Lexington Realty Trust Raises $46.0 Million In Two Credit Tenant Lease Financings

Jun 07, 2010, 09:33 ET from Lexington Realty Trust

NEW YORK, June 7 /PRNewswire-FirstCall/ -- Lexington Realty Trust ("Lexington") (NYSE: LXP), a real estate investment trust (REIT) focused on single-tenant real estate investments, today announced that it closed on (1) a $37.0 million non-recourse first mortgage loan secured by its approximately 295,000 square-foot office building located in the University of Utah's Research Park in Salt Lake City, Utah and (2) a $9.0 million non-recourse first mortgage loan secured by its approximately 128,000 square foot office facility located in Greenville, South Carolina.  

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Salt Lake City, Utah

Lexington's asset in Salt Lake City, Utah is leased to the University of Utah and consists of a leasehold interest with a remaining term of 18 years.  The new loan bears interest at a fixed rate of 5.527% and fully amortizes over 18 years.  The property was previously unencumbered.

In connection with the financing, Lexington extended the related building lease with the University of Utah to match the maturity of the loan.  Rents payable under the building lease exceed debt service and related fees by approximately $32,000 per year and the tenant has an option to purchase Lexington's interest in the leasehold at an initial price of $500,000, which declines over the term, plus assumption of the first mortgage loan.

Greenville, South Carolina

Lexington's asset in Greenville, South Carolina is a fee interest and is leased to Canal Insurance Company for a 20-year term.  The new loan requires interest-only payments at a rate of 5.50% and matures on January 15, 2015, but can be prepaid without penalty on or about the fifth anniversary of the lease commencement when Canal Insurance Company has an option to purchase the asset at fair market value, but not less than $10.7 million and no greater than $11.6 million.  If Canal Insurance Company fails to exercise its purchase option, Lexington has the right to require Canal Insurance Company to purchase the property for approximately $10.7 million.  

Comments From Management

Richard J. Rouse, Chief Investment Officer of Lexington Realty Trust, commented, "These transactions allowed Lexington to extract significant value out of the assets at attractive interest rates.  We plan to use the proceeds of the financings to retire short-term debt."

ABOUT LEXINGTON REALTY TRUST

Lexington Realty Trust is a real estate investment trust that owns, invests in, and manages office, industrial and retail properties net-leased to major corporations throughout the United States and provides investment advisory and asset management services to investors in the net lease area.  Lexington shares are traded on the New York Stock Exchange under the symbol "LXP".  Additional information about Lexington is available on-line at www.lxp.com or by contacting Lexington Realty Trust, Investor Relations, One Penn Plaza, Suite 4015, New York, New York 10119-4015.

SOURCE Lexington Realty Trust



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