On July 31, 2024, LXP Industrial Trust (LXP, Financial) released its 8-K filing detailing the financial results for the second quarter ended June 30, 2024. LXP Industrial Trust is a real estate investment trust principally involved in the ownership of equity and debt investments in single-tenant properties and land throughout the United States. The majority of the revenue is earned through rental revenue.
Performance Overview
For the second quarter of 2024, LXP Industrial Trust reported net income attributable to common shareholders of $3.8 million, or $0.01 per diluted common share, surpassing the analyst estimate of -$0.02 per share. The company generated total gross revenues of $85.8 million, slightly above the estimated $85.04 million but down from $87.1 million in the same quarter last year. This decrease was primarily due to property sales and a reduction in other revenue, partially offset by revenue from market rent increases and stabilized development projects.
Key Financial Achievements
LXP Industrial Trust achieved several notable financial milestones during the quarter:
- Generated Adjusted Company Funds From Operations (FFO) of $46.9 million, or $0.16 per diluted common share, compared to $52.7 million, or $0.18 per diluted common share, in the same period last year.
- Increased Same-Store Net Operating Income (NOI) by 5.0% compared to the second quarter of 2023.
- Completed new leases and lease extensions totaling 2.7 million square feet, raising Base and Cash Base Rents by 44.5% and 44.0%, respectively.
- Fully repaid $198.9 million aggregate principal amount of 4.40% Senior Notes due 2024 at maturity.
- Invested $34.7 million in development activities and sold the remaining two consolidated office assets, transitioning to a 100% industrial asset portfolio.
Income Statement Highlights
For the quarter ended June 30, 2024, LXP Industrial Trust reported:
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Gross Revenues | $85.8 million | $87.1 million |
| Net Income Attributable to Common Shareholders | $3.8 million | $(9.7) million |
| Adjusted Company FFO | $46.9 million | $52.7 million |
Balance Sheet and Cash Flow
As of June 30, 2024, LXP Industrial Trust's balance sheet reflected a total consolidated debt of $1.6 billion, with 91.9% at fixed rates. The weighted-average term to maturity was 6.0 years, and the weighted-average interest rate was 3.810%. The company ended the quarter with a net debt to Adjusted EBITDA ratio of 6.2x.
Commentary and Analysis
"Our excellent second quarter results were driven by nearly three million square feet of leasing volume with strong leasing spreads and same-store NOI growth of 5%. This quarter also marked the completion of our portfolio transformation as we sold our final two consolidated office assets. We remain focused on executing internal growth opportunities, including marking current rents to market and leasing our remaining development pipeline, as well as pursuing build-to-suit projects that fit our target market strategy." - T. Wilson Eglin, Chairman and Chief Executive Officer of LXP.
Conclusion
LXP Industrial Trust's second quarter results demonstrate a solid performance, with significant leasing activity and strategic portfolio transformation. The company's ability to exceed analyst estimates for earnings per share and revenue highlights its operational efficiency and strategic focus on industrial assets. Value investors and potential members of GuruFocus.com can find detailed insights and further analysis on LXP Industrial Trust's performance by visiting the full earnings report.
Explore the complete 8-K earnings release (here) from LXP Industrial Trust for further details.
