LXP Forms Specialty Investment Company

NEW YORK CITY-Locally based REIT Lexington Corporate Properties Trust has started a new specialty investment company called Lexington Strategic Asset Corp. So far, LSAC has raised net proceeds of approximately $61.6 million through the sale in a private placement of 6.7 million shares of common stock.

Through the firm, LXP expects to invest directly and indirectly in general use properties with private or middle market type tenants, special purpose properties. These investments are generally expected to generate higher yields than those available on Lexington’s core investments.

The REIT is contributing its indirect ownership interest in four real estate assets and financing deposits. The properties were not identified by LXP or in an SEC filing on the new venture. In exchange, LSAC will issue to Lexington shares of its common stock having an aggregate value of approximately $33.2 million based on the offering price in the private placement. After both, the firm will have a nearly $95 million capitalization.

Lexington’s chairman E. Robert Roskind, says LSAC will “broaden the universe of investments that Lexington seeks to acquire.” He views LSAC as a continuation of LXP’s joint venture investment strategy. In the SEC filing, LSAC will be treated as a “taxable REIT subsidiary.”

During the second quarter, LXP closed on 33 investments totaling $945.6 million, including $393.1 million in joint ventures. The company also obtained $615.1 million in new non-recourse first mortgage financings and replaced an existing $100-million credit facility with a new $200-million unsecured revolving credit facility.