LXP(US:LXP)2026-02-12 21:41Real Estate Portfolio - As of December 31, 2025, the company had equity ownership interests in approximately 108 consolidated real estate properties, totaling approximately 52.7 million square feet of space, with a leasing rate of approximately 97.1%[21] - The average age of the company's warehouse/distribution facilities was approximately 9.9 years as of December 31, 2025[32] - The company owns interests in approximately 514 acres of developable land in target markets, aiming for higher returns through its development strategy[24] - The company focuses on 12 growing markets within the Sunbelt and lower Midwest, evaluating properties based on criteria such as population growth and employment growth[26][27] - As of December 31, 2025, the total consolidated land projects amount to $82.971 million, with 445 acres held for development[185] - The total area of the warehouse/distribution properties in the consolidated portfolio was 52,676,980 square feet, with an occupancy rate of 97.1%[178] - The total area of special purpose industrial properties in the non-consolidated portfolio is 6,538,975 square feet, with an occupancy rate of 93.6%[181] - The total area of office properties in the non-consolidated portfolio is 701,641 square feet, with an occupancy rate of 83.5%[181] Tenant and Lease Information - The largest tenant represented 6.5% of the company's annual base rent (ABR), while 47.4% of the ABR came from tenants with investment-grade credit ratings[33] - The tenant mix is diversified, with Consumer Products at 23.2%, Transportation/Logistics at 22.6%, and E-Commerce at 14.1% of the annual base rental revenue (ABR)[186] - The 15 largest tenants represent 40.6% of the total leased square footage, with Amazon contributing $18.085 million, or 6.5% of the total ABR[187] - In 2025, lease expirations are projected to impact 9.684 million square feet, accounting for 16.4% of the total ABR[189] - As of December 31, 2025, 99.3% of the company's leases had scheduled rent increases, with an average escalation rate of 2.8%[219] - A majority of the company's leases require tenants to pay operating expenses, reducing exposure to cost increases[217] Financial Performance and Strategy - The company expects to grow in its target markets by executing on its development pipeline and opportunistically acquiring facilities[31] - The company’s growth strategy may be adversely affected by trends in the real estate and financing businesses, impacting financial condition and results of operations[79] - The company has additional equity commitments of $250 million in its joint venture, with a proportionate share of $50 million for acquiring special purpose industrial properties[36] - The total consolidated indebtedness of the company was approximately $1.4 billion as of December 31, 2025, with about $600 million available for borrowing under the principal credit agreement[108] - The company has $351 million of variable rate debt, with $332.5 million subject to interest rate swap agreements through January 2027 and October 2027[112] - The company’s growth strategy is dependent on speculative development of properties, which do not produce current income for debt service obligations[110] - The company plans to prioritize development activities over acquisitions due to the higher yield potential from build-to-suit projects[211] - In 2025, the company completed 4.9 million square feet of new and extended leases, increasing base and cash base rents by 29.7% and 27.7%, respectively[218] Risk Factors - The company is subject to risks related to defaults under leases, which could significantly reduce operating cash flow and property value if a major tenant defaults[65] - A significant portion of the company's leases are long-term and do not have fair market rental rate adjustments, potentially negatively impacting income and shareholder distributions[76] - The company faces risks associated with returning properties to lenders, which could lead to significant losses if properties are foreclosed[121] - The company may face challenges in retaining tenants upon lease expiration, which could adversely affect earnings and debt service obligations[67] - Development activities are subject to risks including supply-chain disruptions and inflation, which could increase costs and delay project completion[72] - The company may face increased costs and operational disruptions due to public health emergencies and economic conditions[100] - The company is exposed to cybersecurity risks from third-party vendors, which could adversely affect operations[90] - The company’s ability to find suitable investment opportunities may be hindered, potentially slowing growth and adversely affecting financial results[84] Cybersecurity and Risk Management - The company has established an enterprise risk management framework to assess key risks, including cybersecurity[149] - The Audit and Risk Committee oversees the company's information technology and cybersecurity strategy, ensuring compliance and risk management[150] - The company employs a Director of Information Technology focused on cybersecurity matters, reporting to the Chief Operating Officer[152] - The cybersecurity program focuses on preventing, detecting, and responding to cybersecurity incidents, with a third-party provider engaged for 24/7 monitoring and periodic assessments[157][158] - The incident response plan includes designated personnel responsible for assessing, containing, and remediating cybersecurity threats, with regular reporting to senior management[156] - The company engages a third party to perform internal and external penetration tests at least annually and requires multi-factor authentication for enhanced security measures[162] - Cybersecurity insurance is maintained to cover certain costs related to cybersecurity failures and incidents, subject to specified limits and exclusions[161] Regulatory and Tax Considerations - The company is required to distribute at least 90% of its taxable income to maintain its REIT status, with potential penalties for not meeting this requirement[141] - The company faces a 100% tax on net income from prohibited transactions, which could significantly impact its financial position[140] - The company is subject to various environmental liabilities that could exceed the value of its properties and adversely affect its financial condition[133] - Changes in laws and regulations may require significant expenditures, adversely affecting the company's results of operations[137] Employee Satisfaction - The company achieved a 95% overall satisfaction rate in its employee satisfaction survey conducted in 2025, with a participation rate of 98%[51] Development Projects - The ongoing redevelopment projects include a total of 603,341 square feet, with estimated project costs of $29.65 million[184] - The redevelopment project in Orlando (100% ownership) has an estimated project cost of $9.4 million and is expected to be completed by Q3 2026[184] - The Richmond redevelopment project (100% ownership) has an estimated project cost of $3.9 million and is expected to be completed by Q2 2026[184] - The company has a total of 2 redevelopment projects with a balance of $29.286 million as of December 31, 2025[184]