In This Article:
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Revenue: Approximately $86 million in the second quarter.
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Property Operating Expenses: About $15 million, with 90% attributable to tenant reimbursements.
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Adjusted Company FFO: $0.16 per diluted common share or approximately $47 million.
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G&A Expenses: $9.2 million in the second quarter.
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Same-Store NOI Growth: Increased 5% in the second quarter compared to the same period in 2023.
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Leverage: Ended the quarter at 6.2 times net debt to adjusted EBITDA.
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Portfolio Leased Rate: 99.4% leased at quarter end.
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Debt Outstanding: Approximately $1.6 billion with a weighted average interest rate of 3.81%.
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Fixed Rate Debt Percentage: Approximately 92% at quarter end.
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Unsecured Revolving Credit Facility: $600 million fully available at quarter end.
Release Date: July 31, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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LXP Industrial Trust (NYSE:LXP) reported strong leasing activity with 2.7 million square feet leased, achieving rental increases of 44.5% and 44% respectively.
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The company successfully completed its portfolio transformation by selling its remaining office assets, positioning itself as a pure play industrial REIT.
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LXP raised its same-store NOI growth expectations to a range of 4.5% to 5.5%, reflecting robust performance.
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The company is in advanced negotiations for an additional 1.7 million square feet of leasing, indicating continued strong demand.
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LXP's balance sheet remains strong with a net debt to adjusted EBITDA ratio of 6.2 times, and the company is focused on reducing leverage further.
Negative Points
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Interest expenses are expected to increase in 2025 due to the expiration of swaps on the term loan, impacting adjusted company FFO by approximately $0.02 per diluted share.
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The company faces potential vacancies with known tenant move-outs in 2024 and 2025, which could impact occupancy rates.
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LXP's G&A expenses for 2024 are expected to be higher due to one-time charges related to employee severance and CFO transition costs.
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The development pipeline's stabilization is still a few quarters away, which may continue to drag on earnings growth.
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The company is exploring asset sales in non-core markets, which could lead to potential dilution if not managed carefully.
Q & A Highlights
Q: Can you provide more details on the development leasing pipeline, specifically the 1.7 million square feet mentioned? A: We are close to securing a tenant for our Ocala facility and have identified a tenant for our Columbus facility. We are also responding to full building RFPs for our Indianapolis facility and have interest in our South Shore Tampa and Greenville Spartanburg facilities. We are optimistic about Ocala and Columbus but are still working on the others. (James Dudley, Executive Vice President, Director - Asset Management)