
Florence, SC 06/10/98 - 06/30/03: $8.55
07/01/03 - 06/30/08: $9.84
7272 55th Street 10/28/88 - 10/27/08 (3) 10 year $ 387 $ 376
Sacramento, CA 10/28/98 - 10/27/03: $8.54
10/28/03 - 10/27/08: $9.30
6405 South Viriginia St. 12/16/88 - 12/15/08 (3) 10 year $ 334 $ 325
Reno, NV 12/16/98 - 12/15/03: $10.65
12/16/03 - 12/15/08: $11.60
5055 West Sahara Avenue 12/16/88 - 12/15/08 (3) 10 year $ 286 $ 278
Las Vegas, NV 12/16/98 - 12/15/03: $7.93
12/16/03 - 12/15/08: $8.64
4733 Hills & Dales Road 01/01/89 - 12/31/08 (2) 5 year $ 654 $ 685
Canton, OH 01/01/00 - 12/31/00: $17.58
01/01/01 - 12/31/08:
Rent increases 2.2% annually
14040 Park Center Road 08/01/99 - 07/31/09 (2) 5 year $ 1,728 $ 2,006
Herndon, VA 08/01/99 - 07/31/00: $16.00
08/01/00 - 07/31/09:
Rent increases 2.0% annually
and by $216 in year six
295 Chipeta Way 10/01/82 - 09/30/09 (1) 9 year $ 8,571 $ 8,571
Salt Lake City, UT 10/01/97 - 09/30/09: $29.06 (1) 10 year
subject to a CPI adjustment
on a portion of the rent.
Fort Street Mall 10/01/80 - 09/30/09 (1) 9 year, 7 $ 963 $ 971
King St. 10/01/95 - 09/30/05: $11.25 months (1) 2
Honolulu, HI 10/01/05 - 09/30/09: $11.56 year (3) 5
year
3350 Miac Cove Road 11/01/99 - 10/31/09 None $ 537 $ 686
Memphis, TN 11/01/99 - 10/31/02: $5.00
11/01/02 - 10/31/04: $5.00
11/01/04 - 10/31/09: $5.50

10
12

9950 Mayland Drive Circuit City Stores, Inc. (1) Office Headquarters 19.71 288,562
Richmond, VA 1990

7055 Highway 85 South Wal-Mart Stores, Inc. Retail 8.61 81,911
Riverdale, GA 1985

4200 RCA Boulevard The Wackenhut Corp. Office 7.70 127,855
Palm Beach Gardens, FL 1996

Highway 101 Fred Meyer, Inc. Retail 8.81 118,179
Newport, OR 1986

6345 Brackbill Boulevard Exel Logistics, Inc. Warehouse/ 29.01 507,000
Mechanicsburg, PA (NFC plc) Distribution
1985 & 1991

2280 Northeast Drive Ryder Integrated Logistics, Warehouse 25.70 276,480
Waterloo, IA Inc. 1996 & 1997
(Ryder Systems, Inc.)

1600 Viceroy Drive FirstPlus Financial Group, Office 8.17 247,968
Dallas, TX Inc. (5) 1986

250 Rittenhouse Circle Jones Apparel Group, Inc. (6) Office/ 15.63 255,019
Bristol, PA Warehouse
1982

3501 West Avenue H Michaels Stores, Inc. Warehouse/ 37.18 431,250
Lancaster, CA Distribution
1998

180 Rittenhouse Circle Jones Apparel Group, Inc. Office 4.73 96,000
Bristol, PA 1998

7150 Exchequer Drive Corporate Express Office Warehouse/ 5.23 65,043
Baton Rouge, LA Products, Inc. Distribution
(CEX Holdings, Inc.) 1998

9950 Mayland Drive 02/28/90 - 02/28/10 (4) 10 year $ 2,796 $ 2,791
Richmond, VA 01/01/98 - 02/29/00: $8.59 (1) 5 year
03/01/00 - 02/28/10: $9.91
7055 Highway 85 South 12/04/85 - 01/31/11 (5) 5 year $ 270 $ 270
Riverdale, GA 12/04/85 - 01/31/11: $3.29
4200 RCA Boulevard 02/15/96 - 02/28/11 (3) 5 year $ 2,260 $ 2,259
Palm Beach Gardens, FL 12/01/97 - 02/28/11: $17.67
Highway 101 06/01/86 - 05/31/11 (3) 5 year $ 826 $ 826
Newport, OR 06/01/86 - 05/31/11: $6.99
plus .5% of gross sales over
$20 million ($72 in 1999)
6345 Brackbill Boulevard 10/29/90 - 03/19/12 (2) 10 year $ 1,771 $ 1,852
Mechanicsburg, PA 3/20/97 - 03/19/02: $3.49
3/20/02 - 03/19/07: $4.02
3/20/07 - 03/19/12:
greater of $4.62 or fair
market rent as specified in
lease
2280 Northeast Drive 08/01/97 - 07/31/12 (3) 5 year $ 891 $ 1,004
Waterloo, IA 08/01/97 - 07/31/02: $3.22
08/01/02 - 07/31/07: $3.61
08/01/07 - 07/31/12: $4.04
1600 Viceroy Drive 09/04/97 - 08/31/12 (4) 5 year $ 3,224 $ 3,224
Dallas, TX 09/04/97 - 08/31/02: $13.00
09/01/02 - 08/31/07: $14.30
09/01/07 - 08/31/12: $15.73
250 Rittenhouse Circle 03/26/98 - 03/25/13 (2) 5 year $ 1,150 $ 1,208
Bristol, PA 03/26/98 - 03/26/03: $4.51
03/27/03 - 03/26/08: $4.96
03/27/08 - 03/25/13: $5.46
3501 West Avenue H 06/19/98 - 06/18/13 (3) 5 year $ 1,398 $ 1,430
Lancaster, CA 06/19/98 - 06/18/03: $3.24
06/19/03 - 06/18/08: $3.31
06/19/08 - 06/18/13: $3.39
180 Rittenhouse Circle 08/01/98 - 07/31/13 (4) 5 year $ 801 $ 970
Bristol, PA 08/01/99 - 07/31/00: $8.24
08/01/00 - 07/31/01: $8.49
08/01/01 - 07/31/13:
Rent increases 3% per year
7150 Exchequer Drive 11/01/98 - 10/31/13 (3) 5 year $ 327 $ 368
Baton Rouge, LA 11/01/98 - 10/31/01: $5.02
11/01/01 - 10/31/04: $5.32
11/01/04 - 10/31/07: $5.64
11/01/07 - 10/31/10: $5.98
11/01/10 - 10/31/13: $6.34

11
13

1133 Poplar Creek Road Corporate Express Office Warehouse/ 19.09 196,946
Henderson, NC Product, Inc. Office
(CEX Holdings, Inc.) 1998

9580 Livingston Road GFS Realty, Inc. Retail 10.60 107,337
Oxon Hill, MD (Giant Food, Inc.) 1976

324 Industrial Park Road SKF USA, Inc. Manufacturing 21.13 72,868
Franklin, NC 1996

250 Turnpike Road Honeywell Consumer Products Office 9.83 57,698
Southborough, MA 1984

Rockshire Village Center GFS Realty, Inc. (1) Retail 7.32 51,682
West Ritchie Parkway (Giant Food, Inc.) 1977
Rockville, MD
------ ----------

125.40 10,680,809
====== ==========

1133 Poplar Creek Road 01/20/99 - 01/19/14 (3) 5 year $ 712 $ 761
Henderson, NC 01/20/99 - 01/19/02: $3.61
01/20/02 - 01/19/05: $3.83
01/20/05 - 01/19/08: $4.01
01/20/08 - 01/19/11: $4.19
01/20/11 - 01/19/14: $4.46
9580 Livingston Road 01/03/77 - 02/28/14 (4) 5 year $ 408 $ 274
Oxon Hill, MD 03/01/77 - 02/29/04: $3.80
03/01/04 - 02/28/14: $1.91
324 Industrial Park Road 12/23/96 - 12/31/14 (3) 10 year $ 340 $ 340
Franklin, NC 01/01/00 - 12/31/02: $4.67
01/01/03 - 12/31/14:
CPI every 3 years
250 Turnpike Road 10/01/95 - 09/30/15 (4) 5 Year $ 417 $ 458
Southborough, MA 10/01/95 - 09/30/00: $7.14
10/01/00 - 09/30/05: $7.49
10/01/05 - 09/30/10: $7.94
10/01/10 - 09/30/15: $8.50
Rockshire Village Center 01/01/78 - 04/30/17 (2) 10 year $ 224 $ 152
West Ritchie Parkway 01/01/78 - 02/28/05: $4.33
Rockville, MD 03/01/05 - 04/30/17: $2.23
------- -------
$74,571 $76,718
======= =======

- ---------------

(E) Estimated

(1) The Company holds leasehold interest in the land. The leases, including
renewal options, expire at various dates through 2074.

(2) The tenant occupied 200,000 square feet through November 30, 1999 and fully
occupied the property thereafter.

(3) Tenant can cancel lease on April 30, 2004 with 270 days notice and a payment
of $899.

(4) The tenant occupies 107,399 square feet through October 31, 2002 and will
fully occupy the property commencing November 1, 2002.

(5) In January 2000 the property was leased to VarTec Inc. through September
2015. Average annual net rent is $3,485.

(6) Tenant can cancel lease on March 26, 2008 with 12 months notice and a
payment of $1,392.

12
14

LEXINGTON CORPORATE PROPERTIES TRUST
JOINT VENTURE PROPERTY CHART

15375 Memorial Drive Vastar Resources, Inc.(1) Office 21.77 327,325
Houston, TX 1985

17 Technology Circle Blue Cross/Blue Shield Office 42.46 348,410
Columbia, SC of South Carolina(2) 1999
------ ----------
64.23 675,735
====== ==========

15375 Memorial Drive 09/16/99 - 09/16/09 None $ 3,273 $ 3,437
Houston, TX 09/16/99 - 09/15/02: $10.00
09/16/02 - 09/15/06: $10.50
09/16/06 - 09/16/09: $11.00
17 Technology Circle 10/01/09 - 09/30/09 None $ 4,564 $ 4,906
Columbia, SC 10/01/99 - 09/30/04: $13.10
10/01/04 - 09/30/09: $15.07
------- -------
$ 7,837 $ 8,343
======= =======

- ---------------

(1) The Company has a 33% ownership interest in this property.

(2) The Company has a 40% ownership interest in this property.

13
15

ITEM 3. LEGAL PROCEEDINGS

The Company is not presently involved in any litigation nor to its
knowledge is any litigation threatened against the Company or its subsidiaries
that, in management's opinion, would result in any material adverse effect on
the Company's ownership, financial condition, management or operation of its
Properties.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

ITEM 4A. EXECUTIVE OFFICERS AND TRUSTEES OF THE REGISTRANT

The following sets forth certain information relating to the executive
officers and Trustees of the Company:

NAME BUSINESS EXPERIENCE
---- -------------------

E. ROBERT ROSKIND.............. Mr. Roskind has served as the Chairman of the Board of
Age 55 Trustees and Co-Chief Executive Officer of the Company since
October 1993. He founded The LCP Group, L.P. in 1973 and has
been its Chairman since 1976. LCP has acted as general
partner in limited partnerships in which the Company has had
prior dealings. Prior to founding LCP, Mr. Roskind headed
the net-leasing financing area of Lehman Brothers Inc. He is
also a general partner for a variety of entities which serve
as the general partner of various partnerships that hold net
leased real properties or interests therein. Mr. Roskind is
a director of Berkshire Realty Company, Inc., Krupp
Government Income Trust I and Krupp Government Income Trust
II. Mr. Roskind received his B.S. in 1966 from the
University of Pennsylvania and is a 1969 Harlan Fiske Stone
Graduate of the Columbia Law School. He has been a member of
the Bar of the State of New York since 1970.
RICHARD J. ROUSE............... Mr. Rouse has served as Co-Chief Executive Officer and a
Age 54 trustee of the Company since October 1993. He served as the
President of the Company from October 1993 to April 1996,
and since April 1996 has served as the Vice Chairman. Mr.
Rouse was also a managing director of LCP. He had been
associated with LCP since 1979 and had been engaged there in
all aspects of net lease finance, acquisition and
syndication and corporate financing transactions. Mr. Rouse
graduated from Michigan State University in 1968 and
received his M.B.A. in 1970 from the Wharton School of
Finance and Commerce of the University of Pennsylvania.
T. WILSON EGLIN................ Mr. Eglin has served as Chief Operating Officer of the
Age 35 Company since October 1993 and a trustee since May 1994. He
served as Executive Vice President from October 1993 to
April 1, 1996, and since April 1996 has served as the
President. Prior to his current position with the Company,
Mr. Eglin had been associated with LCP from 1987 to 1993 and
had been its Vice President -- Acquisitions from 1990 to
1993. In connection with his responsibilities with LCP, Mr.
Eglin was an officer of affiliated companies that owned and
managed over 400 net leased real estate properties and was
involved in all aspects of real estate acquisition and
finance, principally in net leased transactions. Mr. Eglin
received his B.A. from Connecticut College in 1986.

14
16

NAME BUSINESS EXPERIENCE
---- -------------------

PATRICK CARROLL................ Mr. Carroll has served as the Chief Financial Officer of the
Age 36 Company since May 1998 and Treasurer since January 1999.
Prior to joining the Company, Mr. Carroll was, from 1993 to
1998, a Senior Manager in the real estate unit of Coopers &
Lybrand L.L.P. serving both publicly and privately held real
estate entities with a focus on due diligence and public
equity/debt offerings. Mr. Carroll received his B.B.A. from
Hofstra University in 1986, a M.S. in Taxation from C.W.
Post in 1991 and is a Certified Public Accountant.
PAUL R. WOOD................... Mr. Wood has served as the Vice President, Chief Accounting
Age 39 Officer and Secretary of the Company since October 1993. He
had been associated with LCP from 1988 to 1993 and from 1990
to 1993 had been responsible for all accounting activities
relating to the net leased properties managed by LCP and its
affiliates. Prior to joining LCP, Mr. Wood was, from 1987 to
1988, associated with E. F. Hutton & Company Inc. as a
senior accountant. Mr. Wood received his B.B.A. from Adelphi
University in 1982 and is a Certified Public Accountant.
STEPHEN C. HAGEN............... Mr. Hagen has served as Senior Vice President of the Company
Age 57 since October 1996. Mr. Hagen had been associated with LCP
from 1995 to 1996. Prior to joining LCP, Mr. Hagen was a
principal of Pharus Realty Investments, a money manager
focused on real estate stocks, and also served as Chief
Operating Officer of HRE Properties, a New York Stock
Exchange listed REIT. Mr. Hagen received his B.S. from the
University of Kansas in 1965 and his M.B.A. in 1968 from the
Wharton School of Finance and Commerce of the University of
Pennsylvania.
JANET M. KAZ................... Ms. Kaz has served as Vice President of the Company since
Age 36 May 1995 and as Asset Manager since October 1993. Prior to
that, Ms. Kaz was a member of LCP's property acquisition
team from 1986 to 1990 and a member of LCP's asset
management team from 1991 to 1993. Ms. Kaz received her B.A.
from Muhlenberg College in 1985.
PHILIP L. KIANKA............... Mr. Kianka has served as Vice President of Asset Management
Age 43 of the Company since 1997. Prior to joining the Company,
from 1985 through 1997, Mr. Kianka served as a Vice
President and Senior Asset Manager at Merrill Lynch Hubbard,
Inc., a real estate division of Merrill Lynch & Co., Inc.
Mr. Kianka was involved in real estate acquisitions,
development and asset management for a national portfolio of
diversified properties. Mr. Kianka received his B.A. from
Clemson University in 1978 and his M.A. from Clemson
University in 1981.
NATASHA ROBERTS................ Ms. Roberts has served as Vice President of Acquisitions of
Age 33 the Company since 1997. Prior to joining the Company Ms.
Roberts worked for Net Lease Partners Realty Advisors (an
affiliate of Mr. Roskind) from January 1995 to January 1997
and as a licensed real estate broker from February 1992 to
January 1995.
BRENDAN MULLINIX............... Mr. Mullinix has served as a Vice President of the Company
Age 25 since February 2000 and as a member of the acquisitions
department since October 1996. He received his B.A. from
Columbia University in 1996.

15
17

NAME BUSINESS EXPERIENCE
---- -------------------

CARL D. GLICKMAN............... Mr. Glickman has served as a trustee and a member of the
Age 73 Audit Committee and the Chairman of the Executive Committee
of the Board of Trustees of the Company since May 1994 and
as a member of the Compensation Committee of the Board of
Trustees until May 1998. He has been President of The
Glickman Organization since 1953. He is on the Board of
Directors of Alliance Tire & Rubber Co., Ltd., Bear Stearns
Companies, Inc., Jerusalem Economic Corporation Ltd. and
OfficeMax Inc., as well as numerous private companies.
KEVIN W. LYNCH................. Mr. Lynch has served as a trustee of the Company and a
Age 47 member of the Audit Committee since May 1996 and is a
founder and principal of The Townsend Group, an
institutional real estate consulting firm founded in 1983.
Prior to forming The Townsend Group, Mr. Lynch was a Vice
President for Stonehenge Capital Corporation. Mr. Lynch has
been involved in the commercial real estate industry since
1974, and is a director of First Industrial Realty Trust.
JOHN D. MCGURK................. Mr. McGurk became a member of the Board in January 1997 as
Age 56 the designee of Five Arrows Realty Securities, L.L.C. ("Five
Arrows") to the Board of Trustees. He is the founder and
President of Rothschild Realty, Inc., the advisor to Five
Arrows. Prior to starting Rothschild Realty, Inc. in 1981,
Mr. McGurk served as a Regional Vice President for The
Prudential Insurance Company of America where he oversaw its
New York City real estate loan portfolio, equity holdings,
joint ventures and projects under development. Mr. McGurk is
a member of the Urban Land Institute, Pension Real Estate
Association, Real Estate Board of New York and the National
Real Estate Association, and is a member of the Trustee
Committee of the Caedmon School.
SETH M. ZACHARY................ Mr. Zachary has served as a trustee and a member of the
Age 47 Compensation Committee of the Board of Trustees of the
Company since November 1993 and as a member of the Audit
Committee until February 1999. Since 1987, he has been a
partner in the law firm of Paul, Hastings, Janofsky & Walker
LLP, counsel to the Company.

PART II.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED SHAREHOLDER
MATTERS

The common shares of the Company are listed for trading on the New York
Stock Exchange ("NYSE") under the symbol "LXP." The following table sets forth
the high and low sales prices as reported by the NYSE for the common shares of
the Company for each of the periods indicated below:

FOR THE QUARTERS ENDED: HIGH LOW CASH DIVIDEND
----------------------- -------- -------- -------------

December 31, 1999................................ $11.2500 $ 8.8125 $0.30
September 30, 1999............................... 12.8750 10.8750 $0.30
June 30, 1999.................................... 12.0000 10.5000 $0.30
March 31, 1999................................... 12.8750 9.8750 $0.30

December 31, 1998................................ $13.2500 $11.0000 $0.30
September 30, 1998............................... 14.6250 10.8125 $0.30
June 30, 1998.................................... 15.2500 13.7500 $0.29
March 31, 1998................................... 16.3750 14.2500 $0.29

16
18

The closing price of the common shares of the Company was $10.375 on
February 29, 2000.

As of February 29, 2000, the Company had 2,197 common shareholders of
record.

Dividends. The Company has made quarterly distributions since October,
1986 without interruption. The Company paid a dividend of $.27 per share to
shareholders in respect of each of the calendar quarters of 1994, 1995 and the
first quarter of 1996; $.28 per share in respect of the second and third
quarters of 1996; and $.29 per share in respect of the fourth quarter of 1996,
each of the calendar quarters of 1997 and the first and second quarters of 1998;
and $.30 per share in respect of the third and fourth quarters of 1998 and each
of the calendar quarters of 1999. The Company declared the dividend in respect
of the fourth quarter of 1999, in the amount of $.30 per share to shareholders
of record as of January 31, 2000 which was paid on February 14, 2000. The
Company's annualized dividend rate is currently $1.20 per share.

Following is a summary of the average taxable nature of the Company's
dividends for the three years ended December 31:

1999 1998 1997
------ ------ ------

Total dividends per share................................ $ 1.20 $ 1.17 $ 1.16
====== ====== ======
Ordinary income........................................ 83.73% 88.06% 68.91%
20% rate gain.......................................... 10.21% -- --
25% rate gain.......................................... 6.06% 2.30% --
Percent non-taxable as return of capital............... -- 9.64% 31.09%
------ ------ ------
100.00% 100.00% 100.00%
====== ====== ======

While the Company intends to continue paying regular quarterly dividends,
future dividend declarations will be at the discretion of the Board of Trustees
and will depend on the actual cash flow of the Company, its financial condition,
capital requirements, the annual distribution requirements under the REIT
provisions of the Code and such other factors as the Board of Trustees deems
relevant. The actual cash flow available to pay dividends will be affected by a
number of factors, including the revenues received from rental properties, the
operating expenses of the Company, the interest and principal payments required
under various borrowing agreements, the ability of lessees to meet their
obligations to the Company and any unanticipated capital expenditures.

In addition to its common and preferred share offerings, the Company has
capitalized the growth in its business through the issuance of secured and
unsecured fixed and floating-rate debt. Borrowings under the Company's unsecured
revolving credit facility have been a source of funds to both finance the
purchase of properties and meet any short-term working capital requirements. The
various instruments governing the Company's issuance of its unsecured bank debt
impose certain restrictions on the Company with regard to dividends and
incurring additional debt obligations. See "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and Notes 6 and 7 of the Notes
to Consolidated Financial Statements included in this Annual Report on Form
10-K.

The Company does not believe that the financial covenants contained in its
unsecured revolving credit agreement and secured indebtedness will have any
adverse impact on the Company's ability to pay dividends in the normal course to
its common shareholders or to distribute amounts necessary to maintain its
qualifications as a REIT.

The Company maintains a dividend reinvestment program pursuant to which
common shareholders may elect to automatically reinvest their dividends to
purchase common shares of the Company at a 5% discount to the market price and
free of commissions and other charges. The Company may, from time to time,
either repurchase common shares in the open market, or issue new common shares,
for the purpose of fulfilling its obligations under the dividend reinvestment
program.

17
19

ITEM 6. SELECTED FINANCIAL DATA

The following sets forth selected consolidated financial data for the
Company as of and for each of the years in the five-year period ended December
31, 1999. The selected consolidated financial data for the Company should be
read in conjunction with the Consolidated Financial Statements and the related
notes appearing elsewhere in this Annual Report on Form 10-K. ($000's, except
per share data)

1999 1998 1997 1996 1995
-------- --------- --------- -------- --------

Total revenue........................... $ 77,300 $ 65,117 $ 43,569 $ 31,675 $ 25,002
Operating expenses, including minority
interest.............................. (61,080) (48,433) (35,304) (26,209) (19,983)
Transactional expenses.................. -- (559) -- -- --
Gain (loss) on sale of properties....... 5,127 (388) 3,517 -- 1,514
Proceeds from lease termination......... -- -- -- -- 1,600
Loss on extinguishment of debt.......... -- -- (3,189) -- (4,849)
-------- --------- --------- -------- --------
Net income.............................. 21,347 15,737 8,593 5,466 3,284
======== ========= ========= ======== ========
Net income per common share -- basic.... 1.11 0.79 0.33 0.58 0.35
======== ========= ========= ======== ========
Net income per common share --diluted... 1.08 0.78 0.32 0.56 0.35
======== ========= ========= ======== ========
Cash dividends declared per common
share................................. 1.20 1.17 1.16 1.10 1.08
======== ========= ========= ======== ========
Net cash provided by operating
activities............................ 40,119 32,008 23,823 14,975 7,216
======== ========= ========= ======== ========
Net cash (used in) provided by investing
activities............................ (64,942) (111,080) (110,767) (16,955) 7,887
======== ========= ========= ======== ========
Net cash provided by (used in) financing
activities............................ 22,576 86,516 88,116 1,859 (15,610)
======== ========= ========= ======== ========
Real estate assets, net................. 606,592 609,717 416,613 289,326 200,507
======== ========= ========= ======== ========
Total assets............................ 656,481 647,007 468,373 310,384 221,216
======== ========= ========= ======== ========
Mortgages and notes payable............. 372,254 354,281 220,934 187,740 123,223
======== ========= ========= ======== ========
Funds from operations(1)................ 40,652 35,141 21,315 13,783 13,207
======== ========= ========= ======== ========
Rent received above (below) straight
line rent............................. (2,054) (2,411) (924) (105) 400
======== ========= ========= ======== ========

- ---------------
(1) The Company believes that Funds From Operations ("FFO") enhances an
investor's understanding of the Company's financial condition, results of
operations and cash flows. The Company believes that FFO is an appropriate
measure of the performance of an equity REIT, and that it can be one measure
of a REIT's ability to make cash distributions. FFO is defined in the
October 1999 "White Paper", issued by the National Association of Real
Estate Investment Trusts, Inc. ("NAREIT") as "net income (or loss) (computed
in accordance with generally accepted accounting principles ("GAAP"),
excluding gains (or losses) from sales of property, plus real estate
depreciation and amortization and after adjustments for unconsolidated
partnerships and joint ventures." The Company elected to early adopt the
clarification contained in the White Paper and has restated all prior years
FFO. The impact of such early adoption was to reduce FFO in 1998, 1997, 1996
and 1995 by $559, $168, $588 and $442, respectively. FFO should not be
considered an alternative to net income as an indicator of operating
performance or to cash flows from operating activities as determined in
accordance with GAAP, or as a measure of liquidity to other consolidated
income or cash flow statement data as determined in accordance with GAAP.

18
20

The Company believes that the book value of its real estate assets, which
reflects the historical costs of such real estate assets less accumulated
depreciation, is not indicative of the current market value of its Properties.
Historical operating results are not necessarily indicative of future operating
results.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

GENERAL

The Company, which has elected to qualify as a real estate investment trust
under the Internal Revenue Code of 1986, acquires and manages net-leased
commercial properties. The Company has operated as a REIT since October 1993
when it initially issued 9.3 million common shares, approximately 169,000
special limited partnership units (which are exchangeable for an equivalent
number common shares) and approximately $1.9 million in 7.75% subordinated notes
due in October 2000.

As of December 31, 1999, the Company owned (or had interests in) 66 real
estate properties. During 1999, the Company purchased seven properties,
including joint venture investments, for $142.7 million.

During 1999, the Company sold four properties to the Net Partnerships for
$26.9 million, which resulted in a gain of approximately $2.5 million. Also, the
Company purchased two properties from the Net Partnerships for $13.5 million.

LIQUIDITY AND CAPITAL RESOURCES

Since becoming a public company, the Company's principal source of capital
for growth has been the public and private equity markets, selective secured
indebtedness, its unsecured credit facility and issuance of OP Units.

The Company's current $100 million unsecured credit facility, which is
scheduled to expire in July 2001, has made available funds to finance
acquisitions and meet any short-term working capital requirements. As of
December 31, 1999, the weighted average interest rate on outstanding borrowing
was 7.52%.

Since its formation in 1993, the Company has raised, through the issuance
of common shares, preferred shares and OP Units, aggregate capital of
approximately $130.2 million for the purposes of retiring indebtedness and
acquiring properties. In addition, the Company has purchased $77.6 million in
real estate through the direct issuance of its common shares and OP Units.

Dividends. In connection with its intention to continue to qualify as a
REIT for Federal income tax purposes, the Company expects to continue paying
regular dividends to its shareholders. These dividends are expected to be paid
from operating cash flows which are expected to increase due to property
acquisitions and growth in rental revenues in the existing portfolio and from
other sources. Since cash used to pay dividends reduces amounts available for
capital investments, the Company generally intends to maintain a conservative
dividend payout ratio, reserving such amounts as it considers necessary for the
expansion of Properties in its portfolio, debt reduction, the acquisition of
interests in new properties as suitable opportunities arise, and such other
factors as the Board of Trustees considers appropriate.

Cash dividends paid to common shareholders increased to $20.5 million in
1999, compared to $19.6 million in 1998 and $12.8 million in 1997. The Company's
dividend and distribution FFO payout ratio for 1999, 1998, and 1997 was
approximately 72.6%, 74.8%, and 74.1% respectively.

Although the Company receives most of its rental payments on a monthly
basis, it intends to continue paying dividends quarterly. Amounts accumulated in
advance of each quarterly distribution are invested by the Company in short-term
money market or other suitable instruments.

The Company anticipates that cash flows from operations will continue to
provide adequate capital to fund its operating and administrative expenses,
regular debt service obligations and all dividend payments in accordance with
REIT requirements in both the short-term and long-term. In addition, the Company
anticipates that cash on hand, borrowings under its unsecured credit facility,
issuance of equity and debt, as well as other debt and equity alternatives, will
provide the necessary capital required by the Company. Cash

19
21

flows from operations as reported in the Consolidated Statements of Cash Flows
increased to $40.1 million for 1999 from $32.0 million for 1998 and $23.8
million for 1997.

UPREIT Structure. The Company's UPREIT structure permits the Company to
effect acquisitions by issuing to a seller of real estate, as a form of
consideration, interests in partnerships controlled by the Company. All of such
interests are redeemable at certain times for common shares on a one-for-one
basis and all of such interests require the Company to pay certain distributions
to the holders of such interests. The Company accounts for these interests in a
manner similar to a minority interest holder. The number of common shares that
will be outstanding in the future should be expected to increase, and minority
interest expense should be expected to decrease, from time to time, as such
partnership interests are redeemed for common shares.

The following table provides certain information with respect to such
partnership interests as of December 31, 1999 (assuming the Company's annual
dividend rate remains at $1.20 per share).

TOTAL
CURRENT CURRENT
TOTAL ANNUALIZED ANNUALIZED
REDEEMABLE FOR NUMBER AFFILIATE PER UNIT DISTRIBUTION
COMMON SHARES : OF UNITS UNITS DISTRIBUTION ($000)
- --------------- --------- --------- ------------ ------------

At any time........................................ 3,975,395 1,317,759 $1.20 $4,770
At any time........................................ 1,273,196 120,374 1.08 1,375
At any time........................................ 133,332 52,144 1.12 149
January 2003....................................... 17,901 -- -- --
March 2004......................................... 43,734 -- 0.27 12
March 2004......................................... 27,314 -- -- --
November 2004...................................... 29,976 2,856 -- --
March 2005......................................... 29,384 -- -- --
January 2006....................................... 187,163 416 -- --
February 2006...................................... 33,197 1,743 -- --
May 2006........................................... 9,368 -- 0.29 3
--------- --------- ----- ------
Total.................................... 5,759,960 1,495,292 $1.10 $6,309
========= ========= ===== ======

Affiliate units, which are included in total units, represent OP Units held
by two executive officers (including their affiliates) of the Company.

FINANCING

Revolving Credit Facility. The Company's $100 million unsecured credit
facility bears interest at 137.5 basis points over LIBOR and has an interest
rate period of one, three, or six months, at the option of the Company. The
credit facility contains various leverage, debt service coverage, net worth
maintenance and other customary covenants. Approximately $11.5 million was
available to the Company at December 31, 1999. The amount of available
borrowings can increase by identifying additional unencumbered properties as
eligible for the computation of the borrowing base which supports the credit
facility. As of December 31, 1999 approximately $70.9 million was outstanding.

Debt Service Requirements. The Company's principal liquidity needs are the
payment of interest and principal on outstanding indebtedness. As of December
31, 1999, a total of forty-eight properties were subject to outstanding
mortgages which had an aggregate principal amount of $299.4 million. The
weighted average interest rate on the Company's debt, including line of credit
borrowings, on such date was approximately 7.79%. Approximate balloon payment
amounts, including subordinated notes and excluding line of credit borrowings,
having a weighted average interest rate of 8.13% due the next five calendar
years are as follows: $15.1 million in 2000; $1.0 million in 2001; $10.6 million
in 2002; $0 in 2003 and $25.3 million in 2004. The ability of the Company to
make such balloon payments will depend upon its ability to refinance the
mortgage related thereto, sell the related property, have available amounts
under its unsecured credit facility or access

20
22

other capital. The ability of the Company to accomplish such goals will be
affected by numerous economic factors affecting the real estate industry,
including the availability and cost of mortgage debt at the time, the Company's
equity in the mortgaged properties, the financial condition of the Company, the
operating history of the mortgaged properties, the then current tax laws and the
general national, regional and local economic conditions. Subsequent to year end
the Company refinanced a $13.1 million, 8.875% balloon payment due in 2000 with
a $17 million, 8.1% mortgage that requires monthly principal and interest
payments of $126,000 with a balloon payment of $15.2 million due in February,
2010.

Lease Obligations. Since the Company's tenants bear all or substantially
all of the cost of property maintenance and capital improvements, the Company
does not anticipate significant needs for cash for property maintenance or
repairs. The Company generally funds property expansions with additional secured
borrowings, the repayment of which is funded out of rental increases under the
leases covering the expanded properties.

Shares Repurchase. The Company's Board of Trustees has authorized the
Company to repurchase, from time to time, up to 2,000,000 common shares
depending on market conditions and other factors. As of December 31, 1999, the
Company had repurchased and retired 1,008,239 common shares, at an average price
of approximately $10.71 per common share. Through February 29, 2000, the Company
has repurchased 1,200,897 common shares at a weighted average price of $10.61.

IMPACT OF YEAR 2000

The Year 2000 compliance issue concerns the inability of computer systems
to accurately calculate, store or use a date after 1999. This could result in a
system failure or miscalculations causing disruptions of operations. The Year
2000 issue affects virtually all companies and organizations.

The Company took the necessary steps to understand the nature and extent of
the work required to make its core information computer systems and
non-information embedded systems Year 2000 compliant. The Company determined
that it will not be necessary to significantly modify, update or replace its
computer hardware and software applications.

The vendor that provides the Company's existing general ledger software has
released a Year 2000 compliant version of its product which the Company is
currently using. The cost of the general ledger system did not have a material
effect on the Company's financial condition or results of operations.

The Company's Properties, which have no scheduled lease expirations prior
to August 17, 2000, are subject to net leases and accordingly the Year 2000
compliance of embedded systems (e.g., security, HVAC, fire and elevator systems)
are the responsibility of the tenants. The Company has contacted each of its
tenants asking them to identify and evaluate the changes and modifications
necessary to make these systems compliant for Year 2000 processing. The costs
associated with the effort to make the embedded systems Year 2000 compliant are
the tenant's responsibility. However, no assurances can be given that the
Properties embedded systems would be Year 2000 compliant and compliance costs,
if any, incurred by the Company would not be significant.

The Company contacted significant third-party service providers and vendors
with which it does business to determine the efforts being made on their part
for compliance. The Company attempted to receive compliance certificates from
all third parties that have a material impact on the Company's operations, but
no assurance can be given with respect to the cost or timing of such efforts or
the potential effects of any failure to comply.

To date there have been no situations, that the Company is aware of, where
the Year 2000 issues caused a computer system that affects the Company or any of
the Properties to function improperly.

Management will continue to monitor the Company's entire Year 2000
compliance function.

21
23

RESULTS OF OPERATIONS ($000)

INCREASE
(DECREASE)
----------------------
SELECTED INCOME STATEMENT DATA 1999 1998 1997 1999-1998 1998-1997
------------------------------ ------- ------ ------ --------- ---------

Total revenues............................ $77,300 65,117 43,569 $12,183 $21,548
Total expenses............................ 54,642 45,059 32,862 9,583 12,197
Interest................................ 29,099 23,055 16,644 6,044 6,411
Depreciation & amortization............. 18,000 15,083 10,608 2,917 4,475
General & administrative................ 4,687 4,518 3,644 169 874
Property operating...................... 1,865 857 922 1,008 (65)
Transactional expenses.................. -- 559 -- (559) 559
Net Income................................ $21,347 15,737 8,593 $ 5,610 $ 7,144

Changes in the results of operations for the Company are primarily due to
the growth of its portfolio and costs associated with such growth. The increase
in interest expense due to the growth of the Company's portfolio has been offset
by a reduction in the weighted average interest rate from 8.17% as of December
31, 1997 to 7.79% at December 31, 1999 due to debt refinancings, repayments,
lower variable interest rates negotiated on the credit facility and lower
interest rates on new debt incurred by the Company. The Company's general and
administrative expenses have decreased as a percentage of total revenue to 6.1%
in 1999 from 6.9% in 1998 and 8.4% in 1997 due to the growth of the Company's
portfolio relative to these expenses. The increase in property operating expense
in 1999 relates to costs incurred relating to a property that was vacant through
October 1999 and a second property in which the Company has a level of operating
expense responsibility. Transactional expenses in 1998 relate to costs incurred
in an abandoned private equity placement. Net income increased in 1999 due to
the impact of items discussed above plus $5,127 in gains on sales of real
estate. The increase in 1998 net income relates to the impact of items discussed
above.

FUNDS FROM OPERATIONS

The Company believes that Funds From Operations ("FFO") enhances an
investor's understanding of the Company's financial condition, results of
operations and cash flows. The Company believes that FFO is an appropriate
measure of the performance of an equity REIT, and that it can be one measure of
a REIT's ability to make cash distributions. FFO is defined in the October 1999
"White Paper", issued by the National Association of Real Estate Investment
Trusts, Inc. ("NAREIT") as "net income (or loss) (computed in accordance with
generally accepted accounting principles ("GAAP"), excluding gains (or losses)
from sales of property, plus real estate depreciation and amortization and after
adjustments for unconsolidated partnerships and joint ventures." The Company
elected to early adopt the clarification contained in the White Paper and has
restated all prior years FFO. The impact of such early adoption was to reduce
FFO in 1998 and 1997 by $559 and $168, respectively. FFO should not be
considered an alternative to net income as an indicator of operating performance
or to cash flows from operating activities as determined in accordance with
GAAP, or as a measure of liquidity to other consolidated income or cash flow
statement data as determined in accordance with GAAP.

22
24

The following table reflects the calculation of the Company's FFO and cash
flow activities for each of the years in the three year period ended December
31, 1999 ($000):

1999 1998 1997
--------- --------- ---------

Net income.............................................. $ 21,347 $ 15,737 $ 8,593
Depreciation and amortization of real estate.......... 18,000 15,083 10,608
Minority interest's share of net income............... 6,226 3,933 2,442
Loss from debt restructuring.......................... -- -- 3,189
(Gain) loss on sale of property....................... (5,127) 388 (3,517)
Joint venture adjustment.............................. 206 -- --
--------- --------- ---------
Funds From Operations.............................. $ 40,652 $ 35,141 $ 21,315
========= ========= =========
Cash flows from operating activities.................... $ 40,119 $ 32,008 $ 23,823
Cash flows from investing activities.................... (64,942) (111,080) (110,767)
Cash flows from financing activities.................... 22,576 86,516 88,116

The Company's dividend and distribution FFO payout ratio was 72.6%, 74.8%
and 74.1% for the years ended December 31, 1999, 1998 and 1997 respectively.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

The Company's exposure to market risk relates to its variable rate
unsecured credit facility. As of December 31, 1999 and 1998 the Company's
variable rate indebtedness represented 19.1% and 14.9% of total long-term
indebtedness, respectively. During 1999 and 1998, this variable rate
indebtedness had a weighted average interest rate of 7.52% and 7.50%,
respectively. Had the weighted average interest rate been 100 basis points
higher the Company's net income would have been reduced by $514,000 and $350,000
in 1999 and 1998, respectively.

23
25

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES

INDEX

PAGE
-----

Independent Auditors' Report................................ 25
Consolidated Balance Sheets as of December 31, 1999 and
1998...................................................... 26
Consolidated Statements of Income for the years ended
December 31, 1999, 1998 and 1997.......................... 27
Consolidated Statements of Changes in Shareholders' Equity
for the years ended December 31, 1999, 1998 and 1997...... 28
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997.......................... 29
Notes to Consolidated Financial Statements.................. 30-43
Financial Statement Schedule
Schedule III -- Real Estate and Accumulated Depreciation.... 44-45

24
26

INDEPENDENT AUDITORS' REPORT

The Shareholders
Lexington Corporate Properties Trust:

We have audited the consolidated financial statements of Lexington
Corporate Properties Trust and consolidated subsidiaries as listed in the
accompanying index. In connection with our audits of the consolidated financial
statements, we also have audited the financial statement schedule as listed in
the accompanying index. These consolidated financial statements and the
financial statement schedule are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements and the financial statement schedule based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Lexington
Corporate Properties Trust and consolidated subsidiaries as of December 31, 1999
and 1998, and the results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 1999 in conformity with
generally accepted accounting principles. Also in our opinion, the related
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in all
material respects, the information set forth therein.

KPMG LLP

New York, New York
January 21, 2000

25
27

LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
($000 EXCEPT PER SHARE AMOUNTS)
DECEMBER 31,

1999 1998
-------- --------

ASSETS
Real estate, at cost:
Buildings and building improvements....................... $588,866 $578,836
Land and land estates..................................... 88,561 85,781
Land improvements......................................... 3,154 2,831
Fixtures and equipment.................................... 8,345 8,345
-------- --------
688,926 675,793
Less: accumulated depreciation............................ 82,334 66,076
-------- --------
606,592 609,717
Cash and cash equivalents................................... 8,837 11,084
Restricted cash............................................. 2,470 3,545
Deferred expenses (net of accumulated amortization of $4,513
in 1999 and $3,515 in 1998)............................... 5,508 4,942
Rent receivable............................................. 14,108 12,436
Escrow deposits............................................. -- 104
Investment in joint ventures................................ 11,523 --
Other assets, net........................................... 7,443 5,179
-------- --------
$656,481 $647,007
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Mortgages payable........................................... $299,360 $299,687
Credit facility borrowings.................................. 70,921 52,621
Subordinated notes payable, including accrued interest...... 1,973 1,973
Origination fees payable, including accrued interest........ 6,781 5,849
Accounts payable and other liabilities...................... 3,917 5,180
Accrued interest payable.................................... 2,251 2,172
-------- --------
385,203 367,482
Minority interests.......................................... 66,303 74,381
-------- --------
451,506 441,863
-------- --------
Commitments and Contingencies (note 8)
Preferred shares, par value $0.0001 per share; authorized
10,000,000 shares. Class A Senior Cumulative Convertible
Preferred, liquidation preference $25,000, 2,000,000
shares issued and outstanding............................. 24,369 24,369
-------- --------
Common shares, par value $0.0001 per share; 287,888 shares
issued and outstanding, liquidation preference $3,886..... 3,809 --
-------- --------
Shareholders' equity:
Common shares, par value $0.0001 per share, authorized
40,000,000 shares, 16,905,285 and 17,103,532 shares
issued and outstanding in 1999 and 1998, respectively... 2 2
Additional paid-in-capital................................ 240,339 241,924
Deferred compensation, net................................ (701) --
Accumulated distributions in excess of net income......... (60,852) (59,155)
-------- --------
178,788 182,771
Less: notes receivable from officers/shareholders......... (1,991) (1,996)
-------- --------
Total shareholders' equity......................... 176,797 180,775
-------- --------
$656,481 $647,007
======== ========

See accompanying notes to consolidated financial statements.
26
28

LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
($000 EXCEPT PER SHARE AMOUNTS)
YEARS ENDED DECEMBER 31,

1999 1998 1997
---------- ---------- ----------

Revenues:
Rental............................................... $ 75,760 $ 62,846 $ 42,493
Interest and other................................... 1,540 2,271 1,076
---------- ---------- ----------
77,300 65,117 43,569
---------- ---------- ----------
Expenses:
Interest expense..................................... 29,099 23,055 16,644
Depreciation and amortization of real estate......... 18,000 15,083 10,608
Amortization of deferred expenses.................... 991 987 876
General and administrative expenses.................. 4,687 4,518 3,644
Property operating expenses.......................... 1,865 857 922
Transactional expenses............................... -- 559 --
Property arbitration litigation expense.............. -- -- 168
---------- ---------- ----------
54,642 45,059 32,862
---------- ---------- ----------
Income before gain (loss) on sale of properties,
minority interests and extraordinary item............ 22,658 20,058 10,707
Gain (loss) on sale of properties...................... 5,127 (388) 3,517
---------- ---------- ----------
Income before minority interests and extraordinary
item................................................. 27,785 19,670 14,224
Minority interests..................................... 6,438 3,933 2,442
---------- ---------- ----------
Income before extraordinary item....................... 21,347 15,737 11,782
Extraordinary item..................................... -- -- 3,189
---------- ---------- ----------
Net income................................... $ 21,347 $ 15,737 $ 8,593
========== ========== ==========
Income per common share -- basic:
Income before extraordinary item....................... $ 1.11 $ 0.79 $ 0.61
Extraordinary item..................................... -- -- (0.28)
---------- ---------- ----------
Net income............................................. $ 1.11 $ 0.79 $ 0.33
========== ========== ==========
Weighted average common shares outstanding............. 16,979,925 16,835,414 11,444,589
========== ========== ==========
Income per common share -- diluted:
Income before extraordinary item....................... $ 1.08 $ 0.78 $ 0.59
Extraordinary item..................................... -- -- (0.27)
---------- ---------- ----------
Net income............................................. $ 1.08 $ 0.78 $ 0.32
========== ========== ==========
Weighted average common shares outstanding............. 24,945,267 21,983,876 11,639,683
========== ========== ==========

See accompanying notes to consolidated financial statements.
27
29

LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
($000 EXCEPT PER SHARE AMOUNTS)
YEARS ENDED DECEMBER 31,

ACCUMULATED NOTES
ADDITIONAL DEFERRED DISTRIBUTIONS RECEIVABLE
NUMBER PAID-IN COMPENSATION, IN EXCESS OF OFFICERS/ TOTAL
OF SHARES AMOUNT CAPITAL NET NET INCOME SHAREHOLDERS EQUITY
---------- ------ ---------- ------------- ------------- ------------ --------

Balance at December 31, 1996.... 9,426,900 $1 $136,956 $ -- $(44,298) $ -- $ 92,659
Net income...................... -- -- -- 8,593 -- 8,593
Dividends paid to common share-
holders ($1.16 per share)..... -- -- -- -- (12,836) -- (12,836)
Dividends paid to preferred
share-holders ($0.91 per
share)........................ -- -- -- -- (916) -- (916)
Deemed dividend related to
issuance of preferred
shares........................ -- -- 3,548 -- (3,548) -- --
Common shares issued, net....... 7,082,710 1 94,965 -- -- -- 94,966
---------- -- -------- -------- -------- ------- --------
Balance at December 31, 1997.... 16,509,610 2 235,469 -- (53,005) -- 182,466
Net income...................... -- -- -- 15,737 15,737
Dividends paid to common share-
holders ($1.17 per share)..... -- -- -- -- (19,633) -- (19,633)
Dividends paid to preferred
share-holders ($1.2285 per
share)........................ -- -- -- -- (2,254) -- (2,254)
Common shares issued, net....... 723,797 -- 8,013 -- -- (1,996) 6,017
Common shares repurchased and
retired....................... (129,875) -- (1,558) -- -- -- (1,558)
---------- -- -------- -------- -------- ------- --------
Balance at December 31, 1998.... 17,103,532 2 241,924 -- (59,155) (1,996) 180,775
Net income...................... -- -- -- 21,347 -- 21,347
Dividends paid to common share-
holders ($1.20 per share)..... -- -- -- (20,524) -- (20,524)
Dividends paid to preferred
share-holders ($1.26 per
share)........................ -- -- -- (2,520) -- (2,520)
Common shares issued, net....... 673,262 -- 8,343 (701) -- 7,642
Common shares repurchased and
retired....................... (871,509) -- (9,928) -- -- -- (9,928)
Repayments on notes............. -- -- -- -- -- 5 5
---------- -- -------- -------- -------- ------- --------
Balance at December 31, 1999.... 16,905,285 $2 $240,339 $ (701) $(60,852) $(1,991) $176,797
========== == ======== ======== ======== ======= ========

See accompanying notes to consolidated financial statements.
28
30

LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
($000'S)
YEARS ENDED DECEMBER 31,

1999 1998 1997
--------- --------- ---------

Cash flows from operating activities:
Net income................................................ $ 21,347 $ 15,737 $ 8,593
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization.......................... 18,991 16,070 11,484
Minority interests..................................... 6,438 3,933 2,442
Loss (gain) on sale of properties...................... (5,127) 388 (3,517)
Other non-cash charges................................. 244 75 83
Extraordinary item..................................... -- -- 3,189
Equity in earnings of joint ventures................... (25) -- --
Increase (decrease) in accounts payable and other
liabilities.......................................... (305) (292) 3,280
Other adjustments, net................................. (1,444) (3,903) (1,731)
--------- --------- ---------
Net cash provided by operating activities......... 40,119 32,008 23,823
--------- --------- ---------
Cash flows from investing activities:
Net proceeds from sale of properties...................... 31,548 24,113 21,362
Proceeds from sale of joint venture interest.............. 10,781 -- --
Investment in real estate................................. (102,987) (135,193) (132,129)
Investments in joint ventures............................. (4,284) -- --
--------- --------- ---------
Net cash used in investing activities............. (64,942) (111,080) (110,767)
--------- --------- ---------
Cash flows from financing activities:
Proceeds of mortgages and notes payable................... 74,375 160,483 130,942
Dividends to common and preferred shareholders............ (23,044) (21,887) (13,752)
Principal payments on debt, excluding normal
amortization........................................... (5,513) (64,412) (112,451)
Principal amortization payments........................... (10,468) (6,939) (5,950)
Proceeds from the issuance of limited partnership units... -- 23,449 --
Common shares issued, net of offering costs............... 4,676 293 75,133
Preferred shares issued, net of offering costs............ -- -- 24,369
Prepayment premium on early retirement of debt............ -- -- (3,560)
Cash distributions to minority interests.................. (6,533) (4,381) (2,034)
Decrease (increase) in escrow deposits.................... 104 1,145 (1,145)
Increase in deferred expenses............................. (1,718) (1,631) (1,687)
Decrease (increase) in restricted cash.................... 745 1,954 (1,749)
Common shares repurchased................................. (9,928) (1,558) --
Other..................................................... (120) -- --
--------- --------- ---------
Net cash provided by financing activities......... 22,576 86,516 88,116
--------- --------- ---------
Change in cash and cash equivalents......................... (2,247) 7,444 1,172
Cash and cash equivalents, beginning of year................ 11,084 3,640 2,468
--------- --------- ---------
Cash and cash equivalents, end of year...................... $ 8,837 $ 11,084 $ 3,640
========= ========= =========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest.................... $ 29,157 $ 21,916 $ 15,801
========= ========= =========
Cash paid during the year for taxes....................... $ 115 $ 261 $ 106
========= ========= =========

See accompanying notes to consolidated financial statements.
29
31

LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($000'S EXCEPT PER SHARE DATA)

(1) THE COMPANY

Lexington Corporate Properties Trust, (the "Company"), is a Maryland
statutory real estate investment trust ("REIT") that acquires, owns, and manages
a geographically diversified portfolio of net leased office, industrial and
retail properties. As of December 31, 1999 the Company owned or had interests in
66 properties in 28 states. The real properties owned by the Company are subject
to triple net leases to corporate tenants.

The Company's Board of Trustees had authorized the Company to repurchase,
from time to time, up to 2,000,000 common shares, depending on market conditions
and other factors. As of December 31, 1999, the Company repurchased and retired
1,008,239 common shares at an average price of approximately $10.71 per common
share.

(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis Of Presentation and Consolidation. The Company's consolidated
financial statements are prepared on the accrual basis of accounting. The
financial statements reflect the accounts of the Company and its controlled
subsidiaries, including Lepercq Corporate Income Fund L.P. ("LCIF") and Lepercq
Corporate Income Fund II L.P. ("LCIF II"). The Company is the sole general
partner and majority limited partner of LCIF and LCIF II.

Real Estate. Real estate assets are stated at cost, less accumulated
depreciation and amortization. If there is an event or change in circumstance
that indicates an impairment in the value of a property has occurred, the
Company's policy is to assess any impairment in value by making a comparison of
the current and projected operating cash flows of each such property over its
remaining useful life, on an undiscounted basis, to the carrying amount of the
property. If such carrying amounts are in excess of the estimated projected
operating cash flows of the property, the Company would recognize an impairment
loss equivalent to an amount required to adjust the carrying amount to its
estimated fair market value. No such impairment loss has occurred.

Depreciation is determined by the straight-line method over the remaining
estimated economic useful lives of the properties. The Company generally
depreciates buildings and building improvements over a 40-year period, land
improvements over a 20-year period, and fixtures and equipment over a 12-year
period.

All direct costs associated with the acquisition of real estate are
capitalized. Expenditures for maintenance and repairs are charged to operations
as incurred. Significant renovations which extend the useful life of the
properties are capitalized.

Investments in joint ventures. The Company accounts for its investments in
non-controlled entities under the equity method.

Revenue. Rental revenue is recognized on a straight-line basis over the
minimum lease terms. The Company's rent receivable primarily represents the
amounts of the excess of rental revenues recognized on a straight-line basis
over the annual rents collectible under the leases.

Deferred Expenses. Deferred expenses are composed principally of debt
placement, mortgage loan and other loan fees, and are amortized using the
straight-line method, which approximates the interest method, over the terms of
the debt instruments.

Tax Status. The Company has made an election to qualify, and believes it
is operating so as to qualify, as a real estate investment trust under the
Internal Revenue Code. A real estate investment trust is generally not subject
to Federal income tax on that portion of its real estate investment trust
taxable income which is distributed to its shareholders, provided that at least
95% of taxable income is distributed. As distributions

30
32
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

have exceeded taxable income, no provision for Federal income taxes has been
made. State income taxes are not significant.

A summary of the average taxable nature of the Company's dividends for the
three years ended December 31 is as follows:

1999 1998 1997
------ ------ ------

Total dividends per share................................ $ 1.20 $ 1.17 $ 1.16
====== ====== ======
Ordinary income.......................................... 83.73% 88.06% 68.91%
20% rate gain............................................ 10.21% -- --
25% rate gain............................................ 6.06% 2.30% --
Percent non-taxable as return of capital................. -- 9.64% 31.09%
------ ------ ------
100.00% 100.00% 100.00%
====== ====== ======

Earnings Per Share. Basic net income per share is computed by dividing net
income reduced by all preferred dividends by the weighted average number of
common shares outstanding during the period. Diluted net income per share
amounts are similarly computed but include the effect, when dilutive, of
in-the-money common share options and the Company's other dilutive securities
which can include operating partnership units, exchangeable notes and
convertible preferred shares. In 1999 preferred shares were not dilutive; in
1998 the exchangeable notes and preferred shares were not dilutive; and in 1997
all the securities were not dilutive.

Cash and Cash Equivalents. The Company considers all highly liquid
instruments with maturities of three months or less from the date of purchase to
be cash equivalents.

Restricted Cash. Includes tenants security deposits and amounts for
certain debt obligations including funding requirements.

Use of Estimates. Management has made a number of 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 consolidated financial statements in conformity with
generally accepted accounting principles. Actual results could differ from those
estimates.

Reclassifications. Certain amounts included in prior years' financial
statements have been reclassified to conform with the current year presentation.

31
33
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

(3) EARNINGS PER SHARE

The following is a reconciliation of numerators and denominators of the
basic and diluted earnings per share computations for each of the years in the
three-year period ended December 31, 1999:

1999 1998 1997
----------- ----------- -----------

BASIC
Income before extraordinary item............ $ 21,347 $ 15,737 $ 11,782
Less cash and deemed dividends attributable
to preferred shares....................... (2,520) (2,478) (4,871)
----------- ----------- -----------
Income attributed to common shareholders
before extraordinary item................. 18,827 13,259 6,911
Extraordinary item.......................... -- -- (3,189)
----------- ----------- -----------
Net income attributed to common
shareholders.............................. $ 18,827 $ 13,259 $ 3,722
=========== =========== ===========
Weighted average number of common shares
outstanding............................... 16,979,925 16,835,414 11,444,589
=========== =========== ===========
Income per common share -- basic:
Income before extraordinary item............ $ 1.11 $ 0.79 $ 0.61
Extraordinary item.......................... -- -- (0.28)
----------- ----------- -----------
Net income.................................. $ 1.11 $ 0.79 $ 0.33
=========== =========== ===========
DILUTED
Income attributed to common shareholders
before extraordinary item................. $ 18,827 $ 13,259 $ 6,911
Add incremental income attributed to assumed
conversion of dilutive securities......... 8,225 3,831 --
----------- ----------- -----------
Income attributed to common shareholders
before extraordinary item................. 27,052 17,090 6,911
Extraordinary item.......................... -- -- (3,189)
----------- ----------- -----------
Net income attributed to common
shareholders.............................. $ 27,052 $ 17,090 $ 3,722
=========== =========== ===========
Weighted average number of shares used in
calculation of basic earnings per share... 16,979,925 16,835,414 11,444,589
Add incremental shares representing:
Shares issuable upon exercise of employee
stock options.......................... 4,194 156,391 195,094
Shares issuable upon conversion of
dilutive securities.................... 7,961,148 4,992,071 --
----------- ----------- -----------
Weighted average number of shares used in
calculation of diluted earnings per common
share..................................... 24,945,267 21,983,876 11,639,683
=========== =========== ===========
Income per common share -- diluted:
Income before extraordinary item............ $ 1.08 $ 0.78 $ 0.59
Extraordinary item.......................... -- -- (0.27)
----------- ----------- -----------
Net income.................................. $ 1.08 $ 0.78 $ 0.32
=========== =========== ===========

32
34
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

(4) INVESTMENTS IN REAL ESTATE

During 1999, 1998 and 1997 the Company made the following acquisitions,
including joint venture acquisitions:

NET
ANNUALIZED RENTABLE
DATE OF ACQUISITION BASE RENT LEASE SQUARE
ACQUISITION TENANT LOCATION COST DECEMBER 31, EXPIRES FEET
- ----------- --------------------------------------- ---------------------- ----------- ------------ ------- ---------

1999
January 20 Corporate Express Office Products, Inc. Henderson, NC $ 7,416 $ 791 01-14 196,946
August 13 NEC America, Inc. Herndon, VA 19,000 2,006 08-09 108,000
September 15 Vastar Resources, Inc. Houston, TX(1) 34,770 3,436 09-09 327,325
October 1 Blue Cross/Blue Shield of South Columbia, SC(1)
Carolina 42,500 4,900 09-09 348,410
December 22 Jones Apparel Group, Inc. Bristol, PA 8,782 970 07-13 96,000
December 28 Boeing Services Corp. Herndon, VA 25,636 2,585 05-08 159,664
December 29 Honeywell Consumer Products Southborough, MA 4,747 412 09-15 57,698
-------- ------- ---------
$142,851 $15,100 1,294,043
======== ======= =========
1998
March 27 Jones Apparel Group, Inc. Bristol, PA $ 12,539 $ 1,224 03-13 255,019
March 27 Fidelity Corporate Real Estate, LLC Hebron, KY 8,077 817 04-07 81,744
March 27 Kelsey-Hayes (Tech I & II) Livonia, MI 16,442 1,637 04-07 180,230
May 11 Eagle Hardware & Garden, Inc. Federal Way, WA 13,751 1,233 08-17 133,861
May 11 Eagle Hardware & Garden, Inc. Anchorage, AK 17,690 1,588 10-17 157,525
May 15 Stone Container Corporation Columbia, SC 4,230 549 08-12 185,960
May 18 The Wackenhut Corporation Palm Beach Gardens, FL 19,817 2,241 02-11 127,855
June 19 Michaels Stores, Inc. Lancaster, CA 15,102 1,430 06-13 431,250
July 2 Fleet Mortgage Group, Inc. Florence, SC 15,061 1,635 06-08 177,747
July 24 Lear Technologies LLC Auburn Hills, MI 13,939 1,365 07-06 183,717
August 27 Kmart Corporation Warren, OH 63,877 8,932 09-07 1,700,000
October 26 Corporate Express Office Products, Inc. Baton Rouge, LA 3,425 368 10-13 65,043
December 31 Upton's, Inc. Columbia, MD 4,880 549 07-09 60,000
-------- ------- ---------
TOTAL $208,830 $23,568 3,739,951
======== ======= =========
1997
February 20 Johnson Controls, Inc. Cottondale, AL $ 2,910 $ 313 02-07 58,800
March 19 Exel Logistics Inc. Various(2) 27,428 3,003 11-06 761,200
May 1 Cymer, Inc. San Diego, CA 7,707 860 12-09 65,755
July 9 Bull HN Info. Systems, Inc. Phoenix, AZ 10,990 1,032 10-05 137,058
July 22 Lockheed Martin Corporation Marlborough, MA 15,541 1,671 12-06 126,000
September 4 FirstPlus Financial Group, Inc. Dallas, TX 32,645 3,557 08-12 247,968
October 31 Ryder Integrated Logistics, Inc. Waterloo, IA 9,321 1,002 07-12 276,480
December 31 Stevens-Arnold, Inc. Milpitas, CA 22,138 2,667 12-05 100,026
December 31 Allied Holdings, Inc. Decatur, GA 14,633 1,530 12-07 112,248
December 31 Circuit City Stores, Inc. Richmond, VA 27,234 2,791 02-10 288,562
December 31 Dana Corp. Gordonsville, TN 3,377 341 08-07 148,000
December 31 Allegiance Healthcare Corp. Bessemer, AL 4,902 472 09-01 123,924
-------- ------- ---------
TOTAL $178,826 $19,239 2,446,021
======== ======= =========

- ---------------
(1) Joint venture acquisitions

(2) Consists of three properties; two located in New Kingston, PA, one in
Mechanicsburg, PA.

33
35
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

The Company sold seven properties in 1999 and one property in each of 1998
and 1997 for an aggregate net selling price of $63,900, $24,100 and $21,400,
respectively, which resulted in a gain in 1999 of $5,127, a 1998 loss of $388
and a gain in 1997 of $3,517.

The following unaudited pro forma operating information for the years ended
December 31, 1999 and 1998 has been prepared as if the acquisitions and
dispositions in 1999 and 1998 had been consummated as of January 1, 1998. The
information does not purport to be indicative of what the operating results of
the Company would have been had the acquisitions and dispositions been
consummated on January 1, 1998. Unaudited pro forma amounts are as follows:

DECEMBER 31, 1999 DECEMBER 31, 1998
----------------- -----------------

Revenues............................................. $78,355 $79,217
Net income........................................... $17,510 $18,904
Net income per common share:
Basic.............................................. $ 0.88 $ 0.98
Diluted............................................ $ 0.88 $ 0.96

(5) INVESTMENT IN JOINT VENTURES

The Company has investments in two real estate joint ventures. The business
of each joint venture is to acquire, finance, hold for investment and sell
single tenant net leased real estate.

Lexington Acquiport Company, LLC

The Company's first joint venture, Lexington Acquiport Company, LLC
("LAC"), is with the Comptroller of the State of New York as Trustee for the
Common Retirement Fund ("CRF"). The Company and CRF will contribute up to
$50,000 and $100,000, respectively, to invest in high quality office and
industrial net leased real estate. The Company's affiliate, Lexington Realty
Advisors, Inc. ("LRA") will earn annual management fees of 2% of rent collected
and acquisition fees equaling 75 basis points of purchase price of each property
investment.

LAC's first investment was a 12-year, $11,009 participating note to
partially fund the purchase of a real estate property. The participating note
has a current annual interest rate of 6.9% and a 50% participation in operating
cash flows of the property, as defined. The note is convertible, at LAC's
option, into an equity position in the underlying property. The underlying
property, which was purchased on September 15, 1999, is a 327,325 square foot
office property located in Houston, Texas net leased to Vastar Resources, Inc.
for annual rental payments of $3,400 through September 2009. The purchase price
of $34,800 was funded through the participating note and a 10-year, $22,800
non-recourse mortgage note bearing interest at 7.58% which provides for annual
principal and interest payments of $2,000 with a balloon payment of $18,200 at
maturity.

34
36
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

Summarized financial information for the underlying property investment as
of and for the period ended December 31, 1999 is as follows:

1999
--------

Real estate, net............................................ $35,113
Other assets................................................ 479
-------
$35,592
=======
Mortgage payable............................................ $22,699
Convertible note payable -- affiliate....................... 11,009
Other liabilities........................................... 147
Equity...................................................... 1,737
-------
$35,592
=======
Rental revenue.............................................. $ 993
Interest expense............................................ (774)
Depreciation of real estate................................. (206)
Other....................................................... (53)
-------
Net loss............................................... $ (40)
=======

Lexington Columbia LLC

The Company's second joint venture formed on December 30, 1999, Lexington
Columbia LLC ("Columbia"), is with a private investor and its sole purpose is to
own a property in Columbia, South Carolina net leased to Blue Cross/Blue Shield
of South Carolina. The purchase price of the property was approximately $42,500
and partially funded through a 10-year $25,300 mortgage note bearing interest at
7.85%. The note provides for annual principal and interest payments of $2,196
with a balloon payment of $22,100 at maturity. The lease, which expires
September 2009, provides for annual rental payment of $4,906. In accordance with
the partnership agreement, net cash flows, as defined, will be allocated 40% to
the Company and 60% to the partner until both parties have received a 12.5%
return on capital. Thereafter cash flows will be distributed 60% to the Company
and to 40% to the partner. LRA will earn annual asset management fees of 2% of
rents collected.

Summarized balanced sheet information for the underlying property
investment as of December 31, 1999 is as follows:

1999
--------

Real estate, net............................................ $42,667
Other assets................................................ 650
-------
$43,317
=======
Mortgage payable............................................ $25,258
Equity...................................................... 18,059
-------
$43,317
=======

35
37
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

Lexington Realty Advisors, Inc.

The Company also has a 99% non-voting ownership interest in LRA, which
provides management services to the above mentioned joint ventures. During 1999,
LRA generated management and acquisition fees of approximately $575 and
reimbursed the Company $543 for payroll costs.

(6) MORTGAGES AND NOTES PAYABLE

The following table sets forth-certain information regarding the Company's
mortgage and notes payable as of December 31, 1999 and 1998:

2000
INTEREST ANNUAL BALLOON
PROPERTY LOCATION 1999 1998 RATE MATURITY DEBT SERVICE PAYMENT
----------------- -------- -------- -------- -------- ------------ --------

Richmond, VA................ $ 13,093 $ 13,093 8.875% 03-01-00 $13,384 $ 13,093
Credit Facility (a)......... 70,921 52,621 7.520% 07-24-01 5,333 70,921
Bessemer, AL................ 1,000 1,000 9.500% 09-01-01 95 1,000
Tampa, FL (Queen Palm
Dr.)(c)................... 4,223 4,290 7.050% 08-15-02 367 4,020
Tampa, FL (North 30th) (c).. 5,467 5,697 7.050% 08-15-02 624 4,768
Gordonsville, TN............ 1,070 1,158 9.500% 10-01-02 194 771
Bakersfield, CA............. 1,862 -- 9.350% 12-01-02 405 1,064
Columbia, MD................ 1,680 1,980 10.750% 07-20-03 521 --
Oxon Hill, MD............... 1,419 1,702 6.250% 03-01-04 381 --
Mechanicsburg, PA (3 Exel
properties) (d)........... 25,000 25,000 8.000% 03-20-04 2,000 25,000
Brownsville, TX............. 770 852 8.375% 11-01-04 150 260
Rockville, MD............... 927 1,061 8.820% 03-01-05 221 --
REMIC Financing (b)......... 66,258 67,173 8.100% 05-25-05 6,353 60,001
Salt Lake City, UT.......... 9,633 10,911 7.870% 10-01-05 2,099 --
Laguna Hills, CA............ 3,779 4,113 8.375% 02-01-06 666 1,020
Bethesda, MD................ 3,230 -- 9.250% 05-01-06 669 --
Warren, OH.................. 37,250 40,624 7.000% 10-01-07 6,160 --
Palm Beach Gardens, FL...... 13,611 13,756 7.010% 06-15-08 1,105 11,866
Hebron, KY.................. 5,589 5,642 7.000% 10-23-08 451 4,935
Canton, OH.................. 2,368 2,523 9.490% 02-28-09 388 --
Baton Rouge, LA............. 2,134 -- 7.375% 03-01-09 208 1,470
Bristol, PA................. 6,518 -- 7.250% 04-01-09 571 5,228
Livonia, MI................. 11,427 -- 7.800% 04-01-09 992 10,236
Henderson, NC............... 4,710 -- 7.390% 05-01-09 417 3,854
Salt Lake City, UT.......... 19,843 21,170 7.610% 10-01-09 2,901 --
Herndon, VA................. 12,324 -- 7.600% 09-01-10 1,107 9,740
Honolulu, HI................ 5,536 5,901 10.250% 10-01-10 841 --
Dallas, TX.................. 22,774 22,800 7.490% 12-31-12 2,020 15,961
Lancaster, CA............... 11,112 11,224 7.020% 09-01-13 900 8,614
Franklin, NC................ 2,218 2,250 8.500% 04-01-15 236 --
Southborough, MA............ 2,535 -- 7.500% 09-01-15 275 --
Phoenix, AZ (Bank One) (e).. -- 5,538 10.750% -- --

36
38
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

2000
INTEREST ANNUAL BALLOON
PROPERTY LOCATION 1999 1998 RATE MATURITY DEBT SERVICE PAYMENT
----------------- -------- -------- -------- -------- ------------ --------

San Diego, CA (f)........... -- 4,635 7.500% 01-01-11 -- --
Anchorage, AK (f)........... -- 11,267 7.480% 05-11-08 -- --
Federal Way, WA (f)......... -- 8,635 7.480% 05-11-08 -- --
Phoenix, AZ (Bull) (f)...... -- 5,692 8.120% 10-01-05 -- --
-------- -------- ------- ------- --------
Total....................... $370,281 $352,308 7.789% $52,034 $253,822
======== ======== ======= ======= ========

- ---------------
(a) The Company's $100,000 unsecured revolving credit facility, bears interest
at 137.5 basis points over LIBOR and has an interest rate period of one,
three or six months, at the option of the Company. The credit facility
contains various leverage, debt service coverage, net worth maintenance and
other customary covenants all of which the Company is in compliance. Due to
these covenants, approximately $11,486 was available to the Company at
December 31, 1999. The amount of available borrowings can increase by
identifying additional encumbered properties as eligible for the
computation of the borrowing base which supports the credit facility.

(b) The REMIC Financing is secured by mortgages on 17 Properties.

(d) The Notes can be exchanged by the holders for the Company's common shares
at $13 per share beginning on April 1, 2000, subject to adjustment. The
Notes may be redeemed at the Company's option beginning March 2000 at a
price of 103.2% of the principal amount, declining to par after March 2002.
The Notes are subordinated to obligations under the Company's credit
facility.

(e) Mortgage satisfied in 1999.

(f) Mortgage satisfied on sale of property in 1999.

Scheduled principal paydowns of the mortgage notes payable, excluding
borrowings under the credit facility, for the next five years and thereafter are
as follows:

YEARS ENDING SCHEDULED
DECEMBER 31, AMORTIZATION BALLOON TOTAL
- ------------ ------------ -------- --------

2000.............................................. $ 11,416 $ 13,093 $ 24,509
2001.............................................. 12,341 1,000 13,341
2002.............................................. 13,205 10,623 23,828
2003.............................................. 13,609 -- 13,609
2004.............................................. 13,812 25,260 39,072
Thereafter........................................ 52,076 132,925 185,001
-------- -------- --------
$116,459 $182,901 $299,360
======== ======== ========

(7) SUBORDINATED NOTES PAYABLE

The notes bear interest at 7.75% per annum, payable semi-annually on
January 1 and July 1 of each year, and are due on October 12, 2000. The notes
are redeemable at the Company's option, in whole or in part at a redemption
price equal to 100% of the principal amount plus all accrued and unpaid interest
through the date of redemption.

37
39
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

(8) LEASES

Minimum future rental receipts under noncancellable tenant leases assuming
no new or negotiated leases for the next five years and thereafter are as
follows:

YEAR ENDING
DECEMBER 31, AMOUNT
- ------------ --------

2000........................................................ $ 74,007
2001........................................................ 73,754
2002........................................................ 71,571
2003........................................................ 71,910
2004........................................................ 69,954
Thereafter.................................................. 284,659
--------
$645,855
========

The Company entered into a 15-year lease with VarTec, Inc. for its Dallas, Texas
Property. The VarTec lease provides for average annual net rent of $3,485 and
expires September 2015.

The Company leases its corporate headquarters for approximately $263 per
annum through June 30, 2004.

(9) MINORITY INTERESTS

In conjunction with several of the Company's acquisitions, sellers were
given interests in Partnerships controlled by the Company as a form of
consideration. All of such interests are redeemable at certain times for common
shares on a one-for-one basis. As of December 31, 1999, there were 5,759,960 OP
Units outstanding of which 5,381,923 are currently redeemable for common shares.
These units, subject to certain adjustments through the date of conversion, have
distributions per unit in varying amounts up to $1.20 per unit with a weighted
average distribution of $1.10 per unit.

(10) PREFERRED AND COMMON SHARES

The preferred shares are cumulative and convertible at any time at the
holder's option into common shares on a one-for-one basis and are entitled to
quarterly dividends equal to the greater of $.295 per share or 105% of the
quarterly common shares dividend. Currently the dividend is $.315 per share.

During 1997, the Company sold 2,000,000 preferred shares to a single
entity. Based on the market price of the Company's common shares on the dates of
issuance, the Preferred Shares were deemed to have a beneficial conversion
feature equal to the difference between the market price per share and $12.50
per share. This difference, which is non-cash and non-recurring, amounted to
approximately $3.5 million for the year ended December 31, 1997 and has been
recorded as a dividend, with an offset to additional paid-in capital, in the
accompanying statements of changes in shareholders' equity.

The preferred shares may be redeemed by the Company after December 31, 2001
at a premium of 6% over the liquidation preference of $12.50 per share, with
such premium declining to zero on or after December 31, 2011. Each share is
entitled to one vote. In certain instances, including a change of control of the
Company (as defined in the agreement), the holder of the Preferred Shares may
require the Company to redeem its shares at a price equal to $12.75 per share
plus any accrued dividends.

38
40
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

During 1999, the Company issued 287,888 common shares in a transaction
which raised approximately $3,886. The holders of the common shares have agreed
not to sell more than 20% of the common shares each year for a five year period.
On the fifth anniversary of the transaction, the holders of the common shares
have the right to put to the Company their shares, up to 287,888, at $13.50 per
share.

(11) LEGAL PROCEEDINGS

The Company is involved in various legal actions arising in the ordinary
course of business. In the opinion of management, the ultimate disposition of
these matters will not have a material adverse effect on the Company's
consolidated financial position, results of operations or liquidity.

(12) BENEFIT PLANS

The Company maintains a common share option plan pursuant to which
qualified and non-qualified options may be issued. In 1998 the number of options
that can be issued under the plan were increased by 800,000. Options granted
under the plan generally vest over a period of one to four years, expire five
years from date of grant and are exercisable at the market price of the date of
grant.

Share option activity during the periods indicated is as follows:

WEIGHTED-AVERAGE
NUMBER OF EXERCISE PRICE PER
SHARES SHARE
--------- ------------------

Balance at December 31, 1996............................. 775,300 $11.30
Granted................................................ 276,397 12.50
Exercised.............................................. (10,000) 10.09
Forfeited.............................................. (2,500) 14.25
--------- ------
Balance at December 31, 1997............................. 1,039,197 11.62
Granted................................................ 386,600 15.11
Exercised.............................................. (8,230) 10.28
Forfeited.............................................. (7,370) 14.51
--------- ------
Balance at December 31, 1998............................. 1,410,197 12.58
Granted................................................ 286,625 12.06
Exercised.............................................. (5,000) 9.00
Forfeited.............................................. (188,174) 12.13
--------- ------
Balance at December 31, 1999............................. 1,503,648 $12.54
========= ======

At December 31, 1999, the range of exercise prices and weighted-average
remaining contractual life of outstanding options was $11.125 to $15.25 and 2.2
years, respectively. In addition, 941,122 options are still available for grant.

At December 31, 1999, 1998 and 1997, the number of options exercisable was
1,066,917, 1,107,697 and 837,300, respectively, and the weighted-average
exercise price of those options was $11.80, $11.88 and $11.45, respectively.

The per share weighted average fair value of options granted during 1999,
1998 and 1997 were estimated to be $2.41, $3.46, and $3.75, respectively, using
a Black-Scholes option pricing formula. The more significant assumptions
underlying the determination of such fair values include: (i) a risk free
interest rate of 5% in 1999

39
41
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

and 1998 and 6.5% in 1997; (ii) an expected life of five years; (iii) volatility
factors of 16.94%, 18.47% and 17.09% for 1999, 1998 and 1997, respectively; (iv)
and actual dividends paid.

The Company has elected to adopt the disclosure only provisions of SFAS No.
123. Accordingly no compensation cost has been recognized with regard to options
granted in the accompanying consolidated statements of income. If stock based
compensation cost had been recognized based upon the fair value at the date of
grant for options awarded in 1999, 1998 and 1997 the Company's pro forma net
income and pro forma net income per share would have been:

1999 1998 1997
------- ------ ------

Pro forma net income.................................... $20,384 $14,737 $8,276
Pro forma net income per share
Basic................................................. $ 1.05 $ 0.73 $ 0.30
Diluted............................................... $ 1.04 $ 0.73 $ 0.29

The Company has a 401(k) retirement savings plan covering all eligible
employees. The Company will match 25% of the first 4% of employee contributions.
In addition, based on its profitability, the Company may make a discretionary
contribution at each fiscal year end to all eligible employees. The matching and
discretionary contributions are subject to vesting under a schedule providing
for 25% annual vesting starting with the first year of employment and 100%
vesting after four years of employment. Approximately $98, $77 and $80 were
contributed in 1999, 1998 and 1997, respectively.

(13) RELATED PARTY TRANSACTIONS

The Company has been granted an option by the LCP Group, L.P. ("LCP"),
exercisable any time, to acquire the general partnership interests currently
owned by LCP in two limited partnerships, Net 1 L.P. and Net 2 L.P.
(collectively, the "Net Partnerships'), which own net leased office, industrial
and retail properties. Under the terms of the option, the Company, subject to
review of any such transaction by the independent members of its Board of
Trustees, may acquire the general partnership interests in either or both of the
Net Partnerships at their fair market value based upon a formula relating to
partnership cash flows, with the Company retaining the option of paying such
fair market value in securities of the Company, units representing interests in
partnerships controlled by the Company or cash (or a combination thereof). The
Chairman of the Company is a partner in LCP.

The Company currently provides administrative and acquisition support to
the Net Partnerships and is reimbursed for the costs of such services. The
reimbursements amounted to $435, $393 and $279 for the years ended December 31,
1999, 1998 and 1997, respectively, and are shown net, in the Company's general
and administrative expenses in the accompanying consolidated statements of
income.

The Company sold four properties to the Net Partnerships which are located
in Jacksonville, Alabama (leased to Wal-Mart Stores, Inc.); Columbia, South
Carolina (leased to Stone Container Corp.); San Diego, California (leased to
Cymer, Inc.) and Phoenix, Arizona (leased to Bull HN Information Systems, Inc.)
for an aggregate sales price, which included a $1,200, 8% interest only accruing
5 year note, of approximately $26,900 resulting in a gain of approximately
$2,544. The Company purchased two properties for approximately $13,500 from the
Net Partnerships. These purchases and sales were approved by the independent
members of the Board of Trustees.

The Company also received brokerage commissions relating to other purchase
and sale of properties by the Net Partnerships totaling $175 and $376 in 1999
and 1998, which is included in interest and other income in the accompanying
consolidated statements of income.

40
42
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

In connection with the acquisition of certain properties in 1996, the
Company assumed an obligation to pay LCP an aggregate principal amount of $1,778
for rendering services in connection with the original acquisition of the
properties in 1980 and 1981. Simple interest is payable monthly from available
net cash flow of the respective original properties on the various unpaid
principal portions of the fees, at annual rates ranging from 12.25% to 19%.
Monthly installment payments are to commence at various dates to satisfy
principal and current interest payments as well as any unpaid accrued interest
outstanding.

During 1998, the Company issued 1,187,228 OP Units to the Co-Chief
Executive Officers and an affiliate of one of the Co-Chief Executive Officers in
exchange for their interests in certain partnerships and related contractual
obligations.

During 1998, the Company issued 131,000 common shares to two officers in
exchange for notes aggregating $1,998 which mature on February 14, 2003, bear
interest at 7.6% per annum and are secured by the common shares issued.

(14) FAIR MARKET VALUE OF FINANCIAL INSTRUMENTS

Cash Equivalents and Restricted Cash

The Company estimates that the fair value approximates carrying value due
to the relatively short maturity of the instruments.

Mortgages, Notes and Subordinated Notes Payables

The Company determines the fair value of these instruments based on a
discounted cash flow analysis using a discount rate that approximates the
current borrowing rates for instruments of similar maturities. Based on this,
the Company has determined that the fair value of these instruments approximates
carrying values.

(15) CONCENTRATION OF RISK

The Company seeks to reduce its operating and leasing risks through
diversification achieved by the geographic distribution of its Properties,
avoiding dependency on a single property and the creditworthiness of its
tenants.

For each of the years in the three year period ended December 31, 1999 the
following tenants represented 10% or greater of rental revenue:

1999 1998 1997
---- ---- ----

Northwest Pipeline Corp..................................... 11% 14% 20%
Kmart Corporation........................................... 11% -- --

(16) SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES

During 1999 and 1998, holders of an aggregate of 506,882 and 525,433
partnership units, respectively, redeemed such units for common shares of the
Company. This redemption resulted in an increase in shareholders' equity and a
corresponding decrease in minority interests of $6,532 and $5,650, respectively.

During 1999, the Company issued 69,850 common shares to certain employees
and trustees resulting in $877 of deferred compensation. These common shares
vest ratably over a 2 to 5 year period.

41
43
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

During 1999, the Net Partnerships purchased two of the Company's real
estate properties assuming mortgage debt of approximately $10,156 and issuing a
note payable to the Company for $1,200.

During 1998, in connection with the acquisition of certain properties, the
Company assumed $44,200 in mortgage indebtedness as partial satisfaction of the
purchase price.

During 1998, in connection with the acquisition of certain properties, the
Company issued $28,800 in OP Units as partial satisfaction of the purchase
price. The issuance of these OP Units have been recorded as minority interest in
the accompanying consolidated balance sheets.

During 1998, the Company issued 131,000 common shares, at the current
market price, to two officers in exchange for notes aggregating $1,998 which
mature on February 14, 2003, bear interest at 7.6% per annum and are secured by
the common shares issued.

During 1997, the Company issued 1,284,725 common shares in exchange for all
the shares of another company. The Company acquired three properties valued at
$35,100 less the $15,300 of mortgage indebtedness assumed.

During 1997, in connection with a property acquisition, the Company assumed
approximately $5,900 of first mortgage financing and issued a $600 note to the
seller.

During 1997, in connection with an acquisition of properties involving a
partnership, the Company issued $6,000 in OP Units as partial satisfaction of
the purchase price. The issuance of these OP Units have been recorded as
minority interest in the accompanying consolidated financial statements.

(17) UNAUDITED QUARTERLY FINANCIAL DATA

THREE MONTHS ENDED
-------------------------------------
MARCH 31, JUNE 30,
----------------- ----------------
1999 1998 1999 1998
------- ------ ------ ------

Revenues....................................... $19,161 13,980 18,950 14,994
Net income..................................... $ 4,363 4,062 4,869 3,437
Net income per common share:
Basic..................................... $ 0.22 0.21 0.25 0.17
Diluted................................... $ 0.22 0.20 0.24 0.17

THREE MONTHS ENDED
-------------------------------------
SEPTEMBER 30, DECEMBER 31,
----------------- ----------------
1999 1998 1999 1998
------- ------ ------ ------

Revenues....................................... $19,208 17,155 19,981 18,988
Net income..................................... $ 6,350 4,131 5,765 4,107
Net income per common share:
Basic..................................... $ 0.34 0.21 0.30 0.21
Diluted................................... $ 0.32 0.20 0.30 0.20

The sum of the quarterly income (loss) per common share amounts may not
equal the full year amounts primarily because the computations of the weighted
average number of common shares outstanding for each quarter and the full year
are made independently.

42
44
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
($000'S EXCEPT PER SHARE DATA)

(18) SUBSEQUENT EVENTS (UNAUDITED)

Lexington Acquiport Company, LLC purchased for $26,900 a 221,215 square
foot office property in Ohio net leased to Structural Dynamics Research
Corporation at a current annual net rent of $2,791 through April 30, 2011. The
purchase price was partially funded with a $17,800 mortgage note bearing
interest at 8.17%. The note requires an average monthly principal and interest
payment of $145 with a balloon payment of $12,686 due in January 2012.

The Company refinanced a $13,100, 8.875% balloon payment due in 2000 with a
$17,000, 8.1% mortgage that requires monthly principal and interest payments of
$126 with a balloon payment of $15,200 due in February, 2010.

The Company repaid $2,000 on its unsecured credit facility.

43
45

LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES

REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION
SCHEDULE III ($000)

INITIAL COST TO COMPANY AND GROSS AMOUNT AT WHICH CARRIED AT END OF YEAR(A)

LAND ACCUMULATED
AND BUILDINGS DEPRECIATION
LAND AND AND
DESCRIPTION LOCATION ENCUMBRANCES ESTATES IMPROVEMENTS TOTAL AMORTIZATION
----------- ------------------------ ------------ ------- ------------ -------- -------------

Warehouse & Manufacturing....... Modesto, CA $ 2,072 $ 257 $ 3,809 $ 4,066 $ 1,266
Office.......................... Southington, CT 8,532 3,240 20,440 23,680 7,948
Research & Development.......... Glendale, AZ -- 4,996 24,392 29,388 10,389
Retail/Health Club.............. Countryside, IL 2,349 628 3,722 4,350 1,567
Retail/Health Club.............. Voorhees NJ 2,970 577 4,820 5,397 1,921
Retail/Health Club.............. DeWitt, NY 1,796 445 3,043 3,488 1,214
Warehouse & Distribution........ Mansfield, OH 3,246 120 5,464 5,584 1,616
Industrial...................... Marshall, MI 2,176 33 3,378 3,411 1,284
Industrial...................... Marshall, MI 829 14 926 940 353
Retail.......................... Newport, OR 6,078 1,400 7,270 8,670 2,603
Office & Warehouse.............. Memphis, TN 6,562 1,053 11,168 12,221 3,238
Warehouse & Distribution........ Mechanicsburg, PA 10,016 1,439 13,987 15,426 2,910
Office & Warehouse.............. Tampa, FL 4,223 1,389 7,629 9,018 2,495
Retail.......................... Klamath Falls, OR 6,907 727 9,160 9,887 2,700
Office.......................... Tampa, FL 5,467 1,900 9,755 11,655 2,782
Warehouse & Industrial.......... Jacksonville, FL -- 157 3,034 3,191 890
Retail.......................... Sacramento, CA 2,314 885 2,705 3,590 1,013
Office.......................... Phoenix, AZ -- 2,804 13,921 16,725 3,857
Retail.......................... Reno, NV 2,003 1,200 1,904 3,104 693
Retail.......................... Las Vegas, NV 1,796 900 1,759 2,659 639
Retail.......................... Rockville, MD 927 -- 1,784 1,784 446
Retail.......................... Oxon Hill, MD 1,419 403 2,765 3,168 580
Retail.......................... Brownsville, TX 770 -- 1,242 1,242 296
Retail.......................... Laguna Hills, CA 3,779 255 5,035 5,290 992
Retail.......................... Riverdale, GA -- 333 2,233 2,566 223
Retail/Health Club.............. Canton, OH 2,368 602 3,819 4,421 382
Office.......................... Salt Lake City, UT 29,476 -- 55,404 55,404 7,747
Manufacturing................... Franklin, NC 2,218 386 3,062 3,448 230
Industrial...................... Plymouth, MI -- 1,461 4,868 6,329 365
Industrial...................... Oberlin, OH 2,205 276 4,515 4,791 339
Retail.......................... Tulsa, OK -- 447 2,432 2,879 402
Retail.......................... Clackamas, OR -- 523 2,847 3,370 470
Retail.......................... Lynwood, WA -- 488 2,658 3,146 439
Industrial...................... Houston, TX -- 217 3,745 3,962 497
Retail.......................... Honolulu, HI 5,536 -- 11,147 11,147 1,366
Warehouse....................... New Kingston, PA
(Silver Springs) 5,498 674 5,360 6,034 374
Warehouse....................... New Kingston, PA
(Cumberland) 11,250 1,380 10,963 12,343 765
Warehouse....................... Mechanicsburg, PA
(Hampden IV) 8,252 1,012 8,039 9,051 561
Office/Research & Development... Marlborough, MA -- 1,707 13,834 15,541 850
Office.......................... Dallas, TX 22,774 3,582 29,063 32,645 1,664
Warehouse....................... Waterloo, IA 4,407 1,025 8,296 9,321 458
Office/Research & Development... Milipitas, CA -- 3,542 18,603 22,145 930
Industrial...................... Gordonsville, TN 1,070 52 3,325 3,377 191
Office.......................... Decatur, GA -- 975 13,677 14,652 684
Office.......................... Richmond, VA 13,093 -- 27,282 27,282 1,692
Industrial...................... Bessemer, AL 1,000 664 4,238 4,902 251
Office/Warehouse................ Bristol, PA -- 2,508 10,031 12,539 439
Office.......................... Hebron, KY 5,589 1,615 6,462 8,077 283
Office.......................... Livonia, MI 5,402 1,554 6,219 7,773 272
Research & Development.......... Livonia, MI 6,025 1,733 6,936 8,669 303

USEFUL LIFE
COMPUTING
DEPRECIATION IN
LATEST INCOME
DATE DATE STATEMENTS
DESCRIPTION ACQUIRED CONSTRUCTED (YEARS)
----------- ---------- ----------- -----------------------

Warehouse & Manufacturing....... Sept. 1986 1970 & 1976 40 & 12
Office.......................... Oct. 1986 1983 40 & 12
Research & Development.......... Nov. 1986 1985 40 & 12
Retail/Health Club.............. Jul. 1987 1987 40 & 12
Retail/Health Club.............. Jul. 1987 1987 40 & 12
Retail/Health Club.............. Aug. 1987 1977 & 1987 40 & 12
Warehouse & Distribution........ Jul. 1987 1970 40, 20 & 12
Industrial...................... Aug. 1987 1968 & 1972 40, 20 & 12
Industrial...................... Aug. 1987 1979 40, 20 & 12
Retail.......................... Sept. 1987 1986 40, 20 & 12
Office & Warehouse.............. Feb. 1988 1987 40
Warehouse & Distribution........ Oct. 1990 1985 & 1991 40
Office & Warehouse.............. Nov. 1987 1986 40 & 20
Retail.......................... Mar. 1988 1986 40
Office.......................... Jul. 1988 1986 40
Warehouse & Industrial.......... Jul. 1988 1958 & 1969 40 & 20
Retail.......................... Oct. 1988 1988 40, 20 & 12
Office.......................... Nov. 1988 1960 & 1979 40
Retail.......................... Dec. 1988 1988 40, 20 & 12
Retail.......................... Dec. 1988 1988 40, 20 & 12
Retail.......................... Aug. 1995 1977 22.375, 16.583 & 15.583
Retail.......................... Aug. 1995 1976 21.292
Retail.......................... Aug. 1995 1973 18.542
Retail.......................... Aug. 1995 1974 20 & 20.5
Retail.......................... Dec. 1995 1985 40
Retail/Health Club.............. Dec. 1995 1987 40
Office.......................... May 1996 1982 25.958
Manufacturing................... Dec. 1996 1996 40
Industrial...................... Dec. 1996 1996 40
Industrial...................... Dec. 1996 1996 40
Retail.......................... Dec. 1996 1981 23.583 & 13.583
Retail.......................... Dec. 1996 1981 23.583 & 13.583
Retail.......................... Dec. 1996 1981 23.583 & 13.583
Industrial...................... Dec. 1996 1981 24.5 & 14.5
Retail.......................... Dec. 1996 1980 24.33
Warehouse.......................
Mar. 1997 1981 40
Warehouse.......................
Mar. 1997 1989 40
Warehouse.......................
Mar. 1997 1985 40
Office/Research & Development... Jul. 1997 1960 & 1988 40
Office.......................... Sept. 1997 1986 40
Warehouse....................... Oct. 1997 1996 & 1997 40
Office/Research & Development... Dec. 1997 1985 40
Industrial...................... Dec. 1997 1983 & 1985 34.75
Office.......................... Dec. 1997 1983 40
Office.......................... Dec. 1997 1990 32.25
Industrial...................... Dec. 1997 1990 33.75
Office/Warehouse................ Mar. 1998 1982 40
Office.......................... Mar. 1998 1987 40
Office.......................... Mar. 1998 1987 & 1988 40
Research & Development.......... Mar. 1998 1987 & 1988 40

44
46
LEXINGTON CORPORATE PROPERTIES TRUST AND CONSOLIDATED SUBSIDIARIES

REAL ESTATE AND ACCUMULATED DEPRECIATION AND AMORTIZATION
SCHEDULE III ($000) -- (CONTINUED)

Office.......................... Palm Beach Gardens, 13,611 3,960 15,923 19,883 647
Warehouse/Distribution.......... Lancaster, CA 11,112 2,028 13,117 15,145 501
Office.......................... Florence, SC -- 3,012 12,067 15,079 452
Industrial...................... Auburn Hills, MI -- 2,788 11,169 13,957 400
Warehouse/Distribution.......... Warren, OH 37,250 10,231 51,280 61,511 2,885
Warehouse/Distribution.......... Baton Rouge, LA 2,134 685 2,748 3,433 82
Retail.......................... Columbia, MD 1,680 1,002 4,016 5,018 100
Retail.......................... Bakersfield, CA 1,862 400 1,619 2,019 362
Retail.......................... Bethesda, MD 3,230 926 2,415 3,341 732
Office.......................... Herndon, VA 12,324 3,820 15,355 19,175 144
Office.......................... Bristol, PA 6,518 1,073 7,709 8,782 8
Office.......................... Southborough, MA 2,535 456 4,291 4,747 4
Warehouse....................... Henderson, NC 4,710 1,475 5,961 7,436 142
Office.......................... Herndon, VA -- 5,127 20,525 25,652 6
-------- ------- -------- -------- -------

Total $299,360 $88,561 $600,365 $688,926 $82,334
======== ======= ======== ======== =======

USEFUL LIFE
COMPUTING
DEPRECIATION IN
LATEST INCOME
DATE DATE STATEMENTS
DESCRIPTION ACQUIRED CONSTRUCTED (YEARS)
----------- ---------- ----------- -----------------------

Office.......................... May 1998 1996 40
Warehouse/Distribution.......... Jun. 1998 1998 40
Office.......................... Jul. 1998 1998 40
Industrial...................... Jul. 1998 1989 & 1998 40
Warehouse/Distribution.......... Aug. 1998 1982 40
Warehouse/Distribution.......... Oct. 1998 1998 40
Retail.......................... Dec. 1998 1983 40
Retail.......................... Feb. 1977 1976 40
Retail.......................... Feb. 1980 1980 40
Office.......................... Aug. 1999 1987 40
Office.......................... Dec. 1999 1998 40
Office.......................... Dec. 1999 1984 40
Warehouse....................... Jan. 1999 1998 40
Office.......................... Dec. 1999 1987 40
Total

- ---------------
(A) The initial cost includes the purchase price paid by the Company and
acquisition fees and expenses. The total cost basis of the Company's
Properties at December 31, 1999 for Federal income tax purposes was $458
million.

Reconciliation of real estate owned:

1999 1998 1997
--------- -------- --------

Balance at the beginning of the year................... $ 675,793 $467,606 $340,669
Additions during year.................................. 115,006 208,187 179,257
Properties sold during year............................ (101,873) -- (21,476)
Property reclassed to held for sale.................... -- -- (30,844)
--------- -------- --------
Balance at end of year................................. $ 688,926 $675,793 $467,606
========= ======== ========

(D) Reconciliation of accumulated depreciation and amortization:

Balance at beginning of year............................ $ 66,076 $ 50,993 $ 51,343
Depreciation and amortization expense................... 18,000 15,083 10,608
Accumulated depreciation of properties sold during
year................................................. (1,742) -- (3,631)
Accumulated depreciation of property reclassed to held
for sale............................................. -- -- (7,327)
-------- -------- --------
Balance at end of year.................................. $ 82,334 $ 66,076 $ 50,993
======== ======== ========

45
47

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE

None.

PART III.

ITEM 10. TRUSTEES AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information regarding trustees and executive officers of the Company
required to be furnished pursuant to this item is set forth in Item 4A of this
report.

ITEM 11. EXECUTIVE COMPENSATION

The information required to be furnished pursuant to this item will be set
forth under the caption "Compensation of Executive Officers" in the Proxy
Statement, and is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information required to be furnished pursuant to this item will be set
forth under the captions "Principal Security Holders" and "Share Ownership of
Trustees and Executive Officers" in the Proxy Statement, and is incorporated
herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information required to be furnished pursuant to this item will be set
forth under the caption "Election of Trustees -- Certain Relationships and
Related Transactions" in the Proxy Statement, and is incorporated herein by
reference.

Note, the Definitive Proxy Statement will be filed with the Securities and
Exchange Commission on or about April 14, 2000.

PART IV.

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

PAGE
----

(a)(1) Financial Statements........................................ 27-44
(2) Financial Statement Schedule................................ 45-46
(3) Exhibits

EXHIBIT NO. EXHIBIT
- ----------- -------

2.1 -- Form of Agreement and Plan of Merger by and among Lexington
Corporate Properties, Inc. (the "Company"), Lepercq
Corporate Income Fund L.P. ("LCIF I") and Lex M-1, L.P.
(filed as Appendix C-I to the Company's Registration
Statement of Form S-4 (File No. 33-66858) (the "Form S-4"))*
2.2 -- Form of Agreement and Plan of Merger by and among the
Company, Lepercq Corporate Income Fund II L.P. ("LCIF II"),
and Lex M-2, L.P. (filed as Appendix C-II to the Form S-4)*
2.3 -- Form of Agreement and Articles of Merger between the Company
and Lexington Corporate Properties -- Maryland, Inc. (filed
as Exhibit 2.3 to Report on 10-K for year ended December 31,
1993 (the "1993 10-K"))*
2.4 -- Agreement and Plan of Merger between the Company and
Lexington Corporate Properties Trust (filed as Exhibit 2.1
to Form 8-K filed 1-16-98.)*
3.1 -- Declaration of Trust of the Company, dated December 31, 1997
(filed as Exhibit 3.1 to Form 8K filed 1-16-98)*

46
48

EXHIBIT NO. EXHIBIT
- ----------- -------

3.2 -- By-Laws of the Company (filed as Exhibit 3.2 to Form 10-K
filed 3-31-98)*
4.1 -- Specimen of Common Shares Certificate of the Trust (filed as
Exhibit 3.2 to Form 10-K filed 3-31-98)*
4.2 -- Form of Indenture between the Company and The Bank of New
York, as Trustee, including the form of 7.75% Subordinated
Note due 2000 (filed as Exhibit 4.2 to the Form S-4)*
10.8 -- Form of 1994 Outside Director Shares Plan of the Company
(filed as Exhibit 10.8 to 1993 10-K)*
10.24 -- Class A Mortgage Note to Pacific Mutual Life Insurance
Company and Lexington Mortgage Company dated May 19, 1995 in
the amount of $34,000,000 (filed as Exhibit 10.24 to Report
on 10-K for year ended December 31, 1995 (the "1995 10-K"))*
10.25 -- Class B Mortgage Note to Pacific Mutual Life Insurance
Company and Lexington Mortgage Company dated May 19, 1995 in
the amount of $18,500,000 (filed as Exhibit 10.25 to the
1995 10-K)*
10.26 -- Class C Mortgage Note to Pacific Mutual Life Insurance
Company and Lexington Mortgage Company dated May 19, 1995 in
the amount of $17,500,000 (filed as Exhibit 10.26 to the
1995 10-K)*
10.28 -- Indenture of Mortgage, Deed of Trust, Security Agreement,
Financing Statement, Fixture Filing and Assignment of
Leases, Rents and Security Deposits to First American Title
Insurance Company and Pacific Mutual Life Insurance Company
and Lexington Mortgage Company dated May 19, 1995 (filed as
Exhibit 10.28 to the 1995 10-K)*
10.29 -- Assignment of Leases, Rents, and Security Deposits to
Pacific Mutual Life Insurance Company and Lexington Mortgage
Company dated May 19, 1995 (filed as Exhibit 10.29 to the
1995 10-K)*
10.30 -- Cash Collateral Account, Security, Pledge and Assignment
Agreement with the Bank of New York, as agent and Pacific
Mutual Life Insurance Company and Lexington Mortgage Company
dated May 19, 1995 (filed as Exhibit 10.30 to the 1995
10-K)*
10.31 -- Trust and Servicing Agreement with Pacific Mutual Life
Insurance Company, LaSalle National Bank and ABN AMRO Bank
N.V. dated May 19, 1995 (filed as Exhibit 10.31 to the 1995
10-K)*
10.33 -- Investment Agreement dated as of December 31, 1996 with Five
Arrows Realty Securities L.L.C. *
10.34 -- Operating Agreement dated as of January 21, 1997 with Five
Arrows Realty Securities L.L.C. *
10.35 -- Articles Supplementary Classifying 2,000,000 shares of
Preferred Shares as Class A Senior Cumulative Convertible
Preferred Shares and 2,000,000 shares of Excess Shares as
Excess Class A Preferred Shares of the Company*
10.37 -- Unsecured Revolving Credit Agreement with Fleet National
Bank as administrative agent for itself and lenders dated
July 22, 1998 in the amount of $100,000,000 (filed as
Exhibit 10.37 to the 1998 10-K)*
10.38 -- Operating Agreement and Management Agreement between the
Company and Lexington Acquiport Company, LLC (filed as
Exhibit 2 to Form 8-K filed August 31, 1999.)*
10.39 -- Form of Employment Agreement between the Company and E.
Robert Roskind dated September 20, 1999
12 -- Statement of Computation of Ratio of Earnings to Fixed
Charges (filed as Exhibit 12 to the Form S-4)*
21 -- List of Subsidiaries of the Company (filed as Exhibit 21 to
Form 10-K filed 3-31-98)*
23 -- Consent of KPMG LLP
27 -- Financial Data Schedule as of and for the year ended
December 31, 1999

- ---------------
* Incorporated by reference.

(b) Reports on Form 8-K and Form 8-K/A

None.

47
49

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.

LEXINGTON CORPORATE PROPERTIES TRUST

BY: /s/ E. ROBERT ROSKIND
------------------------------------
E. Robert Roskind
Chairman

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the Company
and in the capacities and on the date indicated.

SIGNATURE TITLE
--------- -----

/s/ E. ROBERT ROSKIND Chairman of the Board of Trustees and Co-Chief
- --------------------------------------------------- Executive Officer
E. Robert Roskind

/s/ RICHARD J. ROUSE Vice Chairman of the Board of Trustees and
- --------------------------------------------------- Co-Chief Executive Officer
Richard J. Rouse

/s/ T. WILSON EGLIN President and Chief Operating Officer and
- --------------------------------------------------- Trustee
T. Wilson Eglin

/s/ PATRICK CARROLL Chief Financial Officer and Treasurer
- ---------------------------------------------------
Patrick Carroll

/s/ PAUL R. WOOD Vice President, Chief Accounting Officer and
- --------------------------------------------------- Secretary
Paul R. Wood

/s/ CARL D. GLICKMAN Trustee
- ---------------------------------------------------
Carl D. Glickman

/s/ KEVIN W. LYNCH Trustee
- ---------------------------------------------------
Kevin W. Lynch

/s/ JOHN D. MCGURK Trustee
- ---------------------------------------------------
John D. McGurk

/s/ SETH M. ZACHARY Trustee
- ---------------------------------------------------
Seth M. Zachary

DATE: March 15, 2000