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Lexington Realty Trust Reports Fourth Quarter 2014 Results
Last update: 19/02/2015 7:30:05 am
Lexington Realty Trust Reports Fourth Quarter 2014 Results
NEW YORK, Feb. 19, 2015 (GLOBE NEWSWIRE) -- Lexington Realty Trust ("Lexington") (NYSE:LXP), a real estate investment trust focused on single-tenant real estate investments, today announced results for the fourth quarter ended December 31, 2014.
Fourth Quarter 2014 Highlights
-- Generated Company Funds From Operations ("Company FFO") of $66.3 million,
or $0.27 per diluted common share.
-- Acquired three properties for $70.4 million.
-- Invested $24.5 million in on-going build-to-suit projects and loan
investments.
-- 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,
raising cash and GAAP renewal rents by 4.6%.
T. Wilson Eglin, President and Chief Executive Officer of Lexington, stated "The execution of our stated strategies in 2014 has resulted in a strong balance sheet with a large cash position, which we believe positions us to capitalize on growth opportunities in 2015. We are already committed to fund approximately $325 million in growth initiatives this year. We believe our pipeline remains strong with additional opportunities for growth as the year progresses. We also expect to continue to take advantage of refinancing opportunities in 2015, to reduce interest expense and extend our debt maturities."
FINANCIAL RESULTS
Revenues
For the quarter ended December 31, 2014, total gross revenues were $108.0 million, compared with total gross revenues of $100.5 million for the quarter ended December 31, 2013. The increase is primarily due to property acquisitions.
Company FFO
For the quarter ended December 31, 2014, Lexington generated Company FFO of $66.3 million, or $0.27 per diluted share, compared to Company FFO for the quarter ended December 31, 2013 of $65.7 million, or $0.28 per diluted share. The calculation of Company FFO and a reconciliation to net income (loss) attributable to common shareholders is included later in this press release.
Dividends/Distributions
Lexington declared a regular quarterly common share/unit dividend/distribution for the quarter ended December 31, 2014 of $0.17 per common share/unit, which was paid 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 was paid on February 17, 2015 to Series C Preferred Shareholders of record as of January 30, 2015.
Net Income (Loss) Attributable to Common Shareholders
For the quarter ended December 31, 2014, net income attributable to common shareholders was $35.7 million, or $0.15 per diluted share, compared with net loss attributable to common shareholders for the quarter ended December 31, 2013 of $(8.9) million, or $(0.04) per diluted share.
OPERATING ACTIVITIES
Investment Activity
Acquisitions
Initial
Initial Annualized Initial Estimated Lease
Property Basis Cash Rent Cash GAAP Term
Tenant/Guarantor Location Type ($000) ($000) Yield Yield (Yrs)
----------------- ---------- ----------- --------- ---------- ------- --------- ------
ZE-45 Ground New York,
Tenant LLC NY Land $ 30,426 $ 1,500 4.9% 15.2% 99
Vineland, Rehab
HealthSouth Corp. NJ Hospital 19,100 1,113 5.8% 5.8%(1) 28
International
Automotive
Components Group Anniston,
North America 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
Investment
Maximum Balance as
Lease Commitment/Estimated 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, Private
TX(1) 274,000 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
Acquisition Estimated Initial Estimated Lease
Property Cost Completion Cash GAAP Term
Location Type ($000) Date 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 Greenville,
Company 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, holders converted approximately $8.6 million original principal amount 6.00% Convertible Guaranteed Notes due 2030 ("6.00% Notes") 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 at December 31, 2014. All common shares that are issuable upon conversion of the 6.00% Notes are treated as outstanding for diluted Company FFO calculations.
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 New York,
Tenant LLC(1) NY Land $ 29,193 4.1% 10 years
Federal Express Long Island
Corporation(2) 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
------------------------ ---------
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