LXP Industrial Trust

Previous wording

Unless stated otherwise or the context otherwise requires, when we use the terms the “Company,” the “Trust,” “LXP,” “we,” “our,” and “us,” we refer collectively to LXP Industrial Trust and its consolidated subsidiaries. All of the Company's interests are held, and all of the property operating activities are conducted through special purposes entities, which we refer to as property owner subsidiaries or lender subsidiaries and are separate and distinct legal entities, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. References herein to ‘‘this Quarterly Report” are to this Quarterly Report on Form 10-Q for the three and six months ended June 30, 2025. The results of operations contained herein for the three and six months ended June 30, 2025 and 2024 are not necessarily indicative of the results that may be expected for a full year.

Current wording

Unless stated otherwise or the context otherwise requires, when we use the terms the “Company,” the “Trust,” “LXP,” “we,” “our,” and “us,” we refer collectively to LXP Industrial Trust and its consolidated subsidiaries. All of the Company's interests are held, and all of the property operating activities are conducted through special purposes entities, which we refer to as property owner subsidiaries or lender subsidiaries and are separate and distinct legal entities, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. References herein to ‘‘this Quarterly Report” are to this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2025. The results of operations contained herein for the three and nine months ended September 30, 2025 and 2024 are not necessarily indicative of the results that may be expected for a full year.

Previous wording

The following is a discussion and analysis of the unaudited condensed consolidated financial condition and results of operations of LXP Industrial Trust for the three and six months ended June 30, 2025 and 2024, and significant factors that could affect its prospective financial condition and results of operations. This discussion should be read together with the accompanying unaudited Condensed Consolidated Financial Statements of the Company included herein and notes thereto and with the consolidated financial statements and notes thereto included in the Company's most recent Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on February 13, 2025, which we refer to as the Annual Report. Historical results may not be indicative of future performance.

Current wording

The following is a discussion and analysis of the unaudited condensed consolidated financial condition and results of operations of LXP Industrial Trust for the three and nine months ended September 30, 2025 and 2024, and significant factors that could affect its prospective financial condition and results of operations. This discussion should be read together with the accompanying unaudited Condensed Consolidated Financial Statements of the Company included herein and notes thereto and with the consolidated financial statements and notes thereto included in the Company's most recent Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on February 13, 2025, which we refer to as the Annual Report. Historical results may not be indicative of future performance.

Previous wording

As of June 30, 2025, we had equity ownership interests in approximately 116 consolidated real estate properties, located in 16 states and containing approximately 56.4 million square feet of rentable space, which were approximately 94.1% leased based upon net rentable square feet.

Current wording

As of September 30, 2025, we had equity ownership interests in approximately 112 consolidated real estate properties, located in 15 states and containing approximately 54.2 million square feet of rentable space, which were approximately 96.8% leased based upon net rentable square feet.

Previous wording

Our portfolio primarily consists of Class A warehouse and distribution real estate investments in our 12 target markets within the Sunbelt and lower Midwest. We expect to grow in these markets by executing on our development pipeline, including through build-to-suits, and opportunistically acquiring facilities in these markets, including through capital recycling. However, increased financing costs and industrial real estate fundamentals continue to negatively impact development starts in our target markets and the markets where we own properties. Due to this, the current key drivers to growth in our revenues are leasing our vacant development properties and mark-to-market of our lease rollover.

Current wording

Our portfolio primarily consists of Class A warehouse and distribution real estate investments in our 12 target markets within the Sunbelt and lower Midwest. We expect to grow in these markets by executing on our development pipeline, including through build-to-suits, and opportunistically acquiring facilities in these markets, primarily through tax-deferred exchanges related to capital recycling. However, increased financing costs and industrial real estate fundamentals continue to negatively impact development starts in our target markets and the markets where we own properties. Due to this, the current key drivers to growth in our revenues are leasing our vacant, operating, redevelopment and development properties and mark-to-market of our lease rollover.

Previous wording

•Entered into lease extensions encompassing 0.1 million square feet. The average fixed rent on extended leases was $11.36 per square foot compared to the average fixed rent on these leases before extension of $9.63 per square foot. The weighted-average cost of tenant improvements and lease commissions was $3.11 per square foot for the extended leases.

Current wording

•Entered into a lease extension encompassing 0.5 million square feet. The fixed rent on the extended lease was $5.80 per square foot compared to the fixed rent on this lease before extension of $5.35 per square foot. The cost of tenant improvements and lease commissions was $2.08 per square foot for the extended lease.

Previous wording

Our critical accounting estimates are included in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to these estimates during the six months ended June 30, 2025.

Current wording

Our critical accounting estimates are included in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company's Annual Report on Form 10-K for the year ended December 31, 2024. There have been no material changes to these estimates during the nine months ended September 30, 2025.

Previous wording

As of June 30, 2025, our secured debt was $52.3 million compared to $54.9 million at December 31, 2024. Our property owner subsidiaries do not have mortgage maturities with balloon payments due until 2031. With respect to mortgages encumbering properties where the expected lease rental revenues are sufficient to provide an estimated property value in excess of the mortgage balance, we believe our property owner subsidiaries have sufficient sources of liquidity to meet these obligations through future cash flows from operations, the credit markets and, if determined appropriate by us, a capital contribution from us from either cash on hand ($71.0 million at June 30, 2025), property sale proceeds and borrowing capacity on our unsecured credit facility ($600.0 million at June 30, 2025, subject to covenant compliance).

Current wording

As of September 30, 2025, our secured debt was $50.9 million compared to $54.9 million at December 31, 2024. Our property owner subsidiaries do not have mortgage maturities with balloon payments due until 2031. With respect to mortgages encumbering properties where the expected lease rental revenues are sufficient to provide an estimated property value in excess of the mortgage balance, we believe our property owner subsidiaries have sufficient sources of liquidity to meet these obligations through future cash flows from operations, the credit markets and, if determined appropriate by us, a capital contribution from us from either cash on hand ($229.7 million at September 30, 2025), property sale proceeds and borrowing capacity on our unsecured credit facility ($600.0 million at September 30, 2025, subject to covenant compliance).

Previous wording

Cash flows from operations were $83.3 million for the six months ended June 30, 2025 as compared to $77.4 million for the six months ended June 30, 2024. The increase was primarily related to increased rental revenue related to acquired properties and placing development properties into service and the receipt of a lease termination fee, partially offset by a decrease in cash flow due to property sales and vacancies. The underlying drivers that impact our working capital, and therefore cash flows from operations, are the timing of collection of rents, including reimbursements from tenants, payment of interest on debt and payment of operating and general and administrative costs. We believe the net-lease structure of the leases encumbering a majority of the properties in which we have an interest mitigates the risks of the timing of cash flows from operations since the payment and timing of operating costs related to the properties are generally borne directly by the tenant. The collection and timing of tenant rents are closely monitored by management as part of our cash management program.

Current wording

Cash flows from operations were $146.8 million for the nine months ended September 30, 2025 as compared to $142.0 million for the nine months ended September 30, 2024. The increase was primarily related to increased rental revenue related to acquired properties and placing development properties into service and the receipt of a lease termination fee, partially offset by a decrease in cash flow due to property sales and vacancies. The underlying drivers that impact our working capital, and therefore cash flows from operations, are the timing of collection of rents, including reimbursements from tenants, payment of interest on debt and payment of operating and general and administrative costs. We believe the net-lease structure of the leases encumbering a majority of the properties in which we have an interest mitigates the risks of the timing of cash flows from operations since the payment and timing of operating costs related to the properties are generally borne directly by the tenant. The collection and timing of tenant rents are closely monitored by management as part of our cash management program.

Previous wording

Net cash provided by investing activities totaled $47.6 million and $82.1 million during the six months ended June 30, 2025 and 2024, respectively. Cash provided by investing activities in 2025 related primarily to proceeds from property sales and receipt of insurance proceeds, offset by investments in real estate under construction, capital expenditures, lease costs, investments in non-consolidated entities and changes in real estate deposits, net. Cash provided by investing activities in 2024 related primarily to redeeming investments in held-to-maturity securities, proceeds from property sales and distributions received from non-consolidated entities, offset by investments in real estate under construction, capital expenditures, lease costs, investments in non-consolidated entities and changes in real estate deposits, net.

Current wording

Net cash provided by investing activities totaled $201.3 million and $64.4 million during the nine months ended September 30, 2025 and 2024, respectively. Cash provided by investing activities in 2025 related primarily to proceeds from property sales and receipt of insurance proceeds, offset by acquisitions of real estate, investments in real estate under construction, capital expenditures, lease costs, investments in non-consolidated entities and changes in real estate deposits, net. Cash provided by investing activities in 2024 related primarily to redeeming investments in held-to-maturity securities, proceeds from property sales and distributions received from non-consolidated entities, changes in real estate deposits, net, offset by acquisitions of real estate, investments in real estate under construction, capital expenditures, lease costs, and investments in non-consolidated entities.

Previous wording

Net cash used in financing activities totaled $161.7 million and $310.0 million during the six months ended June 30, 2025 and 2024, respectively. Cash used in financing activities in 2025 was primarily related to the partial repayment of the Term Loan, repurchase of the Trust Preferred Securities, dividends, and debt service payments, offset by contributions from noncontrolling interests.

Current wording

Net cash used in financing activities totaled $220.2 million and $350.6 million during the nine months ended September 30, 2025 and 2024, respectively. Cash used in financing activities in 2025 was primarily related to the partial repayment of the Term Loan, repurchase of the Trust Preferred Securities, distributions to noncontrolling interest, dividends, and debt service payments, offset by contributions from noncontrolling interests.

Previous wording

We may sell up to $350.0 million common shares over the term of the program. We did not sell shares under the ATM program during the six months ended June 30, 2025 and 2024, respectively.

Current wording

We may sell up to $350.0 million common shares over the term of the program. We did not sell shares under the ATM program during the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Share Repurchase Program and Repurchase of Debt. In August 2022, our Board of Trustees authorized the repurchase of an additional 10.0 million common shares under our share repurchase program with no expiration date. We did not repurchase any common shares during the six months ended June 30, 2025 and 2024. At June 30, 2025, 6.9 million common shares remained available for repurchase under this authorization.

Current wording

Share Repurchase Program and Repurchase of Debt. In August 2022, our Board of Trustees authorized the repurchase of an additional 10.0 million common shares under our share repurchase program with no expiration date. We did not repurchase any common shares during the nine months ended September 30, 2025 and 2024. As of September 30, 2025, 6.9 million common shares remained available for repurchase under this authorization.

Previous wording

From time to time, we may repurchase certain of our outstanding debt securities, including our Trust Preferred Securities, in negotiated and/or market transactions. During the six months ended June 30, 2025, we repurchased $28.1 million of our Trust Preferred Securities at a 5.0% discount to par value.

Current wording

From time to time, we may repurchase certain of our outstanding debt securities, including our Trust Preferred Securities, in negotiated and/or market transactions. During the nine months ended September 30, 2025, we repurchased $28.1 million of our Trust Preferred Securities at a 5.0% discount to par value.

Previous wording

Dividends. Dividends paid to our common and preferred shareholders were $82.1 million and $79.1 million in the six months ended June 30, 2025 and 2024, respectively.

Current wording

Dividends. Dividends paid to our common and preferred shareholders were $123.2 million and $118.6 million in the nine months ended September 30, 2025 and 2024, respectively.

Previous wording

We declared a quarterly dividend of $0.135 per common share during the three months ended June 30, 2025, which is an increase of $0.005 per common share from the $0.13 per common share quarterly dividend declared during the three months ended June 30, 2024.

Current wording

We declared a quarterly dividend of $0.135 per common share for the three months ended September 30, 2025, which is an increase of $0.005 per common share from the $0.13 per common share quarterly dividend declared during the three months ended September 30, 2024.

Previous wording

(2) Repaid $50.0 million of the Term Loan, resulting in a loss on debt satisfaction of $0.4 million. The SOFR portion of the interest rate was swapped to 4.31% per annum until January 31, 2027.

Current wording

(2) Repaid $50.0 million of the Term Loan, resulting in a loss on debt satisfaction of $0.4 million. The SOFR portion of the interest rate was swapped for a fixed interest rate of 4.31% per annum until January 31, 2027.

Previous wording

(3) Interest rate spread contains a 0.26% SOFR adjustment plus a spread of 1.70% through maturity. $82.5 million is swapped at an average interest rate of 5.20% from October 30, 2024 to October 30, 2027. As of June 30, 2025, the weighted average interest rate of the Trust Preferred Securities was 5.39%, which includes the effect of the interest rate swaps.

Current wording

(4) Interest rate spread contains a 0.26% SOFR adjustment plus a spread of 1.70% through maturity. $82.5 million is swapped at an average interest rate of 5.20% from October 30, 2024 to October 30, 2027. As of September 30, 2025, the weighted average interest rate of the Trust Preferred Securities was 5.40%, which includes the effect of the interest rate swaps.

Previous wording

As of June 30, 2025, the aggregate amount of our consolidated development and redevelopment projects included in investment in real estate under construction are $33.7 million. We expect to incur approximately $44.0 million of additional costs, excluding noncontrolling interests' share and potential developer incentive fees or partner buyouts, to fund all of the remaining costs for our consolidated development project commitments, including vacant development projects placed in service. However, the risks associated with development, including supply chain issues, which may be exacerbated as a result of international trade conflicts associated with tariffs, could adversely impact our estimates. As of June 30, 2025, we had three consolidated and two non-consolidated subsidiaries that owned land parcels held for industrial development. We are unable to estimate the timing of any required fundings for potential development projects on these parcels.

Current wording

As of September 30, 2025, the aggregate amount of our consolidated development and redevelopment projects included in investment in real estate under construction is $37.9 million. We expect to incur approximately $29.1 million of additional costs, excluding noncontrolling interests' share and potential developer incentive fees or partner buyouts, to fund all of the remaining costs for our consolidated development project commitments, including vacant development projects placed in service. However, the risks associated with development, including supply chain issues, which may be exacerbated as a result of international trade conflicts associated with tariffs, could adversely impact our estimates. As of September 30, 2025, we had three consolidated and two non-consolidated subsidiaries that owned land parcels held for industrial development. We are unable to estimate the timing of any required fundings for potential development projects on these parcels.

Previous wording

Three months ended June 30, 2025 compared with three months ended June 30, 2024. The increase in net income attributable to common shareholders of $23.7 million was primarily due to the items discussed below.

Current wording

Three months ended September 30, 2025 compared with three months ended September 30, 2024. The increase in net income attributable to common shareholders of $29.9 million was primarily due to the items discussed below.

Previous wording

The increase in rental revenue of $4.7 million was primarily due to an aggregate increase in rental revenue of $14.7 million primarily due to properties placed in service, acquisitions and leasing, partially offset by a decrease in rental revenue of $10.0 million due to property sales and vacancies.

Current wording

The increase in rental revenue of $1.3 million was primarily due to an aggregate increase in rental revenue of $5.0 million primarily due to properties placed in service, acquisitions and leasing, partially offset by a decrease of $3.7 million due to property sales and vacancies.

Previous wording

The increase in depreciation and amortization expense of $1.0 million was primarily due to properties acquired and/or completed and placed in service.

Current wording

The increase in depreciation and amortization expense of $0.7 million was primarily due to properties acquired and/or completed and placed in service.

Previous wording

The increase in gain on sale of real estate of $23.0 million was related to the higher gains on the dispositions of one property during three months ended June 30, 2025 compared to the two property dispositions during the three months ended June 30, 2024.

Current wording

The increase in gain on sale of real estate of $35.1 million was related to the $33.1 million increase from the dispositions of five properties and $2.0 million of insurance recovery on real estate during the three months ended September 30, 2025 compared to the two property dispositions during the three months ended September 30, 2024.

Previous wording

Six months ended June 30, 2025 compared with six months ended June 30, 2024. The increase in net income attributable to common shareholders of $43.0 million was primarily due to the items discussed below.

Current wording

Nine months ended September 30, 2025 compared with nine months ended September 30, 2024. The increase in net income attributable to common shareholders of $72.8 million was primarily due to the items discussed below.

Previous wording

The increase in rental revenue of $2.0 million was primarily due to an aggregate increase in rental revenue of $7.5 million primarily due to properties placed in service, acquisitions and leasing, partially offset by a decrease in rental revenue of $5.5 million due to property sales and vacancies.

Current wording

The increase in rental revenue of $5.9 million was primarily due to an aggregate increase in rental revenue of $16.1 million primarily due to properties placed in service, acquisitions and leasing, partially offset by a decrease in rental revenue of $10.2 million due to property sales and vacancies.

Previous wording

The increase in depreciation and amortization expense of $4.0 million was primarily due to properties acquired and/or completed and placed in service.

Current wording

The increase in depreciation and amortization expense of $4.8 million was primarily due to properties acquired and/or completed and placed in service.

Previous wording

The increase in property operating expense of $2.3 million was primarily due to an aggregate increase of $1.6 million related to placed in service, acquisitions and leasing, in addition to an increase of $1.8 million related to increases related to real estate taxes, and maintenance and repairs, partially offset by a decrease of $1.1 million related to property sales.

Current wording

The increase in property operating expense of $2.7 million was primarily due to an aggregate increase of $2.2 million related to properties placed in service, acquisitions and leasing, in addition to an increase of $1.9 million related to increases in real estate taxes, and maintenance and repairs, partially offset by a decrease of $1.4 million related to property sales.

Previous wording

The decrease in non-operating income of $5.2 million was primarily due to a decrease in interest income earned on short-term investments which matured in June 2024.

Current wording

The decrease in non-operating income of $5.3 million was primarily due to lower interest income from short-term investments that matured in June 2024.

Previous wording

The decrease in interest and amortization expense of $1.8 million was primarily due to a $4.1 million decrease in interest expense related to the 2024 Senior Notes that were repaid in full during the six months ended June 30, 2024. Additionally, interest rate swaps on a portion of the Trust Preferred Securities and a partial repurchase of these securities resulted in a $1.2 million decrease in interest expense during the six months ended June 30, 2025. These amounts were partially offset by a $1.0 million increase in interest expense related to the Term Loan and a decrease in capitalized interest of $2.5 million due to properties placed into service subsequent to June 30, 2024.

Current wording

The decrease in interest and amortization expense of $1.8 million was primarily due to a $4.1 million decrease in interest expense related to the 2024 Senior Notes that were repaid in full during the nine months ended September 30, 2024. Additionally, interest rate swaps on a portion of the Trust Preferred Securities and a partial repurchase of these securities resulted in a $2.2 million decrease in interest expense during the nine months ended September 30, 2025. These amounts were partially offset by a $1.4 million increase in interest expense related to the Term Loan and a $3.1 million decrease in capitalized interest due to properties placed in service subsequent to September 30, 2024.

Previous wording

The increase in gain on sale of real estate of $47.6 million was related to the higher gains on the dispositions of two properties during the six months ended June 30, 2025 compared to the two property dispositions during the six months ended June 30, 2024.

Current wording

The increase in gain on sale of real estate of $82.7 million was related to the higher gains on the dispositions of seven properties and $2.0 million of recovery on real estate during the nine months ended September 30, 2025 compared to the three property dispositions during the nine months ended September 30, 2024.

Previous wording

The increase in net loss attributable to noncontrolling interests of $0.6 million is primarily related to the recognition of the noncontrolling interests' share of operating losses related to development projects placed into service vacant during 2024.

Current wording

The decrease in net (income) loss attributable to noncontrolling interests of $6.2 million is primarily related to the recognition of the noncontrolling interests' share of gains on the sale of real estate of two vacant development properties in 2025.

Previous wording

The following presents our consolidated same-store NOI, for the three and six months ended June 30, 2025 and 2024 ($000's):

Current wording

The following presents our consolidated same-store NOI, for the three and nine months ended September 30, 2025 and 2024 ($000's):

Previous wording

Our same-store NOI increased for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 by 4.7% and 5.0%, respectively, primarily due to an increase in cash base rents. As of June 30, 2025 and 2024, our historical same-store square footage leased was 98.0% and 99.1%, respectively.

Current wording

Our same-store NOI increased for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 by 2.0% and 4.0%, respectively, primarily due to an increase in cash base rents. As of September 30, 2025 and 2024, our historical same-store square footage leased was 96.9% and 99.0%, respectively.

Previous wording

The following presents a reconciliation of net income attributable to common shareholders to FFO available to common shareholders and Adjusted Company FFO available to all equityholders for the three and six months ended June 30, 2025 and 2024 (unaudited and dollars in thousands, except share and per share amounts):

Current wording

The following presents a reconciliation of net income attributable to common shareholders to FFO available to common shareholders and Adjusted Company FFO available to all equityholders for the three and nine months ended September 30, 2025 and 2024 (unaudited and dollars in thousands, except share and per share amounts):

Previous wording

As of June 30, 2025, we had investments in various real estate entities with varying structures. The real estate investments owned by our institutional joint ventures are generally financed with non-recourse debt. Non-recourse debt is generally defined as debt whereby the lenders' sole recourse with respect to borrower defaults is limited to the value of the assets collateralized by the debt. The lender generally does not have recourse against any other assets owned by the borrower or any of the members or partners of the borrower, except for certain specified exceptions listed in the particular loan documents. These exceptions generally relate to “bad boy” acts, including fraud, prohibited transfers and breaches of material representations, and environmental matters. We have guaranteed such obligations for certain of our non-consolidated entities with respect to $432.3 million of such non-recourse debt. We believe the likelihood of making any payments under such guaranties is remote and we generally have an agreement from each partner to reimburse us for its proportionate share of any liability related to a guarantee trigger unless such trigger is caused solely by us.

Current wording

As of September 30, 2025, we had investments in various real estate entities with varying structures. The real estate investments owned by our institutional joint ventures are generally financed with non-recourse debt. Non-recourse debt is generally defined as debt whereby the lenders' sole recourse with respect to borrower defaults is limited to the value of the assets collateralized by the debt. The lender generally does not have recourse against any other assets owned by the borrower or any of the members or partners of the borrower, except for certain specified exceptions listed in the particular loan documents. These exceptions generally relate to “bad boy” acts, including fraud, prohibited transfers and breaches of material representations, and environmental matters. We have guaranteed such obligations for certain of our non-consolidated entities with respect to $462.8 million of such non-recourse debt. We believe the likelihood of making any payments under such guaranties is remote and we generally have an agreement from each partner to reimburse us for its proportionate share of any liability related to a guarantee trigger unless such trigger is caused solely by us.