Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 |
(State or other jurisdiction of incorporation of organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company |
PART I. — FINANCIAL INFORMATION | ||||||||
ITEM 1. Financial Statements (Unaudited) | ||||||||
PART II — OTHER INFORMATION | ||||||||
September 30, 2023 | December 31, 2022 | ||||||||||
Assets: | |||||||||||
Real estate, at cost | $ | $ | |||||||||
Real estate - intangible assets | |||||||||||
Land held for development | |||||||||||
Investments in real estate under construction | |||||||||||
Real estate, gross | |||||||||||
Less: accumulated depreciation and amortization | |||||||||||
Real estate, net | |||||||||||
Assets held for sale | |||||||||||
Right-of-use assets, net | |||||||||||
Cash and cash equivalents | |||||||||||
Restricted cash | |||||||||||
Investments in non-consolidated entities | |||||||||||
Deferred expenses, net | |||||||||||
Investment in a sales-type lease, net (allowance for credit loss $ | |||||||||||
Rent receivable – current | |||||||||||
Rent receivable – deferred | |||||||||||
Other assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and Equity: | |||||||||||
Liabilities: | |||||||||||
Mortgages and notes payable, net | $ | $ | |||||||||
Term loan payable, net | |||||||||||
Senior notes payable, net | |||||||||||
Trust preferred securities, net | |||||||||||
Dividends payable | |||||||||||
Liabilities held for sale | |||||||||||
Operating lease liabilities | |||||||||||
Accounts payable and other liabilities | |||||||||||
Accrued interest payable | |||||||||||
Deferred revenue - including below-market leases, net | |||||||||||
Prepaid rent | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Equity: | |||||||||||
Preferred shares, par value $ | |||||||||||
Series C Cumulative Convertible Preferred, liquidation preference $ | |||||||||||
Common shares, par value $ | |||||||||||
Additional paid-in-capital | $ | ||||||||||
Accumulated distributions in excess of net income | ( | ( | |||||||||
Accumulated other comprehensive income | |||||||||||
Total shareholders’ equity | |||||||||||
Noncontrolling interests | |||||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Gross revenues: | |||||||||||||||||||||||
Rental revenue | $ | $ | $ | $ | |||||||||||||||||||
Other revenue | |||||||||||||||||||||||
Total gross revenues | |||||||||||||||||||||||
Expense applicable to revenues: | |||||||||||||||||||||||
Depreciation and amortization | ( | ( | ( | ( | |||||||||||||||||||
Property operating | ( | ( | ( | ( | |||||||||||||||||||
General and administrative | ( | ( | ( | ( | |||||||||||||||||||
Non-operating income | |||||||||||||||||||||||
Interest and amortization expense | ( | ( | ( | ( | |||||||||||||||||||
Debt satisfaction losses, net | ( | ( | |||||||||||||||||||||
Impairment charges | ( | ( | ( | ||||||||||||||||||||
Change in allowance for credit loss | ( | ||||||||||||||||||||||
Gains on sales of properties | |||||||||||||||||||||||
Selling profit from sales-type lease | |||||||||||||||||||||||
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities | |||||||||||||||||||||||
Provision for income taxes | ( | ( | ( | ( | |||||||||||||||||||
Equity in earnings (losses) of non-consolidated entities | ( | ( | |||||||||||||||||||||
Net income | |||||||||||||||||||||||
Less net income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
Net income attributable to LXP Industrial Trust shareholders | |||||||||||||||||||||||
Dividends attributable to preferred shares – Series C | ( | ( | ( | ( | |||||||||||||||||||
Allocation to participating securities | ( | ( | ( | ( | |||||||||||||||||||
Net income attributable to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
Net income attributable to common shareholders - per common share basic | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average common shares outstanding – basic | |||||||||||||||||||||||
Net income attributable to common shareholders - per common share diluted | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average common shares outstanding – diluted | |||||||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | $ | $ | $ | |||||||||||||||||||
Other comprehensive income: | |||||||||||||||||||||||
Change in unrealized gain/(loss) on interest rate swaps, net | ( | ( | |||||||||||||||||||||
Company's share of other comprehensive income (loss) of non-consolidated entities | ( | ( | |||||||||||||||||||||
Other comprehensive income (loss) | ( | ( | |||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||
Comprehensive income attributable to noncontrolling interests | ( | ( | ( | ( | |||||||||||||||||||
Comprehensive income attributable to LXP Industrial Trust shareholders |
LXP Industrial Trust Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Three months ended September 30, 2023 | Total | Number of Preferred Shares | Preferred Shares | Number of Common Shares | Common Shares | Additional Paid-in-Capital | Accumulated Distributions in Excess of Net Income | Accumulated Other Comprehensive Income/(Loss) | Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||||
Balance June 30, 2023 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of partnership interest in real estate | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redemption of noncontrolling OP units for common shares | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares and deferred compensation amortization, net | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Dividends/distributions ($ | ( | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | — | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
Company's share of other comprehensive loss of non-consolidated entities | ( | — | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance September 30, 2023 | $ | $ | $ | $ | $ | ( | $ | $ |
Three Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance June 30, 2022 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of partnership interest in real estate | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redemption of noncontrolling OP units for common shares | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares and deferred compensation amortization, net | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common shares | ( | — | — | ( | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Forfeiture of employee common shares | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends/distributions ($ | ( | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Company's share of other comprehensive income of non-consolidated entities | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance September 30, 2022 | $ | $ | $ | $ | $ | ( | $ | $ |
LXP Industrial Trust Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Nine Months Ended September 30, 2023 | Total | Number of Preferred Shares | Preferred Shares | Number of Common Shares | Common Shares | Additional Paid-in-Capital | Accumulated Distributions in Excess of Net Income | Accumulated Other Comprehensive Income/(Loss) | Noncontrolling Interests | ||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2022 | $ | $ | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||
Issuance of partnership interest in real estate | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redemption of noncontrolling OP units for common shares | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares and deferred compensation amortization, net | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common shares to settle tax obligations | ( | — | — | ( | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Forfeiture of employee common shares | — | — | — | ( | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Dividends/distributions ($ | ( | — | — | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive loss | ( | — | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
Company's share of other comprehensive loss of non-consolidated entities | ( | — | — | — | — | — | — | ( | — | ||||||||||||||||||||||||||||||||||||||||||||
Balance September 30, 2023 | $ | $ | $ | $ | $ | ( | $ | $ |
Nine Months Ended September 30, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance December 31, 2021 | $ | $ | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of partnership interest in real estate | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Redemption of noncontrolling OP units for common shares | — | — | — | — | — | ( | |||||||||||||||||||||||||||||||||||||||||||||||
Purchase of noncontrolling interest in consolidated joint venture | ( | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Issuance of common shares and deferred compensation amortization, net | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common shares | ( | — | — | ( | ( | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Repurchase of common shares to settle tax obligations | ( | — | — | ( | — | ( | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
Forfeiture of employee common shares | — | — | ( | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Dividends/distributions ($ | ( | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Company's share of other comprehensive income of non-consolidated entities | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
Balance September 30, 2022 | $ | $ | $ | $ | $ | ( | $ | $ |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Net cash provided by operating activities: | $ | $ | |||||||||
Cash flows from investing activities: | |||||||||||
Acquisition of real estate, including intangible assets | ( | ( | |||||||||
Investment in real estate under construction | ( | ( | |||||||||
Capital expenditures | ( | ( | |||||||||
Net proceeds from sale of properties | |||||||||||
Principal payments on loans receivable | |||||||||||
Investments in non-consolidated entities | ( | ( | |||||||||
Distributions from non-consolidated entities in excess of accumulated earnings | |||||||||||
Deferred leasing costs | ( | ( | |||||||||
Change in real estate deposits, net | ( | ( | |||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities: | |||||||||||
Dividends to common and preferred shareholders | ( | ( | |||||||||
Principal amortization payments | ( | ( | |||||||||
Revolving credit facility borrowings | |||||||||||
Revolving credit facility payments | ( | ( | |||||||||
Deferred financing costs | ( | ||||||||||
Cash contributions from noncontrolling interests | |||||||||||
Cash distributions to noncontrolling interests | ( | ( | |||||||||
Repurchase of common shares to settle tax obligations | ( | ( | |||||||||
Purchase of noncontrolling interest | ( | ||||||||||
Issuance of common shares, net | ( | ||||||||||
Repurchase of common shares | ( | ||||||||||
Net cash used in financing activities | ( | ( | |||||||||
Change in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash, at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash, at end of period | $ | $ | |||||||||
Reconciliation of cash, cash equivalents and restricted cash: | |||||||||||
Cash and cash equivalents at beginning of period | $ | $ | |||||||||
Restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at beginning of period | $ | $ | |||||||||
Cash and cash equivalents at end of period | $ | $ | |||||||||
Restricted cash at end of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Real estate, net | $ | $ | |||||||||
Total assets | $ | $ | |||||||||
Total liabilities | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
BASIC | |||||||||||||||||||||||
Net income attributable to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average number of common shares outstanding - basic | |||||||||||||||||||||||
Net income attributable to common shareholders - per common share basic | $ | $ | $ | $ | |||||||||||||||||||
DILUTED | |||||||||||||||||||||||
Net income attributable to common shareholders - basic | $ | $ | $ | $ | |||||||||||||||||||
Impact of assumed conversions | ( | ||||||||||||||||||||||
Net income attributable to common shareholders | $ | $ | $ | $ | |||||||||||||||||||
Weighted-average common shares outstanding - basic | |||||||||||||||||||||||
Effect of dilutive securities: | |||||||||||||||||||||||
Shares issuable under forward sales agreements | |||||||||||||||||||||||
Unvested share-based payment awards | |||||||||||||||||||||||
Operating partnership units | |||||||||||||||||||||||
Weighted-average common shares outstanding - diluted | |||||||||||||||||||||||
Net income attributable to common shareholders - per common share diluted | $ | $ | $ | $ | |||||||||||||||||||
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Unvested share-based payment awards | |||||||||||||||||||||||
Preferred shares - Series C | |||||||||||||||||||||||
Market | Acquired/Placed in Service Date | Initial Cost Basis | Lease Expiration Date | Land | Building and Improvements | |||||||||||||||
Phoenix, Arizona(1) | March 2023 | $ | 08/2033 | $ | $ | |||||||||||||||
Dallas, Texas | July 2023 | N/A | ||||||||||||||||||
$ | $ | $ |
Project (% owned) | # of Buildings | Market | Estimated Sq. Ft. | Estimated Project Cost(1) | GAAP Investment Balance as of 9/30/2023(2) | LXP Amount Funded as of 9/30/2023(3) | Actual/Estimated Base Building Completion Date | % Leased as of 9/30/2023 | Estimated Placed in Service Date | ||||||||||||||||||||
Development Projects Leased: | |||||||||||||||||||||||||||||
ETNA Cubes ( | Columbus, OH | $ | $ | $ | 3Q 2022 | % | 4Q 2023 (4) | ||||||||||||||||||||||
Smith Farms ( | Greenville-Spartanburg, SC | 2Q 2023 | % | 4Q 2023 | |||||||||||||||||||||||||
Cotton 303 ( | Phoenix, AZ | 4Q 2023 | % | 1Q 2024 | |||||||||||||||||||||||||
$ | $ | $ | |||||||||||||||||||||||||||
Development Projects Available for Lease: | |||||||||||||||||||||||||||||
Ocala ( | Central Florida | $ | $ | $ | 1Q 2023 | % | — | ||||||||||||||||||||||
Mt. Comfort ( | Indianapolis, IN | 1Q 2023 | % | — | |||||||||||||||||||||||||
Smith Farms ( | Greenville-Spartanburg, SC | 2Q 2023 | % | — | |||||||||||||||||||||||||
South Shore ( | Central Florida | 2Q 2023 - 3Q 2023 | (5) | — | |||||||||||||||||||||||||
$ | $ | $ | |||||||||||||||||||||||||||
$ | $ | $ |
Project (% owned) | Market | Approx. Developable Acres | GAAP Investment Balance as of 9/30/2023 | LXP Amount Funded as of 9/30/2023 (1) | ||||||||||||||||||||||
Reems & Olive ( | Phoenix, AZ | $ | $ | |||||||||||||||||||||||
Mt. Comfort Phase II ( | Indianapolis, IN | |||||||||||||||||||||||||
ATL Fairburn JV ( | Atlanta, GA | |||||||||||||||||||||||||
$ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Assets: | |||||||||||
Real estate, at cost | $ | $ | |||||||||
Real estate, intangible assets | |||||||||||
Accumulated depreciation and amortization | ( | ( | |||||||||
Right-of-use assets | |||||||||||
Other | |||||||||||
$ | $ | ||||||||||
Liabilities: | |||||||||||
Accounts payable and other liabilities | $ | $ | |||||||||
Operating lease liabilities | |||||||||||
Deferred revenue | |||||||||||
Prepaid rent | |||||||||||
$ | $ |
Balance | Fair Value Measurements Using | |||||||||||||||||||||||||
Description | September 30, 2023 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||
Interest rate swap assets | $ | $ | $ | $ | ||||||||||||||||||||||
Balance | Fair Value Measurements Using | |||||||||||||||||||||||||
Description | December 31, 2022 | (Level 1) | (Level 2) | (Level 3) | ||||||||||||||||||||||
Interest rate swap assets | $ | $ | $ | $ | ||||||||||||||||||||||
As of September 30, 2023 | As of December 31, 2022 | ||||||||||||||||||||||
Carrying Amount | Fair Value | Carrying Amount | Fair Value | ||||||||||||||||||||
Assets | |||||||||||||||||||||||
Investment in a sales-type lease, net | $ | $ | $ | $ | |||||||||||||||||||
Liabilities | |||||||||||||||||||||||
Debt | $ | $ | $ | $ |
Percentage Ownership at | Investment Balance as of | Equity in earnings (losses) of non-consolidated entities | ||||||||||||||||||||||||
Investment | September 30, 2023 | September 30, 2023 | December 31, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||||||||||
NNN MFG Cold JV L.P. ("MFG Cold JV")(1) | $ | $ | $ | ( | $ | ( | ||||||||||||||||||||
NNN Office JV L.P. ("NNN JV")(2) | ||||||||||||||||||||||||||
Etna Park 70, LLC(3) | ( | ( | ||||||||||||||||||||||||
Etna Park East LLC(4) | ( | ( | ||||||||||||||||||||||||
BSH Lessee L.P.(5) | ||||||||||||||||||||||||||
$ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Mortgages and notes payable | $ | $ | |||||||||
Unamortized debt issuance costs | ( | ( | |||||||||
Mortgage notes payable, net | $ | $ |
Issue Date | September 30, 2023 | December 31, 2022 | Interest Rate | Maturity Date | Issue Price | |||||||||||||||||||||||||||
August 2021 | $ | $ | % | October 2031 | % | |||||||||||||||||||||||||||
August 2020 | % | September 2030 | % | |||||||||||||||||||||||||||||
May 2014 | % | June 2024 | % | |||||||||||||||||||||||||||||
Unamortized debt discount | ( | ( | ||||||||||||||||||||||||||||||
Unamortized debt issuance costs | ( | ( | ||||||||||||||||||||||||||||||
Senior notes payable, net | $ | $ |
Maturity Date | Interest Rate | ||||||||||
$ | July 2026 | SOFR + | |||||||||
$ | January 2025 | Term SOFR + |
Interest Rate Derivative | Number of Instruments | Notional | ||||||
Interest Rate Swaps | $ |
As of September 30, 2023 | As of December 31, 2022 | ||||||||||||||||||||||
Derivatives designated as hedging instruments: | Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | |||||||||||||||||||
Interest Rate Swaps | Other Assets | $ | Other Assets | $ | |||||||||||||||||||
Derivatives in Cash Flow | Amount of Gain Recognized in OCI on Derivatives September 30, | Amount of (Income) Loss Reclassified from Accumulated OCI into Income(1) September 30, | ||||||||||||||||||||||||
Hedging Relationships | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Interest Rate Swaps | $ | $ | $ | ( | $ | |||||||||||||||||||||
The Company's share of non-consolidated entity's interest rate cap | ( | |||||||||||||||||||||||||
Total | $ | $ | $ | ( | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||
Classification | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||
Fixed | $ | $ | $ | $ | ||||||||||||||||||||||
Sales-type lease income | ||||||||||||||||||||||||||
Variable(1) | ||||||||||||||||||||||||||
Total | $ | $ | $ | $ |
Operating | Sales-Type | |||||||
2023 - remainder | $ | $ | ||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter | ||||||||
Total | $ | $ | ||||||
Difference between undiscounted cash flow and present value | ( | |||||||
Investment in a sales-type lease | $ |
Nine Months Ended | ||||||||||||||
September 30, 2023 | September 30, 2022 | |||||||||||||
Weighted-average remaining lease term | ||||||||||||||
Operating leases (years) | ||||||||||||||
Weighted-average discount rate | ||||||||||||||
Operating leases | % | % |
Income Statement Classification | Fixed | Variable | Total | ||||||||||||||
2023: | |||||||||||||||||
Property operating | $ | $ | $ | ||||||||||||||
General and administrative | |||||||||||||||||
Total | $ | $ | $ | ||||||||||||||
2022: | |||||||||||||||||
Property operating | $ | $ | $ | ||||||||||||||
General and administrative | |||||||||||||||||
Total | $ | $ | $ |
Operating Leases | ||||||||
2023 - remainder | $ | |||||||
2024 | ||||||||
2025 | ||||||||
2026 | ||||||||
2027 | ||||||||
2028 | ||||||||
Thereafter | ||||||||
Total lease payments | ||||||||
Less: Imputed interest | ( | |||||||
Present value of lease liabilities | ||||||||
Less: Held for Sale | ( | |||||||
Present value of lease liabilities, excluding held for sale | $ |
For the Nine Months Ended September 30, 2023 | |||||||||||||||||||||||
Balance at Beginning of Period | Write-Offs | General Allowance | Balance at End of Period | ||||||||||||||||||||
Allowance for credit loss | $ | $ | $ | ( | $ |
As of September 30, 2023 | |||||||||||||||||||||||
Amortized cost | Allowance | Net Investment | Allowance as a % of Amortized Cost | ||||||||||||||||||||
Investment in a sales-type lease | $ | $ | ( | $ | % |
Nine Months Ended September 30, | ||||||||||||||
2023 | 2022 | |||||||||||||
Balance at beginning of period | $ | $ | ( | |||||||||||
Other comprehensive income before reclassifications | ||||||||||||||
Amounts of (income) loss reclassified from accumulated other comprehensive income (loss) to interest expense | ( | |||||||||||||
Balance at end of period | $ | $ |
Net Income Attributable to Shareholders and Transfers from Noncontrolling Interests | |||||||||||
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Net income attributable to LXP Industrial Trust shareholders | $ | $ | |||||||||
Transfers from noncontrolling interests: | |||||||||||
Increase in additional paid-in-capital for redemption of noncontrolling OP units | |||||||||||
Change from net income attributable to shareholders and transfers from noncontrolling interests | $ | $ |
Market | Square Feet | Initial Capitalized Cost (millions) | Acquired/Placed in Service Date | Approximate Lease Term (years) | % Leased | ||||||||||||
Phoenix, Arizona | 392,278 | $ | 37.2 | March 2023 | 10.0 | 100% | |||||||||||
Dallas, Texas | 124,450 | 15.0 | July 2023 | N/A | —% | ||||||||||||
516,728 | $ | 52.2 |
Issue Date | Face Amount (millions) | Interest Rate | Maturity Date | Issue Price | ||||||||||||||||||||||
August 2021 | $ | 400.0 | 2.375 | % | October 2031 | 99.758 | % | |||||||||||||||||||
August 2020 | 400.0 | 2.70 | % | September 2030 | 99.233 | % | ||||||||||||||||||||
May 2014 | 198.9 | 4.40 | % | June 2024 | 99.883 | % | ||||||||||||||||||||
Senior note payable | $ | 998.9 |
Maturity Date | Current Interest Rate | ||||||||||
$600.0 Million Revolving Credit Facility(1) | July 2026 | SOFR + 0.85% | |||||||||
$300.0 Million Term Loan(2) | January 2025 | Term SOFR + 1.00% |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Total cash base rent | $ | 61,738 | $ | 59,637 | $ | 176,270 | $ | 169,634 | |||||||||||||||
Tenant reimbursements | 12,200 | 10,000 | 33,852 | 28,566 | |||||||||||||||||||
Property operating expenses | (12,595) | (11,065) | (35,322) | (30,581) | |||||||||||||||||||
Same-store NOI | $ | 61,343 | $ | 58,572 | $ | 174,800 | $ | 167,619 |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income | $ | 12,901 | $ | 23,591 | $ | 16,436 | $ | 76,037 | |||||||||||||||
Interest and amortization expense | 10,965 | 11,255 | 32,502 | 32,758 | |||||||||||||||||||
Provision for income taxes | 220 | 271 | 646 | 951 | |||||||||||||||||||
Depreciation and amortization | 45,570 | 44,946 | 137,304 | 134,645 | |||||||||||||||||||
General and administrative | 8,614 | 9,060 | 26,866 | 29,093 | |||||||||||||||||||
Transaction costs | — | 1 | 4 | 56 | |||||||||||||||||||
Non-operating/advisory fee income | (1,514) | (1,630) | (4,059) | (4,616) | |||||||||||||||||||
Gains on sales of properties | (7,154) | (24,841) | (15,033) | (52,951) | |||||||||||||||||||
Impairment charges | — | 628 | 16,490 | 2,457 | |||||||||||||||||||
Selling profit from sales-type lease | — | — | — | (9,314) | |||||||||||||||||||
Debt satisfaction losses, net | — | 119 | — | 119 | |||||||||||||||||||
Equity in (earnings) losses of non-consolidated entities | 5 | 1,340 | (2,585) | (15,580) | |||||||||||||||||||
Lease termination income, net | — | (238) | — | (238) | |||||||||||||||||||
Straight-line adjustments | (2,213) | (2,078) | (7,938) | (8,893) | |||||||||||||||||||
Lease incentives | 109 | 128 | 314 | 391 | |||||||||||||||||||
Amortization of above/below market leases | (449) | (455) | (1,347) | (1,416) | |||||||||||||||||||
Sales-types lease adjustments | (556) | 13 | (1,654) | — | |||||||||||||||||||
NOI | $ | 66,498 | $ | 62,110 | $ | 197,946 | $ | 183,499 | |||||||||||||||
Less NOI: | |||||||||||||||||||||||
Acquisitions, developments and dispositions | (5,155) | (3,538) | (23,146) | (15,880) | |||||||||||||||||||
Same-Store NOI | $ | 61,343 | $ | 58,572 | $ | 174,800 | $ | 167,619 |
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||||||||||||||||||
FUNDS FROM OPERATIONS: | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||
Basic and Diluted: | ||||||||||||||||||||||||||||||||
Net income attributable to common shareholders | $ | 11,039 | $ | 21,776 | $ | 10,878 | $ | 70,441 | ||||||||||||||||||||||||
Adjustments: | ||||||||||||||||||||||||||||||||
Depreciation and amortization - real estate | 44,596 | 44,227 | 134,484 | 132,600 | ||||||||||||||||||||||||||||
Impairment charges - real estate, including our share of non-consolidated entities | — | 1,256 | 16,490 | 7,299 | ||||||||||||||||||||||||||||
Noncontrolling interests - OP units | 15 | 11 | (63) | 147 | ||||||||||||||||||||||||||||
Amortization of leasing commissions | 974 | 719 | 2,820 | 2,045 | ||||||||||||||||||||||||||||
Joint venture and noncontrolling interest adjustment | 1,839 | 2,612 | 6,168 | 8,585 | ||||||||||||||||||||||||||||
Gains on sales of properties, including our share of non-consolidated entities | (8,164) | (24,842) | (20,818) | (75,803) | ||||||||||||||||||||||||||||
FFO available to common shareholders and unitholders - basic | 50,299 | 45,759 | 149,959 | 145,314 | ||||||||||||||||||||||||||||
Preferred dividends | 1,573 | 1,573 | 4,718 | 4,718 | ||||||||||||||||||||||||||||
Amount allocated to participating securities | 52 | 41 | 186 | 151 | ||||||||||||||||||||||||||||
FFO available to all equityholders and unitholders - diluted | 51,924 | 47,373 | 154,863 | 150,183 | ||||||||||||||||||||||||||||
Selling profit from sales-type lease(1) | — | — | — | (9,314) | ||||||||||||||||||||||||||||
Allowance for credit losses | 2 | — | (29) | — | ||||||||||||||||||||||||||||
Debt satisfaction losses, net, including our share of non-consolidated entities | — | 119 | — | 1,614 | ||||||||||||||||||||||||||||
Non-recurring costs(2) | — | 640 | 4 | 2,629 | ||||||||||||||||||||||||||||
Noncontrolling interest adjustments | — | — | 1 | — | ||||||||||||||||||||||||||||
Adjusted Company FFO available to all equityholders and unitholders - diluted | $ | 51,926 | $ | 48,132 | $ | 154,839 | $ | 145,112 |
Per Common Share and Unit Amounts | ||||||||||||||||||||||||||
Basic: | ||||||||||||||||||||||||||
FFO | $ | 0.17 | $ | 0.16 | $ | 0.52 | $ | 0.51 | ||||||||||||||||||
Diluted: | ||||||||||||||||||||||||||
FFO | $ | 0.18 | $ | 0.17 | $ | 0.52 | $ | 0.52 | ||||||||||||||||||
Adjusted Company FFO | $ | 0.18 | $ | 0.17 | $ | 0.52 | $ | 0.50 |
Weighted-Average Common Shares: | ||||||||||||||||||||||||||||||||
Basic: | ||||||||||||||||||||||||||||||||
Weighted-average common shares outstanding - basic EPS | 290,291,609 | 277,535,717 | 290,187,124 | 281,559,058 | ||||||||||||||||||||||||||||
Operating partnership units(3) | 825,342 | 846,858 | 828,653 | 859,226 | ||||||||||||||||||||||||||||
Weighted-average common shares outstanding - basic FFO | 291,116,951 | 278,382,575 | 291,015,777 | 282,418,284 | ||||||||||||||||||||||||||||
Diluted: | ||||||||||||||||||||||||||||||||
Weighted-average common shares outstanding - diluted EPS | 291,253,005 | 278,521,946 | 291,148,809 | 284,609,950 | ||||||||||||||||||||||||||||
Unvested share-based payment awards | — | — | — | 23,175 | ||||||||||||||||||||||||||||
Preferred shares - Series C | 4,710,570 | 4,710,570 | 4,710,570 | 4,710,570 | ||||||||||||||||||||||||||||
Weighted-average common shares outstanding - diluted FFO | 295,963,575 | 283,232,516 | 295,859,379 | 289,343,695 |
Period | (a) Total Number of Shares/Units Purchased | (b) Average Price Paid for Share/Unit | (c) Total Number of Shares/Units Purchased as Part of Publicly Announced Plans or Programs (1) | (d) Maximum Number of Shares/Units That May Yet Be Purchased Under the Plans or Programs (1) | ||||||||||||||||||||||
July 1 - 31, 2023 | — | $ | — | — | 6,874,241 | |||||||||||||||||||||
August 1 - 31, 2023 | — | $ | — | — | 6,874,241 | |||||||||||||||||||||
September 1 - 30, 2023 | — | $ | — | — | 6,874,241 | |||||||||||||||||||||
Third quarter 2023 | — | $ | — | — | 6,874,241 |
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101.INS | — | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (2, 5) | ||||||||||||
101.SCH | — | Inline XBRL Taxonomy Extension Schema (2, 5) | ||||||||||||
101.CAL | — | Inline XBRL Taxonomy Extension Calculation Linkbase (2, 5) | ||||||||||||
101.DEF | — | Inline XBRL Taxonomy Extension Definition Linkbase Document (2, 5) | ||||||||||||
101.LAB | — | Inline XBRL Taxonomy Extension Label Linkbase Document (2, 5) | ||||||||||||
101.PRE | — | Inline XBRL Taxonomy Extension Presentation Linkbase Document (2, 5) |
LXP Industrial Trust | |||||||||||
Date: | October 31, 2023 | By: | /s/ T. Wilson Eglin | ||||||||
T. Wilson Eglin | |||||||||||
Chief Executive Officer and President (principal executive officer) | |||||||||||
Date: | October 31, 2023 | By: | /s/ Beth Boulerice | ||||||||
Beth Boulerice | |||||||||||
Chief Financial Officer, Executive Vice President and Treasurer (principal financial officer) |
October 31, 2023 | ||
/s/ T. Wilson Eglin | ||
T. Wilson Eglin Chief Executive Officer |
October 31, 2023 | ||
/s/ Beth Boulerice | ||
Beth Boulerice | ||
Chief Financial Officer |
/s/ T. Wilson Eglin | ||
T. Wilson Eglin Chief Executive Officer | ||
October 31, 2023 |
/s/ Beth Boulerice | ||
Beth Boulerice | ||
Chief Financial Officer | ||
October 31, 2023 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Equity: | ||
Sales-type lease, allowance for credit loss | $ 64 | $ 93 |
Preferred shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Preferred shares, authorized shares (in shares) | 100,000,000 | 100,000,000 |
Series C Cumulative Convertible Preferred, liquidation preference | $ 96,770 | $ 96,770 |
Series C Cumulative Convertible Preferred, shares issued (in shares) | 1,935,400 | 1,935,400 |
Series C Cumulative Convertible Preferred, shares outstanding (in shares) | 1,935,400 | 1,935,400 |
Common shares, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common shares, authorized shares (in shares) | 600,000,000 | 600,000,000 |
Common shares, shares issued (in shares) | 292,611,107 | 291,719,310 |
Common shares, outstanding (in shares) | 292,611,107 | 291,719,310 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 12,901 | $ 23,591 | $ 16,436 | $ 76,037 |
Other comprehensive income: | ||||
Change in unrealized gain/(loss) on interest rate swaps, net | (1,423) | 7,028 | (2,474) | 22,844 |
Company's share of other comprehensive income (loss) of non-consolidated entities | (415) | 1,182 | (853) | 1,182 |
Other comprehensive income (loss) | (1,838) | 8,210 | (3,327) | 24,026 |
Comprehensive income | 11,063 | 31,801 | 13,109 | 100,063 |
Comprehensive income attributable to noncontrolling interests | (237) | (201) | (654) | (727) |
Comprehensive income attributable to LXP Industrial Trust shareholders | $ 10,826 | $ 31,600 | $ 12,455 | $ 99,336 |
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (Parenthetical) - $ / shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Statement of Stockholders' Equity [Abstract] | ||||
Dividends/distributions (in dollars per share) | $ 0.125 | $ 0.12 | $ 0.375 | $ 0.36 |
The Company and Financial Statement Presentation |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The Company and Financial Statement Presentation | The Company and Financial Statement Presentation LXP Industrial Trust (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Company”) is a Maryland real estate investment trust (“REIT”) that owns a portfolio of equity investments focused on single-tenant industrial properties. As of September 30, 2023, the Company had ownership interests in approximately 115 consolidated real estate properties, located in 19 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries. The Company believes it has qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain activities from which it was previously precluded in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS are subject to federal income taxes on the income from these activities. The Company conducts its operations indirectly through (1) property owner subsidiaries, which are single purpose entities, (2) a wholly-owned TRS, Lexington Realty Advisors, Inc., and (3) joint ventures. Property owner subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan agreements secured by properties in which the Company has an interest and lender subsidiaries are lenders under loan agreements where the Company made an investment in a loan asset, but in all cases are separate and distinct legal entities. Each property owner subsidiary is a separate legal entity that maintains separate books and records. The assets and credit of each property owner subsidiary with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other property owner subsidiary or any other affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors. The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three and nine months ended September 30, 2023 have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 16, 2023 (“Annual Report”). Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP. As of September 30, 2023, the Company had interests in seven consolidated joint ventures with developers, consisting of five ongoing development projects and two land joint ventures with ownership interests ranging from 80% to 95.5%. Each joint venture owns land parcels with the intention of developing industrial properties. The Company determined that the joint ventures are variable interest entities in accordance with the applicable accounting guidance. The Company concluded that it is the primary beneficiary in each of the joint ventures and as such, the joint ventures' operations are consolidated in the Company’s unaudited condensed consolidated financial statements. In addition, the Company is the primary beneficiary of certain other VIEs as it has a controlling financial interest in these entities. Lepercq Corporate Income Fund L.P. ("LCIF") is a consolidated VIE and the Company, as of September 30, 2023, had an approximate 99% ownership interest. The assets of each VIE are only available to satisfy such VIE's respective liabilities. Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:
In addition, the Company acquires, from time to time, properties using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a "reverse 1031 exchange") and, as such, the properties are in the possession of an Exchange Accommodation Titleholder ("EAT") until the reverse 1031 exchange is completed. The EAT is classified as a VIE as it is a “thinly capitalized” entity. The Company consolidates the EAT because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the EAT's economic performance and can collapse the 1031 exchange structure at any time. The assets of the EAT primarily consist of leased property (net real estate and intangibles). Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of current and deferred accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments, valuation of derivative financial instruments, valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee, the determination of the term and fair value of sales-type leases, the estimated credit losses for investments in sales-type leases and the useful lives of long-lived assets. Actual results could differ materially from those estimates. Recently Issued Accounting Guidance. In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 is optional, and applies for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR and may be elected over time as reference rate reform activities occur. As of March 31, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. On July 5, 2022, the Company transitioned its benchmark interest rate for its term loan from LIBOR to the Secured Overnight Financing Rate, or SOFR. The Company adopted ASU 2020-04 and the adoption of this standard did not have an impact on the Company's unaudited condensed consolidated financial statements. During the quarter, the Company's Trust Preferred Securities transitioned from LIBOR to SOFR. The impact on the financial statements was immaterial as a result of the transition.
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share | Earnings Per Share A portion of the Company's non-vested share-based payment awards are considered participating securities and as such, the Company is required to use the two-class method for the computation of basic and diluted earnings per share. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The non-vested share-based payment awards are not allocated losses as the awards do not have a contractual obligation to share in losses of the Company. The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2023 and 2022:
For per common share amounts, generally all incremental shares are considered anti-dilutive for periods that have a loss from continuing operations attributable to common shareholders. In addition, other common share equivalents may be anti-dilutive in certain periods. Calculation of dilutive earnings requires certain potentially dilutive shares to be excluded when the inclusion of such shares would be anti-dilutive. The following table summarizes the potentially dilutive shares excluded from the dilutive earnings per share calculation as the inclusion of such shares would be anti-dilutive:
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Investments in Real Estate |
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Real Estate [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Real Estate | Investments in Real Estate The Company acquired or completed and placed in service the following warehouse/distribution facilities during the nine months ended September 30, 2023:
(1) Initial cost basis excludes certain remaining costs, including developer partner promote, if any. In 2022, the Company purchased the remaining 13% of equity owned by a noncontrolling interest in the Fairburn, Georgia warehouse/distribution facility for $27,958. As the Company previously consolidated its interest in the joint venture which owned the property, the acquisition of the noncontrolling ownership interest was recorded as an equity transaction with the difference between the purchase price and carrying balance of $25,058 recorded as a reduction in additional paid-in-capital. As of September 30, 2023, the details of the development arrangements outstanding are as follows (in $000's, except square feet):
(1) Estimated project cost includes estimated tenant improvements and leasing costs and excludes potential developer partner promote, if any. (2) Excludes leasing costs. (3) Excludes noncontrolling interests' share. (4) Subsequent to September 30, 2023, property placed into service. (5) Subsequent to September 30, 2023, 57,690 square feet was leased for a five-year term. As of September 30, 2023, the Company's aggregate investment in development arrangements was $380,446, which included capitalized interest of $8,170 for the nine months ended September 30, 2023 and is presented as investments in real estate under construction in the accompanying unaudited condensed consolidated balance sheet. For the nine months ended September 30, 2022, capitalized interest for development arrangements was $4,888. As of September 30, 2023, the details of the land held for industrial development are as follows (in $000's, except acres):
(1) Excludes noncontrolling interests' share.
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Dispositions and Impairment |
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Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dispositions and Impairment | Dispositions and Impairment During the nine months ended September 30, 2023 and 2022, the Company disposed of its interests in various properties for an aggregate gross disposition price of $75,980 and $147,345, respectively, and recognized aggregate gains on sales of properties of $15,033 and $52,951, respectively. The Company had three properties classified as held for sale at September 30, 2023 and December 31, 2022, respectively. Assets and liabilities of the held for sale properties at September 30, 2023 and December 31, 2022 consisted of the following:
The Company assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability, change in the estimated holding period of the asset, the potential sale or transfer of the property in the near future and changes in economic conditions. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value and the Company estimates that its cost will not be recovered. During the nine months ended September 30, 2023, the Company recognized aggregate impairment charges of $16,490 due to potential property sales. The Company recognized an impairment charge on real estate of $2,457 during the nine months ended September 30, 2022 due to vacancy at the property.
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Fair Value Measurements |
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Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value Measurements | Fair Value Measurements The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2023 and December 31, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall:
The majority of the inputs used to value the Company's interest rate swaps fall within Level 2 of the fair value hierarchy, such as observable market interest rate curves; however, the credit valuation associated with the interest rate swaps utilizes Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2023 and December 31, 2022, the Company determined that the credit valuation adjustment relative to the overall interest rate swaps was not significant. As a result, all interest rate swaps have been classified in Level 2 of the fair value hierarchy. The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments, as of September 30, 2023 and December 31, 2022:
The fair value of the Company's investment in a sales-type lease, net is primarily estimated utilizing Level 3 inputs by using a discounted cash flow analysis and an estimate of the unguaranteed residual value. The fair value of the Company's debt is primarily estimated utilizing Level 3 inputs by using a discounted cash flow analysis, based upon estimates of market interest rates. The Company determines the fair value of its Senior Notes payable using market prices. The inputs used in determining the fair value of these notes are categorized as Level 1 due to the fact that the Company uses quoted market rates to value these instruments. However, the inputs used in determining the fair value could be categorized as Level 2 if trading volumes are low. Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts. Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Company estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.
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Investments in Non-Consolidated Entities |
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Noncontrolling Interest [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Investments in Non-Consolidated Entities | Investments in Non-Consolidated Entities Below is a schedule of the Company's investments in non-consolidated entities:
(1) MFG Cold JV is a joint venture formed in 2021 that owns special purpose industrial properties formerly owned by the Company. (2) NNN JV is a joint venture formed in 2018 that owns office properties formerly owned by the Company. During 2023 and 2022, NNN JV sold one and three assets, respectively, and the Company recognized its share of aggregate gains on sale of $1,010 and $22,896, respectively, within equity in earnings of non-consolidated entities within its unaudited condensed consolidated statements of operations. (3) Joint venture formed in 2017 with a developer entity to acquire a parcel of land. In the second quarter of 2023, the joint venture commenced development of a 250,020 square foot industrial speculative development project for an estimated cost of $29,200. In July 2023, the Company, through a wholly-owned subsidiary entered into an agreement to fund all of the construction costs to complete the project until a point at which the portion of the improved land can be sub-divided and sold to the Company. As of September 30, 2023, the Company paid approximately $8,500 which is accounted for as a deposit on the anticipated purchase of the property. The deposit is included in other assets within the unaudited condensed consolidated balance sheet. (4) Joint venture formed in 2019 with a developer entity to acquire a parcel of land. (5) A joint venture investment which sold its sole single-tenant, net-leased asset in January 2023 and the Company recognized its share of the gain on sale of $4,791 within equity in earnings of non-consolidated entities within its unaudited condensed consolidated statements of operations. The Company earns advisory fees from certain of these non-consolidated entities for services related to acquisitions, asset management and debt placement. Advisory fees earned from these non-consolidated investments for the nine months ended September 30, 2023 and 2022 were $3,328 and $4,263, respectively.
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Debt |
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Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt The Company had the following mortgages and notes payable outstanding as of September 30, 2023 and December 31, 2022:
Interest rates, including imputed rates on mortgages and notes payable, ranged from 3.5% to 4.3%, at September 30, 2023 and December 31, 2022, respectively, and all mortgages and notes payable mature between 2023 and 2031 as of September 30, 2023. The weighted-average interest rate at September 30, 2023 and December 31, 2022 was approximately 4.0%, respectively. The Company had the following senior notes outstanding as of September 30, 2023 and December 31, 2022:
Each series of the senior notes is unsecured and requires payment of interest semi-annually in arrears. The Company may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus any potential make-whole premium. The Company has an unsecured credit agreement with KeyBank National Association, as agent. The maturity dates and interest rates as of September 30, 2023, are as follows:
(1) Maturity date of the revolving credit facility can be extended to July 2027, subject to certain conditions. The interest rate includes a 0.10% adjustment. The interest rate spread ranges from 0.725% to 1.400%, and the revolving credit facility allows for further reductions upon the achievement of to-be-determined sustainability metrics. At September 30, 2023, the Company had no borrowings outstanding and availability of $600,000, subject to covenant compliance. (2) The Term SOFR portion of the interest rate was swapped to obtain a current fixed rate of 2.722% per annum. The aggregate unamortized debt issuance costs for the term loan was $666 and $1,041 as of September 30, 2023 and December 31, 2022, respectively. The Company was compliant with all applicable financial covenants contained in its corporate-level debt agreements at September 30, 2023. During 2007, the Company issued $200,000 original principal amount of Trust Preferred Securities. The Trust Preferred Securities, which are classified as debt, are due in 2037, are open for redemption at the Company's option and bear interest at a variable rate of three-month SOFR plus a 0.26% adjustment plus a spread of 170 basis points through maturity. The interest rate at September 30, 2023 was 7.331%. As of September 30, 2023 and December 31, 2022, there was $129,120 original principal amount of Trust Preferred Securities outstanding and $1,351 and $1,426, respectively, of unamortized debt issuance costs. The variable rate transitioned from LIBOR to SOFR after June 30, 2023. The Company capitalized $8,447 and $4,927 of interest expense for the nine months ended September 30, 2023 and 2022, respectively.
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Derivatives and Hedging Activities |
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivatives and Hedging Activities | Derivatives and Hedging Activities Risk Management Objective of Using Derivatives. The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the type, amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash receipts and its known or expected cash payments principally related to the Company's investments and borrowings. Cash Flow Hedges of Interest Rate Risk. The Company's objectives in using interest rate derivatives are to add stability to interest expense, to manage its exposure to interest rate movements and therefore manage its cash outflows as it relates to the underlying debt instruments. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy relating to certain of its variable rate debt instruments. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company did not incur any ineffectiveness during the nine months ended September 30, 2023 and 2022. During July 2022, the Company transitioned its four interest rate swap agreements with its counterparties to a benchmark rate of Term SOFR. The swaps were designated as cash flow hedges of the risk in variability attributable to changes in the Term SOFR swap rates on its $300,000 SOFR-indexed variable rate unsecured term loan. Accordingly, changes in fair value of the swaps are recorded in other comprehensive income (loss) and reclassified to earnings as interest becomes receivable or payable. The swaps expire coterminous with the maturity of the term loan in January 2025. During the next 12 months, the Company estimates that an additional $10,871 will be reclassified as a decrease in interest expense if the swaps remain outstanding. As of September 30, 2023, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the unaudited condensed consolidated balance sheets:
The table below presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2023 and 2022:
(1) Amounts reclassified from accumulated other comprehensive income (loss) to interest expense within the unaudited condensed consolidated statements of operations. Total interest expense presented in the unaudited condensed consolidated statements of operations, in which the effects of cash flow hedges are recorded was $32,502 and $32,758 for the nine months ended September 30, 2023 and 2022, respectively. The Company's agreements with the swap derivative counterparties contain provisions whereby if the Company defaults on the underlying indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of the swap derivative obligation. As of September 30, 2023, the Company had not posted any collateral related to the agreements.
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Lease Accounting |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Lease Accounting | Lease Accounting Lessor Operating Leases. The Company’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred. Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of the lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before. Accounting guidance under ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions. The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectible, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. The Company elected that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service included within rental revenue is CAM services provided as part of the Company’s real estate leases. ASC 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. For the nine months ended September 30, 2023, the Company incurred a nominal amount of costs that were not incremental to the execution of leases. For the nine months ended September 30, 2022, the Company incurred $30 of costs that were not incremental to the execution of leases. The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities. The Company does not have residual value guarantees on specific properties. Sales-Type Leases. As of September 30, 2023, the Company had one lease that qualified as a sales-type lease. The Company has one ground lease for a 100-acre industrial development land parcel located in the Phoenix, Arizona market that is classified as a sales-type lease. At the commencement date of the lease, the Company evaluated the lease classification and classified the lease as a sales-type lease. The lease contains a purchase option in the amount of $20.00 per land square foot starting on the second anniversary date of the lease and ending on the third anniversary date. The Company determined that the purchase option is not reasonably certain of being exercised. The lease met the sales-type lease criteria because the present value of the lease payments was equal to substantially all of the fair value of the underlying asset on the lease commencement date. For the nine months ended September 30, 2023, the interest income earned from sales-type leases of $5,546 is included in rental revenue in the unaudited condensed consolidated statements of operations. In 2022, the Company had one tenant that exercised the purchase option within their lease for an aggregate purchase option price of $28,000. The purchase option was not reasonably certain to be exercised at the commencement date of the lease, resulting in a modification of the operating lease. As a result of this modification to the lease, the Company re-evaluated the lease classification and classified the lease as a sales-type lease. The Company recognized an aggregate of $9,314 in selling profit from sales-type leases in its unaudited condensed consolidated statements of operations related to this transaction for the nine months ended September 30, 2022. The Company also earned $639 in interest income from this sales-type lease in 2022. Rental Revenue Classification. The following table presents the Company’s classification of rental revenue for its operating leases and sales-type lease for the three and nine months ended September 30, 2023 and 2022:
(1) Primarily comprised of tenant reimbursements. Future fixed rental receipts for operating and sales-type leases, assuming no new or re-negotiated leases as of September 30, 2023 were as follows:
The above minimum lease payments do not include reimbursements to be received from tenants for certain operating expenses and real estate taxes and do not include early termination payments provided for in certain leases, unless such payments are reasonably certain to be received. Certain leases allow for the tenant to terminate the lease if the property is deemed obsolete, as defined, and upon payment of a termination fee to the landlord, as stipulated in the lease. In addition, certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price. Lessee The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2023. The leases have remaining lease terms of up to 37 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred. The accounting guidance under ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate. The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases. Supplemental information related to operating leases is as follows:
The components of lease expense for the nine months ended September 30, 2023 and 2022 were as follows:
The Company recognized sublease income of $2,490 for the nine months ended September 30, 2023 and 2022, respectively. The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2023:
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Lease Accounting | Lease Accounting Lessor Operating Leases. The Company’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred. Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of the lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before. Accounting guidance under ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions. The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectible, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. The Company elected that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service included within rental revenue is CAM services provided as part of the Company’s real estate leases. ASC 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. For the nine months ended September 30, 2023, the Company incurred a nominal amount of costs that were not incremental to the execution of leases. For the nine months ended September 30, 2022, the Company incurred $30 of costs that were not incremental to the execution of leases. The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities. The Company does not have residual value guarantees on specific properties. Sales-Type Leases. As of September 30, 2023, the Company had one lease that qualified as a sales-type lease. The Company has one ground lease for a 100-acre industrial development land parcel located in the Phoenix, Arizona market that is classified as a sales-type lease. At the commencement date of the lease, the Company evaluated the lease classification and classified the lease as a sales-type lease. The lease contains a purchase option in the amount of $20.00 per land square foot starting on the second anniversary date of the lease and ending on the third anniversary date. The Company determined that the purchase option is not reasonably certain of being exercised. The lease met the sales-type lease criteria because the present value of the lease payments was equal to substantially all of the fair value of the underlying asset on the lease commencement date. For the nine months ended September 30, 2023, the interest income earned from sales-type leases of $5,546 is included in rental revenue in the unaudited condensed consolidated statements of operations. In 2022, the Company had one tenant that exercised the purchase option within their lease for an aggregate purchase option price of $28,000. The purchase option was not reasonably certain to be exercised at the commencement date of the lease, resulting in a modification of the operating lease. As a result of this modification to the lease, the Company re-evaluated the lease classification and classified the lease as a sales-type lease. The Company recognized an aggregate of $9,314 in selling profit from sales-type leases in its unaudited condensed consolidated statements of operations related to this transaction for the nine months ended September 30, 2022. The Company also earned $639 in interest income from this sales-type lease in 2022. Rental Revenue Classification. The following table presents the Company’s classification of rental revenue for its operating leases and sales-type lease for the three and nine months ended September 30, 2023 and 2022:
(1) Primarily comprised of tenant reimbursements. Future fixed rental receipts for operating and sales-type leases, assuming no new or re-negotiated leases as of September 30, 2023 were as follows:
The above minimum lease payments do not include reimbursements to be received from tenants for certain operating expenses and real estate taxes and do not include early termination payments provided for in certain leases, unless such payments are reasonably certain to be received. Certain leases allow for the tenant to terminate the lease if the property is deemed obsolete, as defined, and upon payment of a termination fee to the landlord, as stipulated in the lease. In addition, certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price. Lessee The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2023. The leases have remaining lease terms of up to 37 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred. The accounting guidance under ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate. The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases. Supplemental information related to operating leases is as follows:
The components of lease expense for the nine months ended September 30, 2023 and 2022 were as follows:
The Company recognized sublease income of $2,490 for the nine months ended September 30, 2023 and 2022, respectively. The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2023:
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Allowance for Credit Loss |
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Credit Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Allowance for Credit Loss | Allowance for Credit Loss As of September 30, 2023, the Company had a $64 credit loss allowance resulting from an investment in a sales-type lease. There were no allowances for credit losses in 2022. The activity for the credit loss allowance related to the sales-type lease is as follows:
As of September 30, 2023, the lessee in the sales-type lease remains current on their obligations to the Company and, therefore, the investment is not on non-accrual status. The following table details the investment in a sales-type lease as of September 30, 2023:
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Concentration of Risk |
9 Months Ended |
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Sep. 30, 2023 | |
Risks and Uncertainties [Abstract] | |
Concentration of Risk | Concentration of Risk The Company seeks to reduce its operating and leasing risks through the geographic diversification of its properties in target markets, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, 2023 and 2022, no single tenant represented greater than 10% of rental revenues. Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions.
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Equity |
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Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity | Equity Shareholders' Equity: At-The-Market Offering Program. The Company maintains an At-The-Market offering program ("ATM program") under which the Company can issue common shares, including through forward sales contracts. During the nine months ended September 30, 2023 and 2022, the Company did not sell shares under the ATM program. During the nine months ended September 30, 2022, the Company issued 3,649,023 common shares previously sold on a forward basis in the first quarter of 2021 on the maturity date of the contracts and received $38,492 of net proceeds. No shares were sold on a forward basis during the nine months ended September 30, 2023. During 2021, the Company amended the terms of its ATM program, under which the Company may, from time to time, sell up to $350,000 of common shares over the term of the program. As of September 30, 2023, common shares with an aggregate value of $294,985 remain available for issuance under the ATM program. Stock Based Compensation. During the nine months ended September 30, 2023 and 2022, the Company issued 70,072 and 47,505, respectively, of fully vested common shares to non-management members of the Company's Board of Trustees with a fair value of $714 and $616, respectively. Share Repurchase Program. In August 2022, the Company's Board of Trustees authorized the repurchase of up to an additional 10,000,000 common shares under the Company's share repurchase program, which does not have an expiration date. There were no common shares repurchased during the nine months ended September 30, 2023. During the nine months ended September 30, 2022, 11,702,074 common shares were repurchased and retired for an average price of $10.84 per share. As of September 30, 2023, 6,874,241 common shares remain available for repurchase under this authorization. The Company records a liability for repurchases that have not yet been settled as of the period end. There were no unsettled repurchases as of September 30, 2023. Series C Preferred Stock. The Company had 1,935,400 shares of Series C Cumulative Convertible Preferred Stock (“Series C Preferred”) outstanding at September 30, 2023. The shares have a dividend of $3.25 per share per annum, have a liquidation preference of $96,770, and the Company, if certain common share prices are achieved, can force conversion into common shares of the Company. As of September 30, 2023, each share was convertible into 2.4339 common shares. This conversion ratio may increase over time if the Company's common share dividend exceeds certain quarterly thresholds. If certain fundamental changes occur, holders may require the Company, in certain circumstances, to repurchase all or part of their shares of Series C Preferred. In addition, upon the occurrence of certain fundamental changes, the Company will, under certain circumstances, increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the shares of Series C Preferred becoming convertible into shares of the public acquiring or surviving company. The Company may, at the Company's option, cause shares of Series C Preferred to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company's common shares equals or exceeds 125% of the then prevailing conversion price of the Series C Preferred. Holders of shares of Series C Preferred generally have no voting rights, but will have limited voting rights if the Company fails to pay dividends for six or more quarters and under certain other circumstances. Upon conversion, the Company may choose to deliver the conversion value to investors in cash, common shares, or a combination of cash and common shares. A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:
Noncontrolling Interests. In conjunction with several of the Company's acquisitions in prior years, sellers were issued limited partner interests in LCIF (“OP units”) as a form of consideration. All OP units, other than OP units owned by the Company, are redeemable for common shares at certain times, at the option of the holders, and are generally not otherwise mandatorily redeemable by the Company. The OP units are classified as a component of permanent equity as the Company has determined that the OP units are not redeemable securities as defined by GAAP. Each OP unit is currently redeemable for approximately 1.13 common shares, subject to future adjustments. During the nine months ended September 30, 2023 and 2022, 9,944 and 33,378 common shares, respectively, were issued by the Company, in connection with OP unit redemptions, for an aggregate value of $49 and $177, respectively. As of September 30, 2023, there were approximately 731,000 OP units outstanding other than OP units owned by the Company. All OP units receive distributions in accordance with the LCIF partnership agreement. To the extent that the Company's dividend per common share is less than the stated distribution per OP unit per the LCIF partnership agreement, the distributions per OP unit are reduced by the percentage reduction in the Company's dividend per common share. No OP units have a liquidation preference. The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests:
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Related Party Transactions |
9 Months Ended |
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Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party TransactionsThere were no related party transactions other than those disclosed elsewhere in these unaudited condensed consolidated financial statements. |
Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In addition to the commitments and contingencies disclosed elsewhere, the Company has the following commitments and contingencies. The Company is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Company, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries. As of September 30, 2023, the Company had six ongoing consolidated development projects and expects to incur approximately $23,500 and $29,100 of costs during the remainder of 2023 and 2024, respectively, excluding noncontrolling interests' share, to substantially complete the construction and estimated tenant improvements and leasing costs of such projects. Etna Park 70, LLC, a joint venture in which the Company has a 90% ownership interest, commenced construction of an industrial facility estimated to cost $29,200. During the third quarter, the Company, through a wholly-owned subsidiary entered into an agreement to fund construction of the property until the land is subdivided. As of September 30, 2023, the Company expects to incur approximately $9,500 during the remainder of 2023 and 2024, respectively, to complete the development of the facility. As of September 30, 2023, the Company has interests in various industrial land parcels held for development. The Company is unable to estimate the timing of any required funding for the potential development projects on these parcels. The Company and LCIF are parties to a funding agreement under which the Company may be required to fund distributions made on account of LCIF's OP units. Pursuant to the funding agreement, the parties agreed that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, LXP Industrial Trust will fund the shortfall. Payments under the agreement will be made in the form of loans to LCIF and will bear interest at prevailing rates as determined by the Company in its discretion but, no less than the applicable federal rate. LCIF's right to receive these loans will expire if no OP units remain outstanding and all such loans are repaid. No amounts have been advanced under this agreement. From time to time, the Company is directly or indirectly involved in legal proceedings arising in the ordinary course of business. Management believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's business, financial condition and results of operations.
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Supplemental Disclosure of Statement of Cash Flow Information |
9 Months Ended |
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Sep. 30, 2023 | |
Supplemental Cash Flow Information [Abstract] | |
Supplemental Disclosure of Statement of Cash Flow Information | Supplemental Disclosure of Statement of Cash Flow Information In addition to disclosures discussed elsewhere, during the nine months ended September 30, 2023 and 2022, the Company paid $36,990 and $33,430, respectively, for interest and $975 and $1,218, respectively, for income taxes. During the nine months ended September 30, 2023 and 2022, the Company accrued additions for capital projects of $20,866 and $52,049, respectively.
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Subsequent Events |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent EventsSubsequent to September 30, 2023, the Company borrowed $25,000 on its revolving credit facility. |
Pay vs Performance Disclosure - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
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Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
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Pay vs Performance Disclosure | ||||
Net income attributable to LXP Industrial Trust shareholders | $ 12,664 | $ 23,390 | $ 15,782 | $ 75,310 |
Insider Trading Arrangements |
3 Months Ended |
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Sep. 30, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
The Company and Financial Statement Presentation (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Consolidation | Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. |
Variable Interest Entity | The Company consolidates wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP. |
Use of Estimates | Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of current and deferred accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments, valuation of derivative financial instruments, valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee, the determination of the term and fair value of sales-type leases, the estimated credit losses for investments in sales-type leases and the useful lives of long-lived assets. Actual results could differ materially from those estimates. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance. In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 is optional, and applies for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR and may be elected over time as reference rate reform activities occur. As of March 31, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. On July 5, 2022, the Company transitioned its benchmark interest rate for its term loan from LIBOR to the Secured Overnight Financing Rate, or SOFR. The Company adopted ASU 2020-04 and the adoption of this standard did not have an impact on the Company's unaudited condensed consolidated financial statements. During the quarter, the Company's Trust Preferred Securities transitioned from LIBOR to SOFR. The impact on the financial statements was immaterial as a result of the transition. |
Lessor | Lessor Operating Leases. The Company’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred. Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of the lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before. Accounting guidance under ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions. The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectible, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. The Company elected that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service included within rental revenue is CAM services provided as part of the Company’s real estate leases. ASC 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. For the nine months ended September 30, 2023, the Company incurred a nominal amount of costs that were not incremental to the execution of leases. For the nine months ended September 30, 2022, the Company incurred $30 of costs that were not incremental to the execution of leases. The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities. The Company does not have residual value guarantees on specific properties.
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Lessee | Lessee The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2023. The leases have remaining lease terms of up to 37 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred. The accounting guidance under ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate. The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases.
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The Company and Financial Statement Presentation (Tables) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Variable Interest Entities | Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:
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Earnings Per Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share Reconciliation | The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2023 and 2022:
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Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | The following table summarizes the potentially dilutive shares excluded from the dilutive earnings per share calculation as the inclusion of such shares would be anti-dilutive:
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Investments in Real Estate (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Real Estate [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Acquired Properties | The Company acquired or completed and placed in service the following warehouse/distribution facilities during the nine months ended September 30, 2023:
(1) Initial cost basis excludes certain remaining costs, including developer partner promote, if any.
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Schedule of Real Estate Properties | As of September 30, 2023, the details of the development arrangements outstanding are as follows (in $000's, except square feet):
(1) Estimated project cost includes estimated tenant improvements and leasing costs and excludes potential developer partner promote, if any. (2) Excludes leasing costs. (3) Excludes noncontrolling interests' share. (4) Subsequent to September 30, 2023, property placed into service. (5) Subsequent to September 30, 2023, 57,690 square feet was leased for a five-year term. As of September 30, 2023, the details of the land held for industrial development are as follows (in $000's, except acres):
(1) Excludes noncontrolling interests' share.
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Dispositions and Impairment (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Discontinued Operations and Disposal Groups [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disposal Groups, Including Discontinued Operations | Assets and liabilities of the held for sale properties at September 30, 2023 and December 31, 2022 consisted of the following:
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Fair Value Measurements (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value Measurement Inputs | The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2023 and December 31, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall:
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Schedule of Carrying Amounts and Fair Value of Financial Instruments | The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments, as of September 30, 2023 and December 31, 2022:
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Investments in Non-Consolidated Entities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Noncontrolling Interest [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investments in Non-Consolidated Entities | Below is a schedule of the Company's investments in non-consolidated entities:
(1) MFG Cold JV is a joint venture formed in 2021 that owns special purpose industrial properties formerly owned by the Company. (2) NNN JV is a joint venture formed in 2018 that owns office properties formerly owned by the Company. During 2023 and 2022, NNN JV sold one and three assets, respectively, and the Company recognized its share of aggregate gains on sale of $1,010 and $22,896, respectively, within equity in earnings of non-consolidated entities within its unaudited condensed consolidated statements of operations. (3) Joint venture formed in 2017 with a developer entity to acquire a parcel of land. In the second quarter of 2023, the joint venture commenced development of a 250,020 square foot industrial speculative development project for an estimated cost of $29,200. In July 2023, the Company, through a wholly-owned subsidiary entered into an agreement to fund all of the construction costs to complete the project until a point at which the portion of the improved land can be sub-divided and sold to the Company. As of September 30, 2023, the Company paid approximately $8,500 which is accounted for as a deposit on the anticipated purchase of the property. The deposit is included in other assets within the unaudited condensed consolidated balance sheet. (4) Joint venture formed in 2019 with a developer entity to acquire a parcel of land. (5) A joint venture investment which sold its sole single-tenant, net-leased asset in January 2023 and the Company recognized its share of the gain on sale of $4,791 within equity in earnings of non-consolidated entities within its unaudited condensed consolidated statements of operations.
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Debt (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Long-term Debt Instruments | The Company had the following mortgages and notes payable outstanding as of September 30, 2023 and December 31, 2022:
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Debt Instrument Redemption | The Company had the following senior notes outstanding as of September 30, 2023 and December 31, 2022:
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Schedule of Line of Credit Facilities | The maturity dates and interest rates as of September 30, 2023, are as follows:
(1) Maturity date of the revolving credit facility can be extended to July 2027, subject to certain conditions. The interest rate includes a 0.10% adjustment. The interest rate spread ranges from 0.725% to 1.400%, and the revolving credit facility allows for further reductions upon the achievement of to-be-determined sustainability metrics. At September 30, 2023, the Company had no borrowings outstanding and availability of $600,000, subject to covenant compliance. (2) The Term SOFR portion of the interest rate was swapped to obtain a current fixed rate of 2.722% per annum. The aggregate unamortized debt issuance costs for the term loan was $666 and $1,041 as of September 30, 2023 and December 31, 2022, respectively.
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Derivatives and Hedging Activities (Tables) |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | As of September 30, 2023, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
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Fair Value of the Company's Derivative Financial Instruments and Classification on the Balance Sheets | The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the unaudited condensed consolidated balance sheets:
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Effect of the Company's Derivative Financial Instruments on the Statements of Operation | The table below presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2023 and 2022:
(1) Amounts reclassified from accumulated other comprehensive income (loss) to interest expense within the unaudited condensed consolidated statements of operations.
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Lease Accounting (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Operating Lease, Lease Income | The following table presents the Company’s classification of rental revenue for its operating leases and sales-type lease for the three and nine months ended September 30, 2023 and 2022:
(1) Primarily comprised of tenant reimbursements.
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Lessor, Operating Lease, Payments to be Received, Maturity | Future fixed rental receipts for operating and sales-type leases, assuming no new or re-negotiated leases as of September 30, 2023 were as follows:
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Assets and Liabilities, Lessee | Supplemental information related to operating leases is as follows:
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Lease, Cost | The components of lease expense for the nine months ended September 30, 2023 and 2022 were as follows:
|
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Lessee, Operating Lease, Liability, Maturity | The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2023:
|
Allowance for Credit Loss (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Credit Loss [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales-type Lease, Net Investment in Lease, Allowance for Credit Loss | The activity for the credit loss allowance related to the sales-type lease is as follows:
The following table details the investment in a sales-type lease as of September 30, 2023:
|
Equity (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accumulated Other Comprehensive Income (Loss) | A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net | The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests:
|
The Company and Financial Statement Presentation - Schedule of Variable Interest Entities (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Real estate, net | $ 3,596,818 | $ 3,665,539 |
Total assets | 3,929,004 | 4,053,847 |
Total liabilities | 1,634,864 | 1,662,844 |
Variable Interest Entity, Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Real estate, net | 1,036,258 | 1,027,009 |
Total assets | 1,164,943 | 1,125,558 |
Total liabilities | $ 33,385 | $ 40,200 |
Earnings Per Share - Potentially Dilutive Shares (Details) - shares |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Unvested share-based payment awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive shares excluded from the computation of EPS (in shares) | 0 | 0 | 0 | 23,175 |
Preferred shares - Series C | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Potentially dilutive shares excluded from the computation of EPS (in shares) | 4,710,570 | 4,710,570 | 4,710,570 | 4,710,570 |
Investments in Real Estate - Schedule of Real Estate Acquisitions (Details) - Industrial Property $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Real Estate [Line Items] | |
Initial Cost Basis | $ 52,191 |
Land | 9,652 |
Building and Improvements | 42,539 |
Phoenix, AZ | Phoenix, AZ Industrial Property Expiring August 2033 | |
Real Estate [Line Items] | |
Initial Cost Basis | 37,173 |
Land | 7,552 |
Building and Improvements | 29,621 |
Dallas, Texas | Dallas Texas Industrial Property | |
Real Estate [Line Items] | |
Initial Cost Basis | 15,018 |
Land | 2,100 |
Building and Improvements | $ 12,918 |
Investments in Real Estate - Narrative (Details) - USD ($) $ in Thousands |
9 Months Ended | 12 Months Ended | |
---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
|
Real Estate [Line Items] | |||
Investments in real estate under construction | $ 380,446 | $ 361,924 | |
Capitalized interest | 8,447 | $ 4,927 | |
Real Estate Investment | |||
Real Estate [Line Items] | |||
Investments in real estate under construction | 380,446 | ||
Capitalized interest | $ 8,170 | $ 4,888 | |
ATL Fairburn JV | |||
Real Estate [Line Items] | |||
Additional ownership percentage purchased | 13.00% | ||
Payments to acquire interest in joint venture | $ 27,958 | ||
Noncontrolling interest in joint ventures | $ 25,058 |
Dispositions and Impairment - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | |||
---|---|---|---|---|---|
Sep. 30, 2023
USD ($)
property
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
property
|
Sep. 30, 2022
USD ($)
|
Dec. 31, 2022
property
|
|
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Number of real estate properties held for sale | property | 3 | 3 | 3 | ||
Impairment charges | $ 0 | $ 628 | $ 16,490 | $ 2,457 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Aggregate gross disposition price | $ 75,980 | $ 147,345 | 75,980 | 147,345 | |
Gain on sale of properties | $ 15,033 | $ 52,951 |
Dispositions and Impairment - Schedule of Properties Held for Sale (Details) - Disposal Group, Held-for-sale, Not Discontinued Operations - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Assets: | ||
Real estate, at cost | $ 12,277 | $ 131,557 |
Real estate, intangible assets | 7,872 | 9,942 |
Accumulated depreciation and amortization | (9,325) | (76,205) |
Right-of-use assets, net | 508 | 0 |
Other | 359 | 1,140 |
Assets held for sale | 11,691 | 66,434 |
Liabilities: | ||
Accounts payable and other liabilities | 36 | 637 |
Operating lease liabilities | 515 | 0 |
Deferred revenue | 84 | 143 |
Prepaid rent | 448 | 370 |
Liabilities held for sale | $ 1,083 | $ 1,150 |
Fair Value Measurements - Schedule Fair Value Measurements Inputs (Details) - Fair Value, Recurring - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap assets | $ 13,844 | $ 16,318 |
(Level 1) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap assets | 0 | 0 |
(Level 2) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap assets | 13,844 | 16,318 |
(Level 3) | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Interest rate swap assets | $ 0 | $ 0 |
Fair Value Measurements - Fair Value by Balance Sheet Grouping (Details) - (Level 3) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Carrying Amount | ||
Assets: | ||
Investment in a sales-type lease, net | $ 62,887 | $ 61,233 |
Liabilities | ||
Carrying value of debt | 1,480,811 | 1,488,051 |
Fair Value | ||
Assets: | ||
Investment in a sales-type lease, net | 63,580 | 60,984 |
Liabilities | ||
Fair value of debt | $ 1,273,011 | $ 1,293,239 |
Investments in Non-Consolidated Entities - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Schedule of Investments [Line Items] | ||||
Other revenue | $ 1,578 | $ 1,814 | $ 5,221 | $ 5,392 |
Investment Advice | Lexington Reality Advisors Inc | ||||
Schedule of Investments [Line Items] | ||||
Other revenue | $ 3,328 | $ 4,263 |
Debt - Schedule of Mortgages and Notes Payable (Details) - Mortgages and Notes Payable - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Mortgages and notes payable | $ 64,226 | $ 73,154 |
Unamortized debt issuance costs | (836) | (1,051) |
Mortgage notes payable, net | $ 63,390 | $ 72,103 |
Debt - Narrative (Details) - USD ($) |
9 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Dec. 31, 2022 |
Dec. 31, 2007 |
|
Debt Instrument [Line Items] | ||||
Capitalized interest | $ 8,447,000 | $ 4,927,000 | ||
Mortgages and Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Weighted average interest rate | 4.00% | 4.00% | ||
Trust Preferred Securities | Trust Preferred Securities Due in 2037 | ||||
Debt Instrument [Line Items] | ||||
Face amount of debt instrument | $ 200,000,000 | |||
Interest rate, effective percentage | 7.331% | |||
Principal amount outstanding | $ 129,120,000 | $ 129,120,000 | ||
Unamortized debt issuance costs | $ 1,351,000 | $ 1,426,000 | ||
Trust Preferred Securities | Trust Preferred Securities Due in 2037 | SOFR | ||||
Debt Instrument [Line Items] | ||||
Adjustment to interest rate | 0.26% | |||
Basis spread on variable rate | 1.70% | |||
Minimum | Mortgages and Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 3.50% | 3.50% | ||
Maximum | Mortgages and Notes Payable | ||||
Debt Instrument [Line Items] | ||||
Interest rate | 4.30% | 4.30% |
Debt - Schedule of Debt Instrument Redemption (Details) - Senior Notes - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Mortgages and notes payable | $ 998,932 | $ 998,932 |
Unamortized debt discount | (2,910) | (3,228) |
Unamortized debt issuance costs | (5,704) | (6,409) |
Notes payable, net | 990,318 | 989,295 |
August 2021 | ||
Debt Instrument [Line Items] | ||
Mortgages and notes payable | $ 400,000 | 400,000 |
Interest rate | 2.375% | |
Percentage of issuance price | 99.758% | |
August 2020 | ||
Debt Instrument [Line Items] | ||
Mortgages and notes payable | $ 400,000 | 400,000 |
Interest rate | 2.70% | |
Percentage of issuance price | 99.233% | |
May 2014 | ||
Debt Instrument [Line Items] | ||
Mortgages and notes payable | $ 198,932 | $ 198,932 |
Interest rate | 4.40% | |
Percentage of issuance price | 99.883% |
Derivatives and Hedging Activities - Narrative (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023
USD ($)
instrument
|
Sep. 30, 2022
USD ($)
|
Sep. 30, 2023
USD ($)
instrument
|
Sep. 30, 2022
USD ($)
|
|
Derivative [Line Items] | ||||
Gain (loss) to be reclassified during next 12 months | $ 10,871 | $ 10,871 | ||
Interest expense | $ 10,965 | $ 11,255 | $ 32,502 | $ 32,758 |
Interest Rate Swaps | Cash Flow Hedging | Designated as Hedging Instrument | ||||
Derivative [Line Items] | ||||
Number of instruments | instrument | 4 | 4 | ||
Notional amount | $ 300,000 | $ 300,000 |
Derivatives and Hedging Activities - Schedule of Derivative Instruments (Details) - Interest Rate Swaps - Designated as Hedging Instrument - Cash Flow Hedging $ in Thousands |
Sep. 30, 2023
USD ($)
instrument
|
---|---|
Derivative [Line Items] | |
Number of instruments | instrument | 4 |
Notional amount | $ | $ 300,000 |
Derivatives and Hedging Activities - Fair Value of the Company's Derivative Financial Instruments and Classification on the Balance Sheets (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Interest Rate Swaps | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative asset | $ 13,844 | $ 16,318 |
Derivatives and Hedging Activities - Effect of the Company's Derivative Financial Instruments on the Statements of Operation (Details) - Cash Flow Hedging - Designated as Hedging Instrument - Interest Expense - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Derivative [Line Items] | ||
Amount of gain (loss) recognized in OCI on derivatives | $ 5,264 | $ 21,316 |
Amount of (income) loss reclassified from accumulated OCI into income | (8,591) | 1,528 |
Interest Rate Swaps | ||
Derivative [Line Items] | ||
Amount of gain (loss) recognized in OCI on derivatives | 5,029 | 21,316 |
Amount of (income) loss reclassified from accumulated OCI into income | (7,503) | 1,528 |
Interest Rate Cap | ||
Derivative [Line Items] | ||
OCI, equity method investment, before reclassification, after tax | 235 | 0 |
OCI, equity method investment, reclassification, after tax | $ (1,088) | $ 0 |
Lease Accounting - Lease Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Leases [Abstract] | ||||
Fixed | $ 68,849 | $ 66,597 | $ 205,984 | $ 200,326 |
Sales-type lease income | 1,865 | 359 | 5,546 | 639 |
Variable | 13,130 | 11,318 | 40,796 | 33,784 |
Total | $ 83,844 | $ 78,274 | $ 252,326 | $ 234,749 |
Lease Accounting - Future Fixed Rental Receipts (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
---|---|
Operating | |
2023 - remainder | $ 66,047 |
2024 | 253,391 |
2025 | 235,340 |
2026 | 216,334 |
2027 | 180,019 |
2028 | 149,755 |
Thereafter | 500,883 |
Total | 1,601,769 |
Sales-Type | |
2023 - remainder | 1,307 |
2024 | 5,263 |
2025 | 5,473 |
2026 | 5,692 |
2027 | 5,920 |
2028 | 6,156 |
Thereafter | 733,006 |
Total | 762,817 |
Difference between undiscounted cash flow and present value | (699,866) |
Investment in a sales-type lease | $ 62,951 |
Lease Accounting - Supplemental Balance Sheet Information (Details) |
Sep. 30, 2023 |
Sep. 30, 2022 |
---|---|---|
Leases [Abstract] | ||
Weighted-average remaining lease term, operating leases (years) | 9 years 3 months 18 days | 9 years 4 months 24 days |
Weighted-average discount rate, operating leases | 4.10% | 4.00% |
Lease Accounting - Components of Lease Expense (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Lessee, Lease, Description [Line Items] | ||
Fixed | $ 3,801 | $ 3,801 |
Variable | 222 | 81 |
Total | 4,023 | 3,882 |
Property operating | ||
Lessee, Lease, Description [Line Items] | ||
Fixed | 2,657 | 2,657 |
Variable | 7 | 0 |
Total | 2,664 | 2,657 |
General and administrative | ||
Lessee, Lease, Description [Line Items] | ||
Fixed | 1,144 | 1,144 |
Variable | 215 | 81 |
Total | $ 1,359 | $ 1,225 |
Lease Accounting - Operating Lease Liabilities Maturity (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Leases [Abstract] | ||
2023 - remainder | $ 1,257 | |
2024 | 5,199 | |
2025 | 5,204 | |
2026 | 4,174 | |
2027 | 3,673 | |
2028 | 1,061 | |
Thereafter | 6,440 | |
Total lease payments | 27,008 | |
Less: Imputed interest | (5,224) | |
Present value of lease liabilities | 21,784 | |
Less: Held for Sale | (515) | |
Present value of lease liabilities, excluding held for sale | $ 21,269 | $ 25,118 |
Allowance for Credit Loss - Narrative (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
---|---|---|---|
Credit Loss [Abstract] | |||
Allowance | $ (64) | $ (93) | $ 0 |
Allowance for Credit Loss - Allowance for Sales-type Lease (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Sales-type Lease, Net Investment in Lease, Allowance for Credit Loss [Roll Forward] | |
Balance at Beginning of Period | $ 93 |
Write-Offs | 0 |
General Allowance | (29) |
Balance at End of Period | $ 64 |
Allowance for Credit Loss - Detail of Investment in Sales-Type Lease (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
Sep. 30, 2022
USD ($)
|
---|---|---|---|
Credit Loss [Abstract] | |||
Amortized cost | $ 62,951 | ||
Allowance | (64) | $ (93) | $ 0 |
Net Investment | $ 62,887 | $ 61,233 | |
Allowance as a % of Amortized Cost | 0.0010 |
Equity - Changes in Other Comprehensive Income (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | $ 2,391,003 | $ 2,323,228 |
Ending balance | 2,294,140 | 2,202,512 |
AOCI Attributable to Parent | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Beginning balance | 17,689 | (6,258) |
Ending balance | 14,362 | 17,768 |
Accumulated Gain (Loss), Cash Flow Hedge, Including Noncontrolling Interest | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Other comprehensive income before reclassifications | 5,264 | 22,469 |
Amounts of (income) loss reclassified from accumulated other comprehensive income (loss) to interest expense | $ (8,591) | $ 1,557 |
Equity - Effects of Changes in Noncontrolling Interests (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Equity [Abstract] | ||||
Net income attributable to LXP Industrial Trust shareholders | $ 12,664 | $ 23,390 | $ 15,782 | $ 75,310 |
Transfers from noncontrolling interests: | ||||
Increase in additional paid-in-capital for redemption of noncontrolling OP units | 49 | 177 | ||
Change from net income attributable to shareholders and transfers from noncontrolling interests | $ 15,831 | $ 75,487 |
Commitments and Contingencies (Details) $ in Thousands |
Sep. 30, 2023
USD ($)
project
|
---|---|
Etna Park 70 LLC | |
Real Estate Properties [Line Items] | |
Real estate investment property, estimated cost in 2023 | $ 9,500 |
Real estate investment property, estimated cost in 2024 | 9,500 |
Real estate investment property, estimated cost | $ 29,200 |
Consolidated properties | |
Real Estate Properties [Line Items] | |
Number of development projects | project | 6 |
Real estate investment property, estimated cost in 2023 | $ 23,500 |
Real estate investment property, estimated cost in 2024 | $ 29,100 |
Supplemental Disclosure of Statement of Cash Flow Information (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Supplemental Cash Flow Information [Abstract] | ||
Interest paid | $ 36,990 | $ 33,430 |
Income taxes paid, net | 975 | 1,218 |
Noncash increase to real estate investments under construction | $ 20,866 | $ 52,049 |
Subsequent Events - Narrative (Details) - USD ($) $ in Thousands |
1 Months Ended | 9 Months Ended | |
---|---|---|---|
Nov. 02, 2023 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Subsequent Event [Line Items] | |||
Revolving credit facility borrowings | $ 100,000 | $ 210,000 | |
Subsequent Event | Revolving Credit Facility Expires in July 2026 | Unsecured Revolving Credit Facility | |||
Subsequent Event [Line Items] | |||
Revolving credit facility borrowings | $ 25,000 |
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