Lxp Industrial Trust · NYSE:LXP
Lxp Industrial Trust — Lexington Corporate Properties Trust — Investor Presentation (December 2002)
32 slides from Lxp Industrial Trust's investor presentation, December 2002
Slide 1: Lexington Corporate Properties Trust December 2002
\ th LEXINGTON CORPORATE PROPERTIES TRUST December 2002
Slide 2: Safe Harbor
Safe Harbor This presentation contains forward-looking statements based upon current expectations that involve a number of business risks and uncertainties. The factors that could cause results to differ materially include “Risk Factors” described in the Company’s periodic filings with the SEC. 1
Slide 3: Company Overview
Company Overview
Slide 4: Lexington Corporate Properties Trust
Lexington Corporate Properties Trust Property Sector: Triple Net Lease Office & Industrial Ticker / Exchange: LXP / NYSE Recent Price: $15.31 Total Market Capitalization: $1.0 billion Total Assets Under Management: $1.4 billion FFO Multiple: 8.1x Annual Dividend / Yield: $1.32 /8.6% Debt /Total Mark
Slide 5: Investment Summary
Investment Summary w Benefits of Net Leases w Diversified Portfolio Reduces Risk w Seasoned Management Team w High Tenant Retention w Yield Enhancing Growth Strategies w Strong Growth Track Record 4
Slide 6: Benefits of Net Leases
Benefits of Net Leases w Tenant is responsible for operating expenses. w Insulates property owner from rising operating costs. w Provides predictable, growing cash flow with lower risk than multi-tenanted assets. w Long-term leases reduce short-term market risk. w Low vacancy risk with high tenant r
Slide 7: Tenant Credit Quality And Property Type Diversification
Tenant Credit Quality And Property Type Diversification Rent by Tenant Credit Rating(1) Rent by Property Type (2) Industrial Unrated Investment Grade 31.9% 38.2% Office 41.0% 55.8% Non- Investment Retail Grade 12.3% 20.8% (1) Includes Lexington's proportionate ownership interest in its joint venture
Slide 8: Geographic Diversification
Geographic Diversification Office 37 Industrial 35 Retail 29 101 Net Leased Properties in 30 States and Canada (not shown) Totaling Approximately 19.2 Million Square Feet 7
Slide 9: Modest Exposure To Maturing Leases
Modest Exposure To Maturing Leases* % of Revenue # of Leases 18% 18 16% 16 14% 14 12% 12 10% 10 8% 8 6% 6 4% 4 2% 2 0% 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 % of Revenue # of Leases * As of November 19, 2002 8
Slide 10: Kmart Distribution Facility – Warren, Ohio
Kmart Distribution Facility – Warren, Ohio w 1.7 Million Square Feet w One Of Eighteen Distribution Facilities w Supply Source For 167 Open Stores w Ranks Third By Distribution Volume 9
Slide 11: Asset Management
Asset Management Stable, long-term cash flow growth is achieved by a constant focus on: w Tenant relations and lease compliance. w Extending lease maturities. w Revenue enhancing property expansions. Since going public in 1993, Lexington has: w Renewed 22 of 23 expiring leases with existing tenants.
Slide 12: Tenant Retention
Tenant Retention Occupancy and lease renewal track record enhanced by: w Thorough understanding of site’s Lexington Portfolio Occupancy strategic importance to tenant’s 1997 – 2002 operations and long term plans. 100% 99% 100% 100% 98% 99% w Rigorous underwriting of real estate for 100% existing and
Slide 13: Growth Strategies/Acquisitions
Growth Strategies/Acquisitions
Slide 14: Yield Enhancing Growth Strategies
Yield Enhancing Growth Strategies w Capital redeployment w Joint ventures -$384 million in acquisitions -Enhanced returns on equity w Advised accounts -Fee income -Leveraging management skills w Property acquisitions using cash or securities w Corporate sale/leasebacks w Build-to-suits 13
Slide 15: Institutional Investment Programs
Institutional Investment Programs New York Common Retirement Fund w Purchase single tenant, office and industrial properties net leased to investment grade corporations nationwide. w Expanded in December 2001. w $600 million of acquisition capacity. AGAR International Holdings w Invest and manage $5
Slide 16: Acquisition Sourcing
Acquisition Sourcing With over $1.0 billion of net lease transactions currently under review, Lexington has an unparalleled ability to source acquisitions: w Benefit of 29 year track record as buyer within the net lease market. w Repeat business with developers of corporate build-to-suits. w Prefere
Slide 17: TNT Logistics
TNT Logistics Locations: Laurens, SC Temperance, MI Alberta, Canada Net Rentable SF: 2,035,000 Avg. Annual Rent (Net): $5.7 million Acquisition Cost: $48.8 million Acquisition Cap Rate: 11.68 % Mortgage Rate: 6.0% w “ A” credit/10 year net leases w Expandable by 1.0 million square feet w Acquired fr
Slide 18: Apria Healthcare Group, Inc.
Apria Healthcare Group, Inc. Location: Lake Forest, CA Net Rentable SF: 100,012 Avg. Annual Rent (Net): $1.8 million Acquisition Cost: $17.0 million Acquisition Cap Rate: 10.62% Mortgage Rate: 7.26% w The property was constructed as a build-to-suit for Apria Healthcare Group, Inc. (S&P: BBB-; Moody’
Slide 19: Quest Diagnostics, Inc.
Quest Diagnostics, Inc. Location: Valley Forge, PA Net Rentable SF: 109,281 Avg. Annual Rent (Net): $2.2 million Acquisition Cost: $19.5 million Acquisition Cap Rate: 11.1% Mortgage Rate: 7.13% w Quest Diagnostics (S&P: BBB-, Moody’s: Baa 3) is the nation's leading provider of diagnostic testing, in
Slide 20: Wells Fargo Home Mortgage
Wells Fargo Home Mortgage Location: Fort Mill, SC Net Rentable SF: 165,000 Avg. Annual Rent (Net): $2.1 million Acquisition Cost: $17.9 million Acquisition Cap Rate: 11.7% Mortgage Rate: 6.0% w Wells Fargo Home Mortgage (not rated) is one of the nation’s leading retail mortgage lenders and a subsidi
Slide 21: Performance
Performance 20
Slide 22: Seasoned Management Team
Seasoned Management Team Years of Experience E. Robert Roskind Chairman and Co-CEO 29 Richard J. Rouse Vice Chairman and Co-CEO 28 T. Wilson Eglin President and COO 15 Patrick Carroll CFO and Treasurer 15 William N. Cinnamond Senior Vice President 25 21
Slide 23: Portfolio Growth
Portfolio Growth ($ in millions) $1,400 $1,324 Owned Total Under Management $1,234 $1,160 $1,200 Acquisitions $1,036 $987 $1,000 2002 = $ 120 $766 $796 2001 = $ 219 $800 $718 $676 2000 = $ 268 $600 1999 = $ 143 $466 $339 1998 = $ 209 $400 1997 = $ 179 $200 1996 = $ 98 $0 1996 1997 1998 1999 2000 200
Slide 24: Capitalization
Capitalization ($ in millions) September 30, December 31, 2002 2001 2000 1999 Mortgages and notes payable $ 463.4 $ 455.8 $ 387.3 $ 372.3 Market value of equity $ 530.1 $ 493.1 $ 316.5 $ 240.2 Total market capitalization $ 993.5 $ 948.9 $ 703.8 $ 612.5 Debt to total market capitalization 46.6% 48.0%
Slide 25: Operating Results
Operating Results ($ in millions, except per share data) Nine Months Ended Fiscal Year Ended September 30, December 31, 2002 2001 2001 2000 Revenues $74.4 $60.9 $82.9 $80.0 Funds From Operations $46.1 $36.5 $50.3 $46.3 FFO Per Share/Unit $1.43 $1.33 $1.78 $1.76 Dividend Per Share $0.99 $0.97 $1.27 $
Slide 26: Growing Dividends & Funds From Operations
Growing Dividends & Funds From Operations $2.00 Dividends per share $1.87* FFO per share $1.76 $1.78 $1.75 $1.62 $1.50 $1.47 $1.36 $1.32 $1.27 $1.27 $1.25 $1.22 $1.22 $1.20 $1.22 $1.16 $1.17 $1.08 $1.10 $1.05 $1.00 $0.75 1994 1995 1996 1997 1998 1999 2000 2001 2002 *Company guidance is $1.87-$1.88 2
Slide 27: Total Return: Outperforming The Indexes
Total Return: Outperforming The Indexes* (Price appreciation plus dividend yield) 50% 40% 29.1% 30% 20% 16.8% 11.5% 10.4% S&P 500 10% 4.1% 4.0% 0.6% REITS 0% 5 years LXP -10% 2 years 1 Year -20% (-18.0%) (-18.9%) -30% * Source Bloomberg 26
Slide 28: Net Lease REITS - FFO Multiples
Net Lease REITS - FFO Multiples* 16 14 12.5 12 10.9 10.8 9.9 9.6 9.4 10 8.2 8 6 LXP O NNN CARS EPR USV WPC *As of November 15, 2002 27
Slide 29: Net Lease REITS – Dividend Yields
Net Lease REITS – Dividend Yields* 12% 11% 10% 9.6 9% 8.6 8.2 8.1 8% 7.2 7% 6.7 6.7 6% 5% 4% CARS O WPC EPR NNN LXP USV * As of November 15, 2002 28
Slide 30: Consistent Dividend Growth
Consistent Dividend Growth $1.40 $1.36 * $1.32 $1.32 $1.27 $1.28 $1.24 $1.22 $1.20 $1.20 $1.17 $1.16 $1.16 $1.12 $1.10 $1.08 $1.08 $1.05 $1.04 $1.00 1994 1995 1996 1997 1998 1999 2000 2001 2002 *Current quarterly dividend annualized. 29
Slide 31: Investment Summary
Investment Summary w Benefits of Net Leases w Diversified Portfolio Reduces Risk w Seasoned Management Team w High Tenant Retention w Yield Enhancing Growth Strategies w Strong Growth Track Record 30
Slide 32: Lexington Corporate Properties Trust
\ th LEXINGTON CORPORATE PROPERTIES TRUST
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