LXP Industrial Trust (“LXP”) (NYSE:LXP), a real estate investment
trust focused on single-tenant warehouse/distribution real estate
investments, today announced results for the quarter ended
September 30, 2022.
Third Quarter
2022 Highlights
- Recorded
Net Income attributable to common shareholders of
$21.8 million, or
$0.08 per diluted common
share.
- Generated
Adjusted Company Funds From Operations available to all
equityholders and unitholders - diluted (“Adjusted Company FFO”)
of $48.1 million, or
$0.17 per diluted common
share.
-
Completed 0.3 million
square feet of new leases and lease extensions, raising industrial
Base and Cash Base Rents by 47.0%
and 40.7%,
respectively.
- Invested an
aggregate of $70.6 million in six
ongoing development projects.
- Completed
construction of a 1.1 million square foot
warehouse/distribution facility in the Columbus, Ohio
market.
- Amended
unsecured credit facility extending the maturity of the revolving
credit portion to July 2026.
- Repurchased
and retired 5.6 million common
shares for an average price of $10.16
per share and increased repurchase
authorization by 10.0 million common shares.
- Disposed
of three properties for an
aggregate gross sale price of $92.0
million.
Subsequent Events
- Completed
0.6 million square feet of new leases and lease extensions, raising
industrial Base and Cash Base Rents by 38.1% and 42.6%,
respectively.
- Leased approximately
100 acres of land in the Phoenix, Arizona
market for 20
years.
- Repurchased
and retired 0.4 million common
shares at an average price of $9.10
per share.
T. Wilson Eglin, Chairman and Chief Executive
Officer of LXP, commented, "We are pleased with our third quarter
results, as we continued to realize gains through asset sales,
raised rents and strategically invest capital to enhance our
portfolio value. Given the strength of our portfolio and
operations, the Board of Trustees increased our quarterly dividend
by 4.2% for the fourth quarter. Our portfolio is performing well
with 6.2% industrial Same Store NOI growth this quarter and we
continue to see solid tenant demand, reflecting the strength of our
high quality assets located in desirable growth markets and the
resilience of our business."
FINANCIAL RESULTS
Revenues
For the quarter ended September 30, 2022,
total gross revenues were $80.1 million, compared with total gross
revenues of $83.4 million for the quarter ended September 30,
2021. The decrease is primarily attributable to property sales,
including the recapitalization of our special purpose industrial
portfolio in 2021 now owned in a non-consolidated joint venture,
which was partially offset by acquisitions.
Net Income Attributable to Common
Shareholders
For the quarter ended September 30, 2022,
net income attributable to common shareholders was $21.8 million,
or $0.08 per diluted share, compared with net income attributable
to common shareholders for the quarter ended September 30,
2021 of $5.0 million, or $0.02 per diluted share.
Adjusted Company FFO
For the quarter ended September 30, 2022,
LXP generated Adjusted Company FFO of $48.1 million, or $0.17 per
diluted share, compared to Adjusted Company FFO for the quarter
ended September 30, 2021 of $53.6 million, or $0.19 per
diluted share.
Dividends/Distributions
LXP announced that it declared a regular
quarterly common share/unit dividend/distribution for the quarter
ending December 31, 2022 of $0.125 per common share/unit payable
January 17, 2023 to common shareholders/unitholders of record as of
December 30, 2022. This represents an increase of 4.2% from the
previous quarterly per share common share/unit
dividend/distribution and equates to an annualized increase of
$0.02 per common share/unit and an annualized dividend/distribution
of $0.50 per common share/unit, subject to and assuming future
declarations.
LXP also announced that it declared a cash
dividend of $0.8125 per share of Series C Cumulative Convertible
Preferred Stock (“Series C Preferred”) for the quarter ending
December 31, 2022, which is expected to be paid on February 15,
2023 to shareholders of record as of January 31, 2023.
As previously announced, during the third
quarter of 2022, LXP declared a regular quarterly common share/unit
dividend/distribution for the quarter ended September 30, 2022 of
$0.12 per common share/unit, which was paid on October 17, 2022 to
common shareholders/unitholders of record as of September 30, 2022.
LXP also declared a cash dividend of $0.8125 per share of Series C
Preferred for the quarter ending September 30, 2022, which is
expected to be paid on November 15, 2022 to Series C Preferred
shareholders of record as of October 31, 2022.
|
TRANSACTION ACTIVITY(1) |
|
DISPOSITIONS |
|
Location |
|
Property Type |
|
GrossDispositionPrice($000) |
|
AnnualizedNet
Income(2)($000) |
|
AnnualizedNOI(2)($000) |
|
Month ofDisposition |
|
% Leased |
Wilsonville, OR |
|
Industrial |
|
$ |
60,600 |
|
$ |
1,921 |
|
|
$ |
2,797 |
|
|
July |
|
100% |
McDonough, GA(3) |
|
Other |
|
|
28,000 |
|
|
1,719 |
|
|
|
2,182 |
|
|
July |
|
100% |
McDonough, GA |
|
Other |
|
|
3,350 |
|
|
(298 |
) |
|
|
(298 |
) |
|
July |
|
—% |
|
|
|
|
$ |
91,950 |
|
$ |
3,342 |
|
|
$ |
4,681 |
|
|
|
|
|
-
A land parcel located in Hebron, OH was purchased for $747.
- Generally,
quarterly period prior to sale, annualized.
- Tenant exercised
fixed-rate purchase option.
The above properties were sold at aggregated
weighted-average GAAP and Cash capitalization rates of 5.4% and
5.1%, respectively. As of September 30, 2022 total consolidated
2022 property disposition volume was $147.3 million at aggregate
weighted-average GAAP and Cash capitalization rates of 5.7%.
DEVELOPMENT PROJECTS |
|
|
|
|
Project (% owned) |
|
# of Buildings |
|
Market |
|
Estimated Sq. Ft. |
|
Estimated
ProjectCost(1)($000) |
|
GAAPInvestment Balanceas of
09/30/22($000) |
|
LXPAmountFunded as of 09/30/22
($000)(2) |
|
EstimatedBuilding Completion Date |
|
% Leased as of 09/30/22 |
Consolidated: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Cubes at Etna East (95%)(3) |
|
1 |
|
Columbus, OH |
|
1,074,840 |
|
$ |
72,100 |
|
$ |
59,713 |
|
$ |
53,095 |
|
3Q 2022 |
|
—% |
Ocala (80%) |
|
1 |
|
Central Florida |
|
1,085,280 |
|
|
83,100 |
|
|
66,556 |
|
|
54,866 |
|
4Q 2022 |
|
—% |
Mt. Comfort (80%) |
|
1 |
|
Indianapolis, IN |
|
1,053,360 |
|
|
65,500 |
|
|
48,354 |
|
|
38,278 |
|
4Q 2022 |
|
—% |
Smith Farms (90%)(4) |
|
3 |
|
Greenville-Spartanburg, SC |
|
2,194,820 |
|
|
170,400 |
|
|
123,582 |
|
|
97,906 |
|
4Q 2022 -2Q 2023 |
|
36% |
Cotton 303 (93%)(5) |
|
2 |
|
Phoenix, AZ |
|
880,678 |
|
|
84,200 |
|
|
56,554 |
|
|
49,000 |
|
1Q 2023 |
|
45% |
South Shore (100%) |
|
2 |
|
Central Florida |
|
270,885 |
|
|
40,500 |
|
|
13,724 |
|
|
10,435 |
|
2Q 2023 |
|
—% |
|
|
|
|
|
|
|
|
$ |
515,800 |
|
$ |
368,483 |
|
$ |
303,580 |
|
|
|
|
- Estimated
project cost includes estimated tenant improvements and leasing
costs and excludes potential developer partner promote, if
any.
- Excludes
noncontrolling interests' share.
- Base building
substantially completed on September 30, 2022. Property is not in
service.
- Pre-leased
797,936 square foot facility subject to a 12-year lease commencing
upon substantial completion of the facility.
- Pre-leased
392,278 square foot facility subject to a 10-year lease commencing
upon substantial completion of the facility.
|
LAND HELD FOR DEVELOPMENT |
|
Project (% owned) |
|
Market |
|
Approx.DevelopableAcres |
|
GAAP InvestmentBalanceas
of09/30/22($000) |
|
LXP Amount Fundedas
of09/30/22($000)(1) |
Consolidated: |
|
|
|
|
|
|
|
|
Reems & Olive (95.5%)(2) |
|
Phoenix, AZ |
|
420 |
|
$ |
101,412 |
|
$ |
96,961 |
Mt. Comfort Phase II (80%) |
|
Indianapolis, IN |
|
116 |
|
|
5,236 |
|
|
4,165 |
ATL Fairburn JV (100%) |
|
Atlanta, GA |
|
14 |
|
|
1,731 |
|
|
1,728 |
|
|
|
|
550 |
|
$ |
108,379 |
|
$ |
102,854 |
Project (% owned) |
|
Market |
|
Approx.DevelopableAcres |
|
GAAP InvestmentBalanceas
of09/30/22($000) |
|
LXP Amount Fundedas
of09/30/22($000)(1) |
Non-consolidated: |
|
|
|
|
|
|
|
|
ETNA Park 70 (90%) |
|
Columbus, OH |
|
66 |
|
$ |
12,959 |
|
$ |
13,547 |
ETNA Park 70 East (90%) |
|
Columbus, OH |
|
21 |
|
|
2,124 |
|
|
2,278 |
|
|
|
|
87 |
|
$ |
15,083 |
|
$ |
15,825 |
- Excludes
noncontrolling interests' share.
- Subsequent to quarter end, leased
approximately 100 acres of the 420 acre developable land parcel
located in the Phoenix, AZ market, subject to a 20-year lease (with
three 10 year extension options) that will commence in November
2022. The initial annual rental payments are estimated to be $5.2
million and escalate by 4% annually.
|
|
|
|
|
|
|
|
|
LEASES |
|
|
|
|
|
|
|
|
|
|
|
|
|
During the third
quarter of 2022, LXP executed the following new leases and
extensions: |
|
|
|
|
|
|
|
|
|
NEW LEASES
- FIRST GENERATION(1) |
|
|
|
|
|
|
|
|
|
|
|
|
Location |
|
|
|
Lease Expiration Date |
|
Sq. Ft. |
|
|
Industrial |
|
|
|
|
|
|
1 |
|
Lakeland (2) |
FL |
|
|
|
10/2027 |
|
36,274 |
|
1 |
|
TOTAL NEW LEASES - FIRST GENERATION |
|
|
|
|
36,274 |
|
|
|
NEW LEASES
- SECOND GENERATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location |
|
|
|
Lease Expiration Date |
|
Sq. Ft. |
|
|
Other |
|
|
|
|
|
|
1 |
|
Kalamazoo |
MI |
|
|
|
08/2025 |
|
3,880 |
|
1 |
|
TOTAL NEW LEASES - SECOND GENERATION |
|
|
|
|
|
3,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEASE
EXTENSIONS - SECOND GENERATION |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Location |
|
Prior Term |
|
Lease Expiration Date |
|
Sq. Ft. |
|
|
Industrial |
|
|
|
|
|
|
1 |
|
Tampa |
FL |
|
02/2023 |
|
02/2026 |
|
229,605 |
|
1 |
|
TOTAL EXTENDED LEASES - SECOND GENERATION |
|
|
|
|
|
229,605 |
|
|
|
|
|
|
|
|
|
|
|
|
2 |
|
TOTAL NEW AND EXTENDED LEASES - SECOND
GENERATION |
|
|
|
|
|
233,485 |
|
- No prior leases. This tenant leased first generation
space that was acquired vacant in 2021.
- Lease expiration date is estimated.
As of September 30, 2022, LXP's stabilized
industrial portfolio was 99.4% leased. A total of 3.5 million
square feet of new and extended industrial leases were entered into
from January 1, 2022 through September 30, 2022, with Base and
Cash Base Rents increasing by 29.1% and 21.8%, respectively.
BALANCE SHEET/CAPITAL MARKETS
LXP amended its unsecured revolving credit
facility and 2025 term loan with a new unsecured revolving credit
facility and the continuation of the 2025 term loan, which (i)
extended the maturity date of the revolving portion from February
2023 to July 2026, with two six-month extension options, subject to
certain conditions, (ii) reduced the applicable margin for the
revolving portion by five basis points and allows for further
reductions upon the achievement of to-be-determined sustainability
metrics, (iii) amended the debt covenants by reducing the
capitalization rate for determining asset value, and (iv)
transitioned the facility to SOFR.
Also in the third quarter, LXP's Board of
Trustees increased the amount of common shares available for
repurchase under its repurchase authorization by 10.0 million
common shares. During the third quarter of 2022, LXP repurchased
and retired 5.6 million common shares for an average price of
$10.16 per share. Subsequent to September 30, 2022, LXP
repurchased and retired 0.4 million common shares for an average
price of $9.10 per share.
As of September 30, 2022, LXP had an
aggregate of $182.1 million under unsettled forward common share
sales contracts, which are subject to adjustment in accordance with
the forward sales contracts and mature in December
2022.
As of September 30, 2022, LXP ended the
quarter with net debt to Adjusted EBITDA at 7.1x (or 6.3x including
forward common share sales contracts). LXP's total consolidated
debt was $1.6 billion at quarter end with 84% at fixed rates. The
total consolidated debt had a weighted-average term to maturity of
6.5 years and a weighted-average interest rate of 3.1% as of
September 30, 2022.
2022 EARNINGS
GUIDANCE
LXP now estimates that its net income
attributable to common shareholders for the year ended December 31,
2022 will be within an expected range of $0.36 to $0.39 per diluted
common share. LXP is also tightening its Adjusted Company FFO for
the year ended December 31, 2022, to be within an expected range of
$0.65 and $0.68 per diluted common share. This guidance is forward
looking, excludes the impact of certain items and is based on
current expectations.
THIRD QUARTER
2022 CONFERENCE CALL
LXP will host a conference call today, November
3, 2022, at 8:30 a.m. Eastern Time, to discuss its results for the
quarter ended September 30, 2022. Interested parties may
participate in this conference call by dialing 1-888-660-6082 or
1-929-201-6604. Conference ID is 1576583. A replay of the call will
be available through February 1, 2023, at 1-800-770-2030 or
1-647-362-9199, pin code for all replay numbers is 1576583. A link
to a live webcast of the conference call is available at
www.lxp.com within the Investors section or at
https://events.q4inc.com/attendee/538896963.
LXP Industrial Trust (NYSE: LXP) is a publicly
traded real estate investment trust (REIT) focused on single-tenant
industrial real estate investments across the United States. LXP
seeks to expand its industrial portfolio through acquisitions,
build-to-suit transactions, sale-leaseback transactions,
development projects and other transactions. For more information,
including LXP's Quarterly Supplemental Information package, or to
follow LXP on social media, visit www.lxp.com.
Contact:Investor or Media Inquiries for LXP
Industrial Trust:Heather Gentry, Senior Vice President of Investor
RelationsLXP Industrial Trust Phone: (212) 692-7200 E-mail:
hgentry@lxp.com
This release contains certain forward-looking
statements which involve known and unknown risks, uncertainties or
other factors not under LXP's control which may cause actual
results, performance or achievements of LXP to be materially
different from the results, performance, or other expectations
implied by these forward-looking statements. Factors that could
cause or contribute to such differences include, but are not
limited to, those discussed under the headings “Management's
Discussion and Analysis of Financial Condition and Results of
Operations” and “Risk Factors” in LXP's periodic reports filed with
the Securities and Exchange Commission, including risks related to:
(1) national, regional and local economic and political climates
have potential adverse impact on LXP or its tenants from the novel
coronavirus (COVID-19); (2) the authorization by LXP's Board of
Trustees of future dividend declarations, (3) LXP's ability to
achieve its estimates of net income attributable to common
shareholders and Adjusted Company FFO for the year ending December
31, 2022, (4) the successful consummation of any lease,
acquisition, build-to-suit, disposition, financing or other
transaction, (5) the failure to continue to qualify as a real
estate investment trust, (6) changes in general business and
economic conditions, including the impact of any legislation, (7)
competition, (8) increases in real estate construction costs and
construction schedule delays, (9) changes in financial markets and
interest rates, (10) changes in accessibility of debt and equity
capital markets, (11) future impairment charges, and (12) risks
related to our investments in our nonconsolidated joint ventures.
Copies of the periodic reports LXP files with the Securities and
Exchange Commission are available on LXP's web site at www.lxp.com.
Forward-looking statements, which are based on certain assumptions
and describe LXP's future plans, strategies and expectations, are
generally identifiable by use of the words “believes,” “expects,”
“intends,” “anticipates,” “estimates,” “projects”, “may,” “plans,”
“predicts,” “will,” “will likely result,” “is optimistic,” “goal,”
“objective” or similar expressions. Except as required by law, LXP
undertakes no obligation to publicly release the results of any
revisions to those forward-looking statements which may be made to
reflect events or circumstances after the occurrence of
unanticipated events. Accordingly, there is no assurance that LXP's
expectations will be realized.
References to LXP refer to LXP Industrial Trust
and its consolidated subsidiaries. All interests in properties and
loans are held, and all property operating activities are
conducted, through special purpose entities, which are separate and
distinct legal entities that maintain separate books and records,
but in some instances are consolidated for financial statement
purposes and/or disregarded for income tax purposes. The assets and
credit of each special purpose entity with a property subject to a
mortgage loan are not available to creditors to satisfy the debt
and other obligations of any other person, including any other
special purpose entity or affiliate. Consolidated entities that are
not property owner subsidiaries do not directly own any of the
assets of a property owner subsidiary (or the general partner,
member of managing member of such property owner subsidiary), but
merely hold partnership, membership or beneficial interests therein
which interests are subordinate to the claims of the property owner
subsidiary's (or its general partner's, member's or managing
member's) creditors.
Non-GAAP Financial Measures -
Definitions
LXP has used non-GAAP financial measures as
defined by the Securities and Exchange Commission Regulation G in
this Quarterly Earnings Release and in other public
disclosures.
LXP believes that the measures defined below are
helpful to investors in measuring our performance or that of an
individual investment. Since these measures exclude certain items
which are included in their respective most comparable measures
under generally accepted accounting principles (“GAAP”), reliance
on the measures has limitations; management compensates for these
limitations by using the measures simply as supplemental measures
that are weighed in balance with other GAAP measures. These
measures are not necessarily indications of our cash flow available
to fund cash needs. Additionally, they should not be used as an
alternative to the respective most comparable GAAP measures when
evaluating LXP's financial performance or cash flow from operating,
investing or financing activities or liquidity.
Adjusted EBITDA: Adjusted EBITDA represents
EBITDA (earnings before interest, taxes, depreciation and
amortization) modified to include other adjustments to GAAP net
income for gains on sales of properties, impairment charges, debt
satisfaction gains (losses), net, non-cash charges, net,
straight-line adjustments, non-recurring charges and adjustments
for pro-rata share of non-wholly owned entities. LXP's calculation
of Adjusted EBITDA may not be comparable to similarly titled
measures used by other companies. LXP believes that net income is
the most directly comparable GAAP measure to Adjusted EBITDA.
Base Rent: Base Rent is calculated by making
adjustments to GAAP rental revenue to exclude billed tenant
reimbursements and lease termination income and to include
ancillary income. Base Rent excludes reserves/write-offs of
deferred rent receivable, as applicable. LXP believes Base Rent
provides a meaningful measure due to the net lease structure of
leases in the portfolio.
Cash Base Rent: Cash Base Rent is calculated by
making adjustments to GAAP rental revenue to remove the impact of
GAAP required adjustments to rental income such as adjustments for
straight-line rents related to free rent periods and contractual
rent increases. Cash Base Rent excludes billed tenant
reimbursements and lease termination income and includes ancillary
income. LXP believes Cash Base Rent provides a meaningful
indication of an investments ability to fund cash needs.
Company Funds Available for Distribution
(“FAD”): FAD is calculated by making adjustments to Adjusted
Company FFO (see below) for (1) straight-line adjustments, (2)
lease incentive amortization, (3) amortization of above/below
market leases, (4) lease termination payments, net, (5) non-cash
interest, (6) non-cash charges, net, (7) capitalized interest and
internal costs, (8) cash paid for second generation tenant
improvements, and (9) cash paid for second generation lease costs.
Although FAD may not be comparable to that of other real estate
investment trusts (“REITs”), LXP believes it provides a meaningful
indication of its ability to fund cash needs. FAD is a non-GAAP
financial measure and should not be viewed as an alternative
measurement of operating performance to net income, as an
alternative to net cash flows from operating activities or as a
measure of liquidity.
First Generation Costs: Represents cash spend
for tenant improvements and leasing costs for in-service
development projects and expenditures contemplated at acquisition
for recently acquired properties. Because all companies do not
calculate First Generation Costs the same way, LXP's presentation
may not be comparable to similarly titled measures of other
companies.
Funds from Operations (“FFO”) and Adjusted
Company FFO: LXP believes that Funds from Operations, or FFO, which
is a non-GAAP measure, is a widely recognized and appropriate
measure of the performance of an equity REIT. LXP believes FFO is
frequently used by securities analysts, investors and other
interested parties in the evaluation of REITs, many of which
present FFO when reporting their results. FFO is intended to
exclude GAAP historical cost depreciation and amortization of real
estate and related assets, which assumes that the value of real
estate diminishes ratably over time. Historically, however, real
estate values have risen or fallen with market conditions. As a
result, FFO provides a performance measure that, when compared year
over year, reflects the impact to operations from trends in
occupancy rates, rental rates, operating costs, development
activities, interest costs and other matters without the inclusion
of depreciation and amortization, providing perspective that may
not necessarily be apparent from net income.
The National Association of Real Estate
Investment Trusts, or NAREIT, defines FFO as “net income
(calculated in accordance with GAAP), excluding depreciation and
amortization related to real estate, gains and losses from the
sales of certain real estate assets, gains and losses from change
in control and impairment write-downs of certain real estate assets
and investments in entities when the impairment is directly
attributable to decreases in value of depreciable real estate held
by the entity. The reconciling items include amounts to adjust
earnings from consolidated partially-owned entities and equity in
earnings of unconsolidated affiliates to FFO.” FFO does not
represent cash generated from operating activities in accordance
with GAAP and is not indicative of cash available to fund cash
needs.
LXP presents FFO available to common
shareholders and unitholders - basic and also presents FFO
available to all equityholders and unitholders - diluted on a
company-wide basis as if all securities that are convertible, at
the holder's option, into LXP’s common shares, are converted at the
beginning of the period. LXP also presents Adjusted Company FFO
available to all equityholders and unitholders - diluted which
adjusts FFO available to all equityholders and unitholders -
diluted for certain items which we believe are not indicative of
the operating results of LXP's real estate portfolio. LXP believes
this is an appropriate presentation as it is frequently requested
by security analysts, investors and other interested parties. Since
others do not calculate these measures in a similar fashion, these
measures may not be comparable to similarly titled measures as
reported by others. These measures should not be considered as an
alternative to net income as an indicator of LXP’s operating
performance or as an alternative to cash flow as a measure of
liquidity.
GAAP and Cash Yield or Capitalization Rate: GAAP
and cash yields or capitalization rates are measures of operating
performance used to evaluate the individual performance of an
investment. These measures are estimates and are not presented or
intended to be viewed as a liquidity or performance measure that
present a numerical measure of LXP's historical or future financial
performance, financial position or cash flows. The yield or
capitalization rate is calculated by dividing the annualized NOI
(as defined below, except GAAP rent adjustments are added back to
rental income to calculate GAAP yield or capitalization rate) the
investment is expected to generate, (or has generated) divided by
the acquisition/completion cost, (or sale price). Stabilized yields
assume 100% occupancy and the payment of estimated costs to achieve
100% occupancy including partner promotes, if any.
Net Operating Income (“NOI”): NOI is a measure
of operating performance used to evaluate the individual
performance of an investment. This measure is not presented or
intended to be viewed as a liquidity or performance measure that
presents a numerical measure of LXP's historical or future
financial performance, financial position or cash flows. LXP
defines NOI as operating revenues (rental income (less GAAP rent
adjustments and lease termination income, net), and other property
income) less property operating expenses. Other REITs may use
different methodologies for calculating NOI, and accordingly, LXP's
NOI may not be comparable to other companies. Because NOI excludes
general and administrative expenses, interest expense, depreciation
and amortization, acquisition-related expenses, other nonproperty
income and losses, and gains and losses from property dispositions,
it provides a performance measure that, when compared year over
year, reflects the revenues and expenses directly associated with
owning and operating commercial real estate and the impact to
operations from trends in occupancy rates, rental rates, and
operating costs, providing a perspective on operations not
immediately apparent from net income. LXP believes that net income
is the most directly comparable GAAP measure to NOI.
Second Generation Costs: Represents cash spend
for tenant improvements and leasing costs to maintain revenues at
existing properties and are a component of the FAD calculation. LXP
believes that second generation building improvements represent an
investment in existing stabilized properties.
Stabilized Portfolio: All real estate properties
other than acquired or developed properties that have not achieved
90% occupancy within one-year of acquisition or substantial
completion.
|
LXP INDUSTRIAL TRUST AND CONSOLIDATED
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited and in thousands, except share and
per share data) |
|
|
Three months ended September 30, |
|
Nine months ended September 30, |
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
Gross revenues: |
|
|
|
|
|
|
|
Rental revenue |
$ |
78,274 |
|
|
$ |
82,353 |
|
|
$ |
234,749 |
|
|
$ |
254,570 |
|
Other revenue |
|
1,814 |
|
|
|
1,064 |
|
|
|
5,392 |
|
|
|
2,945 |
|
Total gross revenues |
|
80,088 |
|
|
|
83,417 |
|
|
|
240,141 |
|
|
|
257,515 |
|
Expense applicable to revenues: |
|
|
|
|
|
|
|
Depreciation and amortization |
|
(44,946 |
) |
|
|
(45,359 |
) |
|
|
(134,645 |
) |
|
|
(130,579 |
) |
Property operating |
|
(13,961 |
) |
|
|
(11,406 |
) |
|
|
(42,279 |
) |
|
|
(33,966 |
) |
General and administrative |
|
(9,060 |
) |
|
|
(8,363 |
) |
|
|
(29,093 |
) |
|
|
(24,695 |
) |
Non-operating income |
|
242 |
|
|
|
472 |
|
|
|
353 |
|
|
|
953 |
|
Interest and amortization expense |
|
(11,255 |
) |
|
|
(12,210 |
) |
|
|
(32,758 |
) |
|
|
(35,170 |
) |
Debt satisfaction losses, net |
|
(119 |
) |
|
|
(13,222 |
) |
|
|
(119 |
) |
|
|
(13,222 |
) |
Impairment charges |
|
(628 |
) |
|
|
(2,048 |
) |
|
|
(2,457 |
) |
|
|
(2,048 |
) |
Gains on sales of properties |
|
24,841 |
|
|
|
16,122 |
|
|
|
52,951 |
|
|
|
104,767 |
|
Selling profit from sales-type lease |
|
— |
|
|
|
— |
|
|
|
9,314 |
|
|
|
— |
|
Income before provision for
income taxes and equity in earnings (losses) of non-consolidated
entities |
|
25,202 |
|
|
|
7,403 |
|
|
|
61,408 |
|
|
|
123,555 |
|
Provision for income taxes |
|
(271 |
) |
|
|
(270 |
) |
|
|
(951 |
) |
|
|
(986 |
) |
Equity in earnings (losses) of non-consolidated entities |
|
(1,340 |
) |
|
|
(75 |
) |
|
|
15,580 |
|
|
|
(249 |
) |
Net income |
|
23,591 |
|
|
|
7,058 |
|
|
|
76,037 |
|
|
|
122,320 |
|
Less net income attributable to noncontrolling interests |
|
(201 |
) |
|
|
(420 |
) |
|
|
(727 |
) |
|
|
(1,962 |
) |
Net income attributable to LXP
Industrial Trust shareholders |
|
23,390 |
|
|
|
6,638 |
|
|
|
75,310 |
|
|
|
120,358 |
|
Dividends attributable to preferred shares – Series C |
|
(1,573 |
) |
|
|
(1,573 |
) |
|
|
(4,718 |
) |
|
|
(4,718 |
) |
Allocation to participating securities |
|
(41 |
) |
|
|
(37 |
) |
|
|
(151 |
) |
|
|
(170 |
) |
Net income attributable to common shareholders |
$ |
21,776 |
|
|
$ |
5,028 |
|
|
$ |
70,441 |
|
|
$ |
115,470 |
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders - per common share
basic |
$ |
0.08 |
|
|
$ |
0.02 |
|
|
$ |
0.25 |
|
|
$ |
0.42 |
|
Weighted-average common shares outstanding – basic |
|
277,535,717 |
|
|
|
278,124,204 |
|
|
|
281,559,058 |
|
|
|
276,379,718 |
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders - per common share
diluted |
$ |
0.08 |
|
|
$ |
0.02 |
|
|
$ |
0.25 |
|
|
$ |
0.41 |
|
Weighted-average common shares outstanding – diluted |
|
278,521,946 |
|
|
|
282,048,458 |
|
|
|
284,609,950 |
|
|
|
278,581,849 |
|
|
|
|
|
LXP INDUSTRIAL TRUST AND CONSOLIDATED
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(Unaudited and in thousands, except share and per
share data) |
|
|
|
|
|
September 30, 2022 |
|
December 31, 2021 |
|
|
|
|
Assets: |
|
|
|
Real estate, at cost |
$ |
3,642,114 |
|
|
$ |
3,583,978 |
|
Real estate - intangible assets |
|
332,646 |
|
|
|
341,403 |
|
Land held for development |
|
108,379 |
|
|
|
104,160 |
|
Investments in real estate under construction |
|
368,483 |
|
|
|
161,165 |
|
Real estate, gross |
|
4,451,622 |
|
|
|
4,190,706 |
|
Less: accumulated depreciation and amortization |
|
747,535 |
|
|
|
655,740 |
|
Real estate, net |
|
3,704,087 |
|
|
|
3,534,966 |
|
Assets held for sale |
|
73,761 |
|
|
|
82,586 |
|
Right-of-use assets, net |
|
24,994 |
|
|
|
27,966 |
|
Cash and cash equivalents |
|
29,407 |
|
|
|
190,926 |
|
Restricted cash |
|
113 |
|
|
|
101 |
|
Investments in non-consolidated entities |
|
55,415 |
|
|
|
74,559 |
|
Deferred expenses, net |
|
25,564 |
|
|
|
18,861 |
|
Rent receivable – current |
|
2,426 |
|
|
|
3,526 |
|
Rent receivable – deferred |
|
69,419 |
|
|
|
63,283 |
|
Other assets |
|
26,062 |
|
|
|
8,784 |
|
Total assets |
$ |
4,011,248 |
|
|
$ |
4,005,558 |
|
|
|
|
|
Liabilities and Equity: |
|
|
|
Liabilities: |
|
|
|
Mortgages and notes payable, net |
$ |
74,891 |
|
|
$ |
83,092 |
|
Revolving credit facility borrowings |
|
130,000 |
|
|
|
— |
|
Term loan payable, net |
|
298,834 |
|
|
|
298,446 |
|
Senior notes payable, net |
|
988,954 |
|
|
|
987,931 |
|
Trust preferred securities, net |
|
127,669 |
|
|
|
127,595 |
|
Dividends payable |
|
34,778 |
|
|
|
37,425 |
|
Liabilities held for sale |
|
2,815 |
|
|
|
3,468 |
|
Operating lease liabilities |
|
26,062 |
|
|
|
29,094 |
|
Accounts payable and other liabilities |
|
88,028 |
|
|
|
77,607 |
|
Accrued interest payable |
|
10,278 |
|
|
|
8,481 |
|
Deferred revenue - including below market leases, net |
|
11,734 |
|
|
|
14,474 |
|
Prepaid rent |
|
14,693 |
|
|
|
14,717 |
|
Total liabilities |
|
1,808,736 |
|
|
|
1,682,330 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
Equity: |
|
|
|
Preferred shares, par value $0.0001 per share; authorized
100,000,000 shares: |
|
|
|
Series C Cumulative Convertible Preferred, liquidation preference
$96,770; 1,935,400 shares issued and outstanding |
|
94,016 |
|
|
|
94,016 |
|
Common shares, par value $0.0001 per share; authorized 600,000,000
shares, |
|
|
|
276,100,331 and 283,752,726 shares issued and outstanding in 2022
and 2021, respectively |
|
28 |
|
|
|
28 |
|
Additional paid-in-capital |
|
3,134,739 |
|
|
|
3,252,506 |
|
Accumulated distributions in excess of net income |
|
(1,079,407 |
) |
|
|
(1,049,434 |
) |
Accumulated other comprehensive income (loss) |
|
17,768 |
|
|
|
(6,258 |
) |
Total shareholders’ equity |
|
2,167,144 |
|
|
|
2,290,858 |
|
Noncontrolling interests |
|
35,368 |
|
|
|
32,370 |
|
Total equity |
|
2,202,512 |
|
|
|
2,323,228 |
|
Total liabilities and equity |
$ |
4,011,248 |
|
|
$ |
4,005,558 |
|
|
LXP INDUSTRIAL TRUST AND CONSOLIDATED
SUBSIDIARIESEARNINGS PER SHARE(Unaudited
and in thousands, except share and per share data) |
|
|
|
|
Three Months EndedSeptember 30, |
|
Nine Months Ended September 30, |
|
|
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021 |
EARNINGS PER SHARE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
Net income attributable to common shareholders |
|
$ |
21,776 |
|
$ |
5,028 |
|
$ |
70,441 |
|
$ |
115,470 |
|
|
|
|
|
|
|
|
|
|
Weighted-average
number of common shares outstanding - basic |
|
|
277,535,717 |
|
|
278,124,204 |
|
|
281,559,058 |
|
|
276,379,718 |
|
|
|
|
|
|
|
|
|
Net income attributable to common shareholders - per common share
basic |
|
$ |
0.08 |
|
$ |
0.02 |
|
$ |
0.25 |
|
$ |
0.42 |
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
Net income
attributable to common shareholders - basic |
|
$ |
21,776 |
|
$ |
5,028 |
|
$ |
70,441 |
|
$ |
115,470 |
Impact of assumed conversions |
|
|
11 |
|
|
— |
|
|
147 |
|
|
— |
Net income attributable to common shareholders |
|
$ |
21,787 |
|
$ |
5,028 |
|
$ |
70,588 |
|
$ |
115,470 |
|
|
|
|
|
|
|
|
|
|
Weighted-average
common shares outstanding - basic |
|
|
277,535,717 |
|
|
278,124,204 |
|
|
281,559,058 |
|
|
276,379,718 |
Effect of dilutive
securities: |
|
|
|
|
|
|
|
|
Shares issuable under forward sales agreements |
|
|
— |
|
|
2,765,030 |
|
|
1,699,789 |
|
|
1,290,968 |
Unvested share-based payment awards |
|
|
139,371 |
|
|
1,159,224 |
|
|
491,877 |
|
|
911,163 |
Operating partnership units |
|
|
846,858 |
|
|
— |
|
|
859,226 |
|
|
— |
Weighted-average
common shares outstanding - diluted |
|
|
278,521,946 |
|
|
282,048,458 |
|
|
284,609,950 |
|
|
278,581,849 |
|
|
|
|
|
|
|
|
|
|
Net income
attributable to common shareholders - per common share diluted |
|
$ |
0.08 |
|
$ |
0.02 |
|
$ |
0.25 |
|
$ |
0.41 |
LXP INDUSTRIAL TRUST AND CONSOLIDATED
SUBSIDIARIES |
ADJUSTED COMPANY FUNDS FROM OPERATIONS & COMPANY FUNDS
AVAILABLE FOR DISTRIBUTION |
(Unaudited and in thousands, except share and per share data) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2022 |
|
|
|
2021 |
|
|
|
2022 |
|
|
|
2021 |
|
FUNDS FROM OPERATIONS: |
|
|
|
|
|
|
Basic and Diluted: |
|
|
|
|
|
|
|
|
Net income attributable to common shareholders |
|
$ |
21,776 |
|
|
$ |
5,028 |
|
|
$ |
70,441 |
|
|
$ |
115,470 |
|
Adjustments: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
44,227 |
|
|
|
44,652 |
|
|
|
132,600 |
|
|
|
128,442 |
|
Impairment charges - real estate, including our share of
non-consolidated entities |
|
|
1,256 |
|
|
|
2,048 |
|
|
|
7,299 |
|
|
|
2,048 |
|
Noncontrolling interests - OP units |
|
|
11 |
|
|
|
240 |
|
|
|
147 |
|
|
|
1,391 |
|
Amortization of leasing commissions |
|
|
719 |
|
|
|
707 |
|
|
|
2,045 |
|
|
|
2,137 |
|
Joint venture and noncontrolling interest adjustment |
|
|
2,612 |
|
|
|
2,115 |
|
|
|
8,585 |
|
|
|
6,344 |
|
Gains on sales of properties, including our share of
non-consolidated entities, net of tax |
|
|
(24,842 |
) |
|
|
(16,122 |
) |
|
|
(75,803 |
) |
|
|
(104,767 |
) |
FFO available to common shareholders and unitholders -
basic |
|
|
45,759 |
|
|
|
38,668 |
|
|
|
145,314 |
|
|
|
151,065 |
|
Preferred dividends |
|
|
1,573 |
|
|
|
1,573 |
|
|
|
4,718 |
|
|
|
4,718 |
|
Amount allocated to participating securities |
|
|
41 |
|
|
|
37 |
|
|
|
151 |
|
|
|
170 |
|
FFO available to all equityholders and unitholders -
diluted |
|
|
47,373 |
|
|
|
40,278 |
|
|
|
150,183 |
|
|
|
155,953 |
|
Selling profit from sales-type lease(1) |
|
|
— |
|
|
|
— |
|
|
|
(9,314 |
) |
|
|
— |
|
Non-recurring costs(2) |
|
|
640 |
|
|
|
64 |
|
|
|
2,629 |
|
|
|
205 |
|
Debt satisfaction losses, including our share of non-consolidated
entities |
|
|
119 |
|
|
|
13,222 |
|
|
|
1,614 |
|
|
|
13,222 |
|
Adjusted Company FFO available to all equityholders and
unitholders - diluted |
|
|
48,132 |
|
|
|
53,564 |
|
|
|
145,112 |
|
|
|
169,380 |
|
|
|
|
|
|
|
|
|
|
FUNDS AVAILABLE FOR DISTRIBUTION: |
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
Straight-line adjustments |
|
|
(2,078 |
) |
|
|
(3,196 |
) |
|
|
(8,893 |
) |
|
|
(8,146 |
) |
Lease incentives |
|
|
128 |
|
|
|
192 |
|
|
|
391 |
|
|
|
605 |
|
Amortization of above/below market leases |
|
|
(455 |
) |
|
|
(314 |
) |
|
|
(1,416 |
) |
|
|
(1,211 |
) |
Lease termination payments, net |
|
|
— |
|
|
|
(662 |
) |
|
|
— |
|
|
|
881 |
|
Non-cash interest |
|
|
820 |
|
|
|
838 |
|
|
|
2,459 |
|
|
|
2,475 |
|
Non-cash charges, net |
|
|
1,941 |
|
|
|
1,766 |
|
|
|
5,637 |
|
|
|
5,341 |
|
Capitalized interest and internal costs |
|
|
(2,414 |
) |
|
|
(728 |
) |
|
|
(5,465 |
) |
|
|
(2,124 |
) |
Second generation tenant improvements |
|
|
(499 |
) |
|
|
(3,443 |
) |
|
|
(5,016 |
) |
|
|
(4,178 |
) |
Second generation lease costs |
|
|
(1,380 |
) |
|
|
(2,287 |
) |
|
|
(2,138 |
) |
|
|
(5,341 |
) |
Joint venture and noncontrolling interest adjustment |
|
|
111 |
|
|
|
(54 |
) |
|
|
(108 |
) |
|
|
(181 |
) |
Company Funds Available for Distribution |
|
$ |
44,306 |
|
|
$ |
45,676 |
|
|
$ |
130,563 |
|
|
$ |
157,501 |
|
|
|
|
|
|
|
|
|
|
Per Common Share and Unit Amounts |
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
FFO |
|
$ |
0.16 |
|
|
$ |
0.14 |
|
|
$ |
0.51 |
|
|
$ |
0.54 |
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
FFO |
|
$ |
0.17 |
|
|
$ |
0.14 |
|
|
$ |
0.52 |
|
|
$ |
0.55 |
|
Adjusted Company FFO |
|
$ |
0.17 |
|
|
$ |
0.19 |
|
|
$ |
0.50 |
|
|
$ |
0.59 |
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - basic EPS |
|
|
277,535,717 |
|
|
|
278,124,204 |
|
|
|
281,559,058 |
|
|
|
276,379,718 |
|
Operating partnership units(3) |
|
|
846,858 |
|
|
|
1,161,757 |
|
|
|
859,226 |
|
|
|
2,263,105 |
|
Weighted-average common shares outstanding - basic FFO |
|
|
278,382,575 |
|
|
|
279,285,961 |
|
|
|
282,418,284 |
|
|
|
278,642,823 |
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
Weighted-average common shares outstanding - diluted EPS |
|
|
278,521,946 |
|
|
|
282,048,458 |
|
|
|
284,609,950 |
|
|
|
278,581,849 |
|
Operating partnership units(3) |
|
|
— |
|
|
|
1,161,757 |
|
|
|
— |
|
|
|
2,263,105 |
|
Unvested share-based payment awards |
|
|
— |
|
|
|
53,320 |
|
|
|
23,175 |
|
|
|
35,645 |
|
Preferred shares - Series C |
|
|
4,710,570 |
|
|
|
4,710,570 |
|
|
|
4,710,570 |
|
|
|
4,710,570 |
|
Weighted-average common shares outstanding - diluted FFO |
|
|
283,232,516 |
|
|
|
287,974,105 |
|
|
|
289,343,695 |
|
|
|
285,591,169 |
|
(1) Gain recognized upon exercise of the
tenant's purchase option in the lease.(2) Includes
transaction, strategic alternatives and costs related to
shareholder activism.
(3) Includes
all OP units other than OP units held by us.
|
LXP INDUSTRIAL TRUST AND CONSOLIDATED
SUBSIDIARIES |
RECONCILIATION OF NON-GAAP MEASURES |
|
|
|
|
2022 EARNINGS GUIDANCE |
|
|
|
|
Twelve Months EndedDecember 31, 2022 |
|
Range |
Estimated: |
|
|
|
Net income attributable to common shareholders per diluted common
share(1) |
$ |
0.36 |
|
|
$ |
0.39 |
|
Depreciation and amortization |
|
0.66 |
|
|
|
0.66 |
|
Impact of capital transactions |
|
(0.37 |
) |
|
|
(0.37 |
) |
Estimated Adjusted Company FFO per diluted common share |
$ |
0.65 |
|
|
$ |
0.68 |
|
(1) Assumes all convertible securities are
dilutive.
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