Board Authorizes 3.8% Dividend Increase
WEST PALM BEACH, Fla., Nov. 06, 2024 (GLOBE NEWSWIRE) -- LXP Industrial Trust ("LXP”) (NYSE:LXP), a real estate investment trust focused on Class A warehouse and distribution real estate investments, today announced results for the quarter ended September 30, 2024.
Third Quarter 2024 Highlights
- Recorded Net Income attributable to common shareholders of $4.7 million, or $0.02 per diluted common share.
- Generated Adjusted Company Funds From Operations available to all equityholders and unitholders - diluted ("Adjusted Company FFO”) of $46.7 million, or $0.16 per diluted common share.
- Increased Same-Store NOI 5.4% in the third quarter compared to the same period in 2023.
- Completed new leases and lease extensions totaling 0.7 million square feet, raising Base and Cash Base Rents by 38.3% and 22.5%, respectively.
- Leased and placed into service a 250,020 square foot speculative development facility located in Columbus, Ohio.
- Invested an aggregate of $27.5 million in development activities and $7.6 million in a value-add opportunity at the Orlando, Florida asset.
- Entered into forward interest rate swap agreements for an aggregate of $250.0 million of the term loan and an aggregate of $82.5 million of the Trust Preferred Securities.
- Disposed of three facilities outside of Chicago, Illinois for an aggregate gross disposition price of approximately $136.7 million.
- Acquired one facility in Savannah, Georgia for approximately $34.1 million.
- Tenant exercised its purchase option to acquire the leased land owned by LXP in Phoenix, Arizona for $86.5 million, with closing anticipated in December 2024.
FINANCIAL RESULTS
Revenues
For the quarter ended September 30, 2024, total gross revenues were $85.6 million, compared with total gross revenues of $85.4 million for the quarter ended September 30, 2023. The increase is primarily attributable to market rent increases and stabilized development projects, offset by property sales and a decrease in other revenue.
Net Income Attributable to Common Shareholders
For the quarter ended September 30, 2024, net income attributable to common shareholders was $4.7 million, or $0.02 per diluted share, compared with net income attributable to common shareholders for the quarter ended September 30, 2023 of $11.0 million, or $0.04 per diluted share.
Adjusted Company FFO
For the quarter ended September 30, 2024, LXP generated Adjusted Company FFO of $46.7 million, or $0.16 per diluted share, compared to Adjusted Company FFO for the quarter ended September 30, 2023 of $51.9 million, or $0.18 per diluted share.
Dividends
LXP announced that it declared a regular quarterly common share dividend for the quarter ending December 31, 2024 of $0.135 per common share payable January 15, 2025 to common shareholders of record as of December 31, 2024. This represents an increase of 3.8% from the previous quarterly per share common share dividend and equates to an annualized increase of $0.02 per common share and an annualized dividend of $0.54 per common share, 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, 2024, which is expected to be paid on February 14, 2025 to shareholders of record as of January 31, 2025.
As previously announced, LXP declared a regular quarterly common share dividend for the quarter ending September 30, 2024 of $0.13 per common share, which was paid on October 15, 2024 to common shareholders of record as of September 30, 2024. LXP also declared a cash dividend of $0.8125 per share of Series C Preferred for the quarter ending September 30, 2024, which is expected to be paid on November 15, 2024 to shareholders of record as of October 31, 2024.
TRANSACTION ACTIVITY
PLACED IN SERVICE DEVELOPMENT
| Market | % Owned | Sq. Ft. | Initial Cost Basis ($000)(1) | Approximate Lease Term (Yrs) | % Leased | ||||||
| Central Florida (2) | 100% | 80,983 | $ | 12,401 | N/A | -% | |||||
| Columbus, OH | 100% | 250,020 | 23,879 | 5.2 | 100% | ||||||
| 331,003 | $ | 36,280 | |||||||||
2. During the third quarter of 2024, the remaining portion of this facility, representing 58% of the facility, was placed in service vacant one year after the completion of base building construction. During the fourth quarter of 2023, a 57,690 square foot portion of the facility, representing 42% of the facility, was occupied by a tenant and placed into service.
VALUE-ADD INVESTMENT
During the third quarter of 2024, LXP invested in a value-add opportunity by acquiring the fee interest in the land underlying our Orlando, Florida facility and an additional land parcel with a 145,974 square foot tenant-constructed expansion for $7.6 million.
ONGOING DEVELOPMENT PROJECTS
| Project (% owned) | # of Buildings | Market | Estimated Sq. Ft. | Estimated Project Cost ($000) | GAAP Investment Balance as of 9/30/2024($000)(1) | LXP Amount Funded as of 9/30/2024($000) | Estimated Base Building Completion Date | % Leased as of 9/30/2024 | |||||||
| Consolidated: | |||||||||||||||
| Build-to-Suit Development Projects Leased | |||||||||||||||
| Piedmont (100%)(2) | 1 | Greenville/Spartanburg, SC | 625,238 | $ | 74,400 | $ | 59,878 | $ | 54,526 | 4Q 2024 | 100% | ||||
| Land Infrastructure Improvements | |||||||||||||||
| Reems & Olive (95.5%) | N/A | Phoenix, AZ | N/A | $ | 10,120 | $ | 7,083 | $ | 5,807 | N/A | N/A | ||||
| 625,238 | $ | 84,520 | $ | 66,961 | $ | 60,333 | |||||||||
2. During the nine months ended September 30, 2024, LXP acquired a 59.1-acre land parcel for a purchase price of $3.4 million and commenced construction of a build-to-suit facility subject to a 12-year lease, which is estimated to commence January 2025.
LAND HELD FOR INDUSTRIAL DEVELOPMENT
| Project (% owned) | Market | Approx. Developable Acres | GAAP Investment Balance as of 9/30/2024 ($000) | LXP Amount Funded as of 9/30/2024 ($000)(1) | |||||||
| Consolidated: | |||||||||||
| 1 | Reems & Olive (95.5%)(2) | Phoenix, AZ | 315 | $ | 75,278 | $ | 74,149 | ||||
| 2 | Mt. Comfort Phase II (80%) | Indianapolis, IN | 116 | 5,749 | 4,307 | ||||||
| 3 | ATL Fairburn JV (100%) | Atlanta, GA | 14 | 1,732 | 1,757 | ||||||
| 3 | Total Consolidated Land Projects | 445 | $ | 82,759 | $ | 80,213 | |||||
| Project (% owned) | Market | Approx. Developable Acres | GAAP Investment Balance as of 9/30/2024 ($000) | LXP Amount Funded as of 9/30/2024 ($000)(1) | |||||||
| Non-consolidated: | |||||||||||
| 1 | Etna | Columbus, OH | 52 | $ | 9,797 | $ | 11,448 | ||||
| 2 | Etna East | Columbus, OH | 21 | 2,306 | 2,860 | ||||||
| 2 | Total Non-Consolidated Land Projects | 73 | $ | 12,103 | $ | 14,308 | |||||
2. The cost of infrastructure improvements to prepare for vertical development are included in the development table above.
NON-TARGET MARKET PROPERTY DISPOSITIONS
| Location | Gross Disposition Price ($000) | Annualized Net Income(1) ($000) | Annualized NOI (1)($000) | Month of Disposition | % Leased | ||||||||
| Glenwillow, OH | $ | 28,600 | $ | 2,048 | $ | 2,155 | July | 100% | |||||
The property above sold at GAAP and Cash capitalization rates of 7.2% and 7.5%, respectively.
LEASING
During the third quarter of 2024, LXP executed the following new and extended leases(1):
| NEW LEASES - FIRST GENERATION | |||||||||||
| Location | Lease Expiration Date | Sq. Ft. | |||||||||
| 1 | Etna | OH | 10/29 | 250,020 | |||||||
| 1 | TOTAL NEW LEASES - FIRST GENERATION | 250,020 | |||||||||
| NEW LEASES - SECOND GENERATION | |||||||||||
| Location | Lease Expiration Date | Sq. Ft. | |||||||||
| 1 | Antioch | TN | 10/29 | 67,200 | |||||||
| 1 | TOTAL NEW LEASES - SECOND GENERATION | 67,200 | |||||||||
| LEASE EXTENSIONS - SECOND GENERATION | |||||||||||
| Location | Prior Term | Lease Expiration Date | Sq. Ft. | ||||||||
| 1 | Winchester | VA | 11/24 | 09/34 | 324,535 | ||||||
| 2 | Whitestown | IN | 12/24 | 01/28 | 95,832 | ||||||
| 2 | TOTAL EXTENDED LEASES - SECOND GENERATION | 420,367 | |||||||||
| 3 | TOTAL NEW AND EXTENDED LEASES - SECOND GENERATION | 487,567 | |||||||||
As of September 30, 2024, LXP's stabilized portfolio was 93.2% leased. A total of 3.6 million square feet of first generation and new and extended second generation leases were entered into during the nine months ended September 30, 2024 with Base and Cash Base Rents increasing by an estimated 17.0% and 15.3% (42.5% and 39.1%, respectively, excluding tenant improvement reimbursements in one lease).
BALANCE SHEET
In the third quarter of 2024, LXP entered into forward interest rate swap agreements to effectively fix the interest rate related to an aggregate amount of $250.0 million of the term loan at an average interest rate of 4.31% from January 31, 2025 to January 31, 2027.
LXP also entered into forward interest rate swap agreements to effectively fix the interest rate related to an aggregate amount of $82.5 million of the Trust Preferred Securities at an average interest rate of 5.20% from October 30, 2024 to October 30, 2027.
LXP ended the quarter with net debt to Adjusted EBITDA at 6.1x. LXP's total consolidated debt was $1.6 billion at quarter end. The total consolidated debt had a weighted-average term to maturity of 5.7 years and a weighted-average interest rate of 3.804% as of September 30, 2024.
2024 EARNINGS GUIDANCE
LXP now estimates that its net income attributable to common shareholders for the year ended December 31, 2024 will be within an expected range of $0.14 to $0.15 per diluted common share. LXP is tightening its estimated Adjusted Company FFO for the year ended December 31, 2024, to be within an expected range of $0.63 to $0.64 per diluted common share. This guidance is forward looking, excludes the impact of certain items and is based on current expectations.
THIRD QUARTER 2024 CONFERENCE CALL
LXP will host a conference call today, November 6, 2024, at 8:30 a.m. Eastern Time, to discuss its results for the quarter ended September 30, 2024. 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 November 13, 2024, at 1-800-770-2030 or 1-609-800-9909, 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.
ABOUT LXP INDUSTRIAL TRUST
LXP Industrial Trust (NYSE: LXP) is a publicly traded real estate investment trust (REIT) focused on Class A warehouse and distribution investments in target markets across the Sunbelt and Midwest. LXP seeks to expand its warehouse and distribution 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 Relations
LXP Industrial Trust
Phone: (212) 692-7200 E-mail: [email protected]
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 and changes in applicable governmental regulations and tax legislation, (2) the outbreak of highly infectious or contagious diseases and natural disasters, (3) authorization by LXP's Board of Trustees of future dividend declarations, (4) LXP's ability to achieve its estimates of net income attributable to common shareholders and Adjusted Company FFO for the year ending December 31, 2024, (5) the successful consummation of any lease, acquisition, development, build-to-suit, disposition, financing or other transaction, including achieving any estimated yields (6) the failure to continue to qualify as a real estate investment trust, (7) changes in general business and economic conditions, including the impact of any legislation, (8) competition, (9) inflation and increases in operating costs, (10) labor shortages, (11) supply chain disruption and increases in real estate construction costs and raw materials costs and construction schedule delays, (12) defaults or non-renewals of significant tenant leases, (13) changes in financial markets and interest rates, (14) changes in accessibility of debt and equity capital markets, (15) future impairment charges, and (16) risks related to our investments in our non-consolidated 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