Lexington Realty Trust (LXP) filed Quarterly Report for the period ended 2009-09-30.
LEXINGTON CORP PROPERTIES INC is a real estate investment trust engaged in the ownership operation management of a diverse portfolio of real properties. Lexington Realty Trust has a market cap of $477.6 million; its shares were traded at around $4.18 with a P/E ratio of 2.8 and P/S ratio of 1.1. The dividend yield of Lexington Realty Trust stocks is 4.3%.
Highlight of Business Operations:
We attempt to effectively manage our balance sheet in order to accretively reduce leverage through cash flow management of our tenant leases, maintaining occupancy, pursuing and executing well on property dispositions, recycling of capital and accessing the capital markets when opportunities arise. During the nine months ended September 30, 2009, we: (i) sold properties which generated $90.8 million of net proceeds, (ii) raised $16.0 million from sales of common shares under our direct share purchase plan, and (iii) raised $18.1 million from the sale/maturity of debt investments. These proceeds were used to retire indebtedness encumbering our properties and corporate level debt at a discount to par value. As of September 30, 2009, we have approximately $69.5 million of borrowing capacity under our revolving credit facility. Also, we have a $210.0 million accordion feature in our credit facility. This feature can be exercised by providing additional properties as collateral for the borrowing base. However, the approval of the lenders is required for this feature to be exercised.
We generally finance our business with property specific non-recourse mortgage debt, as well as corporate level debt. As of September 30, 2009, we have $23.8 million of property specific non-recourse mortgage debt maturing during the remainder of 2009, excluding $18.2 million of non-recourse mortgage debt on our Houston, Texas property which is anticipated to be conveyed to the lender during the fourth quarter of 2009, and $83.7 million in 2010. There currently are discussions with a lender for a $20.0 million balloon payment due in the fourth quarter of 2009 to extend the maturity of the loan up to 3 years. We believe we have sufficient sources of liquidity to meet these obligations through cash on hand ($56.5 million), current borrowing capacity on our revolving credit facility ($69.5 million), which expires in 2011, but can be extended by us to 2012, and future cash flow from operations.
Financings. On February 13, 2009, we entered into a secured credit facility with KeyBank N.A., as agent, consisting of a $165.0 million term loan and an $85.0 million revolving loan. The proceeds were used to refinance our (1) $200.0 million unsecured revolving credit facility, which had $25.0 million outstanding, bore interest at 120-170 basis points over LIBOR, and was scheduled to expire in June 2009, and our (2) $225.0 million secured term loan with KeyBank N.A., which had $174.3 million outstanding, bore interest at LIBOR plus 60 basis points, and was scheduled to mature in June 2009 (with an option to extend to December 2009 at our option). The new facility bears interest at 285 basis points over LIBOR and matures in February 2011, but can be extended to February 2012 at our option. With the consent of the lenders, we can increase the size of (1) the term loan by $135.0 million and (2) the revolving loan by $115.0 million (or $250.0 million in the aggregate, for a total facility size of $500.0 million, assuming no prepayments of the term loan are made) by adding properties to the borrowing base. During the second quarter of 2009, we increased the availability under the revolving loan by $40.0 million by admitting an additional lender to the bank group, thus increasing the total facility to $290.0 million. The credit facility is secured by ownership interest pledges and guarantees by certain of our subsidiaries that in the aggregate own interests in a borrowing base of 76 properties. As of September 30, 2009, $165.0 million and $30.0 million were outstanding on the secured term loan and secured revolving loan, respectively, and we were in compliance with the covenants contained in the loan agreement.
During 2007, we issued $450.0 million in 5.45% Exchangeable Guaranteed Notes due in 2027, which can be put by the holder to us every five years commencing 2012 and upon certain events. The net proceeds of the issuance were used to repay indebtedness. During the nine months ended September 30, 2009, we repurchased $105.8 million original principal amount of these notes for $84.2 million, which resulted in a gain of $17.2 million, including the write-off of $4.4 million of the debt discount and deferred financing costs. As of September 30, 2009, $105.2 million original principal amount of the 5.45% Exchangeable Guaranteed Notes was outstanding.
Nine months ended September 30, 2009 compared with September 30, 2008. Of the decrease in total gross revenues in 2009 of $33.4 million, $35.3 million is attributable to a decrease in rental revenue which was offset by an increase of $1.9 million attributable to tenant reimbursements and advisory and incentive fees. The decrease in rental revenue is primarily attributable to the receipt of lease termination payments of $28.7 million from two tenants offset by the accelerated amortization of above and below market leases of $4.1 million in 2008 along with the sale/contribution of properties to a co-investment program in 2008.
Equity in losses of non-consolidated entities was a loss of ($130.8) million in 2009 compared with a loss of ($23.2) million in 2008. The primary reason for the fluctuation between periods is due to impairment charges, loan losses and loan loss reserves recognized by our co-investment program, Lex-Win Concord, our share of which was $71.4 million during the nine months ended September 30, 2009, as well as a $68.2 million other-than-temporary impairment charge taken on our investment in Lex-Win Concord compared to impairment charges recognized by Lex-Win Concord, our share of which was $32.6 million for the nine months ended September 30, 2008. In addition, we recognized a $6.5 million impairment charge on our hotel real estate joint venture during 2009.
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