Q2 2024 LXP Industrial Trust Earnings Call Transcript
Key Points
- LXP Industrial Trust (LXP) reported strong leasing activity with 2.7 million square feet leased, achieving rental increases of 44.5% and 44% respectively.
- The company successfully completed its portfolio transformation by selling its remaining office assets, positioning itself as a pure play industrial REIT.
- LXP raised its same-store NOI growth expectations to a range of 4.5% to 5.5%, reflecting robust performance.
- The company is in advanced negotiations for an additional 1.7 million square feet of leasing, indicating continued strong demand.
- LXP's balance sheet remains strong with a net debt to adjusted EBITDA ratio of 6.2 times, and the company is focused on reducing leverage further.
- Interest expenses are expected to increase in 2025 due to the expiration of swaps on the term loan, impacting adjusted company FFO by approximately $0.02 per diluted share.
- The company faces potential vacancies with known tenant move-outs in 2024 and 2025, which could impact occupancy rates.
- LXP's G&A expenses for 2024 are expected to be higher due to one-time charges related to employee severance and CFO transition costs.
- The development pipeline's stabilization is still a few quarters away, which may continue to drag on earnings growth.
- The company is exploring asset sales in non-core markets, which could lead to potential dilution if not managed carefully.
Thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome everyone to the LXP Industrial Trust second-quarter 2024 earnings conference call and webcast. (Operator instructions)
Thank you. I will now turn the conference over to Heather Gentry, Investor Relations. Please go ahead.
Thank you, operator. Welcome to LXP Industrial Trust second-quarter 2024 earnings conference call and webcast. The earnings release was distributed this morning and both the release and quarterly supplemental are available on our website in the Investors section and will be furnished to the SEC on a Form 8-K.
Certain statements made during this conference call regarding future events and expected results may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. LXP believes that these statements are based on reasonable assumptions.
However, certain factors and risks,
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