Lxp Industrial Trust · NYSE:LXP
Lxp Industrial Trust — Lexington Realty Trust — Investor Presentation (February 2016)
28 slides from Lxp Industrial Trust's investor presentation, Feb 24, 2016
Slide 1: Investor Presentation February 2016 - Lexington Realty Trust
INVESTOR PRESENTATION FEBRUARY 2016 LEXINGTON REALTY TRUST
Slide 2: Disclosure
Disclosure This presentation contains certain forward - looking statements within the meaning of Section 27 A of the Securities Act of 1933 , as amended, and Section 21 E of the Securities Exchange Act of 1934 , as amended, which involve known and unknown risks, uncertainties or other factors not un
Slide 3: Company Overview
Company Overview LEXINGTON REALTY TRUST (NYSE: LXP) Long History Portfolio Snapshot Experienced Team 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 $5.0 billion company (gross book value) 215 prope
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 4
Slide 5: Focused Investment Strategy
Focused Investment Strategy 5 INVESTMENT FOCUS ▪ Build - to - suit and sale - leaseback investments ▪ Long - term net leases, typically 15 - 20 years ▪ Single - tenant properties SECTOR ▪ Industrial, o ffice and select specialty r eal estate PORTFOLIO MANAGEMENT ▪ Originate , operate and sell certai
Slide 6: Investment Strategy Opportunities
Investment Strategy Opportunities 6 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 Sale Leasebacks ▪ Ab
Slide 7: Portfolio Transformation Continues
7 Through its focused strategy, Lexington continues to show meaningful progress towards creating a best - in - class net - lease REIT. Portfolio Metrics 2013 (1) 2015 (2) Status Office Exposure (3) 61.3% 50.1% i Multi - Tenant Exposure (3) 7.9% 3.0% i % of Revenue from Long - Term Leases (4) 30.1% 4
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 (30 assets) Acquisitions ▪ Committed to $265 million in build - to - suit projects to be primarily funded with disposition proceeds ▪ Potential to acquire add
Slide 9: Well Diversified by Geography/Property Type
25.6 12.8 2.3 1.4 0.2 Square Footage (Millions) Industrial Office Multi-Tenant Retail/ Specialty Land/ Infrastructure Well Diversified by Geography/Property Type 9 24 5 7 1 2 2 2 3 3 1 2 3 4 2 3 7 14 13 13 2 2 8 5 9 4 6 15 5 9 10 2 2 8 1 2 1 1 5 2 States with rental revenue greater than $10 million
Slide 10: Revenue Sources by Property Type
Revenue Sources by Property Type 10 3.4% 61.3% 24.6% 7.9% 2.8% 16.0% 50.1% 27.9% 3.0% 3.0% Land/Infrastructure Office Industrial Multi-Tenant Retail/Specialty 2013 (1) 2015 (2) Lexington continues to improve and diversify its revenue sources. (1) GAAP revenue as of 12/31/13. (2) GAAP revenue as of 1
Slide 11: Strong Tenant Diversification
Strong Tenant Diversification Top 10 Tenants (1) Revenue by Credit Rating (2) (1) Based on cash rent for the year ended 12/31/15, for consolidated properties owned as of 12/31/15. (2) Based on GAAP rent for the year ended 12/31/15, for consolidated properties owned as of 12/31/15 . (3) Total shown m
Slide 12: Execution: Strong Acquisition Activity
Execution: Strong Acquisition Activity (1) Includes 100% of joint venture acquisitions ($39.5 million in 2013, $57.5 million in 2012 and $15.3 million in 2011) and excl ude s the acquisition of NLS on 9/1/2012. $128.2 $247.0 $590.4 $212.3 $483.0 8.8% 8.4% 5.9% 7.6% 7.4% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%
Slide 13: External Growth Prospects - Build-to-Suit Pipeline
External Growth Prospects - Build - to - Suit Pipeline (1) No assurances can be given that any of these investments will be completed or, if completed, will perform to our expectation s. (2) Forward purchase commitment. Closed in the first quarter of 2016. (3) Lexington has a 25% interest in the joi
Slide 14: Build-to-Suit Investment Rationale: Preferred Freezer
▪ Acquired in Q4 1015 for approx. $152 million ▪ Attractive cash cap rate of 7.1% and GAAP cap rate of 8.6 % ▪ 456,400 sq. foot state - of - the - art industrial facility located in Washington State ▪ Lease payments backed by strong credit tenant — ConAgra Foods, Inc. ▪ Obtained $110 million 10 - ye
Slide 15: Build-to-Suit Investment Rationale: McGuireWoods
Build - to - Suit Investment Rationale: McGuireWoods 15 ▪ Acquired in Q4 1015 for approx. $101.5 million (1) ▪ Attractive initial cash cap rate of 8.2% and GAAP cap rate of 9.0% (1) ▪ 330,000 sq. foot new office building in desired Richmond, VA location ▪ Match - funded 15 - year financing with 15 -
Slide 16: Portfolio Repositioning Activity
Portfolio Repositioning Activity 16 Disposition Volume and Cap Rate (1) Lexington has consistently used proceeds from non - core dispositions to recycle capital into higher - quality properties. 7.4% 7.2% 6.5% 3.6% 6.3% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% $0 $50 $100 $150 $200 $250 $300 2011 2012 2013 20
Slide 17: Asset Repositioning Case Study: Sea Harbor Center
Asset Repositioning Case Study: Sea Harbor Center 17 ▪ Vacated in 2008 ▪ Conversion to multi - tenant ▪ Lexington invested $39 million ▪ Occupancy raised to 99.7% (1) ▪ Sold for $64.7 million in June 2015 Sea Harbor Center Orlando, Florida $(0.4) $(0.8) $(0.8) $(0.6) $2.7 $(2.0) $(1.0) $- $1.0 $2.0
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 (1) ▪ Occupancy raised to 94.2% (2) ▪ NOI grew from $(3.8) million to $8.5 million ▪ Sold for $121.0 million in August 2015 $(3.8) $(1.1) $4.7 $7.5 $8.5 $(6.0) $(4.0) $(2.0) $- $2.0
Slide 19: Asset Repositioning Case Study: Corporate Center At The Gardens
Asset Repositioning Case Study: Corporate Center At The Gardens ▪ Vacated in 2011 ▪ Lexington invested $11.6 million ▪ Occupancy raised to 100.0% ▪ NOI expected to grow from $(0.3) million to $1.6 million at forecasted stabilization ▪ Currently under contract to be sold for $30.1 million (1) $(0.3)
Slide 20: Managing Lease Expirations
Managing Lease Expirations Balanced rollover with meaningful progress addressing expirations. (1) 0% 10% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Lease Expiration Schedule (By Percentage of GAAP Rent) (2) Q4 2015 Q4 2014 (1) Based on consolidated GAAP rent for the year ended 12/31/15, exclu
Slide 21: Stable and Predictable Cash Flows
21 64.5% 19.6% 15.9% Annual increases Flat Other scheduled increases 6.9 11.2 12.1 12.6 4.0 6.0 8.0 10.0 12.0 14.0 2012 2013 2014 2015 (1) Cash basis for consolidated properties. As of 12/31/15. (2) Based on consolidated cash rent for the year ended 12/31/15 for single - tenant leases . Excludes par
Slide 22: Strong Operational Performance
22 93.4% 95.9% 97.3% 97.6% 96.4% 96.8% 85.0% 90.0% 95.0% 100.0% - 2,000 4,000 6,000 8,000 2010 2011 2012 2013 2014 2015 Leasing Volume SF in 000s Strong Operational Performance Historical Occupancy and Leasing Volume LXP continues to maintain high occupancy through its proactive leasing efforts.
Slide 23: Flexible Capital Structure
Flexible Capital Structure (1) 23 (1) Data reflects balances at 12/31/15. (2) Data includes OP Units and reflects a common share price of $7.11 at 2/19/16. Debt Amount ($ in Millions) Interest Rate/ Coupon Unsecured Credit Facility – 2019 $ 177.0 L + 100 bps Unsecured Term Loan Due 2020 250.0 2.19%
Slide 24: Balance Sheet Strategy
Balance Sheet Strategy 24 Lexington will focus on extending maturities, unencumbering assets, maintaining its investment - grade ratings and selectively utilizing secured financing. LXP Debt Maturity Profile ($000’s ) (1) (1) As of 12/31/2015. Percentage denotes weighted - average interest rate . 5.
Slide 25: Strong Dividend Yield
Strong Dividend Yield Strong dividend yield relative to its peers, REITs and other equity investments. Current Dividend Yield 25 Source: KeyBanc and Bloomberg as of 2/19/16. LXP’s current dividend yield reflects common share price of $7.11 at 2/19/16. 9.6% 7.0% 4.1% 4.8% 2.7% 2.3% 1.8% 0.0% 2.0% 4.0
Slide 26: Conservative Payout Ratio
Conservative Payout Ratio LXP believes its low payout ratio relative to its peers could improve growth prospects over time. 26 (1) Source: KeyBanc as of 2/19/16. 2016 Estimated FFO Payout Ratio (1) 63.6% 62.3% 52.6% 74.4% 0% 10% 20% 30% 40% 50% 60% 70% 80% LXP Industrial REITs Office REITs Net-Lease
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 27
Slide 28: Lexington Realty Trust
LEXINGTON REALTY TRUST A real estate investment trust specializing in single - tenant commercial properties.
Lexington Realty Trust — Investor Presentation (February 2016) on 6ix