LXP - Earnings call 4 2023 | LXP Industrial Trust

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Operator

Thank you for standing by, and welcome to the LXP Industrial Trust Fourth Quarter Earnings Call and webcast. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to hand today's call over to Heather Gentry. Please go ahead.

Heather Gentry

Thank you, operator. Trust XXXX Industrial and Conference LXP Webcast. to Fourth Earnings Quarter Call Welcome was and at this and earnings a be distributed The 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

LXP forward-looking statements conference Litigation meaning the of based Private Securities during Certain future assumptions. and within statements this made these expected statements events Act believes of on reasonable XXXX. Reform regarding are call results that may constitute the

certain those or actual However, LXP's described included today's by implied earnings time files factors that with from expressed cause reports could results those such statements. and to in to and risks, time SEC the differ including press materially in LXP those release from

by has not and financial press all earnings duty as undertake In comparable forward-looking and LXP law, references company funds release measure. directly measures any Except diluted adjusted does available all package, a to the reconciled Any operations statements. disclosure on to documents holders a LXP update to the equity in to to company non-GAAP quarterly basis. supplemental fully refer from most GAAP unitholders adjusted FFO these required

today's quarter provide Brendan individual CFO; an James a Will performance Boulerice, measures President, On commentary intended and of viewed to Eglin, will be presenting Beth are Operating of Chairman CIO; update CEO; and a historical future call, recent on investment or and Executive financial flows. position, fourth Dudley, cash not or as and LXP's measure numerical Mullinix, results. Vice business performance, financial

over call now turn I to Will. the will

T. Wilson Eglin

Thanks, Heather, and everyone. morning, good

robust were leasing and results excellent volume quarter leasing fourth strong, propelled by Our spreads.

effectively debt refinancing advantage opportunities to that of XXXX. took also extend our will maturities We

cash-based Over of results year, quarter leasing and and industrial leased on which the million our fixed at renewals. expirations we were respectively, XX% in million the expect we XXXX, the fourth throughout addressed half feet. attractive remaining square momentum good increases X.X base and activity XX%, rental of excluding in feet X.X Our maintained square approximately strong on built XXXX we

are increase We anticipate expirations rental current for result that to based market cash majority XXXX these of in in on and a XX% conditions. renewals negotiations XX% will the

office Mill, currently contract for Fort South $XX remaining closing assets approximately X total subject Our of in are to under Carolina a million, conditions. certain

of expect million rent in for projected assets prior in We to XXXX collect approximately the second to these sale their quarter. $X.X

markets sheet capital we side, the maintain our flexibility. and considerable On strengthen position financial to balance continue

our in senior XXXX million During raised to remaining the offering for needs $XXX our of notes June repayment from funding this proceeds in with maturing our and year. XXXX currently of $XXX of quarter, term maturity earmarked loan we development XXXX the the million extended a and bond the

until notes increase will debt and and weighted forma beginning the XXXX of of to payoff a expected our the currently no of average debt the of is With XXXX. X.X% average which weighted pro at of X.X XXXX a maturing Approximately floating, have X.X% years. interest expected XX% is to term rate

long-term other or rate year early year. exposure or fixed next this of some later swapping consider options may We this

year contributing million sales, XXXX that revenue of leasing X.X full square the development feet The share from recent and big share. are Our per year box sales. this reflected leasing diluted morning we strong $X.XX common per timing in in projects company our diluted of are office The to outcomes, $X.XX the of development of was driven development for delay this FFO in lease expense our guidance interest any FFO increased office loss began lease. common and by adjusted the end of we that company the low $X.XX range adjusted assumes available of guidance don't XXXX announced revenue our the

occupancy rents, look environment. of we of valuation leases favorable fixed as building spec result $X.XX $X.XX market represents rate below annual of XXXX declines million strongly our leasing estimate starts share. and of rental XX% expiring rents we through for the of estimated offer our rent escalations and non-lease construction on $XX or cash annual an dynamics, in more initial potential average a current $XX or are which backdrop and also below our pipeline. including ahead, rent per The in square million X.X%, per of the Moreover, annual is million market, stabilization market market growth feet initial blocks lower X.X approximately in new our cash pipeline such steady believe to gains interest favor, are in the development As for Based development share. increase in

build-to-suit our area track we execute new revenue that this long relationships ability opportunities arise, record further As merchant strong builder value. maximize believe on shareholder investments enhance and in to accretive and our

investments With to Brendan in I'll more the over detail. our that, turn to discuss call

Brendan Mullinix

on we million projects, in In the $XXX quarter. development million XXXX, Will. $XX approximately Thanks, fourth invested including

As of million excluding approximately to plan partner which remaining with in our promotes, hand. any have to projects, left year-end, we fund we $XX fund cash on

foot achieved supply for yield new have we decisions cautious During This square make development leasing development into more feet revenue placed construction began that partner cash current projects challenged and we X.X project in our X.X of are a big-box continues in the service. approximately are of macro longer be prospective choices, of stabilized which million The million more given the to in the market included were as Columbus, quarter, being recognizing to for product, environment. taking X.X% after tenants square promote.

However, we the square gain and development end, our placed project we in foot XXX,XXX Subsequent visibility. and we development will at greater we foot projects, approximately build-out remaining to Columbus. of square as see you into facility shell XXX,XXX quarter core our service continue and our update Phoenix activity to completed

completion the and our spec out, core development are complete. this of With build of all projects shell

with the spec new and in construction opportunities risk. currently we plans, us near-term about the the investment provide will believe starts of capital build-to-suit leasing the decline given market thinking best elimination In

to in the late excess portfolio is year original the an data respond to XXX the continue acres. leased $XX.X previously and user end of reviewing has may inquiries to Phoenix bank, purchase million, land of in to be center The the that of for roughly this allocated plan acres represents fit our a the XXXX XXX projects our million land. at relating our in $XX for million including Our for land option which Phoenix that build-to-suit $XX cost good

million. With on to over the turn remaining Our XXX in that, the James basis Phoenix I'll approximately discuss call leasing. $XX is cost acres to

James Dudley

in upward had cash-based We quarter feet square approximately signed respectively, Brendan. leasing spreads renewals. escalators XX% of renewals. on of average XX%, at and million fixed the base escalator continue X.X the excluding with at trend fixed leases volume in Thanks, XXXX X.X%, to Lease rental strong excluding and

the XX%, opportunities reflect bumps investment in XX% and our with of facility of a the X% increases prior X-year square of quarter underscore value continue to and over market, respectively, Notable Our quality strategy. Atlanta at in leasing our rent. outcomes XXX,XXX rental cash-based annual excellent base extension portfolio and in foot the mark-to-market considerable our the fourth include resulting the

annual compared Dallas to achieving Additionally, bumps we XX% executed the our and previous market, at base rental foot facility respectively, the rent. extension cash-based X% of and in XX-year with when XXX,XXX square increases a XX%,

at during fourth bumps with at a leased This XX-year Houston a bumps feet as lease portfolio year-end with addressed our the we at XXX,XXX square remaining stabilized remaining industrial X-year our was quarter. Our X.XX% for Florida included XXX,XXX X.X% our and Plant XXX% the foot City, square vacancy lease facility facility. approximately

to over Beth results. turn With to call that, discuss I'll the financial

Beth Boulerice

in reimbursement. million operating Revenue of attributable fourth with James. Thanks, about was tenant quarter million, the $XX $XX expenses to was XX% which property of

full rate to $X.XX XXXX million adjusted per range Fourth million. million was to Fourth $XX XX%. company million. common $X.X approximately G&A We was XXXX approximately tenant diluted or $XX was reimbursement approximately year XXXX quarter quarter to $XX anticipate be $XX overall G&A within G&A of a Our share bringing million. FFO

same-store XXX% portfolio of to period year industrial the an X.X%. average industrial Full compared end, portfolio year-end, in growth when leases industrial XXXX. at our approximately same escalations the same-store quarter in compared XX% XXXX. same-store At had Our NOI annual when quarter X.X% also increased leased with to X.X% fourth rate was of was and NOI industrial year full

a With XXXX, revolving to respect of X.X% range end, NOI within was net X.X%, EBITDA growth facility credit range are million to of which unsecured we considers a be debt adjusted to our fully was expecting At $XXX same-store industrial quarter Xx and available. to assumptions. leasing

end consolidated term $X.X of to approximately weighted years. debt billion with and maturity X.X of a average outstanding Our at average a rate was interest X.X% quarter weighted

XX% approximately rate our at quarter fixed was end. Finally, debt percentage

conduct will turn I'll the over of that, the call. portion back who the this call question-and-answer operator to With

Operator

with first KeyBanc of [Operator from the is line Thomas Capital. question Instructions] Your Todd

Todd Thomas

and expand some the of in or guidance the First projects related guidance, question, demand the much sounds Beth. bit It And leasing development talk of the assumes for on Brendan, a the that can of discuss How little and maybe you just development around just assume at no the leasing end the range? the the larger year. during then commencements to general? leasing end pipeline for high spaces is like the low

Beth Boulerice

Todd. Yes.

form big low quarter. X has the in end being high some them boxes, leased coming in the The fourth So year. end not all has in, the

James Dudley

Todd, this James. is

big the our facilities leasing very with now. right activity. those box have a on of It's markets. Look, elaborate of But X all kind on in lot have that just hopeful buildings. we do new some X of activity pipeline there's All we're dealing supply So competitive.

when good that's But this hopefully, So to going to a new it's equate going some to have say to year, difficult sometime we're news. lease.

Todd Thomas

the thoughts or given updated in you increase rents? seeing supply development change at all expectations stabilized Any some of the portfolio? any And on Okay. across just market Are in yield competition? the

Brendan Mullinix

that. Brendan. take I'll is This

promote our In from the looking returns for pipeline, to X% to. post of not at guided the previously balance the targeted development we're we're changing unleased that that terms we've X.X% guidance the of

James Dudley

is And I just I again. add, guess this would James

far, going are see seem of in rents concessions on we're opportunities Thus be a if are likely holding. first-generation rent mean, the bit rents. market to change to a be to of we space. more now reviewing there's holding. rents But I market or as little we TI right market the as On that

Operator

[Operator is Instructions] with the from Your Bonnel America. line Bank next Camille of of question

Jing Xian Tan

size placements from of leases rental outlook risk Can by moderating supply where XX% clearly XXXX to building. vacancy the are going driven us spreads how then, rent for in we growth? expiring those across rates the you As for is in for you is industrial remind market to by of disclosed concentration the versus XX% it's larger the look much XX%

Brendan Mullinix

mix. Brendan. portfolio with to necessarily or don't lot know our This pipeline. for do I that entire is A just it's of the has it forecast

Jing Xian Tan

about comments market To earlier Got clarify, your on just rents. it. And right? basis, gross that's expanding on a

Brendan Mullinix

you No the to? that mark-to-market referring -- are

Jing Xian Tan

No. you In the gross market flat. like Is on previous response, mentioned basis? are that just a relatively rents

James Dudley

was rent. I net referring mean, I the to

Jing Xian Tan

Okay. for that. clarifying Thanks

capital implied of how cap of allocation limited slightly to the a do growth? year. stabilized you to thinking Just when Recognize Finally, with each below strategy by embedded line to the portfolio many it about driving unlock lot development in but growth are are earnings your yields tracking you of have within sort leases are given rolling how rate LXP. comes that's

funding So you're thinking can in income today's you how talk -- environment? growth about to just how evolves how

Brendan Mullinix

would is outline I in the building of -- both I yes, his mean, This blocks Will to you that prepared Brendan comments. growth again. point

very in of seeing we're the depending be interesting build-to-suit which In for the potentially X.X% lease as what and addition, initial duration structure a escalation and line is. currently on it we X% of us, to going-in being would range yields think is business the in -- market, for investment

Operator

next Your is of Kammert Instructions] with Evercore. the question [Operator from Jim line

James Kammert

apologize, it's my I my notes, fault. so

reinvesting messed center Regarding my nice, in or the you very effectively gain. you trying able Again, a to land And other think that is latter year, history assets? review sale part I'm you to of potential shelter Phoenix. are my of in this fault. were the if up, the data sell just Can it about that? embedded by Can a notes in

Brendan Mullinix

Brendan. is This

just of terms site quarter or options, with into XXX million. The user cash a XXXX late in for year, XXX-acre history, In $XXX inside we roughly in the XXXX, later about we the a about of so million a so of initial fourth ground acres acquired is with a lease years. lease center entered that ground ground is on lease that rent data XXX about XX for $X.X year the the

option ground us. anniversary, And provides second opportunity will a a cash to whole remarks that lease vertical So $XX relatively immediate tenant project be has and of prepared a of the include it's in purchase does for explained and purchase in roughly to began. value was That great flow transaction which for the quarter year. this on It construction added the the before the for year, open any lot the X million. a fourth

factors I'm have whether lot begun a are I option. consider site. the of and add that, sure there that will exercise can of or that development to their user the they not

So they're already substantial investing the investment. there all

option, exercise valuable a we very So if they not lease whether still or they have there. to, that not ground choose

Operator

is from question Mitch JMP next Your line Germain Securities. the of with

Jyoti Yadav

dynamic is lease the Is the to dynamic far? on it of negotiations. is ask as Mitch. taking finish for right to line? This Jyoti it Or just the wanted now? Is the just I get it kind longer about same to

James Dudley

identifying duration from and significantly a a from ago. to the identifying that tenant years perspective say lease a this couple signing would ultimately than getting it has from was through market the lengthened the would is LOI to definitely property, the I James. the that process is definitely start finish of I longer say --

Jyoti Yadav

Got it. And have do coming move-outs large you expected quarters? in any the

James Dudley

We moved out happened, was which do a known XXX,XXX X the end Memphis, significant. which tenant one XXXX, that's deal foot at of move-outs in of have the just for square January. Nothing

we Dallas square XXX,XXX our foot foot have at market move-outs. the and end We in October. out March, of the another is have that's tenant out tenant that That's then list in building the of in square XX,XXX known moving a Columbus moving

Operator

Green question Street. Jessica ] next is [ [Operator Zheng the Instructions] with of line Your from

Unknown Analyst

to the expand you versus have on what Could markets concessions expanded your versus past in couple extent and of pre-COVID years? TI please

James Dudley

a competition into market But in example, because are digits. situation. where box, generalize. to might hard been difficult Every But really to might different use again, depending double whereas in is big different. digits TIs have that you TI. creeping mid-single generalize It's particular every a the is situation on -- you have for situation the low been it's we'll on and

Operator

have do Camille of from a line follow-up We the question Bonnel.

Jing Xian Tan

debt Just what bad X you into Could expand assumptions on quick guidance? are and NOI same-store baked follow-up. occupancy your your

Beth Boulerice

So on bad point. there this it's really same-store There's baked outcomes. guidance, debt in at leasing no our

Operator

questions. At no this are there further time,

T. Wilson Eglin

to for joining call And or your our management our receive our morning, Heather addition, in our quarterly members Once visit everyone if Thanks with again, any you like may we other or appreciate interest questions. would you senior website materials. as company. in this for contact the and thank Gentry me joining Please of you always, contact again us today.

Operator

Thank This joining. you concludes today's for call.

may now You disconnect lines. your

LXP Industrial Trust (LXP) 15 Feb 242023 Q4 Earnings call transcript