LXP Industrial Trust (LXP, Financial), a real estate investment trust focused on Class A warehouse and distribution real estate investments, released its 8-K filing on November 6, 2024, detailing its financial performance for the third quarter ended September 30, 2024. The company reported a net income attributable to common shareholders of $4.7 million, or $0.02 per diluted share, and total gross revenues of $85.6 million, surpassing the analyst revenue estimate of $84.22 million.
Company Overview
LXP Industrial Trust is primarily involved in the ownership of equity and debt investments in single-tenant properties and land across the United States, with the majority of its revenue generated through rental income.
Performance Highlights and Challenges
For the third quarter of 2024, LXP Industrial Trust recorded a net income of $4.7 million, or $0.02 per diluted share, which is a decline from the $11.0 million, or $0.04 per diluted share, reported in the same period last year. The decrease in net income is attributed to property sales and a decrease in other revenue streams. Despite these challenges, the company achieved a 5.4% increase in Same-Store Net Operating Income (NOI) compared to the previous year, driven by market rent increases and stabilized development projects.
Financial Achievements
LXP's Adjusted Company Funds From Operations (FFO) for the quarter was $46.7 million, or $0.16 per diluted share, slightly down from $51.9 million, or $0.18 per diluted share, in the third quarter of 2023. The company also announced a 3.8% increase in its quarterly dividend, reflecting confidence in its cash flow generation and commitment to returning value to shareholders.
Key Financial Metrics
For the quarter ended September 30, 2024, LXP's total consolidated debt stood at $1.6 billion, with a weighted-average term to maturity of 5.7 years and a weighted-average interest rate of 3.804%. The company effectively managed its interest rate exposure by entering into forward interest rate swap agreements, fixing the interest rate on $332.5 million of floating-rate debt.
| Metric | Q3 2024 | Q3 2023 |
|---|---|---|
| Net Income Attributable to Common Shareholders | $4.7 million | $11.0 million |
| Adjusted Company FFO | $46.7 million | $51.9 million |
| Total Gross Revenues | $85.6 million | $85.4 million |
Strategic Developments and Future Outlook
LXP completed new leases and lease extensions totaling 0.7 million square feet, significantly increasing Base and Cash Base Rents by 38.3% and 22.5%, respectively. The company also invested $27.5 million in development activities and $7.6 million in a value-add opportunity in Orlando, Florida. Additionally, LXP disposed of three facilities outside Chicago for $136.7 million and acquired a facility in Savannah, Georgia for $34.1 million.
T. Wilson Eglin, Chairman and CEO of LXP, stated, "We posted strong third-quarter results with same-store NOI growth of 5.4% driven by 39.1% cash rental increases on second generation leases completed through September 30, 2024."
Analysis
LXP Industrial Trust's performance in the third quarter of 2024 demonstrates its strategic focus on enhancing its portfolio through targeted acquisitions and developments. The increase in Same-Store NOI and strategic asset recycling initiatives highlight the company's ability to adapt to market conditions and optimize its asset base. However, the decline in net income compared to the previous year underscores the challenges posed by property sales and revenue fluctuations. The company's proactive approach to managing interest rate exposure and increasing dividends reflects a strong commitment to maintaining financial stability and shareholder value.
Explore the complete 8-K earnings release (here) from LXP Industrial Trust for further details.
