Lexington Realty Trust
Lexington Realty Trust (LXP)
Company Profile: New York City-based Lexington Realty Trust is a self-managed and self-administered Maryland statutory real estate investment trust which acquires, owns, and manages a diversified portfolio of net leased office, industrial and retail properties.Lexington Realty Trust was upgraded to overweight from neutral by Paolone, who set a $10 price target on LXP shares. Paolone upgraded the stock based on his view that "management has made progress with its balance sheet (debt maturities are essentially a non-issue at this point), the company's portfolio has performed well, and we believe the company could see an outsized dividend increase in 2011 -- on top of what is already an above-average dividend from both a yield (5.8%) and payout ratio (about 50%) perspective." He added that "we think the potential sale of its Inland [joint venture] assets could provide significant cash to reinvest in the business, and also the sale of non-core assets should improve portfolio quality. Also important is the simple fact that the stock appears cheap." Lexington Realty was recently listed on TheStreet's list of 10 Top Buy-Rated Real Estate Stocks for 2011. Analysts from Keefe, Bruyette & Woods tapped the stock, along with Alexandria Real Estate (ARE), as REITs poised to benefit as restrictive lending for new construction and little new supply help the office and industrial REIT subsector rebound at a relatively quicker pace. Last fall Lexington Realty increased its dividend by 15% to 11.5 cents per share. The higher dividend was paid today to holders of record on Dec. 31, bringing LXP's yield to around 5.7%.
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