Lexington Realty Trust LXP
December 31, 2008 - 11:39am EST by
2008 2009
Price: 4.60 EPS
Shares Out. (in M): 0 P/E
Market Cap (in $M): 430 P/FCF
Net Debt (in $M): 0 EBIT 0 0

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       Lexington Realty Trust is a REIT which specializes in long-term net-leased properties. The Company owns 288 properties in 44 states. The portfolio is 93.8% leased. The five greatest geographic concentrations are Dallas (9.3%), Los Angeles (7.1%), New York / New Jersey (5.6%), Houston (5.5%) and Memphis (3.5%). The largest five tenants are Raytheon (3.1%), Bank of America (2.8%), Baker Hughes (2.5%), Sanofi-Aventis (2.4%) and Dana (2.2%). The top 10 tenants account for 23.1% of revenues. 53% of the teants are investment grade, 32% are unrates and 15% are below-investment grade. Offices are 74% of the portfolio, industrial is 18% and retail is 8%. Overall, the portfolio is well diversified.
       LXP has $2.5 bil of debt. Of that, $1.8 bil is long-term amortizing mortgage debt. Of the $700 mil remaining, $200 mil is a term loan due 6/2009 which maybe extended to 12/2009. Apart from mortgage debt amortizations and maturities, which are not substantial, the next nearest maturity is $300 mil due 1/2012. The Company has been very aggressive in addressing its balance sheet. I believe that this has been done in order to advantage of the dislocations in the debt market. During 2008, the Company has repurchased $278.5 mil of debt for $219.5 mil. The Company has indicated that it will continue to take advantage of the market for its securities. In order to do so, LXP reduced its dividend from $1.32 a year to $0.72, saving it $56 mil a year.
       With LXP stock at $4.60, the $0.72 dividend provides stockholders with a 15.6% current yield. With a FFO run-rate of $1.50 a share, the $0.78 a share retained by the Company will accrue to shareholders' benfit through accetive debt and preferred equity repurchases.  At $4.60, LXP stock sells for 3 times FFO and 54% of an increasing book.


There is no catalyst but the passage of time.
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