FORM 10-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-K
(Mark One)
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2005
or
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 |
For the transition period
from to
Commission File Number
1-12386
LEXINGTON CORPORATE PROPERTIES TRUST
(Exact name of Registrant as specified in its charter)
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Maryland |
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13-3717318 |
(State or other jurisdiction of |
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(I.R.S. Employer |
incorporation or organization) |
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Identification No.) |
One Penn Plaza, Suite 4015 |
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New York, NY
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10119-4015 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area
code (212) 692-7200
Securities registered pursuant to Section 12(b) of the
Act:
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Title of Each Class |
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Name of Each Exchange on which Registered |
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Common Shares of beneficial interests, par value $0.0001 |
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New York Stock Exchange |
8.05% Series B Cumulative Redeemable Preferred Stock, |
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New York Stock Exchange |
par value $0.0001 |
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6.50% Series C Cumulative Convertible Preferred
Stock, |
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New York Stock Exchange |
par value $0.0001 |
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Securities registered pursuant to Section 12(g) of the
Act: None
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes þ No o.
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or Section 15(d) of the
Act. Yes o No þ.
Indicate by check mark whether the Registrant: (1) has
filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past
90 days. Yes þ No o
..
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
(§229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrants
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this
Form 10-K or any
amendment to this
Form 10-K. o
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, or a non-accelerated
filer. See definition of accelerated filer and large
accelerated filer in
Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated
filer þ Accelerated
filer o Non-accelerated
filer o
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2 of the
Act) Yes o No þ.
The aggregate market value of the voting shares held by
non-affiliates of the Registrant as of June 30, 2005, which
was the last business day of the Registrants most recently
completed second fiscal quarter was $1,108,593,588, based on the
closing price of common shares as of that date, which was
$24.31 per share.
Number of common shares outstanding as of March 8, 2006 was
52,848,907.
Certain information contained in the Definitive Proxy Statement
for Registrants 2006 Annual Meeting of Shareholders, to be
held on May 23, 2006 or the Proxy Statement, is
incorporated herein by reference into Part III.
TABLE OF CONTENTS
PART I.
Cautionary Statements Concerning Forward-Looking
Statements
This annual report on
Form 10-K (this
Annual Report), together with other statements and
information publicly disseminated by Lexington Corporate
Properties Trust (the Company) 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. The Company intends such forward-looking statements to
be covered by the safe harbor provisions for forward-looking
statements contained in the Private Securities Litigation Reform
Act of 1995 and include this statement for purposes of complying
with these safe harbor provisions. Forward-looking statements,
which are based on certain assumptions and describe the
Companys future plans, strategies and expectations, are
generally identifiable by use of the words believes,
expects, intends,
anticipates, estimates,
projects, or similar expressions. Readers should not
rely on forward-looking statements since they involve known and
unknown risks, uncertainties and other factors which are, in
some cases, beyond the Companys control and which could
materially affect actual results, performances or achievements.
In particular, among the factors that could cause actual results
to differ materially from current expectations include, but are
not limited to, (i) the failure to continue to qualify as a
real estate investment trust, (ii) changes in general
business and economic conditions, (iii) competition,
(iv) increases in real estate construction costs,
(v) changes in interest rates, (vi) changes in
accessibility of debt and equity capital markets and other risks
inherent in the real estate business, including, but not limited
to, tenant defaults, potential liability relating to
environmental matters, the availability of suitable acquisition
opportunities and illiquidity of real estate investments,
(vii) changes in governmental laws and regulations, and
(viii) increases in operating costs. The Company undertakes
no obligation to publicly release the results of any revisions
to these forward-looking statements which may be made to reflect
events or circumstances after the date hereof or to reflect
occurrence of unanticipated events. Accordingly, there is no
assurance that the Companys expectations will be realized.
General
The Company is a self-managed and self-administered Maryland
statutory real estate investment trust that acquires, owns and
manages a geographically diverse portfolio of net leased office,
industrial and retail properties and provides investment
advisory and asset management services to institutional
investors in the net lease area. Net leases are generally
characterized as leases in which the tenant bears all or
substantially all of the costs and/or cost increases for real
estate taxes, utilities, insurance and ordinary repairs. The
Companys predecessor was organized in October 1993 and
merged into the Company on December 31, 1997.
As of December 31, 2005, the Companys real property
portfolio consisted of 189 properties or interests therein
located in 39 states, including warehousing, distribution
and manufacturing facilities, office buildings and retail
properties containing an aggregate 40.2 million net
rentable square feet of space. In addition, Lexington Realty
Advisors, Inc. (LRA), a wholly-owned taxable REIT
subsidiary, manages two properties for an unaffiliated third
party. The Companys properties are generally subject to
triple net leases. Of the Companys 189 properties, 16
provide for operating expense stops and one is subject to a
modified gross lease. As of December 31, 2005, 98.3% of net
rentable square feet were subject to a lease.
The Company manages its real estate and credit risk through
geographic, industry, tenant and lease maturity diversification.
For the year ended December 31, 2005, the fifteen largest
tenants/guarantors, which occupied 48 properties, represented
37.8% of trailing twelve month base rent, including the
Companys proportionate share of base rent from
non-consolidated entities, properties held for sale and
properties sold through the respective date of sale. As of
December 31, 2004 and 2003, the fifteen largest
tenants/guarantors represented 43.5% and 46.1% of trailing
twelve month base rent, respectively, including the
Companys proportionate share of base rent from
non-consolidated entities, properties held for sale and
properties sold through date of sale. In 2005, 2004 and 2003, no
tenant/guarantor represented greater than 10% of annual base
rent.
1
Objectives and Strategy
The Companys primary objectives are to increase funds from
operations, cash available for distribution per share to its
shareholders, and net asset value per share. The Company
believes that funds from operations enhances an investors
understanding of its financial condition, results of operations
and cash flows. The Company believes that funds from operations
is an appropriate, but limited, measure of the performance of an
equity REIT. Funds from operations is defined in the April 2002
White Paper issued by the National Association of
Real Estate Investment Trusts, Inc. as net income (or
loss) computed in accordance with generally accepted accounting
principles (GAAP), excluding gains (or losses) from
sales of property, plus real estate depreciation and
amortization and after adjustments for unconsolidated
partnerships and joint ventures. The Company includes in
the calculation of funds from operations the dilutive effect of
the deemed conversion of its outstanding exchangeable notes (in
2001) which were redeemed by the Company in 2001 and the
Series C Cumulative Convertible Preferred Shares in 2005
and 2004. Funds from operations should not be considered an
alternative to net income as an indicator of operating
performance or to cash flows from operating activities as
determined in accordance with GAAP, or as a measure of liquidity
to other consolidated income or cash flow statement data as
determined in accordance with GAAP. In an effort to achieve the
Companys primary objectives, management focuses on:
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acquiring portfolios and individual net lease properties from
third parties, completing sale/leaseback transactions and
acquiring build-to-suit
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entering into strategic co-investment programs which generate
higher equity returns than direct investments due to
acquisition, asset management and debt placement fees, a
promoted interest and in some cases increased leverage levels; |
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managing assets through lease extensions, revenue enhancing
property expansions, opportunistic property sales and
redeployment of assets; |
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refinancing existing indebtedness at lower average interest
rates and increasing the Companys access to capital to
finance property acquisitions and expansions; and |
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entering into third party advisory contracts to generate
advisory fee revenue. |
Acquisition Strategies
The Company seeks to enhance its net lease property portfolio
through acquisitions of general purpose, efficient, well-located
properties in growing markets. Management has diversified the
Companys portfolio by geographical location, tenant
industry segment, lease term expiration and property type.
Management believes that such diversification should help
insulate the Company from regional recession, industry specific
downturns and price fluctuations by property type. Prior to
effecting any acquisitions, management analyzes the
(i) propertys design, construction quality,
efficiency, functionality and location with respect to the
immediate sub-market, city and region; (ii) lease integrity
with respect to term, rental rate increases, corporate
guarantees and property maintenance provisions;
(iii) present and anticipated conditions in the local real
estate market; and (iv) prospects for selling or re-leasing
the property on favorable terms in the event of a vacancy.
Management also evaluates each potential tenants financial
strength, growth prospects, competitive position within its
respective industry and a propertys strategic location and
function within a tenants operations or distribution
systems. Management believes that its comprehensive underwriting
process is critical to the assessment of long-term profitability
of any investment by the Company.
Acquisitions of Portfolio and Individual Net Lease
Properties. The Company seeks to acquire portfolio and
individual properties that are leased to creditworthy tenants
under long-term net leases. Management believes there is
significantly less competition for the acquisition of property
portfolios containing a number of net leased properties located
in more than one geographic region. Management also believes
that the Companys geographical diversification,
acquisition experience and access to capital will allow it to
compete effectively for the acquisition of such net leased
properties.
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The Company is structured as an umbrella partnership REIT
(UPREIT), and a substantial portion of its business
is conducted through its operating partnerships, Lepercq
Corporate Income Fund L.P., Lepercq Corporate Income Fund II
L.P. and Net 3 Acquisition L.P. The operating partnership
structure enables the Company to acquire properties by issuing
to a property owner, as a form of consideration in exchange for
the property, interests in the Companys operating
partnerships (OP Units). Management believes
that this structure facilitates the Companys ability to
raise capital and to acquire portfolio and individual properties
by enabling the Company to structure transactions which may
defer tax gains for a contributor of property. During 2005, the
Company issued 352,244 OP Units in exchange for all of the
outstanding partnership interests in Westport View Corporate
Center L.P., a Delaware limited partnership and the beneficiary
of an escrow account with a qualified intermediary holding
$7.7 million in remaining cash proceeds from the sale of an
investment property.
Sale/ Leaseback Transactions. The Company seeks to
acquire portfolio and individual net lease properties in
sale/leaseback transactions. The Company selectively pursues
sale/leaseback transactions with creditworthy sellers/tenants
with respect to properties that are integral to the
sellers/tenants ongoing operations.
Build-to-Suit
Properties. The Company seeks to acquire, generally after
construction has been completed,
build-to-suit
properties that are entirely pre-leased to their intended
corporate users before construction. As a result, the Company
generally does not assume the risk associated with the
construction phase of a project.
Competition. Through our predecessor entities the Company
has been in the net lease business for over 30 years and
has established close relationships with a large number of major
corporate tenants and maintains a broad network of contacts
including developers, brokers and lenders. In addition,
management is associated with and/or participates in many
industry organizations. Notwithstanding these relationships,
there are numerous commercial developers, real estate companies,
financial institutions and other investors with greater
financial resources that compete with the Company in seeking
properties for acquisition and tenants who will lease space in
these properties. The Companys competitors include other
REITs, pension funds, private companies and individuals.
Co-Investment Programs
Lexington Acquiport Company, LLC. In 1999, the Company
entered into a joint venture agreement with The Comptroller of
the State of New York as Trustee of the Common Retirement Fund
(CRF). The joint venture entity, Lexington Acquiport
Company, LLC (LAC), was created to acquire high
quality office and industrial real estate properties net leased
to investment and non-investment grade single tenant users. The
Company and CRF committed to make equity contributions to LAC of
up to $50 million and $100 million, respectively. LAC
has completed its acquisition program and no more investments
will be made unless to complete a tax-free exchange. In
addition, LAC financed a portion of acquisition costs through
the use of non-recourse mortgages. As of December 31, 2005,
LAC owned 10 properties. LAC also has an investment in an
$11.0 million participating note which was used to
partially fund the purchase of a 327,325 square foot office
property in Houston, Texas for $34.8 million. The Company
and CRF also purchased a property for $22.7 million
directly as partners and therefore, it is not owned by LAC. The
purchase price was partially funded through a $19.2 million
non-recourse mortgage maturing in 2021.
LRA has a management agreement with LAC and the separate
partnership whereby LRA will perform certain services for a fee
relating to the acquisition and management of the investments.
Lexington Acquiport Company II, LLC. In December 2001,
the Company and CRF announced the formation of Lexington
Acquiport Company II, LLC (LAC II). The
Company and CRF have committed to make equity contributions to
LAC II of up to $50.0 million and $150.0 million,
respectively, to purchase up to $560.0 million in single
tenant office and industrial properties net leased to investment
and non-investment grade tenants. As of December 31, 2005,
$135.1 million has been funded. LRA, in addition to earning
acquisition and asset management fees, earns a fee for all
mortgage debt directly placed. During 2005, LAC II acquired
four properties (two from the Company) for an aggregate
capitalized cost of $181.9 million
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($52.1 million for properties transferred from the Company
at cost). These acquisitions were partially funded by the use of
$124.2 million non-recourse mortgages, which bear interest
at fixed rates ranging from 5.2% to 5.9% and mature at various
dates ranging from 2013 and 2020.
The Company is required to first offer to LAC II 50% of the
Companys opportunities to acquire office and industrial
properties generally requiring a minimum investment of
$15.0 million, which are net leased primarily to investment
grade tenants for a minimum term of ten years, are available for
immediate delivery and satisfy other specified investment
criteria. Only if CRF elects not to approve LAC IIs
pursuit of an acquisition opportunity may the Company pursue the
opportunity directly.
Lexington/Lion Venture L.P. In October 2003, the Company
entered into a joint venture agreement with CLPF-LXP/ Lion
Venture GP, LLC (Clarion). The joint venture entity
Lexington/ Lion Venture L.P. (LION), was created to
acquire high quality single tenant office, industrial and retail
properties net leased to investment and non-investment grade
tenants. The Company and Clarion initially committed to make
equity contributions to LION of up to $30.0 million and
$70.0 million, respectively. In 2004, the Company and
Clarion increased their equity commitment by $25.7 million and
$60.0 million, respectively. As of December 31, 2005,
$187.3 million of the commitments had been funded which
completed the equity commitment obligations of each partner. In
addition, LION finances a portion of the acquisitions through
the use of non-recourse mortgages. During 2005, LION made three
acquisitions for an aggregate capitalized cost of
$92.4 million, of which $54.8 million was funded
through non-recourse mortgages, which bear interest at fixed
rates, ranging from 5.0% to 5.6% and mature at various dates
ranging from 2012 to 2019.
LRA has a management agreement with LION whereby LRA will
perform certain services for a fee relating to acquisition,
financing and management of the LION investments.
Triple Net Investment Company LLC. In June 2004, the
Company entered into a joint venture agreement with the Utah
State Retirement Investment Fund (Utah). The joint
venture entity, Triple Net Investment Company LLC
(TNI), was created to acquire high quality single
tenant office and industrial properties net leased to
non-investment grade tenants. The Company and Utah initially
committed to fund equity contributions to TNI of
$15.0 million and $35.0 million, respectively. In
December 2004, the Company and Utah increased their equity
commitment by $21.4 million and $50.0 million,
respectively. As of December 31, 2005, $83.0 million
of the commitments has been funded. In addition, TNI finances a
portion of acquisition costs through the use of non-recourse
mortgages. During 2005, TNI made three acquisitions for an
aggregate capitalized cost of $126.8 million, of which
$83.3 million was funded through non-recourse mortgages,
which bear interest at fixed rates ranging from 5.1% to 5.2% and
mature at various dates ranging in 2012 and 2013.
LRA has a management agreement with TNI whereby LRA performs
certain services for a fee relating to acquisition, financing
and management of the TNI investments.
The Company is required to first offer to Utah all of the
Companys opportunities (other than the opportunities it is
required to offer LAC II) to acquire office and industrial
properties requiring a minimum investment of $8.0 million
to $30.0 million, which are net leased to non-investment
grade tenants for a minimum term of at least seven years, are
generally available for immediate delivery and satisfy other
specified investment criteria. Only if Utah elects and any
overlapping co-investment program with a similar exclusively
right elects, not to approve the joint ventures pursuit of
an acquisition opportunity may the Company pursue the
opportunity directly.
Lexington Columbia L.L.C. In 1999, the Company also
formed a joint venture, Lexington Columbia L.L.C. (Lex
Columbia), to own a property net leased to Blue Cross Blue
Shield of South Carolina, Inc. The Company has a 40% interest in
Lex Columbia and LRA entered into a management agreement with
Lex Columbia with similar terms as the management agreement
with the above mentioned joint venture programs.
Lexington Florence LLC. In January 2002, the Company sold
a 77.3% interest in its Florence, South Carolina property net
leased to Washington Mutual Home Loans, Inc., along with the
proportionate share of
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mortgage debt for $4.6 million in proceeds. During 2004,
the Company repurchased the entire 77.3% interest it did not own
in this property for $6.1 million.
Oklahoma City, Oklahoma TIC. In 2005, the Company sold,
at cost, a 60% tenancy in common interest in its Oklahoma City,
Oklahoma property net leased primarily to AT&T Wireless
Services Inc., which it acquired during 2005, for
$4.0 million in cash and the assumption of
$8.8 million in non-recourse mortgage debt.
Lexington Strategic Asset Corp. In 2005, the Company
contributed four properties (three of which were subject to
non-recourse mortgages
aggregating $21.3 million) to Lexington Strategic Asset
Corp. (LSAC) in exchange for 3,319,600 shares of
common stock of LSAC valued at $10.00 per share. In
addition, LSAC sold 6,738,000 shares of common stock, at
$10.00 per share, generating net proceeds, after offering
costs and expenses, of $61.6 million. Due to the
Companys ownership percentage (approximately 32% of the
fully diluted outstanding common shares) in LSAC, the
Companys investment in LSAC is accounted for under the
equity method. LRA earns an advisory fee, including a promoted
interest, for its management of LSAC. Certain officers of the
Company have been granted the right to 40% of all promoted
interest earned by LRA. Also, these officers purchased an
aggregate of 220,000 shares of common stock of LSAC at its
formation for $0.1 million and they purchased an additional
100,000 shares of common stock in the offering for
$1.0 million. During 2005, LSAC acquired an additional two
properties for an aggregate capitalized cost of
$25.0 million. In addition, LSAC obtained a
$10.1 million non-recourse mortgage note, secured by one of
the properties contributed by the Company, which bears interest
at 5.46% and matures in 2020.
The Company adopted a conflicts policy with respect to the
Company and LSAC. Under the conflicts policy the Company is
required to first offer to LSAC, subject to the first offer
rights of LAC II and TNI, all of the Companys
opportunities to acquire (i) general purpose real estate
net leased to unrated or below investment grade credit tenants,
(ii) net leased special purpose real estate located in the
United States, such as medical buildings, theaters, hotels and
auto dealerships, (iii) net leased properties located in
the Americas outside of the United States with rent payments
denominated in United States dollars which are typically leased
to U.S. companies, (iv) specialized facilities in the
United States supported by net leases or other contracts where a
significant portion of the facilitys value is in equipment
or other improvements, such as power generation assets and cell
phone towers, and (v) net leased equipment and major
capital assets that are integral to the operations of
LSACs tenants and LSACs real estate investments. To
the extent that a specific investment opportunity, which is not
otherwise subject to a first offer obligation to LAC II or TNI,
is determined to be suitable to the Company and LSAC, the
investment opportunity will be allocated to LSAC. Where full
allocation to LSAC is not reasonably practicable (for example,
if LSAC does not have sufficient capital), the Company may
allocate a portion of the investment to itself after determining
in good faith that such allocation is fair and reasonable. The
Company will apply the foregoing allocation procedures between
LSAC and any investment funds or programs, companies or vehicles
or other entities that the Company controls which have
overlapping investment objectives with LSAC.
Internal Growth; Effectively Managing Assets
Tenant Relations and Lease Compliance. The Company
maintains close contact with its tenants in order to understand
their future real estate needs. The Company monitors the
financial, property maintenance and other lease obligations of
its tenants through a variety of means, including periodic
reviews of financial statements and physical inspections of the
properties. The Company performs annual inspections of those
properties where it has an ongoing obligation with respect to
the maintenance of the property and for all properties during
each of the last three years immediately prior to a scheduled
lease expiration. Biannual physical inspections are undertaken
for all other properties.
Extending Lease Maturities. The Company seeks to extend
its leases in advance of their expiration in order to maintain a
balanced lease rollover schedule and high occupancy levels.
During 2005, the Company entered into 12 lease extensions for
leases scheduled to expire at various dates ranging from 2005 to
2020, for an average 6.0 years and 2 leases (one
expiring in 2012 and a second in 2016) for vacant space.
5
Revenue Enhancing Property Expansions. The Company
undertakes expansions of its properties based on tenant
requirements or marketing opportunities. The Company believes
that selective property expansions can provide it with
attractive rates of return and actively seeks such opportunities.
Property Sales. Subject to regulatory requirements, the
Company sells properties when management believes that the
return realized from selling a property will exceed the expected
return from continuing to hold such property.
Access to Capital and Refinancing Existing Indebtedness
Capital Markets. During 2005 and 2004, the Company
completed common share offerings of 2.5 million and
6.9 million shares, respectively, raising aggregate net
proceeds of $60.7 million and $144.0 million,
respectively. During 2005, the Company issued 400,000 cumulative
convertible preferred shares, which were subject to an
underwriters over-allotment option, at $50 per share and a
dividend rate of 6.50%, raising net proceeds of
$19.5 million. During 2004, the Company issued
2.7 million cumulative convertible preferred shares at
$50 per share and a dividend rate of 6.50%, raising net
proceeds of $131.1 million. Currently these
3.1 million preferred shares are convertible into
5.8 million common shares.
Non-Recourse Mortgage Financing. During 2005, the
Company, including its non-consolidated entities, obtained
$840.3 million in non-recourse mortgage financings on
properties at a fixed weighted average interest rate of 5.2%.
The proceeds of the financings were used to partially fund
acquisitions.
During 2004, the Company, including its non-consolidated
entities, obtained and/or assumed $699.1 million in
non-recourse mortgage financings on properties at a fixed
weighted average interest rate (including imputed interest
rates) of 5.8%. The proceeds of the financings were used to
partially fund acquisitions and repay existing indebtedness.
As a result of the Companys financing activities, the
weighted average fixed interest rate on the Companys
outstanding indebtedness has been reduced from approximately
6.6% as of December 31, 2004, to approximately 6.0% as of
December 31, 2005.
Credit Facility. During 2005, the Company replaced its
$100 million unsecured revolving credit facility with a new
$200 million unsecured revolving credit facility which
bears interest at a rate of LIBOR plus 120-170 basis points
depending on the leverage (as defined) of the Company and
matures in June 2008. The credit facility contains customary
financial covenants including restrictions on the level of
indebtedness, amount of variable rate debt to be borrowed and
net worth maintenance provisions. As of December 31, 2005,
the Company was in compliance with all covenants, no borrowings
were outstanding on the facility, $198.5 million was
available to be borrowed and $1.5 million in letters of
credit were outstanding.
Common Share Repurchases. In September 1998, the
Companys Board of Trustees approved a funding limit for
the repurchase of 1.0 million common shares/ OP Units, and
authorized any repurchase transactions within that limit. In
November 1998, the Companys Board of Trustees approved an
additional 1.0 million common shares/ OP Units for
repurchase, thereby increasing the funding limit to
2.0 million common shares/ OP Units available for
repurchase. From September 1998 to March 2005, the Company
repurchased approximately 1.4 million common shares/ OP
Units at an average price of $10.62 per share/OP Unit. In
November 2005, the Companys Board of Trustees increased
the remaining amount of common shares/ OP Units eligible for
repurchase, so that an aggregate of 2.0 million common
shares/ OP Units are available for repurchase under the
Companys share repurchase program. No common share/ OP
Unit repurchases have been made under this increased share
repurchase program.
Advisory Contracts
In addition to the contracts discussed above, in August 2000,
LRA entered into an advisory and asset management agreement to
invest and manage an equity commitment of up to
$50.0 million on behalf of a private investment fund. The
investment program could, depending on leverage utilized,
acquire up to $140.0 million in single tenant, net leased
office, industrial and retail properties in the United States.
LRA earns acquisition fees (90 basis points of total
acquisition costs), annual asset management fees (30 basis
6
points of gross asset value) and a promoted interest of 16% of
the return in excess of an internal rate of return of 10% earned
by the private investment fund. The investment fund made no
purchases in 2005 or 2004.
Other
Environmental Matters. Under various federal, state and
local environmental laws, statutes, ordinances, rules and
regulations, an owner of real property may be liable for the
costs of removal or remediation of certain hazardous or toxic
substances at, on, in or under such property as well as certain
other potential costs relating to hazardous or toxic substances.
These liabilities may include government fines and penalties and
damages for injuries to persons and adjacent property. Such laws
often impose liability without regard to whether the owner knew
of, or was responsible for, the presence or disposal of such
substances. Although generally the Companys tenants are
primarily responsible for any environmental damage and claims
related to the leased premises, in the event of the bankruptcy
or inability of a tenant of such premises to satisfy any
obligations with respect to such environmental liability, the
Company may be required to satisfy such obligations. In
addition, the Company as the owner of such properties may be
held directly liable for any such damages or claims irrespective
of the provisions of any lease.
From time to time, in connection with the conduct of the
Companys business, and prior to the acquisition of any
property from a third party or as required by the Companys
financing sources, the Company authorizes the preparation of
Phase I and, when necessary, Phase II environmental
reports with respect to its properties. Based upon such
environmental reports and managements ongoing review of
its properties, as of the date of this Annual Report, management
is not aware of any environmental condition with respect to any
of the Companys properties which management believes would
be reasonably likely to have a material adverse effect on the
Companys financial condition and/or results of operations.
There can be no assurance, however, that (i) the discovery
of environmental conditions, the existence or severity of which
were previously unknown, (ii) changes in law,
(iii) the conduct of tenants or (iv) activities
relating to properties in the vicinity of the Companys
properties, will not expose the Company to material liability in
the future. Changes in laws increasing the potential liability
for environmental conditions existing on properties or
increasing the restrictions on discharges or other conditions
may result in significant unanticipated expenditures or may
otherwise adversely affect the operations of the Companys
tenants, which would adversely affect the Companys
financial condition and/ or results of operations, including
funds from operations.
Employees. As of December 31, 2005, the Company had
52 employees.
Industry Segments. The Company operates in one industry
segment, investment in single tenant, net leased real properties.
Website. The Companys website is located at
www.lxp.com. The Company makes available free of charge through
its web site its annual reports on
Form 10-K,
quarterly reports on
Form 10-Q, current
reports on
Form 8-K and
amendments to these reports filed or furnished pursuant to
Section 13(a) or 15(d) of the Exchange Act as soon as
reasonably practicable after it electronically files such
materials with the Securities and Exchange Commission. The
Company also has made available on its website copies of its
current Audit Committee Charter, Compensation Committee Charter,
Nominating and Corporate Governance Committee Charter, Code of
Business Conduct and Ethics, and Corporate Governance
Guidelines. In the event of any changes to these charters or the
code or the guidelines, changed copies will also be made
available on its web site.
Principal Executive Offices. The Companys principal
executive offices are located at One Penn Plaza,
Suite 4015, New York, New York 10119-4015; our telephone
number is (212) 692-7200. The Company also maintains
regional offices in Chicago, Illinois and Dallas, Texas.
NYSE CEO Certification. The Chief Executive Officer of
the Company made an unqualified certification to the New York
Stock Exchange with respect to the Companys compliance
with the New York Stock Exchange corporate governance listing
standards in June 2005.
7
Item 1A. Risk
Factors
Set forth below are material factors that may adversely
affect our business and operations. All references to the
Company, we, our and
us in this Item 1A mean Lexington Corporate
Properties Trust and all entities owned by us, including
non-consolidated entities, except where it is made clear that
the term means only the parent company.
Risks involved in single tenant leases. We focus our
acquisition activities on real properties that are net leased to
single tenants. Therefore, the financial failure of, or other
default by, a single tenant under its lease is likely to cause a
significant reduction in the operating cash flow generated by
the property leased to that tenant and might decrease the value
of that property.
In March 2006, Dana Corporation, a tenant in 10 of the
Companys properties (including one in a non-consolidated
entity) as of December 31, 2005, declared Chapter 11
bankruptcy. As of December 31, 2005 the aggregate net
carrying cost of the 9 consolidated properties was
$144.6 million, aggregate non-recourse mortgages
encumbering these properties was $82.8 million and
scheduled cash rent due in 2006 is $12.5 million. The
aggregate carrying cost of the 1 non-consolidated property was
$24.0 million, the non-recourse mortgage encumbering the
property was $14.3 million and scheduled cash rent in 2006
is $2.4 million. The Company has a 30% interest in this
non-consolidated entity.
Dependence on major tenants. Revenues from several of our
tenants and/or their guarantors constitute a significant
percentage of our base rental revenues. As of December 31,
2005, our 15 largest tenants/guarantors, which occupied 48
properties, represented approximately 37.8% of our base rental
revenue for the year ended December 31, 2005, including our
proportionate share of base rental revenue from non-consolidated
entities and base rental revenue recognized from properties sold
through the respective date of sale. The default, financial
distress or bankruptcy of any of the tenants of these properties
could cause interruptions in the receipt of lease revenues from
these tenants and/or result in vacancies, which would reduce our
revenues and increase operating costs until the affected
property is re-let, and could decrease the ultimate sales value
of that property. Upon the expiration or other termination of
the leases that are currently in place with respect to these
properties, we may not be able to re-lease the vacant property
at a comparable lease rate or without incurring additional
expenditures in connection with the re-leasing.
Leverage. We have incurred, and expect to continue to
incur, indebtedness (secured and unsecured) in furtherance of
our activities. Neither our declaration of trust nor any policy
statement formally adopted by our board of trustees limits
either the total amount of indebtedness or the specified
percentage of indebtedness that we may incur. Accordingly, we
could become more highly leveraged, resulting in increased risk
of default on our obligations and in an increase in debt service
requirements which could adversely affect our financial
condition and results of operations and our ability to pay
distributions. Our current unsecured revolving credit facility
contains cross-default provisions to our other material
indebtedness (as defined therein). In the event of a default on
such other material indebtedness, our indebtedness under our
current unsecured revolving credit facility could be
accelerated. Depending upon the amount of indebtedness under our
current unsecured revolving credit facility, such an
acceleration could have a material adverse impact on our
financial condition and results of operations. Our current
unsecured revolving credit facility also contains various
covenants which limit the amount of secured, unsecured and
variable-rate indebtedness we may incur and restricts the amount
of capital we may invest in specific categories of assets in
which we may otherwise want to invest.
Risks relating to interest rate increases. We have
exposure to market risks relating to increases in interest rates
due to our variable-rate debt. An increase in interest rates may
increase our costs of borrowing on existing variable-rate
indebtedness, leading to a reduction in our net income. As of
December 31, 2005, we had outstanding $11.9 million in
variable-rate indebtedness which represents 1.0% of our total
mortgages and notes payable. The level of our variable-rate
indebtedness, along with the interest rate associated with such
variable-rate indebtedness, may change in the future and
materially affect our interest costs and net income.
In addition, our interest costs on our fixed-rate indebtedness
can increase if we are required to refinance our fixed-rate
indebtedness at maturity at higher interest rates.
8
Risks associated with refinancing. A significant number
of our properties are subject to mortgage notes with balloon
payments due at maturity. As of December 31, 2005, the
scheduled balloon payments for our consolidated properties for
the next five calendar years are as follows:
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2006 $11.9 million; |
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2007 $0; |
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2008 $59.0 million; |
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2009 $47.7 million; and |
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2010 $56.6 million. |
As of December 31, 2005, none of our joint venture
properties require a balloon payment prior to 2009, at which
time $69.0 million (of which our proportionate share is
$23.6 million) will become due. In 2010, balloon payments
due for our joint venture properties aggregate
$61.6 million (of which our proportionate share is
$20.5 million).
Our ability to make the scheduled balloon payments will depend
upon the amount available under our unsecured revolving credit
facility and our ability either to refinance the related
mortgage debt or to sell the related property.
Our ability to accomplish these goals will be affected by
various factors existing at the relevant time, such as the state
of the national and regional economies, local real estate
conditions, available mortgage rates, the lease terms of the
mortgaged properties, our equity in the mortgaged properties,
our financial condition, the operating history of the mortgaged
properties and tax laws. If we are unable to obtain sufficient
financing to fund the scheduled non-recourse balloon payments or
to sell the related property at a price that generates
sufficient proceeds to pay the scheduled non-recourse balloon
payments, we would lose our entire investment in the related
property.
On January 5, 2006, we announced that we informed the
holder of the non-recourse mortgage on one of our properties
located in Milpitas, California that we will no longer make debt
service payments as a result of a vacancy caused by the
expiration of the lease on this property in December 2005. As a
result of this decision, we recorded an impairment charge of
approximately $12.1 million in the fourth quarter of 2005,
which is equal to the difference between this propertys
net book value (approximately $17.3 million) and our
estimate of the propertys fair market value (approximately
$5.2 million). We intend to convey this property to the
lender in a
deed-in-lieu of
foreclosure to satisfy the mortgage. Any adjustment made to the
approximately $11.1 million owed by us, which is net of
$0.9 million in escrow deposits, will be recognized as a
debt satisfaction gain in the period it occurs.
Uncertainties relating to lease renewals and re-letting of
space. Upon the expiration of current leases for space
located in our properties, we may not be able to re-let all or a
portion of that space, or the terms of re-letting (including the
cost of concessions to tenants) may be less favorable to us than
current lease terms. If we are unable to re-let promptly all or
a substantial portion of the space located in our properties or
if the rental rates we receive upon re-letting are significantly
lower than current rates, our net income and ability to make
expected distributions to our shareholders will be adversely
affected due to the resulting reduction in rent receipts and
increase in our property operating costs. There can be no
assurance that we will be able to retain tenants in any of our
properties upon the expiration of their leases.
Defaults on cross-collateralized properties. As of
December 31, 2005, the mortgages on three sets of two
properties, for an aggregate of six properties, are
cross-collateralized: (1) Canton, Ohio and Spartansburg,
South Carolina leased to Best Buy Co. Inc., (2) 730 N.
Black Branch Road, Elizabethtown, Kentucky and 750 N. Black
Branch Road, Elizabethtown, Kentucky leased to Dana Corporation,
and (3) Dry Ridge, Kentucky and Owensboro, Kentucky leased
to Dana Corporation. To the extent that any of our properties
are cross-collateralized, any default by us under the mortgage
note relating to one property will result in a default under the
financing arrangements relating to any other property that also
provides security for that mortgage note or is
cross-collateralized with such mortgage note.
9
Possible liability relating to environmental matters.
Under various federal, state and local environmental laws,
statutes, ordinances, rules and regulations, as an owner of real
property, we may be liable for the costs of removal or
remediation of certain hazardous or toxic substances at, on, in
or under our properties, as well as certain other potential
costs relating to hazardous or toxic substances. These
liabilities may include government fines and penalties and
damages for injuries to persons and adjacent property. These
laws may impose liability without regard to whether we knew of,
or were responsible for, the presence or disposal of those
substances. This liability may be imposed on us in connection
with the activities of an operator of, or tenant at, the
property. The cost of any required remediation, removal, fines
or personal or property damages and our liability therefore
could exceed the value of the property and/or our aggregate
assets. In addition, the presence of those substances, or the
failure to properly dispose of or remove those substances, may
adversely affect our ability to sell or rent that property or to
borrow using that property as collateral, which, in turn, would
reduce our revenues and ability to make distributions.
A property can also be adversely affected either through
physical contamination or by virtue of an adverse effect upon
value attributable to the migration of hazardous or toxic
substances, or other contaminants that have or may have emanated
from other properties. Although our tenants are primarily
responsible for any environmental damages and claims related to
the leased premises, in the event of the bankruptcy or inability
of any of our tenants to satisfy any obligations with respect to
the property leased to that tenant, we may be required to
satisfy such obligations. In addition, we may be held directly
liable for any such damages or claims irrespective of the
provisions of any lease.
From time to time, in connection with the conduct of our
business, and prior to the acquisition of any property from a
third party or as required by our financing sources, we
authorize the preparation of Phase I environmental reports and,
when necessary, Phase II environmental reports, with respect to
our properties. Based upon these environmental reports and our
ongoing review of our properties, as of the date of this Annual
Report, we are not aware of any environmental condition with
respect to any of our properties that we believe would be
reasonably likely to have a material adverse effect on us.
There can be no assurance, however, that the environmental
reports will reveal all environmental conditions at our
properties or that the following will not expose us to material
liability in the future:
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the discovery of previously unknown environmental conditions; |
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changes in law; |
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activities of tenants; or |
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activities relating to properties in the vicinity of our
properties. |
Changes in laws increasing the potential liability for
environmental conditions existing on properties or increasing
the restrictions on discharges or other conditions may result in
significant unanticipated expenditures or may otherwise
adversely affect the operations of our tenants, which could
adversely affect our financial condition or results of
operations, including funds from operations.
Uninsured loss. We carry comprehensive liability, fire,
extended coverage and rent loss insurance on most of our
properties, with policy specifications and insured limits that
we believe are customary for similar properties.
However, with respect to those properties where the leases do
not provide for abatement of rent under any circumstances, we
generally do not maintain rent loss insurance. In addition,
there are certain types of losses, such as losses resulting from
wars, terrorism or certain acts of God that generally are not
insured because they are either uninsurable or not economically
insurable.
Should an uninsured loss or a loss in excess of insured limits
occur, we could lose capital invested in a property, as well as
the anticipated future revenues from a property, while remaining
obligated for any mortgage indebtedness or other financial
obligations related to the property. Any loss of these types
would adversely affect our financial condition.
10
Risks relating to terrorism. Future terrorist attacks
such as the attacks which occurred in New York City,
Pennsylvania and Washington, D.C. on September 11, 2001,
and the military conflicts such as the military actions taken by
the United States and its allies in Afghanistan and Iraq, could
have a material adverse effect on general economic conditions,
consumer confidence and market liquidity.
Among other things, it is possible that interest rates may be
affected by these events. An increase in interest rates may
increase our costs of borrowing on existing variable-rate
indebtedness, leading to a reduction in our net income. These
types of terrorist acts could also result in significant damages
to, or loss of, our properties.
We and our tenants may be unable to obtain adequate insurance
coverage on acceptable economic terms for losses resulting from
acts of terrorism. Our lenders may require that we carry
terrorism insurance even if we do not believe this insurance is
necessary or cost effective. We may also be prohibited under the
applicable lease from passing all or a portion of the cost of
such insurance through to the tenant. Should an act of terrorism
result in an uninsured loss or a loss in excess of insured
limits, we could lose capital invested in a property, as well as
the anticipated future revenues from a property, while remaining
obligated for any mortgage indebtedness or other financial
obligations related to the property. Any loss of these types
would adversely affect our financial condition.
Competition. There are numerous commercial developers,
real estate companies, financial institutions and other
investors with greater financial resources than we have that
compete with us in seeking properties for acquisition and
tenants who will lease space in our properties. Due to our focus
on net lease properties located throughout the United States,
and because most competitors are locally and/or regionally
focused, we do not encounter the same competitors in each
market. Our competitors include other REITs, financial
institutions, insurance companies, pension funds, private
companies and individuals. This competition may result in a
higher cost for properties that we wish to purchase.
Failure to maintain effective internal controls could have a
material adverse effect on our business, operating results and
share price. Section 404 of the Sarbanes-Oxley Act of
2002 requires annual management assessments of the effectiveness
of our internal controls over financial reporting and a report
by our independent registered public accounting firm addressing
these assessments.
If we fail to maintain the adequacy of our internal controls, as
such standards may be modified, supplemented or amended from
time to time, we may not be able to ensure that we can conclude
on an ongoing basis that we have effective internal controls
over financial reporting in accordance with Section 404 of
the Sarbanes-Oxley Act of 2002. Moreover, effective internal
controls, particularly those related to revenue recognition, are
necessary for us to produce reliable financial reports and to
maintain our qualification as a REIT and are important to
helping prevent financial fraud. If we cannot provide reliable
financial reports or prevent fraud, our business and operating
results could be harmed, our REIT qualification could be
jeopardized, investors could lose confidence in our reported
financial information, and the trading price of our shares could
drop significantly.
Interest rate fluctuations. It is likely that the public
valuation of our common shares will be related primarily to the
earnings that we derive from rental income with respect to our
properties and not from the underlying appraised value of the
properties themselves. As a result, interest rate fluctuations
and capital market conditions can affect the market value of our
common shares. For instance, if interest rates rise, the market
price of our common shares may decrease because potential
investors seeking a higher dividend yield than they would
receive from our common shares may sell our common shares in
favor of higher rate interest-bearing securities.
Inability to carry out our growth strategy. Our growth
strategy is based on the acquisition and development of
additional properties, including acquisitions through
co-investment programs such as joint ventures. In the context of
our business plan, development generally means an
expansion or renovation of an existing property or the
acquisition of a newly constructed property. We typically
provide a developer with a commitment to acquire a property upon
completion of construction of a property and commencement of
rent from the tenant. Our plan to grow through the acquisition
and development of new properties could be
11
adversely affected by trends in the real estate and financing
businesses. The consummation of any future acquisitions will be
subject to satisfactory completion of our extensive valuation
analysis and due diligence review and to the negotiation of
definitive documentation. We cannot be sure that we will be able
to implement our strategy because we may have difficulty finding
new properties at attractive prices that meet our investment
criteria, negotiating with new or existing tenants or securing
acceptable financing. If we are unable to carry out our
strategy, our financial condition and results of operations
could be adversely affected.
Acquisitions of additional properties entail the risk that
investments will fail to perform in accordance with
expectations, including operating and leasing expectations.
Redevelopment and new project development are subject to
numerous risks, including risks of construction delays, cost
overruns or force majure events that may increase project costs,
new project commencement risks such as the receipt of zoning,
occupancy and other required governmental approvals and permits,
and the incurrence of development costs in connection with
projects that are not pursued to completion.
We anticipate that some of our acquisitions and developments
will be financed using the proceeds of periodic equity or debt
offerings, lines of credit or other forms of secured or
unsecured financing that will result in a risk that permanent
financing for newly acquired projects might not be available or
would be available only on disadvantageous terms. If permanent
debt or equity financing is not available on acceptable terms to
refinance acquisitions undertaken without permanent financing,
further acquisitions may be curtailed or cash available for
distribution may be adversely affected.
Concentration of ownership by certain investors. As of
December 31, 2005, E. Robert Roskind, the Chairman of our
board of trustees, owned or controlled (including through trusts
with respect to which he is a beneficiary) 712,567 common shares
and 1,651,486 operating partnership units which are convertible,
on a one-to-one basis,
into our common shares, representing approximately 3.71% of our
fully-diluted outstanding voting securities.
In 1999, we entered into a joint venture agreement with The
Comptroller of the State of New York as trustee of The Common
Retirement Fund, or CRF, to acquire properties. This
joint venture and a separate partnership established by the
partners has made investments in 13 (one of which was sold in
2005) properties for an aggregated capitalized cost of
$409.1 million and no additional investments will be made
unless they are made pursuant to a tax-free exchange. We have a
331/3%
equity interest in this joint venture. In December 2001, we
formed a second joint venture with CRF to acquire additional
properties in an aggregate amount of up to approximately
$560.0 million. We have a 25% equity interest in this joint
venture.
Under these joint venture agreements, CRF has the right to sell
its equity position in the joint ventures to us. In the event
CRF exercises its right to sell its equity interest in either
joint venture to us, we may, at our option, either issue common
shares to CRF for the fair market value of CRFs equity
position, based upon a formula contained in the respective joint
venture agreement, or pay cash to CRF equal to 110% of the fair
market value of CRFs equity position. We have the right
not to accept any property in the joint ventures (thereby
reducing the fair market value of CRFs equity position)
that does not meet certain underwriting criteria. In addition,
the joint venture agreements contain a mutual buy-sell provision
in which either CRF or we can force the sale of any property.
In October 2003, we entered into a joint venture agreement with
CLPF-LXP/Lion Venture GP, LLC, or Clarion, which was
expanded in September 2004, to acquire properties in an
aggregate amount of up to approximately $460.0 million.
This joint venture has made investments in 16 properties for an
aggregate capitalized cost of $458.7 and no additional
investments will be made unless they are made pursuant to a
tax-free exchange or upon the mutual agreement of Clarion and
us. We have a 30% equity interest in this joint venture. Under
the joint venture agreement, Clarion has the right to sell its
equity position in the joint venture to us. In the event Clarion
exercises its right to sell its equity interest in the joint
venture to us, we may, at our option, either issue common shares
to Clarion for the fair market value of Clarions equity
position, based upon a formula contained in the partnership
agreement, or pay cash to Clarion equal to 100% of the fair
market value of Clarions equity position. We have the
right not to accept any property in the joint venture (thereby
reducing the fair market value of Clarions equity
position) that does not meet certain underwriting
12
criteria. In addition, the joint venture agreement contains a
mutual buy-sell provision in which either Clarion or we can
force the sale of any property.
In June 2004, we entered in a joint venture agreement with the
Utah State Retirement Investment Fund, or Utah,
which was expanded in December 2004, to acquire properties in an
aggregate amount of up to approximately $345.0 million. As
of December 31, 2005, this joint venture owned 14
properties for an aggregate capitalized cost of
$241.1 million. We have a 30% equity interest in this joint
venture. Under the joint venture agreement, Utah has the right
to sell its equity position in the joint venture to us. This
right becomes effective upon the occurrence of certain
conditions. In the event Utah exercises its right to sell its
equity interest in the joint venture to us, we may, at our
option, either issue common shares to Utah for the fair market
value of Utahs equity position, based upon a formula
contained in the joint venture agreement, or pay cash to Utah
equal to 100% of the fair market value of Utahs equity
position. We have the right not to accept any property in the
joint venture (thereby reducing the fair market value of
Utahs equity position) that does not meet certain
underwriting criteria. In addition, the joint venture agreement
contains a mutual buy-sell provision in which either Utah or we
can force the sale of any property.
Dilution of common shares. Our future growth will depend
in part on our ability to raise additional capital. If we raise
additional capital through the issuance of equity securities,
the interests of holders of our common shares could be diluted.
Likewise, our board of trustees is authorized to cause us to
issue preferred shares in one or more series, the holders of
which would be entitled to dividends and voting and other rights
as our board of trustees determines, and which could be senior
to or convertible into our common shares. Accordingly, an
issuance by us of preferred shares could be dilutive to or
otherwise adversely affect the interests of holders of our
common shares.
Our Series C Preferred Shares may be converted by the
holder, at its option, into our common shares at a current
conversion rate of 1.8643 common shares per $50.00 liquidation
preference, which is equivalent to an initial conversion price
of approximately $26.82 per common share (subject to adjustment
in certain events). Depending upon the number of Series C
Preferred Shares being converted at one time, a conversion of
Series C Preferred Shares could be dilutive to or otherwise
adversely affect the interests of holders of our common shares.
Under our joint venture agreements, our joint venture partners
have the right to sell their equity position in the applicable
joint venture to us. In the event one of our joint venture
partners exercises its right to sell its equity interest in the
applicable joint venture to us, we may, at our option, either
issue our common shares to the exercising joint venture partner
for the fair market value of the exercising joint venture
partners equity position, based upon a formula contained
in the applicable joint venture agreement, or pay cash to the
exercising joint venture partner equal to either (i) 110%
of the fair market value of the exercising joint venture
partners equity position with respect to our joint
ventures with CRF, or (ii) 100% of the fair market value of
the exercising joint venture partners equity position with
respect to Lion and Utah. An exercise by one or more of our
joint venture partners and our election to satisfy an exercise
with our common shares could be dilutive to or otherwise
adversely affect the interests of holders of our common shares.
As of December 31, 2005, an aggregate of approximately
5,760,571 common shares are issuable upon (i) the exchange
of all outstanding units of limited partnership interests in our
operating partnership subsidiaries (5,720,071 common shares) and
(ii) the exercise of outstanding options under our
equity-based award plans (40,500 common shares). Depending upon
the number of such securities exchanged or exercised at one
time, an exchange or exercise of such securities could be
dilutive to or otherwise adversely affect the interests of
holders of our common shares.
Limited control over joint venture investments. Our joint
venture investments are a significant portion of our assets and
are also a significant component of our growth strategy. In
particular, as of December 31, 2005, 63 of our 189
properties representing 14.6 million of our total of
approximately 40.2 million net rentable square feet of
space was owned by joint ventures in which we have an ownership
interest ranging from 25% to 40%. For the year ended
December 31, 2005, our joint venture investments accounted
for approximately $6.2 million of equity in earnings, while
our gross revenues totaled approximately $197.1 million
(approximately $5.3 million of which represents advisory
fees earned from our management of the joint ventures). As
13
of December 31, 2005, we had approximately
$2.2 billion in consolidated total assets of which
$191.1 million was investment in joint ventures. Our joint
venture investments may involve risks not otherwise present for
investments made solely by us, including the possibility that
our joint venture partner might, at any time, become bankrupt,
have different interests or goals than we do, or take action
contrary to our instructions, requests, policies or objectives,
including our policy with respect to maintaining our
qualification as a REIT. Other risks of joint venture
investments include impasse on decisions, such as a sale,
because neither we nor a joint venture partner have full control
over the joint venture. Also, there is no limitation under our
organizational documents as to the amount of funds that may be
invested in joint ventures. Our unsecured revolving credit
facility restricts the amount of capital that we can invest in
joint ventures.
Joint venture investments may conflict with our ability to
make attractive investments. Under the terms of our active
joint venture with CRF, we are required to first offer to the
joint venture 50% of our opportunities to acquire office and
industrial properties requiring a minimum investment of
$15.0 million which are net leased primarily to investment
grade tenants for a minimum term of ten years, are available for
immediate delivery and satisfy other specified investment
criteria.
Similarly, under the terms of our joint venture with Utah,
unless 75% of Utahs capital commitment is funded, we are
required to first offer to the joint venture all of our
opportunities to acquire certain office, bulk warehouse and
distribution properties requiring an investment of
$8.0 million to $30.0 million which are net leased
primarily to non-investment grade tenants for a minimum term of
at least nine years and satisfy other specified investment
criteria, subject also to our obligation to first offer such
opportunities to our joint venture with CRF.
On September 12, 2005, our board of trustees adopted a
conflicts policy with respect to us and LSAC. In connection with
a private offering by LSAC, we contributed to LSAC our indirect
ownership interests in four real estate assets and financing
deposits. In exchange, LSAC issued to us shares of its common
stock having an aggregate value of approximately
$33.2 million based on the offering price in the private
offering. Under the conflicts policy we are required to first
offer to LSAC, subject to the first offer rights of CRF and
Utah, all of our opportunities to acquire (i) general
purpose real estate net leased to unrated or below investment
grade credit tenants, (ii) net leased special purpose real
estate located in the United States, such as medical buildings,
theaters, hotels and auto dealerships, (iii) net leased
properties located in the Americas outside of the United States
with rent payments denominated in United States dollars which
are typically leased to U.S. companies, (iv) specialized
facilities in the United States supported by net leases or other
contracts where a significant portion of the facilitys
value is in equipment or other improvements, such as power
generation assets and cell phone towers, and (v) net leased
equipment and major capital assets that are integral to the
operations of LSACs tenants and LSACs real estate
investments. To the extent that a specific investment
opportunity, which is not otherwise subject to a first offer
obligation to our joint ventures with CRF or Utah, is determined
to be suitable to us and LSAC, the investment opportunity will
be allocated to LSAC. Where full allocation to LSAC is not
reasonably practicable (for example, if LSAC does not have
sufficient capital), we may allocate a portion of the investment
to ourselves after determining in good faith that such
allocation is fair and reasonable. We will apply the foregoing
allocation procedures between LSAC and any investment funds or
programs, companies or vehicles or other entities that we
control which have overlapping investment objectives with LSAC.
Only if all of our joint venture partners elect not to approve
the applicable joint ventures pursuit of an acquisition
opportunity or the applicable exclusivity conditions have
expired may we pursue the opportunity directly. As a result of
the foregoing rights of first offer, we may not be able to make
attractive acquisitions directly and may only receive a minority
interest in such acquisitions through our minority interest in
these joint ventures.
Conflicts of interest with respect to sales and
refinancings. Two of our trustees and officers own limited
partnership interests in our operating partnerships and, as a
result, may face different and more adverse tax consequences
than our other shareholders will if we sell our properties or
reduce our mortgage indebtedness on our properties. Those
individuals may, therefore, have different objectives than our
other shareholders regarding the appropriate pricing and timing
of any sale of such properties or reduction of mortgage debt.
14
Accordingly, there may be instances in which we may not sell a
property or pay down the debt on a property even though doing so
would be advantageous to our other shareholders. In the event of
an appearance of a conflict of interest, the conflicted trustee
or officer must recuse himself or herself from any decision
making or seek a waiver of our Code of Business Conduct and
Ethics.
Our ability to change our portfolio is limited because real
estate investments are illiquid. Equity investments in real
estate are relatively illiquid and, therefore, our ability to
change our portfolio promptly in response to changed conditions
will be limited. Our board of trustees may establish investment
criteria or limitations as it deems appropriate, but currently
does not limit the number of properties in which we may seek to
invest or on the concentration of investments in any one
geographic region. We could change our investment, disposition
and financing policies without a vote of our shareholders.
Failure to qualify as a REIT. We believe that we have met
the requirements for qualification as a REIT for federal income
tax purposes beginning with our taxable year ended
December 31, 1993, and we intend to continue to meet these
requirements in the future. However, qualification as a REIT
involves the application of highly technical and complex
provisions of the Internal Revenue Code of 1986, as amended (the
Code), for which there are only limited judicial or
administrative interpretations. No assurance can be given that
we have qualified or will remain qualified as a REIT. The Code
provisions and income tax regulations applicable to REITs are
more complex than those applicable to corporations. The
determination of various factual matters and circumstances not
entirely within our control may affect our ability to continue
to qualify as a REIT. In addition, no assurance can be given
that legislation, regulations, administrative interpretations or
court decisions will not significantly change the requirements
for qualification as a REIT or the federal income tax
consequences of such qualification. If we do not qualify as a
REIT, we would not be allowed a deduction for distributions to
shareholders in computing our net taxable income. In addition,
our income would be subject to tax at the regular corporate
rates. We also could be disqualified from treatment as a REIT
for the four taxable years following the year during which
qualification was lost. Cash available for distribution to our
shareholders would be significantly reduced for each year in
which we do not qualify as a REIT. In that event, we would not
be required to continue to make distributions. Although we
currently intend to continue to qualify as a REIT, it is
possible that future economic, market, legal, tax or other
considerations may cause us, without the consent of the
shareholders, to revoke the REIT election or to otherwise take
action that would result in disqualification.
Distribution requirements imposed by law limit our
flexibility. To maintain our status as a REIT for federal
income tax purposes, we are generally required to distribute to
our shareholders at least 90% of our taxable income for that
calendar year. Our taxable income is determined with regard to
the deduction for dividends paid and by excluding net capital
gains. To the extent that we satisfy the distribution
requirement, but distribute less than 100% of our taxable
income, we will be subject to federal corporate income tax on
our undistributed income. In addition, we will incur a 4%
nondeductible excise tax on the amount, if any, by which our
distributions in any year are less than the sum of (i) 85%
of our ordinary income for that year, (ii) 95% of our
capital gain net income for that year and (iii) 100% of our
undistributed taxable income from prior years. We intend to
continue to make distributions to our shareholders to comply
with the distribution requirements of the Code and to reduce
exposure to federal income and nondeductible excise taxes.
Differences in timing between the receipt of income and the
payment of expenses in determining our income and the effect of
required debt amortization payments could require us to borrow
funds on a short-term basis in order to meet the distribution
requirements that are necessary to achieve the tax benefits
associated with qualifying as a REIT.
Ownership limitations. For us to qualify as a REIT for
federal income tax purposes, among other requirements, not more
than 50% of the value of our capital shares may be owned,
directly or indirectly, by five or fewer individuals (as defined
for federal income tax purposes to include certain entities)
during the last half of each taxable year, and these capital
shares must be beneficially owned by 100 or more persons during
at least 335 days of a taxable year of 12 months or
during a proportionate part of a shorter taxable year (in each
case, other than the first such year for which a REIT election
is made). Our declaration of trust includes certain restrictions
regarding transfers of our capital shares and ownership limits.
15
Actual or constructive ownership of our capital shares in excess
of the share ownership limits contained in our declaration of
trust would cause the violative transfer or ownership to be void
or cause the shares to be transferred to a charitable trust and
then sold to a person or entity who can own the shares without
violating these limits. As a result, if a violative transfer
were made, the recipient of the shares would not acquire any
economic or voting rights attributable to the transferred
shares. Additionally, the constructive ownership rules for these
limits are complex and groups of related individuals or entities
may be deemed a single owner and consequently in violation of
the share ownership limits.
These restrictions and limits may not be adequate in all cases,
however, to prevent the transfer of our capital shares in
violation of the ownership limitations. The ownership limits
discussed above may have the effect of delaying, deferring or
preventing someone from taking control of our company, even
though a change of control could involve a premium price for
your common shares or otherwise be in your best interest.
Adverse legislative or regulatory tax changes. At any
time, the federal income tax laws governing REITs or the
administrative interpretations of those laws may be amended. Any
of those new laws or interpretations may take effect
retroactively and could adversely affect us or you as a
shareholder. Recently enacted legislation reduces individual tax
rates applicable to certain corporate dividends. REIT dividends
generally would not be eligible for reduced rates (other than
dividends from LSAC and other taxable REIT subsidiaries that are
distributed by us) because a REITs income generally is not
subject to corporate level tax. As a result, investment in
non-REIT corporations may be relatively more attractive than
investment in REITs. This could adversely affect the market
price of our shares.
Restrictions on a potential change of control. Our board
of trustees is authorized by our declaration of trust to
establish and issue one or more series of preferred shares
without shareholder approval. As of the date of this Annual
Report, we had outstanding 3,160,000 Series B Cumulative
Redeemable Preferred Shares that we issued in June 2003 and
3,100,000 Series C Cumulative Convertible Preferred Shares
that we issued in December 2004 and January 2005. Both our
Series B and Series C Preferred Shares include
provisions that may deter a change of control of us. The
establishment and issuance of shares of our existing series of
preferred shares or a future series of preferred shares could
make more difficult a change of control of us.
In addition, we have entered into employment agreements with six
of our executive officers which provide that, upon the
occurrence of a change in control of us (including a change in
ownership of more than 50% of the total combined voting power of
our outstanding securities, the sale of all or substantially all
of our assets, dissolution of our company, the acquisition,
except from us, of 20% or more of our voting shares or a change
in the majority of our board of trustees), those executive
officers would be entitled to severance benefits based on their
current annual base salaries and recent annual bonuses, as
defined in the employment agreements. The provisions of these
agreements could deter a change of control of us.
Our board of trustees may change our investment policy
without shareholders approval. Subject to our
fundamental investment policy to maintain our qualification as a
REIT, our board of trustees will determine our investment and
financing policies, our growth strategy and our debt,
capitalization, distribution, acquisition, disposition and
operating policies.
Our board of trustees may revise or amend these strategies and
policies at any time without a vote by our shareholders.
Accordingly, our shareholders control over changes in our
strategies and policies is limited to the election of trustees,
and changes made by our board of trustees may not serve the
interests of our shareholders and could adversely affect our
financial condition or results of operations, including our
ability to distribute cash to shareholders or qualify as a REIT.
|
|
Item 1B. |
Unresolved Staff Comments |
There are no unresolved written comments that were received from
the SEC staff 180 days or more before the end of the
Companys fiscal year relating to the Companys
periodic or current reports under the Securities Exchange Act of
1934.
16
Real Estate Portfolio
General. As of December 31, 2005, the Company owned
or had interests in approximately 40.2 million square feet
of rentable space in 189 office, industrial and retail
properties. As of December 31, 2005, the Companys
properties were 98.3% leased based upon net rentable square
feet. As of December 31, 2005, the number, percentage of
trailing 12 month base rent (including base rent from
properties sold through date of sale, properties held for sale
and the Companys proportionate share of non-consolidated
entities) and square footage mix of the Companys portfolio
is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Base | |
|
Square | |
|
|
Number | |
|
Rent | |
|
Footage | |
|
|
| |
|
| |
|
| |
Office
|
|
|
107 |
|
|
|
65.6 |
% |
|
|
41.8 |
% |
Industrial
|
|
|
59 |
|
|
|
29.7 |
|
|
|
53.4 |
|
Retail
|
|
|
23 |
|
|
|
4.7 |
|
|
|
4.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
189 |
|
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
The Companys properties are generally subject to net
leases; however, in certain leases the Company is responsible
for roof and structural repairs. In such situations the Company
performs annual inspections of the properties. Seventeen of the
Companys properties (including non-consolidated entities)
are subject to leases in which the landlord is responsible for a
portion of the real estate taxes, utilities and general
maintenance. The Company is responsible for all operating
expenses of any vacant properties. As of December 31, 2005,
the Company had three completely vacant properties (Milpitas,
California, Dallas, Texas and Phoenix, Arizona).
The Companys tenants represent a variety of industries,
including general retailing, finance and insurance, energy,
transportation and logistics, automotive, technology,
telecommunications and defense. For the year ended
December 31, 2005, base rent, including base rent earned by
non-consolidated entities, from properties held for sale, and
for properties sold through date of sale, were earned from 137
tenants in 20 different industries.
Tenant Leases. A substantial portion of the
Companys income consists of base rent under long-term
leases. As of December 31, 2005, of the 189 properties,
three are completely vacant and the remaining are subject to 202
leases.
Ground Leases. The Company has 19 properties (including
three properties owned by non-consolidated entities) that are
subject to long-term ground leases where a third party owns and
has leased the underlying land to the Company. In each of these
situations the rental payments made to the landowner are passed
on to the Companys tenant. Three of these properties are
economically owned through the holding of industrial revenue
bonds and as such neither ground lease payments nor bond
interest payments are made or received, respectively. For eight
of the properties the Company has a purchase option. At the end
of these long-term ground leases, unless extended or the
purchase option exercised, the land together with all
improvements thereon reverts to the landowner. In addition, the
Company has one property in which a portion of the land, on
which a portion of the parking lot is located, is subject to a
ground lease. At expiration of the ground lease only that
portion of the parking lot reverts to the landowner. These
ground leases, including renewal options, expire at various
dates from 2026 through 2082.
Leverage. The Company generally uses fixed rate,
non-recourse mortgages to partially fund the acquisition of real
estate. As of December 31, 2005, the Company had
outstanding mortgages, including mortgages classified as
discontinued operations, of $1.2 billion with a weighted
average interest rate of 6.0%.
17
Table Regarding Real Estate Holdings
The table on the following pages sets forth certain information
relating to the Companys real property portfolio,
including non-consolidated properties, as of December 31,
2005. All the properties listed have been fully leased by
tenants for the last five years, or since the date of purchase
by the Company or its non-consolidated entities if less than
five years, with the exception of the properties located in
Philadelphia, Pennsylvania, Dallas, Texas, Milpitas, California,
Hebron, Kentucky, Memphis, Tennessee, San Francisco,
California and two properties located in Phoenix, Arizona. The
Philadelphia, Pennsylvania has 2,842 square feet of vacant
space since the Companys acquisition in 2005. During the
last five years, (1) the Dallas, Texas property has been
vacant since December 31, 2004, (2) the Milpitas,
California property has been vacant since December 9, 2005,
(3) the Hebron, Kentucky property has been vacant since
April 2004 (except that 21,542 square feet was leased
during 2005) and (4) the tenant at the Memphis, Tennessee
property entered into a lease extension in 2005 leaving
34,359 square feet of rentable space vacant. The
San Francisco, California property was acquired by a
non-consolidated entity in 2005 and has 20,006 square feet
vacant since the acquisition. One of the Phoenix, Arizona
properties has been vacant since December 2003 and the other
Phoenix, Arizona property has 49,799 square feet vacant at
December 31, 2005.
18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
OFFICE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10001 Richmond Avenue |
|
|
Baker Hughes, Inc. |
|
|
1976/1984 |
|
|
|
28.57 |
|
|
|
554,385 |
|
|
|
09/28/00 - 09/27/15 |
|
|
$ |
6,029 |
|
|
$ |
7,375 |
|
|
Houston, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
295 Chipeta Way |
|
|
Northwest Pipeline Corp. |
|
|
1982 |
|
|
|
19.79 |
|
|
|
295,000 |
|
|
|
10/01/82 - 09/30/09 |
|
|
$ |
6,322 |
|
|
$ |
6,322 |
|
|
Salt Lake City, UT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6303 Barfield Road |
|
|
Internet Security Systems, Inc.(22) |
|
|
2003 |
|
|
|
4.20 |
|
|
|
289,000 |
|
|
|
11/18/00 - 05/31/13 |
|
|
$ |
6,302 |
|
|
$ |
6,077 |
|
|
Atlanta, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1701 Market Street |
|
|
Morgan Lewis & Bockius LLP(19)(20) |
|
|
1957 |
|
|
|
1.07 |
|
|
|
322,317 |
|
|
|
12/20/96 - 01/31/14 |
|
|
$ |
4,847 |
|
|
$ |
4,856 |
|
|
Philadelphia, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3480 Stateview Boulevard |
|
|
Wells Fargo Bank N.A.(13) |
|
|
2004 |
|
|
|
16.10 |
|
|
|
169,218 |
|
|
|
06/01/04 - 05/31/14 |
|
|
$ |
3,229 |
|
|
$ |
3,449 |
|
|
Fort Mill, SC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1311 Broadfield Blvd. |
|
|
Transocean, Inc.(23) |
|
|
2000 |
|
|
|
3.88 |
|
|
|
103,260 |
|
|
|
04/28/01 - 03/31/11 |
|
|
$ |
2,284 |
|
|
$ |
2,277 |
|
|
Houston ,TX |
|
|
Newpark Resources, Inc.(24) |
|
|
|
|
|
|
|
|
|
|
52,731 |
|
|
|
06/01/99 - 08/31/09 |
|
|
$ |
1,122 |
|
|
$ |
1,129 |
|
|
601 & 701 Experian Parkway |
|
|
TRW, Inc. |
|
|
1981/1983 |
|
|
|
26.53 |
|
|
|
292,700 |
|
|
|
04/15/93 - 10/15/10 |
|
|
$ |
3,661 |
|
|
$ |
3,374 |
|
|
Allen, TX |
|
|
(Experian Information Solutions, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33 Commercial Street |
|
|
Invensys Systems, Inc. |
|
|
1982 |
|
|
|
40.80 |
|
|
|
164,689 |
|
|
|
07/01/95 - 07/01/15 |
|
|
$ |
3,270 |
|
|
$ |
3,270 |
|
|
Foxboro, MA |
|
|
(Siebe, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3476 Stateview Boulevard |
|
|
Wells Fargo Home Mortgage, Inc.(4)(5) |
|
|
2002 |
|
|
|
15.99 |
|
|
|
169,083 |
|
|
|
01/25/03 - 01/30/13 |
|
|
$ |
2,884 |
|
|
$ |
3,021 |
|
|
Fort Mill, SC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1415 Wyckoff Road |
|
|
NJ Natural Gas Co. |
|
|
1983 |
|
|
|
22.10 |
|
|
|
157,511 |
|
|
|
07/01/96 - 06/30/21 |
|
|
$ |
2,923 |
|
|
$ |
2,923 |
|
|
Wall Township, NJ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70 Mechanic Street |
|
|
Invensys Systems, Inc. |
|
|
1965/1988 |
|
|
|
31.90 |
|
|
|
251,914 |
|
|
|
07/01/94 - 07/01/14 |
|
|
$ |
2,817 |
|
|
$ |
2,449 |
|
|
Foxboro, MA |
|
|
(Siebe, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9950 Mayland Drive |
|
|
Circuit City Stores, Inc. |
|
|
1990 |
|
|
|
19.71 |
|
|
|
288,562 |
|
|
|
02/28/90 - 02/28/10 |
|
|
$ |
2,859 |
|
|
$ |
2,791 |
|
|
Richmond, VA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2750 Monroe Boulevard |
|
|
Quest Diagnostics, Inc.(2) |
|
|
1985/2001 |
|
|
|
10.50 |
|
|
|
109,281 |
|
|
|
05/01/01 - 04/30/11 |
|
|
$ |
2,521 |
|
|
$ |
2,554 |
|
|
Valley Forge, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
700 Oakmont Lane |
|
|
North American Van Lines, Inc.(3) |
|
|
1989 |
|
|
|
17.93 |
|
|
|
269,715 |
|
|
|
12/01/02 - 11/30/15 |
|
|
$ |
2,438 |
|
|
$ |
2,571 |
|
|
Westmont, IL |
|
|
(SIRVA, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13651 McLearen Road |
|
|
Boeing North American Services, Inc. |
|
|
1987 |
|
|
|
10.39 |
|
|
|
159,664 |
|
|
|
05/31/99 - 05/30/08 |
|
|
$ |
2,772 |
|
|
$ |
2,477 |
|
|
Herndon, VA |
|
|
(The Boeing Company) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10475 Crosspoint Boulevard |
|
|
John Wiley & Sons, Inc.(29) |
|
|
1999 |
|
|
|
10.30 |
|
|
|
141,047 |
|
|
|
11/01/99 - 10/31/09 |
|
|
$ |
2,397 |
|
|
$ |
2,397 |
|
|
Indianapolis, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27404 Drake Road |
|
|
Dana Corporation |
|
|
1999 |
|
|
|
7.73 |
|
|
|
111,454 |
|
|
|
10/26/01 - 10/31/21 |
|
|
$ |
2,331 |
|
|
$ |
2,331 |
|
|
Farmington Hills, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2211 South 47th Street |
|
|
Avnet, Inc. |
|
|
1997 |
|
|
|
11.33 |
|
|
|
176,402 |
|
|
|
11/15/97 - 11/14/12 |
|
|
$ |
2,205 |
|
|
$ |
2,259 |
|
|
Phoenix, AZ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
810 & 820 Gears Road |
|
|
Ikon Office Solutions, Inc. |
|
|
2000 |
|
|
|
15.71 |
|
|
|
157,790 |
|
|
|
05/01/00 - 01/31/13 |
|
|
$ |
2,229 |
|
|
$ |
2,251 |
|
|
Houston, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
5600 Broken Sound Boulevard |
|
|
Oce Printing Systems USA, Inc. |
|
|
1983/2002 |
|
|
|
12.19 |
|
|
|
143,290 |
|
|
|
02/15/02 - 02/14/20 |
|
|
$ |
2,012 |
|
|
$ |
2,245 |
|
|
Boca Raton, FL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4200 RCA Boulevard |
|
|
The Wackenhut Corp.(6) |
|
|
1996 |
|
|
|
7.70 |
|
|
|
114,518 |
|
|
|
02/15/96 - 02/28/11 |
|
|
$ |
2,181 |
|
|
$ |
2,167 |
|
|
Palm Beach Gardens, FL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
701 Brookfield Parkway |
|
|
Verizon Wireless(7) |
|
|
2000/2001 |
|
|
|
16.71 |
|
|
|
192,884 |
|
|
|
01/11/02 - 01/31/12 |
|
|
$ |
2,011 |
|
|
$ |
2,067 |
|
|
Greenville, SC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2800 Waterford Lake Drive |
|
|
Alstom Power, Inc.(26)(33) |
|
|
2000 |
|
|
|
7.50 |
|
|
|
99,057 |
|
|
|
04/13/05 - 10/31/14 |
|
|
$ |
1,808 |
|
|
$ |
2,015 |
|
|
Richmond, VA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4201 Marsh Lane |
|
|
Carlson Restaurants Worldwide, Inc.(16) |
|
|
2003 |
|
|
|
11.77 |
|
|
|
130,000 |
|
|
|
11/21/03 - 11/30/18 |
|
|
$ |
1,868 |
|
|
$ |
1,975 |
|
|
Carrollton, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12645 W. Airport Road |
|
|
Baker Hughes, Inc. |
|
|
1997 |
|
|
|
19.00 |
|
|
|
165,836 |
|
|
|
09/28/00 - 09/27/15 |
|
|
$ |
1,711 |
|
|
$ |
1,943 |
|
|
Sugar Land, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15501 North Dial Boulevard |
|
|
The Dial Corporation |
|
|
1998 |
|
|
|
8.84 |
|
|
|
129,689 |
|
|
|
04/13/05 - 08/31/08 |
|
|
$ |
1,388 |
|
|
$ |
1,914 |
|
|
Scottsdale, AZ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8555 South River Parkway |
|
|
ASM Lithography Holding NV |
|
|
1998 |
|
|
|
9.51 |
|
|
|
95,133 |
|
|
|
04/13/05 - 06/30/13 |
|
|
$ |
2,130 |
|
|
$ |
1,841 |
|
|
Tempe, AZ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26210 and 26220 Enterprise Court |
|
|
Apria Healthcare Group, Inc. |
|
|
2001 |
|
|
|
7.23 |
|
|
|
100,012 |
|
|
|
02/01/01 - 01/31/12 |
|
|
$ |
1,752 |
|
|
$ |
1,792 |
|
|
Lake Forest, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200 Executive Boulevard South |
|
|
Hartford Fire Insurance Co. |
|
|
1983 |
|
|
|
12.40 |
|
|
|
153,364 |
|
|
|
09/01/91 - 12/31/12 |
|
|
$ |
1,679 |
|
|
$ |
1,625 |
|
|
Southington, CT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2210 Enterprise Drive |
|
|
Washington Mutual Home Loans, Inc. |
|
|
1998 |
|
|
|
16.53 |
|
|
|
177,747 |
|
|
|
06/10/98 - 06/30/08 |
|
|
$ |
1,750 |
|
|
$ |
1,699 |
|
|
Florence, SC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16676 Northchase Drive |
|
|
Kerr-McGee Corporation |
|
|
2003 |
|
|
|
4.20 |
|
|
|
101,111 |
|
|
|
04/01/03 - 07/31/14 |
|
|
$ |
1,559 |
|
|
$ |
1,627 |
|
|
Houston, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6200 Northwest Parkway |
|
|
PacifiCare Health Systems, Inc. |
|
|
2000 |
|
|
|
21.60 |
|
|
|
142,500 |
|
|
|
11/20/00 - 11/30/10 |
|
|
$ |
1,640 |
|
|
$ |
1,621 |
|
|
San Antonio, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4000 Johns Creek Court |
|
|
Kraft Foods N.A., Inc.(25)(34) |
|
|
2001 |
|
|
|
10.29 |
|
|
|
73,264 |
|
|
|
02/01/02 - 01/31/12 |
|
|
$ |
1,340 |
|
|
$ |
1,385 |
|
|
Atlanta, GA |
|
|
PerkinElmer Instruments LLC(31) |
|
|
|
|
|
|
|
|
|
|
13,955 |
|
|
|
12/01/01 - 11/30/16 |
|
|
$ |
211 |
|
|
$ |
232 |
|
|
5757 Decatur Boulevard |
|
|
Allstate Insurance Company(27)(21) |
|
|
2002 |
|
|
|
12.71 |
|
|
|
84,200 |
|
|
|
03/15/02 - 08/31/12 |
|
|
$ |
1,246 |
|
|
$ |
1,548 |
|
|
Indianapolis, IN |
|
|
Holladay Property Services(28) |
|
|
|
|
|
|
|
|
|
|
5,756 |
|
|
|
10/01/01 - 09/30/06 |
|
|
$ |
56 |
|
|
$ |
56 |
|
|
1600 Eberhardt Road |
|
|
Nextel of Texas, Inc. |
|
|
2001 |
|
|
|
14.26 |
|
|
|
108,800 |
|
|
|
02/01/01 - 01/31/16 |
|
|
$ |
1,511 |
|
|
$ |
1,559 |
|
|
Temple, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2999 S.W. 6th Street |
|
|
Voicestream PCS I LLC |
|
|
2004 |
|
|
|
13.13 |
|
|
|
77,484 |
|
|
|
01/30/04 - 01/31/19 |
|
|
$ |
1,335 |
|
|
$ |
1,552 |
|
|
Redmond, OR |
|
|
(T-Mobile USA, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
160 Clairemont Avenue |
|
|
Allied Holdings, Inc. |
|
|
1983 |
|
|
|
2.98 |
|
|
|
112,248 |
|
|
|
01/01/98 - 12/31/07 |
|
|
$ |
1,677 |
|
|
$ |
1,530 |
|
|
Decatur, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27016 Media Center Drive |
|
|
Playboy Enterprises, Inc. |
|
|
2000 |
|
|
|
4.42 |
|
|
|
63,049 |
|
|
|
11/01/02 - 10/31/12 |
|
|
$ |
1,339 |
|
|
$ |
1,257 |
|
|
Los Angeles, CA |
|
|
Sony Electronics, Inc.(17) |
|
|
|
|
|
|
|
|
|
|
20,203 |
|
|
|
08/05/04 - 08/31/09 |
|
|
$ |
265 |
|
|
$ |
271 |
|
|
2550 Interstate Drive |
|
|
AT&T Wireless Services, Inc. |
|
|
1998 |
|
|
|
10.50 |
|
|
|
81,859 |
|
|
|
11/16/98 - 11/15/08 |
|
|
$ |
1,433 |
|
|
$ |
1,449 |
|
|
Harrisburg, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2655 Northwestern Highway |
|
|
Federal-Mogul Corporation |
|
|
1963/1965 |
|
|
|
22.44 |
|
|
|
187,163 |
|
|
|
01/22/88 - 01/13/15 |
|
|
$ |
1,158 |
|
|
$ |
1,418 |
|
|
Southfield, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10419 North 30th Street |
|
|
Time Customer Service, Inc. |
|
|
1986 |
|
|
|
14.38 |
|
|
|
132,981 |
|
|
|
04/01/87 - 07/31/10 |
|
|
$ |
1,490 |
|
|
$ |
1,410 |
|
|
Tampa, FL |
|
|
(Time, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
250 Rittenhouse Circle Bristol, PA |
|
|
Jones Apparel Group USA, Inc.(1)
(Jones Apparel Group, Inc.) |
|
|
1982 |
|
|
|
15.63 |
|
|
|
255,019 |
|
|
|
03/26/98 - 03/25/13 |
|
|
$ |
1,265 |
|
|
$ |
1,347 |
|
|
400 Butler Farm Road |
|
|
Nextel Communications of Mid-Atlantic, Inc. |
|
|
1999 |
|
|
|
14.34 |
|
|
|
100,632 |
|
|
|
03/20/00 - 12/31/09 |
|
|
$ |
1,315 |
|
|
$ |
1,302 |
|
|
Hampton, VA |
|
|
(Nextel Finance Company) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11555 University Boulevard |
|
|
Kelsey-Seybold Clinic |
|
|
2004 |
|
|
|
8.53 |
|
|
|
72,683 |
|
|
|
11/14/05 - 11/30/20 |
|
|
$ |
1,114 |
|
|
$ |
1,230 |
|
|
Houston, TX |
|
|
(St. Lukes Episcopal Health System) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6455 State Highway 303 N.E |
|
|
Nextel West Corporation |
|
|
2001 |
|
|
|
6.90 |
|
|
|
60,200 |
|
|
|
02/01/01 - 05/14/16 |
|
|
$ |
1,042 |
|
|
$ |
1,113 |
|
|
Bremerton, WA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13430 N. Black Canyon Freeway |
|
|
Bull HN Information Systems, Inc. |
|
|
1985/1994/2005 |
|
|
|
13.37 |
|
|
|
69,492 |
|
|
|
10/11/94 - 10/31/10 |
|
|
$ |
784 |
|
|
$ |
836 |
|
|
Phoenix, AZ |
|
|
Associated Billing Services, LLC(32) |
|
|
|
|
|
|
|
|
|
|
17,767 |
|
|
|
02/01/06 - 07/31/16 |
|
|
$ |
125 |
|
|
$ |
254 |
|
|
|
|
|
Vacant |
|
|
|
|
|
|
|
|
|
|
49,799 |
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
19019 N. 59th Avenue |
|
|
Honeywell, Inc. |
|
|
1985 |
|
|
|
51.79 |
|
|
|
252,300 |
|
|
|
07/16/86 - 07/15/06 |
|
|
$ |
1,082 |
|
|
$ |
1,070 |
|
|
Glendale, AZ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
270 Brillerica Road |
|
|
Cadence Design Systems(14) |
|
|
1985 |
|
|
|
6.96 |
|
|
|
100,000 |
|
|
|
03/01/93 - 09/30/13 |
|
|
$ |
1,015 |
|
|
$ |
1,065 |
|
|
Chelmsford, MA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12600 Gateway Boulevard |
|
|
Gartner, Inc. |
|
|
1997 |
|
|
|
4.90 |
|
|
|
62,400 |
|
|
|
07/01/04 - 01/31/13 |
|
|
$ |
998 |
|
|
$ |
1,052 |
|
|
Fort Meyers, FL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
180 Rittenhouse Circle |
|
|
Jones Apparel Group USA, Inc.(10) |
|
|
1998 |
|
|
|
4.73 |
|
|
|
96,000 |
|
|
|
08/01/98 - 07/31/13 |
|
|
$ |
957 |
|
|
$ |
970 |
|
|
Bristol, PA |
|
|
(Jones Apparel Group, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3940 South Teller Street |
|
|
Travelers Express, Inc.(18) |
|
|
2002 |
|
|
|
7.88 |
|
|
|
68,165 |
|
|
|
04/01/02 - 03/31/12 |
|
|
$ |
1,091 |
|
|
$ |
866 |
|
|
Lakewood, CO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2529 W. Throne Drive |
|
|
Baker Hughes, Inc. |
|
|
1981/1999 |
|
|
|
6.93 |
|
|
|
65,500 |
|
|
|
09/28/00 - 09/27/15 |
|
|
$ |
687 |
|
|
$ |
846 |
|
|
Houston, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12000 Tech Center Drive |
|
|
Kelsey-Hayes Company |
|
|
1988 |
|
|
|
5.72 |
|
|
|
80,230 |
|
|
|
05/01/97 - 04/30/14 |
|
|
$ |
787 |
|
|
$ |
823 |
|
|
Livonia, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2401 Cherahala Boulevard |
|
|
Advance PCS, Inc. |
|
|
2002 |
|
|
|
7.97 |
|
|
|
59,748 |
|
|
|
06/01/02 - 05/31/13 |
|
|
$ |
786 |
|
|
$ |
822 |
|
|
Knoxville, TN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1275 N.W. 128th Street |
|
|
Principal Life Insurance Company(12) |
|
|
2003 |
|
|
|
5.39 |
|
|
|
61,180 |
|
|
|
02/10/04 - 01/31/12 |
|
|
$ |
799 |
|
|
$ |
817 |
|
|
Clive, IA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
421 Butler Farm Road |
|
|
Nextel Communications of Mid-Atlantic, Inc. |
|
|
2000 |
|
|
|
7.81 |
|
|
|
56,515 |
|
|
|
01/15/00 - 01/14/10 |
|
|
$ |
738 |
|
|
$ |
719 |
|
|
Hampton, VA |
|
|
(Nextel Finance Company) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100 Barnes Road |
|
|
Minnesota Mining and Manufacturing Co |
|
|
1978/1985 |
|
|
|
39.80 |
|
|
|
44,400 |
|
|
|
01/01/04 - 07/01/10 |
|
|
$ |
581 |
|
|
$ |
606 |
|
|
Wallingford, CT |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250 Turnpike Road |
|
|
Honeywell Consumer Products |
|
|
1984 |
|
|
|
9.83 |
|
|
|
57,698 |
|
|
|
10/01/95 - 09/30/15 |
|
|
$ |
459 |
|
|
$ |
459 |
|
|
Southborough, MA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
1440 East 15th Street |
|
|
Cox Communications, Inc. |
|
|
1988 |
|
|
|
3.58 |
|
|
|
28,591 |
|
|
|
10/01/90 - 09/30/16 |
|
|
$ |
465 |
|
|
$ |
457 |
|
|
Tucson, AZ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2300 Litton Lane |
|
|
AGC Automotive Americas Company |
|
|
1987/2005 |
|
|
|
24.00 |
|
|
|
21,542 |
|
|
|
09/01/05 - 08/31/12 |
|
|
$ |
204 |
|
|
$ |
204 |
|
|
Hebron, KY |
|
|
Vacant |
|
|
|
|
|
|
|
|
|
|
58,878 |
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
1600 Viceroy Drive |
|
|
Vacant |
|
|
1986 |
|
|
|
8.17 |
|
|
|
249,452 |
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
Dallas, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1301 California Circle |
|
|
Vacant |
|
|
1985 |
|
|
|
6.34 |
|
|
|
100,026 |
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
Milpitas, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3615 North 27th Avenue |
|
|
Vacant |
|
|
1960/1979 |
|
|
|
10.26 |
|
|
|
179,280 |
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
Phoenix, AZ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office Subtotal |
|
|
|
|
|
|
845.65 |
|
|
|
9,209,323 |
|
|
|
|
|
|
$ |
118,286 |
|
|
$ |
121,209 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INDUSTRIAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
541 Perkins Jones Road |
|
|
Kmart Corp. |
|
|
1982 |
|
|
|
103.12 |
|
|
|
1,462,642 |
|
|
|
10/01/82 - 09/30/07 |
|
|
$ |
9,359 |
|
|
$ |
8,932 |
|
|
Warren, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19500 Bulverde Road |
|
|
Harcourt Brace |
|
|
2001 |
|
|
|
92.32 |
|
|
|
559,258 |
|
|
|
04/01/01 - 03/31/16 |
|
|
$ |
3,255 |
|
|
$ |
3,429 |
|
|
San Antonio, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2425 Highway 77 North |
|
|
James Hardie Building Products, Inc. |
|
|
1996/1997 |
|
|
|
45.29 |
|
|
|
425,816 |
|
|
|
10/07/00 - 03/31/20 |
|
|
$ |
3,400 |
|
|
$ |
3,400 |
|
|
Waxahachie, TX |
|
|
(James Hardie Industry, NV) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3501 West Avenue H |
|
|
Michaels Stores, Inc. |
|
|
1998/2002 |
|
|
|
37.18 |
|
|
|
762,775 |
|
|
|
06/19/98 - 09/30/19 |
|
|
$ |
3,238 |
|
|
$ |
3,304 |
|
|
Lancaster, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9110 Grogans Mill Road |
|
|
Baker Hughes, Inc. |
|
|
1992 |
|
|
|
24.75 |
|
|
|
275,750 |
|
|
|
09/28/00 - 09/27/15 |
|
|
$ |
2,490 |
|
|
$ |
3,065 |
|
|
Houston, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
750 N. Black Branch Road |
|
|
Dana Corporation |
|
|
1995/2001 |
|
|
|
46.69 |
|
|
|
539,592 |
|
|
|
08/01/05 - 07/31/25 |
|
|
$ |
2,838 |
|
|
$ |
2,838 |
|
|
Elizabethtown, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
224 Harbor Freight Road |
|
|
Harbor Freight Tools USA, Inc. |
|
|
2001/2005 |
|
|
|
74.95 |
|
|
|
1,010,859 |
|
|
|
12/05/01 - 12/31/21 |
|
|
$ |
2,760 |
|
|
$ |
2,736 |
|
|
Dillon, SC |
|
|
(Central Purchasing, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3820 Micro Drive |
|
|
Ingram Micro, Inc. |
|
|
1997 |
|
|
|
39.20 |
|
|
|
701,819 |
|
|
|
09/26/01 - 09/25/11 |
|
|
$ |
2,112 |
|
|
$ |
2,271 |
|
|
Millington, TN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8305 S.E. 58th Avenue |
|
|
Associated Grocers of Florida, Inc. |
|
|
1976 |
|
|
|
63.48 |
|
|
|
668,034 |
|
|
|
01/08/99 - 12/31/18 |
|
|
$ |
2,067 |
|
|
$ |
2,238 |
|
|
Ocala, FL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
590 Ecology Lane |
|
|
Owens Corning |
|
|
2001/2005 |
|
|
|
41.08 |
|
|
|
420,597 |
|
|
|
01/11/00 - 07/14/25 |
|
|
$ |
2,185 |
|
|
$ |
2,185 |
|
|
Chester, SC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6345 Brackbill Boulevard |
|
|
Exel Logistics, Inc. |
|
|
1985/1995 |
|
|
|
29.01 |
|
|
|
507,000 |
|
|
|
10/29/90 - 03/19/12 |
|
|
$ |
2,037 |
|
|
$ |
1,852 |
|
|
Mechanicsburg, PA |
|
|
(NFC plc) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6938 Elm Valley Drive |
|
|
Dana Corporation |
|
|
1999 |
|
|
|
27.50 |
|
|
|
150,945 |
|
|
|
10/26/01 - 10/31/21 |
|
|
$ |
1,843 |
|
|
$ |
1,843 |
|
|
Kalamazoo, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
301 Bill Bryan Road |
|
|
Dana Corporation |
|
|
1987, 1997, 2000 |
|
|
|
46.28 |
|
|
|
410,844 |
|
|
|
08/01/05 - 07/31/25 |
|
|
$ |
1,451 |
|
|
$ |
1,451 |
|
|
Hopkinsville, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
431 Smith Lane |
|
|
Kirklands Inc.(11) |
|
|
2004 |
|
|
|
85.80 |
|
|
|
771,120 |
|
|
|
05/10/04 - 05/31/19 |
|
|
$ |
1,408 |
|
|
$ |
1,408 |
|
|
Jackson, TN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1000 Business Boulevard |
|
|
Dana Corporation |
|
|
1988 |
|
|
|
28.84 |
|
|
|
336,350 |
|
|
|
08/01/05 - 07/31/25 |
|
|
$ |
1,346 |
|
|
$ |
1,346 |
|
|
Dry Ridge, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6 Doughten Road |
|
|
Exel Logistics, Inc. |
|
|
1989 |
|
|
|
24.38 |
|
|
|
330,000 |
|
|
|
11/18/91 - 11/30/06 |
|
|
$ |
1,363 |
|
|
$ |
1,236 |
|
|
New Kingston, PA |
|
|
(NFC plc) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6500 Adelaide Court |
|
|
Anda Pharmaceuticals, Inc. |
|
|
2002 |
|
|
|
22.67 |
|
|
|
354,676 |
|
|
|
04/01/02 - 03/31/12 |
|
|
$ |
1,277 |
|
|
$ |
1,206 |
|
|
Groveport, OH |
|
|
(Andrx Corporation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7500 Chavenelle Road |
|
|
The McGraw-Hill Companies, Inc. |
|
|
2002 |
|
|
|
21.80 |
|
|
|
330,988 |
|
|
|
11/13/01 - 06/30/17 |
|
|
$ |
1,089 |
|
|
$ |
1,164 |
|
|
Dubuque, IA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12025 Tech Center Drive |
|
|
Kelsey-Hayes Company |
|
|
1987/1988 |
|
|
|
9.18 |
|
|
|
100,000 |
|
|
|
05/01/97 - 04/30/14 |
|
|
$ |
1,082 |
|
|
$ |
1,139 |
|
|
Livonia, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250 Swathmore Avenue |
|
|
Steelcase, Inc.(15) |
|
|
2002 |
|
|
|
23.40 |
|
|
|
244,851 |
|
|
|
10/01/02 - 09/30/17 |
|
|
$ |
1,037 |
|
|
$ |
1,087 |
|
|
High Point, NC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2415 US Highway 78 East |
|
|
TNT Logistics North America, Inc. |
|
|
2004 |
|
|
|
42.17 |
|
|
|
595,346 |
|
|
|
02/27/04 - 01/02/14 |
|
|
$ |
1,054 |
|
|
$ |
1,054 |
|
|
Moody, AL |
|
|
(TPG NV) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
245 Salem Church Road |
|
|
Exel Logistics, Inc. |
|
|
1985 |
|
|
|
12.52 |
|
|
|
252,000 |
|
|
|
11/15/91 - 12/31/07 |
|
|
$ |
1,090 |
|
|
$ |
1,026 |
|
|
Mechanicsburg, PA |
|
|
(NFC plc) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3102 Queen Palm Drive |
|
|
Time Customer Service, Inc. |
|
|
1986 |
|
|
|
15.02 |
|
|
|
229,605 |
|
|
|
08/01/87 - 07/31/10 |
|
|
$ |
1,037 |
|
|
$ |
1,010 |
|
|
Tampa, FL |
|
|
(Time Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2280 Northeast Drive |
|
|
Ryder Integrated Logistics, Inc. |
|
|
1996/1997 |
|
|
|
26.22 |
|
|
|
276,480 |
|
|
|
08/01/97 - 07/31/12 |
|
|
$ |
998 |
|
|
$ |
1,004 |
|
|
Waterloo, IA |
|
|
(Ryder Systems, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
200 Arrowhead Drive |
|
|
Owens Corning |
|
|
1999 |
|
|
|
21.62 |
|
|
|
400,522 |
|
|
|
03/01/01 - 05/31/09 |
|
|
$ |
1,027 |
|
|
$ |
985 |
|
|
Hebron, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7670 Hacks Cross Road |
|
|
Dana Corporation |
|
|
1989 |
|
|
|
17.01 |
|
|
|
268,100 |
|
|
|
03/01/06 - 02/28/16 |
|
|
$ |
959 |
|
|
$ |
959 |
|
|
Olive Branch, MS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
46600 Port Street |
|
|
Johnson Controls, Inc. |
|
|
1996 |
|
|
|
30.36 |
|
|
|
134,160 |
|
|
|
05/19/00 - 12/22/06 |
|
|
$ |
938 |
|
|
$ |
938 |
|
|
Plymouth, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3600 Southgate Drive |
|
|
Sygma Network, Inc. |
|
|
2000 |
|
|
|
19.00 |
|
|
|
149,500 |
|
|
|
10/15/00 - 10/31/15 |
|
|
$ |
933 |
|
|
$ |
933 |
|
|
Danville, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1133 Poplar Creek Road |
|
|
Corporate Express Office Products, Inc. |
|
|
1998 |
|
|
|
19.09 |
|
|
|
196,946 |
|
|
|
01/20/99 - 01/31/14 |
|
|
$ |
789 |
|
|
$ |
810 |
|
|
Henderson, NC |
|
|
(Buhrmann, N.V.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4010 Airpark Drive |
|
|
Dana Corporation |
|
|
1998/2000 |
|
|
|
20.25 |
|
|
|
162,468 |
|
|
|
08/01/05 - 07/31/25 |
|
|
$ |
796 |
|
|
$ |
796 |
|
|
Owensboro, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4425 Purks Road |
|
|
Lear Technologies LLC |
|
|
1989/1998 |
|
|
|
12.00 |
|
|
|
183,717 |
|
|
|
07/23/88 - 07/22/06 |
|
|
$ |
820 |
|
|
$ |
796 |
|
|
Auburn Hills, MI |
|
|
(Lear Corporation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(General Motors Corp.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
450 Stern Street |
|
|
Johnson Controls, Inc. |
|
|
1996 |
|
|
|
20.10 |
|
|
|
111,160 |
|
|
|
12/23/96 - 12/22/06 |
|
|
$ |
730 |
|
|
$ |
730 |
|
|
Oberlin, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
191 Arrowhead Drive |
|
|
Owens Corning |
|
|
2000 |
|
|
|
13.62 |
|
|
|
250,410 |
|
|
|
06/01/01 - 02/28/10 |
|
|
$ |
658 |
|
|
$ |
626 |
|
|
Hebron, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
904 Industrial Road |
|
|
Tenneco Automotive Operating Company, Inc. |
|
|
1968/1972 |
|
|
|
20.00 |
|
|
|
195,640 |
|
|
|
08/18/87 - 08/17/10 |
|
|
$ |
595 |
|
|
$ |
600 |
|
|
Marshall, MI |
|
|
(Tenneco Automotive Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
34 East Main Street |
|
|
Exel Logistics, Inc. |
|
|
1981 |
|
|
|
9.66 |
|
|
|
179,200 |
|
|
|
11/15/91 - 11/30/06 |
|
|
$ |
660 |
|
|
$ |
599 |
|
|
New Kingston, PA |
|
|
(NFC plc) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1901 49th Avenue |
|
|
Owens Corning |
|
|
2003 |
|
|
|
8.90 |
|
|
|
18,620 |
|
|
|
07/01/03 - 06/30/15 |
|
|
$ |
560 |
|
|
$ |
596 |
|
|
Minneapolis, MN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
109 Stevens Street |
|
|
Unisource Worldwide, Inc. |
|
|
1958/1969 |
|
|
|
6.97 |
|
|
|
168,800 |
|
|
|
10/01/87 - 09/30/09 |
|
|
$ |
591 |
|
|
$ |
588 |
|
|
Jacksonville, FL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
128 Crews Drive |
|
|
Stone Container Corporation |
|
|
1968/1998 |
|
|
|
10.76 |
|
|
|
185,961 |
|
|
|
12/16/82 - 08/31/12 |
|
|
$ |
554 |
|
|
$ |
571 |
|
|
Columbia, SC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
730 N. Black Branch Road |
|
|
Dana Corporation |
|
|
2001 |
|
|
|
17.80 |
|
|
|
167,770 |
|
|
|
08/01/05 - 07/31/25 |
|
|
$ |
537 |
|
|
$ |
537 |
|
|
Elizabethtown, KY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7150 Exchequer Drive |
|
|
Corporate Express Office Products, Inc. |
|
|
1998 |
|
|
|
5.23 |
|
|
|
79,086 |
|
|
|
11/01/98 - 10/31/13 |
|
|
$ |
438 |
|
|
$ |
439 |
|
|
Baton Rouge, LA |
|
|
(Buhrmann N.V.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
324 Industrial Park Road |
|
|
SKF USA, Inc. |
|
|
1996 |
|
|
|
21.13 |
|
|
|
72,868 |
|
|
|
12/23/96 - 12/31/14 |
|
|
$ |
395 |
|
|
$ |
395 |
|
|
Franklin, NC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3350 Miac Cove Road |
|
|
Mimeo.com, Inc.(8) |
|
|
1987 |
|
|
|
10.92 |
|
|
|
107,000 |
|
|
|
11/01/99 - 09/30/20 |
|
|
$ |
283 |
|
|
$ |
370 |
|
|
Memphis, TN |
|
|
Vacant |
|
|
|
|
|
|
|
|
|
|
34,359 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
187 Spicer Drive |
|
|
Dana Corporation |
|
|
1983/1985 |
|
|
|
20.98 |
|
|
|
148,000 |
|
|
|
01/01/84 - 08/31/07 |
|
|
$ |
354 |
|
|
$ |
341 |
|
|
Gordonsville, TN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
477 Distribution Parkway |
|
|
Federal Express Corporation(30) |
|
|
2005 |
|
|
|
9.88 |
|
|
|
120,000 |
|
|
|
02/01/06 - 01/31/21 |
|
|
$ |
280 |
|
|
$ |
280 |
|
|
Colliersville, TN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
300 McCormick Boulevard |
|
|
Ameritech Services, Inc.(9) |
|
|
1990 |
|
|
|
10.12 |
|
|
|
20,000 |
|
|
|
09/14/90 - 05/31/15 |
|
|
$ |
128 |
|
|
$ |
155 |
|
|
Columbus, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1601 Pratt Avenue |
|
|
Joseph Campbell Company |
|
|
1979 |
|
|
|
8.26 |
|
|
|
58,300 |
|
|
|
08/18/05 - 08/31/07 |
|
|
$ |
141 |
|
|
$ |
141 |
|
|
Marshall, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Subtotal |
|
|
|
|
|
|
1,316.51 |
|
|
|
15,129,934 |
|
|
|
|
|
|
$ |
64,982 |
|
|
$ |
65,409 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RETAIL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2655 Shasta Way |
|
|
Fred Meyer, Inc. |
|
|
1986 |
|
|
|
13.99 |
|
|
|
178,204 |
|
|
|
03/10/88 - 03/31/08 |
|
|
$ |
1,009 |
|
|
$ |
1,009 |
|
|
Klamath Falls, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fort Street Mall, King Street |
|
|
Liberty House, Inc. |
|
|
1980 |
|
|
|
1.22 |
|
|
|
85,610 |
|
|
|
10/01/80 - 09/30/09 |
|
|
$ |
990 |
|
|
$ |
971 |
|
|
Honolulu, HI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
150 N.E. 20th Street, |
|
|
Fred Meyer, Inc. |
|
|
1986 |
|
|
|
8.76 |
|
|
|
118,179 |
|
|
|
06/01/86 - 05/31/11 |
|
|
$ |
826 |
|
|
$ |
826 |
|
|
Highway 101 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Newport, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
35400 Cowan Road |
|
|
Sams Real Estate Business Trust |
|
|
1987/1997 |
|
|
|
9.70 |
|
|
|
102,826 |
|
|
|
06/06/97 - 01/31/09 |
|
|
$ |
753 |
|
|
$ |
753 |
|
|
Westland, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
4733 Hills & Dales Road |
|
|
Scandinavian Health Spa, Inc. |
|
|
1987 |
|
|
|
3.32 |
|
|
|
37,214 |
|
|
|
01/01/89 - 12/31/08 |
|
|
$ |
745 |
|
|
$ |
685 |
|
|
Canton, OH |
|
|
(Bally Total Fitness Corp.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5917 S. La Grange Road |
|
|
Bally Total Fitness Corp. |
|
|
1987 |
|
|
|
2.73 |
|
|
|
25,250 |
|
|
|
07/13/87 - 06/30/17 |
|
|
$ |
660 |
|
|
$ |
515 |
|
|
Countryside, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1160 White Horse Road |
|
|
Physical Fitness Centers of Philadelphia, Inc. |
|
|
1987 |
|
|
|
2.87 |
|
|
|
31,750 |
|
|
|
07/14/87 - 06/30/17 |
|
|
$ |
820 |
|
|
$ |
494 |
|
|
Voorhees, NJ |
|
|
(Bally Total Fitness Corp.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4831 Whipple Avenue N.W. |
|
|
Best Buy Co., Inc. |
|
|
1995 |
|
|
|
6.59 |
|
|
|
46,350 |
|
|
|
02/27/98 - 02/26/18 |
|
|
$ |
465 |
|
|
$ |
465 |
|
|
Canton, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3711 Gateway Drive |
|
|
Kohls Dept. Stores, Inc. |
|
|
1994 |
|
|
|
6.24 |
|
|
|
76,164 |
|
|
|
03/11/94 - 01/25/15 |
|
|
$ |
469 |
|
|
$ |
463 |
|
|
Eau Claire, WI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
399 Peachwood Center Drive |
|
|
Best Buy Co., Inc. |
|
|
1996 |
|
|
|
7.49 |
|
|
|
45,800 |
|
|
|
12/29/83 - 02/26/18 |
|
|
$ |
395 |
|
|
$ |
395 |
|
|
Spartanburg, SC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24100 Laguna Hills Mall |
|
|
Federated Department Stores, Inc. |
|
|
1974 |
|
|
|
11.00 |
|
|
|
160,000 |
|
|
|
02/01/76 - 04/16/14 |
|
|
$ |
323 |
|
|
$ |
349 |
|
|
Laguna Hills, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12535 S.E. 82nd Avenue |
|
|
Toys R Us, Inc. |
|
|
1981 |
|
|
|
5.85 |
|
|
|
42,842 |
|
|
|
06/01/81 - 05/31/11 |
|
|
$ |
360 |
|
|
$ |
320 |
|
|
Clackamas, OR |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18601 Alderwood Mall Boulevard |
|
|
Toys R Us, Inc. |
|
|
1981 |
|
|
|
3.76 |
|
|
|
43,105 |
|
|
|
06/01/81 - 05/31/11 |
|
|
$ |
328 |
|
|
$ |
297 |
|
|
Lynwood, WA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9580 Livingston Road |
|
|
GFS Realty, Inc. |
|
|
1976 |
|
|
|
10.60 |
|
|
|
107,337 |
|
|
|
01/03/77 - 02/28/14 |
|
|
$ |
205 |
|
|
$ |
274 |
|
|
Oxon Hill, MD |
|
|
(Giant Food, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6910 S. Memorial Highway |
|
|
Toys R Us, Inc. |
|
|
1981 |
|
|
|
4.44 |
|
|
|
43,123 |
|
|
|
06/01/81 - 05/31/11 |
|
|
$ |
300 |
|
|
$ |
271 |
|
|
Tulsa, OK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rockshire Village Center, |
|
|
GFS Realty, Inc. |
|
|
1977 |
|
|
|
7.32 |
|
|
|
51,682 |
|
|
|
01/01/78 - 06/19/17 |
|
|
$ |
115 |
|
|
$ |
152 |
|
|
2401 Wootton Parkway |
|
|
(Giant Food, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rockville, MD |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121 South Center Street |
|
|
Greyhound Lines, Inc. |
|
|
1968 |
|
|
|
1.67 |
|
|
|
17,000 |
|
|
|
02/28/89 - 02/28/09 |
|
|
$ |
216 |
|
|
$ |
216 |
|
|
Stockton, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Subtotal |
|
|
|
|
|
|
107.55 |
|
|
|
1,212,436 |
|
|
|
|
|
|
$ |
8,979 |
|
|
$ |
8,455 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total |
|
|
|
|
|
|
2,269.71 |
|
|
|
25,551,693 |
|
|
|
|
|
|
$ |
192,247 |
|
|
$ |
195,073 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
Tenant can cancel lease on 03/26/08 with 12 months notice
and payment of $1,392. |
|
(2) |
Expense stop on this property is $393 per annum. |
|
(3) |
Tenant can cancel lease on 11/30/13 with 12 months notice
and a payment of $1,300. |
|
(4) |
Expense stop on this property is $820. |
|
(5) |
Tenant has the right to contract leased space by
27,000 square feet on 01/31/08 with 6 months notice
and a payment estimated to be $696. In addition, the tenant can
cancel lease on 01/31/10 with 12 months notice and a
payment estimated to be $3,968. |
|
(6) |
This is a modified gross lease. Annual net operating expense for
which the Company is responsible approximates $600. There is a
second tenant at this property encompassing approximately
18,000 square feet. |
|
(7) |
Expense stop on this property is $112 per annum. |
|
(8) |
Tenant occupies 107,000 square feet and is responsible for
all operating expenses. |
25
|
|
(9) |
Tenant can cancel lease on 06/01/10 with 6 months notice
and payment of $102. |
(10) |
Tenant can cancel lease on 07/31/08 with 12 months notice
and payment of $2,095. |
(11) |
Tenant can cancel lease on 05/30/14 for a payment equal to the
remaining 5 years rent discounted at 150 bps over the
then 5 year U.S. Treasury rate. |
(12) |
Tenant can cancel lease on 02/01/09 with 12 months notice
and a payment equal to approximately one year rent and operating
costs. |
(13) |
Expense stop on this property is $948. |
(14) |
Tenant can cancel lease on 09/30/10 with 12 months notice
and a payment of $965. |
(15) |
Tenant can cancel lease during the last year if damage occurs
and is greater than $500 or 50% of cost to replace building. |
(16) |
Tenant can cancel lease on 12/22/13 with 12 months notice
plus payment equal to one year rent plus unamortized deal costs. |
(17) |
Tenant can cancel lease on 09/01/07 with 180 days notice
and payment of 2 months rent plus unamortized tenant
improvements and commissions. |
(18) |
Tenant can cancel lease on 03/31/09 with 12 months notice
and a payment of approximately $1,041. |
(19) |
The Company has an 80.5% economic interest in this property. |
(20) |
Included in square footage is 10,426 of retail space leased to
three tenants and 2,842 of vacant space. |
(21) |
Tenant can cancel lease on 08/31/07 with 12 months written
notice and a payment of $385 plus unamortized costs of
landlords improvements in excess of $30 per square
foot. |
(22) |
Expense stop on this property is $804 per annum. |
(23) |
Expense stop on this property for tenant is $7.89 per
square foot. |
(24) |
Expense stop on this property for tenant is $6.50 per
square foot. |
(25) |
Expense stop on this property for tenant is $4.35 per
square foot. |
(26) |
Expense stop on this property is $593 per annum. |
(27) |
Expense stop on this property for tenant is $2.75 per
square foot. |
(28) |
Expense stop on this property for tenant is $2.50 per
square foot. |
(29) |
Expense stop on this property is $501 per annum. |
(30) |
Property currently being expanded. |
(31) |
Tenant can cancel lease on 11/30/11 with 12 months written
notice and payment of $325. |
(32) |
Tenant can cancel lease on 07/31/11 with 9 months written
notice and a payment equal to the unamortized tenant
improvements. Tenant lease commences in 2006. |
(33) |
Tenant can cancel lease on 07/31/12 with 12 months written
notice and a payment equal to the sum of $340 plus 50% of rent,
as defined, for the year ended 07/31/13 plus 6 months of
operating expenses for 2012. |
(34) |
Tenant can cancel lease on 01/31/09 with 12 months written
notice and payment of $1,845. |
26
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
JOINT VENTURE PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
OFFICE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27 South Valencia Avenue |
|
|
Bank of America NT & SA(H) |
|
|
1983 |
|
|
|
31.60 |
|
|
|
637,503 |
|
|
|
04/13/05 - 06/30/12 |
|
|
$ |
7,574 |
|
|
$ |
9,106 |
|
|
Los Angeles, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
389-399 Interpace Parkway, |
|
|
Aventis Pharmaceuticals, Inc.(A)(Y) |
|
|
2000 |
|
|
|
14.00 |
|
|
|
340,240 |
|
|
|
07/01/05 - 06/30/15 |
|
|
$ |
9,227 |
|
|
$ |
8,700 |
|
|
Morris Corporate Center IV |
|
|
(Pharma Holdings GmbH) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Parsippany, NJ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17 Technology Circle |
|
|
Blue Cross Blue Shield of South Carolina Inc.(B) |
|
|
1999/2001 |
|
|
|
46.82 |
|
|
|
456,304 |
|
|
|
10/01/99 - 09/30/09 |
|
|
$ |
7,377 |
|
|
$ |
6,930 |
|
|
Columbia, SC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
600 Business Center Drive |
|
|
First USA Management Services, Inc.(A)(C) |
|
|
1997 |
|
|
|
13.30 |
|
|
|
125,155 |
|
|
|
10/01/99 - 09/30/09 |
|
|
$ |
2,990 |
|
|
$ |
2,921 |
|
|
Lake Mary, FL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
550 Business Center Drive |
|
|
First USA Management Services, Inc.(A)(C) |
|
|
1999 |
|
|
|
12.80 |
|
|
|
125,920 |
|
|
|
10/01/99 - 09/30/09 |
|
|
$ |
2,892 |
|
|
$ |
2,820 |
|
|
Lake Mary, FL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100 Wood Hollow Drive |
|
|
Greenpoint Mortgage Funding, Inc.(E)(F) |
|
|
2001 |
|
|
|
12.93 |
|
|
|
124,600 |
|
|
|
06/30/00 - 07/31/11 |
|
|
$ |
4,635 |
|
|
$ |
4,864 |
|
|
Novato, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8900 Freeport Parkway |
|
|
Nissan Motor Acceptance Corporation(L) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Irving, TX |
|
|
(Nissan North America, Inc.) |
|
|
2002 |
|
|
|
14.87 |
|
|
|
268,445 |
|
|
|
09/19/01 - 03/31/13 |
|
|
$ |
4,505 |
|
|
$ |
4,810 |
|
|
6555 Sierra Drive |
|
|
True North Communications Inc.(A) |
|
|
1999 |
|
|
|
9.98 |
|
|
|
247,254 |
|
|
|
02/01/00 - 01/31/10 |
|
|
$ |
4,462 |
|
|
$ |
4,250 |
|
|
Irving, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5200 Metcalf Avenue |
|
|
Employers Reinsurance Corporation(H) |
|
|
1980/2003 |
|
|
|
26.20 |
|
|
|
320,198 |
|
|
|
01/22/03 - 12/22/18 |
|
|
$ |
4,076 |
|
|
$ |
4,076 |
|
|
Overland Park, KS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101 East Erie Street |
|
|
Foote, Cone & Belding(E) |
|
|
1986 |
|
|
|
|
|
|
|
203,376 |
|
|
|
03/16/94 - 03/15/14 |
|
|
$ |
3,805 |
|
|
$ |
3,805 |
|
|
Chicago, IL |
|
|
(Interpublic Group of Companies, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Higgins Development Partners(E) |
|
|
|
|
|
|
|
|
|
|
19,089 |
|
|
|
11/23/04 - 03/15/14 |
|
|
$ |
117 |
|
|
$ |
119 |
|
|
|
|
|
Lexington Corporate Properties Trust(E) |
|
|
|
|
|
|
|
|
|
|
2,100 |
|
|
|
07/06/05 - 07/05/10 |
|
|
$ |
37 |
|
|
$ |
37 |
|
|
27027 Tourney Drive |
|
|
Specialty Laboratories, Inc.(E) |
|
|
2004 |
|
|
|
13.78 |
|
|
|
187,262 |
|
|
|
09/01/01 - 08/31/24 |
|
|
$ |
3,563 |
|
|
$ |
3,563 |
|
|
Santa Clarita, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2050 Roanoke Road |
|
|
Chrysler Financial Company LLC(L)(T) |
|
|
2001 |
|
|
|
13.18 |
|
|
|
130,290 |
|
|
|
11/01/01 - 12/31/11 |
|
|
$ |
3,190 |
|
|
$ |
3,540 |
|
|
Westlake, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15375 Memorial Drive |
|
|
Vastar Resources, Inc.(A) |
|
|
1985 |
|
|
|
21.77 |
|
|
|
327,325 |
|
|
|
09/16/99 - 09/15/09 |
|
|
$ |
3,484 |
|
|
$ |
3,437 |
|
|
Houston, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10300 Kincaid Drive |
|
|
Bank One Indiana, N.A.(A)(D) |
|
|
1999 |
|
|
|
13.30 |
|
|
|
193,000 |
|
|
|
11/01/99 - 10/31/09 |
|
|
$ |
3,381 |
|
|
$ |
3,287 |
|
|
Fishers, IN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10300 Town Park Drive |
|
|
Veritas DGC, Inc.(E) |
|
|
2000 |
|
|
|
19.44 |
|
|
|
218,641 |
|
|
|
08/01/04 - 09/30/15 |
|
|
$ |
3,114 |
|
|
$ |
3,249 |
|
|
Houston, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4001 International Parkway |
|
|
Accor S.A.(H)(U) |
|
|
2003 |
|
|
|
10.10 |
|
|
|
138,443 |
|
|
|
06/28/03 - 07/31/15 |
|
|
$ |
2,987 |
|
|
$ |
3,231 |
|
|
Carrollton, TX |
|
|
(Motel 6 Operating L.P.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100, 120 and 130 |
|
|
Capital One Services, Inc.(E)(Z) |
|
|
1999 |
|
|
|
18.71 |
|
|
|
225,220 |
|
|
|
07/15/99 - 03/13/10 |
|
|
$ |
2,841 |
|
|
$ |
2,890 |
|
|
East Shore Drive Richmond, VA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10940 White Rock Road, |
|
|
Progressive Casualty Insurance Company(E) |
|
|
2002 |
|
|
|
11.05 |
|
|
|
158,582 |
|
|
|
08/01/02 - 07/31/12 |
|
|
$ |
2,740 |
|
|
$ |
2,804 |
|
|
10929 Disk Drive |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rancho Cordova, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2000 Eastman Drive |
|
|
Structural Dynamic Research Corp.(A) |
|
|
1991 |
|
|
|
12.36 |
|
|
|
212,836 |
|
|
|
05/01/91 - 04/30/11 |
|
|
$ |
2,830 |
|
|
$ |
2,790 |
|
|
Milford, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
JOINT VENTURE PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
3701 Corporate Drive |
|
|
Motorola, Inc.(A)(J) |
|
|
2001 |
|
|
|
22.85 |
|
|
|
119,829 |
|
|
|
12/28/01 - 12/31/16 |
|
|
$ |
2,714 |
|
|
$ |
2,714 |
|
|
Farmington Hills, MI |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1401-1501 Nolan Ryan Parkway |
|
|
Seimens Dematic Postal Automation, L.P.(H) |
|
|
2003 |
|
|
|
14.14 |
|
|
|
236,547 |
|
|
|
01/15/04 - 01/31/14 |
|
|
$ |
2,385 |
|
|
$ |
2,533 |
|
|
Arlington, TX |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
350 Rhode Island Street |
|
|
California Culinary Academy, LLC(E) |
|
|
2002 |
|
|
|
|
|
|
|
103,838 |
|
|
|
11/15/04 - 11/14/19 |
|
|
$ |
2,492 |
|
|
$ |
2,395 |
|
|
San Francisco, CA |
|
|
(Career Education Corp.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Starbucks Coffee Company(E)(P) |
|
|
|
|
|
|
|
|
|
|
1,500 |
|
|
|
09/25/03 - 09/30/13 |
|
|
$ |
68 |
|
|
$ |
74 |
|
|
|
|
|
Vacant(E) |
|
|
|
|
|
|
|
|
|
|
20,006 |
|
|
|
|
|
|
$ |
|
|
|
$ |
|
|
|
9201 East Dry Creek Road |
|
|
The Shaw Group, Inc.(K)(L) |
|
|
2001/2002 |
|
|
|
7.50 |
|
|
|
128,500 |
|
|
|
08/29/02 - 09/30/17 |
|
|
$ |
2,022 |
|
|
$ |
2,447 |
|
|
Centennial, CO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1475 Dunwoody Drive |
|
|
ING USA Annuity and Life Insurance Co.(E) |
|
|
1998/1999 |
|
|
|
15.87 |
|
|
|
125,000 |
|
|
|
06/29/04 - 05/31/10 |
|
|
$ |
2,063 |
|
|
$ |
2,038 |
|
|
West Chester, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13775 Mclearen Road |
|
|
Equant, N.V.(E)(G) |
|
|
1984/1988/1992 |
|
|
|
8.65 |
|
|
|
125,293 |
|
|
|
01/01/04 - 04/30/15 |
|
|
$ |
1,849 |
|
|
$ |
2,011 |
|
|
Herndon, VA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
70 Valley Stream Parkway |
|
|
Ikon Office Solutions, Inc.(E)(I) |
|
|
1987 |
|
|
|
10.40 |
|
|
|
106,855 |
|
|
|
09/22/03 - 09/30/13 |
|
|
$ |
1,938 |
|
|
$ |
1,995 |
|
|
Malvern, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5150 220th Avenue |
|
|
Spacelabs Medical, Inc.(H) |
|
|
1987 |
|
|
|
5.65 |
|
|
|
106,944 |
|
|
|
01/01/03 - 12/14/14 |
|
|
$ |
1,925 |
|
|
$ |
1,949 |
|
|
Issaquah, WA |
|
|
(OSI Systems, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9201 State Line |
|
|
Employers Reinsurance Corporation(H) |
|
|
1963/2003 |
|
|
|
7.17 |
|
|
|
166,641 |
|
|
|
01/22/03 - 04/01/19 |
|
|
$ |
1,888 |
|
|
$ |
1,888 |
|
|
Kansas City, MO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3201 Quail Springs Pkwy |
|
|
AT&T Wireless Services, Inc.(N) |
|
|
1999 |
|
|
|
9.40 |
|
|
|
103,500 |
|
|
|
06/05/00 - 11/30/10 |
|
|
$ |
1,346 |
|
|
$ |
1,366 |
|
|
Oklahoma City, OK |
|
|
Jordan Associates, Inc.(N) |
|
|
|
|
|
|
|
|
|
|
25,000 |
|
|
|
01/01/99 - 12/31/08 |
|
|
$ |
332 |
|
|
$ |
332 |
|
|
200 Lucent Lane |
|
|
Lucent Technologies, Inc.(E) |
|
|
1999 |
|
|
|
11.85 |
|
|
|
124,944 |
|
|
|
10/01/01 - 09/30/11 |
|
|
$ |
2,041 |
|
|
$ |
1,643 |
|
|
Cary, NC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1110 Bayfield Drive |
|
|
Honeywell International, Inc.(A)(O) |
|
|
1980/2002 |
|
|
|
26.35 |
|
|
|
166,575 |
|
|
|
11/15/02 - 11/30/13 |
|
|
$ |
1,635 |
|
|
$ |
1,637 |
|
|
Colorado Springs, CO |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1409 Centerpoint Boulevard |
|
|
Alstom Power, Inc.(S)(V)(W) |
|
|
2001 |
|
|
|
5.62 |
|
|
|
84,404 |
|
|
|
06/01/04 - 10/31/14 |
|
|
$ |
1,456 |
|
|
$ |
1,635 |
|
|
Knoxville, TN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3601 Converse Drive |
|
|
Verizon Wireless(H) |
|
|
2004 |
|
|
|
17.58 |
|
|
|
160,500 |
|
|
|
12/31/04 - 12/31/16 |
|
|
$ |
1,533 |
|
|
$ |
1,624 |
|
|
Wilmington, NC |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22011 S.E. 51st Street |
|
|
Spacelabs Medical, Inc.(H) |
|
|
1992 |
|
|
|
4.67 |
|
|
|
95,600 |
|
|
|
02/15/03 - 12/14/14 |
|
|
$ |
1,714 |
|
|
$ |
1,619 |
|
|
Issaquah, WA |
|
|
(OSI Systems, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2500 Patrick Henry Parkway |
|
|
Georgia Power Company(H) |
|
|
1999 |
|
|
|
15.54 |
|
|
|
111,911 |
|
|
|
02/19/99 - 06/30/15 |
|
|
$ |
1,421 |
|
|
$ |
1,511 |
|
|
McDonough, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
133 First Park Drive |
|
|
Omnipoint Holdings, Inc.(H) |
|
|
2005 |
|
|
|
19.80 |
|
|
|
78,610 |
|
|
|
12/27/04 - 08/31/20 |
|
|
$ |
1,192 |
|
|
$ |
1,365 |
|
|
Oakland, ME |
|
|
(T-Mobile USA, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
275 Technology Drive |
|
|
Ansys, Inc.(L) |
|
|
1996 |
|
|
|
9.08 |
|
|
|
107,872 |
|
|
|
01/01/04 - 12/31/14 |
|
|
$ |
1,241 |
|
|
$ |
1,354 |
|
|
Canonsburg, PA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9601 Renner Boulevard |
|
|
Voicestream PCS II Corporation(H) |
|
|
2004 |
|
|
|
10.47 |
|
|
|
77,484 |
|
|
|
11/01/04 - 11/01/19 |
|
|
$ |
1,200 |
|
|
$ |
1,352 |
|
|
Lenexa, KS |
|
|
(T-Mobile USA, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3265 East Goldstone Drive |
|
|
Voicestream PCS II Corporation(H) |
|
|
2004 |
|
|
|
11.92 |
|
|
|
77,484 |
|
|
|
06/29/04 - 06/28/19 |
|
|
$ |
1,179 |
|
|
$ |
1,320 |
|
|
Meridian, ID |
|
|
(T-Mobile USA, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4848 129th East Ave |
|
|
Metris Companies, Inc.(S) |
|
|
2000 |
|
|
|
9.63 |
|
|
|
101,100 |
|
|
|
02/01/00 - 01/31/10 |
|
|
$ |
1,307 |
|
|
$ |
1,307 |
|
|
Tulsa, OK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
JOINT VENTURE PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
2310 Village Square Parkway |
|
|
AmeriCredit Corporation(S)(X) |
|
|
2001 |
|
|
|
12.33 |
|
|
|
85,000 |
|
|
|
11/20/00 - 06/30/11 |
|
|
$ |
1,460 |
|
|
$ |
1,220 |
|
|
Jacksonville, FL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11707 Miracle Hills Drive |
|
|
(i) Structure, LLC (Infocrossing, Inc.)(S) |
|
|
1995 |
|
|
|
3.74 |
|
|
|
86,800 |
|
|
|
11/30/05 - 11/30/25 |
|
|
$ |
1,167 |
|
|
$ |
1,167 |
|
|
Omaha, NE |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 East Technology Circle |
|
|
(i) Structure, LLC (Infocrossing, Inc.)(S) |
|
|
1998 |
|
|
|
11.21 |
|
|
|
60,000 |
|
|
|
12/29/05 - 12/31/25 |
|
|
$ |
1,128 |
|
|
$ |
1,128 |
|
|
Tempe, AZ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4455 American Way |
|
|
Bell South Mobility, Inc.(L) |
|
|
1997 |
|
|
|
5.73 |
|
|
|
70,100 |
|
|
|
11/01/97 - 10/31/12 |
|
|
$ |
1,037 |
|
|
$ |
1,090 |
|
|
Baton Rouge, LA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3711 San Gabriel |
|
|
Voice Stream PCS II LLC(L) |
|
|
2004 |
|
|
|
12.95 |
|
|
|
75,016 |
|
|
|
01/15/04 - 06/30/15 |
|
|
$ |
900 |
|
|
$ |
984 |
|
|
Mission, TX |
|
|
(T-Mobile USA, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Office Subtotal |
|
|
|
|
|
|
606.29 |
|
|
|
7,594,636 |
|
|
|
|
|
|
$ |
122,460 |
|
|
$ |
124,927 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INDUSTRIAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
101 Michelin Drive |
|
|
TNT Logistics North America, Inc.(A) |
|
|
1991/1993 |
|
|
|
118.14 |
|
|
|
1,164,000 |
|
|
|
08/05/02 - 08/04/12 |
|
|
$ |
3,103 |
|
|
$ |
3,227 |
|
|
Laurens, SC |
|
|
(TPG N.V.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3600 Army Post Road |
|
|
EDS Information Services LLC(L) |
|
|
2002 |
|
|
|
27.97 |
|
|
|
405,000 |
|
|
|
05/01/02 - 04/30/12 |
|
|
$ |
2,663 |
|
|
$ |
2,856 |
|
|
Des Moines, IA |
|
|
(Electronic Data Systems Corporation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1345 Phillip Parkway |
|
|
LOreal USA, Inc.(H) |
|
|
2004 |
|
|
|
57.86 |
|
|
|
649,250 |
|
|
|
08/15/04 - 10/17/19 |
|
|
$ |
2,290 |
|
|
$ |
2,518 |
|
|
Streetsboro, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6050 Dana Way |
|
|
Dana Corporation(L)(Q) |
|
|
1999 |
|
|
|
55.57 |
|
|
|
677,400 |
|
|
|
10/26/01 - 10/25/21 |
|
|
$ |
2,444 |
|
|
$ |
2,444 |
|
|
Antioch, TN |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7111 Crabb Road |
|
|
TNT Logistics North America, Inc.(A) |
|
|
1978/1993 |
|
|
|
51.41 |
|
|
|
752,000 |
|
|
|
08/05/02 - 08/04/12 |
|
|
$ |
2,078 |
|
|
$ |
2,161 |
|
|
Temperance, MI |
|
|
(TPG N.V.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2400 W. Haven Avenue |
|
|
Michaels Stores Procurement Company, Inc.(E) |
|
|
2004 |
|
|
|
45.09 |
|
|
|
693,185 |
|
|
|
01/14/01 - 01/31/24 |
|
|
$ |
1,986 |
|
|
$ |
1,986 |
|
|
New Lenox, IL |
|
|
(Michaels Stores, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
43955 Plymouth Oaks Boulevard |
|
|
Tower Automotive Products Company(E) |
|
|
1996/1998 |
|
|
|
18.40 |
|
|
|
290,133 |
|
|
|
11/01/02 - 10/31/12 |
|
|
$ |
1,886 |
|
|
$ |
1,886 |
|
|
Plymouth, MI |
|
|
(Tower Automotive, Inc.) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
121 Technology Drive |
|
|
Heidelberg Web Systems, Inc.(M) |
|
|
1986/2003 |
|
|
|
173.00 |
|
|
|
500,500 |
|
|
|
03/30/01 - 12/30/21 |
|
|
$ |
1,833 |
|
|
$ |
1,850 |
|
|
Durham, NH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3225 Meridian Parkway |
|
|
Hagemeyer Foods, Inc.(E) |
|
|
1995 |
|
|
|
15.10 |
|
|
|
201,845 |
|
|
|
01/01/98 - 12/31/12 |
|
|
$ |
1,482 |
|
|
$ |
1,609 |
|
|
Weston, FL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
291 Park Center Drive |
|
|
Kraft Foods North America, Inc.(A) |
|
|
2001 |
|
|
|
25.50 |
|
|
|
344,700 |
|
|
|
06/01/01 - 03/31/11 |
|
|
$ |
1,530 |
|
|
$ |
1,514 |
|
|
Winchester, VA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1109 Commerce Boulevard |
|
|
Linens-n-Things, Inc.(E) |
|
|
1998 |
|
|
|
14.40 |
|
|
|
262,644 |
|
|
|
12/21/98 - 01/31/09 |
|
|
$ |
1,258 |
|
|
$ |
1,251 |
|
|
Logan Township, NJ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
359 Gateway Drive |
|
|
TI Group Automotive Services, LLC(S) |
|
|
2005 |
|
|
|
25.19 |
|
|
|
133,221 |
|
|
|
10/01/04 - 05/31/20 |
|
|
$ |
1,200 |
|
|
$ |
1,200 |
|
|
Livonia, GA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3425 Meridian Parkway Weston, FL |
|
|
Circuit City Stores, Inc.(E) |
|
|
1995 |
|
|
|
16.11 |
|
|
|
230,600 |
|
|
|
02/24/95 - 02/28/17 |
|
|
$ |
1,047 |
|
|
$ |
1,169 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Subtotal |
|
|
|
|
|
|
643.74 |
|
|
|
6,304,478 |
|
|
|
|
|
|
$ |
24,800 |
|
|
$ |
25,671 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
29
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LEXINGTON CORPORATE PROPERTIES TRUST | |
JOINT VENTURE PROPERTY CHART | |
|
|
2006 | |
|
2006 | |
|
|
Estimated | |
|
Estimated | |
|
|
Minimum | |
|
Straight-Line | |
|
|
Land | |
|
Net | |
|
|
|
Cash | |
|
Rental | |
|
|
Tenant/ |
|
Year Constructed/ | |
|
Area | |
|
Rentable | |
|
Base | |
|
Revenue | |
|
Revenue | |
Property Location | |
|
(Guarantor) |
|
Redeveloped | |
|
(acres) | |
|
Square Feet | |
|
Lease Term | |
|
($000) | |
|
($000) | |
| |
|
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
RETAIL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12080 Carmel Mountain Road |
|
|
Kmart Corporation(L)(R) |
|
|
1993 |
|
|
|
9.90 |
|
|
|
107,210 |
|
|
|
07/01/94 - 12/31/18 |
|
|
$ |
454 |
|
|
$ |
980 |
|
|
San Diego, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5350 Leavitt Road |
|
|
Kmart Corporation (L)(R) |
|
|
1993 |
|
|
|
28.32 |
|
|
|
193,193 |
|
|
|
07/01/94 - 12/31/18 |
|
|
$ |
1,008 |
|
|
$ |
729 |
|
|
Lorain, OH |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
255 Northgate Drive |
|
|
Kmart Corporation (L)(R) |
|
|
1993 |
|
|
|
8.68 |
|
|
|
107,489 |
|
|
|
08/29/94 - 12/31/18 |
|
|
$ |
712 |
|
|
$ |
515 |
|
|
Manteca, CA |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
21082 Pioneer Plaza |
|
|
Kmart Corporation(L)(R) |
|
|
1993 |
|
|
|
3.57 |
|
|
|
120,727 |
|
|
|
07/01/94 - 12/31/18 |
|
|
$ |
670 |
|
|
$ |
484 |
|
|
Watertown, NY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
97 Seneca Trail |
|
|
Kmart Corporation(L)(R) |
|
|
1993 |
|
|
|
9.28 |
|
|
|
90,933 |
|
|
|
07/01/94 - 12/31/18 |
|
|
$ |
471 |
|
|
$ |
309 |
|
|
Fairlea, WV |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1150 West Carl Sandburg Drive |
|
|
Kmart Corporation(L)(R) |
|
|
1992 |
|
|
|
2.43 |
|
|
|
94,970 |
|
|
|
07/01/94 - 12/31/18 |
|
|
$ |
400 |
|
|
$ |
289 |
|
|
Galesburg, IL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail Subtotal |
|
|
|
|
|
|
62.18 |
|
|
|
714,522 |
|
|
|
|
|
|
$ |
3,715 |
|
|
$ |
3,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Grand Total |
|
|
|
|
|
|
1,312.21 |
|
|
|
14,613,636 |
|
|
|
|
|
|
$ |
150,975 |
|
|
$ |
153,904 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) |
|
The Company has a
331/3%
economic interest in this property through Lexington Acquiport
Company, LLC. |
(B) |
|
The Company has a 40% economic interest in this property through
Lexington Columbia L.L.C. |
(C) |
|
Cumulative expense stop on these properties is $1,264 per
annum. |
(D) |
|
Expense stop on this property is $768 per annum. |
(E) |
|
The Company has a 30% economic interest in this property through
Lexington/Lion Venture LP. |
(F) |
|
Expense stop on this property is $945 per annum. |
(G) |
|
Tenant can cancel lease no earlier than 04/30/13 with
12 months notice and a payment equal to the net present
value of remaining rent discontinued at 12%. |
(H) |
|
The Company has a 25% economic interest in this property through
Lexington Acquiport Company II, LLC. |
(I) |
|
Tenant can cancel lease anytime after 09/30/10 with a payment
equal to the present value of all remaining lease payments,
including operating expenses, discounted at 6%. |
(J) |
|
Tenant can cancel lease on 12/28/11 with 18 months notice
and a payment equal to two years rent and two years of
unamortized tenant allowance. |
(K) |
|
Tenant can cancel lease with 12 months notice, on 05/01/13
and 03/01/15 for a payment of $2,850 and $1,500, respectively. |
(L) |
|
The Company has a 30% economic interest in this property through
Triple Net Investment Company LLC. |
(M) |
|
The Company has a
331/3%
exonomic interest in this property through Lexington Durham
Limited Partnership. |
(N) |
|
The Company has a 40% economic interest in this property through
a tenancy in common. |
(O) |
|
Tenant can cancel lease on 11/30/10 with 12 months notice. |
(P) |
|
Tenant can cancel lease on 09/30/08 with 120 days notice
for a payment of $40. |
(Q) |
|
Tenant can terminate lease, for obsolescence by providing
120 days notice, anytime between 11/01/08 and 10/31/18 and
pay a predetermined price or fair market value, whichever is
greater. |
(R) |
|
Tenant has the right to cancel the lease providing
12 months notice and a minimum payment stipulated in the
lease. |
(S) |
|
The Company has a 32.3% economic interest through Lexington
Strategic Asset Corp. |
(T) |
|
Expense stop on this property is $798 per annum. |
(U) |
|
Expense stop on this property is $720 per annum. |
(V) |
|
Expense stop on this property is $481 per annum. |
(W) |
|
Tenant can cancel lease on 06/30/12 with 12 months notice
and a payment of 6 months base rent plus approximately
$1,100 of unamortized tenant improvements and leasing
commissions. |
(X) |
|
Tenant can cancel lease on 05/31/08 with 12 months notice
and a payment of $1,922. |
(Y) |
|
After the primary tenant lease expires in 2010 approximately 50%
of the rentable square feet is subject to a lease with Cadbury
Schwepps Holdings through 06/30/15. |
(Z) |
|
Tenant leases three separate buildings. The leases expire in
2007 and 2010. |
30
|
|
Item 3. |
Legal Proceedings |
From time to time, the Company and/or its subsidiaries are
involved in legal proceedings arising in the ordinary course of
its business. In managements opinion, after consultation
with legal counsel, the outcome of such matters is not expected
to have a material adverse effect on the Companys
ownership, financial condition, management or operation of its
properties.
|
|
Item 4. |
Submission of Matters to a Vote of Security Holders |
None.
Item 4A. Executive
Officers and Trustees of the Registrant
|
|
|
Executive Officers and Trustees |
The following sets forth certain information relating to the
executive officers and trustees of the Company:
|
|
|
Name |
|
Business Experience |
|
|
|
E. Robert Roskind Age 60
|
|
Mr. Roskind has served as the Chairman of the Board of Trustees
since October 1993 and was Co-Chief Executive Officer of the
Company until January 2003. He founded The LCP Group, L.P., a
real estate advisory firm, in 1973 and has been its Chairman
since 1976. Mr. Roskind spends approximately 25% of his business
time on the affairs of the LCP Group L.P. and its subsidiaries;
however, Mr. Roskind prioritizes his business time to address
the needs of the Company ahead of the LCP Group L.P. The LCP
Group, L.P. has been the general partner of various limited
partnerships with which the Company has had prior dealings.
Mr. Roskind received his B.S. in 1966 from the University
of Pennsylvania and is a 1969 Harlan Fiske Stone Graduate of the
Columbia Law School. |
|
Richard J. Rouse Age 60
|
|
Mr. Rouse has served as Chief Investment Officer of the Company
since January 2003 and as a trustee of the Company since October
1993. He served as President of the Company from October 1993 to
April 1996, was Co-Chief Executive Officer of the Company from
October 1993 until January 2003, and since April 1996 has served
as Vice Chairman of the Board of Trustees. Mr. Rouse
graduated from Michigan State University in 1968 and received
his M.B.A. in 1970 from the Wharton School of Finance and
Commerce of the University of Pennsylvania. |
|
T. Wilson Eglin Age 41
|
|
Mr. Eglin has served as Chief Executive Officer of the Company
since January 2003, Chief Operating Officer since October 1993,
President since April 1996 and as a trustee since May 1994. He
served as Executive Vice President from October 1993 to April
1996. Mr. Eglin received his B.A. from Connecticut College
in 1986. |
|
Patrick Carroll Age 42
|
|
Mr. Carroll has served as Chief Financial Officer of the Company
since May 1998, Treasurer since January 1999 and Executive Vice
President since January 2003. Prior to joining the Company,
Mr. Carroll was, from 1993 to 1998, a Senior Manager in the
real estate practice of Coopers & Lybrand L.L.P., a
public accounting firm that was one of the predecessors of
Pricewaterhouse Coopers LLP. Mr. Carroll received his
B.B.A. from Hofstra University in 1986, his M.S. in Taxation
from C.W. Post in 1995, and is a Certified Public Accountant. |
31
|
|
|
Name |
|
Business Experience |
|
|
|
John B. Vander Zwaag Age 48
|
|
Mr. Vander Zwaag has been employed by the Company since May 2003
and currently is Executive Vice President. From 1982 to 1992, he
was employed by The LCP Group serving as Director of
Acquisitions from 1987 to 1992. Between his employment by The
LCP Group and the Company, Mr. Vander Zwaag was managing
director of Chesterton Binswanger Capital Advisors
(1992 1997) and Managing Director with Cohen
Financial (1997 2003). He received his B.A. from
Amherst College in 1979 and his M.B.A. from Columbia University
in 1982. |
|
Paul R. Wood Age 45
|
|
Mr. Wood has served as Vice President, Chief Accounting Officer
and Secretary of the Company since October 1993. Mr. Wood
received his B.B.A. from Adelphi University in 1982 and is a
Certified Public Accountant. |
|
Geoffrey Dohrmann Age 55
|
|
Mr. Dohrmann has served as a trustee since August 2000.
Mr. Dorhmann co- founded Institutional Real Estate, Inc., a
real estate-oriented publishing and consulting company in 1987
and is currently its Chairman and Chief Executive Officer.
Mr. Dohrmann also belongs to the advisory boards for the
National Real Estate Index, The Journal of Real Estate Portfolio
Management and Center for Real Estate Enterprise Management. He
is also a fellow of the Homer Hoyt Institute and holds the
Counselors of Real Estate (CRE) designation. |
|
Carl D. Glickman Age 79
|
|
Mr. Glickman has served as a trustee since May 1994. He has been
President of The Glickman Organization, a real estate
development and management firm, since 1953. He is on the Board
of Directors of Bear Stearns Companies, Inc. |
|
James Grosfeld Age 68
|
|
Mr. Grosfeld has served as a trustee since November 2003. He
also serves as a Director of Copart, Inc., Ramco-Gershenson
Properties Trust and BlackRock, Inc. He has served on the
Advisory Board of the Federal National Mortgage Association and
as Director of Interstate Bakeries Corporation and
Addington Resources. He was Chairman and Chief Executive Officer
of Pulte Home Corporation from 1974 to 1990. He received his
B.A. from Amherst College in 1959 and L.L.B. from Columbia Law
School in 1962. |
|
Kevin W. Lynch Age 53
|
|
Mr. Lynch has served as a trustee from May 1996 to May 2000 and
again from May 2003 to the present. Mr. Lynch co-founded
and has been a Principal of The Townsend Group since 1983. The
Townsend Group is the largest real estate consulting firm to
institutional investors in the United States. Mr. Lynch is
a frequent industry speaker and member of the Pension Real
Estate Association and the National Council of Real Estate
Investment Fiduciaries. He currently sits on the Real Estate
Advisory Board for New York University and is a Director for
First Industrial Realty Trust. |
32
|
|
|
Name |
|
Business Experience |
|
|
|
Stanley R. Perla Age 62
|
|
Mr. Perla has served as a trustee since April 2003.
Mr. Perla, a licensed Certified Public Accountant, was a
partner for Ernst & Young LLP, a public accounting
firm. He served as Ernst & Youngs National
Director of Real Estate Accounting as well as on
Ernst & Youngs National Accounting and Auditing
Committee. He is an active member of the National Association of
Real Estate Investment Trusts and the National Association of
Real Estate Companies. Mr. Perla also served on the real
estate committees of the New York State Society of Certified
Public Accountants and the American Institute of Certified
Public Accountants. Mr. Perla is also a director of
American Mortgage Acceptance Company and is a Vice President and
the director of Internal Audit of Vornado Realty Trust. |
|
Seth M. Zachary Age 53
|
|
Mr. Zachary has served as a trustee since November 1993. Since
1987, he has been a partner, and is currently the Chairman, of
the law firm Paul, Hastings, Janofsky & Walker LLP,
outside corporate counsel to the Company. |
33
PART II.
|
|
Item 5. |
Market For The Registrants Common Equity, Related
Shareholder Matters And Issuer Purchases of Equity
Securities |
Market Information. The common shares of the Company are
listed for trading on the New York Stock Exchange
(NYSE) under the symbol LXP. The
following table sets forth the closing high and low sales prices
as reported by the NYSE for the common shares of the Company for
each of the periods indicated below:
|
|
|
|
|
|
|
|
|
For the Quarters Ended: |
|
High | |
|
Low | |
|
|
| |
|
| |
December 31, 2005
|
|
$ |
23.62 |
|
|
$ |
20.37 |
|
September 30, 2005
|
|
|
25.19 |
|
|
|
21.65 |
|
June 30, 2005
|
|
|
24.39 |
|
|
|
21.99 |
|
March 31, 2005
|
|
|
23.56 |
|
|
|
20.65 |
|
December 31, 2004
|
|
$ |
23.23 |
|
|
$ |
21.90 |
|
September 30, 2004
|
|
|
22.00 |
|
|
|
19.01 |
|
June 30, 2004
|
|
|
21.86 |
|
|
|
17.30 |
|
March 31, 2004
|
|
|
22.08 |
|
|
|
20.26 |
|
The closing price of the common shares of the Company was $20.61
on March 8, 2006.
Holders. As of March 8, 2006, the Company had
approximately 2,690 common shareholders of record.
Dividends. The Company has made quarterly distributions
since October 1986 without interruption.
The common share dividends paid in each quarter for the last
five years are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Quarters Ended |
|
2005 | |
|
2004 | |
|
2003 | |
|
2002 | |
|
2001 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
March 31,
|
|
$ |
0.360 |
|
|
$ |
0.350 |
|
|
$ |
0.335 |
|
|
$ |
0.330 |
|
|
$ |
0.310 |
|
June 30,
|
|
$ |
0.360 |
|
|
$ |
0.350 |
|
|
$ |
0.335 |
|
|
$ |
0.330 |
|
|
$ |
0.320 |
|
September 30,
|
|
$ |
0.360 |
|
|
$ |
0.350 |
|
|
$ |
0.335 |
|
|
$ |
0.330 |
|
|
$ |
0.320 |
|
December 31,
|
|
$ |
0.360 |
|
|
$ |
0.350 |
|
|
$ |
0.335 |
|
|
$ |
0.330 |
|
|
$ |
0.320 |
|
The Companys current quarterly common share dividend rate
is $0.365 per share, or $1.46 per common share on an
annualized basis.
Following is a summary of the average taxable nature of the
Companys common share dividends for the three years ended
December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 | |
|
2004 | |
|
2003 | |
|
|
| |
|
| |
|
| |
Total dividends per share
|
|
$ |
1.44 |
|
|
$ |
1.40 |
|
|
$ |
1.34 |
|
|
|
|
|
|
|
|
|
|
|
Ordinary income
|
|
|
87.29 |
% |
|
|
84.09 |
% |
|
|
68.94 |
% |
Short-term capital gain
|
|
|
|
|
|
|
|
|
|
|
|
|
15% rate qualifying dividend
|
|
|
1.04 |
|
|
|
6.82 |
|
|
|
|
|
15% rate gain
|
|
|
8.72 |
|
|
|
0.34 |
|
|
|
3.10 |
|
20% rate gain
|
|
|
|
|
|
|
|
|
|
|
|
|
25% rate gain
|
|
|
2.95 |
|
|
|
2.28 |
|
|
|
0.70 |
|
Return of capital
|
|
|
|
|
|
|
6.47 |
|
|
|
27.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
|
|
|
|
|
|
|
|
The Companys per share dividend on its Series B
Cumulative Redeemable Preferred Shares is $2.0125 per annum.
34
Following is a summary of the average taxable nature of the
Companys dividend on its Series B Cumulative
Redeemable Preferred Shares for the years ended December 31:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 | |
|
2004 | |
|
2003 | |
|
|
| |
|
| |
|
| |
Ordinary income
|
|
|
87.29 |
% |
|
|
89.91 |
% |
|
|
89.20 |
% |
15% rate qualifying dividend
|
|
|
1.04 |
|
|
|
7.29 |
|
|
|
|
|
15% rate gain
|
|
|
8.72 |
|
|
|
0.37 |
|
|
|
8.05 |
|
25% rate gain
|
|
|
2.95 |
|
|
|
2.43 |
|
|
|
2.75 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
|
|
|
|
|
|
|
|
The Companys per share dividend on its Series C
Cumulative Convertible Preferred Shares is $3.25 per annum.
Following is a summary of the average taxable nature of the
Companys dividend on its Series C Cumulative
Convertible Preferred Shares for the year ended December 31:
|
|
|
|
|
|
|
2005 | |
|
|
| |
Ordinary income
|
|
|
87.29 |
% |
15% rate qualifying dividend
|
|
|
1.04 |
|
15% rate gain
|
|
|
8.72 |
|
25% rate gain
|
|
|
2.95 |
|
|
|
|
|
|
|
|
100.00 |
% |
|
|
|
|
While the Company intends to continue paying regular quarterly
dividends to holders of its common shares, future dividend
declarations will be at the discretion of the Board of Trustees
and will depend on the actual cash flow of the Company, its
financial condition, capital requirements, the annual
distribution requirements under the REIT provisions of the Code
and such other factors as the Board of Trustees deems relevant.
The actual cash flow available to pay dividends will be affected
by a number of factors, including the revenues received from
rental properties, the operating expenses of the Company, the
interest and principal payments required under various borrowing
agreements, the ability of lessees to meet their obligations to
the Company and any unanticipated capital expenditures.
The various instruments governing the Companys unsecured
revolving credit facility impose certain restrictions on the
Company with regard to dividends and incurring additional debt
obligations. See Managements Discussion and Analysis
of Financial Condition and Results of Operations and
Note 7 of the Notes to Consolidated Financial Statements
included in this Annual Report on
Form 10-K.
The Company does not believe that the financial covenants
contained in its unsecured revolving credit facility and secured
indebtedness will have any adverse impact on the Companys
ability to pay dividends in the normal course of business to its
common and preferred shareholders or to distribute amounts
necessary to maintain its qualifications as a REIT.
The Company maintains a dividend reinvestment program pursuant
to which common shareholders and operating partnership limited
partners may elect to automatically reinvest their dividends and
distributions to purchase common shares of the Company at a 5%
discount to the market price and free of commissions and other
charges. The Company may, from time to time, either repurchase
common shares in the open market, or issue new common shares,
for the purpose of fulfilling its obligations under the dividend
reinvestment program. To date, none of the common shares issued
under this program were purchased on the open market.
35
Equity Compensation Plan Information. The following table
sets forth certain information, as of December 31, 2005,
with respect to the compensation plan under which equity
securities of the Company are authorized for issuance.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of securities | |
|
|
|
|
|
|
remaining available for | |
|
|
Number of securities | |
|
|
|
future issuance under | |
|
|
to be issued upon | |
|
Weighted-average | |
|
equity compensation | |
|
|
exercise of | |
|
exercise price of | |
|
plans (excluding | |
|
|
outstanding options, | |
|
outstanding options, | |
|
securities reflected in | |
|
|
warrants and rights | |
|
warrants and rights | |
|
column (a)) | |
|
|
| |
|
| |
|
| |
Plan Category |
|
(a) | |
|
(b) | |
|
(c) | |
|
|
| |
|
| |
|
| |
Equity compensation plans approved by security holders
|
|
|
40,500 |
|
|
$ |
14.71 |
|
|
|
1,230,571 |
|
Equity compensation plans not approved by security holders
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
40,500 |
|
|
$ |
14.71 |
|
|
|
1,230,571 |
|
|
|
|
|
|
|
|
|
|
|
Recent Sales of Unregistered Securities.
None.
36
|
|
Item 6. |
Selected Financial Data |
The following sets forth selected consolidated financial data
for the Company as of and for each of the years in the five-year
period ended December 31, 2005. The selected consolidated
financial data for the Company should be read in conjunction
with the Consolidated Financial Statements and the related notes
appearing elsewhere in this Annual Report on
Form 10-K.
($000s, except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 | |
|
2004 | |
|
2003 | |
|
2002 | |
|
2001 | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
Total gross revenues
|
|
$ |
197,132 |
|
|
$ |
143,364 |
|
|
$ |
105,974 |
|
|
$ |
85,093 |
|
|
$ |
74,602 |
|
Expenses applicable to revenues
|
|
|
(94,400 |
) |
|
|
(49,684 |
) |
|
|
(33,696 |
) |
|
|
(25,760 |
) |
|
|
(21,594 |
) |
Interest and amortization expense
|
|
|
(65,065 |
) |
|
|
(44,857 |
) |
|
|
(34,168 |
) |
|
|
(32,354 |
) |
|
|
(29,416 |
) |
Income from continuing operations
|
|
|
18,192 |
|
|
|
35,293 |
|
|
|
24,411 |
|
|
|
22,409 |
|
|
|
15,180 |
|
Total discontinued operations
|
|
|
14,503 |
|
|
|
9,514 |
|
|
|
9,238 |
|
|
|
8,186 |
|
|
|
2,882 |
|
Net income
|
|
|
32,695 |
|
|
|
44,807 |
|
|
|
33,649 |
|
|
|
30,595 |
|
|
|
18,062 |
|
Net income allocable to common shareholders
|
|
|
16,260 |
|
|
|
37,862 |
|
|
|
30,257 |
|
|
|
29,902 |
|
|
|
15,353 |
|
Income from continuing operations per common share
basic
|
|
|
0.04 |
|
|
|
0.61 |
|
|
|
0.62 |
|
|
|
0.80 |
|
|
|
0.64 |
|
Income from continuing operations per common share
diluted
|
|
|
0.04 |
|
|
|
0.59 |
|
|
|
0.61 |
|
|
|
0.79 |
|
|
|
0.63 |
|
Income from discontinued operations basic
|
|
|
0.29 |
|
|
|
0.20 |
|
|
|
0.27 |
|
|
|
0.31 |
|
|
|
0.15 |
|
Income from discontinued operations diluted
|
|
|
0.29 |
|
|
|
0.21 |
|
|
|
0.27 |
|
|
|
0.30 |
|
|
|
0.14 |
|
Net income per common share basic
|
|
|
0.33 |
|
|
|
0.81 |
|
|
|
0.89 |
|
|
|
1.11 |
|
|
|
0.79 |
|
Net income per common share diluted
|
|
|
0.33 |
|
|
|
0.80 |
|
|
|
0.88 |
|
|
|
1.09 |
|
|
|
0.77 |
|
Cash dividends declared per common share
|
|
|
1.445 |
|
|
|
1.410 |
|
|
|
1.355 |
|
|
|
1.325 |
|
|
|
1.290 |
|
Net cash provided by operating activities
|
|
|
112,559 |
|
|
|
90,860 |
|
|
|
71,815 |
|
|
|
57,732 |
|
|
|
41,277 |
|
Net cash used in investing activities
|
|
|
(650,879 |
) |
|
|
(202,549 |
) |
|
|
(298,553 |
) |
|
|
(107,064 |
) |
|
|
(64,321 |
) |
Net cash provided by financing activities
|
|
|
444,878 |
|
|
|
242,723 |
|
|
|
228,986 |
|
|
|
47,566 |
|
|
|
32,115 |
|
Ratio of earnings to combined fixed charges and preferred
dividends
|
|
|
1.15 |
|
|
|
1.57 |
|
|
|
1.59 |
|
|
|
1.82 |
|
|
|
1.47 |
|
Real estate assets, net
|
|
|
1,641,927 |
|
|
|
1,227,262 |
|
|
|
1,001,772 |
|
|
|
779,150 |
|
|
|
714,047 |
|
Investments in non-consolidated entities
|
|
|
191,146 |
|
|
|
132,738 |
|
|
|
69,225 |
|
|
|
54,261 |
|
|
|
48,764 |
|
Total assets
|
|
|
2,160,232 |
|
|
|
1,697,086 |
|
|
|
1,207,411 |
|
|
|
902,471 |
|
|
|
822,153 |
|
Mortgages, notes payable and credit facility, including
discontinued operations
|
|
|
1,170,560 |
|
|
|
765,909 |
|
|
|
551,385 |
|
|
|
491,517 |
|
|
|
455,771 |
|
Shareholders equity
|
|
|
891,310 |
|
|
|
847,290 |
|
|
|
579,848 |
|
|
|
332,976 |
|
|
|
266,713 |
|
Preferred share liquidation preference
|
|
|
234,000 |
|
|
|
214,000 |
|
|
|
79,000 |
|
|
|
|
|
|
|
25,000 |
|
Funds from operations(1)
|
|
|
104,150 |
|
|
|
83,642 |
|
|
|
64,502 |
|
|
|
61,818 |
|
|
|
47,126 |
|
|
|
(1) |
The Company believes that Funds From Operations
(FFO) enhances an investors understanding of
the Companys financial condition, results of operations
and cash flows. The Company believes that FFO |
37
|
|
|
is an appropriate, but limited, measure of the performance of an
equity REIT. FFO is defined in the April 2002 White
Paper, issued by the National Association of Real Estate
Investment Trusts, Inc. (NAREIT) as net income
(or loss), computed in accordance with generally accepted
accounting principles (GAAP), excluding gains (or
losses) from sales of property, plus real estate depreciation
and amortization and after adjustments for unconsolidated
partnerships and joint ventures. The Company included in
the calculation of FFO the dilutive effect of the deemed
conversion of (1) its outstanding exchangeable notes (in
2001) which were redeemed by the Company in 2001, (2) its
convertible OP units, and (3) the Series C Cumulative
Convertible Preferred Shares in 2005 and 2004. FFO should not be
considered an alternative to net income as an indicator of
operating performance or to cash flows from operating activities
as determined in accordance with GAAP, or as a measure of
liquidity to other consolidated income or cash flow statement
data as determined in accordance with GAAP. |
Item 7. Managements
Discussion and Analysis of Financial Condition and Results of
Operations
General
The Company, which has elected to qualify as a real estate
investment trust under the Code, acquires and manages net leased
commercial properties throughout the United States. The Company
believes it has operated as a REIT since October 1993. As of
December 31, 2005, the Company owned or had interests in
189 real estate properties encompassing 40.2 million
rentable square feet. During 2005, the Company purchased 43
properties, including non-consolidated investments, for a
capitalized cost of $1.1 billion.
During 2005, the Company sold eight properties, including one in
a non-consolidated entity, to unrelated third parties for
a net sales price of $74.7 million. In addition, the
Company contributed seven properties to its various
non-consolidated entities for $124.7 million which
approximated original cost.
As of December 31, 2005, the Company, including its
non-consolidated entities, leased properties to 137 tenants in
20 different industries. The Companys revenues and cash
flows are generated predominantly from property rent receipts.
Growth in revenue and cash flows is directly correlated to the
Companys ability to (i) acquire income producing
properties and (ii) to release properties that are vacant,
or may become vacant at favorable rental rates. The challenge
the Company faces in purchasing properties is finding
investments that will provide an attractive return without
compromising the Companys real estate underwriting
criteria. The Company believes it has access to acquisition
opportunities due to its relationship with developers, brokers,
corporate users and sellers.
The Company has experienced minimal lease turnover in the recent
past, and accordingly, minimal capital expenditures. There can
be no assurance that this will continue. Through 2010, the
Company, including its non-consolidated entities, has 57 leases
expiring which generate approximately $72.0 million in base
rent, including the Companys proportionate share of base
rent from properties owned by non-consolidated entities.
Releasing these properties and properties currently vacant at
favorable effective rates is the primary focus of the Company.
The primary risks associated with re-tenanting properties are
(i) the period of time required to find a new tenant,
(ii) whether rental rates will be lower than previously
received, (iii) the significant leasing costs such as
commissions and tenant improvement allowances and (iv) the
payment of operating costs such as real estate taxes and
insurance while there is no offsetting revenue. The Company
addresses these risks by contacting tenants well in advance of
lease maturity to get an understanding of their occupancy needs,
contacting local brokers to determine the depth of the rental
market and retaining local expertise to assist in the
re-tenanting of a property. As part of the acquisition
underwriting process, the Company focuses on buying general
purpose real estate which can be leased to other tenants without
significant modification to the properties. No assurance can be
given that once a property becomes vacant it will subsequently
be re-let.
During 2004, the Company sold eight properties to unrelated
parties for a net sales price of $36.7 million. In
addition, the Company contributed eight properties to its
various non-consolidated entity programs for
$197.0 million, which approximated carrying costs. In
addition, the Company was reimbursed for certain holding costs
by the partners in the respective venture. During 2003, the
Company sold four properties for
38
$11.1 million to unrelated parties, which resulted in an
aggregate gain of approximately $2.2 million. During 2003,
the Company contributed two properties to LION for
$23.8 million, which approximated carrying costs.
Inflation
Certain of the Companys
long-term leases on its
properties contain provisions to mitigate the adverse impact of
inflation on its operating results. Such provisions include
clauses entitling the Company to receive (i) scheduled
fixed base rent increases and (ii) base rent increases
based upon the consumer price index. In addition,
a majority of the Companys leases require tenants to
pay operating expenses, including maintenance, real estate
taxes, insurance and utilities, thereby reducing our exposure to
increases in costs and operating expenses. In addition, the
Companys leases are structured in a way that
minimizes its responsibility for capital improvements.
Critical Accounting Policies
The Companys accompanying consolidated financial
statements have been prepared in conformity with accounting
principles generally accepted in the United States, which
require management to make estimates that affect the amounts of
revenues, expenses, assets and liabilities reported. The
following are critical accounting policies which are important
to the portrayal of the Companys financial condition and
results of operations and which require some of
managements most difficult, subjective and complex
judgments. The accounting for these matters involves the making
of estimates based on current facts, circumstances and
assumptions which could change in a manner that would materially
affect managements future estimates with respect to such
matters. Accordingly, future reported financial conditions and
results could differ materially from financial conditions and
results reported based on managements current estimates.
Purchase Accounting for Acquisition of Real Estate. The
Company allocates the purchase price of real estate acquired in
accordance with Statement of Financial Accounting Standards
No. 141, Business Combinations (SFAS 141).
SFAS 141 requires that the fair value of the real estate
acquired, which includes the impact of
mark-to-market
adjustments for assumed mortgage debt relating to property
acquisitions, is allocated to the acquired tangible assets,
consisting of land, building and improvements, and identified
intangible assets and liabilities, consisting of the value of
above-market and below-market leases, other value of in-place
leases and value of tenant relationships, based in each case on
their fair values.
The fair value of the tangible assets, which includes land,
building and improvements, and fixtures and equipment, of an
acquired property is determined by valuing the property as if it
were vacant, and the as-if-vacant value is then
allocated to the tangible assets based on managements
determination of relative fair values of these assets. Factors
considered by management in performing these analyses include an
estimate of carrying costs during the expected
lease-up periods
considering current market conditions and costs to execute
similar leases. In estimating carrying costs, management
includes real estate taxes, insurance and other operating
expenses and estimates of lost rental revenue during the
expected lease-up
periods based on current market demand. Management also
estimates costs to execute similar leases including leasing
commissions.
In allocating the fair value of the identified intangible assets
and liabilities of an acquired property, above-market and
below-market in-place lease values are recorded based on the
difference between the current in-place lease rent and a
management estimate of current market rents. Below-market lease
intangibles are recorded as part of deferred revenue and
amortized into rental revenue over the non-cancelable periods of
the respective leases. Above-market leases are recorded as part
of intangible assets and amortized as a direct charge against
rental revenue over the non-cancelable portion of the respective
leases.
The aggregate value of other acquired intangible assets,
consisting of in-place leases and tenant relationships, is
measured by the excess of (i) the purchase price paid for a
property over (ii) the estimated fair value of the property
as if vacant, determined as set forth above. This aggregate
value is allocated between in-place lease values and tenant
relationships based on managements evaluation of the
specific characteristics of each tenants lease. The value
of in-place leases and customer relationships are amortized to
expense over the remaining non-cancelable periods of the
respective leases.
39
Revenue Recognition. The Company recognizes revenue in
accordance with Statement of Financial Accounting Standards
No. 13 Accounting for Leases, as amended
(SFAS 13). SFAS 13 requires that revenue
be recognized on a straight-line basis over the term of the
lease unless another systematic and rational basis is more
representative of the time pattern in which the use benefit is
derived from the leased property. Renewal options in leases with
rental terms that are lower than those in the primary term are
excluded from the calculation of straight line rent, if they do
not meet the criteria of a bargain renewal option. In those
instances in which the Company funds tenant improvements and the
improvements are deemed to be owned by the Company, revenue
recognition will commence when the improvements are
substantially completed and possession or control of the space
is turned over to the tenant. When the Company determines that
the tenant allowances are lease incentives, the Company
commences revenue recognition when possession or control of the
space is turned over to the tenant for tenant work to begin.
Gains on sales of real estate are recognized pursuant to the
provisions of SFAS No. 66 Accounting for Sales of Real
Estate, as amended (SFAS 66). The specific
timing of the sale is measured against various criteria in
SFAS 66 related to the terms of the transactions and any
continuing involvement in the form of management or financial
assistance associated with the properties. If the sales criteria
are not met, the gain is deferred and the finance, installment
or cost recovery method, as appropriate, is applied until the
sales criteria are met.
Accounts Receivable. The Company continuously monitors
collections from its tenants and would make a provision for
estimated losses based upon historical experience and any
specific tenant collection issues that the Company has
identified. As of December 31, 2005 and 2004, the Company
did not record an allowance for doubtful accounts.
Impairment of Real Estate. The Company evaluates the
carrying value of all real estate held when a triggering event
under Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets,
as amended (SFAS 144) has occurred to determine
if an impairment has occurred which would require the
recognition of a loss. The evaluation includes reviewing
anticipated cash flows of the property, based on current leases
in place, and an estimate of what lease rents will be if the
property is vacant coupled with an estimate of proceeds to be
realized upon sale. However, estimating market lease rents and
future sale proceeds is highly subjective and such estimates
could differ materially from actual results.
Depreciation is determined by the straight-line method over the
remaining estimated economic useful lives of the properties.
Tax Status. The Company has made an election to qualify,
and believes it is operating so as to qualify, as a REIT for
federal income tax purposes. Accordingly, the Company generally
will not be subject to federal income tax, provided that
distributions to its shareholders equal at least the amount of
its REIT taxable income as defined under Sections 856
through 860 of the Code.
The Company is now permitted to participate in certain
activities from which it was previously precluded in order to
maintain its qualification as a REIT, so long as these
activities are conducted in entities which elect to be treated
as taxable subsidiaries under the Code. LRA, Lexington
Contributions Inc. (LCI) and LSAC are taxable REIT
subsidiaries. As such, the Company is subject to federal and
state income taxes on the income it receives from these
activities.
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for
the estimated future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis
and operating loss and tax credit carry-forwards. Deferred tax
assets and liabilities are measured using enacted tax rates in
effect for the year in which those temporary differences are
expected to be recovered or settled.
Properties Held For Sale. The Company accounts for
properties held for sale in accordance with SFAS 144.
SFAS 144 requires that the assets and liabilities of
properties that meet various criteria be presented separately in
the statement of financial position, with assets and liabilities
being separately stated.
40
The operating results of these properties are reflected as
discontinued operations in the income statement. Properties that
do not meet the held for sale criteria of SFAS 144 are
accounted for as operating properties.
Basis of Consolidation. The Company determines whether an
entity for which it holds an interest should be consolidated
pursuant to Financial Accounting Standards Board Interpretation
No. 46, Consolidation of Variable Interest Entities
(FIN 46R). If the entity is not a variable
interest entity, and the Company controls the entitys
voting shares or similar rights, the entity is consolidated.
FIN 46R requires the Company to evaluate whether it has a
controlling financial interest in an entity through means other
than voting rights.
Liquidity and Capital Resources
Since becoming a public company, the Companys principal
sources of capital for growth have been the public and private
equity markets, selective secured indebtedness, its unsecured
revolving credit facility, issuance of OP Units and
undistributed funds from operations. The Company expects to
continue to have access to and use these sources in the future;
however, there are factors that may have a material adverse
effect on the Companys access to capital sources. The
Companys ability to incur additional debt to fund
acquisitions is dependent upon its existing leverage, the value
of the assets the Company is attempting to leverage and general
economic conditions which may be outside of managements
influence.
During 2005, the Company replaced its $100 million
unsecured revolving credit facility with a new $200 million
unsecured revolving credit facility which bears interest at a
rate of LIBOR plus 120-170 basis points depending on the
leverage (as defined) of the Company and matures in June 2008.
The credit facility contains customary financial covenants
including restrictions on the level of indebtedness, amount of
variable rate debt to be borrowed and net worth maintenance
provisions. As of December 31, 2005, the Company was in
compliance with all covenants, no borrowings were outstanding on
the facility, $198.5 million was available to be borrowed
and $1.5 million in letters of credit were outstanding.
During 2005 and 2004, the Company completed common share
offerings of 2.5 million and 6.9 million shares,
respectively, raising aggregate net proceeds of
$60.7 million and $144.0 million, respectively. During
2005, the Company issued 400,000 cumulative convertible
preferred shares, at $50 per share and a dividend rate of
6.50%, raising net proceeds of $19.5 million. During 2004,
the Company issued 2.7 million cumulative convertible
preferred shares at $50 per share and a dividend rate of
6.50%, raising net proceeds of $131.1 million. Currently
these 3.1 million preferred shares are convertible into
5.8 million common shares.
The Company has made equity commitments of $192.1 million
to its various joint venture programs, of which
$27.7 million is unfunded as of December 31, 2005.
This amount will be funded as investments are made. In addition,
the joint venture agreements provide the partners, under certain
circumstances, the ability to put their interests to the Company
for cash or common shares. Exercise of these put rights could
require the Company to use its resources to purchase these
assets instead of more favorable investment opportunities. As of
December 31, 2005, the aggregate contingent commitment is
approximately $443.9 million. This assumes the Company
issues common shares to settle the put and that the Company does
not use its ability to block certain properties to be put to it.
Dividends. In connection with its intention to continue
to qualify as a REIT for federal income tax purposes, the
Company expects to continue paying regular dividends to its
shareholders. These dividends are expected to be paid from
operating cash flows and/or from other sources. Since cash used
to pay dividends reduces amounts available for capital
investments, the Company generally intends to maintain a
conservative dividend payout ratio as a percentage of FFO,
reserving such amounts as it considers necessary for the
maintenance or expansion of properties in its portfolio, debt
reduction, the acquisition of interests in new properties as
suitable opportunities arise, and such other factors as the
Board of Trustees considers appropriate.
Dividends paid to common shareholders increased to
$72.6 million in 2005, compared to $65.1 million in
2004 and $45.8 million in 2003. Preferred dividends paid
were $14.5 million, $6.4 million and $1.8 million
in 2005, 2004 and 2003, respectively.
41
Although the Company receives the majority of its base rent
payments on a monthly basis, it intends to continue paying
dividends quarterly. Amounts accumulated in advance of each
quarterly distribution are invested by the Company in short-term
money market or other suitable instruments.
The Company believes that cash flows from operations will
continue to provide adequate capital to fund its operating and
administrative expenses, regular debt service obligations and
all dividend payments in accordance with REIT requirements in
both the short-term and long-term. In addition, the Company
anticipates that cash on hand, borrowings under its unsecured
revolving credit facility, issuance of equity and debt, as well
as other alternatives, will provide the necessary capital
required by the Company. Cash flows from operations as reported
in the Consolidated Statements of Cash Flows increased to
$112.6 million for 2005 from $90.9 million for 2004
and $71.8 million for 2003.
Net cash used in investing activities totaled
$650.9 million in 2005, $202.5 million in 2004 and
$298.6 million in 2003. Cash used in investing activities
related primarily to investments in real estate properties and
joint ventures. Cash provided by investing activities related
primarily to collection of notes receivable and proceeds from
the sale of properties. Therefore, the fluctuation in investing
activities relates primarily to the timing of investments and
dispositions.
Net cash provided by financing activities totaled
$444.9 million in 2005, $242.7 million in 2004 and
$229.0 million in 2003. Cash provided by financing
activities during each year was primarily attributable to
proceeds from equity offerings and non-recourse mortgages offset
by dividend and distribution payments and debt payments.
UPREIT Structure. The Companys UPREIT structure
permits the Company to effect acquisitions by issuing to a
property owner, as a form of consideration in exchange for the
property, OP Units in operating partnerships controlled by
the Company. All outstanding OP Units are redeemable at
certain times for common shares on a one-for-one basis and
substantially all outstanding OP Units require the Company
to pay quarterly distributions to the holders of such
OP Units. The Company accounts for outstanding
OP Units in a manner similar to a minority interest holder.
The number of common shares that will be outstanding in the
future should be expected to increase, and minority interest
expense should be expected to decrease, as such OP Units
are redeemed for common shares.
The following table provides certain information with respect to
such OP Units as of December 31, 2005 (assuming the
Companys annualized dividend rate remains at the current
$1.46 per share).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current | |
|
Total | |
|
|
|
|
|
|
Annualized | |
|
Current | |
|
|
Total | |
|
|
|
Per OP | |
|
Annualized | |
Redeemable for |
|
Number | |
|
Affiliate | |
|
Unit | |
|
Distribution | |
common shares: |
|
of OP Units | |
|
OP Units | |
|
Distribution | |
|
($000) | |
|
|
| |
|
| |
|
| |
|
| |
At any time
|
|
|
3,476,236 |
|
|
|
1,404,015 |
|
|
$ |
1.46 |
|
|
$ |
5,075 |
|
At any time
|
|
|
1,199,652 |
|
|
|
65,874 |
|
|
|
1.08 |
|
|
|
1,296 |
|
At any time
|
|
|
108,724 |
|
|
|
52,144 |
|
|
|
1.12 |
|
|
|
122 |
|
January 2006
|
|
|
171,168 |
|
|
|
416 |
|
|
|
|
|
|
|
|
|
January 2006
|
|
|
231,763 |
|
|
|
120,662 |
|
|
|
1.46 |
|
|
|
338 |
|
February 2006
|
|
|
28,230 |
|
|
|
1,743 |
|
|
|
|
|
|
|
|
|
May 2006
|
|
|
9,368 |
|
|
|
|
|
|
|
0.29 |
|
|
|
3 |
|
May 2006
|
|
|
97,828 |
|
|
|
27,212 |
|
|
|
1.46 |
|
|
|
143 |
|
November 2006
|
|
|
397,102 |
|
|
|
44,858 |
|
|
|
1.46 |
|
|
|
580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,720,071 |
|
|
|
1,716,924 |
|
|
$ |
1.32 |
|
|
$ |
7,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Affiliate OP Units, which are included in total
OP Units, represent OP Units held by the Chairman of
the Company, E. Robert Roskind (including his affiliates) and
the Vice Chairman and Chief Investment Officer of the Company,
Richard J. Rouse.
42
Financing
Revolving Credit Facility. The Companys
$200.0 million unsecured revolving credit facility, which
expires June 2008, bears interest at 120-170 basis points
over LIBOR depending on the leverage (as defined) of the
Company. The credit facility contains customary financial
covenants including restrictions on the level of indebtedness,
amount of variable debt to be borrowed and net worth maintenance
provisions. As of December 31, 2005, the Company was in
compliance with all covenants, no borrowings were outstanding
and $198.5 million was available to be borrowed. The
Company has four letters of credit outstanding under the
facility aggregating $1.5 million issued in accordance with
provisions in certain non-recourse mortgages.
Debt Service Requirements. The Companys principal
liquidity needs are the payment of interest and principal on
outstanding indebtedness. As of December 31, 2005, a total
of 98 of the Companys 126 consolidated properties
were subject to outstanding mortgages which had an aggregate
principal amount of $1.2 billion, including properties
included in discontinued operations. As of December 31,
2005, the weighted average interest rate on the Companys
outstanding debt was approximately 6.0%. The scheduled principal
amortization payments for the next five years are as follows:
$27.8 million in 2006, $35.7 million in 2007,
$30.5 million in 2008, $31.6 million in 2009 and
$30.5 million in 2010. Approximate balloon payment amounts,
having a weighted average interest rate of 7.3%, due the next
five years are as follows: $11.9 million in 2006, $0 in
2007, $59.0 million in 2008, $47.7 million in 2009 and
$56.6 million in 2010. The ability of the Company to make
such balloon payments will depend upon its ability to refinance
the mortgage related thereto, sell the related property, have
available amounts under its unsecured revolving credit facility
or access other capital. The ability of the Company to
accomplish such goals will be affected by numerous economic
factors affecting the real estate industry, including the
availability and cost of mortgage debt at the time, the
Companys equity in the mortgaged properties, the financial
condition of the Company, the operating history of the mortgaged
properties, the then current tax laws and the general national,
regional and local economic conditions.
The Company expects to continue to use property specific,
non-recourse mortgages as it believes that by properly matching
a debt obligation, including the balloon maturity risk, with a
lease expiration the Companys
cash-on-cash returns
increase and the exposure to residual valuation risk is reduced.
In December 2005, the Company informed the lender for its
Milpitas, California property that it will no longer make debt
service payments and its intention is to complete a
deed-in-lieu of
foreclosure to satisfy the mortgage. The Company recorded a
$12.1 million impairment charge in 2005 relating to this
property.
Other
Lease Obligations. Since the Companys tenants
generally bear all or substantially all of the cost of property
operations, maintenance and repairs, the Company does not
anticipate significant needs for cash for these costs. For
seventeen of the properties, the Company has a level of property
operating expense responsibility. The Company generally funds
property expansions with additional secured borrowings, the
repayment of which is funded out of rental increases under the
leases covering the expanded properties. To the extent there is
a vacancy in a property, the Company would be obligated for all
operating expenses, including real estate taxes and insurance.
As of December 31, 2005, three properties were fully vacant.
The Companys tenants pay the rental obligations on ground
leases either directly to the fee holder or to the Company as
increased rent. The annual ground lease rental payment
obligations for each of the next five years is $1.2 million
in 2006, $1.2 million in 2007, $1.2 million in 2008,
$1.2 million in 2009 and $1.0 million in 2010. These
amounts do not include payments due under bond leases in which a
right of offset exists between the lease obligation of the
Company and the debt service due to the Company.
43
The leases on the following properties contain renewal options,
exercisable by the tenant, with rents per square foot less than
that paid in 2005. The Company does not believe that any of
these renewal options are bargain renewal options, and,
accordingly, the renewal periods are excluded from straight-line
rent calculations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Rent | |
|
|
|
|
|
|
|
|
per Net | |
|
|
|
|
|
|
|
|
Rentable | |
|
|
|
|
Tenant |
|
Rentable | |
|
Square Foot | |
|
Renewal Option Term and Renewal |
Property Location |
|
(Guarantor) |
|
Square Feet | |
|
2005 | |
|
Net Rent per Square Foot |
|
|
|
|
| |
|
| |
|
|
295 Chipeta Way
Salt Lake City, UT |
|
Northwest Pipeline Corp. |
|
|
295,000 |
|
|
$ |
27.66 |
|
|
10/01/09 - 09/15/18: $11.73
plus base cost component ($.06) adjusted by CPI,
plus ($.03) |
450 Stern Street
Oberlin, OH |
|
Johnson Controls, Inc. |
|
|
111,160 |
|
|
$ |
6.29 |
|
|
12/23/06 - 12/22/11: $3.65
12/23/11 - 12/22/16: $4.20 |
46600 Port Street
Plymouth, MI |
|
Johnson Controls, Inc. |
|
|
134,160 |
|
|
$ |
6.89 |
|
|
12/23/06 - 12/22/11: $4.00
12/23/11 - 12/22/16: $4.60 |
541 Perkins Jones Road
Warren, OH |
|
Kmart Corp. |
|
|
1,462,642 |
|
|
$ |
6.40 |
|
|
10/01/07 - 09/30/12: $3.10
10/01/12 - 09/30/17: $3.10
10/01/17 - 09/30/22: $3.10
10/01/22 - 09/30/27: $3.10
10/01/27 - 09/30/32: $3.10
10/01/32 - 09/30/37: $3.10
10/01/37 - 09/30/42: FMV
10/01/42 - 09/30/47: FMV
10/01/47 - 09/30/52: FMV
10/01/52 - 09/30/57: FMV |
24100 Laguna Hills Mall
Laguna Hills, CA |
|
Federated Department Stores, Inc. |
|
|
160,000 |
|
|
$ |
4.24 |
|
|
04/17/14 - 04/16/29: $1.81
04/17/29 - 04/16/44: $1.81
04/17/44 - 04/16/50: $1.81 |
6910 S. Memorial Highway
Tulsa, OK |
|
Toys R Us, Inc. |
|
|
43,123 |
|
|
$ |
8.44 |
|
|
06/01/11 - 05/31/16: $5.92
06/01/16 - 05/31/21: $5.92
06/01/21 - 05/31/26: $5.92
06/01/26 - 05/31/31: $5.92 |
12535 S.E. 82nd Avenue
Clackamas, OR |
|
Toys R Us, Inc. |
|
|
42,842 |
|
|
$ |
10.06 |
|
|
06/01/11 - 05/31/16: $6.96
06/01/16 - 05/31/21: $6.96
06/01/21 - 05/31/26: $6.96
06/01/26 - 05/31/31: $6.96 |
18601 Alderwood Mall Boulevard
Lynnwood, WA |
|
Toys R Us, Inc. |
|
|
43,105 |
|
|
$ |
9.24 |
|
|
06/01/11 - 05/31/16: $6.48
06/01/16 - 05/31/21: $6.48
06/01/21 - 05/31/26: $6.48
06/01/26 - 05/31/31: $6.48 |
9580 Livingston Road
Oxon Hill, MD |
|
GFS Realty, Inc.
(Giant Food, Inc.) |
|
|
107,337 |
|
|
$ |
1.91 |
|
|
03/01/14 - 02/29/19: $1.53
03/01/19 - 02/29/24: $1.53
03/01/24 - 02/29/29: $1.15
03/01/29 - 02/29/34: $1.15 |
Rockshire Village Center
2401 Wootton Parkway
Rockville, MD |
|
GFS Realty, Inc.
(Giant Food, Inc.) |
|
|
51,682 |
|
|
$ |
2.57 |
|
|
06/01/27 - 05/31/37: $1.33
06/20/17 - 05/31/27: $1.78 |
590 Ecology Lane
Chester, SC |
|
Owens Corning |
|
|
420,597 |
|
|
$ |
5.22 |
|
|
01/01/21 - 12/31/25: $3.99
01/01/26 - 12/31/30: $4.41 |
44
Contractual Obligations. The following summarizes the
Companys principal contractual obligations as of
December 31, 2005 ($000s):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2011 and | |
|
|
|
|
2006 | |
|
2007 | |
|
2008 | |
|
2009 | |
|
2010 | |
|
thereafter | |
|
Total(3) | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Mortgages payable - normal amortization
|
|
$ |
27,804 |
|
|
$ |
35,657 |
|
|
$ |
30,481 |
|
|
$ |
31,621 |
|
|
$ |
30,517 |
|
|
$ |
160,733 |
|
|
$ |
316,813 |
|
Mortgages payable - balloon maturities
|
|
|
11,870 |
|
|
|
|
|
|
|
58,969 |
|
|
|
47,681 |
|
|
|
56,558 |
|
|
|
678,669 |
|
|
|
853,747 |
|
Purchase obligations
|
|
|
48,785 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,785 |
|
Credit facility(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease obligations(1)
|
|
|
1,856 |
|
|
|
1,851 |
|
|
|
1,823 |
|
|
|
1,225 |
|
|
|
995 |
|
|
|
12,140 |
|
|
|
19,890 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
90,315 |
|
|
$ |
37,508 |
|
|
$ |
91,273 |
|
|
$ |
80,527 |
|
|
$ |
88,070 |
|
|
$ |
851,542 |
|
|
$ |
1,239,235 |
|
|
|
|
|
|
|
|
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(1) |
Includes ground lease payments and office rent. Amounts
disclosed through 2008 include rent for the Companys
principal executive office which is fixed through 2008 and
adjusted to fair market value as determined at January 2009.
Therefore, the amounts for 2009 and thereafter do not include
principal executive office rent. |
|
(2) |
The Company has $1,521 in outstanding letters of credit. |
|
(3) |
The Company has approximately $27,700 of unfunded equity
commitments to joint ventures. In addition, the joint venture
agreements provide the partners, under certain circumstances,
the ability to put their interest to the Company for cash or
common shares. The aggregate contingent commitment as of
December 31, 2005 is approximately $443,882 to be issued in
common shares. |
Capital Expenditures. Due to the net lease structure, the
Company does not incur significant expenditures in the ordinary
course of business to maintain its properties. However, as
leases expire, the Company expects to incur costs in extending
the existing tenant leases or
re-tenanting the
properties. The amounts of these expenditures can vary
significantly depending on tenant negotiations, market
conditions and rental rates. These expenditures are expected to
be funded from operating cash flows or borrowings on the
unsecured revolving credit facility. As of December 31,
2005, the Company had entered into binding letters of intent to
purchase two properties upon completion of
(i) construction and commencement of rent from the tenants
and/or (ii) the seller fulfilling its contractual
obligation concerning certain deliverables. As of
December 31, 2005 the aggregate estimated obligation was
$48.8 million.
Shares Repurchase. In September 1998, the Companys
Board of Trustees approved a funding limit for the repurchase of
1.0 million common shares/OP Units, and authorized any
repurchase transactions within that limit. In November 1998, the
Companys Board of Trustees approved an additional
1.0 million common shares/OP Units for repurchase, thereby
increasing the funding limit to 2.0 million common
shares/OP Units available for repurchase. From September 1998 to
March 2005, the Company has repurchased approximately
1.4 million common shares/OP Units at an average price of
$10.62 per share/OP Unit. In November 2005, the
Companys Board of Trustees increased the remaining amount
of common shares/OP Units eligible for repurchase, so that an
aggregate of 2.0 million common shares/OP Units are
available for repurchase under the Companys share
repurchase program. No common share/OP Unit repurchases have
been made under this increased share repurchase program.
Comparison of 2005 to 2004
Changes in the results of operations for the Company are
primarily due to the growth of its portfolio and costs
associated with such growth. Of the increase in total gross
revenues in 2005 of $53.8 million, $47.8 million is
attributable to increases in rental revenue. The remaining
$6.0 million increase in gross revenues in 2005 was
attributable to an increase in tenant reimbursements of
$5.5 million and a $0.5 million increase in advisory
fees. The increase in interest and amortization expense of
$20.2 million is due to increased leverage incurred
relating to acquisitions and has been partially offset by
interest savings resulting from scheduled principal amortization
payments, lower interest rates and mortgage satisfactions. The
increase in
45
depreciation and amortization of $32.0 million is due
primarily to the growth in real estate and intangibles due to
property acquisitions. The Companys general and
administrative expenses increased by $3.7 million primarily
due to greater professional service fees ($0.4 million),
personnel costs ($2.0 million), terminated deal costs
($0.3 million), technology costs ($0.3 million),
insurance ($0.2 million) and rent ($0.2 million). The
increase in property operating expenses of $12.7 million is
due primarily to incurring property level operating expenses for
properties in which the Company has operating expense
responsibility and an increase in vacancy. Debt satisfaction
charges decreased by $4.5 million due to the payoff of
certain mortgages in 2005 which resulted in a net gain.
Impairment charges increased by $8.5 million due to an
impairment of one property in 2005 of $12.1 million
compared to an impairment charge in 2004 aggregating
$3.6 million. The impairment charge in 2005 was recorded
when the Company decided that it would no longer continue making
debt service payments on a mortgage encumbering a property and
would deliver the property to the lender as a deed in lieu of
foreclosure to satisfy the mortgage. The Company incurred a
$2.9 million write-off of assets relating to the bankruptcy
of a tenant in its Dallas, Texas property in 2004. Non-operating
income decreased $1.8 million primarily due to the decrease
in reimbursement of certain costs from non-consolidated entities
and a reduction of interest earned. The provision for income
taxes decreased $1.3 million due to decreased earnings in
taxable REIT subsidiaries primarily due to fewer properties held
in the taxable REIT subsidiaries. Minority interest expense
decreased by $0.3 million due to the decrease in earnings
at the partnership level. Equity in earnings of non-consolidated
entities decreased $1.0 million due to a decrease in net
income of non-consolidated entities, related primarily to
increased depreciation. Net income decreased primarily due to
the impact of items discussed above offset by an increase in
total discontinued operations of $5.0 million. The total
discontinued operations income increase was comprised of an
increase in gains on sale of properties of $6.1 million, an
increase in debt satisfaction charges of $0.7 million, a
reduction in impairment charges of $2.0 million and a
reduction in income from discontinued operations of
$2.4 million. Net income allocable to common shareholders
decreased due to the items discussed above plus an increase in
preferred dividends of $9.5 million resulting from the
issuance of preferred shares.
Any increase in net income in future periods will be closely
tied to the level of acquisitions made by the Company. Without
acquisitions, which in addition to generating rental revenue,
generate acquisition, debt placement and asset management fees
when such properties are acquired by joint venture or advisory
programs, growth in net income is dependent on index adjusted
rents, percentage rents, reduced interest expense on amortizing
mortgages and by controlling variable overhead costs. However,
there are many factors beyond managements control that
could offset these items including, without limitation,
increased interest rates of debt and tenant monetary defaults.
Comparison of 2004 to 2003
Changes in the results of operations for the Company are
primarily due to the growth of its portfolio and costs
associated with such growth. Of the increase in total gross
revenues in 2004 of $37.4 million, $32.7 million is
primarily attributable to increases in rental revenue. The
remaining $4.7 million increase in gross revenues in 2004
was attributable to an increase in tenant reimbursements of
$1.2 million and a $3.5 million increase in advisory
fees. The increase in interest and amortization expense of
$10.7 million is due to increased leverage incurred
relating to acquisitions and has been partially offset by
interest savings resulting from scheduled principal amortization
payments, lower interest rates and mortgage satisfactions. The
increase in depreciation and amortization of $12.8 million
is due, primarily to the growth in real estate and intangibles
due to property acquisitions. The Companys general and
administrative expenses increased by $4.2 million primarily
due to greater professional service fees ($1.2 million),
personnel costs ($1.2 million), severance costs for a
former officer ($0.5 million), trustee fees
($0.3 million) and investor relations/financial reporting
($0.2 million). The Company incurred a $2.9 million
write-off of assets relating to the bankruptcy of the tenant in
its Dallas, Texas property in 2004. The increase in property
operating expenses of $3.2 million is due primarily to
incurring property level operating expenses for properties in
which the Company has operating expense responsibility and an
increase in vacancy. Debt satisfaction charges decreased by
$7.4 million due to the payoff of certain mortgages in
2003. Non-operating income increased $1.8 million primarily
due to reimbursement of certain costs from non-consolidated
entities and greater interest earned. The provision for income
taxes increased by $0.9 million due to increased earnings
in taxable REIT subsidiaries. Minority
46
interest expense decreased by $1.0 million due to the
decrease in earnings at the partnership level. Equity in
earnings of non-consolidated entities increased
$1.5 million due to an increase in assets owned and net
income of non-consolidated entities. Net income increased
primarily due to the impact of items discussed above plus a
$0.3 million increase in the total discontinued operations
income. The total discontinued operations income increase was
comprised of an increase in gains on sales of properties of
$3.3 million, an increase in impairment charges of
$2.8 million, a reduction in income from discontinued
operations of $0.3 million and a reduction in debt
satisfaction charges of $0.1 million. Net income allocable
to common shareholders increased due to the items discussed
above offset by an increase in preferred dividends of
$3.6 million resulting from the issuance of preferred
shares in 2004 and 2003.
Environmental Matters. Based upon managements
ongoing review of its properties, management is not aware of any
environmental condition with respect to any of the
Companys properties, which would be reasonably likely to
have a material adverse effect on the Company. There can be no
assurance, however, that (i) the discovery of environmental
conditions, which were previously unknown, (ii) changes in
law, (iii) the conduct of tenants or (iv) activities
relating to properties in the vicinity of the Companys
properties, will not expose the Company to material liability in
the future. Changes in laws increasing the potential liability
for environmental conditions existing on properties or
increasing the restrictions on discharges or other conditions
may result in significant unanticipated expenditures or may
otherwise adversely affect the operations of the Companys
tenants, which would adversely affect the Companys
financial condition and results of operations.
Funds From Operations
The Company believes that funds from operations
(FFO) enhances an investors understanding of
the Companys financial condition, results of operations
and cash flows. The Company believes that FFO is an appropriate,
but limited, measure of the performance of an equity REIT. FFO
is defined in the April 2002 White Paper, issued by
the National Association of Real Estate Investment Trusts, Inc.
(NAREIT) as net income (or loss), computed in
accordance with generally accepted accounting principles
(GAAP), excluding gains (or losses) from sales of
property, plus real estate depreciation and amortization and
after adjustments for unconsolidated partnerships and joint
ventures. The Company included in the calculation of FFO
the dilutive effect of the deemed conversion of its convertible
OP Units and Series C Cumulative Convertible Preferred
Shares. FFO should not be considered an alternative to net
income as an indicator of operating performance or to cash flows
from operating activities as determined in accordance with GAAP,
or as a measure of liquidity to other consolidated income or
cash flow statement data as determined in accordance with GAAP.
The following table reflects the calculation of the
Companys FFO and cash flow activities for each of the
years in the three year period ended December 31, 2005
($000):
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2005 | |
|
2004 | |
|
2003 | |
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| |
|
| |
|
| |
Net income allocable to common shareholders-basic
|
|
$ |
16,260 |
|
|
$ |
37,862 |
|
|
$ |
30,257 |
|
|
Depreciation and amortization
|
|
|
71,044 |
|
|
|
39,894 |
|
|
|
27,634 |
|
|
Minority interests share of net income
|
|
|
1,910 |
|
|
|
2,570 |
|
|
|
4,039 |
|
|
Amortization of leasing commissions
|
|
|
547 |
|
|
|
647 |
|
|
|
812 |
|
|
Joint venture adjustmentdepreciation
|
|
|
17,632 |
|
|
|
7,559 |
|
|
|
3,951 |
|
|
Preferred dividend Series C
|
|
|
10,075 |
|
|
|
585 |
|
|
|
|
|
|
Gain on sale of properties
|
|
|
(11,578 |
) |
|
|
(5,475 |
) |
|
|
(2,191 |
) |
|
Gain on sale of properties-joint ventures
|
|
|
(1,740 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds From Operations
|
|
$ |
104,150 |
|
|
$ |
83,642 |
|
|
$ |
64,502 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
$ |
112,559 |
|
|
$ |
90,860 |
|
|
$ |
71,815 |
|
Cash flows used in investing activities
|
|
|
(650,879 |
) |
|
|
(202,549 |
) |
|
|
(298,553 |
) |
Cash flows from financing activities
|
|
|
444,878 |
|
|
|
242,723 |
|
|
|
228,986 |
|
47
Recently Issued Accounting Standards
In May 2003, the FASB issued Statement No. 150, Accounting
for Certain Financial Instruments with Characteristics of both
Liabilities and Equity, as amended, (SFAS 150).
SFAS 150 establishes standards for the classification and
measurement of certain financial instruments with
characteristics of both liabilities and equity. SFAS 150
also includes required disclosures for financial instruments
within its scope. For the Company, SFAS 150 was effective
for instruments entered into or modified after May 31, 2003
and otherwise was effective as of January 1, 2004, except
for mandatorily redeemable financial instruments. SFAS 150
has been deferred indefinitely for certain types of mandatorily
redeemable financial instruments. The adoption of the required
portions of SFAS 150 had no impact on the Company.
In December 2004, the FASB issued Statement No. 123,
(revised 2004) Share-Based Payment (SFAS 123R),
which supersedes Accounting Principals Board (APB)
Opinion No. 25, Accounting for Stock Issued to Employees,
and its related implementation guidance. SFAS 123R
establishes standards for the accounting for transactions in
which an entity exchanges its equity instruments for goods or
services. It also addresses transactions in which an entity
incurs liabilities in exchange for goods or services that are
based on the fair value of the entitys equity instruments
or that may be settled by the issuance of those equity
instruments. SFAS 123R focuses primarily on accounting for
transactions in which an entity obtains employee services in
share-based payment transactions. SFAS 123R requires a
public entity to measure the cost of employee services received
in exchange for an award of equity instruments based on the
grant date fair value of the award. The cost will be recognized
over the period in which an employee is required to provide
services in exchange for the award. SFAS 123R is effective
for fiscal years beginning after January 1, 2006, based on
new rules issued by the Securities and Exchange Commission. The
impact of adopting this statement will result in the elimination
of $11,401 of deferred compensation and additional
paid-in-capital from
shareholders equity. The adoption will not have a material
impact on the Companys results of operations.
In December 2004, the FASB issued Statement No. 153,
Exchange of Non-monetary Assets an amendment of APB
Opinion No. 29 (SFAS 153). The guidance in
APB Opinion No. 29, Accounting for Non-monetary
Transactions, is based on the principle that exchanges of
non-monetary assets should be measured based on the fair value
of the assets exchanged. The guidance in that opinion, however,
included certain exceptions to that principle. SFAS 153
amends APB Opinion No. 29 to eliminate the exception for
non-monetary assets that do not have commercial substance. A
non-monetary exchange has commercial substance if the future
cash flows of the entity are expected to change significantly as
a result of the exchange. SFAS 153 is effective for
non-monetary asset exchanges occurring in fiscal periods
beginning after June 15, 2005. The impact of adopting this
statement did not have a material impact on the Companys
financial position or results of operations.
In March 2005, the FASB issued Interpretation No. 47,
Accounting for Conditional Asset Retirement
Obligations an Interpretation of SFAS Statement
No. 143 (FIN 47). FIN 47 clarifies
the timing of liability recognition for legal obligations
associated with the retirement of a tangible long-lived asset
when the timing and/or method of settlement are conditional on a
future event. FIN 47 is effective for fiscal years ending
after December 15, 2005. The application of FIN 47 did
not have a material impact on the Companys consolidated
financial position or results of operations.
In May 2005, the FASB issued SFAS No. 154, Accounting
Changes and Error Corrections (SFAS 154) which
replaces APB Opinions No. 20 Accounting Changes and
SFAS No. 3, Reporting Accounting Changes in Interim
Financial Statements An Amendment of APB Opinion
No. 28. SFAS 154 provides guidance on the accounting
for and reporting of accounting changes and error corrections.
It establishes retrospective application as the required method
for reporting a change in accounting principle and the reporting
of a correction of an error. SFAS 154 is effective for
accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005. The impact of
adopting this statement is not expected to have a material
impact on the Companys financial position or results of
operations.
In June 2005, the FASB ratified the Emerging Issues Task
Forces (EITF) consensus on
EITF 04-05,
Determining Whether a General Partner, or the General Partners
as a Group, Controls a Limited Partnership or Similar Entity
When the Limited Partners Have Certain Rights.
EITF 04-05
provides a framework for
48
determining whether a general partner controls, and should
consolidate, a limited partnership or a similar entity. It was
effective after June 29, 2005, for all newly formed limited
partnerships and for any pre-existing limited partnerships that
modify their partnership agreements after that date. General
partners of all other limited partnerships will apply the
consensus no later than the beginning of the first reporting
period in fiscal years beginning after December 15, 2005.
The impact of the adoption of
EITF 04-05 is not
expected to have a material impact on the Companys
financial position or results of operations.
In 2005, the EITF released Issue No. 05-6, Determining the
Amortization Period for Leasehold Improvements
(EITF 05-6),
which clarifies the period over which leasehold improvements
should be amortized.
EITF 05-6 requires
all leasehold improvements to be amortized over the shorter of
the useful life of the assets, or the applicable lease term, as
defined. The applicable lease term is determined on the date the
leasehold improvements are acquired and includes renewal periods
for which exercise is reasonably assured.
EITF 05-06 was
effective for leasehold improvements acquired in reporting
periods beginning after June 29, 2005. The impact of the
adoption of
EITF 05-6 did not
have a material impact on the Companys financial position
or results of operations.
Off-Balance Sheet Arrangements
Non-Consolidated Real Estate Entities. As of
December 31, 2005, the Company has investments in various
real estate entities with varying structures. These investments
include the Companys
331/3%
non-controlling interest in Lexington Acquiport Company, LLC;
its 25% non-controlling interest in Lexington Acquiport
Company II, LLC; its 40% non-controlling interest in
Lexington Columbia LLC; its 30% non-controlling interest in
Lexington/Lion Venture L.P.; its 30% non-controlling interest in
Triple Net Investment Company LLC; its
331/3%
non-controlling interest in Lexington Durham Limited
Partnership; its 32.3% non-controlling interest in Lexington
Strategic Asset Corp. and through Oklahoma City, its 40%
non-controlling tenancy in common interest in real property. The
properties owned by these entities are financed with individual
non-recourse mortgage loans. Non-recourse mortgage debt is
generally defined as debt whereby the lenders sole
recourse with respect to borrower defaults is limited to the
value of the property collateralized by the mortgage. The lender
generally does not have recourse against any other assets owned
by the borrower or any of the members of the borrower, except
for certain specified expectations listed in the particular loan
documents. These exceptions generally relate to limited
circumstances including breaches of material representations.
The Company invests in entities with third parties to increase
portfolio diversification, reduce the amount of equity invested
in any one property and to increase returns on equity due to the
realization of advisory fees. See footnote 6 to the
condensed consolidated financial statements for summary combined
balance sheet and income statement data relating to these
entities.
In addition, the Company has issued $1.5 million in letters
of credit.
Item 7A. Quantitative and Qualitative Disclosure about
Market Risk
The Companys exposure to market risk relates to its debt.
As of December 31, 2005 and 2004, the Companys
variable rate indebtedness represented 1.0% and 1.8%,
respectively, of total mortgages and notes payable. During 2005
and 2004, this variable rate indebtedness had a weighted average
interest rate of 6.0% and 3.6%, respectively. Had the weighted
average interest rate been 100 basis points higher the
Companys net income would have been reduced by
$0.3 million and $0.3 million in 2005 and 2004,
respectively. As of December 31, 2005 and 2004, the
Companys fixed rate debt, including discontinued
operations, was $1,158.7 million and $752.2 million,
respectively, which represented 99.0% and 98.2%, respectively,
of total long-term indebtness. The weighted average interest
rate as of December 31, 2005 of fixed rate debt was 6.0%,
which is approximately 82 basis points higher than the
weighted average fixed rate debt obtained by the Company during
2005. The weighted average interest rate as of December 31,
2004 of fixed rate debt was 6.6%. With no fixed rate debt
maturing until 2008, the Company believes it has limited market
risk exposure to rising interest rates as it relates to its
fixed rate debt obligations. However, had the fixed interest
rate been higher by 100 basis points, the Companys
net income would have been reduced by $10.3 million and
$6.5 million, for years ended December 31, 2005 and
2004, respectively.
49
MANAGEMENTS ANNUAL REPORT ON INTERNAL CONTROLS
OVER FINANCIAL REPORTING
Management is responsible for establishing and maintaining
adequate internal control over financial reporting. The
Companys internal control system was designed to provide
reasonable assurance regarding the reliability of financial
reporting and the preparation and fair presentation of published
financial statements in accordance with U.S. generally accepted
accounting principles.
All internal control systems, no matter how well designed, have
inherent limitations. Therefore, even those systems determined
to be effective can provide only reasonable assurance with
respect to financial statement preparation and presentation.
In assessing the effectiveness of the Companys internal
control over financial reporting, management used as guidance
the criteria established in Internal Control
Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
Based upon the assessment performed, management believes that
the Companys internal controls over financial reporting
are effective as of December 31, 2005. In addition, KPMG
LLP, the Companys independent registered public accounting
firm, has issued an unqualified attestation report on
managements assessment of the Companys internal
controls over financial reporting which is included on
page 53.
50
|
|
Item 8. |
Financial Statements and Supplementary Data |
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
INDEX
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Page | |
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52-53 |
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|
54 |
|
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|
55 |
|
|
|
|
56 |
|
|
|
|
57 |
|
|
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|
58-83 |
|
Financial Statement Schedule
|
|
|
|
|
|
|
|
84-87 |
|
51
Report of Independent Registered Public Accounting Firm
The Shareholders
Lexington Corporate Properties Trust:
We have audited managements assessment, included in the
accompanying Managements Annual Report on Internal
Controls Over Financial Reporting, that Lexington Corporate
Properties Trust (the Company) maintained effective
internal control over financial reporting as of
December 31, 2005, based on criteria established in
Internal Control Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO). The Companys management is responsible for
maintaining effective internal control over financial reporting
and for its assessment of the effectiveness of internal control
over financial reporting. Our responsibility is to express an
opinion on managements assessment and an opinion on the
effectiveness of the Companys internal control over
financial reporting based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control
over financial reporting was maintained in all material
respects. Our audit included obtaining an understanding of
internal control over financial reporting, evaluating
managements assessment, testing and evaluating the design
and operating effectiveness of internal control, and performing
such other procedures as we considered necessary in the
circumstances. We believe that our audit provides a reasonable
basis for our opinion.
A companys internal control over financial reporting is a
process designed to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of
financial statements for external purposes in accordance with
generally accepted accounting principles. A companys
internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance
of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the
company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company
are being made only in accordance with authorizations of
management and directors of the company; and (3) provide
reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the
financial statements.
Because of its inherent limitations, internal control over
financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future
periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.
In our opinion, managements assessment that the Company
maintained effective internal control over financial reporting
as of December 31, 2005, is fairly stated, in all material
respects, based on criteria established in Internal
Control Integrated Framework issued by the Committee
of Sponsoring Organizations of the Treadway Commission (COSO).
Also, in our opinion, the Company maintained, in all material
respects, effective internal control over financial reporting as
of December 31, 2005, based on criteria established in
Internal Control Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
consolidated statements and financial statement schedule as
listed in the accompanying index, and our report dated
March 10, 2006 expressed an unqualified opinion on those
consolidated financial statements and financial statement
schedule.
New York, New York
March 10, 2006
52
Report of Independent Registered Public Accounting Firm
The Shareholders
Lexington Corporate Properties Trust:
We have audited the accompanying consolidated financial
statements of Lexington Corporate Properties Trust and
subsidiaries (the Company) as listed in the
accompanying index. In connection with our audits of the
consolidated financial statements, we also have audited the
financial statement schedule as listed in the accompanying
index. These consolidated financial statements and financial
statement schedule are the responsibility of the Companys
management. Our responsibility is to express an opinion on these
consolidated financial statements and financial statement
schedule based on our audits.
We conducted our audits in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in
the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the financial
position of Lexington Corporate Properties Trust and
subsidiaries as of December 31, 2005 and 2004, and the
results of their operations and their cash flows for each of the
years in the three-year period ended December 31, 2005, in
conformity with U.S. generally accepted accounting
principles. Also in our opinion, the related financial statement
schedule, when considered in relation to the basic consolidated
financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
We also have audited, in accordance with the standards of the
Public Company Accounting Oversight Board (United States), the
effectiveness of the Companys internal control over
financial reporting as of December 31, 2005, based on
criteria established in Internal Control Integrated
Framework issued by the Committee of Sponsoring Organizations of
the Treadway Commission (COSO), and our report dated
March 10, 2006 expressed an unqualified opinion on
managements assessment of, and the effective operation of,
internal control over financial reporting.
New York, New York
March 10, 2006
53
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
Consolidated Balance Sheets
($000 except per share amounts)
Years ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 | |
|
2004 | |
|
|
| |
|
| |
ASSETS |
Real estate, at cost
|
|
|
|
|
|
|
|
|
|
Buildings and building improvements
|
|
$ |
1,608,175 |
|
|
$ |
1,182,171 |
|
|
Land and land estates
|
|
|
259,682 |
|
|
|
210,764 |
|
|
Land improvements
|
|
|
2,044 |
|
|
|
2,154 |
|
|
Fixtures and equipment
|
|
|
13,214 |
|
|
|
12,783 |
|
|
|
|
|
|
|
|
|
|
|
1,883,115 |
|
|
|
1,407,872 |
|
|
Less: accumulated depreciation
|
|
|
241,188 |
|
|
|
180,610 |
|
|
|
|
|
|
|
|
|
|
|
1,641,927 |
|
|
|
1,227,262 |
|
Properties held for sale discontinued operations
|
|
|
49,397 |
|
|
|
13,216 |
|
Intangible assets (net of accumulated amortization of $13,277 in
2005 and $3,101 in 2004)
|
|
|
128,775 |
|
|
|
54,736 |
|
Investment in and advances to non-consolidated entities
|
|
|
191,146 |
|
|
|
132,738 |
|
Cash and cash equivalents
|
|
|
53,515 |
|
|
|
146,957 |
|
Deferred expenses (net of accumulated amortization of $4,740 in
2005 and $4,896 in 2004)
|
|
|
13,582 |
|
|
|
7,860 |
|
Rent receivable current
|
|
|
7,673 |
|
|
|
4,123 |
|
Rent receivable deferred
|
|
|
24,778 |
|
|
|
23,923 |
|
Notes receivable from affiliate
|
|
|
|
|
|
|
45,800 |
|
Notes receivable
|
|
|
11,050 |
|
|
|
|
|
Other assets, net
|
|
|
38,389 |
|
|
|
40,471 |
|
|
|
|
|
|
|
|
|
|
$ |
2,160,232 |
|
|
$ |
1,697,086 |
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS EQUITY |
Liabilities:
|
|
|
|
|
|
|
|
|
Mortgages and notes payable
|
|
$ |
1,139,971 |
|
|
$ |
765,144 |
|
Liabilities discontinued operations
|
|
|
32,145 |
|
|
|
1,688 |
|
Accounts payable and other liabilities
|
|
|
13,250 |
|
|
|
12,406 |
|
Accrued interest payable
|
|
|
5,859 |
|
|
|
5,808 |
|
Prepaid rent
|
|
|
10,054 |
|
|
|
3,818 |
|
Deferred revenue
|
|
|
6,271 |
|
|
|
4,173 |
|
|
|
|
|
|
|
|
|
|
|
1,207,550 |
|
|
|
793,037 |
|
Minority interests
|
|
|
61,372 |
|
|
|
56,759 |
|
|
|
|
|
|
|
|
|
|
|
1,268,922 |
|
|
|
849,796 |
|
|
|
|
|
|
|
|
Commitments and contingencies (notes 6, 7, 8 and
13)
|
|
|
|
|
|
|
|
|
|
Shareholders equity:
|
|
|
|
|
|
|
|
|
|
Preferred shares, par value $0.0001 per share; authorized
10,000,000 shares;
|
|
|
|
|
|
|
|
|
|
|
Series B Cumulative Redeemable Preferred, liquidation
preference, $79,000, 3,160,000 shares issued and
outstanding in 2005 and 2004
|
|
|
76,315 |
|
|
|
76,315 |
|
|
|
Series C Cumulative Convertible Preferred, liquidation
preference $155,000 and $135,000 in 2005 and 2004, respectively;
3,100,000 and 2,700,000 shares issued and outstanding in
2005 and 2004, respectively
|
|
|
150,589 |
|
|
|
131,126 |
|
|
Common shares, par value $0.0001 per share, authorized
160,000,000 and 80,000,000 shares in 2005 and 2004,
respectively; 52,155,855 and 48,621,273 shares issued and
outstanding in 2005 and 2004, respectively
|
|
|
5 |
|
|
|
5 |
|
|
Additional paid-in-capital
|
|
|
848,564 |
|
|
|
766,882 |
|
|
Deferred compensation, net
|
|
|
(11,401 |
) |
|
|
(8,692 |
) |
|
Accumulated distributions in excess of net income
|
|
|
(172,762 |
) |
|
|
(118,346 |
) |
|
|
|
|
|
|
|
|
|
Total shareholders equity
|
|
|
891,310 |
|
|
|
847,290 |
|
|
|
|
|
|
|
|
|
|
$ |
2,160,232 |
|
|
$ |
1,697,086 |
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
54
LEXINGTON CORPORATE PROPERTIS TRUST
AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Income
($000 except per share amounts)
Years ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 | |
|
2004 | |
|
2003 | |
|
|
| |
|
| |
|
| |
Gross revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental
|
|
$ |
180,871 |
|
|
$ |
133,050 |
|
|
$ |
100,355 |
|
|
Advisory fees
|
|
|
5,365 |
|
|
|
4,885 |
|
|
|
1,429 |
|
|
Tenant reimbursements
|
|
|
10,896 |
|
|
|
5,429 |
|
|
|
4,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total gross revenues
|
|
|
197,132 |
|
|
|
143,364 |
|
|
|
105,974 |
|
Expense applicable to revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
(70,906 |
) |
|
|
(38,928 |
) |
|
|
(26,106 |
) |
|
Property operating
|
|
|
(23,494 |
) |
|
|
(10,756 |
) |
|
|
(7,590 |
) |
General and administrative
|
|
|
(17,612 |
) |
|
|
(13,877 |
) |
|
|
(9,652 |
) |
Impairment charges
|
|
|
(12,050 |
) |
|
|
(3,584 |
) |
|
|
|
|
Non-operating income
|
|
|
1,519 |
|
|
|
3,272 |
|
|
|
1,426 |
|
Interest and amortization expense
|
|
|
(65,065 |
) |
|
|
(44,857 |
) |
|
|
(34,168 |
) |
Debt satisfaction gain (charges), net
|
|
|
4,409 |
|
|
|
(56 |
) |
|
|
(7,459 |
) |
Write-off tenant bankruptcy
|
|
|
|
|
|
|
(2,884 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before benefit (provision) for income taxes,
minority interests, equity in earnings of non-consolidated
entities and discontinued operations
|
|
|
13,933 |
|
|
|
31,694 |
|
|
|
22,425 |
|
Benefit (provision) for income taxes
|
|
|
150 |
|
|
|
(1,181 |
) |
|
|
(259 |
) |
Minority interests
|
|
|
(2,111 |
) |
|
|
(2,414 |
) |
|
|
(3,462 |
) |
Equity in earnings of non-consolidated entities
|
|
|
6,220 |
|
|
|
7,194 |
|
|
|
5,707 |
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
18,192 |
|
|
|
35,293 |
|
|
|
24,411 |
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of minority interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from discontinued operations
|
|
|
4,479 |
|
|
|
6,830 |
|
|
|
7,138 |
|
|
Debt satisfaction charges
|
|
|
(725 |
) |
|
|
|
|
|
|
(91 |
) |
|
Impairment charges
|
|
|
(829 |
) |
|
|
(2,791 |
) |
|
|
|
|
|
Gains on sales of properties
|
|
|
11,578 |
|
|
|
5,475 |
|
|
|
2,191 |
|
|
|
|
|
|
|
|
|
|
|
|
Total discontinued operations
|
|
|
14,503 |
|
|
|
9,514 |
|
|
|
9,238 |
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
32,695 |
|
|
|
44,807 |
|
|
|
33,649 |
|
Dividends attributable to preferred
shares Series B
|
|
|
(6,360 |
) |
|
|
(6,360 |
) |
|
|
(3,392 |
) |
Dividends attributable to preferred
shares Series C
|
|
|
(10,075 |
) |
|
|
(585 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income allocable to common shareholders
|
|
$ |
16,260 |
|
|
$ |
37,862 |
|
|
$ |
30,257 |
|
|
|
|
|
|
|
|
|
|
|
Income per common share basic:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$ |
0.04 |
|
|
$ |
0.61 |
|
|
$ |
0.62 |
|
Income from discontinued operations
|
|
|
0.29 |
|
|
|
0.20 |
|
|
|
0.27 |
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
0.33 |
|
|
$ |
0.81 |
|
|
$ |
0.89 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding basic
|
|
|
49,835,773 |
|
|
|
46,551,328 |
|
|
|
34,074,935 |
|
|
|
|
|
|
|
|
|
|
|
Income per common share diluted:
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
$ |
0.04 |
|
|
$ |
0.59 |
|
|
$ |
0.61 |
|
Income from discontinued operations
|
|
|
0.29 |
|
|
|
0.21 |
|
|
|
0.27 |
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
0.33 |
|
|
$ |
0.80 |
|
|
$ |
0.88 |
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares
outstanding diluted
|
|
|
49,902,649 |
|
|
|
52,048,909 |
|
|
|
34,277,439 |
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
55
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Changes in Shareholders
Equity
($000 except per share amounts)
Years ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated | |
|
Notes | |
|
|
|
|
Number of | |
|
|
|
Number of | |
|
|
|
Additional | |
|
Deferred | |
|
Distributions | |
|
Receivable | |
|
Total | |
|
|
Preferred | |
|
|
|
Common | |
|
|
|
Paid-in | |
|
Compensation, | |
|
In Excess of | |
|
Officers / | |
|
Shareholders | |
|
|
Shares | |
|
Amount | |
|
Shares | |
|
Amount | |
|
Capital | |
|
net | |
|
Net Income | |
|
Shareholders | |
|
Equity | |
|
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
Balance at December 31, 2002
|
|
|
|
|
|
$ |
|
|
|
|
29,742,160 |
|
|
$ |
3 |
|
|
$ |
414,989 |
|
|
$ |
(1,766 |
) |
|
$ |
(77,777 |
) |
|
$ |
(2,473 |
) |
|
$ |
332,976 |
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,649 |
|
|
|
|
|
|
|
33,649 |
|
Dividends paid to common shareholders ($1.34 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(45,777 |
) |
|
|
|
|
|
|
(45,777 |
) |
Dividends paid to preferred shareholders ($0.5702 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1,802 |
) |
|
|
|
|
|
|
(1,802 |
) |
Issuance of common shares, net
|
|
|
|
|
|
|
|
|
|
|
10,810,177 |
|
|
|
1 |
|
|
|
188,985 |
|
|
|
(5,887 |
) |
|
|
|
|
|
|
|
|
|
|
183,099 |
|
Issuance of preferred shares, net
|
|
|
3,160,000 |
|
|
|
76,315 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
76,315 |
|
Amortization of deferred compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,388 |
|
|
|
|
|
|
|
|
|
|
|
1,388 |
|
Repayments on notes
|
|
|
|
|
|
|
|
|
|
|
(158,224 |
) |
|
|
|
|
|
|
(2,473 |
) |
|
|
|
|
|
|
|
|
|
|
2,473 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2003
|
|
|
3,160,000 |
|
|
|
76,315 |
|
|
|
40,394,113 |
|
|
|
4 |
|
|
|
601,501 |
|
|
|
(6,265 |
) |
|
|
(91,707 |
) |
|
|
|
|
|
|
579,848 |
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44,807 |
|
|
|
|
|
|
|
44,807 |
|
Dividends paid to common shareholders ($1.40 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(65,086 |
) |
|
|
|
|
|
|
(65,086 |
) |
Dividends paid to preferred shareholders ($2.0125 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,360 |
) |
|
|
|
|
|
|
(6,360 |
) |
Issuance of common shares, net
|
|
|
|
|
|
|
|
|
|
|
7,939,272 |
|
|
|
1 |
|
|
|
161,572 |
|
|
|
(4,381 |
) |
|
|
|
|
|
|
|
|
|
|
157,192 |
|
Issuance of preferred shares, net
|
|
|
2,700,000 |
|
|
|
131,126 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
131,126 |
|
Amortization of deferred compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,954 |
|
|
|
|
|
|
|
|
|
|
|
1,954 |
|
Reclass of common shares from mezzanine equity
|
|
|
|
|
|
|
|
|
|
|
287,888 |
|
|
|
|
|
|
|
3,809 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,809 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2004
|
|
|
5,860,000 |
|
|
|
207,441 |
|
|
|
48,621,273 |
|
|
|
5 |
|
|
|
766,882 |
|
|
|
(8,692 |
) |
|
|
(118,346 |
) |
|
|
|
|
|
|
847,290 |
|
Net income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,695 |
|
|
|
|
|
|
|
32,695 |
|
Dividends paid to common shareholders ($1.44 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(72,617 |
) |
|
|
|
|
|
|
(72,617 |
) |
Dividends paid to preferred shareholders ($2.0125 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(6,360 |
) |
|
|
|
|
|
|
(6,360 |
) |
Dividends paid to preferred shareholders ($2.62 per share)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8,134 |
) |
|
|
|
|
|
|
(8,134 |
) |
Issuance of common shares, net
|
|
|
|
|
|
|
|
|
|
|
3,534,582 |
|
|
|
|
|
|
|
81,682 |
|
|
|
(5,575 |
) |
|
|
|
|
|
|
|
|
|
|
76,107 |
|
Issuance of preferred shares, net
|
|
|
400,000 |
|
|
|
19,463 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,463 |
|
Amortization of deferred compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,866 |
|
|
|
|
|
|
|
|
|
|
|
2,866 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2005
|
|
|
6,260,000 |
|
|
$ |
226,904 |
|
|
|
52,155,855 |
|
|
$ |
5 |
|
|
$ |
848,564 |
|
|
$ |
(11,401 |
) |
|
$ |
(172,762 |
) |
|
$ |
|
|
|
$ |
891,310 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
56
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
Consolidated Statements of Cash Flows
($000 except per share amounts)
Years ended December 31,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 | |
|
2004 | |
|
2003 | |
|
|
| |
|
| |
|
| |
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$ |
32,695 |
|
|
$ |
44,807 |
|
|
$ |
33,649 |
|
|
Adjustments to reconcile net income to net cash provided by
operating activities, net of effects from acquisitions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
73,034 |
|
|
|
41,710 |
|
|
|
29,572 |
|
|
|
Minority interests
|
|
|
2,165 |
|
|
|
2,983 |
|
|
|
4,276 |
|
|
|
Gains on sales of properties
|
|
|
(11,578 |
) |
|
|
(5,475 |
) |
|
|
(2,191 |
) |
|
|
Debt satisfaction gain, net
|
|
|
(4,536 |
) |
|
|
|
|
|
|
|
|
|
|
Impairment charges
|
|
|
12,879 |
|
|
|
6,375 |
|
|
|
|
|
|
|
Write-off-tenant bankruptcy
|
|
|
|
|
|
|
2,884 |
|
|
|
|
|
|
|
Straight-line rents
|
|
|
(3,447 |
) |
|
|
(3,395 |
) |
|
|
(3,790 |
) |
|
|
Other non-cash charges
|
|
|
4,196 |
|
|
|
2,556 |
|
|
|
2,026 |
|
|
|
Equity in earnings of non-consolidated entities
|
|
|
(6,220 |
) |
|
|
(7,194 |
) |
|
|
(5,707 |
) |
|
|
Distributions from non-consolidated entities
|
|
|
14,663 |
|
|
|
5,294 |
|
|
|
8,495 |
|
|
|
Deferred tax assets
|
|
|
(466 |
) |
|
|
(2,026 |
) |
|
|
|
|
|
|
Increase in accounts payable and other liabilities
|
|
|
(788 |
) |
|
|
1,710 |
|
|
|
1,708 |
|
|
|
Other adjustments, net
|
|
|
(38 |
) |
|
|
631 |
|
|
|
3,777 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities
|
|
|
112,559 |
|
|
|
90,860 |
|
|
|
71,815 |
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from sales/transfers of properties
|
|
|
96,685 |
|
|
|
101,367 |
|
|
|
34,943 |
|
|
Investments in real estate properties and intangible assets
|
|
|
(759,656 |
) |
|
|
(203,678 |
) |
|
|
(327,435 |
) |
|
Investments in and advances to non-consolidated entities
|
|
|
(41,943 |
) |
|
|
(86,171 |
) |
|
|
(6,824 |
) |
|
Investment in convertible mortgage receivable
|
|
|
|
|
|
|
(19,800 |
) |
|
|
|
|
|
Collection (issuance) of notes from affiliate
|
|
|
45,800 |
|
|
|
(32,800 |
) |
|
|
(2,331 |
) |
|
Collection of notes from non-affiliate
|
|
|
3,488 |
|
|
|
|
|
|
|
|
|
|
Real estate deposits
|
|
|
1,579 |
|
|
|
1,180 |
|
|
|
(23,222 |
) |
|
Net sale proceeds distributed from non-consolidated entity
|
|
|
3,541 |
|
|
|
|
|
|
|
|
|
|
Distribution of loan proceeds from non-consolidated entities
|
|
|
6,559 |
|
|
|
38,527 |
|
|
|
26,899 |
|
|
Increase in deferred leasing costs
|
|
|
(2,919 |
) |
|
|
(207 |
) |
|
|
(1,034 |
) |
|
Change in escrow deposits and restricted cash
|
|
|
(4,013 |
) |
|
|
(967 |
) |
|
|
451 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
|
(650,879 |
) |
|
|
(202,549 |
) |
|
|
(298,553 |
) |
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds of mortgages and notes payable
|
|
|
516,520 |
|
|
|
159,760 |
|
|
|
90,882 |
|
|
Change in credit facility borrowing, net
|
|
|
|
|
|
|
(94,000 |
) |
|
|
63,000 |
|
|
Dividends to common and preferred shareholders
|
|
|
(87,111 |
) |
|
|
(71,446 |
) |
|
|
(47,579 |
) |
|
Dividend reinvestment plan proceeds
|
|
|
13,815 |
|
|
|
10,608 |
|
|
|
7,095 |
|
|
Principal payments on debt, excluding normal amortization
|
|
|
(50,936 |
) |
|
|
(6,543 |
) |
|
|
(107,942 |
) |
|
Principal amortization payments
|
|
|
(25,313 |
) |
|
|
(19,704 |
) |
|
|
(16,121 |
) |
|
Debt deposits
|
|
|
1,334 |
|
|
|
(1,384 |
) |
|
|
121 |
|
|
Origination fee amortization payments
|
|
|
|
|
|
|
(29 |
) |
|
|
(406 |
) |
|
Proceeds from the sale of common/preferred shares, net
|
|
|
80,671 |
|
|
|
275,644 |
|
|
|
250,467 |
|
|
Contributions from minority partners
|
|
|
9,412 |
|
|
|
|
|
|
|
|
|
|
Cash distributions to minority partners
|
|
|
(7,028 |
) |
|
|
(8,975 |
) |
|
|
(6,618 |
) |
|
Increase in deferred financing costs
|
|
|
(6,403 |
) |
|
|
(1,087 |
) |
|
|
(3,913 |
) |
|
Common shares/partnership units repurchased
|
|
|
(83 |
) |
|
|
(121 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities
|
|
|
444,878 |
|
|
|
242,723 |
|
|
|
228,986 |
|
|
|
|
|
|
|
|
|
|
|
Cash attributable to newly consolidated entity
|
|
|
|
|
|
|
|
|
|
|
1,578 |
|
|
|
|
|
|
|
|
|
|
|
Change in cash and cash equivalents
|
|
|
(93,442 |
) |
|
|
131,034 |
|
|
|
3,826 |
|
Cash and cash equivalents, beginning of year
|
|
|
146,957 |
|
|
|
15,923 |
|
|
|
12,097 |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents, end of year
|
|
$ |
53,515 |
|
|
$ |
146,957 |
|
|
$ |
15,923 |
|
|
|
|
|
|
|
|
|
|
|
The accompanying notes are an integral part of these
consolidated financial statements.
57
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial Statements
($000 except per share amounts)
Lexington Corporate Properties Trust (the Company)
is a self-managed and self-administered Maryland statutory real
estate investment trust (REIT) that acquires, owns,
and manages a geographically diversified portfolio of net leased
office, industrial and retail properties and provides investment
advisory and asset management services to institutional
investors in the net lease area. As of December 31, 2005,
the Company owned or had interests in 189 properties in
39 states. The real properties owned by the Company are
generally subject to triple net leases to corporate tenants,
however sixteen provide for operating expense stops and one is
subject to a modified gross lease. As of December 31, 2004,
the Company owned or had interests in 154 properties in
37 states.
The Company believes it has qualified as a REIT under the
Internal Revenue Code of 1986, as amended (the
Code). Accordingly, the Company will not be subject
to federal income tax, provided that distributions to its
shareholders equal at least the amount of its REIT taxable
income as defined under the Code. The Company is permitted to
participate in certain activities from which it was previously
precluded in order to maintain its qualification as a REIT, so
long as these activities are conducted in entities which elect
to be treated as taxable REIT subsidiaries (TRS)
under the Code. As such, the TRS will be subject to federal
income taxes on the income from these activities.
The Companys Board of Trustees authorized the Company to
repurchase, from time to time, up to 2.0 million common
shares and/or operating partnership units
(OP Units) in its three controlled operating
partnership subsidiaries, depending on market conditions and
other factors. As of December 31, 2005, the Company
repurchased approximately 1.4 million common shares/
OP Units at an average price of approximately
$10.62 per common share/ OP Unit. In November 2005,
the Board of Trustees authorized the repurchase of up to a
maximum of 2.0 million additional common shares/OP Units.
No repurchases have been made under this authorization.
|
|
(2) |
Summary of Significant Accounting Policies |
Basis of Presentation and Consolidation. The
Companys consolidated financial statements are prepared on
the accrual basis of accounting. The financial statements
reflect the accounts of the Company and its controlled
subsidiaries, including Lepercq Corporate Income Fund L.P.
(LCIF), Lepercq Corporate Income Fund II L.P.
(LCIF II), Net 3 Acquisition L.P. (Net
3), Lexington Realty Advisors, Inc. (LRA),
Lexington Contributions, Inc. (LCI) and Six Penn
Center L.P. LRA and LCI are wholly owned taxable REIT
subsidiaries, and the Company is the sole unitholder of the
general partner and the majority limited partner of each of
LCIF, LCIF II, Net 3 and Six Penn Center L.P. The Company
determines whether an entity for which it holds an interest
should be consolidated pursuant to Financial Accounting
Standards Board (FASB) Interpretation No. 46,
Consolidation of Variable Interest Entities
(FIN 46R). FIN 46R requires the Company to
evaluate whether it has a controlling financial interest in an
entity through means other than voting rights. If the entity is
not a variable interest entity and the Company controls the
entitys voting shares or similar rights, the entity is
consolidated.
Earnings Per Share. Basic net income per share is
computed by dividing net income reduced by preferred dividends,
if applicable, by the weighted average number of common shares
outstanding during the period. Diluted net income per share
amounts are similarly computed but include the effect, when
dilutive, of
in-the-money common
share options, OP Units, put options of certain
partners interests in non-consolidated entities and
convertible preferred shares.
58
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial
Statements (Continued)
($000 except per share amounts)
|
|
|
Recently Issued Accounting Standards. |
FASB Statement No. 150, Accounting for Certain Financial
Instruments with Characteristics of Both Liabilities and Equity,
as amended, (SFAS 150), was issued in May 2003.
SFAS 150 establishes standards for the classification and
measurement of certain financial instruments with
characteristics of both liabilities and equity. SFAS 150
also includes required disclosures for financial instruments
within its scope. For the Company, SFAS 150 was effective
for instruments entered into or modified after May 31, 2003
and otherwise was effective as of January 1, 2004, except
for mandatorily redeemable financial instruments. SFAS 150
has been deferred indefinitely for certain types of mandatorily
redeemable financial instruments. The adoption of the required
portions of SFAS 150 had no impact on the Company.
In December 2004, the FASB issued Statement of Financial
Accounting Standards (SFAS) No. 123, (revised
2004) Share-Based Payment (SFAS 123R), which
supersedes Accounting Principals Board (APB) Opinion
No. 25, Accounting for Stock Issued to Employees, and its
related implementation guidance. SFAS 123R establishes
standards for the accounting for transactions in which an entity
exchanges its equity instruments for goods or services. It also
addresses transactions in which an entity incurs liabilities in
exchange for goods or services that are based on the fair value
of the entitys equity instruments or that may be settled
by the issuance of those equity instruments. SFAS 123R
focuses primarily on accounting for transactions in which an
entity obtains employee services in share-based payment
transactions. SFAS 123R requires a public entity to measure
the cost of employee services received in exchange for an award
of equity instruments based on the grant date fair value of the
award. The cost will be recognized over the period in which an
employee is required to provide services in exchange for the
award. SFAS 123R is effective for fiscal years beginning
after January 1, 2006, based on new rules issued by the
Securities and Exchange Commission. The impact of adopting this
statement will result in the elimination of $11,401 of deferred
compensation and additional
paid-in-capital from
the Consolidated Statements of Changes in Shareholders
Equity. The adoption will not have a material impact on the
Companys results of operations.
In December 2004, the FASB issued Statement No. 153,
Exchange of Non-monetary Assets an amendment of APB
Opinion No. 29 (SFAS 153). The guidance in
APB Opinion No. 29, Accounting for Non-monetary
Transactions, is based on the principle that exchanges of
non-monetary assets should be measured based on the fair value
of the assets exchanged. The guidance in that opinion, however,
included certain exceptions to that principle. SFAS 153
amends APB Opinion No. 29 to eliminate the exception for
non-monetary assets that do not have commercial substance. A
non-monetary exchange has commercial substance if the future
cash flows of the entity are expected to change significantly as
a result of the exchange. SFAS 153 is effective for
non-monetary asset exchanges, occurring in fiscal periods
beginning after June 15, 2005. The impact of adopting this
statement did not have a material impact on the Companys
financial position or results of operations.
In March 2005, the FASB issued Interpretation No. 47,
Accounting for Conditional Asset Retirement
Obligations an Interpretation of SFAS Statement
No. 143 (FIN 47). FIN 47 clarifies
the timing of liability recognition for legal obligations
associated with the retirement of a tangible long-lived asset
when the timing and/or method of settlement are conditional on a
future event. FIN 47 is effective for fiscal years ending
after December 15, 2005. The application of FIN 47 did
not have a material impact on the Companys consolidated
financial position or results of operations.
In May 2005, the FASB issued SFAS No. 154, Accounting
Changes and Error Corrections (SFAS 154) which
replaces APB Opinions No. 20 Accounting Changes and
SFAS No. 3, Reporting Accounting Changes in Interim
Financial Statements An Amendment of APB Opinion
No. 28. SFAS 154 provides guidance on the accounting
for and reporting of accounting changes and error corrections.
It establishes retrospective application as the required method
for reporting a change in accounting principle and
59
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial
Statements (Continued)
($000 except per share amounts)
the reporting of a correction of an error. SFAS 154 is
effective for accounting changes and corrections of errors made
in fiscal years beginning after December 15, 2005. The
impact of adopting this statement is not expected to have a
material impact on the Companys financial position or
results of operations.
In June 2005, the FASB ratified the Emerging Issues Task
Forces (EITF) consensus on
EITF 04-05,
Determining Whether a General Partner, or the General Partners
as a Group, Controls a Limited Partnership or Similar Entity
When the Limited Partners Have Certain Rights.
EITF 04-05
provides a framework for determining whether a general partner
controls, and should consolidate, a limited partnership or a
similar entity. It was effective after June 29, 2005, for
all newly formed limited partnerships and for any pre-existing
limited partnerships that modify their partnership agreements
after that date. General partners of all other limited
partnerships will apply the consensus no later than the
beginning of the first reporting period in fiscal years
beginning after December 15, 2005. The impact of the
adoption of
EITF 04-05 is not
expected to have a material impact on the Companys
financial position or results of operations.
In 2005, the EITF released Issue No. 05-6, Determining the
Amortization Period for Leasehold Improvements
(EITF 05-6),
which clarifies the period over which leasehold improvements
should be amortized.
EITF 05-6 requires
all leasehold improvements to be amortized over the shorter of
the useful life of the assets, or the applicable lease term, as
defined. The applicable lease term is determined on the date the
leasehold improvements are acquired and includes renewal periods
for which exercise is reasonably assured.
EITF 05-06 was
effective for leasehold improvements acquired in reporting
periods beginning after June 29, 2005. The impact of the
adoption of
EITF 05-6 did not
have a material impact on the Companys financial position
or results of operations.
Use of Estimates. Management has made a number of
estimates and assumptions relating to the reporting of assets
and liabilities, the disclosure of contingent assets and
liabilities and the reported amounts of revenues and expenses to
prepare these consolidated financial statements in conformity
with generally accepted accounting principles. The most
significant estimates made include the recoverability of
accounts receivable (primarily related to straight-line rents),
allocation of property purchase price to tangible and intangible
assets, the determination of impairment of long-lived assets and
the useful lives of long-lived assets. Actual results could
differ from those estimates.
Purchase Accounting for Acquisition of Real Estate. The
fair value of the real estate acquired, which includes the
impact of
mark-to-market
adjustments for assumed mortgage debt related to property
acquisitions, is allocated to the acquired tangible assets,
consisting of land, building and improvements, and identified
intangible assets and liabilities, consisting of the value of
above-market and below-market leases, other value of in-place
leases and value of tenant relationships, based in each case on
their fair values.
The fair value of the tangible assets of an acquired property
(which includes land, building and improvements and fixtures and
equipment) is determined by valuing the property as if it were
vacant, and the as-if-vacant value is then allocated
to land, building and improvements based on managements
determination of relative fair values of these assets. Factors
considered by management in performing these analyses include an
estimate of carrying costs during the expected
lease-up periods
considering current market conditions and costs to execute
similar leases. In estimating carrying costs, management
includes real estate taxes, insurance and other operating
expenses and estimates of lost rental revenue during the
expected lease-up
periods based on current market demand. Management also
estimates costs to execute similar leases including leasing
commissions.
In allocating the fair value of the identified intangible assets
and liabilities of an acquired property, above-market and
below-market in-place lease values are recorded based on the
difference between the current in-place lease rent and a
management estimate of current market rents. Below-market lease
intangibles are
60
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial
Statements (Continued)
($000 except per share amounts)
recorded as part of deferred revenue and amortized into rental
revenue over the non-cancelable periods of the respective
leases. Above-market leases are recorded as part of intangible
assets and amortized as a direct charge against rental revenue
over the non-cancelable portion of the respective leases.
The aggregate value of other acquired intangible assets,
consisting of in-place leases and tenant relationships, is
measured by the excess of (i) the purchase price paid for a
property over (ii) the estimated fair value of the property
as if vacant, determined as set forth above. This aggregate
value is allocated between in-place lease values and tenant
relationships based on managements evaluation of the
specific characteristics of each tenants lease. The value
of in-place leases and customer relationships are amortized to
expense over the remaining non-cancelable periods of the
respective leases.
Revenue Recognition. The Company recognizes revenue in
accordance with Statement of Financial Accounting Standards
No. 13 Accounting for Leases, as amended
(SFAS 13). SFAS 13 requires that revenue
be recognized on a straight-line basis over the term of the
lease unless another systematic and rational basis is more
representative of the time pattern in which the use benefit is
derived from the leased property. Renewal options in leases with
rental terms that are lower than those in the primary term are
excluded from the calculation of straight line rent if they do
not meet the criteria of a bargain renewal option. In those
instances in which the Company funds tenant improvements and the
improvements are deemed to be owned by the Company, revenue
recognition will commence when the improvements are
substantially completed and possession or control of the space
is turned over to the tenant. When the Company determines that
the tenant allowances are lease incentives, the Company
commences revenue recognition when possession or control of the
space is turned over to the tenant for tenant work to begin.
Gains on sales of real estate are recognized pursuant to the
provisions of Statement of Financial Accounting Standards
No. 66 Accounting for Sales of Real Estate, as amended
(SFAS 66). The specific timing of the sale is
measured against various criteria in SFAS 66 related to the
terms of the transactions and any continuing involvement in the
form of management or financial assistance associated with the
properties. If the sales criteria are not met, the gain is
deferred and the finance, installment or cost recovery method,
as appropriate, is applied until the sales criteria are met.
Accounts Receivable. The Company continuously monitors
collections from its tenants and would make a provision for
estimated losses based upon historical experience and any
specific tenant collection issues that the Company has
identified. As of December 31, 2005 and 2004, the Company
did not record an allowance for doubtful accounts.
Impairment of Real Estate. The Company evaluates the
carrying value of all real estate held when a triggering event
under Statement of Financial Accounting Standards No. 144,
Accounting for the Impairment or Disposal of Long-Lived Assets,
as amended (SFAS 144) has occurred to determine
if an impairment has occurred which would require the
recognition of a loss. The evaluation includes reviewing
anticipated cash flows of the property, based on current leases
in place, coupled with an estimate of proceeds to be realized
upon sale. However, estimating future sale proceeds is highly
subjective and such estimates could differ materially from
actual results.
Depreciation is determined by the straight-line method over the
remaining estimated economic useful lives of the properties. The
Company generally depreciates buildings and building
improvements over periods ranging from 8 to 40 years, land
improvements from 15 to 20 years, and fixtures and
equipment from 5 to 16 years.
Only costs incurred to third parties in acquiring properties are
capitalized. No internal costs (rents, salaries, overhead) are
capitalized. Expenditures for maintenance and repairs are
charged to operations as incurred. Significant renovations which
extend the useful life of the properties are capitalized.
61
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial
Statements (Continued)
($000 except per share amounts)
Properties Held For Sale. The Company accounts for
properties held for sale in accordance with SFAS 144.
SFAS 144 requires that the assets and liabilities of
properties that meet various criteria in SFAS 144 be
presented separately in the Consolidated Balance Sheets, with
assets and liabilities being separately stated. The operating
results of these properties are reflected as discontinued
operations in the Consolidated Statements of Income. Properties
that do not meet the held for sale criteria of SFAS 144 are
accounted for as operating properties.
Investments in non-consolidated entities. The Company
accounts for its investments in less than 50% owned entities
under the equity method, unless pursuant to FIN 46R
consolidation is required.
Deferred Expenses. Deferred expenses consist primarily of
debt and leasing costs. Debt costs are amortized using the
straight-line method, which approximates the interest method,
over the terms of the debt instruments and leasing costs are
amortized over the term of the related lease.
Deferred Compensation. Deferred compensation consists of
the value of non-vested common shares issued by the Company to
employees. The deferred compensation is amortized ratably over
the vesting period which generally is five years. Certain common
shares vest only when certain performance based measures are met.
Tax Status. The Company has made an election to qualify,
and believes it is operating so as to qualify, as a REIT for
federal income tax purposes. Accordingly, the Company generally
will not be subject to federal income tax, provided that
distributions to its shareholders equal at least the amount of
its REIT taxable income as defined under Sections 856
through 860 of the Code.
The Company is now permitted to participate in certain
activities from which it was previously precluded in order to
maintain its qualification as a REIT, so long as these
activities are conducted in entities which elect to be treated
as taxable REIT subsidiaries under the Code. LRA and LCI are
taxable REIT subsidiaries. As such, the Company is subject to
federal and state income taxes on the income from these
activities.
Income taxes are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for
the estimated future tax consequences attributable to
differences between the financial statement carrying amounts of
existing assets and liabilities and their respective tax basis
and operating loss and tax credit carry-forwards. Deferred tax
assets and liabilities are measured using enacted tax rates in
effect for the year in which those temporary differences are
expected to be recovered or settled.
A summary of the average taxable nature of the Companys
common dividends for each of the years in the three year period
ended December 31, 2005, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 | |
|
2004 | |
|
2003 | |
|
|
| |
|
| |
|
| |
Total dividends per share
|
|
$ |
1.44 |
|
|
$ |
1.40 |
|
|
$ |
1.34 |
|
|
|
|
|
|
|
|
|
|
|
Ordinary income
|
|
|
87.29 |
% |
|
|
84.09 |
% |
|
|
68.94 |
% |
Short-term capital gain
|
|
|
|
|
|
|
|
|
|
|
|
|
15% rate qualifying dividend
|
|
|
1.04 |
|
|
|
6.82 |
|
|
|
|
|
15% rate gain
|
|
|
8.72 |
|
|
|
0.34 |
|
|
|
3.10 |
|
20% rate gain
|
|
|
|
|
|
|
|
|
|
|
|
|
25% rate gain
|
|
|
2.95 |
|
|
|
2.28 |
|
|
|
0.70 |
|
Return of capital
|
|
|
|
|
|
|
6.47 |
|
|
|
27.26 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
100.00 |
% |
|
|
|
|
|
|
|
|
|
|
62
LEXINGTON CORPORATE PROPERTIES TRUST
AND CONSOLIDATED SUBSIDIARIES
Notes to Consolidated Financial
Statements (Continued)
($000 except per share amounts)
A summary of the average taxable nature of the Companys
dividend on Series B Cumulative Redeemable Preferred Shares
for each of the years in the three year period ended
December 31, 2005, is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 | |
|
2004 | |
|
2003 | |
|
|
| |
|
| |
|
| |
Total dividends per share
|
|
$ |
2.0125 |
|
|
$ |
2.0125 |
|
|
$ |
0.5702 |
|
|
|
|
|
|
|
|
|
|
|
Ordinary income
|
|
|
87.29 |
% |
|
|
89.91 |
% |
|
|
89.20 |
% |
15% rate qualifying dividend
|
|
|
1.04 |
|
|
|
7.29 |
|
|
|
|
|
15% rate gain
|
|
|