Lxp Industrial Trust · NYSE:LXP
Lxp Industrial Trust — Lexington Realty Trust — Investor Presentation (May 2016)
29 slides from Lxp Industrial Trust's investor presentation, May 18, 2016
Slide 1: Lexington Realty Trust Investor Presentation May 2016
ft ft LexiNGrol LEXINGTON REALTY TRUST INVESTOR PRESENTATION May 2016
Slide 2: Disclosure
Disclosure This presentation contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which involve known and unknown risks, uncertainties or other factors not under Le
Slide 3: Company Overview
Company Overview LEXINGTON REALTY TRUST (NYSE: LXP) Long History Franchise founded in 1973 Public since 1993 Consistent dividend paying company for 22 years Investment grade credit ratings by S&P, Moody's and Fitch As of March 31, 2016. Portfolio Snapshot $5.0 billion company (gross book value) 213
Slide 4: Investment Features
Investment Features Focused Single-Tenant, Net-Lease Strategy Diversified Portfolio Attractive Growth Prospects Active Portfolio Management Consistent Operating Performance Flexible Balance Sheet Strong Dividend with Conservative Payout Ratio
Slide 5: Investment Strategy
INVESTMENT Primarily build-to-suit and sale-leaseback investments Long-term net leases, ically 15-20 years 9 I typically y FOCUS Single-tenant properties SECTOR Industrial, office and select specialty real estate PORTFOLIO Originate, operate and sell certain properties with more than 10 years of rem
Slide 6: Investment Strategy Opportunities
Investment Strategy Opportunities Build-to-Suit Projects = Ability to originate a transaction for a yield : premium = Less competition in market provides more : opportunities with attractive pricing = Potential to make favorable returns with less risk by managing exit strategy Advantages Net-Lease P
Slide 7: Portfolio Transformation Continues...
Portfolio Transformation Continues... Through its focused strategy, Lexington continues to show meaningful progress towards creating a best-in-class net-lease REIT. Portfolio Metrics 2013” Q1 2016” Status Office Exposure®) 61.3% 50.3% i Multi-Tenant Exposure®) 7.9% 18% db % of Revenue from Long-Term
Slide 8: 2016 Business Plan Highlights
2016 Business Plan Highlights Dispositions * Dispose of approximately $600-$700 million of office, multi-tenant, and NYC land investments at targeted capitalization rate of 5.75%-6.50%) Acquisitions = Committed to $215 million in build-to-suit projects to be primarily funded with disposition proceed
Slide 9: Well Diversified by Geography/Property Type
Well Diversified by Geography/Property Type fue @ States with rental revenue greater than $10 million on an annualized GAAP basis. Note: All information as of March 31, 2016. Numbers indicated in the individual states represent number Number of Properties 420 Office ls Industral Retail MuttiTenant L
Slide 10: Revenue Sources by Property Type
Revenue Sources by Property Type Lexington continues to improve and diversify its revenue sources. Q1 20162) 1.8% 24% WM Land/Infrastructure mOffice m Industrial | Multi-Tenant mRetail/Specialty xp NYSE (1) GAAP revenueas of December31, 2013, (2) GAAP revenueas of March31, 2016, 10
Slide 11: Strong Tenant Diversification
Strong Tenant Diversification Primary Lease Term Expiration # of % of ve atin (d) Top 10 Tenants/Lease Guarantor“) Year Leases Base Rent (1.2) Revenue’ by eect Rating FedEx Corporation / Federal Express Corporation 19/21/28 a 3.5% Preferred Freezer Services of Richland, 14.6% LLC 2035, 1 3.0% Non-IG
Slide 12: Execution: Strong Acquisition Activity
Execution: Strong Acquisition Activity Lexington has been able to maintain strong acquisition activity with attractive pricing. Property Acquisition Volume and Cap Rate‘ $700.0 5 10.0% 8.8% 8.4% 9.0% $600.0 4 $590.4 7.6% 7% 8.0% E $5000 + 7.1% | 7.0% E 6.0% gE Mees $352.4 bd 5.0% $300.0 + 4.0% $212.
Slide 13: External Growth Prospects - Build-to-Suit Pipeline
External Growth Prospects- Build-to-Suit Pipeline Future build-to-suit investments are estimated to add consolidated annual revenue of $28.4 million to the portfolio.” Type Industrial Private School office office Industrial Square Feet 1,325,000 274,000 664,000 201,000 165,000 Fag eo $70.0 $86.5 $16
Slide 14: Build-to-Suit Investment Rationale: Preferred Freezer
Build-to-Suit Investment Rationale: Preferred Freezer + Acquired in Q4 2015 for approx. $152 million + Attractive initial cash cap rate of 7.1% and GAAP cap rate of 8.6% = 456,400 sq. foot state-of-the-art industrial facility prerenny cscs located in Washington State + Lease payments backed by stron
Slide 15: Build-to-Suit Investment Rationale: McGuireWoods
Build-to-Suit Investment Rationale: McGuireWoods Estimated Internal Rate of Return (IRR) Scena! + Acquired in Q4 2015 for approx. $101.5 million’ Conservative Scenario® + Attractive initial cash cap rate of 8.2% and GAAP Price/SF $162 cap rate of 9.0% \sold $250 $225 $200 | (webt ealance) |Estimate
Slide 16: Portfolio Repositioning Activity
Portfolio Repositioning Activity Lexington has consistently used proceeds from non-core disposi recycle capital into higher-quality properties. Disposition Volume and Cap Rate“ 10.0% e E 8.0% a 5.9% 6.0% 4.0% 2.0% + 0.0% 2011 2012 2013 2014 2015 Qi 2016/Subsequent 60% Long-term Lease Revenue® 50% 45
Slide 17: Asset Repositioning Case Study: Sea Harbor Center
Asset Repositioning Case Study: Sea Harbor Center + Vacated in 2008 + Conversion to multi-tenant + Lexington invested $39 million + Occupancy raised to 99.796 + Sold for $64.7 million in June 2015 Sea Harbor Center Orlando, Florida (1) Atclosing in June 2015. 100.0% 80.0% 60.0% 40.0% 20.0% 0.0% Net
Slide 18: Asset Repositioning Case Study: Transamerica Tower
Asset Repositioning Case Study: Transamerica Tower = 27% occupancy at the end of 2009 = Lexington invested $55 million® = Occupancy raised to 94.2%?) = NOI grew from $(3.8) million to $8.5 million = Sold for $121.0 millionin August 2015 Transamerica Tower Baltimore, MD (1) Since single-tenant termin
Slide 19: Asset Repositioning Case Study: Corporate Center At The Gardens
Asset Repositioning Case Study: Corporate Center At The Gardens = Vacated in 2011 Net Operating Income . . a sta + Lexington invested $11.6 million 2 32 = Occupancy raised to 100.0% ZB 908 306 + NOI grew from $(0.3) million to $1.6 million so4 so. at forcasted stabilization 2 0.1 + 5 + $(0.1) + Sold
Slide 20: Managing Lease Expirations
Managing Lease Expirations Balanced rollover with meaningful progress addressing expirations. Lease Rollover Distribution 25% 29.6% 27.2% 15% 23.7% 19.5% 5% + Through 2020 2021-2025 2026-2030 Post 2030 Lease Expiration Schedule (By Percentage of GAAP Rent)” QI 2016 mQi2015 11.0% 10%; 13% 0% 7.6% 79%
Slide 21: Stable and Predictable Cash Flows
Stable and Predictable Cash Flows Scheduled Rental Increases) Weighted-Average Lease Term (In Years) 14.0 12.0 10.0 86 8.0 60 40 20 0.0 2015 = Q12016 mCash Basis Adjusted m Cash Basis m Annual increases lat Other scheduled Lease Type® Leases Under 10 Approximately 70% of office revenue is Nears Rema
Slide 22: Strong Operational Performance
Strong Operational Performance LXP continues to maintain high occupancy through its proactive leasing efforts. Historical Occupancy and Leasing Volume 8,000 100.0% 97.3% 97.6% 96.8% 96.7% 96.4% 6,000 95.0% 93.4 4,000 90.0% 2,000 - | | 85.0% 2010 2011 2012 2013 2014 2015 Qt 2016 Leasing Volume SF in
Slide 23: Flexible Capital Structure
Flexible Capital Structure Focus on maintaining maximum flexibility to access most advantageous source of capital. Convertible Unsecured Bond Debt, 11.1% Debt, 0.3%. Trust Preferred, 2.9% Unsecured Term Debt, Unsecured Credit Facility, 3.3% (2) Data reflects balances at March 31, 2016. ‘Amount Inter
Slide 24: Balance Sheet Strategy
Balance Sheet Strategy Lexington will focus on extending maturities, unencumbering assets, maintaining its investment-grade ratings and selectively utilizing secured financing. LXP Debt Maturity Profile ($000's)” $300,000 43% 4.4% $250,000 $200,000 $150,000 $100,000 Ex i. $50,000 cy a s 2023 = 2024
Slide 25: Strong Dividend Yield
Strong Dividend Yield Strong dividend yield relative to its peers, REITs and other equity investments. Current Dividend Yield 80% 7.0% 6.0% 5.0% 4.0% TA% 3.0% 5.5% 2.0% 3.0% 1.0% 0.0% NetLease Off/Ind REITs AIIREITs. += DowJones = S&P500 Russell 2000 Source: KeyBanc and Bloomberg as of May 6, 2016,
Slide 26: Conservative Payout Ratio
Conservative Payout Ratio LXP believes its low payout ratio relative to its peers could improve growth prospects over time. 2016 Estimated FFO Payout Ratio 2016 Estimated AFFO Multiples 80% TA.0% 25.0 DAK 70% 60% 50% 40% 30% 20% 10% 0% 21.1x 200 15.0 13.8x 100 5.0 00 + LXP _ Industrial Office REITs
Slide 27: Investment Features
Investment Features Focused Single-Tenant, Net-Lease Strategy Diversified Portfolio Attractive Growth Prospects Active Portfolio Management Consistent Operating Performance Flexible Balance Sheet Strong Dividend with Conservative Payout Ratio
Slide 28: Additional Disclaimers
Additional Disclaimers Funds from Operations (FFO): The National Association of Real Estate Investment Trusts, Inc. ("NAREIT") defines FFO as “net income (or loss) computed in accordance with Generally Accepted Accounting Principles (GAAP), excluding gains (or losses) from sales of property, plus re
Slide 29: Lexington
LEXINGTON
Lexington Realty Trust — Investor Presentation (May 2016) on 6ix