Lexington Realty Trust Announces Fourth Quarter Activity
NEW YORK, Jan. 8 /PRNewswire-FirstCall/ -- 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 and recent transaction activity, some of which was previously announced:
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Leasing
During the fourth quarter of 2009, Lexington executed 19 new and extended leases for approximately 1.0 million square feet and ended the year with portfolio occupancy of approximately 92%.
Leasing activity for the quarter included the following new leases:
New
New GAAP
Cash Rent
Lease Rent Per Per
Tenants/ Expiration Annum Annum
Guarantors Location Date Sq. Ft. ($000) ($000)
---------------- --------- --------- ------- ------ ------
Office
1 Brown Mackie Phoenix AZ 09/2019 4,747 $85 $85
College-
Phoenix(1)
2 Leetex Dallas TX 07/2012 554 $9 $9
Construction(1)
3 Neighborhood
Assistance
Corporation
of America Decatur GA 05/2017 6,994 $138 $138
4 Patient Hampton VA 12/2019 36,484 $602 $602
Advocate
Foundation
5 STIA, LLC Dallas TX 01/2013 1,288 $18 $18
-----------------
5 Total office
new leases 50,067 $852 $852
----------------- ------ ---- ----
Industrial
1 Ozburn- Statesville NC 05/2013 471,000 $1,313 $1,313
Hessey
Logistics
2 Cardinal Jacksonville FL 03/2010 58,589 $148 $148
Unijax, LLC
and Camelot
Drive
Holdings, LLC(2)
------------------ ------ ---- ----
2 Total
industrial
new leases 529,589 $1,461 $1,461
------------------ ------- ------ ------
7 TOTAL NEW LEASES 579,656 $2,313 $2,313
------------------ ======= ====== ======
Footnotes
---------
(1) Represents expansion portion of existing lease.
(2) Held as an investment in Net Lease Strategic Assets Fund.
Leasing activity for the quarter also included the following lease extensions:
Lease
Tenants/ Prior Expiration
Guarantors Location Term Date Sq. Ft.
----------
Office
1 Alice H. Vinton, Honolulu HI 10/2009 02/2013 308
d/b/a Vinton
Realty
2 Capital One Glenn Allen VA 03/2010 03/2012 77,045
Services, LLC
3 City National Philadelphia PA 12/2009 12/2010 5,315
Bank of NJ (2)
4 Cityspace Real Dallas TX 11/2009 11/2012 1,161
Estate, Inc.
5 Dallas MTA, Dallas TX 09/2009 09/2014 265
L.P., d/b/a
Verizon
Wireless
6 Entergy Little Rock AR 10/2010 10/2015 36,311
Arkansas, Inc.
7 Entergy Pine Bluff AR 10/2010 10/2015 27,189
Services,
Inc.(1)
8 HSBC Card Tulsa OK 01/2010 01/2011 101,100
Services, Inc.
9 John Michelli Baltimore MD 09/2009 12/2015 543
10 Money Management Phoenix AZ 03/2016 07/2018 48,831
International(4)
11 United San Antonio TX 11/2010 11/2017 142,500
HealthCare
Services, Inc.
12 Windell Irvine CA 02/2010 08/2015 6,725
Investments,
Inc. (3)
----------------- -- -------
12 Total office
lease extensions 447,293
-------------------- =======
19 TOTAL NEW AND
EXTENDED LEASES 1,026,949
-------------------- =========
New Prior New Prior
Cash Cash GAAP GAAP
Rent Rent Rent Rent
Per Per Per Per
Tenants/Guarantors Annum Annum Annum Annum
------------------------- ($000) ($000) ($000) ($000)
Office
1 Alice H. Vinton, d/b/a Vinton
Realty $4 $7 $4 $7
2 Capital One Services, LLC $732 $1,019 $785 $1,010
3 City National Bank of NJ (2) $239 $213 $239 $213
4 Cityspace Real Estate, Inc. $16 $17 $16 $17
5 Dallas MTA, L.P., d/b/a Verizon
Wireless $25 $18 $25 $18
6 Entergy Arkansas, Inc. $237 $237 $237 $237
7 Entergy Services, Inc. (1) $192 $192 $192 $192
8 HSBC Card Services, Inc. $1,446 $1,307 $1,446 $1,307
9 John Michelli $4 $3 $4 $3
10 Money Management
International(4) $1,099 $646 $1,107 $627
11 United HealthCare Services,
Inc. $1,781 $1,640 $1,866 $1,621
12 Windell Investments, Inc.(3) $160 $129 $160 $129
----------------------------- ---- ---- ---- ----
12 Total office lease extensions $5,935 $5,428 $6,081 $5,381
-------------------------------- ====== ====== ====== ======
19 TOTAL NEW AND EXTENDED LEASES $8,248 $5,428 $8,394 $5,381
-------------------------------- ====== ====== ====== ======
Footnotes
---------
(1) Held as an investment in Net Lease Strategic Assets Fund.
(2) Consolidated joint venture property, Lexington's ownership is
80.50%.
(3) Consolidated joint venture property, Lexington's ownership is
64.35%.
(4) New cash and GAAP rents represent full occupancy, prior cash and
GAAP rents for 28,710 square feet.
Balance Sheet
Lexington reduced its consolidated debt (exclusive of normal amortization) during the fourth quarter by approximately $66.4 million, including approximately $17.6 million original principal amount of Exchangeable Notes. During 2009, Lexington reduced the amount of Exchangeable Notes outstanding from $211.0 million to approximately $87.7 million. At year-end, Lexington had $7.0 million outstanding on the $125.0 million revolving loan portion of its secured credit facility.
Common Share Dividend
Lexington returned to paying its quarterly common share dividend in cash. On November 18, 2009, Lexington announced that it declared a regular common share dividend for the quarter ending December 31, 2009 of $0.10 per common share payable in cash on January 15, 2010 to common shareholders of record on December 31, 2009.
Dispositions
During the fourth quarter of 2009, Lexington sold or disposed of its interests in eight properties to unrelated parties for an aggregate disposition price of approximately $45.7 million. Prior to disposition, the properties generated annualized net operating income of approximately $1.7 million or 3.7% of the aggregate disposition price. In addition, Lexington sold its interest in two joint venture investments generating approximately $12.6 million in net proceeds.
Lexington's disposition activity for the quarter included the following dispositions(1):
Gross
Sale Month of
Property Price Dispos-
Tenants/Guarantors Location Type ($000) ition
-------- -------- ------ ------
1 Compass Bank Beaumont TX Office $3,200 Nov
2 Kohl's Department Eau Claire WI Retail $5,000 Dec
Stores, Inc.
3 Multi-tenant Dallas TX Office $7,750 Dec
4 Rock Falls Country Market, Rock Falls IL Retail $650 Nov
LLC (Rock Island Country
Market, LLC)
5 Staples, Inc. Baton Rouge LA Industrial $5,000 Dec
6 Vacant (2) Plymouth MI Industrial $4,335 Dec
7 Vacant (2) Houston TX Office $18,229 Dec
8 Vacant Grand Prairie TX Retail $1,525 Nov
-------------------- ------
8 TOTAL DISPOSITIONS $45,689
-------------------- =======
Footnotes
---------
(1) Lexington also sold its investment in two joint ventures for an
aggregate gross sales price of $36,560. Lexington's share of gross
sales price was $14,660 and net proceeds were $12,573.
(2) Gross sale price represents mortgage debt balance at foreclosure or
other disposition.
Acquisitions
On December 31, 2009, Lexington acquired a property in Greenville, South Carolina for $10.5 million, consisting of a three-story 106,306 square foot office building and a one-story 21,735 square foot annex building on an approximately 8.0 acre parcel. At closing, the property was net-leased to Canal Insurance Company for 20 years at an initial capitalization rate of 8.60%, with 2.35% rent increases annually during the first ten years and CPI rent increases subject to a floor of 2.0% and a ceiling of 4.0% during the remainder of the term. Canal Insurance Company has an option to purchase the property on the fifth anniversary of the lease commencement at fair market value, but not less than $10.7 million and no greater than $11.6 million. If Canal Insurance Company fails to exercise its purchase option, Lexington has the right to require Canal Insurance Company to purchase the property for approximately $10.7 million.
Canal Insurance Company is an underwriter and provider of property/casualty insurance, primarily for the commercial trucking industry. Canal Insurance Company is rated A(PI) by Standard & Poor's and A+ by A.M. Best.
Comments from Management
T. Wilson Eglin, Chief Executive Officer of Lexington Realty Trust, commented, "Our fourth quarter leasing activity was robust and we are pleased to have finished 2009 with portfolio occupancy of approximately 92%. We believe our disposition efforts continue to strengthen our balance sheet and liquidity and fourth quarter dispositions volume brought our total for 2009 to approximately $190.0 million, or approximately $40.0 million above our objectives. We have used the majority of proceeds to reduce our indebtedness. Our strategy for 2010 will be to continue selling our non-core holdings, specifically our multi-tenant and retail properties with the objective of reducing our recourse leverage, while selectively taking advantage of growth opportunities in single-tenant office and industrial properties."
ABOUT LEXINGTON REALTY TRUST
Lexington Realty Trust is a real estate investment trust that owns, invests in and manages office, industrial and retail properties primarily net-leased to major corporations throughout the United States and provides investment advisory and asset management services to investors in the net lease area. Lexington 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, Investor Relations, One Penn Plaza, Suite 4015, New York, New York 10119-4015.
SOURCE Lexington Realty Trust
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