Lexington Realty Trust (LXP), a real estate investment trust (REIT) focused on single-tenant real estate investment, recently announced that it has secured a $215.0 million term loan, scheduled to mature in January 2019. The company expects to utilize the proceeds generated from the transaction to repay certain debts.
In connection with the procurement of the term loan, Lexington Realty replaced its existing $300.00 million secured revolving credit facility, which was scheduled to mature in January 2014 with a new $300.0 million secured revolving credit facility. The new secured revolving credit facility matures in January 2015 and also carries a one-year extension option.
The strategic move on Lexington Realty’s part is aimed at lowering its financing costs and improving the cash flow position of the company. The company further expects to strengthen its balance sheet and create long term value for its shareholders.
Lexington reported third quarter 2011 funds from operations (FFO) of 23 cents per share compared with 25 cents in the year-earlier quarter. Fund from operations, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and other non-cash expenses to net income.
Lexington Realty owns, invests and manages office, industrial and retail properties net-leased to major corporations throughout the United States and provides investment advisory and asset management services to investors in the net lease area.
Lexington Realty currently retains a Zacks #4 Rank, which translates into a short-term Sell rating. We are also maintaining our long-term Neutral recommendation on the stock. One of its competitors, Boston Properties Inc (BXP) also holds a Zacks #4 Rank.
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