- Earnings call transcript Q3 2022

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Operator

Good day. My name is [Shantel] and I will be your conference operator today. At this time I would like to welcome everyone to the LXP Industrial Trust Third Quarter 2022 Earnings Conference Call and Webcast.

As a reminder today's conference call is being recorded. [Operator Instructions] Heather Gentry, you may begin your conference.

Heather Gentry

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

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

Wilson Eglin

to portfolio delivered leasing to rental solid as drive disposition our enhance We our everyone. morning, Good strategies third growth. team results continues strong prudent and our investment execute Heather. Thanks, quarter and and

with Our industrial portfolio growth continues store NOI perform X.X%. to of quarterly same well

Additionally, of average and of term stability provides attributes. years lease us years functional of age our building average our and investment of valuable XX.X% X.X industrial tenancy utility grade weighted assets X.X with defensive

momentum in confident strong are financial to our We value ability and releasing advance in pipeline. we to to and enhance performance our continue capitalize on on development build our as leasing shareholder opportunities drive

Detroit Louis, estimated priorities. This we quarter, this million. that our quarter additional and NOI X.X% sold second currently quarter XXXX. to for properties sales Louisiana quarter to our in quarter, the assets strategy dispose marked Colorado weighted quarter, buildings are primarily and of we Asset the one industrial asset the Cleveland, third selling portfolio assets targeted cash to in five one in Oregon. end, parachute sold or venture, homestretch which we in the the during subsequent gap sold totaled consisting and our St. $XX.X to working quarter X.X% assets million $XX Subsequent and respectively. our sold and two from industrial eight sales not remaining end cap rates of of non-core DK do to sales in first in We're After of with fit portfolio. assets City, with on dispositions our industrial other year with of asset Kansas consistent average These industrial at markets other growth are office our on the in in by focused an joint be plan and is end, departure Philadelphia office for

quarter, debt. in the Farms our our in site Development X.X invest to square We the Atlanta, in roughly and Phoenix. used in to retire ongoing in we acres Olam to completed substantially project projects Ohio foot be million six our markets We quarter. will funding proceeds from development, quarter subsequent land our in fund XXX sales $XX and end, of expect third was target at leased million

Our remaining of year quarter projects by this XXXX. through for are estimated completion second the substantial of end

rents We XX% continue high and and XX% on during feet performance, XX% leasing industrial respectively. leases increased extended leasing of cash to annual quarter feet approximately produce square Year-to-date of of million [X] and square base XX% X.X% or volume. strong with base at spreads escalations with and the cash base lease rental and XXX,XXX industrial base respectively, average new

to remains believe per of shareholders us. an activity. we the share of to ahead repurchase to $XXX Our shareholders have We positive mark opportunity million to continue of million very during And leasing common $XX.XX share. outlook capital through we repurchase via quarter at market the of average total for a return a we've X.X next shares returned price good year. Year-to-date,

repurchases maintaining considered debt share the utilized context expected leverage will forward year needs. adjusted levels. to when equity decline and quarter net seven within be over EBITDA funding six development increased is at debt but Leverage forward of of proceeds range target end to the to Going are reduce our times in to during

trustees be our the new which the X.X% quarterly reflects will prior will dividend, operations. quarterly a share, We an the board XXXX dividend paid that increase quarter announced declared $XX.X that approximately first The authorized share of per quarterly common over also representing of our strength dividend. this be of morning increase of in

received and which to progress comprehensive responsibility making report On the initiatives are policies October, A on And are our the recognition communities our we're and dedicated team progress foster to culture our and increased our relative to score our is more have disclosure our tenants we average we're that help ESG pleased at A estate create strategies. in to our significant employees. second to ESG initiatives to and our this for front, a to to public overview on to of last diversity who the global year. future our score commitment in inclusion overall and supports continuing sustainable published includes a a corporate embrace in practices a assessment advance and date, LXP. enhance year's we of we core ESG and our above In of our real Gresb reporting to empowers and

class We including ensuring to for also and structure best remain execution oversee strategy the of our committed to we governance in the value practices, board shareholders. maximize right continue have to

sector board summary, our lead valuations seven the despite resolution trustee refreshing recently the impacted and Frary perform industrial interest Richard independent members next have well, current rates our In financial since Handwerker continues nominating to XXXX our May to a we lead new believe addition as trustee down. In recommend in that been Jamie conditions. higher adopted committee steps XXXX with market to by when

our softening our seen remain on While value portfolio projects, not I'll well demand. detail. existing and very high occupancy initiatives, that, rents. far, to levels over so development as Brandon is focused call turn With raising in more of little maintaining intended discuss to investments or vacancy, leasing we've We as immune these development to effects, stabilizing the

Brendan Mullinix

year an development was ongoing additional approximately Both spend quarter by end. Will. projects anticipate million be third the funded XXXX we and $XX $XXX six through million to the on Thanks

spans A reached project XX class X.X in sub-market facility Columbus development completion will right Ohio million project's East and coming modern square tenant XX that September EDNA the a experienced in off resides including months. clear feet. warehouse the on occupy building specs the hopeful foot space features prime by a deal We've in a This substantial Our distribution and we the interest height. user are XX good since full completion location of

option The expect for for XX% approximately additional Also approximately site a already end, a our along for Phoenix. X% the up with of X.X% at million on acres XXX a expected extend purchase. is Olam Greenville entered return data subsequent Initial includes ground acre be previously as for significant by after foot. farms parcel value to lease to to XXX quarter two compared is an paid our outcome also to we is annual appreciation original XXX lease $XXX with when $X.X center increases. in the deliver in Spartanburg an to the rental produce purchase annual for million rent end. the to in Indianapolis to user property our at This years year our land A Ocala $XX three acres with in $X.X XXXX. approximately well this great We year XX December we annual project initial to foot projects, estimated XX leased as options per square land asset ground the as building years, square per

remains site quite our We plans development continue at user to for on where strong. interest the additional work projects

will projects we ongoing Looking to over development turn anticipate that to million With be $XXX partner call our XXXX development promotes. excluding spend I'll leasing. discuss six approximately for the ahead James to

James Dudley

positive certain portfolios market through mark on our leases markets of to XX% pockets currently approximately Thanks, opportunities. teacher Brendan. industrial market growth softening estimate the to based with presenting some our More estimates to grew demand in and In place remains We general, despite average in rent third brokers markets on quarter. demand year-over-year below target be independent us significant supply specifically, imbalances. XX% due tenant

rent our to independent on expirations In escalations or XX% industrial lease forecasted XX% are cash portfolio XXXX through fact, on for rents adjusted average for progressiveness. today grow when based

with markets our quality successful with and to strategy that stabilized high a to underscores strong portfolio industrial are opportunity market of last to to compared our attract assets Vacancy mark increase quarter. XX.X% representing tenant slight in key when portfolio likely grow remains low interest. Our occupancy

existing Texas an a XXX,XXX vacant three terms for XX% a of and we to remaining above we assumptions, years. space Lakeland lease square our starting XXXX Florida over original industrial five XX% bumps the had and on stabilizing the cash Florida square This an then facility X% explorations, a Notable the expiry the during for feet approximately with exploration in underwriting $X end, broker respect leasing bumps remaining a a in outcomes facility included leasing our activity years a amount of the our well range XX% For extension third based X.X% development rental intend to to to lease on as as a to portfolio. With as XX%, bumps negotiations XXXX for to generation exploration focus and resulting the Tampa, cash year in we vacancy new as XXXX well in increase, extended XXXX, industrial our rent prior of quarter of quarter the foot annual three foot space. expect square of for by lease rent. current we XX,XXX remainder early party Subsequent leasing XX% rent new rents rent estimates. a X%. successful small And base with resulted and of XXXX second existing within annual on lease our increase on increase Dallas, in

We building X% XX,XXX years, very feet bonds and full also over $X.XX square in roughly at XXX,XXX annual rental for bringing Greer, is underwriting the original are of starting leased our square to facility occupancy. XX% the rate The five South our Carolina rent attractive. above just assumptions, industrial foot

continue turn the Beth call and of development We interest this RFPs our results. updates provide will With financial to as for over to we to field discuss receive I'll activity and progresses. to continue portfolio indications that

Beth Boulerice

Thanks James.

guidance we Third XXXX quarter million raising was that attributable $XX diluted or million million expect We per share. to for million $X excluding of diluted XX% a end common reimbursements. be the to share. $XX announced range, G&A was a FFO $XX costs. million, $X.XX penny of Adjusted operating by advisory our per to the XXXX tenant company approximately approximately the $XX $X.XX with low are which to quarter million within property we quarter expenses in $X.XX our revenue this G&A $XX by range of share approximately morning tightening was the and certain was per

leased at NOI our Our quarter-over-quarter quarter industrial same-store X.X% year-to-date. XX.X% And same-store and industrial end. portfolio grew was X.X%

now store with of range office our end guided million. end quarter debt portfolio quarter are approximately end. majority NOI with properties, to within XXXX of same decline our X% market And of quarter midpoint at range rate $XX leases EBITDA basis a $XX the of we forward XXXX conjunction million XX adjusted a at of $XXX At growth times, portfolio to sale escalations of approximately as an remains We million, which the XX, X.X%. we aggregate X.X%. The equity the these expect September average X.X forecasted for industrial XX.X% value contracts. for by of annual industrial to increasing NOI sell our end, be held at had with year and to points by Net the the was of contracts estimated to maturity to in

to X.X adjusted have would debt times. EBITDA been net Our

common $XXX.X unsecured settle unsecured We under XX, September of December. total end, borrowing contracts, in At was unsettled an revolving share currently available over have of NOI we contract capacity As our facility. quarter of aggregate XX% to four million sale credit million maturity which had at intend we of our our NOI. under $XXX

During was quarter that us to added revolving unsecured our approximately of With of out sheet protected Consolidated average to Will. amended terms this maturity maturity a X.X turn clickable of had balance fixed. the for debt extending call portion end to flexibility over rising debt average the quarter keep we over of Total XXXX against facility, billion term with and at interest rate weighted outstanding I'll July the $X.X credit covenant rates. at back and margin XX% weighted and consolidated debt the quarter years the debt end calculation. to for well X.X% a a improved continuing

Wilson Eglin

Thanks, call over the Beth. turn the question portion will now I to this operator will call. the of and answer who conduct

Operator

Our Thalmann. from first Villard question Instructions] James [Operator with Ladenburg Allen comes

open. is line Your

James Allen Villard

guys. Good morning,

Wilson Eglin

Good morning.

James Allen Villard

us in give on you subsequent to end? quarter some you Phoenix rented the that XXX Can more acres color

Wilson Eglin

Sure.

years As that on two term the an to I lease operator XXX the years develop data park prepared XX and are site. that The for of center there acres in center portion indicated ground plans that. options remarks, it's extension of who we has a data initial beyond XX these

James Allen Villard

be of are balancing How you big just activity? Yes, deleveraging preferred potential would deleveraging? versus Okay, picture. kind that's And stock trust repurchases of, target again a kind for the helpful.

Wilson Eglin

Yes.

year keeping I that within has monitoring good a to things overall we're this As of use said, that is sure of what acquisitions. one times leverage the to area. we're six capital our that just seven been making compared Buyback

but bank moment needs where aren't for farms a year, the sort the a land rate great floating opportunity that to next because had we that projects want we huge piece preferred exposure. talking especially our exploit our to And year just build trust that's well. have in maturity. Our about, as is capital funding land of to was underway we roughly But have at available principal interesting but Brendan want available of on outcome to XX Olam capital the the it's lease

balance from be of XXXX sort standpoint, I in So the then guess highest that shorter the you to compared while it XXXX. and maturities would deleveraging a return, have to

James Allen Villard

kind That's acquisition thinking of are Right. into helpful. picture, Kind bigger disposition kind of going what today about the and just you how you seeing and the it market of XXXX? in

Wilson Eglin

just lot began price broadly slow. really spike in continues to and the that the interest expectation in there's market the inflation transaction And be of speaking, rising Well, discovery a rates. market with

to tough pretty is market the [pick] So today.

land on we're own our activity looking opportunities our focused we've we're of and allocation really, capital our ongoing terms bank. in pipeline, said existing before, future and In today how presently, at development as

although market acquisition the in active we're presently monitoring not we're So it.

James Dudley

side, pricing our markets say in just sources can't strong we the we and And revolver balances Michigan or in assets two we'll year. where the comments But And we two keep I information there that to we've at on will low look mentioned very liquidity next got in yet. buildings have interest. investor have the there's market, give as some we that properties of that the one disposition

James Allen Villard

me. Thanks. from it That's helpful. is Thanks

Wilson Eglin

Thank you.

Operator

the [Operator this Wilson questions back Instructions] at There to Eglin. now are time. call will no turn I further over

Jefferies. one Petersen from more Jon have We question with

Your line is open.

Jon Petersen

in Got time. thanks. in Great, just

down a that pre-leasing mean, So still some for expected know like be potential those might that I on the portfolio some lead of slowing anything still is that decent just you're of kind -- strong. changed industrial the environment you macro on has on at the I all, going that demand in But seems yields development been to in amount given I developments that's world? seeing remains guess, got the the needs everything

Wilson Eglin

don't demand don't [indiscernible] about side the [indiscernible] you Why that? why talk with Yes. start you to want if

James Dudley

to And still and Okay, every like development making be will are track more the maybe seems their on highest say I relative our bit, now. user a as point bit right not there's little seem some. last of little to setting absorption seems it this be net it's tracking decisions. in our softer. all a It taking is users I make in that's releasing from of does maybe just XX of just a and year one second and in would time that And so demand markets. much history. slowed there's to record a But north We're year, to demand year out like year decision of quite markets XX the still million bit perspective.

it have though year relative demand was that and I to significant what and we're the to that softer there's going feels it outcomes. market, think positive still last So in do

versus may be of little to a downtime So there releasing. bit them lease

Wilson Eglin

of development And venture do then a as develop I to market there you're on has yield, of the in rising for projects and with to process just very aware, rent yield well as that. as sensitive opportunities do in during promotes be regard that partner result growth to your expectations, our are we the think occurred question as, past exit joint cap that exceed our may that the buildings, rates,

some lower exit rent higher growth or promote promotes market cap between and yield. So rates, after

are there to opportunities our prior guidance good, on there's think I there exceed yield.

Jon Petersen

close And And might it I that's by some Okay, give you like, lot fall debt these back on these how indications a next obviously, I [market] a of mean, buildings, the pull of retraining, the you the that helpful. deals through, of I think year. then move know, done can selling been mean, can into some to quarter it little and you of little were it's on us we've There all like yearend, a the been of first indicated sales. pushed more context and prior then markets right, -- get bit? be some I to there. if curtain

Wilson Eglin

that Yes. [debt] components been and XXXX we're Fargo under just working I I has CEA the yet. contract that most The the we Wells lease been sensitive other one Street don't with property to value has facilities with the think in refundable Market buyers, market them longest Jersey, mean two of are the have big which New non that's conditions. deposits where

just the it transact we're become So making to market Unfortunately, progress. more challenging in. has

Jon Petersen

Okay. And is the this, portfolio on now? market you but to I apologize your I right if did what mark indicate missed

Wilson Eglin

XX% at the moment.

Jon Petersen

or Is that GAAP cash?

Wilson Eglin

Cash.

Jon Petersen

Cash.

Okay. Great.

Okay, that's Thank for me. all you.

Wilson Eglin

Thank Jon. you,

Operator

comes [indiscernible] Our next of from question with Bank America.

line open. Your is

Unidentified Analyst

morning. just and good over years, the see I or how to average Could weighted few for you've the you appropriate comment you term see are portfolio shorter past release trending Hi, lease on what shifting pipeline leasing trending? level an been these is the duration.

Wilson Eglin

Sure.

a think to lease I shorter will do average has so. term weighted trending been continue and

five to I on that's to sort if between more rollover And makes tenants leasing sometimes often it for new making we of facilities in of negotiating those construction think year years, of and term five get longer the are terms on opportunity are leasing about balance it three extensions short stability right investments flow. in term cash term. and significant

do each most little negotiation So We it's of just asset. to try for predict. bit to to make hard a the what's right every

Unidentified Analyst

is leases. final just portfolio opening level? higher it for Could what And comment signed commented In lease Okay. on on a new remarks, escalators you me. question your you on

Wilson Eglin

We completed Sure. moment year. we had X.X% about signed escalators. with X about and feet. some this on And leases X% X.X% that we million We're at leases have at recent the

continuing favor still our So move that's overall. to in

Unidentified Analyst

for taking you questions. my Okay. Thank

Wilson Eglin

thank Great, you.

Operator

[Operator turn I’ll further Will closing to Eglin this questions call are back over for at There no time. now remarks. Instructions] the

Wilson Eglin

questions. for you to always, as member Gentry thank visit materials. us you joining great senior we our may quarterly have me in other encourage to our contact like day. would we And a again, once if receive Thanks our website again this you or team and management morning. contact And Heather Well, with you or any any of addition,

Operator

concludes conference call. This today's

You may now disconnect.

LXP Industrial Trust (LXP) 3 Nov 222022 Q3 Earnings call transcript