LXP - Earnings call transcript Q4 2017

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Operator

Good morning and welcome to the Lexington Realty Trust Fourth Quarter 2017 Earnings Conference Call and Webcast. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. I would now like to turn the conference over to Heather Gentry. ahead. go Please

Heather Gentry

statements SEC disclosure regarding within Welcome in XXXX statements operator. was made Lexington Trust our may and Realty conference this call future will results this Private and Reform Thank Certain available constitute meaning Securities Investors are be these call to section and reasonable quarter during on supplemental release Act Lexington the conference and at release that webcast. fourth the detail X-K. morning quarter’s are forward-looking furnished of the of assumptions. www.lxp.com on Form you, website based on to both the believes package results events the the The statements expected distributed Litigation this that earnings XXXX. and

law, factors cause those materially the Lexington does In Lexington reports financial release, to adjusted statements. to non-GAAP forward-looking those and release Presidents, Will. today’s CEO; included James reconciled results. However, risks, Will I quarter directly Except statements. now to SEC a by actual that conference could today’s to of earnings differ implied Lexington’s including results in around as most individual in from to from viewed operations historical not equity-holders numerical presenting and GAAP the Executive described measure. Operating are a from has certain FFO in expressed CFO; On a comparable provide references unitholders earnings adjusted and turn performance, will these or time-to-time undertake the documents future measures diluted press financial Lexington’s Lexington available Johnson, and any supplemental the update all and measures duty performance all Any by investment funds Dudley company those refer such disclosure flow. measure the not files cash be Lara financial with or Mullinix, press an package, required to over company to intended and as basis. fully call, fourth Pat commentary call Eglin, and full-year of on Brendan Carroll, will or position to Vice

Will Eglin

Good to welcome quarter and and Heather. our XXXX earnings webcast. call Thanks, morning fourth

revenue common with We income quarter average higher on common half XXXX selling common expect revised adjusted plan on on diluted from value diluted near-term quarter XXXX. quality by disposition a finished high more adjusted on focused and we multiyear to diluted business. common share was and to a XXXX. and generated to of share. all in in our of rollover per in continued more XXXX Pat company fourth our which represents This speak of for and part costs year borrowing diluted our in strong plan results This of increase FFO guidance noncore net extend $X.XX XXXX guidance come per results. industrial year this company improve ago. the we shareholders successful for FFO year-end XXXX revenues brought the per diluted $X.XX were $X.XX of attributable will $X.XX industrial executed full-year positive full-year in acquiring of We common The on the be year net assumptions. will note FFO holdings three fully our morning the real $X.XX Industrial $X.XX high-quality forth shortly and assets put a lease to We totaled expirations and heavily detail with continued asset end the company effort share to an and concessions to properties maturities. the to range and our extensions, areas dispositions, the quarter company share. overall indicates initial total debt fourth guidance FFO Adjusted despite the company lease income FFO range. we of the than for as common estate, per quite past adjusted Our early XXXX share our as provided per adjusted more noncore similar managing

million, the investment we’ve for assets investment X.X Our years. the in efforts of in to resulted volume million addition square portfolio seen feet of primarily recent industrial highest $XXX the

not tenants for rise and industrial have have seen distribution easily centers concentrated repurposed. been pricing been investment real in of the meaningful in change predominantly recent way yields, mostly have markets newer a to we in stayed investment industrial estate credit treasury that across we believe in activities In spite demand markets leads well-located as strong. properties be Our strong generic secondary can

Given the be we to We make standpoint. fundamentals positive. investment towards though much believe pursue XXXX portfolio environment, total don’t investments in as in robust that it competitive in activity anticipate space quality asset that better as will remained from long-term reshaping we as XXXX our and continue continued risk-adjusted, profile will the warrants the industrial they return pricing to very extent particularly the sense space, was still investment both the this

from is intent to In regards new dispositions dispositions. and to for so Our we investments leverage expect come remain would year-end, to available at neutral capitals primarily cash.

have further sales. vacant revenue. our multi-tenanted, represents and which enhanced Dispositions office, our have largely X% of on including our operations quality short-term and of portfolio assets simplified through centered only specialty the retail, about asset We

single-tenant term, with will related or million and pricing additional similar the we continue sold pleased come and advance substantially these we of although to we to properties were term, in have of representing area extend sale we this ago. these, rolling we a us. risk in year, acquired more a concentration million X% assets office our remains almost leases considerably we to leases through the in sell of half rollover subsequent office as sell We XXXX from disposition vast other revenue to crisis. XXXX over to expenditures part the the roll, our and on for XXXX to fluctuate an are we major achieved portfolio in expiration. of down assets first Currently, ongoing as manage $XXX the program. financial of X.X% the mark-to-market year for in long our or expect Leasing prepare been As majority the of expect of down capital quarter-to-quarter expenditures will XXXX lease assets approximately in short $XXX Once

reduced see relative rental should XX% volume positive thereafter note, portfolio to we believe some we property our and year-end. with brought concessions. leasing as rates On approximately relates sales lease leased it So, to strong a release along at

to of XX%, the office extensions. XXXX leverage more X% increased our XX% basis investments. well as I a positioned were XXXX sheet us and touch coming X% turn rents I a rents efficiently lease our quarter the two on increasing cash before to respectively. on balance for Overall, to renewal briefly Low balance cash and a the sheet GAAP into call Additionally, on during GAAP mainly decreased strong want basis, to discuss Brendan utilize result over but year.

times active our within Given range comfortable year, with debt-to-adjusted X.X year us. the for a leverage net we still EBITDA, ended at

but goal NOI strong NOI and is at unencumbered base quarter-to-quarter our our about to more unencumbered where unsecured is may the of XX% fluctuate our end to debt six Our are also times. today. year Leverage than asset remained we

debt. venture on strategy, and obtained generated secured has mitigated The joint our the the We enhanced one wholly with investment plan year used yields proceeds of and in XX we portfolio down revolving financings sheet in fourth proceeds. balance our of pay office reduce our in million additional approximately our on property credit our owned one office part financing and equity financing property. obtaining other this order risk, facility As quarter, to to

discuss investments, asset the business to And the more management have now our respective and specifics quarter. will three our of that, dispositions heads with We call will over our investment from on Brendan department to activity. I provide turn main to units;

Brendan Mullinix

Lipari had quarter average earlier $XXX properties of another we where X.X%. of and in million leased foot quarter. XXX,XXX a and cap These Indiana. cold acquisition XXX,XXX investment cash we GAAP leased at and Thanks, of leased Caterpillar the in XXXX Michigan, storage for had center a a to for an years; automaker in total center years; Will. during square We distribution Warren, to for seven in bringing to closed Foods acquired Michigan, to XX consisted Three Lafayette, industrial active distribution Romulus, to square-foot X.X% committed assets, facility $XXX our year volume XX rates the approximately million years

years. commitments in We also Winchester, build-to-suits XXXX, our center distribution automaker the a the leased XXXX. in in XX At pipeline for of end we to for number forward one delivery or purchased had same Virginia located

of as were existing compelling a compressed, there were fewer more in in that properties. the active purchase the year. market yields last we we result, And As build-to-suit industrial found opportunities

become While have more our we XXXX forward we have no pipeline, to us. active which in again, bodes believe build-to-suits presently commitments well for started

last our our investments directly purchases, majority While working year favorable focuses still so yields. more can with we of generate builders, on business were strategy

can expected accommodate surrounding has to a with to target totaled During industrial in it projects. location affiliate infrastructures have worked construction be a development the to highway up absorb Columbus, site $X.X X.X The of numerous of feet market phase warehouse distribution million XXX-acre this joint in start industrial million. recent and and venture we make site in site our pursue submarket formed The been to great developer of completed to Ohio quarter, upgrades first fourth whom this of to the past to quick joint a Cleco, park distribution in is we The and venture industrial investment with of have Columbus land make a users. properties. for the times is an parcel space initial the future The which square acquired summer. completions build-to-suit the quarter ready

to the We will and you dispositions. activities on other year updated to investment the I’ll the turn to over call progresses. progress keep the of as discuss our Lara continue park now

Lara Johnson

activity million cash portfolio X.X% in made reshaping of Thanks time $XXX leased respectively. and plan at disposition an the XX properties portfolio of year, cap rates square we single The fourth had quarter, the the the Brendan. and multi-tenanted, result noncore sold million sold X.X $XXX the retail additional of to XXXX. of beginning $XX X.X%, year, At tenant disposing and million of $XXX to GAAP vacant, of of properties disposition a of bringing activity short-term another X.X% feet XX% during total to disposition at our assets X.X%. at XXXX consolidated portfolio left range average office multi-year assets, sale cap for sale our In including vacancy We properties. progress million and the of cash the anticipated was XXXX rate an last in as million of average

So, projected. than had pricing we came in much better

greater at generated effort which collected than forecast reposition we estimated X% the portfolio, with began. be balance the anticipated proceeds GAAP other Additionally, $XXX million to our in from our In ranges plan winding X.X% down year of X.XX% to of office the million sale an to and About cash rate to to of the XX% average we selling $XXX assets. up X.XX%, property further XXXX million we anticipated to had in noncore loan respectively. is when $XXX portfolio, and

program the lease simplify other these some our We noncore Importantly, call will sale to or and X sell expect With that be XX the we with I’ll originated disposition XXXX where enhance build-to-suits we XXXX dispositions the are on the provide and with net of leasing. intermediate along quality further XXXX properties efforts of that, in portfolio. office an firms turn over update believe expect remaining who vacancy, to expanded on single-tenant James of years the focused assets certain will our meaningful gains. multi-tenant which part office of of to to

James Dudley

space square additional million to roughly Thanks, leased quarter X feet. of with Lara. of the fourth feet year leasing plus We strong end in square volume the an million X

term compared lease Our portfolio term a of industrial a was year-end years weighted approximately at leased weighted with our average a At with to end of the was at over of of average portfolio lease XX.X XX% just XX.X% term of X.X the XXX% our lease to weighted average portfolio years years years. year-end, X.X with X.X was leased while years leased compared XX.X XXXX. XXXX office end at

new Statesville, multi-tenant in the Logistics XXX,XXX Texas Geodis XX% and rental quarter. leases feet increases we quarter, XX%, square GAAP driver property. Farmers cash XXX,XXX at Also our of square was and respectively with extension our signed lease of for for the three-year approximately the Carolina North office during at main feet Our Branch,

At second to Our quarter new team of XX% tenants by had be XXXX. Virginia. an excellent sale. has single has end by raise this The non-renewal that at value end securing and now this XXXX, almost leasing square been an done a job year tenant property XX,XXX of tenant XXX% Richmond, asset creating from property office feet for approximately at from one we XXXX occupancy in the at formerly property will taking to marketed

the in of been process will signed to Theseus a marketing cash office Loan Subsequent Litton has Servicing. for approximately $XXX,XXX square the our McDonough, leased at of we [ph] annual XX,XXX There property. are in quarter-end, decline three-year space to rental We which be for lease lease. foot Georgia, an with this property

or tenant of less when we renewals single re-leasing. done little to mitigate to potential. our X.X% downside begin revenue vacancy continue we managing tenant through roll and of We deal have We visibility address. forward proactively to we work tenant lease on great sale a have lease pursue probably than Already XXXX to our currently relationships a through market have

on As with a for Ingalls office feet that’s in negotiations square Mississippi prospective side, Huntington XXXX Pacific tenant feet leased currently underway Union. are office in square it for relates Irving, property and Texas expirations of to Pascagoula, the space our XX,XXX XX,XXX to with

our square through Swiss property the of also currently to office currently as foot through end of June Park, in XXX,XXX Overland Kansas our XX,XXX We as Wallingford, marketing property Connecticut are Re end XXXX foot to leased XM square the XXXX. office leased well

cannot is in the excess $XX mortgage which we means our As Will value a loan the million downside is in risk large previous mentioned mitigated on balance. create calls, event of that on non-recourse property the there of

rent them, on are a in represents third lease expect In addition, XXXX and FedEx facility of lease been we XXX,XXX sale negotiating would long-term lease foot lease extension office they office we about current or with have our with through is what Their secure paying. decrease a from a square a roll. currently of extension possible in Memphis. XXXX If we June

XXXX in September, Plymouth, On respective their the will in until in rolling the Food of the Duncan, lease leases Carolina; industrial be of end Bay side, we Staples Carolina; don’t renewing and terms. South Omnium have Plastic end North any Henderson, Valley Indiana at although not

marketing the continued favorable and assets advanced for outcomes. We and of or for of have made progress we on optimistic demand sale sales on because notice industrial lease strong leasing are these product, vacancy or

and X% portfolio less these of only XXX,XXX properties represent whole, square As a feet overall than revenue.

Touching is to cash and March approximately GAAP entire X, of our foot discuss Sears retail, warehouses, adjusted FFO we on property to our over per stop rent will breaches square and who we the in on the expect lease promising a of to call prospect believe process we financial turn Georgia, and paying in vacant are Additionally, XX,XXX representing who penny of we lease. in briefly XXXX. have space. rent the now results. million located marketing I’ll in Pat in property Albany, the still XXXX one less than Memphis This company rent, a in generated $X.X $X.X share million

Pat Carroll

common $XXX share New Despite compared and heavy generated This the compared company from property to calendar $XXX largely to most for adjusted revenues new or for disposition $X.XX a net leases. year. shareholders diluted common $XX totaled of decrease share. or XXXX the favorably compared in $X.XX income company period increase $X.XX diluted common FFO per revenue, in investments shareholders for or of diluted million $X.XX per to was to $X.XX sale time subject for million quarter diluted gross relates the revenues This $XX with quarter the in period City time Net decrease per was guidance per quality shareholders and attributable throughout to for revenues diluted XXXX. or $X.XX the FFO million share, share $XXX positioned compared coming same line revenue portfolio was share the share $X.XX quarter income Full-year net $XX common over of XXXX notably to change full-year attributable $XX related million for income Gross acquisitions $X.XX common range Thanks, in vacant were repositioning properties $XX totaled has attributable The Adjusted full-year XXXX. diluted XXXX. XXXX. compared the to for million to per diluted $X.XX diluted revenues the to same James. more Gross provided believe XXXX. portfolio $XX gross common range an increase common share, per per quarter We million, million volume, for time and per expected period million compared The common long million, year or primarily to for morning million common was company per of $X.XX common overall land share. same the this the the share or the XXXX. acquisitions to full-year York term. attributable the our in XXXX. diluted improved we Full-year in on totaled common to common $XX is the for to XXXX

at guidance and we provided compared just maturity with million proceeds are earnings to City rate timing have to whether X.X% extend XXXX. limited main with per common rate morning discussed approximately debt. assumptions particularly Same FFO in new adjusted sale our replace we James disposition of with was the with end leasing of fixed not of outcomes to expenses $X.X leasing floating they which to time volume when differences range New is discussed investments, on to leased debt year-end. the NOI. common change million but million up Property reduction disposition $X.XX and initial previous amount in costs and to high store $XXX the The the year-end company of Guidance versus dispositions, to just and diluted in investments. we higher have the ends and as used the are store $X.XX which XXXX. in in as XXXX was FFO low share, visibility call, land and in store As adjusted this and per paid $XX line as total debt of share which over NOI company borrowing quarter, $XXX roughly resulted primary in the include percentage relate line XXXX and down Same our average in of from $XX million $XXX XXXX, in $X.XX the at on FFO diluted roughly XXXX debt million of to the contributed our high York compared company adjusted XXXX. XXXX, XX.X% We same We the the leasing period million our as during brings costs TI operating were to costs XX.X% approximately of XXXX. tenant approximately improvements year-end same guidance

XXXX. million approximately We have budgeted $XX in

expirations. could address Although this we G&A expenses million full-year amount for were came about as quarter; in increase the million. approximately $XX future $X.X at G&A lease

be Our to $XX XXXX expected approximately budget million. is G&A

in have simplifying operations progress on We our costs. good to lowering made and our we continue focus

a seven balance Now, $XXX which of billion approximately had We At years. $X.X we year-end, moving X.X% term cash bears average and balance weighted of cash debt on weighted as approximately consolidated of classified to outstanding a the rate of has average including restricted. interest on the sheet. million had

additional has property interest secured as since average result a financing. last slightly weighted rate Our of increased quarter

end debt-to-adjusted leverage times We investment credit rate the end $XX has revolving times a at EBITDA at quarter the our year-over-year with basis decreased by to $XXX XX end the due outstanding. million the year facility the coverage of points. primarily million during approximately X.X Fixed net year with However, increased on was charge of the activity. X.X at quarter to the repaid

some to on intention revolver pay is down with Our office of our our properties. mortgage proceeds

due of We debt $XX payments bringing during mortgage in a of an non-recourse Currently average of quarter $X coming total XXXX. mortgage to X.X%, the have approximately million. year also million retied at satisfied secured interest aggregate the balloon mortgage $XX.X of weighted during rate we million debt

equity. proceeds the obtained amount XX% fixed consisted unencumbered mortgage opportunity years asset a which million in XX, debt the We construction X.X% to first million of December rate in for average third office million the British property approximately $X.X approximately loan cash in paying that completed average Charlotte, used second the and annual to $XX.X and risk, return in on XXXX an estimated the base we equity. we take rate the XXXX. effort on the financing as cash mitigate In two NOI have on of is XX-year XXXX venture to of North in third-party an million financing, on our approximately attractively was loan. The of was quarter matures has provided. quarter an in our billion, financing, maturities, XXXX priced on fourth Our $X at This which our the is first million XXXX interest AvidXchange XX% properties now and the return assets. In mortgage joint $XX.X in had of joint of venture build-to-suit of Schools a capital Texas of second XX.X an satisfy December mezzanine financing extract debt X.XX%, Completed cash five-year Carolina X.X%. of from of financing lengthen in the maturity Katy, of the the did representing non-recourse fixed and cash XX.X% weighted estimated a our our weighted The quarter we in $XX XXXX. $XX.X an finance

call turn will the I Will. to Now, back over

Will Eglin

Pat. I time. further comments at no Operator, this have Thanks,

So, the of call. to question-and-answer we you the conduct for portion are ready

Operator

Evercore go Instructions] The McGrath from question Please [Operator first comes Sheila of ahead. ISI.

Sheila McGrath

to to over moving in CapEx by of wonder goal us update average past how lease give weighted ‘XX the and the company, and of office shift industrial ‘XX longer profile of morning. could company you versus to expenditure looks years. the partly couple Good I cap lower just if term. an did profile kind time for Will, the a mix you by of the Yes. have partly

Pat Carroll

Pat. CapEx because it’s office that really The is we be more done reduced Hey, ‘XX had we and couple in reduced roll the transformation have budgeted of $XX we’ve to extensions which what industrial Yes. about the expense; the of the our already to we’re estimated of prior. leases in has to million, next to years exposure Sheila, a part compared

Will Eglin

or Over extended been probably has years as in average X.X to years it’s that and term portfolio X.X six has roughly cut five Yes. shrunk half years from about been today. office in weighted about

Sheila McGrath

Okay.

number that TI So, million commissions for includes and XXXX all $XX for the year.

Pat Carroll

Yes, budget of of the the portfolio. the in TI portfolio mean, is expenditures had at portfolio. we ‘XX-year, for vast very office are on and a leased portfolio I small and what the the industrial amount commissions the look the whole and you multi-tenant if majority on

as coming numbers industrial, transform So, will those down. an more you to see we

Sheila McGrath

what like just And shorter leases how industrial mix follow-up That’s a portfolio office, as look of could this the couple of that, and there? if terms progress sell look you’re ago, planning look in term year great. at years does of so versus on a Okay. to you at we targeted acquisitions, of the kind

Will Eglin

the of buy about the of get little this about of XX% year would office. that chance year-end. we industrial as portfolio XX% mix from we as is be we toward And in disposition having than is year in more have of portfolio it XX% can heavier this industrial, and have last And plan derived we roughly thought the we’ve five years, NOI last find a year, Well, industrial doubled. if to the has a amount

So, is that to shift going continue.

Sheila McGrath

or selling FedEx. information? that situation Okay. change there is Is question, said thought And negotiation, that on last the no asset new to just I you under it’s still that that might consider you

Will Eglin

interest ongoing or purchasing occupy or are in with they buildings discussions The continuing Yes. to either expressed an lease and FedEx the perhaps to the subject have it.

So, a discussion that’s continuing. that’s

Operator

of Our Craig Capital go next Please Mailman question comes ahead. Markets. KeyBanc from

Laura Dickson

now investment at is seeing what you’re if I could be on just tough to Well, but kind elaborate terms Laura wondering right was know, continues it primarily Hey, too? and environment you on then in rates Dickson to This like if cap of everyone. forward here of elaborate in like is venture a commitments. opportunities, regards in from joint there the And competition BTS in could or the that build-to-suite you -- improvement Craig.

Pat Carroll

Yes.

So capital and gone cap far, of a even their investments no Yes. industrial change still up, in chasing treasury see lot rates. yields we have

So, there working are on. we’re some things

We commitments presently. have no

to a it’s that preserving certainly up So, would extent little sheet cap favor in balance the the the of bit progresses. as inch possible our rates work year airing on

what But this next see well we of opportunities to year, to we see had Last the one for change year. cap X.X think progressed. this in of area. purchases I and year, rate our didn’t built-to-suit I business, the bodes and we and maybe many opportunities are little to more we pursuing lucrative of wait space year that this best more starting in which which as The middle lot compressed yields for build-to-suit year most sort part bit those So, are see that’s the is there opportunity was a a some see us. of is opportunities stack -- building be in say starting we may for to more -- X.X would versus year, that of that delivering think prove to that

Laura Dickson

for land parcel, market of Okay. the to then, primarily stack a or ahead the be regarding is And is that going time? JV bigger to such strength

Brendan Mullinix

part. is build-to-suit Brendan. planning are This that opportunities we No. in to No, pursue

Laura Dickson

you XXXX? can the the there sounded were then, for It like And from downside Okay. recap like a example. couple Sears move-outs in

Brendan Mullinix

is we Sears GAAP mean, with I are lease. and in agreeing of call as about $X.X is million interpretation the their obviously on not said we the Well,

an happen obviously as in the in end the as the have impact So, forefront so of we will year. fight were industrial year, there move-outs tail big back. if an The the from rest the they don’t of on ‘XX of standpoint

Laura Dickson

Okay.

Sears it’s then… move-out primarily then. So, the And

Brendan Mullinix

from industrial. true lease a true lease the it’s a the payment If on -- stop

Laura Dickson

you And kind Okay. you what like with of could of that then, the guidance? think kind drag rate quickly, what be would turn to do out be on curious at able Just just debt? revolver mortgage

Pat Carroll

would we the now. high That’s about selling treasury. probably right bonds, at the If XX-year Xs, in were XXX over we

comparable. I think financing mortgage would

Operator

Instructions] [Operator Stifel. of next Guinee John ahead. question go Please comes from Our

John Guinee

speakers. aboard about Thank about -- personnel Great. all changes? or new And of welcome Will, to reorg you. sort talk of any the Did you

Will Eglin

just themselves the appropriate to given to they opportunity that I the think have what time for. next are Actually, didn’t. responsible I of talk generation part of our to and business it’s about leadership that passage present of an shareholders the

thinking the that’s So behind it.

John Guinee

A couple okay. of Great, things.

basis a billion just it that and prototype of sales completely is eradicate First on dilutive $XXX is, into year that That’s of off sale a price, though $XXX I repurchase hundred million yourself for a $X.XX to you sooner of thoughts the modest even band-aid industrial? level. is couple to then $X will likely about at seven, each a worth ripping next at asset a of Any question. question track re-purchasers being eight-year most And share think be the million the obvious have asset share record one share points at process.

Will Eglin

answer do repurchase an the We authorization. we the attractive have share I’ll second question price and first. believe is share existing that

is to idea the all for write. I these out it levels, us that expect of And to there of size large circulation. the you that to stock a in question active should is to think, like with very the So, be direction of portfolio, transacting respect think I of office what at at cheque the

maximize but I continue it maybe years to think, eight do to on the we want be in of years the portfolio not building. over lease value and shorter few that to we of a as with tends one where to only own stuff a we over portion is markets what think

I path. continue portfolio options or we for may of down on be go on do how a clear want mix the directionally, shrink if to all But, office, weighs cost choose over that and the office that that our say to industrial recognize period, XX% and are the portfolio XX% we few-year table So, shift heavily to exposure to capital. we we

John Guinee

reinvestment question into to the $X.XX and strategy That’s at Can as going expirations? share maintain about you the then, beyond out. essentially some a ‘XX, given $X.XX the And you the midpoint, $X.XX a $X.XX plus last probably ‘XX, first dilutive pointed half in a year lease known share. pressure is the of

Pat Carroll

It yields finance. depends we are well and how on reinvestment what

market because buildings CapEx of pressure as events AFFO lease XXXX, we on that it. in that FFO ‘XX. cash about we Swiss is would reposition put particularly our resolving into portfolio. as have escalations And the look Express revenue suffer I Re and number the out around much Kansas as much Some in we lease doesn’t the with from the Federal the coming say of flow now so our would XX% City

looks underlying might some flow in FFO, So, additional you correct still are good. that there but weakness be number pretty the cash

John Guinee

weakness? much how Pat,

Pat Carroll

Nice try, John.

John Guinee

later. talk Thanks,

Operator

Our Petersen next Please Jon question comes Jefferies. ahead. go of from

Jon Petersen

good morning. Hey,

talked rate One about of some the rate at you swapping out I’m looking here. follow-up flow debt debt, page fixed your in

rate couple this of probably another and acquired a floating of guess already loans month are one term that through that January I got You’ve swapped, through ‘XX.

getting and swap where So, new facility about issuing the should thinking talking you putting new when through expire or you debt on million loans to their going down? or be on you the guys that be about term of we swap current guys $XXX the you rid credit are maturity swaps just that those

Pat Carroll

about office want remaining swap, answer the and swapping it, we that expire of the one Hey, and portfolio that pay term to with to after down it term XX extent whether down that. can that we debt we term February. is we’ll discuss John. And mortgage revolver. then did loan swap, for on loan, we about the paying replacing are the the talking the the in those When XX talk financing The -- swap the

Jon Petersen

Got it.

dispositions out right. curious was kind stagger like that tenant a there building All left. of us XX years like be left versus years you sense. may target left cap with get versus years less I for to if five just what sounded kind plus on you years on That then, on And something was makes properties, something guys seven left with the with lease. five single seven has it towards than a those about kind was five can office of do of to talking rates Lara Okay. when

ranges those are durations when of you us of on maybe an the at give cap Just idea different rates lease?

Lara Johnson

Lara. is Good This morning. Sure.

of extent, depends and on the So, market, tenant the tenant. the to some it obviously credit

those types asset amount from [indiscernible] range we of a a types So, fairly yield for reasonable of sizable seeing but the investors are there private is assets. of

asset specific tenancy. I to to again clearly the say if had X. But So, generalize, and the I market it’s would

Jon Petersen

Okay.

to like So, for the same compare with eight seven that of years. down today, types to five does XX-year How a properties…

Lara Johnson

Obviously, more been the longer are But meaningfully than reasonably [ph] the so term is sensitive credit, XX-year we term a they ten-year. the five if new buyers better a the a term, if are Office to the see better cap good will. in market, have over past you have XX-year, you are you rate. comparable years, going in

Operator

comes Ladenburg Massocca next Our go of from Please question ahead. John Thalmann.

John Massocca

a office going back FedEx morning. kind give a some on bit know, you but you is Good piece may this up around roll coming kind XXXX do is to to the forward? maybe and run this expect want number this, going noise I given the be or little potential year and exact year-over-year maybe down rate XXXX TI of in steady not bounce of

Will Eglin

And fluctuate, meaningful advisable think for can where John, spend investment It we sensible it’s to will from quarter-to-quarter. asset be us. and supervision a where times to just sold it’s capital there be

lower a will But it be it’s directionally, today. three will it certainly period, to five-year sometimes, sometimes little higher. So, it be a to going low, than over is be

John Massocca

business, space? of you do then out then, to think you something of the of can try -- Okay. you and huge look that And and of you exit side mean, be get kind those get the that if would did not look know a in on retail I portion you specialty what to assets, it’s of kind pricing but portfolio, your the as I

Will Eglin

Yes.

to zero trying that our at under-occupied. are are than down Cap buildings are map all some portfolio that are point. the and X% over grind we it’s this We rates of less to cases NOI sub and in selling

portfolio of regardless a foot the a is what cap question, and and results rate. impact it’s de is the that minimus the of value selling But, have by small cap the redeploying on of capital. So, our per not sort so square now that meaningful stuff retail more wouldn’t rates are

John Massocca

it much. That’s me. you Thank for very Understood.

Will Eglin

you. Thank

Operator

turn to remarks. like back This concludes closing I over any Will conference would Eglin to the our question-and-answer session. for

Will Eglin

us for support. joining again morning. We this appreciate your and everyone continued Thanks participation

contact like Heather receive If website on have questions. contact or me you information Gentry great you our you members of the on Thanks if again to quarterly additional and find a at would company, the you package, our can www.lxp.com. team, our have may management day. please or senior supplemental any And always, other as

Operator

concluded. attending you presentation. for today’s now has conference The Thank

You may now disconnect.

LXP Industrial Trust (LXP) 27 Feb 182017 Q4 Earnings call transcript