1 april 11, 2007. 2 safe harbor this presentation contains certain forward-looking statements which...
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SAFE HARBOR
This presentation contains certain forward-looking statements which involve known and unknown risks, uncertainties or other factors not under Lexington’s control which may cause actual results, performance or achievements of Lexington to be materially different from the results, performance, or other expectations implied by these forward-looking statements. These factors include, but are not limited to, those factors and risks detailed in Lexington’s periodic filings with the Securities and Exchange Commission. Lexington undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the occurrence of unanticipated events. Accordingly, there is no assurance that Lexington’s expectations will be realized. The Company assumes no obligation to update or supplement forward-looking statements that become untrue because of subsequent events.
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$1.50/ 7.0%Dividend/Yield
Symbol/Listing LXP/ NYSE
OVERVIEW
America’s dominant real estate investment trust (REIT) focused on single-tenant real estate investments
Focus
Portfolio Diversity Nationwide holdings in multiple asset types, net-leased to corporations in a wide variety of industries, reduces exposure to regional downturns, price fluctuations in property types and exposure to specific sectors of the economy
Price $21.50
Total Enterprise Value $5.1 billion
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Office 67%
Variety of Asset Types Creates Portfolio Diversification
Industrial 30%
PROVEN PORTFOLIO
Revenue by Property Type1
Retail & Other Asset Types 3%
1 12 months ended 12/31/06
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NATIONAL PLATFORM IN GROWTH MARKETS
Annualized Base Rent
> $20 mm
$10 mm - $20mm
$5 mm - $10mm
< $5 mm
No Holdings
Growth Focused in Highly Desirable Markets
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(1) “Investment Grade” indicates a rating by S&P of BBB- or better or a rating by Moody’s of Baa3 or better, but not necessarily both, as of 12/31/06
HIGH QUALITY TENANTS
ZX
Investment Grade1
56%
Unrated27%
Sub-Investment Grade17%
Investment grade1 tenants account for the majority of rental income
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Source: NAREIT, as of 04/05/07
LXP has an Attractive Yield Backed by Strong Cash Flows
3.00%
4.00%
5.00%
6.00%
7.00%
Office/IndustrialREITs
Equity REITs DiversifiedREITs
SpecialtyREITs
10Y Treasury LXP
3.64% 3.70% 3.74%
4.22%
7.0%
ABOVE AVERAGE DIVIDEND YIELD
4.68%
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$1.00
$1.10
$1.20
$1.30
$1.40
$1.50
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
$1.05
$1.08$1.10
$1.16$1.17
$1.20
$1.22
$1.27
$1.32$1.34
$1.40
$1.44
$1.46
$1.50
CONSISTENT DIVIDEND GROWTH
14 Consecutive Years of Annual Dividend Increases
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LEXINGTON REALTY TRUST – OUT PERFORMING
Total Returns 12/93 – 12/06
0%
50%
100%
150%
200%
250%
300%
350%
400%
450%
500%
550%
600%
650%
700%
Dec-93 Dec-94 Dec-95 Dec-96 Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06
LXP S&P 500 Russell 2000 FTSE NAREIT *
Source: Bloomberg
684%
487%
289%
208%
17% Annualized Total Return for LXP
Investors Since 1993 IPO
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BALANCE SHEET RESTRUCTURED FOR CONTINUED GROWTH
Balance Sheet Refinancing$600 million of floating-rate short-term debtReplace with long-term, fixed-rate capitalReduce interest expense, extend maturities,
fix rates
Selective AcquisitionsCapitalize on favorable financing
opportunitiesDispositions & Capital Recycling
Prune non-core holdingsReduce exposure to slow growth
marketsRepurchase common shares
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VAST OPPORTUNITIES TO PROPEL GROWTH
Capital provider to Merchant BuildersPurchases of build-to-suit propertiesFinancially able to provide forward
commitmentsFacilitates construction financing
Corporate UsersAcquire & leasebackFinancially strong landlordStrong client relationships
Acquire Properties with Existing LeasesNationwide ownerNot a ‘1031’ investor
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Strategic AcquisitionsPrivate portfoliosPublic real estate companies (Newkirk)
UPREITTax deferred exit strategiesLiquidity for sellersBenefit to investing in a larger portfolio
Expand Business LinesDebt investmentsNew joint ventures & asset classes
VAST OPPORTUNITIES TO PROPEL GROWTH
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(1) “ Investment Grade” indicates a rating by S&P of BBB – or better or a rating by Moody’s of Baa3 or better, but not necessarily both.
RECENT PUBLIC-TO-PUBLIC ACQUISITION
Increase to
InvestmentGradeRentalIncome
Pro-Forma with Merger
Investment Grade1
56%
Unrated27%
Sub-Investment Grade17%
Strategic Acquisition of Newkirk Further Enhanced LXP Credit Quality
Before Mergerat 12/31/06
Unrated33%
Investment Grade1
46%
Sub-Investment Grade21%
56%
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$0.5
$1.0
$1.5
$2.0
$2.5
$3.0
$3.5
$4.0
$4.5
$5.0
$5.5
LexingtonRealty Trust
Realty Income AmericanFinancial Realty
Spirit FinancialCorporation
EntertainmentProperties
Trust
National RetailProperties
Capital LeaseFunding
W.P. Carey Getty Realty
The merger with Newkirk created the largest publicly traded, pure play net lease company in the United States with significant scale, critical mass and market penetration
$5.1
$4.1
$3.7
$2.7
$1.5
Size Gives Us A Strategic Advantage
$2.5
$1.7
$2.5
$0.8
(1) Source: KeyBanc report 3/30/07 based on public filings, FactSet, SNL Financial. (2) Calculated by multiplying 12/31/06 share price by shares and units outstanding as of 12/31/06 and adding debt (net of cash).
Enterprise Value (1) ($ in billions)
$
Billion
s
(2)
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Total Debt $2.141 B $1.155 B
Market EquityPreferred $ 0.234 B $ 0.234 BCommon/Operating Partnership Units(1) $ 2.472 B $ 1.316 B
Total Market Equity $2.706 B $1.550 B
Total Market Capitalization $4.847 B $2.705 B
Acquisition of Newkirk Improves Capital Structure
Merger Completed
As of 12/31/06
Pre-MergerAs of 9/30/06
(1) Calculated using share price as of 12/31/06 of $22.42.
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SUMMARY
Premier portfolio of more than 350 commercial buildings leased primarily to single-tenant, investment-grade corporations Properties diversified across product types (office, industrial, retail) and located within 44 of the 50 states (limiting exposure to geographic trends)
Balance sheet prepared for external growth, access to JV capital
Share repurchase opportunity to enhance shareholder value
Increased dividend annually for past 14 years, since IPO