NEW YORK, Jan. 8, 2015 (GLOBE NEWSWIRE) -- 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 | |||||||
| Initial | |||||||
| Initial | Annualized | Initial | Estimated | ||||
| 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 |
| $ 70,433 | $ 4,185 | 5.9% | 10.6% | ||||
| 1. Lease contains annual CPI increases. | |||||||
| ON-GOING BUILD-TO-SUIT PROJECTS | ||||||
| GAAP | ||||||
| Maximum | Investment | |||||
| Lease | Commitment/Estimated | Balance as of | Estimated | |||
| 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 |
| 1,640,000 | $ 395,646 | $ 117,533 | ||||
| 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. | ||||||
| FORWARD COMMITMENTS | ||||||
| Estimated | Estimated | Estimated | Estimated | Lease | ||
| 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 |
| $ 195,025 | 7.3% | 8.7% | ||||
Capital Recycling
| PROPERTY DISPOSITIONS | |||||
| Gross Disposition | Annualized | ||||
| 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 |
| $ 167,186 | $ 9,087 | ||||
| 1. $29.9 million secured debt satisfied at closing. | |||||
| 2. Purchaser assumed an $11.5 million secured debt. | |||||
| LOAN INVESTMENTS |
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:
| Property | Amount | 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 |
| $ 80,843 | 3.7% | ||||
| 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:
| LEASE EXTENSIONS | |||||
| Location | Prior Term | Lease Expiration Date | Sq. Ft. | ||
| Office/Multi-Tenant | |||||
| 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 | 70,482 | |||
| Industrial/Multi-Tenant | |||||
| 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 | 1,819,346 | |||
| 6 | Total lease extensions | 1,889,828 | |||
| NEW LEASES | |||||
| Location | Lease Expiration Date | Sq. Ft. | |||
| 2 | Palm Beach Gardens | FL | 2016-2022 | 20,067 | |
| 3 | Various | 2015-2025 | 5,067 | ||
| 5 | Total new leases | 25,134 | |||
| 11 | TOTAL NEW AND EXTENDED LEASES | 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.