LXP(LXP) - 2025 Q2 - Quarterly Report

PART I. — FINANCIAL INFORMATION ITEM 1. Financial Statements (Unaudited) This section contains LXP Industrial Trust's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, comprehensive income (loss), changes in equity, and cash flows, along with related notes, for the quarters and six-month periods ended June 30, 2025, and June 30, 2024 Condensed Consolidated Balance Sheets As of June 30, 2025, the company's total assets decreased to $3,717,130 thousand from $3,843,312 thousand on December 31, 2024, with corresponding reductions in total liabilities and equity Condensed Consolidated Balance Sheets Key Data (Thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets: | | | | Real estate, net | 3,444,731 | 3,536,346 | | Cash and cash equivalents | 70,976 | 101,836 | | Investments in real estate under development | 33,735 | 5,947 | | Total assets | 3,717,130 | 3,843,312 | | Liabilities: | | | | Mortgage notes and notes payable, net | 52,260 | 54,930 | | Term loans, net | 248,615 | 297,814 | | Senior notes, net | 1,090,411 | 1,089,373 | | Trust preferred securities, net | 100,074 | 127,893 | | Total liabilities | 1,630,956 | 1,722,529 | | Equity: | | | | Total shareholders' equity | 2,064,355 | 2,098,292 | | Non-controlling interests | 21,819 | 22,491 | | Total equity | 2,086,174 | 2,120,783 | | Total liabilities and equity | 3,717,130 | 3,843,312 | - As of June 30, 2025, the company's total assets were $3,717,130 thousand, a 3.3% decrease from December 31, 2024[10] - As of June 30, 2025, the company's total liabilities were $1,630,956 thousand, a 5.3% decrease from December 31, 2024[10] Condensed Consolidated Statements of Operations Net income attributable to common shareholders significantly increased for both the three and six-month periods ended June 30, 2025, with basic and diluted EPS rising from $0.01 to $0.09 and $0.15, respectively Condensed Consolidated Statements of Operations Key Data (Thousand USD, except per share data) | Indicator | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Rental income | 86,744 | 84,768 | 174,637 | 169,975 | | Total revenues | 87,719 | 85,786 | 176,582 | 172,037 | | Depreciation and amortization | (49,362) | (48,347) | (99,874) | (95,856) | | Interest and amortization expense | (16,467) | (17,603) | (32,747) | (34,587) | | Gain on sale or disposal of real estate, net | 31,320 | 8,352 | 55,955 | 8,352 | | Net income | 28,397 | 4,801 | 46,559 | 4,246 | | Net income attributable to LXP Industrial Trust shareholders | 29,132 | 5,426 | 48,110 | 5,157 | | Net income attributable to common shareholders | 27,450 | 3,775 | 44,729 | 1,844 | | Basic earnings per share | 0.09 | 0.01 | 0.15 | 0.01 | | Diluted earnings per share | 0.09 | 0.01 | 0.15 | 0.01 | - For the three months ended June 30, 2025, net income attributable to common shareholders increased by 627.2% to $27,450 thousand year-over-year[12] - For the six months ended June 30, 2025, net income attributable to common shareholders increased by 2325.6% to $44,729 thousand year-over-year[12] Condensed Consolidated Statements of Comprehensive Income (Loss) Comprehensive income significantly increased for both the three and six-month periods ended June 30, 2025, reaching $27,072 thousand and $42,024 thousand, respectively Condensed Consolidated Statements of Comprehensive Income (Loss) Key Data (Thousand USD) | Indicator | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Net income | 28,397 | 4,801 | 46,559 | 4,246 | | Other comprehensive income (loss) | (1,325) | (2,226) | (4,535) | (3,286) | | Comprehensive income | 27,072 | 2,575 | 42,024 | 960 | | Comprehensive income attributable to LXP Industrial Trust shareholders | 27,807 | 3,200 | 43,575 | 1,871 | - For the three months ended June 30, 2025, comprehensive income attributable to LXP Industrial Trust shareholders increased by 769.0% to $27,807 thousand year-over-year[15] - For the six months ended June 30, 2025, comprehensive income attributable to LXP Industrial Trust shareholders increased by 2226.8% to $43,575 thousand year-over-year[15] Condensed Consolidated Statements of Changes in Equity Total equity decreased to $2,086,174 thousand as of June 30, 2025, primarily due to dividends/distributions and comprehensive loss, partially offset by net income and equity-based compensation Condensed Consolidated Statements of Changes in Equity Key Data (Thousand USD, except share count) | Indicator | June 30, 2025 (Period End) | December 31, 2024 (Period Start) | | :--- | :--- | :--- | | Total equity | 2,086,174 | 2,120,783 | | Preferred stock | 94,016 | 94,016 | | Common stock | 30 | 29 | | Additional paid-in capital | 3,320,069 | 3,315,104 | | Accumulated distributions in excess of net income | (1,351,361) | (1,316,993) | | Accumulated other comprehensive income | 1,601 | 6,136 | | Non-controlling interests | 21,819 | 22,491 | | Common shares issued (6 months 2025) | 1,256,593 | - | | Dividends/distributions (6 months 2025) | (82,588) | - | | Net income (6 months 2025) | 46,559 | - | | Other comprehensive loss (6 months 2025) | (4,518) | - | - As of June 30, 2025, the company's total equity was $2,086,174 thousand, a 1.6% decrease from December 31, 2024[21] - For the six months ended June 30, 2025, the company paid $82,588 thousand in dividends/distributions[21] Condensed Consolidated Statements of Cash Flows Net cash from operating activities increased, while net cash used in investing and financing activities decreased for the six months ended June 30, 2025, resulting in a lower ending cash balance Condensed Consolidated Statements of Cash Flows Key Data (Thousand USD) | Indicator | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Net cash provided by operating activities | 83,278 | 77,369 | | Net cash provided by investing activities | 47,615 | 82,060 | | Net cash used in financing activities | (161,743) | (309,990) | | Change in cash, cash equivalents, and restricted cash | (30,850) | (150,561) | | Cash, cash equivalents, and restricted cash at period end | 71,223 | 48,902 | | Interest paid | 30,921 | 35,561 | | Income taxes paid | 652 | 588 | - For the six months ended June 30, 2025, net cash provided by operating activities increased by 7.6% to $83,278 thousand year-over-year[25] - For the six months ended June 30, 2025, net cash provided by investing activities decreased by 41.9% to $47,615 thousand, primarily due to reduced net proceeds from real estate sales and lower investments in real estate under development[25] - For the six months ended June 30, 2025, net cash used in financing activities decreased by 47.9% to $161,743 thousand, mainly due to partial repayment of term loans and repurchase of trust preferred securities[25] Notes to Condensed Consolidated Financial Statements This section provides detailed notes to the condensed consolidated financial statements, covering company overview, accounting policies, EPS calculation, real estate investments, dispositions, fair value, debt, and other key financial disclosures Note 1: The Company and Financial Statement Presentation LXP Industrial Trust, a Maryland REIT focused on Class A warehouse and distribution facilities, owned approximately 116 consolidated real estate interests as of June 30, 2025, with financial statements prepared under GAAP and consolidating certain VIEs - LXP Industrial Trust is a Maryland real estate investment trust (REIT) focused on equity investments in Class A warehouse and distribution facilities[29] - As of June 30, 2025, the company owned approximately 116 consolidated real estate interests across 16 states[30] - The company has identified its joint ventures as variable interest entities (VIEs) and consolidates their operations into its condensed consolidated financial statements as the primary beneficiary[35] Selected Financial Data for Consolidated VIEs (Thousand USD) | Indicator | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Real estate, net | 377,378 | 380,563 | | Total assets | 390,500 | 392,791 | | Total liabilities | 9,507 | 8,603 | Note 2: Earnings Per Share The company calculates basic and diluted earnings per share using the two-class method, with both metrics showing significant growth for the three and six-month periods ended June 30, 2025 Earnings Per Share Calculation (USD, except share count) | Indicator | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to common shareholders | 27,450 | 3,775 | 44,729 | 1,844 | | Weighted-average common shares (basic) | 291,872,243 | 291,403,985 | 291,789,613 | 291,346,184 | | Basic earnings per share | 0.09 | 0.01 | 0.15 | 0.01 | | Weighted-average common shares (diluted) | 292,208,168 | 291,615,350 | 292,253,680 | 291,451,866 | | Diluted earnings per share | 0.09 | 0.01 | 0.15 | 0.01 | - For the three months ended June 30, 2025, basic and diluted EPS both increased from $0.01 in 2024 to $0.09[42] - For the six months ended June 30, 2025, basic and diluted EPS both increased from $0.01 in 2024 to $0.15[42] Note 3: Investments in Real Estate As of June 30, 2025, the company's total investment in real estate under development was $33,735 thousand, including redevelopment projects and land infrastructure improvements, alongside $82,945 thousand in land held for industrial development Real Estate Under Development Investment Details (Thousand USD, except square feet) | Project | Number of Buildings | Market | Estimated Square Feet | Estimated Project Cost | GAAP Balance (June 30, 2025) | LXP Amount Invested (June 30, 2025) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Orlando Redevelopment (100.0%) | 1 | Central Florida | 350,990 | 9,400 | 14,303 | 254 | | Richmond Redevelopment (100.0%) | 1 | Richmond, VA | 252,351 | 3,700 | 11,244 | 201 | | Reems & Olive Land Infrastructure Improvements (95.5%) | N/A | Phoenix, AZ | N/A | 15,381 | 8,188 | 8,446 | | Total | 2 | | 603,341 | 28,481 | 33,735 | 8,901 | Land Held for Development Details (Thousand USD, except acres) | Project | Market | Approximately Developable Acres | GAAP Investment Balance (June 30, 2025) | LXP Amount Invested (June 30, 2025) | | :--- | :--- | :--- | :--- | :--- | | Reems & Olive (95.5%) | Phoenix, AZ | 315 | 75,352 | 74,239 | | Mt. Comfort Phase II (80.0%) | Indianapolis, IN | 116 | 5,861 | 4,738 | | ATL Fairburn (100.0%) | Atlanta, GA | 14 | 1,732 | 1,768 | | Total | | 445 | 82,945 | 80,745 | - As of June 30, 2025, the company's total investment in real estate under development was $33,735 thousand[46] Note 4: Dispositions and Impairment For the six months ended June 30, 2025, the company disposed of two properties, generating $73,502 thousand in net proceeds and $56,035 thousand in gains, with no impairment charges and a $80 thousand net loss from a fire Real Estate Dispositions Summary (Thousand USD, except square feet) | Indicator | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Number of buildings | 2 | 2 | | Building area (square feet) | 731,127 | 338,301 | | Net proceeds from real estate sales | 73,502 | 15,493 | | Net book value | 17,467 | 9,018 | | Gain on real estate sales | 56,035 | 8,352 | - For the six months ended June 30, 2025, the company disposed of two real estate properties, generating $73,502 thousand in net proceeds and realizing $56,035 thousand in gains on sales[49] - For the six months ended June 30, 2025, no real estate impairment charges were incurred by the company[52] - A fire at a Georgia warehouse facility on May 10, 2025, resulted in a $80 thousand net loss, recorded in the statements of operations[53] Note 5: Fair Value Measurements As of June 30, 2025, the fair value of the company's interest rate swap assets was $1,616 thousand, primarily classified as Level 2, while the fair value of debt was estimated at $1,401,620 thousand Fair Value Measurements (Thousand USD) | Description | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Interest rate swap assets | 1,616 | 6,134 | | Debt (carrying value) | 1,491,360 | 1,570,010 | | Debt (fair value) | 1,401,620 | 1,459,062 | - As of June 30, 2025, the fair value of interest rate swap assets was $1,616 thousand, a decrease from $6,134 thousand on December 31, 2024[54] - As of June 30, 2025, the fair value of the company's debt was estimated at $1,401,620 thousand[55] Note 6: Investments in Non-Consolidated Entities As of June 30, 2025, the company's total investment in non-consolidated entities was $38,416 thousand, from which it earned $1,945 thousand in advisory fees for the six-month period Non-Consolidated Entities Investment Summary (Thousand USD) | Investment Project | Ownership Percentage (June 30, 2025) | Investment Balance (June 30, 2025) | Investment Balance (December 31, 2024) | Equity Income (Loss) (6 months June 30, 2025) | Equity Income (Loss) (6 months June 30, 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | | NNN MFG Cold JV L.P. | 20% | 8,873 | 10,428 | (1,538) | (1,986) | | NNN Office JV L.P. | 20% | 14,980 | 15,189 | (210) | (74) | | Etna Park 70, LLC | 90% | 9,871 | 9,732 | (107) | (134) | | Etna Park East LLC | 90% | 2,381 | 2,360 | (85) | (92) | | Lombard Street Lots, LLC | 44.1% | 2,311 | 2,309 | 2 | — | | Total | | 38,416 | 40,018 | (1,938) | (2,286) | - For the six months ended June 30, 2025, the company earned $1,945 thousand in advisory fees from non-consolidated entities, a decrease from $2,062 thousand in the prior year period[60] Note 7: Debt As of June 30, 2025, total debt decreased to $1,491,360 thousand due to term loan repayments and trust preferred securities repurchases, with $600,000 thousand available on an unsecured revolving credit facility Outstanding Debt Obligations (Thousand USD) | Debt Type | June 30, 2025 | December 31, 2024 | Interest Rate | Maturity Date | | :--- | :--- | :--- | :--- | :--- | | Mortgage notes, net | 52,260 | 54,930 | 4.1% (weighted average) | 2028-2031 | | Term loans, net | 248,615 | 297,814 | SOFR + 1.10% | January 2027 | | 2023 Senior Notes | 300,000 | 300,000 | 6.750% | November 2028 | | 2020 Senior Notes | 400,000 | 400,000 | 2.700% | September 2030 | | 2021 Senior Notes | 400,000 | 400,000 | 2.375% | October 2031 | | Trust preferred securities, net | 100,074 | 127,893 | Three-month SOFR + 1.96% | April 2037 | | Total Debt | 1,491,360 | 1,570,010 | | | - As of June 30, 2025, the company's total debt was $1,491,360 thousand, a 5.0% decrease from December 31, 2024[62] - As of June 30, 2025, the company repaid $50,000 thousand of its term loan and repurchased $28,125 thousand of trust preferred securities, leading to a net reduction in debt[63][65] - The company has a $600,000 thousand unsecured revolving credit facility with no outstanding borrowings as of June 30, 2025[67] Note 8: Derivatives and Hedging Activities The company uses interest rate swaps to manage interest rate risk, holding $632,500 thousand in notional value of swaps with a fair value of $1,616 thousand as of June 30, 2025 Outstanding Derivative Financial Instruments Summary (Thousand USD) | Derivative Type | Number | Effective Date | Maturity Date | Notional Value | Fair Value (June 30, 2025) | Fair Value (December 31, 2024) | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Term Loan Interest Rate Swaps | 4 | July 1, 2022 | January 31, 2025 | 300,000 | — | 678 | | Term Loan Interest Rate Swaps | 5 | January 31, 2025 | January 31, 2027 | 250,000 | 1,326 | 3,762 | | Trust Preferred Securities Interest Rate Swaps | 2 | October 30, 2024 | October 30, 2027 | 82,500 | 290 | 1,694 | | Total | | | | 632,500 | 1,616 | 6,134 | - As of June 30, 2025, the company held interest rate swap agreements with a total notional value of $632,500 thousand and a fair value of $1,616 thousand[71] - For the six months ended June 30, 2025, the company estimates $1,953 thousand will be reclassified from accumulated other comprehensive income to a reduction in interest expense[71] Note 9: Lease Accounting As a lessor, the company's rental income increased for both periods ended June 30, 2025, from its net-lease real estate assets; as a lessee, it holds operating leases with a 9.0-year weighted-average remaining term and a 4.2% discount rate Rental Income Classification (Thousand USD) | Classification | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Fixed rent | 72,285 | 69,748 | 145,175 | 139,760 | | Sales-type lease income | — | 1,917 | — | 3,816 | | Variable rent | 14,459 | 13,103 | 29,462 | 26,399 | | Total | 86,744 | 84,768 | 174,637 | 169,975 | Future Fixed Rental Income (Lessor, Thousand USD) | Year | Amount | | :--- | :--- | | 2025 (remaining) | 141,742 | | 2026 | 278,808 | | 2027 | 242,688 | | 2028 | 207,663 | | 2029 | 181,346 | | 2030 | 138,990 | | Thereafter | 395,809 | | Total | 1,587,046 | Operating Lease Supplemental Information (Lessee) | Indicator | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Weighted-average remaining lease term (years) | 9.0 | 8.6 | | Weighted-average discount rate | 4.2% | 4.1% | | Total lease cost (6 months 2025) | 2,856 | 2,683 | | Present value of operating lease liabilities | 14,730 | - | Note 10: Concentration of Risk The company mitigates operational and leasing risks through geographic and tenant industry diversification, avoiding single-asset dependency, and maintaining tenant credit ratings, with no single tenant accounting for over 10% of rental income for the six months ended June 30, 2025 - The company mitigates operational and leasing risks through geographic diversification, tenant industry diversification, and tenant credit ratings[92] - For the six months ended June 30, 2025, no single tenant accounted for more than 10% of rental income[92] Note 11: Equity The company maintains an ATM program for up to $350,000 thousand in common stock, has 6,874,241 shares available for repurchase, and has 1,935,400 shares of Series C Cumulative Convertible Preferred Stock outstanding as of June 30, 2025 - The company maintains an At-The-Market (ATM) program to issue up to $350,000 thousand of common stock, but no shares were sold during the first six months of 2025 or 2024[94] - The Board of Trustees authorized the repurchase of an additional 10,000,000 shares of common stock, with 6,874,241 shares remaining available for repurchase as of June 30, 2025[96] - As of June 30, 2025, the company had 1,935,400 shares of Series C Cumulative Convertible Preferred Stock outstanding, with a $3.25 per share dividend and a $96,770 thousand liquidation preference[97] Summary of Changes in Accumulated Other Comprehensive Income (Loss) (Thousand USD) | Indicator | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | | Beginning balance | 6,136 | 9,483 | | Other comprehensive income before reclassifications | (2,257) | 2,499 | | Reclassification from accumulated other comprehensive income to interest expense | (2,278) | (5,785) | | Ending balance | 1,601 | 6,197 | Note 12: Segment Reporting The company operates as a single operating segment, focusing on Class A warehouse and distribution facilities, as its Chief Operating Decision Maker (CODM) reviews the business on a consolidated basis for performance evaluation and operational decisions - The company has a single operating segment, as its organizational and management structure and the information used by the CODM for decision-making are based on a consolidated basis[101] - The CODM uses consolidated net income (loss) to measure performance and assess the company's ability to pay dividends[102] Note 13: Related Party Transactions No additional related party transactions occurred during the reporting period beyond those already disclosed in other sections of the financial statements - No additional related party transactions beyond those already disclosed[103] Note 14: Commitments and Contingencies As of June 30, 2025, the company anticipates approximately $44,000 thousand in additional costs for consolidated development project commitments and is involved in legal proceedings not expected to materially impact its financial condition - As of June 30, 2025, the company expects to incur approximately $44,000 thousand in additional costs to fund its consolidated development project commitments[106] - The company is involved in legal proceedings arising in the ordinary course of business, which management believes will not have a material adverse effect on its business, financial condition, and results of operations[107] Note 15: Subsequent Events The company has evaluated all subsequent events through June 30, 2025, and found no material events requiring adjustment, recognition, or disclosure - The company has evaluated all subsequent events through June 30, 2025, and found no material events requiring adjustment, recognition, or disclosure[108] ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses LXP Industrial Trust's financial condition and operating results for the three and six-month periods ended June 30, 2025, covering company overview, liquidity, capital resources, development costs, operating performance, same-store results, and non-GAAP financial measures Introduction This introduction defines LXP Industrial Trust and its consolidated subsidiaries, specifies the reporting period, explains key terms like REIT and GAAP, and mentions new tax legislation and forward-looking statements - This report covers the financial condition and results of operations for LXP Industrial Trust and its consolidated subsidiaries for the three and six-month periods ended June 30, 2025[110][111] - New tax legislation effective July 4, 2025, permanently extended the 20% deduction for 'qualified REIT dividends' and increased the asset test percentage limitation for taxable REIT subsidiaries (TRSs) from 20% to 25%[116] Overview As of June 30, 2025, the company owned approximately 116 consolidated real estate interests totaling 56.4 million square feet with 94.1% occupancy, focusing on Class A warehouse and distribution facilities, and undertook redevelopment, repurchases, and dispositions in Q2 2025 - As of June 30, 2025, the company owned approximately 116 consolidated real estate interests, totaling approximately 56.4 million square feet, with an occupancy rate of 94.1%[119] - The company focuses on investing in Class A warehouse and distribution facilities across 12 target markets in the Sunbelt and Midwest regions[120] - In Q2 2025, the company commenced redevelopment of a 350 thousand square foot warehouse facility, repurchased $28.1 million of trust preferred securities, and disposed of one facility for $39.6 million[122][123][124] - The company executed lease extensions for 0.1 million square feet at an average fixed rent of $11.36 per square foot, up from $9.63 prior to extension[126] Critical Accounting Estimates No significant changes occurred in the company's critical accounting estimates during the six-month period ended June 30, 2025, as detailed in the annual report - No significant changes occurred in the company's critical accounting estimates during the six months ended June 30, 2025[125] Liquidity and Capital Resources The company maintains strong liquidity with $71.0 million in cash and a $600.0 million unsecured revolving credit facility, with operating cash flow increasing to $83.3 million for the first half of 2025, supporting operations, debt, and dividends - The company believes cash flow from operations will continue to provide sufficient capital to meet operating and administrative expenses, scheduled debt service obligations, and all dividend payments[127] - As of June 30, 2025, the company had $71.0 million in cash and cash equivalents and a $600.0 million unsecured revolving credit facility (subject to covenant compliance)[128] Cash Flow Activities Summary (Million USD) | Activity Type | June 30, 2025 (6 months) | June 30, 2024 (6 months) | Change | | :--- | :--- | :--- | :--- | | Operating cash flow | 83.3 | 77.4 | Increase 5.9 | | Investing cash flow | 47.6 | 82.1 | Decrease 34.5 | | Financing cash flow | (161.7) | (310.0) | Decrease 148.3 | | Cash and restricted cash at period end | 71.2 | 48.9 | Increase 22.3 | - In the first half of 2025, the company repurchased $28.1 million of trust preferred securities and increased its quarterly common stock dividend from $0.13 to $0.135[135][136] Development Costs As of June 30, 2025, the company's total investment in real estate under development for consolidated projects was $33.7 million, with an estimated $44.0 million in additional costs anticipated for remaining commitments - As of June 30, 2025, the company's total investment in real estate under development for consolidated development and redevelopment projects was $33.7 million[144] - The company expects to incur approximately $44.0 million in additional costs (excluding non-controlling interest share and potential developer incentive fees or partner acquisitions) to fund all remaining consolidated development project commitments[144] Results of Operations Net income attributable to common shareholders significantly increased for both the three and six-month periods ended June 30, 2025, driven by higher gains on real estate sales, increased rental income, and reduced interest and amortization expenses - For the three months ended June 30, 2025, net income attributable to common shareholders increased by $23.7 million, primarily due to a $23.0 million increase in gains on real estate sales and a $2.0 million increase in rental income[145][146][149] - For the six months ended June 30, 2025, net income attributable to common shareholders increased by $43.0 million, primarily due to a $47.6 million increase in gains on real estate sales and a $4.7 million increase in rental income[150][156] - Interest and amortization expense decreased by $1.1 million and $1.8 million for the three and six-month periods, respectively, mainly due to the repayment of 2024 Senior Notes and interest rate swaps and partial repurchases of trust preferred securities[148][154] Same-Store Results Same-store Net Operating Income (NOI) grew by 4.7% and 5.0% for the three and six-month periods ended June 30, 2025, respectively, driven by increased cash base rent, with same-store leased square footage at 98.0% Same-Store Net Operating Income (NOI) Summary (Thousand USD) | Indicator | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Total cash base rent | 63,413 | 61,235 | 126,856 | 121,605 | | Tenant reimbursements | 14,277 | 13,315 | 29,093 | 26,845 | | Property operating expenses | (14,211) | (13,945) | (29,313) | (27,863) | | Same-Store NOI | 63,479 | 60,605 | 126,636 | 120,587 | - For the three months ended June 30, 2025, same-store NOI increased by 4.7% to $63,479 thousand year-over-year[158] - For the six months ended June 30, 2025, same-store NOI increased by 5.0% to $126,636 thousand year-over-year[158] - As of June 30, 2025, same-store leased square footage was 98.0%[158] Funds From Operations (FFO) Basic FFO attributable to common shareholders was $46,698 thousand and $91,060 thousand, and Adjusted Company FFO (diluted) was $47,275 thousand and $93,686 thousand for the three and six-month periods ended June 30, 2025, respectively FFO and Adjusted Company FFO Summary (Thousand USD, except per share data) | Indicator | June 30, 2025 (3 months) | June 30, 2024 (3 months) | June 30, 2025 (6 months) | June 30, 2024 (6 months) | | :--- | :--- | :--- | :--- | :--- | | Net income attributable to common shareholders | 27,450 | 3,775 | 44,729 | 1,844 | | Real estate depreciation and amortization | 47,725 | 46,937 | 96,547 | 93,145 | | Gain (loss) on sale of real estate, net | (31,320) | (8,635) | (55,955) | (8,635) | | Basic FFO attributable to common shareholders | 46,698 | 44,818 | 91,060 | 91,959 | | Diluted FFO attributable to all equity holders | 48,380 | 46,469 | 94,441 | 95,272 | | Adjusted Company FFO (diluted) attributable to all equity holders | 47,275 | 46,904 | 93,686 | 95,702 | | Basic FFO per share | 0.16 | 0.15 | 0.31 | 0.32 | | Diluted FFO per share | 0.16 | 0.16 | 0.32 | 0.32 | | Adjusted Company FFO per share | 0.16 | 0.16 | 0.32 | 0.32 | - For the three months ended June 30, 2025, basic FFO attributable to common shareholders increased by 4.2% to $46,698 thousand year-over-year[167] - For the six months ended June 30, 2025, basic FFO attributable to common shareholders decreased by 1.0% to $91,060 thousand year-over-year[167] Off-Balance Sheet Arrangements The company has guaranteed $432.3 million in non-recourse debt for certain non-consolidated entities, but management believes the likelihood of any payments under these guarantees is remote - The company has guaranteed $432.3 million of non-recourse debt for certain non-consolidated entities[168] - The company believes the likelihood of any payments under such guarantees is remote and typically has agreements with each partner requiring proportional reimbursement for any liabilities related to a guarantee trigger[168] ITEM 3. Quantitative and Qualitative Disclosures About Market Risk The company primarily faces market risk from unhedged floating-rate debt and fixed-rate debt, with $18.5 million (1.2% of total debt) unhedged floating-rate debt and $1.5 billion (98.8% of total debt) fixed-rate debt as of June 30, 2025, managed through fixed-rate instruments and interest rate swaps Market Risk Disclosure Summary (Million USD, except percentages) | Indicator | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Unhedged floating-rate debt | 18.5 | 129.1 | | Percentage of total debt | 1.2% | 8.1% | | Fixed-rate debt | 1,500.0 | 1,500.0 | | Percentage of total debt | 98.8% | 91.9% | | Weighted-average interest rate on floating-rate debt (3 months) | 6.2% | 7.3% | | Weighted-average interest rate on floating-rate debt (6 months) | 6.3% | 7.3% | | Fair value of fixed-rate debt | 1,400.0 | - | - As of June 30, 2025, the company's unhedged floating-rate debt was $18.5 million, representing 1.2% of total debt[171] - As of June 30, 2025, the company's fixed-rate debt was $1.5 billion, representing 98.8% of total debt[171] - The company manages interest rate risk through the use of fixed-rate debt instruments and derivative financial instruments, such as interest rate swaps or caps[173] ITEM 4. Controls and Procedures Management assessed the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they are effective, with no material changes to internal controls during the quarter, acknowledging inherent limitations - Management assessed the effectiveness of disclosure controls and procedures as of June 30, 2025, concluding they are effective[175] - No material changes occurred in internal control over financial reporting during the quarter, but internal controls have inherent limitations and cannot provide absolute assurance of achieving financial reporting objectives[176][177] PART II — OTHER INFORMATION ITEM 1. Legal Proceedings The company is involved in ordinary course legal proceedings, including creditor claims under non-recourse guarantees, which management believes will not materially adversely affect its business, financial condition, or operating results - The company is involved in legal proceedings arising in the ordinary course of business, including creditor claims under non-recourse guarantees[178] - Management believes the aggregate outcome of these proceedings will not have a material adverse effect on the company's business, financial condition, and results of operations[178] ITEM 1A. Risk Factors No material changes occurred in the company's risk factors during the reporting period compared to those disclosed in the annual report - No material changes occurred in the company's risk factors during the reporting period compared to those disclosed in the annual report[180] ITEM 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities The company did not repurchase any common stock during the six months ended June 30, 2025, and no Rule 10b5-1 trading arrangements were adopted or terminated by trustees or officers during the quarter - The company did not repurchase any common stock during the six months ended June 30, 2025[181] - No Rule 10b5-1 trading arrangements or non-Rule 10b5-1 trading arrangements were adopted or terminated by any trustee or officer of the company during the quarter[182] ITEM 3. Defaults Upon Senior Securities This section is not applicable - This section is not applicable[183] ITEM 4. Mine Safety Disclosures This section is not applicable - This section is not applicable[183] ITEM 5. Other Information This section provides no specific information ITEM 6. Exhibits This section lists all exhibits filed with this quarterly report, including the company's articles of incorporation, trust agreement, senior note indentures, equity incentive plans, certification documents, and XBRL data files - Exhibits include the company's articles of incorporation, trust agreement, senior note indentures, equity incentive plans, certification documents, and XBRL data files[184][185] SIGNATURES This quarterly report was formally signed by LXP Industrial Trust's CEO and President T. Wilson Eglin and CFO, Executive Vice President, and Treasurer Nathan Brunner on July 30, 2025 - This report was signed by LXP Industrial Trust's CEO and President T. Wilson Eglin and CFO, Executive Vice President, and Treasurer Nathan Brunner on July 30, 2025[187]