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Paul, Hastings, Janofsky & Walker LLP
June 2, 1997
23062.74545
Lexington Corporate Properties, Inc.
355 Lexington Avenue
New York, NY 10017
Ladies and Gentlemen:
We have acted as counsel to Lexington Corporate Properties, Inc., a
Maryland corporation (the "Company"), in connection with the Form S-3
Registration Statement (No. 333-3688) filed by the Company with the Securities
and Exchange Commission (the "Commission") on April 15, 1996 and the
Prospectus and Prospectus Supplement filed with the Commission pursuant to Rule
424(b) of the Securities Act of 1933 and dated June 2, 1997 (collectively, the
"Registration Statement"). In such capacity, you have requested our opinions
concerning (i) the treatment of Lexington Corporate Income Fund L.P. ("LCIF"),
Lexington Corporate Income Fund II L.P. ("LCIF II"), LXP I, L.P. ("LXP I"), LXP
II, L.P. ("LXP II"), Barnhech Montgomery Associates, L.P. ("Montgomery"),
Barngiant Livingston Associates, L.P. ("Livingston"), Barnhale Modesto
Properties, L.P. ("Modesto"), Barnward Brownsville Properties, L.P.
("Brownsville"), Barnvyn Bakersfield Associates, L.P. ("Bakersfield"), and
Barnes Rockshire Associates, L.P. ("Rockshire") as partnerships for Federal
income tax purposes; and (ii) the qualification for Federal income tax purposes
of the Company as a REIT under
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Lexington Corporate Properties, Inc.
June 2, 1997
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the Internal Revenue Code of 1986, as amended, (the "Code"), for its taxable
years ending prior to the date hereof.
In rendering our opinions, we have examined and relied upon the
Registration Statement, the Fifth Amended and Restated Agreement of Limited
Partnership of LCIF, the First Amended and Restated Agreement of Limited
Partnership of Lex M-2, L.P., the Agreement of Limited Partnership of LXP I,
L.P., the Agreement of Limited Partnership of LXP II, L.P., the Third Amended
and Restated Limited Partnership Agreement of Montgomery, the Agreement of
Limited Partnership of Livingston, the Second Amendment to the Agreement of
Limited Partnership of Modesto, the Agreement of Limited Partnership of
Brownsville, the Agreement of Limited Partnership of Bakersfield, the Agreement
of Limited Partnership of Rockshire, the Articles of Incorporation and Bylaws
of the Company, copies of the Company's Federal income tax returns on Form
1120-REIT for its taxable years ending December 31, 1993, December 31, 1994,
and December 31, 1995, the draft Agreement and Plan of Merger between Corporate
Realty Income Trust I ("CRIT") and the Company dated May 16, 1997 as well as
other documents and information we have deemed appropriate.
In addition, we have relied upon the representations of a duly
appointed officer of the Company dated June 2, 1997 (the "Officer's
Certificate") regarding the organization and actual and proposed operation of
the Company. For purposes of our opinions, we have made such factual and legal
inquiries, including examination of the documents set forth above, as we have
deemed necessary or appropriate for purposes of our opinion. However, we have
not made an independent investigation of the facts set forth in any of the
above-referenced documents, including the Officer's Certificate. We have,
consequently, relied upon your representations that the information presented in
such documents or otherwise furnished to us accurately and completely describes
all material facts relevant to our opinion. No facts have come to our
attention, however, that would course us to question the accuracy or
completeness of such facts or documents in a material way. In addition, to the
extent that any of the representations provided to us in the Officer's
Certificate are with respect to matters set
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Lexington Corporate Properties, Inc.
June 2, 1997
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forth in the Code or Treasury Regulations thereunder, we have reviewed with the
individuals making such representations the relevant portion of the Code and
the applicable Regulations.
The opinions are based on the assumption that the Company has operated
and will continue to be operated in the manner described in the Officer's
Certificate, the Registration Statement, and the applicable organizational
documents, and all terms and provisions of such documents have been and will
continue to be complied with. In our examination, we have assumed the
genuineness of all signatures, the legal capacity of natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as certified or photostatic
copies, and the authenticity of the originals of such copies.
Based upon and subject to the foregoing, it is our opinion that:
1. LCIF, LCIF II, LXP I, LXP II, Montgomery, Livingston, Modesto,
Brownsville, Bakersfield, and Rockshire are properly characterized as
partnerships for Federal income tax purposes and not as associations taxable as
corporations or publicly traded partnerships.
2. The Company was organized and has operated in conformity with the
requirements for qualification and taxation as a REIT under the Code commencing
with its taxable year ended December 31, 1993 and the Company's current
organization and method of operation, taking into account the anticipated
merger of CRIT with and into the Company, as set forth in the Officer's
Certificate, the Registration Statement and other applicable documents, should
enable it to continue to meet the requirements for qualification and taxation
as a REIT.
The above opinions are based on the Code, Treasury Regulations
promulgated thereunder, administrative pronouncements and judicial
interpretations thereof, and the applicable laws of the States of Delaware and
Maryland, in each case as in effect on the date hereof, all of which are
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June 2, 1997
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subject to change. An opinion of counsel merely represents counsel's best
judgment with respect to the probable outcome on the merits and is not binding
on the Internal Revenue Service or the courts. Accordingly, there can be no
assurance that the Internal Revenue Service will not take a contrary position,
that the applicable law will not change, or that any such change will not have
retroactive effect. Moreover, the Company's qualification and taxation as a
REIT depends upon the Company's ability to meet, on a continuing basis, through
actual annual operating and other results, the various requirements under the
Code with regard to, among other things, the sources of its gross income, the
composition of its assets, the level of its distributions to stockholders, and
the diversity of its stock ownership. Paul, Hastings, Janofsky & Walker LLP will
not review the Company's compliance with these requirements on a continuing
basis. Accordingly, no assurance can be given that the actual results of the
Company's operations for any one taxable year will satisfy such requirements.
We hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to the reference to us under the caption "REIT
Qualification Requirements" in the Prospectus Supplement.
Very truly yours,
PAUL, HASTINGS, JANOFSKY & WALKER LLP