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Lexington Realty Trust Announces 2014 Fourth Quarter Activity

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.

CONTACT: Investor or Media Inquiries, T. Wilson Eglin, CEO Lexington Realty Trust Phone: (212) 692-7200 E-mail: tweglin@lxp.comSource:Lexington Realty Trust