Lexington Realty Trust Announces 2014 Fourth Quarter Activity
January 08 2015 - 5:00PM
Lexington Realty Trust ("Lexington") (NYSE:LXP), a real estate
investment trust (REIT) focused on single-tenant real estate
investments, announced the following update on fourth quarter
transaction activity, some of which was previously announced.
Highlights
- Acquired three properties for $70.4 million.
- Generated gross disposition proceeds of $167.2 million from the
sale of four office buildings.
- Received $32.8 million from maturing loan investment.
- Retired $59.0 million of debt.
- Completed 1.9 million square feet of new leases and lease
extensions.
Investment Activity
ACQUISITIONS |
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Initial |
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Initial |
Annualized |
Initial |
Estimated |
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Property |
Basis |
Cash Rent |
Cash |
GAAP |
Lease |
Tenant/Guarantor |
Location |
Type |
($000) |
($000) |
Yield |
Yield |
Term (Yrs) |
ZE-45 Ground Tenant LLC |
New York, NY |
Land |
$ 30,426 |
$ 1,500 |
4.9% |
15.2% |
99 |
HealthSouth Corp. |
Vineland, NJ |
Rehab Hospital |
19,100 |
1,113 |
5.8% |
5.8%(1) |
28 |
International Automotive Components Group
North America |
Anniston, AL |
Industrial |
20,907 |
1,572 |
7.5% |
8.3% |
15 |
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$ 70,433 |
$ 4,185 |
5.9% |
10.6% |
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1. Lease contains annual
CPI increases. |
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ON-GOING
BUILD-TO-SUIT PROJECTS |
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GAAP |
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Maximum |
Investment |
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Lease |
Commitment/Estimated |
Balance as of |
Estimated |
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Property |
Term |
Completion Cost |
12/31/2014 |
Completion |
Location |
Sq. Ft. |
Type |
(Years) |
($000) |
($000) |
Date |
Oak Creek, WI |
164,000 |
Industrial |
20 |
$ 22,609 |
$ 11,860 |
2Q 15 |
Thomson, GA |
208,000 |
Industrial |
15 |
10,245 |
3,428 |
2Q 15 |
Richmond, VA |
330,000 |
Office |
15 |
110,137 |
62,225 |
3Q 15 |
Lake Jackson, TX |
664,000 |
Office/R&D |
20 |
166,164 |
28,225 |
4Q 16 |
Houston, TX(1) |
274,000 |
Private School |
20 |
86,491 |
11,795 |
3Q 16 |
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1,640,000 |
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$ 395,646 |
$ 117,533 |
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1. Lexington has a 25%
interest as of December 31, 2014. Lexington may provide
construction financing up to $56.7 million to the joint
venture. |
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FORWARD
COMMITMENTS |
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Estimated |
Estimated |
Estimated |
Estimated |
Lease |
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Property |
Acquisition
Cost |
Completion |
Initial |
GAAP |
Term |
Location |
Type |
($000) |
Date |
Cash Yield |
Yield |
(Years) |
Auburn Hills, MI |
Office |
$ 40,025 |
1Q 15 |
7.9% |
9.0% |
14 |
Richland, WA |
Industrial |
$ 155,000 |
4Q 15 |
7.1% |
8.6% |
20 |
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$ 195,025 |
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7.3% |
8.7% |
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Capital Recycling
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PROPERTY DISPOSITIONS |
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Gross Disposition |
Annualized |
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Property |
Price |
NOI |
Month of |
Tenant |
Location |
Type |
($000) |
($000) |
Disposition |
Bank of America, National Association |
Brea, CA |
Office |
$ 110,000 |
$ 8,096 |
Nov-14 |
Vacant(1) |
Chicago, IL |
Office |
34,150 |
— |
Nov-14 |
Canal Insurance Company |
Greenville, SC |
Office |
11,550 |
991 |
Dec-14 |
Vacant(2) |
Houston, TX |
Office |
11,486 |
— |
Dec-14 |
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$ 167,186 |
$ 9,087 |
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1. $29.9 million secured
debt satisfied at closing. |
2. Purchaser assumed an
$11.5 million secured debt. |
Lexington collected $32.8 million in full satisfaction of the
Norwalk, Connecticut loan investment.
Balance Sheet
During the fourth quarter of 2014, Lexington satisfied $50.5
million of secured debt, which had a weighted-average interest rate
of 5.5%, including the $41.4 million of aggregate secured debt
encumbering properties which were disposed.
In December 2014, Lexington converted approximately $8.6 million
original principal amount 6.00% Convertible Guaranteed Notes due
2030 for 1,280,439 common shares and a cash payment of $171
thousand plus accrued interest, reducing the outstanding balance of
this note issuance to $16.2 million.
During the fourth quarter of 2014, Lexington locked rate on the
following secured loans:
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Property |
Amount |
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Term |
Tenant/Guarantor |
Location |
Type |
($000) |
Fixed Rate |
(approx.) |
ZE-45 Ground Tenant LLC(1) |
New York, NY |
Land |
$ 29,193 |
4.1% |
10 years |
Federal Express Corporation(2) |
Long Island City, NY |
Industrial |
51,650 |
3.5% |
13 years |
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$ 80,843 |
3.7% |
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1. Loan closed in first
quarter of 2015. |
2. No assurances can be
given that the loan will be funded on these terms or at all. |
Leasing
During the fourth quarter of 2014, Lexington executed the
following new and extended leases:
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LEASE EXTENSIONS |
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Location |
Prior Term |
Lease Expiration
Date |
Sq. Ft. |
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Office/Multi-Tenant |
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1 |
Little Rock |
AR |
10/2015 |
10/2020 |
36,311 |
2 |
Pine Bluff |
AR |
10/2015 |
10/2017 |
27,189 |
3 |
Phoenix |
AZ |
11/2016 |
11/2021 |
6,982 |
3 |
Total
office lease extensions |
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70,482 |
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Industrial/Multi-Tenant |
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1 |
Moody |
AL |
12/2017 |
12/2019 |
595,346 |
2 |
Laurens |
SC |
01/2017 |
1/2020 |
1,164,000 |
3 |
Antioch |
TN |
12/2014 |
12/2015 |
60,000 |
3 |
Total
industrial lease extensions |
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1,819,346 |
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6 |
Total
lease extensions |
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1,889,828 |
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NEW LEASES |
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Location |
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Lease Expiration
Date |
Sq. Ft. |
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2 |
Palm Beach Gardens |
FL |
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2016-2022 |
20,067 |
3 |
Various |
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2015-2025 |
5,067 |
5 |
Total
new leases |
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25,134 |
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11 |
TOTAL
NEW AND EXTENDED LEASES |
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1,914,962 |
Common Share Dividend/Unit Distribution
During the fourth quarter of 2014, Lexington declared a regular
quarterly common share dividend/distribution for the quarter ended
December 31, 2014 of $0.17 per common share/unit, which is payable
on January 15, 2015 to common shareholders/unitholders of record as
of December 31, 2014, and a dividend of $0.8125 per share on its
Series C Cumulative Convertible Preferred Stock ("Series C
Preferred Shares"), which is payable on February 17, 2015 to Series
C Preferred Shareholders of record as of January 30, 2015.
Effective January 1, 2015, the conversion rate of the 6.00%
Convertible Guaranteed Notes due 2030 increased to 151.5965 common
shares per one thousand principal amount of the notes from 149.6190
common shares per one thousand principal amount of the notes. The
new conversion price is $6.60 per common share compared to the
previous conversion price of $6.68 per common share.
ABOUT LEXINGTON REALTY TRUST
Lexington Realty Trust is a real estate investment trust that
owns a diversified portfolio of equity and debt interests in
single-tenant commercial properties and land. Lexington seeks to
expand its portfolio through acquisitions, sale-leaseback
transactions, build-to-suit arrangements and other transactions. A
majority of these properties and all land interests are subject to
net or similar leases, where the tenant bears all or substantially
all of the operating costs, including cost increases, for real
estate taxes, utilities, insurance and ordinary repairs. Lexington
also provides investment advisory and asset management services to
investors in the single-tenant area. Lexington common shares are
traded on the New York Stock Exchange under the symbol
"LXP". Additional information about Lexington is available
on-line at www.lxp.com or by contacting Lexington Realty Trust, One
Penn Plaza, Suite 4015, New York, New York 10119-4015, Attention:
Investor Relations.
This release contains certain forward-looking statements which
involve known and unknown risks, uncertainties or other factors not
under Lexington's control which may cause actual results,
performance or achievements of Lexington to be materially different
from the results, performance, or other expectations implied by
these forward-looking statements. Factors that could cause or
contribute to such differences include, but are not limited to,
those discussed under the headings "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and
"Risk Factors" in Lexington's periodic reports filed with the
Securities and Exchange Commission, including risks related to: (1)
the successful consummation of any lease, acquisition,
build-to-suit, financing or other transaction, (2) the failure to
continue to qualify as a real estate investment trust, (3) changes
in general business and economic conditions, including the impact
of any legislation, (4) competition, (5) increases in real estate
construction costs, (6) changes in interest rates, (7) changes in
accessibility of debt and equity capital markets, and (8) future
impairment charges. Copies of the periodic reports Lexington files
with the Securities and Exchange Commission are available on
Lexington's web site at www.lxp.com. Forward-looking statements,
which are based on certain assumptions and describe Lexington's
future plans, strategies and expectations, are generally
identifiable by use of the words "believes," "expects," "intends,"
"anticipates," "estimates," "projects", "may," "plans," "predicts,"
"will," "will likely result," "is optimistic," "goal," "objective"
or similar expressions. Except as required by law, Lexington
undertakes no obligation to publicly release the results of any
revisions to those forward-looking statements which may be made to
reflect events or circumstances after the occurrence of
unanticipated events. Accordingly, there is no assurance that
Lexington's expectations will be realized.
References to Lexington refer to Lexington Realty Trust and its
consolidated subsidiaries. All interests in properties and loans
are held through special purpose entities, which are separate and
distinct legal entities, some of which are consolidated for
financial statement purposes and/or disregarded for income tax
purposes.
CONTACT: Investor or Media Inquiries, T. Wilson Eglin, CEO
Lexington Realty Trust
Phone: (212) 692-7200 E-mail: tweglin@lxp.com
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