A joint venture subsidiary of
Lexington Realty Trust (
, a real estate investment trust (REIT), recently announced the
sale of an unleveraged multi-tenant building for $69.0 million.
The divested property is located at 1500 Hughes Way, Long Beach
in California and bears a capitalization rate on disposition of
around 6.8%. Lexington had a 55% stake in the property, which was
74% leased, while its joint venture partner held the remaining 45%
The asset sale is part of the company's long-term strategy to
focus on improving the quality of its portfolio by divesting
non-core assets and acquiring strategic assets. This portfolio
management effort will free funds for effective acquisitions and
Recently, another joint venture partner of Lexington acquired a
55,650 square feet in-patient rehabilitation hospital in Humble,
Texas for $27.8 million. Further, one of the subsidiaries of
Lexington also acquired a Texas-based 152 acres industrial property
for $23.0 million.
New York City-based Lexington owns, invests 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 reported first quarter 2012 adjusted funds from
operations (FFO) of 24 cents, beating the Zacks Consensus Estimate
by a penny. Fund from operations, a widely used metric to gauge the
performance of REITs, is obtained after adding depreciation and
other non-cash expenses to net income. The company raised its 2012
FFO guidance by 2 cents and now expects it in the range of 92 to 95
cents per share.
We currently have a Neutral recommendation on Lexington, which
has a Zacks #3 Rank that translates into a short-term Hold rating.
We also have a Neutral recommendation and a Zacks #3 Rank for
Vornado Realty Trust (
, one of the peers of Lexington.
LEXINGTON PPTY (LXP): Free Stock Analysis
VORNADO RLTY TR (VNO): Free Stock Analysis
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