Lexington Realty Trust Announces Fourth Quarter 2016 Activity

NEW YORK, Jan. 10, 2017 (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 its fourth quarter 2016 transaction activity.

Highlights
  • Acquired two industrial properties for an aggregate cost of $97.5 million and completed 389,000 square feet of the Lake Jackson, TX build-to-suit project for an estimated cost of $78.5 million.
  • Disposed of nine office properties for $87.1 million.
  • Invested $25.4 million in on-going build-to-suit projects and committed to acquire two industrial properties in 2017 for an aggregate cost of $71.7 million.
  • Issued approximately 1.0 million common shares at an average gross price of $10.75 per share under its At-The-Market ("ATM") offering program.
  • Retired $14.0 million of secured debt.
  • Completed 0.7 million square feet of new leases and lease extensions with overall portfolio 96.0% leased at quarter end.

Transaction Activity
ACQUISITIONS AND COMPLETED BUILD-TO-SUIT TRANSACTIONS
Primary Tenant (Guarantor)   Location   Sq. Ft.   Property  Type   Initial Basis ($000)   Estimated Annual GAAP Rent ($000)   Initial Annualized Cash Rent ($000)   Estimated  GAAP  Yield   Initial  Cash  Yield   Approximate Lease  Term  (Yrs)
Aryzta, LLC (Aryzta AG)   Romeoville, IL   188,000     Industrial   $ 52,700     $ 3,544     $ 3,301     6.7 %   6.3 %   15
Amazon.com.dedc, LLC (Amazon.com Inc.)   Edwardsville, IL   770,000     Industrial   44,800     2,682     2,501     6.0 %   5.6 %   10
The Dow Chemical Company (1)   Lake Jackson, TX   389,000     Office   78,484     8,673     7,108     9.5 %   7.7 %   20
        1,347,000         $ 175,984     $ 14,899     $ 12,910     7.8 %   6.7 %    
 
1. Three of four buildings completed in Q4 2016. Estimated GAAP and cash yields reflect estimated costs of completion of final building and developer partner payout of all four buildings, as set forth in the table immediately below.

ON-GOING BUILD-TO-SUIT PROJECTS    
Location   Sq. Ft.   Property Type   Maximum Commitment/Estimated Completion Cost ($000)   GAAP Investment Balance as of  12/31/2016 ($000) (1)   Estimated Completion Date   Approximate Lease Term  (Yrs)
Lake Jackson, TX (2)   275,000     Office   $ 78,447     $ 55,960     1Q 17   20
Charlotte, NC   201,000     Office   62,445     40,443     2Q 17   15
Opelika, AL   165,000     Industrial   37,000     10,249     2Q 17   25
    641,000         $ 177,892     $ 106,652          
 
1. During the quarter, Lexington funded $25.4 million of the projected costs of the above projects, including the completed Lake Jackson buildings.
2. Total project is 664,000 square feet. 389,000 square feet completed in Q4 2016 as set forth in the table above.

FORWARD PURCHASE COMMITMENTS
Location   Sq. Ft.   Property  Type   Maximum  Acquisition Cost  ($000)   Estimated Completion Date   Estimated GAAP  Yield   Estimated Initial Cash Yield   Approximate Lease Term  (Yrs)
Grand Prairie, TX   215,000     Industrial   $ 24,725     2Q 17   7.6 %   6.2 %   20
Warren, MI (1)   260,000     Industrial   47,000     3Q 17   8.3 %   7.3 %   15
    475,000         $ 71,725         8.0 %   6.9 %    
 
1. Lexington issued a $4.6 million letter of credit.

PROPERTY DISPOSITIONS
Primary Tenant   Location   Property Type   Gross Disposition Price ($000)   Annualized Net Income (1)(2) ($000)   Annualized NOI (1) ($000)   Month of Disposition
Vacant   Canonsburg, PA   Office   $ 8,250     $ (330 )   $ (330 )   October
Avnet, Inc.   Phoenix, AZ   Office   32,000     1,276     1,949     October
Bank of America, National Association   Los Angeles, CA   Office   19,200     1,014     1,107     November
BluePearl Holdings, LLC (3)   Tampa, FL/Houston, TX   Office   15,177     566     946     November
Nextel of Texas, Inc. (4)   Temple, TX   Office   7,463     (366 )   800     December
Vacant   Westmont, IL   Office   5,000     (682 )   (635 )   December
            $ 87,090     $ 1,478     $ 3,837      
 
1. Quarterly period prior to sale annualized.
2. Excludes impairment charges recognized.
3. Four properties.
4. Conveyed to lender in a foreclosure sale.

Including fourth quarter 2016 disposition activity, consolidated 2016 disposition volume totaled $663.0 million at average GAAP and cash capitalization rates of 10.2% and 5.1%, respectively.
LOAN INVESTMENTS

Lexington collected an aggregate $1.6 million in full satisfaction of three loan investments secured by portfolios of single-tenant retail properties.

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