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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2020.
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _________________ to ________________
Commission File Number 1-12386
 LEXINGTON REALTY TRUST
(Exact name of registrant as specified in its charter)
Maryland13-3717318
(State or other jurisdiction of
incorporation of organization)
(I.R.S. Employer
Identification No.)
One Penn Plaza, Suite 4015, New York, NY 10119-4015
(Address of principal executive offices) (zip code)
(212) 692-7200
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Shares of beneficial interest, par value $0.0001 per share, classified as Common StockLXPNew York Stock Exchange
6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share
LXPPRCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth
company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 276,952,514 common shares of beneficial interest, par value $0.0001 per share, as of November 3, 2020.




TABLE OF CONTENTS

PART I. — FINANCIAL INFORMATION  
 
 
 
 
PART II — OTHER INFORMATION  
 
 
 
 
 
 
 

WHERE YOU CAN FIND MORE INFORMATION:
We file and furnish annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission, which we refer to as the SEC. You may read and copy any materials that we file or furnish with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We file and furnish information electronically with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file or furnish electronically with the SEC. The address of the SEC's Internet site is http://www.sec.gov. We also maintain a web site at http://www.lxp.com through which you can obtain copies of documents that we file or furnish with the SEC. The contents of that web site are not incorporated by reference in or otherwise a part of this Quarterly Report on Form 10-Q or any other document that we file or furnish with the SEC.

2

Table of Contents

PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
September 30, 2020December 31, 2019
 (unaudited)
Assets: 
Real estate, at cost$3,439,314 $3,320,574 
Real estate - intangible assets413,208 409,756 
Investments in real estate under construction41,948 13,313 
Real estate, gross3,894,470 3,743,643 
Less: accumulated depreciation and amortization906,789 887,629 
Real estate, net2,987,681 2,856,014 
Assets held for sale159,210  
Operating right-of-use assets, net36,034 38,133 
Cash and cash equivalents 287,920 122,666 
Restricted cash1,697 6,644 
Investments in non-consolidated entities56,489 57,168 
Deferred expenses, net16,428 18,404 
Rent receivable – current 2,310 3,229 
Rent receivable – deferred 66,383 66,294 
Other assets 7,699 11,708 
Total assets$3,621,851 $3,180,260 
Liabilities and Equity:  
Liabilities:  
Mortgages and notes payable, net $157,723 $390,272 
Term loan payable, net297,817 297,439 
Senior notes payable, net778,943 496,870 
Trust preferred securities, net127,470 127,396 
Dividends payable34,463 32,432 
Liabilities held for sale179,052  
Operating lease liabilities37,338 39,442 
Accounts payable and other liabilities 52,819 29,925 
Accrued interest payable9,083 7,897 
Deferred revenue - including below-market leases, net18,054 20,350 
Prepaid rent14,740 13,518 
Total liabilities1,707,502 1,455,541 
Commitments and contingencies
Equity:  
Preferred shares, par value $0.0001 per share; authorized 100,000,000 shares:
  
Series C Cumulative Convertible Preferred, liquidation preference $96,770; 1,935,400 shares issued and outstanding
94,016 94,016 
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 276,941,239 and 254,770,719 shares issued and outstanding in 2020 and 2019, respectively
28 25 
Additional paid-in-capital3,193,751 2,976,670 
Accumulated distributions in excess of net income(1,374,748)(1,363,676)
Accumulated other comprehensive loss(19,687)(1,928)
Total shareholders’ equity1,893,360 1,705,107 
Noncontrolling interests20,989 19,612 
Total equity1,914,349 1,724,719 
Total liabilities and equity$3,621,851 $3,180,260 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share data)
Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Gross revenues:    
Rental revenue$83,592 $80,325 $243,421 $239,058 
Other revenue922 1,225 3,712 3,875 
Total gross revenues84,514 81,550 247,133 242,933 
Expense applicable to revenues:    
Depreciation and amortization(40,555)(37,211)(120,869)(111,617)
Property operating(11,343)(10,611)(31,895)(30,966)
General and administrative(7,232)(7,791)(22,612)(23,652)
Non-operating income40 532 314 1,927 
Interest and amortization expense(13,649)(16,481)(42,610)(50,715)
Debt satisfaction gains (charges), net17,557 (4,424)18,950 (4,527)
Impairment charges(6,175)(673)(7,792)(2,355)
Gains on sales of properties20,878 140,461 41,876 176,662 
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities
44,035 145,352 82,495 197,690 
Provision for income taxes(286)(241)(1,361)(1,108)
Equity in earnings (losses) of non-consolidated entities(131)2,710 35 3,288 
Net income43,618 147,821 81,169 199,870 
Less net income attributable to noncontrolling interests
(1,714)(4,502)(2,245)(5,191)
Net income attributable to Lexington Realty Trust shareholders
41,904 143,319 78,924 194,679 
Dividends attributable to preferred shares – Series C(1,573)(1,573)(4,718)(4,718)
Allocation to participating securities(46)(186)(118)(304)
Net income attributable to common shareholders$40,285 $141,560 $74,088 $189,657 
    
Net income attributable to common shareholders - per common share basic
$0.15 $0.60 $0.28 $0.81 
Weighted-average common shares outstanding – basic274,696,046 236,285,216 264,211,668 233,833,340 
Net income attributable to common shareholders - per common share diluted
$0.15 $0.59 $0.28 $0.81 
Weighted-average common shares outstanding – diluted
276,022,762 241,355,289 265,446,221 234,011,643 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited and in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
Net income$43,618 $147,821 $81,169 $199,870 
Other comprehensive income (loss):    
Change in unrealized income (loss) on interest rate swaps, net1,043 (5,549)(17,759)(5,625)
Other comprehensive income (loss)1,043 (5,549)(17,759)(5,625)
Comprehensive income44,661 142,272 63,410 194,245 
Comprehensive income attributable to noncontrolling interests
(1,714)(4,502)(2,245)(5,191)
Comprehensive income attributable to Lexington Realty Trust shareholders
$42,947 $137,770 $61,165 $189,054 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited and in thousands)


Three Months Ended September 30, 2020Lexington Realty Trust Shareholders
TotalPreferred SharesCommon SharesAdditional Paid-in-CapitalAccumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive LossNoncontrolling Interests
Balance June 30, 2020$1,892,186 $94,016 $28 $3,185,458 $(1,386,001)$(20,730)$19,415 
Issuance of partnership interest in real estate398 — — — — — 398 
Redemption of noncontrolling OP units for common shares— — — 150 — — (150)
Issuance of common shares and deferred compensation amortization, net8,143 —  8,143 — — — 
Dividends/distributions(31,039)— — — (30,651)— (388)
Net income43,618 — — — 41,904 — 1,714 
Other comprehensive income1,043 — — — — 1,043 — 
Balance September 30, 2020$1,914,349 $94,016 $28 $3,193,751 $(1,374,748)$(19,687)$20,989 


Three Months Ended September 30, 2019Lexington Realty Trust Shareholders
TotalPreferred SharesCommon SharesAdditional Paid-in-CapitalAccumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive LossNoncontrolling Interests
Balance June 30, 2019$1,344,174 $94,016 $23 $2,771,213 $(1,536,752)$— $15,674 
Redemption of noncontrolling OP units for common shares — — 343 — — (343)
Issuance of common shares and deferred compensation amortization, net133,489 — 2 133,487 — — — 
Repurchase of common shares to settle tax obligations(1,339)— — (1,339)— — — 
Forfeiture of employee common shares10 — — — 10 — — 
Dividends/distributions(27,571)— — — (27,036)— (535)
Net income147,821 — — — 143,319 — 4,502 
Other comprehensive loss(5,549)— — — — (5,549)— 
Balance September 30, 2019$1,591,035 $94,016 $25 $2,903,704 $(1,420,459)$(5,549)$19,298 




LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited and in thousands)


Nine Months Ended September 30, 2020Lexington Realty Trust Shareholders 
 TotalPreferred SharesCommon SharesAdditional Paid-in-CapitalAccumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive LossNoncontrolling Interests
Balance December 31, 2019$1,724,719 $94,016 $25 $2,976,670 $(1,363,676)$(1,928)$19,612 
Issuance of partnership interest in real estate1,285 — — — — — 1,285 
Redemption of noncontrolling OP units for common shares— — — 632 — — (632)
Issuance of common shares and deferred compensation amortization, net230,117 — 3 230,114 — — — 
Repurchase of common shares(11,042)— — (11,042)— — — 
Repurchase of common shares to settle tax obligations(2,623)— — (2,623)— — — 
Forfeiture of employee common shares1 — —  1 — — 
Dividends/distributions(91,518)— — — (89,997)— (1,521)
Net income81,169 — — — 78,924 — 2,245 
Other comprehensive loss(17,759)— — — — (17,759)— 
Balance September 30, 2020$1,914,349 $94,016 $28 $3,193,751 $(1,374,748)$(19,687)$20,989 


Nine Months Ended September 30, 2019Lexington Realty Trust Shareholders 
 TotalPreferred SharesCommon SharesAdditional Paid-in-CapitalAccumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive Income (Loss)Noncontrolling Interests
Balance December 31, 2018$1,346,678 $94,016 $24 $2,772,855 $(1,537,100)$76 $16,807 
Redemption of noncontrolling OP units for common shares— — — 504 — — (504)
Issuance of common shares and deferred compensation amortization, net136,585 — 2 136,583 — — — 
Repurchase of common shares(958)— — (958)— — — 
Repurchase of common shares to settle tax obligations(5,281)— (1)(5,280)— — — 
Forfeiture of employee common shares15 — — — 15 — — 
Dividends/distributions(80,249)— — — (78,053)— (2,196)
Net income199,870 — — — 194,679 — 5,191 
Other comprehensive loss(5,625)— — — — (5,625)— 
Balance September 30, 2019$1,591,035 $94,016 $25 $2,903,704 $(1,420,459)$(5,549)$19,298 

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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Nine Months Ended September 30,
 20202019
Net cash provided by operating activities:$152,466 $142,919 
Cash flows from investing activities:  
Acquisition of real estate, including intangible assets(429,834)(439,885)
Investment in real estate under construction(21,561) 
Capital expenditures(15,328)(12,130)
Net proceeds from sale of properties99,740 334,395 
Investments in non-consolidated entities(6,152)(1,776)
Distributions from non-consolidated entities in excess of accumulated earnings6,843 14,830 
Deferred leasing costs(4,791)(5,231)
Change in real estate deposits, net461 (4,936)
Net cash used in investing activities(370,622)(114,733)
Cash flows from financing activities:  
Dividends to common and preferred shareholders(87,966)(96,117)
Principal amortization payments(16,132)(20,050)
Principal payments on debt, excluding normal amortization (67,229)
Revolving credit facility borrowings170,000 110,000 
Revolving credit facility payments(170,000)(110,000)
Proceeds from senior notes396,932  
Repurchase of senior notes(112,312) 
Deferred financing costs(3,803)(5,456)
Payment of early extinguishment of debt charges(9,477)(3,500)
Cash contributions from noncontrolling interests1,285  
Cash distributions to noncontrolling interests(1,521)(2,196)
Repurchases to settle tax obligations(2,623)(5,368)
Issuance of common shares, net225,122 131,831 
Repurchase of common shares(11,042)(3,598)
Net cash provided by (used in) financing activities378,463 (71,683)
Change in cash, cash equivalents and restricted cash160,307 (43,497)
Cash, cash equivalents and restricted cash, at beginning of period129,310 177,247 
Cash, cash equivalents and restricted cash, at end of period$289,617 $133,750 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents at beginning of period$122,666 $168,750 
Restricted cash at beginning of period6,644 8,497 
Cash, cash equivalents and restricted cash at beginning of period$129,310 $177,247 
Cash and cash equivalents at end of period$287,920 $126,058 
Restricted cash at end of period1,697 7,692 
Cash, cash equivalents and restricted cash at end of period$289,617 $133,750 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(1)The Company and Financial Statement Presentation
Lexington Realty Trust (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Company”) is a Maryland real estate investment trust (“REIT”) that owns a portfolio of equity investments focused on single-tenant industrial properties.
As of September 30, 2020, the Company had ownership interests in approximately 135 consolidated real estate properties, located in 29 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries.
The Company believes it has qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain activities from which it was previously precluded in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS are subject to federal income taxes on the income from these activities.
The Company conducts its operations either directly or indirectly through (1) property owner subsidiaries, which are single purpose entities, (2) an operating partnership, Lepercq Corporate Income Fund L.P. (“LCIF”), in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests, (3) a wholly-owned TRS, Lexington Realty Advisors, Inc. (“LRA”), and (4) investments in joint ventures. References to “OP units” refer to units of limited partner interests in LCIF. Property owner subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan agreements secured by properties in which the Company has an interest. Each property owner subsidiary is a separate legal entity that maintains separate books and records. The assets and credit of each property owner subsidiary with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other property owner subsidiary or any other affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors.
The financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three and nine months ended September 30, 2020 have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 20, 2020 (“Annual Report”).
Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates the wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The Company is the primary beneficiary of certain VIEs as it has a controlling financial interest in these entities. LCIF, which is consolidated and in which the Company has an approximate 97% interest, is a VIE. The Company has a 90% ownership interest in a joint venture with a developer, which acquired a parcel of land in the Atlanta, Georgia market and plans to develop an industrial property. The joint venture is consolidated and is a VIE.
The assets of each VIE are only available to satisfy such VIE's respective liabilities. As of September 30, 2020 and December 31, 2019, the VIEs' mortgages and notes payable were non-recourse to the Company. Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019:
September 30, 2020December 31, 2019
Real estate, net$599,701 $592,372 
Total assets$676,938 $645,623 
Mortgages and notes payable, net$44,008 $82,978 
Total liabilities$61,802 $101,901 
In addition, the Company acquires, from time to time, properties using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a "reverse 1031 exchange") and, as such, the properties are in the possession of an Exchange Accommodation Titleholder ("EAT") until the reverse 1031 exchange is completed. The EAT is classified as a VIE as it is a “thinly capitalized” entity. The Company consolidates the EAT because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the EAT's economic performance and can collapse the 1031 exchange structure at any time. The assets of the EAT primarily consist of leased property (net real estate and intangibles).
Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the economic uncertainty primarily caused by the recent outbreak of COVID-19. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable and deferred rent receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments, valuation of derivative financial instruments, valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee and the useful lives of long-lived assets. Actual results could differ materially from those estimates.
Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("Topic 820"), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The Company estimates the fair value of its real estate assets, including non-consolidated real estate assets, by using income and market valuation techniques. The Company may estimate fair values using market information such as recent sale contracts (Level 2 inputs) or recent sale offers or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.
New Accounting Standards Adopted in 2020. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of an allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company analyzed its accounts receivable using an aging methodology and determined that there have been no historical credit losses related to its outstanding accounts receivable. As a result, the Company's adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40). This ASU addresses customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company's adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements. This ASU includes additional disclosures requirements for recurring and nonrecurring Level 3 fair value measurements including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income, disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and a narrative description of measurement uncertainty related to Level 3 measurements. This standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements.
Recently Issued Accounting Guidance. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 is optional, applies for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR and may be elected over time as reference rate reform activities occur. As of March 31, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)

While the lease modification guidance in ASC Topic 842 ("Topic 842") addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance did not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of some lessees arising from the COVID-19 pandemic. In April 2020, the FASB staff issued a question and answer document (the "Lease Modification Q&A") focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows the Company, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances.

During the nine months ended September 30, 2020, the Company granted one nominal rent deferral to a consolidated tenant that changed the timing of the rent payments but not the total rent or the lease term and applied the Lease Modification Q&A to account for this modification. The Lease Modification Q&A's future impact on the Company's consolidated financial statements is dependent upon the extent of lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by the Company at the time of entering into such concessions.


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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)

(2)Earnings Per Share
A portion of the Company's non-vested share-based payment awards are considered participating securities and as such, the Company is required to use the two-class method for the computation of basic and diluted earnings per share. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The non-vested share-based payment awards are not allocated losses as the awards do not have a contractual obligation to share in losses of the Company.
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2020 and 2019:
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
BASIC    
Net income attributable to common shareholders
$40,285 $141,560 $74,088 $189,657 
Weighted-average number of common shares outstanding - basic
274,696,046 236,285,216 264,211,668 233,833,340 
   
Net income attributable to common shareholders - per common share basic
$0.15 $0.60 $0.28 $0.81 
DILUTED
Net income attributable to common shareholders - basic
$40,285 $141,560 $74,088 $189,657 
Impact of assumed conversions
 1,573   
Net income attributable to common shareholders
$40,285 $143,133 $74,088 $189,657 
Weighted-average common shares outstanding - basic
274,696,046 236,285,216 264,211,668 233,833,340 
Effect of dilutive securities:
Unvested share-based payment awards and options
1,326,716 359,503 1,234,553 178,303 
Preferred shares - Series C
 4,710,570   
Weighted-average common shares outstanding - diluted
276,022,762 241,355,289 265,446,221 234,011,643 
Net income attributable to common shareholders - per common share diluted
$0.15 $0.59 $0.28 $0.81 
For per common share amounts, all incremental shares are considered anti-dilutive for periods that have a loss from continuing operations attributable to common shareholders. In addition, other common share equivalents may be anti-dilutive in certain periods.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(3)Investments in Real Estate
The Company completed the following acquisition transactions during the nine months ended September 30, 2020:
Property
Type
MarketAcquisition
Date
Initial
Cost
Basis
Primary
Lease
Expiration
LandBuilding and ImprovementsLease in-place Value Intangible
IndustrialChicago, ILJanuary 2020$53,642 11/2029$3,681 $45,817 $4,144 
IndustrialPhoenix, AZJanuary 202019,164 12/20251,614 16,222 1,328 
IndustrialChicago, ILJanuary 202039,153 12/20291,788 34,301 3,064 
IndustrialDallas, TXFebruary 202083,495 8/20294,500 71,635 7,360 
Industrial Savannah, GA April 202034,753 7/20271,689 30,346 2,718 
Industrial Dallas, TXMay 202010,731 6/20301,308 8,466 957 
Industrial Savannah, GA June 202030,448 6/20252,560 25,697 2,191 
Industrial Savannah, GA June 20209,130 8/20251,070 7,448 612 
Industrial Houston, TX June 202020,949 4/20252,202 17,101 1,646 
Industrial Ocala, FLJune 202058,283 8/20304,113 49,904 4,266 
IndustrialDC/Baltimore, MDSeptember 202029,143 11/20242,818 24,423 1,902 
IndustrialSavannah, GASeptember 202040,908 07/20263,775 34,322 2,811 
$429,799 $31,118 $365,682 $32,999 

The Company is engaged in two consolidated development projects. As of September 30, 2020, the Company's aggregate investment in the development arrangements was $41,948, which included capitalized interest of $578 for the nine-month period ended September 30, 2020 and is presented as investments in real estate under construction in the accompanying unaudited condensed consolidated balance sheets.
As of September 30, 2020, the details of the development arrangements outstanding are as follows (in $000's, except square feet):
Project (% owned)MarketProperty TypeEstimated Sq. Ft. Estimated Project Cost GAAP Investment Balance as of
9/30/2020
Amount Funded as of
9/30/2020
Estimated Completion Date
Fairburn (90%)
Atlanta, GAIndustrial910,000 $53,812 $30,638 $22,543 1Q 2021
Rickenbacker (100%)
Columbus, OHIndustrial320,000 20,300 11,310 8,233 4Q 2020
$74,112 $41,948 $30,776 

(4)Dispositions and Impairment
During the nine months ended September 30, 2020 and 2019, the Company disposed of its interests in various properties for an aggregate gross disposition price of $140,573 and $448,900, respectively, and recognized aggregate gains on sales of properties of $41,876 and $176,662, respectively. Included in the 2020 dispositions are two office properties located in Charleston, South Carolina and Overland Park, Kansas which were conveyed to the lenders in forgiveness of the mortgage loan encumbering each property. The balances of the non-recourse mortgage loans were in excess of the value of the property collateral, resulting in an aggregate debt satisfaction gain, net of $29,016. Included in the 2019 dispositions, the Company recognized debt satisfaction charges, net of $4,415 relating to sold properties.
As of September 30, 2020, the Company had five properties classified as held for sale because the properties met the criteria included under the held for sale accounting guidance and sales to a third party within the next 12 months were deemed probable. As of December 31, 2019, the Company had no properties that met the held for sale criteria.


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Assets and liabilities of the held for sale properties as of September 30, 2020 consisted of the following:
September 30, 2020
Assets:
Real estate, at cost$180,981 
Real estate, intangible assets5,361 
Accumulated depreciation and amortization(38,405)
Rent receivable - deferred8,066 
Other3,207 
$159,210 
Liabilities:
Mortgages and notes payable, net$177,784 
Accounts payable and other liabilities680 
Accrued interest payable322 
Prepaid rent 266 
$179,052 
The Company assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability, change in the estimated holding period of the asset, the potential sale or transfer of the property in the near future and changes in economic conditions such as the recent economic uncertainty primarily caused by the COVID-19 outbreak. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value and the Company estimates that its cost will not be recovered. During the nine months ended September 30, 2020, the Company recognized aggregate impairment charges on real estate properties of $7,792 comprised of two impairment charges of $1,617 and $6,175 on a vacant office property located in Houston, Texas and an industrial facility located in Kalamazoo, Michigan, respectively.
During the nine months ended September 30, 2019, the Company recognized aggregate impairment charges on real estate properties of $2,355 comprised of $2,106 and $249 on unencumbered and vacant retail properties in Watertown, New York and Albany, Georgia, respectively. Both of these properties were sold during 2019.

(5)Fair Value Measurements
The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall:
 BalanceFair Value Measurements Using
DescriptionSeptember 30, 2020(Level 1)(Level 2)(Level 3)
Interest rate swap liabilities$(19,687)$ $(19,687)$ 
Impaired property held for sale(1)$8,742 $ $ $8,742 
(1)    Represents a non-recurring fair value measurement. The fair value is calculated as of the date of the impairment. The Company measured these impairment charges based on discounted cash flow analysis, using a hold period of ten years and residual capitalization rates and discount rates ranging from 8.0% to 9.0% and 9.0% to 12.0%, respectively. As significant inputs to the models are unobservable, the Company determined that the value determined for these properties falls within Level 3 of the fair value reporting hierarchy.
 BalanceFair Value Measurements Using
DescriptionDecember 31, 2019(Level 1)(Level 2)(Level 3)
Interest rate swap liabilities$(1,928)$ $(1,928)$ 
Impaired real estate assets(1)$4,846 $ $ $4,846 
(1)    Represents a non-recurring fair value measurement. The fair value is calculated as of the date of the impairment.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The majority of the inputs used to value the Company's interest rate swaps fell within Level 2 of the fair value hierarchy, such as observable market interest rate curves; however, the credit valuation associated with the interest rate swaps utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2020 and December 31, 2019, the Company determined that the credit valuation adjustment relative to the overall fair value of the interest rate swaps was not significant. As a result, the interest rate swaps were classified in Level 2 of the fair value hierarchy.
The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments, excluding held for sale assets, as of September 30, 2020 and December 31, 2019:

 As of September 30, 2020As of December 31, 2019
 Carrying
Amount
Fair ValueCarrying
Amount
Fair Value
Liabilities    
Debt$1,361,953 $1,375,415 $1,311,977 $1,276,589 

The fair value of the Company's debt is primarily estimated utilizing Level 3 inputs by using a discounted cash flow analysis, based upon estimates of market interest rates, except for the Company's senior notes payable. The Company determines the fair value of its senior notes payable using market prices. The inputs used in determining the fair value of these notes are categorized as Level 1 due to the fact that the Company uses quoted market rates to value these instruments. However, the inputs used in determining the fair value could be categorized as Level 2 if trading volumes are low.
Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts.
Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Company estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.

(6)Investments in Non-Consolidated Entities
Below is a schedule of the Company's investments in non-consolidated entities:
Percentage Ownership atInvestment Balance as of
InvestmentSeptember 30, 2020September 30, 2020December 31, 2019
NNN Office JV LP ("NNN JV")(1)20%$32,723 $39,288 
Etna Park 70 LLC(2)90%11,352 8,352 
Etna Park East LLC (3)90%7,391 4,310 
Other(4)25%5,023 5,218 
$56,489 $57,168 
(1)    NNN JV is a joint venture formed in 2018 and owns office properties formerly owned by the Company.
(2)    Joint venture formed in 2017 with a developer entity to acquire a 151-acre parcel of developable land and to pursue industrial build-to-suit opportunities. The Company determined that it is not the primary beneficiary. In December 2018, the parcel was subdivided and the Company received a distribution of an ownership interest in a 57-acre parcel with a historical cost of $3,008. The Company acquired control of the 57-acre parcel via the purchase of the Company's joint venture partners' interests.
(3) Joint venture formed in 2019 with a developer entity to acquire a 129.6-acre parcel of land and to pursue industrial build-to-suit opportunities. The Company determined it is not the primary beneficiary.
(4)    As of September 30, 2020, represents one joint venture investment, which owns a single-tenant, net-leased asset.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
During the nine months ended September 30, 2020, NNN JV sold two assets and the Company recognized an aggregate gain on the transactions of $557 within equity in earnings (losses) of non-consolidated entities within its unaudited condensed consolidated statement of operations. In conjunction with these property sales, NNN JV received net proceeds of $8,504 after the satisfaction of $40,800 of its non-recourse mortgage indebtedness.
During the nine months ended September 30, 2019, NNN JV sold four assets and the Company recognized aggregate gains on the transactions of $3,529 within equity in earnings (losses) of non-consolidated entities in its unaudited condensed consolidated statement of operations. In conjunction with these property sales, NNN JV received aggregate net proceeds of $45,208 after the satisfaction of an aggregate of $101,520 of its non-recourse mortgage indebtedness.
In February 2019, a non-consolidated real estate entity, in which the Company owned a 15% ownership interest, sold its only asset and the Company received $2,317 of proceeds. The Company recognized a gain on the transaction of $824, which is included in equity in earnings (losses) on non-consolidated entities within its unaudited condensed consolidated statement of operations.

(7)Debt
The Company had the following mortgages and notes payable outstanding as of September 30, 2020 and December 31, 2019:
September 30, 2020December 31, 2019
Mortgages and notes payable$159,686 $393,872 
Unamortized debt issuance costs(1,963)(3,600)
$157,723 $390,272 
Interest rates, including imputed rates on mortgages and notes payable, ranged from 3.5% to 6.5%, respectively, at September 30, 2020 and December 31, 2019, and all mortgages and notes payables mature between 2020 and 2032 as of September 30, 2020. The weighted-average interest rate was 4.7% and 4.5% at September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, the Lake Jackson, Texas property, which was held for sale, was encumbered by a $179,110 mortgage that matures in 2036 and bears interest at 4.04% and is not included in the September 30, 2020 table above.
As of September 30, 2020, the Company had one non-recourse mortgage loan that was in default with an outstanding principal balance of $18,413. The mortgage loan is secured by a vacant office property in Boca Raton, Florida.
The Company had the following senior notes outstanding as of September 30, 2020 and December 31, 2019:
Issue DateSeptember 30, 2020December 31, 2019Interest RateMaturity DateIssue Price
August 2020$400,000 $ 2.70 %September 203099.233 %
May 2014198,932 250,000 4.40 %June 202499.883 %
June 2013188,756 250,000 4.25 %June 202399.026 %
787,688 500,000 
Unamortized debt discount(3,619)(963)
Unamortized debt issuance cost(5,126)(2,167)
$778,943 $496,870 
Each series of the senior notes is unsecured and requires payment of interest semi-annually in arrears. The Company may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
In August 2020, the Company issued $400,000 aggregate principal amount of 2.70% Senior Notes due 2030 ("2030 Senior Notes") at an issuance price of 99.233% of the principal amount. The Company issued the 2030 Senior Notes at an initial discount of $3,068 which is being recognized as additional interest expense over the term of the 2030 Senior Notes.
During the three months ended September 30, 2020, the Company used a portion of the net proceeds from the offering of the 2030 Senior Notes to repurchase $61,244 and $51,068 aggregate principal balance of its outstanding 4.25% senior notes due 2023 and 4.40% senior notes due 2024, respectively, through a tender offer. The tender offer consideration included $9,477 in prepayment costs and fees and $1,024 of accrued interest. The Company recognized a $10,066 debt satisfaction charge related to the aggregate repurchases, which included a write-off of the proportionate amount of unamortized discount and debt issuance costs related to the 2023 and 2024 senior notes.
The Company has an unsecured credit agreement with KeyBank National Association, as agent. A summary of the significant terms, as of September 30, 2020, is as follows:

Maturity Date
Current
Interest Rate
$600,000 Revolving Credit Facility(1)
February 2023
LIBOR + 0.90%
$300,000 Term Loan(2)
January 2025
LIBOR + 1.00%
(1)     Maturity date of the revolving credit facility can be extended to February 2024 at the Company's option. The interest rate ranges from LIBOR plus 0.775% to 1.45%. At September 30, 2020, the Company had no borrowings outstanding and availability of $600,000, subject to covenant compliance.
(2) The LIBOR portion of the interest rate was swapped to obtain a current fixed rate of 2.732% per annum. The aggregate unamortized debt issuance costs for the term loan was $2,183 and $2,561 as of September 30, 2020 and December 31, 2019, respectively.

The Company was compliant with all applicable financial covenants contained in its corporate-level debt agreements at September 30, 2020.
During 2007, the Company issued $200,000 original principal amount of Trust Preferred Securities. The Trust Preferred Securities, which are classified as debt, are due in 2037, are open for redemption at the Company's option, bore interest at a fixed rate of 6.804% through April 2017 and bear interest at a variable rate of three-month LIBOR plus 170 basis points through maturity. The interest rate at September 30, 2020 was 1.968%. As of September 30, 2020 and December 31, 2019, there was $129,120 original principal amount of Trust Preferred Securities outstanding and $1,650 and $1,724, respectively, of unamortized debt issuance costs.
Capitalized interest recorded during the nine months ended September 30, 2020 and 2019 was $1,112 and $251, respectively.

(8)    Derivatives and Hedging Activities
Risk Management Objective of Using Derivatives. The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the type, amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash receipts and its known or expected cash payments principally related to the Company's investments and borrowings.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Cash Flow Hedges of Interest Rate Risk. The Company's objectives in using interest rate derivatives are to add stability to interest expense, to manage its exposure to interest rate movements and therefore manage its cash outflows as it relates to the underlying debt instruments. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy relating to certain of its variable rate debt instruments. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company did not incur any ineffectiveness during the nine months ended September 30, 2020 and 2019.
During July 2019, the Company entered into four interest rate swap agreements with its counterparties. The swaps were designated as cash flow hedges of the risk of variability attributable to changes in the LIBOR swap rates on its $300,000 LIBOR-indexed variable-rate unsecured term loan. Accordingly, changes in fair value of the swaps are recorded in other comprehensive income (loss) and reclassified to earnings as interest becomes receivable or payable. The swaps expire coterminous with the extended maturity of the term loan in January 2025. During the next 12 months ending September 30, 2021, the Company estimates that an additional $4,830 will be reclassified as an increase to interest expense if the swaps remain outstanding.
Interest Rate DerivativeNumber of InstrumentsNotional
Interest Rate Swaps4$300,000
The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the condensed consolidated balance sheets:
 As of September 30, 2020As of December 31, 2019
 Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Derivatives designated as hedging instruments
Interest Rate SwapsAccounts Payable and Other Liabilities$(19,687)Accounts Payable and Other Liabilities$(1,928)

The table below presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2020 and 2019.
Derivatives in Cash FlowAmount of Gain (Loss)
Recognized in OCI on Derivatives
September 30,
Amount of (Income) Loss
Reclassified from Accumulated OCI into Income (1)
September 30,
Hedging Relationships2020201920202019
Interest Rate Swaps$(19,934)$(5,326)$2,175 $(299)
(1)    Amounts reclassified from accumulated other comprehensive income (loss) to interest expense within the unaudited condensed consolidated statement of operations.
Total interest expense presented in the unaudited condensed consolidated statements of operations in which the effects of cash flow hedges are recorded was $42,610 and $50,715 for the nine months ended September 30, 2020 and 2019, respectively.
The Company's agreements with swap derivatives counterparties contain provisions whereby if the Company defaults on the underlying indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of the swap derivative obligation. As of September 30, 2020, the Company had not posted any collateral related to the agreements.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)

(9)    Lease Accounting
The following is a summary of the Company's accounting for leases as of and during the nine-month period ended September 30, 2020 and 2019:
Lessor
Lexington’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased industrial and office real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred.
Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before.
Accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions.
From a lessor perspective, the Company concluded that revenue from lease components are primarily recognized on a straight-line basis over the lease term unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Revenue is recognized on a contractual basis for leases with escalations tied to a Consumer Price Index (CPI) with no floor. If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition commences when the improvements are substantially complete and control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred on the unaudited condensed consolidated balance sheets.
The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectable, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. In February 2020, the Company wrote off a deferred rent receivable balance of $615 as a reduction of rental revenue, related to a tenant that dissolved and surrendered its leased premises in an industrial property located in the Columbus, Ohio market. During the nine months ended September 30, 2019, rental revenue was reduced by an aggregate $1,452 for accounts receivable and deferred rent receivable deemed uncollectable.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Certain tenants have been experiencing financial difficulties as a result of the COVID-19 pandemic. During the nine months ended September 30, 2020, the Company wrote off or reserved aggregate deferred rent receivable balances of $1,383, as a reduction of rental revenue, related to certain tenants as the deferred rent receivable balances were deemed uncollectable. In addition, during the nine-month period ended September 30, 2020, the Company also wrote off or reserved an aggregate of $177 accounts receivable relating to certain tenants suffering from the current economic conditions.
The Company determined that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service is included within rental revenue is CAM services provided as part of the Company’s real estate leases. Topic 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. As of September 30, 2020 and 2019, the Company incurred $67 and $163, respectively, of costs that were not incremental to the execution of leases, which are included in property operating expenses on its unaudited condensed consolidated statements of operations.
The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities. The Company does not have residual value guarantees on specific properties.
The following table presents the Company’s classification of rental revenue for its operating leases for the three and nine months ended September 30, 2020 and 2019:
Three Months EndedNine Months Ended
Classification September 30, 2020September 30, 2019September 30, 2020September 30, 2019
Fixed$74,902 $73,396 $219,542 $218,808 
Variable(1)
8,690 6,929 23,879 20,250 
Total$83,592 $80,325 $243,421 $239,058 
(1)    Primarily comprised of tenant reimbursements.
Future fixed rental receipts for leases, assuming no new or re-negotiated leases as of September 30, 2020 were as follows:
2020 - remainder$71,930 
2021281,421 
2022270,067 
2023269,224 
2024238,853 
2025212,486 
Thereafter1,280,114 
Total$2,624,095 

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Lessee
The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2020. The leases have remaining lease terms of up to 43 years, some of which include options to extend the leases in 5 to 10-year increments for up to 53 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. Minimum lease payments for leases that commenced before the date of adoption of ASC 842 were determined based on previous leases guidance under ASC 840. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred.
The accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate.
The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease.
As the Company does not know the rate implicit in the respective leases, the Company used its incremental borrowing rate based on the information available at the transition date for such existing leases. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases.
Supplemental information related to operating leases is as follows:
Nine Months Ended
September 30, 2020September 30, 2019
Weighted-average remaining lease term
Operating leases (years)12.312.4
Weighted-average discount rate
Operating leases4.2 %4.1 %

The components of lease expense for the nine months ended September 30, 2020 and 2019 were as follows:
Income Statement Classification FixedVariableTotal
2020:
Property operating$2,985 $ $2,985 
General and administrative1,012 76 1,088 
Total$3,997 $76 $4,073 
2019:
Property operating$2,988 $ $2,988 
General and administrative1,007 85 1,092 
Total$3,995 $85 $4,080 
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The Company recognized sublease income of $2,824 and $2,823 for the nine months ended September 30, 2020 and 2019, respectively.
The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2020:
Operating Leases
2020 - remainder$1,241 
20215,117 
20225,211 
20235,355 
20245,377 
20255,377 
Thereafter21,389 
Total lease payments$49,067 
Less: Imputed interest(11,729)
Present value of operating lease liabilities$37,338 

(10)Concentration of Risk
The Company seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, 2020 and 2019, no single tenant represented greater than 10% of rental revenues.
Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions.

(11)Equity
At-The-Market Offering Program. The Company maintains an At-The-Market offering program ("ATM program") under which the Company can issue common shares. The following table summarizes common share issuances under the ATM program for the nine months ended September 30, 2020 and 2019, respectively:

Nine months ended September 30, 2020
Shares Sold Net Proceeds
2020 ATM Issuances5,950,882$61,032
Nine months ended September 30, 2019
Shares SoldNet Proceeds
2019 ATM Issuances3,020,190$31,083

Under the ATM program, the Company may also enter into forward sales agreements. The Company entered into a forward sales transaction for the sale of 3,875,751 common shares during the nine months ended September 30, 2020 that have not yet been settled. Subject to the Company's right to elect cash or net share settlement, the Company expects to settle the forward sales transaction by the maturity date of August 2021. The shares have an initial weighted-average sales price of $11.23 per common share, which is subject to adjustment in accordance with the forward sales contract.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
As of September 30, 2020, common shares with an aggregate value of $189,584 remain available for issuance under the ATM program.

Underwritten Common Stock Offerings. During 2020, the Company issued 17,250,000 common shares at a public offering price of $9.60 per common share in an underwritten offering and generated net proceeds of approximately $164,000. The proceeds have and will be used for general corporate purposes, including acquisitions, and pending the application of the proceeds, were used to pay down all of the then outstanding balance under the Company's revolving credit facility.

During the nine months ended September 30, 2019, the Company issued 10,000,000 common shares at $10.09 per common share in an underwritten offering and generated net proceeds of $100,749. The net proceeds were used for working capital and for general corporate purposes, including acquisitions.

Nonemployee Stock Based Compensation. In addition, during the nine months ended September 30, 2020 and 2019, the Company issued 35,880 and 54,726, respectively, of fully vested common shares to non-management members of the Company's Board of Trustees with a fair value of $375 and $470, respectively.

Share Repurchase Program. In July 2015, the Company's Board of Trustees authorized the repurchase of up to 10,000,000 common shares and increased this authorization by 10,000,000 in 2018. This share repurchase program has no expiration date. During the nine months ended September 30, 2020 and 2019, the Company repurchased and retired 1,329,940 and 441,581 common shares, respectively, at an average price of $8.28 and $8.13, respectively, per common share under the share repurchase program. As of September 30, 2020, 8,976,315 common shares remain available for repurchase under this authorization. The Company records a liability for repurchases that have not yet been settled as of the period end. There were no unsettled repurchases as of September 30, 2020.

A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:
Nine Months Ended September 30,
20202019
Balance at beginning of period$(1,928)$76 
Other comprehensive loss before reclassifications(19,934)(5,326)
Amounts of (income) loss reclassified from accumulated other comprehensive income to interest expense
2,175 (299)
Balance at end of period$(19,687)$(5,549)
Noncontrolling Interests. In conjunction with several of the Company's acquisitions in prior years, sellers were issued OP units as a form of consideration. All OP units, other than OP units owned by the Company, are redeemable for common shares at certain times, at the option of the holders, and are generally not otherwise mandatorily redeemable by the Company. The OP units are classified as a component of permanent equity as the Company has determined that the OP units are not redeemable securities as defined by GAAP. Each OP unit is currently redeemable at the holder's option for approximately 1.13 common shares, subject to future adjustments.
As of September 30, 2020, there were approximately 2,711,000 OP units outstanding other than OP units owned by the Company. All OP units receive distributions in accordance with the LCIF partnership agreement. To the extent that the Company's dividend per common share is less than the stated distribution per OP unit per the LCIF partnership agreement, the distributions per OP unit are reduced by the percentage reduction in the Company's dividend per common share. No OP units have a liquidation preference.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests:

Net Income Attributable to
Shareholders and Transfers from Noncontrolling Interests
Nine Months Ended September 30,
 20202019
Net income attributable to Lexington Realty Trust shareholders$78,924 $194,679 
Transfers from noncontrolling interests:
Increase in additional paid-in-capital for redemption of noncontrolling OP units
632 504 
Change from net income attributable to shareholders and transfers from noncontrolling interests
$79,556 $195,183 


(12)Related Party Transactions
There were no related party transactions other than those disclosed elsewhere in this Quarterly Report and the audited consolidated financial statements in the Annual Report.

(13)Commitments and Contingencies
In addition to the commitments and contingencies disclosed elsewhere and previously disclosed, the Company has the following commitments and contingencies.
The Company is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Company, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries.
The Company and LCIF are parties to a funding agreement under which the Company may be required to fund distributions made on account of LCIF's OP units. Pursuant to the funding agreement, the parties agreed that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, Lexington will fund the shortfall. Payments under the agreement will be made in the form of loans to LCIF and will bear interest at prevailing rates as determined by the Company in its discretion, but no less than the applicable federal rate. LCIF's right to receive these loans will expire if no OP units remain outstanding and all such loans are repaid. No amounts have been advanced under this agreement.
From time to time, the Company is, directly and indirectly, involved in legal proceedings arising in the ordinary course of business. Management believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's business, financial condition and results of operations.

(14)Supplemental Disclosure of Statement of Cash Flow Information
In addition to disclosures discussed elsewhere, during the nine months ended September 30, 2020 and 2019, the Company paid $34,818 and $40,798, respectively, for interest and $1,525 and $1,321, respectively, for income taxes.
As a result of the foreclosure of two office properties located in South Carolina and Kansas, during the nine months ended September 30, 2020, there was an aggregate non-cash charge of $38,942 and $14,188 in mortgages and notes payable, net, and real estate, net, respectively.

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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
During the nine months ended September 30, 2020, the Company exercised extension options on two ground leases related to parcels of land located in Owensboro, Kentucky and Orlando, Florida. The extensions of the ground lease terms resulted in an aggregate non-cash increase of $719 to the related operating lease liabilities and right of use assets.

During the nine months ended September 30, 2019, the Company sold its Richland, Washington property, which included the assumption by the buyer of the related non-recourse mortgage debt in the amount of $110,000.

(15)Subsequent Events
Subsequent to September 30, 2020, the Company:
disposed of three properties for an aggregate gross disposition price of approximately $39,634;
entered into an agreement to fund a build-to-suit industrial property in the Phoenix, Arizona market for an estimated cost of $72,000, which will be subject to a 15-year net lease;
entered into forward sales transactions under the ATM program for the sale of 153,441 common shares that have not yet been settled. The shares have an initial weighted-average sales price of $11.03 per common share, which is subject to adjustment in accordance with the sales contract; and
declared a common share/unit dividend/distribution of $0.1075 per share/unit, an increase of 2.4%.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction

When we use the terms “the Company,” “we,” “us” and “our,” we mean Lexington Realty Trust and all entities owned by us, including non-consolidated entities, except where it is clear that the term means only Lexington Realty Trust. References herein to ‘‘this Quarterly Report” are to this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2020. The results of operations contained herein for the three and nine months ended September 30, 2020 and 2019 are not necessarily indicative of the results that may be expected for a full year.

The following is a discussion and analysis of the unaudited condensed consolidated financial condition and results of operations of Lexington Realty Trust for the three and nine months ended September 30, 2020 and 2019, 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 20, 2020, which we refer to as the Annual Report. Historical results may not be indicative of future performance.

Forward-Looking Statements. This Quarterly Report, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects,” “may,” “plans,” “predicts,” “will,” “will likely result” or similar expressions. Readers should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. In particular, the factors that could cause actual results, performances or achievements to differ materially from current expectations, strategies or plans include, among others, any risks discussed below in “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and under the headings “Risk Factors” in this Quarterly Report and “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in the Annual Report and other periodic reports filed by the Company with the SEC. Except as required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Accordingly, there is no assurance that our expectations will be realized.

Overview
General. We are a Maryland real estate investment trust, or REIT, that owns a portfolio of equity investments focused on single-tenant industrial properties.
As of September 30, 2020, we had ownership interests in approximately 135 consolidated real estate properties, located in 29 states and containing an aggregate of approximately 56.3 million square feet of space, approximately 98.9% of which was leased. The properties in which we have an interest are primarily net leased to tenants in various industries.
Our revenues and cash flows are generated predominantly from property rent receipts. As a result, growth in revenues and cash flows is directly correlated to our ability to (1) acquire income producing real estate investments and (2) re-lease properties that are vacant, or may become vacant, at favorable rental rates.
Our current business strategy is focused on enhancing our cash flow stability, growing our portfolio with attractive leased industrial investments, reducing lease rollover risk and maintaining a strong and flexible balance sheet to allow us to act on opportunities as they arise. To that end, during 2020, we continue to strive to be an active seller of non-core assets such as office properties, retail properties and vacant properties. In addition, we continue our efforts to increase the percentage of industrial assets in our portfolio, including through limited speculative development. Our non-core asset sales efforts and acquisitions during the nine months ended September 30, 2020, have resulted in our percentage of gross book value from industrial assets, excluding held for sale assets, to increase to 88.5% as of September 30, 2020.
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COVID-19 Impact. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic, and on March 13, 2020 the United States declared a national emergency with respect to COVID-19. As federal, state and local governments begin to ease restrictions, our management continues to monitor events and is taking steps to mitigate the potential impact and risks to us.

We have received, and may continue to receive, limited rent relief requests from our tenants. However, we do not believe that these rent relief requests will have a material impact on our rental revenues. During the nine months ended September 30, 2020, we granted rent relief of $0.1 million in exchange for a two-year lease extension to one tenant and a nominal rent deferral to another tenant. In addition, during the nine months ended September 30, 2020, we wrote off or reserved an aggregate of $1.4 million of deferred rent receivables as we determined that the future collection of the full contractual lease payments is no longer probable. A limited number of other tenants, particularly retail tenants and those with businesses tied to the aviation industry, continue to be impacted by COVID-19 and related government restrictions and social distancing requirements. We continue to believe that the impacts of COVID-19 on our portfolio are mitigated due to our focus on warehouse and distribution industrial properties and the diversity of our tenant base, both geographically and by industry exposure.

While our acquisition activity has recovered from the reduced level experienced earlier in 2020, we believe that there continues to be limited financing opportunities for potential purchasers of our properties, which has impacted our disposition activities.

We remain unable to estimate the long-term impacts COVID-19 will have on our financial condition.

Third Quarter 2020 Transaction Summary.
The following summarizes our significant transactions during the three months ended September 30, 2020.
Leasing Activity:
During the third quarter of 2020, we entered into new leases and lease extensions encompassing 1.3 million square feet. The average fixed rent on these extended leases was $2.86 per square foot compared to the average fixed rent on these leases before extension of $2.69 per square foot. The weighted-average cost of tenant improvements and lease commissions was $2.90 per square foot for new leases and we did not incur tenant improvement costs or lease commissions related to the extended leases.
Investments/Capital Recycling:
Acquired two properties for an aggregate cost of $70.1 million.
Invested an aggregate of $14.0 million in four development projects.
Disposed of our interests in three consolidated properties for an aggregate gross disposition price of $66.5 million.
Debt:
Issued $400.0 million aggregate principal amount of 2.70% Senior Notes due 2030 ("2030 Senior Notes") at an issuance price of 99.233% of the principal amount.
Repurchased $61.2 million and $51.1 million aggregate principal balance of our outstanding 4.25% Senior Notes due 2023 (the "2023 Senior Notes") and 4.40% Senior Notes due 2024 (the "2024 Senior Notes"), respectively, repurchased pursuant to a tender offer.
Repaid $40.0 million outstanding on our revolving credit facility.
Satisfied a $32.1 million mortgage encumbering our Overland Park, Kansas office property sold in foreclosure.
Equity:
Issued 0.6 million common shares under our At-the-Market offering program and generated net proceeds of approximately $6.7 million.
Entered into a forward sales transaction to sell 3.9 million common shares under our At-the-Market offering program on a forward basis at an initial weighted-average sales price of $11.23 per common share.

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Acquisition/Disposition Activity:
During the nine months ended September 30, 2020, we completed the following industrial transactions, inclusive of the acquisitions above:
MarketSquare FeetCapitalized Cost (millions)Date AcquiredApproximate Lease Term (years)
Chicago, IL705,661$53.6 January 20209.9
Phoenix, AZ 160,14019.2 January 20206.0
Chicago, IL 473,28039.2 January 202010.0
Dallas, TX 1,214,52683.5 February 20209.5
Savannah, GA499,50034.8 April 20207.3
Dallas, TX120,96010.7 May 202010.1
Savannah, GA355,52730.4 June 20205.0
Savannah, GA88,5039.1 June 20205.2
Houston, TX248,24020.9 June 20204.9
Ocala, FL617,05558.3 June 202010.1
DC/Baltimore, MD324,53529.2 September 20204.2
Savannah, GA419,66740.9 September 20205.9
5,227,594$429.8 

During the nine months ended September 30, 2020, we disposed of eight properties and a land parcel, inclusive of the dispositions above, for an aggregate gross disposition price of $140.6 million.


Critical Accounting Policies
Management's discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. In preparing our unaudited condensed consolidated financial statements in accordance with GAAP and pursuant to the rules and regulations of the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosures of contingent assets and liabilities. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances, including the recent economic uncertainty primarily caused by COVID-19. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis, we evaluate our assumptions, judgments and estimates. Certain of our accounting policies are discussed under (1) Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report, (2) note 2 to our consolidated financial statements contained in our Annual Report and (3) note 1 to our unaudited condensed consolidated financial statements contained in this Quarterly Report. We believe there have been no material changes to the items that we disclosed as our critical accounting policies under Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.

Liquidity and Capital Resources
Cash Flows. We believe that cash flows from operations will continue to provide adequate capital to fund our operating and administrative expenses, regular debt service obligations and all dividend payments in accordance with applicable REIT requirements in both the short-term and long-term. However, we anticipate that our cash flow from operations may be negatively affected in the near term if we grant tenant rent relief packages or experience tenant defaults as a result of the effects of COVID-19. In addition, we anticipate that cash on hand, borrowings under our unsecured revolving credit facility, capital recycling proceeds, issuances of equity, mortgage proceeds and other debt, as well as other available alternatives, will provide the necessary capital required by our business.
At September 30, 2020, we had $18.4 million and $10.4 million of property-specific mortgage balloon debt due in 2020 and 2021, respectively. The 2020 balloon debt relates to a mortgage that is in default. We believe we have sufficient sources of liquidity to meet obligations we are required to meet through cash on hand ($287.9 million at September 30, 2020), property sale proceeds, borrowing capacity under our unsecured revolving credit facility ($600 million at September 30, 2020), which expires in 2023, but can be extended by us to 2024, and future cash flows from operations.
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The mortgages encumbering the properties in which we have an interest are generally non-recourse to us, such that in situations where we believe it is beneficial to satisfy a mortgage obligation by transferring title of the property to the lender, including through a foreclosure, we may do so.
Cash flows from operations were $152.5 million for the nine months ended September 30, 2020 as compared to $142.9 million for the nine months ended September 30, 2019. The increase was primarily related to the impact of cash flow generated from acquiring properties, partially offset by 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 mortgage 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.
Net cash used in investing activities totaled $370.6 million and $114.7 million during the nine months ended September 30, 2020 and 2019, respectively. Cash used in investing activities related primarily to 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 related primarily to proceeds from the sale of properties, distributions from non-consolidated entities and changes in real estate deposits, net.
Net cash provided by (used in) financing activities totaled $378.5 million and $(71.7) million during the nine months ended September 30, 2020 and 2019, respectively. Cash provided by financing activities related primarily to the issuance of the 2030 Senior Notes, the revolving credit facility borrowings and issuances of common shares. Cash used in financing activities was primarily attributable to the repurchase of a portion of the 2023 Senior Notes and 2024 Senior Notes through a tender offer, dividend and distribution payments, repayment of debt obligations and repurchases of common shares.
Common Share Issuances:

At-The-Market Offering Program. We maintain an At-The-Market offering program ("ATM program") under which the Company can issue common shares. The following table summarizes common share issuances under the ATM program for the nine months ended September 30, 2020 and 2019, respectively:
Nine months ended September 30, 2020
Shares Sold Net Proceeds
2020 ATM Issuances5,950,882 $61.0  million
Nine months ended September 30, 2019
Shares SoldNet Proceeds
2019 ATM Issuances3,020,190$31.1  million

Under the ATM program, we may also enter into forward sales agreements. We entered into a forward sales transaction for the sale of 3,875,751 common shares during the nine months ended September 30, 2020 that have not yet been settled. Subject to our right to elect cash or net share settlement, we expect to settle the forward sales transaction by the maturity date of August 2021. The shares have an initial weighted-average sales price of $11.23 per common share, which is subject to adjustment in accordance with the forward sales contract.

As of September 30, 2020, common shares with an aggregate value of $189.6 million remain available for issuance under the ATM program.

Underwritten Common Stock Offerings. During 2020, we issued 17,250,000 common shares at a public offering price of $9.60 per common share in an underwritten offering and generated net proceeds of approximately $164.0 million. The proceeds have and will be used for general corporate purposes, including acquisitions, and, pending the application of the proceeds, were used to pay down all of the then outstanding balance under our revolving credit facility.

The volatility in the capital markets primarily resulting from the effects of the COVID-19 pandemic may negatively affect our ability to access the capital markets through our ATM program and other offerings.

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Dividends. Dividends paid to our common and preferred shareholders were $88.0 million and $96.1 million in the nine months ended September 30, 2020 and 2019, respectively.
We declared a quarterly dividend of $0.105 per common share during the three months ended September 30, 2020, which is an increase from the $0.1025 per common share quarterly dividend declared during the three months ended September 30, 2019.
UPREIT Structure. As of September 30, 2020, 2,711,000 units of limited partner interests, or OP units, in our operating partnership, LCIF, were outstanding not including OP units held by us. Assuming all outstanding OP units not held by us were redeemed on such date, the estimated fair value of such OP units was $31.9 million based on our closing price of $10.45 per common share as of September 30, 2020 and a redemption factor of approximately 1.13 common shares per OP unit.
Financings. The following senior notes were outstanding as of September 30, 2020:
Issue DateFace Amount ($000)Interest RateMaturity DateIssue Price
August 2020$400,000 2.70 %September 203099.233 %
May 2014198,932 4.40 %June 202499.883 %
June 2013188,756 4.25 %June 202399.026 %
$787,688 
The senior notes are unsecured and pay interest semi-annually in arrears. We may redeem the senior notes at our option at any time prior to maturity in whole or in part by paying the principal amount of the senior notes being redeemed plus a premium.
In August 2020, we issued $400.0 million aggregate principal amount of 2.70% Senior Notes due 2030 ("2030 Senior Notes") at an issuance price of 99.233% of the principal amount. We issued the 2030 Senior Notes at an initial discount of $3.1 million, which is being recognized as additional interest expense over the term of the 2030 Senior Notes.

During the nine months ended September 30, 2020, we used a portion of the net proceeds from the offering of the 2030 Senior Notes to repurchase $61.2 million and $51.1 million aggregate principal balance of our outstanding 2023 Senior Notes and 2024 Senior Notes, respectively, through a tender offer. The tender offer consideration included $9.5 million in prepayment costs and fees and $1.0 million of accrued interest. We recognized a $10.1 million debt satisfaction charge related to the total repurchases, which includes a write-off of the proportionate amount of unamortized discount and debt issuance costs related to the 2023 Senior Notes and 2024 Senior Notes.
We have an unsecured credit agreement with KeyBank National Association, as agent. A summary of the significant terms, as of September 30, 2020, is as follows:

Maturity Date
Current
Interest Rate
$600.0 Million Revolving Credit Facility(1)
February 2023LIBOR + 0.90%
$300.0 Million Term Loan(2)
January 2025LIBOR + 1.00%
(1) Maturity date of the revolving credit facility can be extended to February 2024 at our option. The interest rate ranges from LIBOR plus 0.775% to 1.45%. At September 30, 2020, we had no borrowings outstanding and availability of $600.0 million, subject to covenant compliance.
(2) The LIBOR portion of the interest rate was swapped to obtain a current fixed rate of 2.732% per annum.

As of September 30, 2020, we were compliant with all applicable financial covenants contained in our corporate-level debt agreements.


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Results of Operations
Three months ended September 30, 2020 compared with three months ended September 30, 2019.
The decrease in net income attributable to common shareholders of $101.3 million was primarily due to the items discussed below.
The increase in total gross revenues of $3.0 million was primarily a result of an increase in rental revenue. Rental revenue increased $3.3 million primarily as a result of an increase in rental revenue from asset acquisitions that occurred subsequent to the third quarter of 2019, partially offset by a decrease in rental revenue due to property sales. The increase in total gross revenues was partially offset by a decrease in other revenue of $0.3 million, primarily due to a decrease in fee income.
The increase in depreciation and amortization expense of $3.3 million was primarily due to acquisition activity.
The increase in property operating expense of $0.7 million was primarily due to an increase in operating expense responsibilities at certain properties.
The decrease in general and administrative expenses of $0.6 million was primarily due to a decrease in professional fees.
The decrease in interest and amortization expense of $2.8 million related primarily to a decrease in the amount of our mortgage debt outstanding and a decrease in our overall borrowing rate.
The increase in debt satisfaction gains, net, of $22.0 million was primarily related to the recognition of a debt satisfaction gain of $27.6 million upon the foreclosure of our Overland Park, Kansas office property, offset by a $10.1 million debt satisfaction charge incurred as a result of the repurchase of a portion of the 2023 Senior Notes and 2024 Senior Notes pursuant to a tender offer. During the third quarter ended September 2019, we incurred an aggregate of $4.4 million of debt satisfaction charges upon the sale of two of our properties.
The increase in impairment charges of $5.5 million related to the timing of impairment charges recognized on certain properties. The impairments were primarily due to potential sales, vacancies and lack of leasing prospects.
The decrease in gains on sales of properties of $119.6 million related to the timing of property dispositions.
The decrease in equity in earnings of non-consolidated entities of $2.8 million primarily related to the timing of gains recognized on the sale of joint venture assets.
The decrease in net income attributable to noncontrolling interests of $2.8 million is primarily a result of a decrease in earnings of LCIF, primarily, as a result of recognizing gains on sold properties in 2019.
Nine months ended September 30, 2020 compared with nine months ended September 30, 2019.
The decrease in net income attributable to common shareholders of $115.6 million was primarily due to the items discussed below.
The increase in total gross revenues of $4.2 million was primarily a result of an increase in rental revenue attributable to an increase in rental revenue from asset acquisitions that occurred subsequent to the third quarter of 2019, partially offset by a decrease in rental revenue due to property sales.
The increase in depreciation and amortization expense of $9.3 million was primarily due to acquisition activity.
The increase in property operating expenses of $0.9 million was primarily due to an increase in operating expense responsibilities at certain properties.
The decrease in general and administrative expenses of $1.0 million was primarily due to a decrease in professional fees and travel expenses, as a result of COVID-19.
The decrease in non-operating income of $1.6 million was primarily related to funds received in 2019 related to a bankruptcy claim and funds received to settle a tenant's deferred maintenance obligation, with no comparable income in 2020.
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The decrease in interest and amortization expense of $8.1 million related primarily to a decrease in the amount of our mortgage debt outstanding and a decrease in our overall borrowing rate.
The increase in debt satisfaction gains, net, of $23.5 million was primarily related to the recognition of aggregate debt satisfaction gains of $29.0 million upon the foreclosure of our Charleston, South Carolina and Overland Park, Kansas properties, offset by a $10.1 million debt satisfaction charge incurred as a result of the repurchase of a portion of the 2023 Senior Notes and 2024 Senior Notes pursuant to a tender offer. During the third quarter ended September 2019, we incurred an aggregate of $4.4 million of debt satisfaction charges upon the sale of two of our properties.
The increase in impairment charges of $5.4 million was primarily due to the timing of impairment charges taken on certain properties.
The decrease in gains on sales of properties of $134.8 million related to the timing of property dispositions.
The decrease in equity in earnings of non-consolidated entities of $3.3 million primarily related to the timing of gains recognized on the sale of joint venture assets.
The decrease in net income attributable to noncontrolling interests of $2.9 million is primarily a result of a decrease in earnings of LCIF, primarily, as a result of recognizing gains on sold properties in 2019.

The increase in net income or decrease in net loss in future periods will be closely tied to the level of acquisitions made by us. Without acquisitions, the sources of growth in net income are limited to fixed rent adjustments and index adjustments (such as the consumer price index), reduced interest expense on amortizing mortgages and variable rate indebtedness and by controlling other variable overhead costs. However, there are many factors beyond management's control that could offset these items including, without limitation, changes in economic conditions such as the recent economic uncertainty primarily caused by the COVID-19 pandemic, increased interest rates and tenant monetary defaults and the other risks described in this Quarterly Report. Furthermore, our ability to complete acquisitions may be limited due to travel restrictions and social distancing measures during the COVID-19 pandemic.
Same-Store Results
Same-store net operating income, or NOI, which is a non-GAAP measure, represents the NOI for consolidated properties that were owned and included in our portfolio for two comparable reporting periods, excluding properties encumbered by mortgage loans in default, as applicable. We define NOI as operating revenues (rental income (less GAAP rent adjustments and lease termination income), and other property income) less property operating expenses. As same-store NOI excludes the change in NOI from acquired and disposed of properties, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating same-store NOI, and accordingly same-store NOI may not be comparable to other REITs. Management believes that same-store NOI is a useful supplemental measure of our operating performance. However, same-store NOI should not be viewed as an alternative measure of our financial performance since it does not reflect the operations of our entire portfolio, nor does it reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations. We believe that net income is the most directly comparable GAAP measure to same-store NOI.

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The following presents our consolidated same-store NOI, for the nine months ended September 30, 2020 and 2019 ($000's):
Nine Months Ended September 30,
20202019
Total cash base rent$168,347 $165,254 
Tenant reimbursements18,494 18,027 
Property operating expenses(24,007)(22,380)
Same-store NOI$162,834 $160,901 

Our reported same-store NOI increased from the first nine months of 2019 to the first nine months of 2020 by 1.2%.

The increase in same-store NOI between periods primarily related to an increase in cash base rent, which was partially offset by an increase in operating expense responsibilities at certain properties. Our same-store results could be further impacted in the future due to COVID-19 related rent deferrals, rent forgiveness or tenant defaults (in the short-term and/or long-term).
Below is a reconciliation of net income to same-store NOI for periods presented ($000's):
Nine Months Ended September 30,
20202019
Net income$81,169 $199,870 
Interest and amortization expense42,610 50,715 
Provision for income taxes1,361 1,108 
Depreciation and amortization120,869 111,617 
General and administrative22,612 23,652 
Transaction costs81 — 
Non-operating and fee income(3,392)(4,836)
Gains on sales of properties(41,876)(176,662)
Impairment charges7,792 2,355 
Debt satisfaction (gains) charges, net(18,950)4,527 
Equity in (earnings) of non-consolidated entities(35)(3,288)
Lease termination income(662)(1,551)
Straight-line adjustments(10,224)(10,846)
Lease incentives732 898 
Amortization of above/below market leases(1,110)(174)
NOI200,977 197,385 
Less NOI:
Acquisitions and dispositions(38,272)(34,627)
Properties in default129 (1,857)
Same-Store NOI$162,834 $160,901 


33

Table of Contents

Funds From Operations
We believe that Funds from Operations, or FFO, which is a non-GAAP measure, is a widely recognized and appropriate measure of the performance of an equity REIT. We believe FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income.
The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sales of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO.” FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.
We present FFO available to common shareholders and unitholders - basic and also present FFO available to all equityholders and unitholders - diluted on a company-wide basis as if all securities that are convertible, at the holder's option, into our common shares, are converted at the beginning of the period. We also present Adjusted Company FFO available to all equityholders and unitholders - diluted which adjusts FFO available to all equityholders and unitholders - diluted for certain items which we believe are not indicative of the operating results of our real estate portfolio. We believe this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate these measures in a similar fashion, these measures may not be comparable to similarly titled measures as reported by others. These measures should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow as a measure of liquidity.

34

Table of Contents

The following presents a reconciliation of net income attributable to common shareholders to FFO available to common shareholders and unitholders and Adjusted Company FFO available to all equityholders and unitholders for the three and nine months ended September 30, 2020 and 2019 (unaudited and dollars in thousands, except share and per share amounts):
Three Months Ended September 30,Nine Months Ended September 30,
2020201920202019
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income attributable to common shareholders
$40,285 $141,560 $74,088 $189,657 
Adjustments:
Depreciation and amortization39,858 36,537 118,605 109,469 
Impairment charges - real estate
6,175 673 7,792 2,355 
Noncontrolling interests - OP units1,518 4,244 1,702 4,410 
Amortization of leasing commissions697 674 2,264 2,148 
Joint venture and noncontrolling interest adjustment2,094 2,267 6,463 7,200 
Gains on sales of properties, including non-consolidated entities
(20,886)(143,719)(42,433)(180,837)
FFO available to common shareholders and unitholders - basic69,741 42,236 168,481 134,402 
Preferred dividends1,573 1,573 4,718 4,718 
Amount allocated to participating securities46 186 118 304 
FFO available to all equityholders and unitholders - diluted71,360 43,995 173,317 139,424 
Transaction costs— 81 — 
Debt satisfaction (gains) charges, net, including non-consolidated entities
(17,522)4,679 (18,894)4,782 
Adjusted Company FFO available to all equityholders and unitholders - diluted
$53,839 $48,674 $154,504 $144,206 

Per Common Share and Unit Amounts
Basic:
FFO$0.25 $0.18 $0.63 $0.57 
Diluted:
FFO
$0.25 $0.18 $0.63 $0.58 
Adjusted Company FFO
$0.19 $0.20 $0.57 $0.60 

Weighted-Average Common Shares:
Basic:
Weighted-average common shares outstanding - basic EPS274,696,046 236,285,216 264,211,668 233,833,340 
Operating partnership units(1)
3,060,436 3,520,643 3,100,309 3,535,207 
Weighted-average common shares outstanding - basic FFO277,756,482 239,805,859 267,311,977 237,368,547 
Diluted:
Weighted-average common shares outstanding - diluted EPS276,022,762 241,355,289 265,446,221 234,011,643 
Operating partnership units(1)
3,060,436 3,520,643 3,100,309 3,535,207 
Unvested share-based payment awards19,261 25,090 19,813 20,169 
Preferred shares - Series C4,710,570 — 4,710,570 4,710,570 
Weighted-average common shares outstanding - diluted FFO283,813,029 244,901,022 273,276,913 242,277,589 
(1)    Includes all OP units other than OP units held by us.
35

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Off-Balance Sheet Arrangements
As of September 30, 2020, we had investments in various real estate entities with varying structures. The real estate investments owned by these entities 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 and breaches of material representations. We have guaranteed such obligations for certain of our non-consolidated entities.
36

Table of Contents

ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk relates primarily to our variable-rate indebtedness not subject to interest rate swaps and our fixed-rate debt. Our consolidated aggregate principal variable-rate indebtedness not subject to interest rate swaps was $129.1 million at each of September 30, 2020 and 2019, which represented 8.3% and 9.9%, respectively, of our aggregate principal consolidated indebtedness. During the three-month periods ended September 30, 2020 and 2019, our variable-rate indebtedness had a weighted-average interest rate of 2.0% and 3.6%, respectively. Had the weighted-average interest rate been 100 basis points higher, our interest expense for the three months ended September 30, 2020 and 2019 would have increased by $392 thousand and $745 thousand, respectively. During the nine-month periods ended September 30, 2020 and 2019, our variable-rate interest rate was 2.5% and 3.8%, respectively. Had the weighted-average interest rate been 100 basis points higher, our interest expense for the nine months ended September 30, 2020 and 2019 would have increased by $1.4 million and $2.8 million, respectively. As of September 30, 2020 and 2019, our aggregate principal consolidated fixed-rate debt was $1.4 billion and $1.2 billion, respectively, which represented 91.7% and 90.1%, respectively, of our aggregate principal indebtedness.

For certain of our financial instruments, fair values are not readily available since there are no active trading markets as characterized by current exchanges between willing parties. Accordingly, we derive or estimate fair values using various valuation techniques, such as computing the present value of estimated future cash flows using discount rates commensurate with the risks involved. However, the determination of estimated cash flows may be subjective and imprecise. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values, especially given the volatility of the current economic environment. The following fair value was determined using the interest rates that we believe our outstanding fixed-rate indebtedness would warrant as of September 30, 2020. We believe the fair value is indicative of the interest rate environment as of September 30, 2020, but this amount does not take into consideration the effects of subsequent interest rate fluctuations. Accordingly, we estimate that the fair value of our fixed-rate indebtedness was $1.5 billion as of September 30, 2020.

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we manage our exposure to fluctuations in market interest rates through the use of fixed-rate debt instruments to the extent that reasonably favorable rates are obtainable with such arrangements. We may enter into derivative financial instruments such as interest rate swaps or caps to mitigate our interest rate risk on a related financial instrument or to effectively lock the interest rate on a portion of our variable-rate debt. As of September 30, 2020, we had four interest rate swap agreements (see note 8 to our unaudited condensed consolidated financial statements contained in this Quarterly Report).

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures. Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report to determine if such controls and procedures were effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management, including each of our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures were effective as of September 30, 2020.

Changes in Internal Control Over Financial Reporting. There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this Quarterly Report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on the Effectiveness of Controls. Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
37

Table of Contents

PART II - OTHER INFORMATION
ITEM 1.Legal Proceedings.
From time to time, we are directly and indirectly involved in legal proceedings arising in the ordinary course of our business, including claims by lenders under non-recourse carve-out guarantees. We believe, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on our business, financial condition and results of operations.

ITEM 1A.Risk Factors.
There have been no material changes in our risk factors from those disclosed in the Annual Report and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

ITEM 2.Unregistered Sales of Equity Securities and Use of Proceeds.
The following table summarizes repurchases of our common shares/OP units during the three months ended September 30, 2020 pursuant to publicly announced repurchase plans(1):
Issuer Purchases of Equity Securities
Period(a)
Total Number of Shares/Units Purchased
(b)
Average Price Paid Per Share/ Unit
(c)
Total Number of Shares/Units Purchased as Part of Publicly Announced Plans or Programs(1)
(d)
Maximum Number of Shares/Units That May Yet Be Purchased Under the Plans or Programs(1)
July 1 - 31, 2020— $— — 8,976,315 
August 1 - 31, 2020— — — 8,976,315 
September 1 - 30, 2020— — — 8,976,315 
Third quarter 2020— $— — 8,976,315 
(1)Share repurchase authorization most recently announced November 2, 2018, which has no expiration date.

ITEM 3.Defaults Upon Senior Securities - not applicable.
ITEM 4.Mine Safety Disclosures - not applicable.
ITEM 5.Other Information - not applicable.

38

Table of Contents

ITEM 6.Exhibits.
Exhibit No.   Description
     
  
  
  
  
  
  
  
  
  
  
  
  
  
  
39

Table of Contents

  
  
  
  
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (2, 5)
101.SCHInline XBRL Taxonomy Extension Schema (2, 5)
101.CALInline XBRL Taxonomy Extension Calculation Linkbase (2, 5)
101.DEFInline XBRL Taxonomy Extension Definition Linkbase Document (2, 5)
101.LABInline XBRL Taxonomy Extension Label Linkbase Document (2, 5)
101.PREInline XBRL Taxonomy Extension Presentation Linkbase Document (2, 5)
(1)    Incorporated by reference.
(2)    Filed herewith.
(3)    Furnished herewith. This exhibit shall not be deemed "filed" for purposes of Section 11 or 12 of the Securities Act of 1933, as amended (the "Securities Act"), or Section 18 of the Securities Exchanges Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of those sections, and shall not be part of any registration statement to which it may relate, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing or document.
(4)    Management contract or compensatory plan or arrangement.
(5)    The following materials from this Quarterly Report on Form 10-Q for the period ended September 30, 2020 are formatted in Inline XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets of the Company; (ii) Unaudited Condensed Consolidated Statements of Operations of the Company; (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) of the Company; (iv) Unaudited Condensed Consolidated Statements of Changes in Equity of the Company; (v) Unaudited Condensed Consolidated Statements of Cash Flows of the Company; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements of the Company, detailed tagged.
40

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 Lexington Realty Trust
   
Date:November 5, 2020By:/s/ T. Wilson Eglin
  T. Wilson Eglin
  
Chief Executive Officer and President
(principal executive officer)
   
Date:November 5, 2020By:/s/ Beth Boulerice
  Beth Boulerice
  
Chief Financial Officer, Executive Vice President and Treasurer
(principal financial officer)




41
Document

Exhibit 31.1
CERTIFICATION
PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, T. Wilson Eglin, certify that:
1.I have reviewed this report on Form 10-Q of Lexington Realty Trust;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 5, 2020
/s/ T. Wilson Eglin
T. Wilson Eglin
Chief Executive Officer


Document

Exhibit 31.2
CERTIFICATION
PURSUANT TO SECTION 302 OF
THE SARBANES-OXLEY ACT OF 2002

I, Beth Boulerice, certify that:
1.I have reviewed this report on Form 10-Q of Lexington Realty Trust;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

November 5, 2020
/s/ Beth Boulerice
Beth Boulerice
Chief Financial Officer


Document

Exhibit 32.1
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lexington Realty Trust (“the Company”) on Form 10-Q for the period ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof, I, T. Wilson Eglin, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/s/ T. Wilson Eglin
T. Wilson Eglin
Chief Executive Officer
November 5, 2020



Document

Exhibit 32.2
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Lexington Realty Trust (“the Company”) on Form 10-Q for the period ended September 30, 2020 as filed with the Securities and Exchange Commission on the date hereof, I, Beth Boulerice, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:
(1)The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
 
/s/ Beth Boulerice
Beth Boulerice
Chief Financial Officer
November 5, 2020



v3.20.2
Cover - shares
9 Months Ended
Sep. 30, 2020
Nov. 03, 2020
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period Ended Date Sep. 30, 2020  
Document Transition Report false  
Entity File Number 1-12386  
Entity Registrant Name LEXINGTON REALTY TRUST  
Entity Incorporation, State or Country Code MD  
Entity Tax Identification Number 13-3717318  
Entity Address, Address Line One One Penn Plaza, Suite 4015  
Entity Address, City or Town New York  
Entity Address, State or Province NY  
Entity Address, Postal Zip Code 10119-4015  
City Area Code 212  
Local Phone Number 692-7200  
Entity Current Reporting Status Yes  
Entity Interactive Data Current Yes  
Entity Filer Category Large Accelerated Filer  
Entity Small Business false  
Entity Emerging Growth false  
Entity Shell Company false  
Entity Common Stock, Shares Outstanding (in shares)   276,952,514
Entity Central Index Key 0000910108  
Current Fiscal Year End Date --12-31  
Document Fiscal Year Focus 2020  
Document Fiscal Period Focus Q3  
Amendment Flag false  
Common Shares    
Document Information [Line Items]    
Title of 12(b) Security Shares of beneficial interest, par value $0.0001 per share, classified as Common Stock  
Trading Symbol LXP  
Security Exchange Name NYSE  
Series C Cumulative Convertible Preferred Stock    
Document Information [Line Items]    
Title of 12(b) Security 6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share  
Trading Symbol LXPPRC  
Security Exchange Name NYSE  
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Assets:    
Real estate, at cost $ 3,439,314 $ 3,320,574
Real estate - intangible assets 413,208 409,756
Investments in real estate under construction 41,948 13,313
Real estate, gross 3,894,470 3,743,643
Less: accumulated depreciation and amortization 906,789 887,629
Real estate, net 2,987,681 2,856,014
Assets held for sale 159,210 0
Operating right-of-use assets, net 36,034 38,133
Cash and cash equivalents 287,920 122,666
Restricted cash 1,697 6,644
Investments in non-consolidated entities 56,489 57,168
Deferred expenses, net 16,428 18,404
Rent receivable – current 2,310 3,229
Rent receivable – deferred 66,383 66,294
Other assets 7,699 11,708
Total assets 3,621,851 3,180,260
Liabilities:    
Mortgages and notes payable, net 157,723 390,272
Term loan payable, net 297,817 297,439
Senior notes payable, net 778,943 496,870
Trust preferred securities, net 127,470 127,396
Dividends payable 34,463 32,432
Liabilities held for sale 179,052 0
Operating lease liabilities 37,338 39,442
Accounts payable and other liabilities 52,819 29,925
Accrued interest payable 9,083 7,897
Deferred revenue - including below-market leases, net 18,054 20,350
Prepaid rent 14,740 13,518
Total liabilities 1,707,502 1,455,541
Commitments and contingencies
Equity:    
Series C Cumulative Convertible Preferred, liquidation preference $96,770; 1,935,400 shares issued and outstanding 94,016 94,016
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 276,941,239 and 254,770,719 shares issued and outstanding in 2020 and 2019, respectively 28 25
Additional paid-in-capital 3,193,751 2,976,670
Accumulated distributions in excess of net income (1,374,748) (1,363,676)
Accumulated other comprehensive loss (19,687) (1,928)
Total shareholders’ equity 1,893,360 1,705,107
Noncontrolling interests 20,989 19,612
Total equity 1,914,349 1,724,719
Total liabilities and equity $ 3,621,851 $ 3,180,260
v3.20.2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Equity:    
Preferred shares, par value (in dollars per share) $ 0.0001 $ 0.0001
Preferred shares, authorized shares (in shares) 100,000,000 100,000,000
Series C Cumulative Convertible Preferred, liquidation preference $ 96,770 $ 96,770
Series C Cumulative Convertible Preferred, shares issued (in shares) 1,935,400 1,935,400
Series C Cumulative Convertible Preferred, shares outstanding (in shares) 1,935,400 1,935,400
Common shares, par value (in dollars per share) $ 0.0001 $ 0.0001
Common shares, authorized shares (in shares) 400,000,000 400,000,000
Common shares, shares issued (in shares) 276,941,239 254,770,719
Common shares, outstanding (in shares) 276,941,239 254,770,719
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Gross revenues:        
Rental revenue $ 83,592 $ 80,325 $ 243,421 $ 239,058
Total gross revenues 84,514 81,550 247,133 242,933
Expense applicable to revenues:        
Depreciation and amortization (40,555) (37,211) (120,869) (111,617)
General and administrative (7,232) (7,791) (22,612) (23,652)
Non-operating income 40 532 314 1,927
Interest and amortization expense (13,649) (16,481) (42,610) (50,715)
Debt satisfaction gains (charges), net 17,557 (4,424) 18,950 (4,527)
Impairment charges (6,175) (673) (7,792) (2,355)
Gains on sales of properties 20,878 140,461 41,876 176,662
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities 44,035 145,352 82,495 197,690
Provision for income taxes (286) (241) (1,361) (1,108)
Equity in earnings (losses) of non-consolidated entities (131) 2,710 35 3,288
Net income 43,618 147,821 81,169 199,870
Less net income attributable to noncontrolling interests (1,714) (4,502) (2,245) (5,191)
Net income attributable to Lexington Realty Trust shareholders 41,904 143,319 78,924 194,679
Allocation to participating securities (46) (186) (118) (304)
Net income attributable to common shareholders $ 40,285 $ 141,560 $ 74,088 $ 189,657
Net income (loss) attributable to common shareholders - per common share basic (in dollars per share) $ 0.15 $ 0.60 $ 0.28 $ 0.81
Weighted-average common shares outstanding – basic (in shares) 274,696,046 236,285,216 264,211,668 233,833,340
Net income (loss) attributable to common shareholders – per common share diluted (in dollars per share) $ 0.15 $ 0.59 $ 0.28 $ 0.81
Weighted-average common shares outstanding – diluted (in shares) 276,022,762 241,355,289 265,446,221 234,011,643
Series C        
Expense applicable to revenues:        
Dividends attributable to preferred shares – Series C $ (1,573) $ (1,573) $ (4,718) $ (4,718)
Other revenue        
Gross revenues:        
Other revenue 922 1,225 3,712 3,875
Property operating        
Expense applicable to revenues:        
Property operating $ (11,343) $ (10,611) $ (31,895) $ (30,966)
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Statement of Comprehensive Income [Abstract]        
Net income $ 43,618 $ 147,821 $ 81,169 $ 199,870
Other comprehensive income (loss):        
Change in unrealized income (loss) on interest rate swaps, net 1,043 (5,549) (17,759) (5,625)
Other comprehensive income (loss) 1,043 (5,549) (17,759) (5,625)
Comprehensive income 44,661 142,272 63,410 194,245
Comprehensive income attributable to noncontrolling interests (1,714) (4,502) (2,245) (5,191)
Comprehensive income attributable to Lexington Realty Trust shareholders $ 42,947 $ 137,770 $ 61,165 $ 189,054
v3.20.2
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY - USD ($)
$ in Thousands
Total
Preferred Shares
Common Shares
Additional Paid-in-Capital
Accumulated Distributions in Excess of Net Income
Accumulated Other Comprehensive Loss
Noncontrolling Interests
Beginning Balance at Dec. 31, 2018 $ 1,346,678 $ 94,016 $ 24 $ 2,772,855 $ (1,537,100) $ 76 $ 16,807
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Redemption of noncontrolling OP units for common shares       504     (504)
Issuance of common shares and deferred compensation amortization, net 136,585   2 136,583      
Repurchase of common shares (958)     (958)      
Repurchase of common shares to settle tax obligations (5,281)   (1) (5,280)      
Forfeiture of employee common shares 15       15    
Dividends/distributions (80,249)       (78,053)   (2,196)
Net income 199,870       194,679   5,191
Other comprehensive loss (5,625)         (5,625)  
Ending Balance at Sep. 30, 2019 1,591,035 94,016 25 2,903,704 (1,420,459) (5,549) 19,298
Beginning Balance at Jun. 30, 2019 1,344,174 94,016 23 2,771,213 (1,536,752)   15,674
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Redemption of noncontrolling OP units for common shares 0     343     (343)
Issuance of common shares and deferred compensation amortization, net 133,489   2 133,487      
Repurchase of common shares to settle tax obligations (1,339)     (1,339)      
Forfeiture of employee common shares 10       10    
Dividends/distributions (27,571)       (27,036)   (535)
Net income 147,821       143,319   4,502
Other comprehensive loss (5,549)         (5,549)  
Ending Balance at Sep. 30, 2019 1,591,035 94,016 25 2,903,704 (1,420,459) (5,549) 19,298
Beginning Balance at Dec. 31, 2019 1,724,719 94,016 25 2,976,670 (1,363,676) (1,928) 19,612
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Issuance of partnership interest in real estate 1,285           1,285
Redemption of noncontrolling OP units for common shares       632     (632)
Issuance of common shares and deferred compensation amortization, net 230,117   3 230,114      
Repurchase of common shares (11,042)     (11,042)      
Repurchase of common shares to settle tax obligations (2,623)     (2,623)      
Forfeiture of employee common shares 1     0 1    
Dividends/distributions (91,518)       (89,997)   (1,521)
Net income 81,169       78,924   2,245
Other comprehensive loss (17,759)         (17,759)  
Ending Balance at Sep. 30, 2020 1,914,349 94,016 28 3,193,751 (1,374,748) (19,687) 20,989
Beginning Balance at Jun. 30, 2020 1,892,186 94,016 28 3,185,458 (1,386,001) (20,730) 19,415
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Issuance of partnership interest in real estate 398           398
Redemption of noncontrolling OP units for common shares       150     (150)
Issuance of common shares and deferred compensation amortization, net 8,143   0 8,143      
Dividends/distributions (31,039)       (30,651)   (388)
Net income 43,618       41,904   1,714
Other comprehensive loss 1,043         1,043  
Ending Balance at Sep. 30, 2020 $ 1,914,349 $ 94,016 $ 28 $ 3,193,751 $ (1,374,748) $ (19,687) $ 20,989
v3.20.2
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Statement of Cash Flows [Abstract]    
Net cash provided by operating activities: $ 152,466 $ 142,919
Cash flows from investing activities:    
Acquisition of real estate, including intangible assets (429,834) (439,885)
Investment in real estate under construction (21,561) 0
Capital expenditures (15,328) (12,130)
Net proceeds from sale of properties 99,740 334,395
Investments in non-consolidated entities (6,152) (1,776)
Distributions from non-consolidated entities in excess of accumulated earnings 6,843 14,830
Deferred leasing costs (4,791) (5,231)
Change in real estate deposits, net 461 (4,936)
Net cash used in investing activities (370,622) (114,733)
Cash flows from financing activities:    
Dividends to common and preferred shareholders (87,966) (96,117)
Principal amortization payments (16,132) (20,050)
Principal payments on debt, excluding normal amortization 0 (67,229)
Revolving credit facility borrowings 170,000 110,000
Revolving credit facility payments (170,000) (110,000)
Proceeds from senior notes 396,932 0
Repurchase of senior notes (112,312) 0
Deferred financing costs (3,803) (5,456)
Payment of early extinguishment of debt charges (9,477) (3,500)
Cash contributions from noncontrolling interests 1,285 0
Cash distributions to noncontrolling interests (1,521) (2,196)
Repurchases to settle tax obligations (2,623) (5,368)
Issuance of common shares, net 225,122 131,831
Repurchase of common shares (11,042) (3,598)
Net cash provided by (used in) financing activities 378,463 (71,683)
Change in cash, cash equivalents and restricted cash 160,307 (43,497)
Cash, cash equivalents and restricted cash, at beginning of period 129,310 177,247
Cash, cash equivalents and restricted cash, at end of period 289,617 133,750
Reconciliation of cash, cash equivalents and restricted cash:    
Cash and cash equivalents at beginning of period 122,666 168,750
Restricted cash at beginning of period 6,644 8,497
Cash and cash equivalents at end of period 287,920 126,058
Restricted cash at end of period $ 1,697 $ 7,692
v3.20.2
The Company and Financial Statement Presentation
9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
The Company and Financial Statement Presentation The Company and Financial Statement Presentation
Lexington Realty Trust (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Company”) is a Maryland real estate investment trust (“REIT”) that owns a portfolio of equity investments focused on single-tenant industrial properties.
As of September 30, 2020, the Company had ownership interests in approximately 135 consolidated real estate properties, located in 29 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries.
The Company believes it has qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain activities from which it was previously precluded in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS are subject to federal income taxes on the income from these activities.
The Company conducts its operations either directly or indirectly through (1) property owner subsidiaries, which are single purpose entities, (2) an operating partnership, Lepercq Corporate Income Fund L.P. (“LCIF”), in which the Company is the sole unit holder of the general partner and the sole unit holder of the limited partner that holds a majority of the limited partner interests, (3) a wholly-owned TRS, Lexington Realty Advisors, Inc. (“LRA”), and (4) investments in joint ventures. References to “OP units” refer to units of limited partner interests in LCIF. Property owner subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan agreements secured by properties in which the Company has an interest. Each property owner subsidiary is a separate legal entity that maintains separate books and records. The assets and credit of each property owner subsidiary with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other property owner subsidiary or any other affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors.
The financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three and nine months ended September 30, 2020 have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair statement of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019 filed with the SEC on February 20, 2020 (“Annual Report”).
Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates the wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP.
The Company is the primary beneficiary of certain VIEs as it has a controlling financial interest in these entities. LCIF, which is consolidated and in which the Company has an approximate 97% interest, is a VIE. The Company has a 90% ownership interest in a joint venture with a developer, which acquired a parcel of land in the Atlanta, Georgia market and plans to develop an industrial property. The joint venture is consolidated and is a VIE.
The assets of each VIE are only available to satisfy such VIE's respective liabilities. As of September 30, 2020 and December 31, 2019, the VIEs' mortgages and notes payable were non-recourse to the Company. Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019:
September 30, 2020December 31, 2019
Real estate, net$599,701 $592,372 
Total assets$676,938 $645,623 
Mortgages and notes payable, net$44,008 $82,978 
Total liabilities$61,802 $101,901 
In addition, the Company acquires, from time to time, properties using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a "reverse 1031 exchange") and, as such, the properties are in the possession of an Exchange Accommodation Titleholder ("EAT") until the reverse 1031 exchange is completed. The EAT is classified as a VIE as it is a “thinly capitalized” entity. The Company consolidates the EAT because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the EAT's economic performance and can collapse the 1031 exchange structure at any time. The assets of the EAT primarily consist of leased property (net real estate and intangibles).
Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the economic uncertainty primarily caused by the recent outbreak of COVID-19. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable and deferred rent receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments, valuation of derivative financial instruments, valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee and the useful lives of long-lived assets. Actual results could differ materially from those estimates.
Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("Topic 820"), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements.
The Company estimates the fair value of its real estate assets, including non-consolidated real estate assets, by using income and market valuation techniques. The Company may estimate fair values using market information such as recent sale contracts (Level 2 inputs) or recent sale offers or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.
New Accounting Standards Adopted in 2020. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of an allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company analyzed its accounts receivable using an aging methodology and determined that there have been no historical credit losses related to its outstanding accounts receivable. As a result, the Company's adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40). This ASU addresses customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company's adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements. This ASU includes additional disclosures requirements for recurring and nonrecurring Level 3 fair value measurements including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income, disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and a narrative description of measurement uncertainty related to Level 3 measurements. This standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements.
Recently Issued Accounting Guidance. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 is optional, applies for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR and may be elected over time as reference rate reform activities occur. As of March 31, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
While the lease modification guidance in ASC Topic 842 ("Topic 842") addresses routine changes to lease terms resulting from negotiations between the lessee and the lessor, this guidance did not contemplate concessions being so rapidly executed to address the sudden liquidity constraints of some lessees arising from the COVID-19 pandemic. In April 2020, the FASB staff issued a question and answer document (the "Lease Modification Q&A") focused on the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. Under existing lease guidance, the Company would have to determine, on a lease by lease basis, if a lease concession was the result of a new arrangement reached with the tenant (treated within the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (precluded from applying the lease modification accounting framework). The Lease Modification Q&A allows the Company, if certain criteria have been met, to bypass the lease by lease analysis, and instead elect to either apply the lease modification accounting framework or not, with such election applied consistently to leases with similar characteristics and similar circumstances. During the nine months ended September 30, 2020, the Company granted one nominal rent deferral to a consolidated tenant that changed the timing of the rent payments but not the total rent or the lease term and applied the Lease Modification Q&A to account for this modification. The Lease Modification Q&A's future impact on the Company's consolidated financial statements is dependent upon the extent of lease concessions granted to tenants as a result of the COVID-19 pandemic in future periods and the elections made by the Company at the time of entering into such concessions.
v3.20.2
Earnings Per Share
9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]  
Earnings Per Share Earnings Per Share
A portion of the Company's non-vested share-based payment awards are considered participating securities and as such, the Company is required to use the two-class method for the computation of basic and diluted earnings per share. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The non-vested share-based payment awards are not allocated losses as the awards do not have a contractual obligation to share in losses of the Company.
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2020 and 2019:
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
BASIC    
Net income attributable to common shareholders
$40,285 $141,560 $74,088 $189,657 
Weighted-average number of common shares outstanding - basic
274,696,046 236,285,216 264,211,668 233,833,340 
   
Net income attributable to common shareholders - per common share basic
$0.15 $0.60 $0.28 $0.81 
DILUTED
Net income attributable to common shareholders - basic
$40,285 $141,560 $74,088 $189,657 
Impact of assumed conversions
— 1,573 — — 
Net income attributable to common shareholders
$40,285 $143,133 $74,088 $189,657 
Weighted-average common shares outstanding - basic
274,696,046 236,285,216 264,211,668 233,833,340 
Effect of dilutive securities:
Unvested share-based payment awards and options
1,326,716 359,503 1,234,553 178,303 
Preferred shares - Series C
— 4,710,570 — — 
Weighted-average common shares outstanding - diluted
276,022,762 241,355,289 265,446,221 234,011,643 
Net income attributable to common shareholders - per common share diluted
$0.15 $0.59 $0.28 $0.81 
For per common share amounts, all incremental shares are considered anti-dilutive for periods that have a loss from continuing operations attributable to common shareholders. In addition, other common share equivalents may be anti-dilutive in certain periods.
v3.20.2
Investments in Real Estate
9 Months Ended
Sep. 30, 2020
Real Estate [Abstract]  
Investments in Real Estate Investments in Real Estate
The Company completed the following acquisition transactions during the nine months ended September 30, 2020:
Property
Type
MarketAcquisition
Date
Initial
Cost
Basis
Primary
Lease
Expiration
LandBuilding and ImprovementsLease in-place Value Intangible
IndustrialChicago, ILJanuary 2020$53,642 11/2029$3,681 $45,817 $4,144 
IndustrialPhoenix, AZJanuary 202019,164 12/20251,614 16,222 1,328 
IndustrialChicago, ILJanuary 202039,153 12/20291,788 34,301 3,064 
IndustrialDallas, TXFebruary 202083,495 8/20294,500 71,635 7,360 
Industrial Savannah, GA April 202034,753 7/20271,689 30,346 2,718 
Industrial Dallas, TXMay 202010,731 6/20301,308 8,466 957 
Industrial Savannah, GA June 202030,448 6/20252,560 25,697 2,191 
Industrial Savannah, GA June 20209,130 8/20251,070 7,448 612 
Industrial Houston, TX June 202020,949 4/20252,202 17,101 1,646 
Industrial Ocala, FLJune 202058,283 8/20304,113 49,904 4,266 
IndustrialDC/Baltimore, MDSeptember 202029,143 11/20242,818 24,423 1,902 
IndustrialSavannah, GASeptember 202040,908 07/20263,775 34,322 2,811 
$429,799 $31,118 $365,682 $32,999 

The Company is engaged in two consolidated development projects. As of September 30, 2020, the Company's aggregate investment in the development arrangements was $41,948, which included capitalized interest of $578 for the nine-month period ended September 30, 2020 and is presented as investments in real estate under construction in the accompanying unaudited condensed consolidated balance sheets.
As of September 30, 2020, the details of the development arrangements outstanding are as follows (in $000's, except square feet):
Project (% owned)MarketProperty TypeEstimated Sq. Ft. Estimated Project Cost GAAP Investment Balance as of
9/30/2020
Amount Funded as of
9/30/2020
Estimated Completion Date
Fairburn (90%)
Atlanta, GAIndustrial910,000 $53,812 $30,638 $22,543 1Q 2021
Rickenbacker (100%)
Columbus, OHIndustrial320,000 20,300 11,310 8,233 4Q 2020
$74,112 $41,948 $30,776 
v3.20.2
Dispositions and Impairment
9 Months Ended
Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Dispositions and Impairment Dispositions and Impairment
During the nine months ended September 30, 2020 and 2019, the Company disposed of its interests in various properties for an aggregate gross disposition price of $140,573 and $448,900, respectively, and recognized aggregate gains on sales of properties of $41,876 and $176,662, respectively. Included in the 2020 dispositions are two office properties located in Charleston, South Carolina and Overland Park, Kansas which were conveyed to the lenders in forgiveness of the mortgage loan encumbering each property. The balances of the non-recourse mortgage loans were in excess of the value of the property collateral, resulting in an aggregate debt satisfaction gain, net of $29,016. Included in the 2019 dispositions, the Company recognized debt satisfaction charges, net of $4,415 relating to sold properties.
As of September 30, 2020, the Company had five properties classified as held for sale because the properties met the criteria included under the held for sale accounting guidance and sales to a third party within the next 12 months were deemed probable. As of December 31, 2019, the Company had no properties that met the held for sale criteria.
Assets and liabilities of the held for sale properties as of September 30, 2020 consisted of the following:
September 30, 2020
Assets:
Real estate, at cost$180,981 
Real estate, intangible assets5,361 
Accumulated depreciation and amortization(38,405)
Rent receivable - deferred8,066 
Other3,207 
$159,210 
Liabilities:
Mortgages and notes payable, net$177,784 
Accounts payable and other liabilities680 
Accrued interest payable322 
Prepaid rent 266 
$179,052 
The Company assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability, change in the estimated holding period of the asset, the potential sale or transfer of the property in the near future and changes in economic conditions such as the recent economic uncertainty primarily caused by the COVID-19 outbreak. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value and the Company estimates that its cost will not be recovered. During the nine months ended September 30, 2020, the Company recognized aggregate impairment charges on real estate properties of $7,792 comprised of two impairment charges of $1,617 and $6,175 on a vacant office property located in Houston, Texas and an industrial facility located in Kalamazoo, Michigan, respectively.
During the nine months ended September 30, 2019, the Company recognized aggregate impairment charges on real estate properties of $2,355 comprised of $2,106 and $249 on unencumbered and vacant retail properties in Watertown, New York and Albany, Georgia, respectively. Both of these properties were sold during 2019.
v3.20.2
Fair Value Measurements
9 Months Ended
Sep. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]  
Fair Value Measurements Fair Value Measurements
The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall:
 BalanceFair Value Measurements Using
DescriptionSeptember 30, 2020(Level 1)(Level 2)(Level 3)
Interest rate swap liabilities$(19,687)$— $(19,687)$— 
Impaired property held for sale(1)$8,742 $— $— $8,742 
(1)    Represents a non-recurring fair value measurement. The fair value is calculated as of the date of the impairment. The Company measured these impairment charges based on discounted cash flow analysis, using a hold period of ten years and residual capitalization rates and discount rates ranging from 8.0% to 9.0% and 9.0% to 12.0%, respectively. As significant inputs to the models are unobservable, the Company determined that the value determined for these properties falls within Level 3 of the fair value reporting hierarchy.
 BalanceFair Value Measurements Using
DescriptionDecember 31, 2019(Level 1)(Level 2)(Level 3)
Interest rate swap liabilities$(1,928)$— $(1,928)$— 
Impaired real estate assets(1)$4,846 $— $— $4,846 
(1)    Represents a non-recurring fair value measurement. The fair value is calculated as of the date of the impairment.
The majority of the inputs used to value the Company's interest rate swaps fell within Level 2 of the fair value hierarchy, such as observable market interest rate curves; however, the credit valuation associated with the interest rate swaps utilized Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2020 and December 31, 2019, the Company determined that the credit valuation adjustment relative to the overall fair value of the interest rate swaps was not significant. As a result, the interest rate swaps were classified in Level 2 of the fair value hierarchy.
The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments, excluding held for sale assets, as of September 30, 2020 and December 31, 2019:

 As of September 30, 2020As of December 31, 2019
 Carrying
Amount
Fair ValueCarrying
Amount
Fair Value
Liabilities    
Debt$1,361,953 $1,375,415 $1,311,977 $1,276,589 

The fair value of the Company's debt is primarily estimated utilizing Level 3 inputs by using a discounted cash flow analysis, based upon estimates of market interest rates, except for the Company's senior notes payable. The Company determines the fair value of its senior notes payable using market prices. The inputs used in determining the fair value of these notes are categorized as Level 1 due to the fact that the Company uses quoted market rates to value these instruments. However, the inputs used in determining the fair value could be categorized as Level 2 if trading volumes are low.
Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts.
Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Company estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.
v3.20.2
Investments in Non-Consolidated Entities
9 Months Ended
Sep. 30, 2020
Noncontrolling Interest [Abstract]  
Investments in Non-Consolidated Entities Investments in Non-Consolidated Entities
Below is a schedule of the Company's investments in non-consolidated entities:
Percentage Ownership atInvestment Balance as of
InvestmentSeptember 30, 2020September 30, 2020December 31, 2019
NNN Office JV LP ("NNN JV")(1)20%$32,723 $39,288 
Etna Park 70 LLC(2)90%11,352 8,352 
Etna Park East LLC (3)90%7,391 4,310 
Other(4)25%5,023 5,218 
$56,489 $57,168 
(1)    NNN JV is a joint venture formed in 2018 and owns office properties formerly owned by the Company.
(2)    Joint venture formed in 2017 with a developer entity to acquire a 151-acre parcel of developable land and to pursue industrial build-to-suit opportunities. The Company determined that it is not the primary beneficiary. In December 2018, the parcel was subdivided and the Company received a distribution of an ownership interest in a 57-acre parcel with a historical cost of $3,008. The Company acquired control of the 57-acre parcel via the purchase of the Company's joint venture partners' interests.
(3) Joint venture formed in 2019 with a developer entity to acquire a 129.6-acre parcel of land and to pursue industrial build-to-suit opportunities. The Company determined it is not the primary beneficiary.
(4)    As of September 30, 2020, represents one joint venture investment, which owns a single-tenant, net-leased asset.
During the nine months ended September 30, 2020, NNN JV sold two assets and the Company recognized an aggregate gain on the transactions of $557 within equity in earnings (losses) of non-consolidated entities within its unaudited condensed consolidated statement of operations. In conjunction with these property sales, NNN JV received net proceeds of $8,504 after the satisfaction of $40,800 of its non-recourse mortgage indebtedness.
During the nine months ended September 30, 2019, NNN JV sold four assets and the Company recognized aggregate gains on the transactions of $3,529 within equity in earnings (losses) of non-consolidated entities in its unaudited condensed consolidated statement of operations. In conjunction with these property sales, NNN JV received aggregate net proceeds of $45,208 after the satisfaction of an aggregate of $101,520 of its non-recourse mortgage indebtedness.
In February 2019, a non-consolidated real estate entity, in which the Company owned a 15% ownership interest, sold its only asset and the Company received $2,317 of proceeds. The Company recognized a gain on the transaction of $824, which is included in equity in earnings (losses) on non-consolidated entities within its unaudited condensed consolidated statement of operations.
v3.20.2
Debt
9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Debt Debt
The Company had the following mortgages and notes payable outstanding as of September 30, 2020 and December 31, 2019:
September 30, 2020December 31, 2019
Mortgages and notes payable$159,686 $393,872 
Unamortized debt issuance costs(1,963)(3,600)
$157,723 $390,272 
Interest rates, including imputed rates on mortgages and notes payable, ranged from 3.5% to 6.5%, respectively, at September 30, 2020 and December 31, 2019, and all mortgages and notes payables mature between 2020 and 2032 as of September 30, 2020. The weighted-average interest rate was 4.7% and 4.5% at September 30, 2020 and December 31, 2019, respectively. As of September 30, 2020, the Lake Jackson, Texas property, which was held for sale, was encumbered by a $179,110 mortgage that matures in 2036 and bears interest at 4.04% and is not included in the September 30, 2020 table above.
As of September 30, 2020, the Company had one non-recourse mortgage loan that was in default with an outstanding principal balance of $18,413. The mortgage loan is secured by a vacant office property in Boca Raton, Florida.
The Company had the following senior notes outstanding as of September 30, 2020 and December 31, 2019:
Issue DateSeptember 30, 2020December 31, 2019Interest RateMaturity DateIssue Price
August 2020$400,000 $— 2.70 %September 203099.233 %
May 2014198,932 250,000 4.40 %June 202499.883 %
June 2013188,756 250,000 4.25 %June 202399.026 %
787,688 500,000 
Unamortized debt discount(3,619)(963)
Unamortized debt issuance cost(5,126)(2,167)
$778,943 $496,870 
Each series of the senior notes is unsecured and requires payment of interest semi-annually in arrears. The Company may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium.
In August 2020, the Company issued $400,000 aggregate principal amount of 2.70% Senior Notes due 2030 ("2030 Senior Notes") at an issuance price of 99.233% of the principal amount. The Company issued the 2030 Senior Notes at an initial discount of $3,068 which is being recognized as additional interest expense over the term of the 2030 Senior Notes.
During the three months ended September 30, 2020, the Company used a portion of the net proceeds from the offering of the 2030 Senior Notes to repurchase $61,244 and $51,068 aggregate principal balance of its outstanding 4.25% senior notes due 2023 and 4.40% senior notes due 2024, respectively, through a tender offer. The tender offer consideration included $9,477 in prepayment costs and fees and $1,024 of accrued interest. The Company recognized a $10,066 debt satisfaction charge related to the aggregate repurchases, which included a write-off of the proportionate amount of unamortized discount and debt issuance costs related to the 2023 and 2024 senior notes.
The Company has an unsecured credit agreement with KeyBank National Association, as agent. A summary of the significant terms, as of September 30, 2020, is as follows:

Maturity Date
Current
Interest Rate
$600,000 Revolving Credit Facility(1)
February 2023
LIBOR + 0.90%
$300,000 Term Loan(2)
January 2025
LIBOR + 1.00%
(1)     Maturity date of the revolving credit facility can be extended to February 2024 at the Company's option. The interest rate ranges from LIBOR plus 0.775% to 1.45%. At September 30, 2020, the Company had no borrowings outstanding and availability of $600,000, subject to covenant compliance.
(2) The LIBOR portion of the interest rate was swapped to obtain a current fixed rate of 2.732% per annum. The aggregate unamortized debt issuance costs for the term loan was $2,183 and $2,561 as of September 30, 2020 and December 31, 2019, respectively.

The Company was compliant with all applicable financial covenants contained in its corporate-level debt agreements at September 30, 2020.
During 2007, the Company issued $200,000 original principal amount of Trust Preferred Securities. The Trust Preferred Securities, which are classified as debt, are due in 2037, are open for redemption at the Company's option, bore interest at a fixed rate of 6.804% through April 2017 and bear interest at a variable rate of three-month LIBOR plus 170 basis points through maturity. The interest rate at September 30, 2020 was 1.968%. As of September 30, 2020 and December 31, 2019, there was $129,120 original principal amount of Trust Preferred Securities outstanding and $1,650 and $1,724, respectively, of unamortized debt issuance costs.
Capitalized interest recorded during the nine months ended September 30, 2020 and 2019 was $1,112 and $251, respectively.
v3.20.2
Derivatives and Hedging Activities
9 Months Ended
Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivatives and Hedging Activities Derivatives and Hedging ActivitiesRisk Management Objective of Using Derivatives. The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the type, amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash receipts and its known or expected cash payments principally related to the Company's investments and borrowings.
Cash Flow Hedges of Interest Rate Risk. The Company's objectives in using interest rate derivatives are to add stability to interest expense, to manage its exposure to interest rate movements and therefore manage its cash outflows as it relates to the underlying debt instruments. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy relating to certain of its variable rate debt instruments. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. The Company did not incur any ineffectiveness during the nine months ended September 30, 2020 and 2019.
During July 2019, the Company entered into four interest rate swap agreements with its counterparties. The swaps were designated as cash flow hedges of the risk of variability attributable to changes in the LIBOR swap rates on its $300,000 LIBOR-indexed variable-rate unsecured term loan. Accordingly, changes in fair value of the swaps are recorded in other comprehensive income (loss) and reclassified to earnings as interest becomes receivable or payable. The swaps expire coterminous with the extended maturity of the term loan in January 2025. During the next 12 months ending September 30, 2021, the Company estimates that an additional $4,830 will be reclassified as an increase to interest expense if the swaps remain outstanding.
Interest Rate DerivativeNumber of InstrumentsNotional
Interest Rate Swaps4$300,000
The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the condensed consolidated balance sheets:
 As of September 30, 2020As of December 31, 2019
 Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Derivatives designated as hedging instruments
Interest Rate SwapsAccounts Payable and Other Liabilities$(19,687)Accounts Payable and Other Liabilities$(1,928)

The table below presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2020 and 2019.
Derivatives in Cash FlowAmount of Gain (Loss)
Recognized in OCI on Derivatives
September 30,
Amount of (Income) Loss
Reclassified from Accumulated OCI into Income (1)
September 30,
Hedging Relationships2020201920202019
Interest Rate Swaps$(19,934)$(5,326)$2,175 $(299)
(1)    Amounts reclassified from accumulated other comprehensive income (loss) to interest expense within the unaudited condensed consolidated statement of operations.
Total interest expense presented in the unaudited condensed consolidated statements of operations in which the effects of cash flow hedges are recorded was $42,610 and $50,715 for the nine months ended September 30, 2020 and 2019, respectively.
The Company's agreements with swap derivatives counterparties contain provisions whereby if the Company defaults on the underlying indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of the swap derivative obligation. As of September 30, 2020, the Company had not posted any collateral related to the agreements.
v3.20.2
Lease Accounting
9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
Lease Accounting Lease Accounting
The following is a summary of the Company's accounting for leases as of and during the nine-month period ended September 30, 2020 and 2019:
Lessor
Lexington’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased industrial and office real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred.
Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before.
Accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions.
From a lessor perspective, the Company concluded that revenue from lease components are primarily recognized on a straight-line basis over the lease term unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Revenue is recognized on a contractual basis for leases with escalations tied to a Consumer Price Index (CPI) with no floor. If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition commences when the improvements are substantially complete and control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred on the unaudited condensed consolidated balance sheets.
The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectable, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. In February 2020, the Company wrote off a deferred rent receivable balance of $615 as a reduction of rental revenue, related to a tenant that dissolved and surrendered its leased premises in an industrial property located in the Columbus, Ohio market. During the nine months ended September 30, 2019, rental revenue was reduced by an aggregate $1,452 for accounts receivable and deferred rent receivable deemed uncollectable.
Certain tenants have been experiencing financial difficulties as a result of the COVID-19 pandemic. During the nine months ended September 30, 2020, the Company wrote off or reserved aggregate deferred rent receivable balances of $1,383, as a reduction of rental revenue, related to certain tenants as the deferred rent receivable balances were deemed uncollectable. In addition, during the nine-month period ended September 30, 2020, the Company also wrote off or reserved an aggregate of $177 accounts receivable relating to certain tenants suffering from the current economic conditions.
The Company determined that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service is included within rental revenue is CAM services provided as part of the Company’s real estate leases. Topic 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. As of September 30, 2020 and 2019, the Company incurred $67 and $163, respectively, of costs that were not incremental to the execution of leases, which are included in property operating expenses on its unaudited condensed consolidated statements of operations.
The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities. The Company does not have residual value guarantees on specific properties.
The following table presents the Company’s classification of rental revenue for its operating leases for the three and nine months ended September 30, 2020 and 2019:
Three Months EndedNine Months Ended
Classification September 30, 2020September 30, 2019September 30, 2020September 30, 2019
Fixed$74,902 $73,396 $219,542 $218,808 
Variable(1)
8,690 6,929 23,879 20,250 
Total$83,592 $80,325 $243,421 $239,058 
(1)    Primarily comprised of tenant reimbursements.
Future fixed rental receipts for leases, assuming no new or re-negotiated leases as of September 30, 2020 were as follows:
2020 - remainder$71,930 
2021281,421 
2022270,067 
2023269,224 
2024238,853 
2025212,486 
Thereafter1,280,114 
Total$2,624,095 
Lessee
The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2020. The leases have remaining lease terms of up to 43 years, some of which include options to extend the leases in 5 to 10-year increments for up to 53 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. Minimum lease payments for leases that commenced before the date of adoption of ASC 842 were determined based on previous leases guidance under ASC 840. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred.
The accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate.
The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease.
As the Company does not know the rate implicit in the respective leases, the Company used its incremental borrowing rate based on the information available at the transition date for such existing leases. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases.
Supplemental information related to operating leases is as follows:
Nine Months Ended
September 30, 2020September 30, 2019
Weighted-average remaining lease term
Operating leases (years)12.312.4
Weighted-average discount rate
Operating leases4.2 %4.1 %

The components of lease expense for the nine months ended September 30, 2020 and 2019 were as follows:
Income Statement Classification FixedVariableTotal
2020:
Property operating$2,985 $— $2,985 
General and administrative1,012 76 1,088 
Total$3,997 $76 $4,073 
2019:
Property operating$2,988 $— $2,988 
General and administrative1,007 85 1,092 
Total$3,995 $85 $4,080 
The Company recognized sublease income of $2,824 and $2,823 for the nine months ended September 30, 2020 and 2019, respectively.
The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2020:
Operating Leases
2020 - remainder$1,241 
20215,117 
20225,211 
20235,355 
20245,377 
20255,377 
Thereafter21,389 
Total lease payments$49,067 
Less: Imputed interest(11,729)
Present value of operating lease liabilities$37,338 
Lease Accounting Lease Accounting
The following is a summary of the Company's accounting for leases as of and during the nine-month period ended September 30, 2020 and 2019:
Lessor
Lexington’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased industrial and office real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred.
Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before.
Accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions.
From a lessor perspective, the Company concluded that revenue from lease components are primarily recognized on a straight-line basis over the lease term unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Revenue is recognized on a contractual basis for leases with escalations tied to a Consumer Price Index (CPI) with no floor. If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition commences when the improvements are substantially complete and control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred on the unaudited condensed consolidated balance sheets.
The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectable, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. In February 2020, the Company wrote off a deferred rent receivable balance of $615 as a reduction of rental revenue, related to a tenant that dissolved and surrendered its leased premises in an industrial property located in the Columbus, Ohio market. During the nine months ended September 30, 2019, rental revenue was reduced by an aggregate $1,452 for accounts receivable and deferred rent receivable deemed uncollectable.
Certain tenants have been experiencing financial difficulties as a result of the COVID-19 pandemic. During the nine months ended September 30, 2020, the Company wrote off or reserved aggregate deferred rent receivable balances of $1,383, as a reduction of rental revenue, related to certain tenants as the deferred rent receivable balances were deemed uncollectable. In addition, during the nine-month period ended September 30, 2020, the Company also wrote off or reserved an aggregate of $177 accounts receivable relating to certain tenants suffering from the current economic conditions.
The Company determined that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service is included within rental revenue is CAM services provided as part of the Company’s real estate leases. Topic 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. As of September 30, 2020 and 2019, the Company incurred $67 and $163, respectively, of costs that were not incremental to the execution of leases, which are included in property operating expenses on its unaudited condensed consolidated statements of operations.
The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities. The Company does not have residual value guarantees on specific properties.
The following table presents the Company’s classification of rental revenue for its operating leases for the three and nine months ended September 30, 2020 and 2019:
Three Months EndedNine Months Ended
Classification September 30, 2020September 30, 2019September 30, 2020September 30, 2019
Fixed$74,902 $73,396 $219,542 $218,808 
Variable(1)
8,690 6,929 23,879 20,250 
Total$83,592 $80,325 $243,421 $239,058 
(1)    Primarily comprised of tenant reimbursements.
Future fixed rental receipts for leases, assuming no new or re-negotiated leases as of September 30, 2020 were as follows:
2020 - remainder$71,930 
2021281,421 
2022270,067 
2023269,224 
2024238,853 
2025212,486 
Thereafter1,280,114 
Total$2,624,095 
Lessee
The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2020. The leases have remaining lease terms of up to 43 years, some of which include options to extend the leases in 5 to 10-year increments for up to 53 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. Minimum lease payments for leases that commenced before the date of adoption of ASC 842 were determined based on previous leases guidance under ASC 840. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred.
The accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate.
The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease.
As the Company does not know the rate implicit in the respective leases, the Company used its incremental borrowing rate based on the information available at the transition date for such existing leases. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases.
Supplemental information related to operating leases is as follows:
Nine Months Ended
September 30, 2020September 30, 2019
Weighted-average remaining lease term
Operating leases (years)12.312.4
Weighted-average discount rate
Operating leases4.2 %4.1 %

The components of lease expense for the nine months ended September 30, 2020 and 2019 were as follows:
Income Statement Classification FixedVariableTotal
2020:
Property operating$2,985 $— $2,985 
General and administrative1,012 76 1,088 
Total$3,997 $76 $4,073 
2019:
Property operating$2,988 $— $2,988 
General and administrative1,007 85 1,092 
Total$3,995 $85 $4,080 
The Company recognized sublease income of $2,824 and $2,823 for the nine months ended September 30, 2020 and 2019, respectively.
The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2020:
Operating Leases
2020 - remainder$1,241 
20215,117 
20225,211 
20235,355 
20245,377 
20255,377 
Thereafter21,389 
Total lease payments$49,067 
Less: Imputed interest(11,729)
Present value of operating lease liabilities$37,338 
v3.20.2
Concentration of Risk
9 Months Ended
Sep. 30, 2020
Risks and Uncertainties [Abstract]  
Concentration of Risk Concentration of Risk
The Company seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, 2020 and 2019, no single tenant represented greater than 10% of rental revenues.
Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions.
v3.20.2
Equity
9 Months Ended
Sep. 30, 2020
Equity [Abstract]  
Equity Equity
At-The-Market Offering Program. The Company maintains an At-The-Market offering program ("ATM program") under which the Company can issue common shares. The following table summarizes common share issuances under the ATM program for the nine months ended September 30, 2020 and 2019, respectively:

Nine months ended September 30, 2020
Shares Sold Net Proceeds
2020 ATM Issuances5,950,882$61,032
Nine months ended September 30, 2019
Shares SoldNet Proceeds
2019 ATM Issuances3,020,190$31,083

Under the ATM program, the Company may also enter into forward sales agreements. The Company entered into a forward sales transaction for the sale of 3,875,751 common shares during the nine months ended September 30, 2020 that have not yet been settled. Subject to the Company's right to elect cash or net share settlement, the Company expects to settle the forward sales transaction by the maturity date of August 2021. The shares have an initial weighted-average sales price of $11.23 per common share, which is subject to adjustment in accordance with the forward sales contract.
As of September 30, 2020, common shares with an aggregate value of $189,584 remain available for issuance under the ATM program.

Underwritten Common Stock Offerings. During 2020, the Company issued 17,250,000 common shares at a public offering price of $9.60 per common share in an underwritten offering and generated net proceeds of approximately $164,000. The proceeds have and will be used for general corporate purposes, including acquisitions, and pending the application of the proceeds, were used to pay down all of the then outstanding balance under the Company's revolving credit facility.

During the nine months ended September 30, 2019, the Company issued 10,000,000 common shares at $10.09 per common share in an underwritten offering and generated net proceeds of $100,749. The net proceeds were used for working capital and for general corporate purposes, including acquisitions.

Nonemployee Stock Based Compensation. In addition, during the nine months ended September 30, 2020 and 2019, the Company issued 35,880 and 54,726, respectively, of fully vested common shares to non-management members of the Company's Board of Trustees with a fair value of $375 and $470, respectively.

Share Repurchase Program. In July 2015, the Company's Board of Trustees authorized the repurchase of up to 10,000,000 common shares and increased this authorization by 10,000,000 in 2018. This share repurchase program has no expiration date. During the nine months ended September 30, 2020 and 2019, the Company repurchased and retired 1,329,940 and 441,581 common shares, respectively, at an average price of $8.28 and $8.13, respectively, per common share under the share repurchase program. As of September 30, 2020, 8,976,315 common shares remain available for repurchase under this authorization. The Company records a liability for repurchases that have not yet been settled as of the period end. There were no unsettled repurchases as of September 30, 2020.

A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:
Nine Months Ended September 30,
20202019
Balance at beginning of period$(1,928)$76 
Other comprehensive loss before reclassifications(19,934)(5,326)
Amounts of (income) loss reclassified from accumulated other comprehensive income to interest expense
2,175 (299)
Balance at end of period$(19,687)$(5,549)
Noncontrolling Interests. In conjunction with several of the Company's acquisitions in prior years, sellers were issued OP units as a form of consideration. All OP units, other than OP units owned by the Company, are redeemable for common shares at certain times, at the option of the holders, and are generally not otherwise mandatorily redeemable by the Company. The OP units are classified as a component of permanent equity as the Company has determined that the OP units are not redeemable securities as defined by GAAP. Each OP unit is currently redeemable at the holder's option for approximately 1.13 common shares, subject to future adjustments.
As of September 30, 2020, there were approximately 2,711,000 OP units outstanding other than OP units owned by the Company. All OP units receive distributions in accordance with the LCIF partnership agreement. To the extent that the Company's dividend per common share is less than the stated distribution per OP unit per the LCIF partnership agreement, the distributions per OP unit are reduced by the percentage reduction in the Company's dividend per common share. No OP units have a liquidation preference.
The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests:

Net Income Attributable to
Shareholders and Transfers from Noncontrolling Interests
Nine Months Ended September 30,
 20202019
Net income attributable to Lexington Realty Trust shareholders$78,924 $194,679 
Transfers from noncontrolling interests:
Increase in additional paid-in-capital for redemption of noncontrolling OP units
632 504 
Change from net income attributable to shareholders and transfers from noncontrolling interests
$79,556 $195,183 
v3.20.2
Related Party Transactions
9 Months Ended
Sep. 30, 2020
Related Party Transactions [Abstract]  
Related Party Transactions Related Party TransactionsThere were no related party transactions other than those disclosed elsewhere in this Quarterly Report and the audited consolidated financial statements in the Annual Report.
v3.20.2
Commitments and Contingencies
9 Months Ended
Sep. 30, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
In addition to the commitments and contingencies disclosed elsewhere and previously disclosed, the Company has the following commitments and contingencies.
The Company is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Company, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries.
The Company and LCIF are parties to a funding agreement under which the Company may be required to fund distributions made on account of LCIF's OP units. Pursuant to the funding agreement, the parties agreed that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, Lexington will fund the shortfall. Payments under the agreement will be made in the form of loans to LCIF and will bear interest at prevailing rates as determined by the Company in its discretion, but no less than the applicable federal rate. LCIF's right to receive these loans will expire if no OP units remain outstanding and all such loans are repaid. No amounts have been advanced under this agreement.
From time to time, the Company is, directly and indirectly, involved in legal proceedings arising in the ordinary course of business. Management believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's business, financial condition and results of operations.
v3.20.2
Supplemental Disclosure of Statement of Cash Flow Information
9 Months Ended
Sep. 30, 2020
Supplemental Cash Flow Information [Abstract]  
Supplemental Disclosure of Statement of Cash Flow Information Supplemental Disclosure of Statement of Cash Flow Information
In addition to disclosures discussed elsewhere, during the nine months ended September 30, 2020 and 2019, the Company paid $34,818 and $40,798, respectively, for interest and $1,525 and $1,321, respectively, for income taxes.
As a result of the foreclosure of two office properties located in South Carolina and Kansas, during the nine months ended September 30, 2020, there was an aggregate non-cash charge of $38,942 and $14,188 in mortgages and notes payable, net, and real estate, net, respectively.
During the nine months ended September 30, 2020, the Company exercised extension options on two ground leases related to parcels of land located in Owensboro, Kentucky and Orlando, Florida. The extensions of the ground lease terms resulted in an aggregate non-cash increase of $719 to the related operating lease liabilities and right of use assets.

During the nine months ended September 30, 2019, the Company sold its Richland, Washington property, which included the assumption by the buyer of the related non-recourse mortgage debt in the amount of $110,000.
v3.20.2
Subsequent Events
9 Months Ended
Sep. 30, 2020
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
Subsequent to September 30, 2020, the Company:
disposed of three properties for an aggregate gross disposition price of approximately $39,634;
entered into an agreement to fund a build-to-suit industrial property in the Phoenix, Arizona market for an estimated cost of $72,000, which will be subject to a 15-year net lease;
entered into forward sales transactions under the ATM program for the sale of 153,441 common shares that have not yet been settled. The shares have an initial weighted-average sales price of $11.03 per common share, which is subject to adjustment in accordance with the sales contract; and
declared a common share/unit dividend/distribution of $0.1075 per share/unit, an increase of 2.4%.
v3.20.2
The Company and Financial Statement Presentation (Policies)
9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation and Consolidation Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries.
Variable Interest Entity The Company consolidates the wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP.
Use of Estimates Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the economic uncertainty primarily caused by the recent outbreak of COVID-19. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable and deferred rent receivable, the allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments, valuation of derivative financial instruments, valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee and the useful lives of long-lived assets. Actual results could differ materially from those estimates.
Fair Value Measurements Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("Topic 820"), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements.The Company estimates the fair value of its real estate assets, including non-consolidated real estate assets, by using income and market valuation techniques. The Company may estimate fair values using market information such as recent sale contracts (Level 2 inputs) or recent sale offers or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.
New Accounting Standards Adopted in 2020
New Accounting Standards Adopted in 2020. In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward-looking “expected loss” model that generally will result in the earlier recognition of an allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company analyzed its accounts receivable using an aging methodology and determined that there have been no historical credit losses related to its outstanding accounts receivable. As a result, the Company's adoption of this guidance did not have a material impact on the Company's consolidated financial statements.
In August 2018, the FASB issued ASU 2018-15, Intangibles-Goodwill and Other- Internal-Use Software (Subtopic 350-40). This ASU addresses customer’s accounting for implementation costs incurred in a cloud computing arrangement that is a service contract and also adds certain disclosure requirements related to implementation costs incurred for internal-use software and cloud computing arrangements. The amendment aligns the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). The standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The Company's adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements.
In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820), Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurements. This ASU includes additional disclosures requirements for recurring and nonrecurring Level 3 fair value measurements including disclosure of changes in unrealized gains and losses for the period included in other comprehensive income, disclosure of the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements and a narrative description of measurement uncertainty related to Level 3 measurements. This standard was effective for fiscal years beginning after December 15, 2019. The Company adopted this guidance on January 1, 2020 on a prospective basis. The adoption of this guidance on January 1, 2020 did not have a material impact on the Company's consolidated financial statements.
Recently Issued Accounting Guidance. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 is optional, applies for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR and may be elected over time as reference rate reform activities occur. As of March 31, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
Lessor
Lessor
Lexington’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased industrial and office real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred.
Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before.
Accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions.
From a lessor perspective, the Company concluded that revenue from lease components are primarily recognized on a straight-line basis over the lease term unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Revenue is recognized on a contractual basis for leases with escalations tied to a Consumer Price Index (CPI) with no floor. If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition commences when the improvements are substantially complete and control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred on the unaudited condensed consolidated balance sheets.
The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectable, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis. In February 2020, the Company wrote off a deferred rent receivable balance of $615 as a reduction of rental revenue, related to a tenant that dissolved and surrendered its leased premises in an industrial property located in the Columbus, Ohio market. During the nine months ended September 30, 2019, rental revenue was reduced by an aggregate $1,452 for accounts receivable and deferred rent receivable deemed uncollectable.
Certain tenants have been experiencing financial difficulties as a result of the COVID-19 pandemic. During the nine months ended September 30, 2020, the Company wrote off or reserved aggregate deferred rent receivable balances of $1,383, as a reduction of rental revenue, related to certain tenants as the deferred rent receivable balances were deemed uncollectable. In addition, during the nine-month period ended September 30, 2020, the Company also wrote off or reserved an aggregate of $177 accounts receivable relating to certain tenants suffering from the current economic conditions.
The Company determined that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service is included within rental revenue is CAM services provided as part of the Company’s real estate leases. Topic 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. As of September 30, 2020 and 2019, the Company incurred $67 and $163, respectively, of costs that were not incremental to the execution of leases, which are included in property operating expenses on its unaudited condensed consolidated statements of operations.
The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities. The Company does not have residual value guarantees on specific properties.
Lessee
Lessee
The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2020. The leases have remaining lease terms of up to 43 years, some of which include options to extend the leases in 5 to 10-year increments for up to 53 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. Minimum lease payments for leases that commenced before the date of adoption of ASC 842 were determined based on previous leases guidance under ASC 840. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred.
The accounting guidance under Topic 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate.
The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease.
As the Company does not know the rate implicit in the respective leases, the Company used its incremental borrowing rate based on the information available at the transition date for such existing leases. The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases.
v3.20.2
The Company and Financial Statement Presentation (Tables)
9 Months Ended
Sep. 30, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Schedule of Variable Interest Entities Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, 2020 and December 31, 2019:
September 30, 2020December 31, 2019
Real estate, net$599,701 $592,372 
Total assets$676,938 $645,623 
Mortgages and notes payable, net$44,008 $82,978 
Total liabilities$61,802 $101,901 
v3.20.2
Earnings Per Share (Tables)
9 Months Ended
Sep. 30, 2020
Earnings Per Share [Abstract]  
Schedule of Earnings Per Share Reconciliation
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2020 and 2019:
 Three Months Ended September 30,Nine Months Ended September 30,
 2020201920202019
BASIC    
Net income attributable to common shareholders
$40,285 $141,560 $74,088 $189,657 
Weighted-average number of common shares outstanding - basic
274,696,046 236,285,216 264,211,668 233,833,340 
   
Net income attributable to common shareholders - per common share basic
$0.15 $0.60 $0.28 $0.81 
DILUTED
Net income attributable to common shareholders - basic
$40,285 $141,560 $74,088 $189,657 
Impact of assumed conversions
— 1,573 — — 
Net income attributable to common shareholders
$40,285 $143,133 $74,088 $189,657 
Weighted-average common shares outstanding - basic
274,696,046 236,285,216 264,211,668 233,833,340 
Effect of dilutive securities:
Unvested share-based payment awards and options
1,326,716 359,503 1,234,553 178,303 
Preferred shares - Series C
— 4,710,570 — — 
Weighted-average common shares outstanding - diluted
276,022,762 241,355,289 265,446,221 234,011,643 
Net income attributable to common shareholders - per common share diluted
$0.15 $0.59 $0.28 $0.81 
v3.20.2
Investments in Real Estate (Tables)
9 Months Ended
Sep. 30, 2020
Real Estate [Abstract]  
Schedule of Acquired Properties
The Company completed the following acquisition transactions during the nine months ended September 30, 2020:
Property
Type
MarketAcquisition
Date
Initial
Cost
Basis
Primary
Lease
Expiration
LandBuilding and ImprovementsLease in-place Value Intangible
IndustrialChicago, ILJanuary 2020$53,642 11/2029$3,681 $45,817 $4,144 
IndustrialPhoenix, AZJanuary 202019,164 12/20251,614 16,222 1,328 
IndustrialChicago, ILJanuary 202039,153 12/20291,788 34,301 3,064 
IndustrialDallas, TXFebruary 202083,495 8/20294,500 71,635 7,360 
Industrial Savannah, GA April 202034,753 7/20271,689 30,346 2,718 
Industrial Dallas, TXMay 202010,731 6/20301,308 8,466 957 
Industrial Savannah, GA June 202030,448 6/20252,560 25,697 2,191 
Industrial Savannah, GA June 20209,130 8/20251,070 7,448 612 
Industrial Houston, TX June 202020,949 4/20252,202 17,101 1,646 
Industrial Ocala, FLJune 202058,283 8/20304,113 49,904 4,266 
IndustrialDC/Baltimore, MDSeptember 202029,143 11/20242,818 24,423 1,902 
IndustrialSavannah, GASeptember 202040,908 07/20263,775 34,322 2,811 
$429,799 $31,118 $365,682 $32,999 
Schedule of Real Estate Properties Development
As of September 30, 2020, the details of the development arrangements outstanding are as follows (in $000's, except square feet):
Project (% owned)MarketProperty TypeEstimated Sq. Ft. Estimated Project Cost GAAP Investment Balance as of
9/30/2020
Amount Funded as of
9/30/2020
Estimated Completion Date
Fairburn (90%)
Atlanta, GAIndustrial910,000 $53,812 $30,638 $22,543 1Q 2021
Rickenbacker (100%)
Columbus, OHIndustrial320,000 20,300 11,310 8,233 4Q 2020
$74,112 $41,948 $30,776 
v3.20.2
Disposition and Impairment (Tables)
9 Months Ended
Sep. 30, 2020
Discontinued Operations and Disposal Groups [Abstract]  
Disposal Groups, Including Discontinued Operations
Assets and liabilities of the held for sale properties as of September 30, 2020 consisted of the following:
September 30, 2020
Assets:
Real estate, at cost$180,981 
Real estate, intangible assets5,361 
Accumulated depreciation and amortization(38,405)
Rent receivable - deferred8,066 
Other3,207 
$159,210 
Liabilities:
Mortgages and notes payable, net$177,784 
Accounts payable and other liabilities680 
Accrued interest payable322 
Prepaid rent 266 
$179,052 
v3.20.2
Fair Value Measurements (Tables)
9 Months Ended
Sep. 30, 2020
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Abstract]  
Schedule of Fair Value Measurement Inputs
The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall:
 BalanceFair Value Measurements Using
DescriptionSeptember 30, 2020(Level 1)(Level 2)(Level 3)
Interest rate swap liabilities$(19,687)$— $(19,687)$— 
Impaired property held for sale(1)$8,742 $— $— $8,742 
(1)    Represents a non-recurring fair value measurement. The fair value is calculated as of the date of the impairment. The Company measured these impairment charges based on discounted cash flow analysis, using a hold period of ten years and residual capitalization rates and discount rates ranging from 8.0% to 9.0% and 9.0% to 12.0%, respectively. As significant inputs to the models are unobservable, the Company determined that the value determined for these properties falls within Level 3 of the fair value reporting hierarchy.
 BalanceFair Value Measurements Using
DescriptionDecember 31, 2019(Level 1)(Level 2)(Level 3)
Interest rate swap liabilities$(1,928)$— $(1,928)$— 
Impaired real estate assets(1)$4,846 $— $— $4,846 
(1)    Represents a non-recurring fair value measurement. The fair value is calculated as of the date of the impairment
Schedule of Carrying Amounts and Fair Value of Financial Instruments
The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments, excluding held for sale assets, as of September 30, 2020 and December 31, 2019:

 As of September 30, 2020As of December 31, 2019
 Carrying
Amount
Fair ValueCarrying
Amount
Fair Value
Liabilities    
Debt$1,361,953 $1,375,415 $1,311,977 $1,276,589 
v3.20.2
Investments in Non-Consolidated Entities (Tables)
9 Months Ended
Sep. 30, 2020
Noncontrolling Interest [Abstract]  
Investments in and Advances to Affiliates
Below is a schedule of the Company's investments in non-consolidated entities:
Percentage Ownership atInvestment Balance as of
InvestmentSeptember 30, 2020September 30, 2020December 31, 2019
NNN Office JV LP ("NNN JV")(1)20%$32,723 $39,288 
Etna Park 70 LLC(2)90%11,352 8,352 
Etna Park East LLC (3)90%7,391 4,310 
Other(4)25%5,023 5,218 
$56,489 $57,168 
(1)    NNN JV is a joint venture formed in 2018 and owns office properties formerly owned by the Company.
(2)    Joint venture formed in 2017 with a developer entity to acquire a 151-acre parcel of developable land and to pursue industrial build-to-suit opportunities. The Company determined that it is not the primary beneficiary. In December 2018, the parcel was subdivided and the Company received a distribution of an ownership interest in a 57-acre parcel with a historical cost of $3,008. The Company acquired control of the 57-acre parcel via the purchase of the Company's joint venture partners' interests.
(3) Joint venture formed in 2019 with a developer entity to acquire a 129.6-acre parcel of land and to pursue industrial build-to-suit opportunities. The Company determined it is not the primary beneficiary.
(4)    As of September 30, 2020, represents one joint venture investment, which owns a single-tenant, net-leased asset.
v3.20.2
Debt (Tables)
9 Months Ended
Sep. 30, 2020
Debt Disclosure [Abstract]  
Schedule of Long-term Debt Instruments
The Company had the following mortgages and notes payable outstanding as of September 30, 2020 and December 31, 2019:
September 30, 2020December 31, 2019
Mortgages and notes payable$159,686 $393,872 
Unamortized debt issuance costs(1,963)(3,600)
$157,723 $390,272 
Debt Instrument Redemption
The Company had the following senior notes outstanding as of September 30, 2020 and December 31, 2019:
Issue DateSeptember 30, 2020December 31, 2019Interest RateMaturity DateIssue Price
August 2020$400,000 $— 2.70 %September 203099.233 %
May 2014198,932 250,000 4.40 %June 202499.883 %
June 2013188,756 250,000 4.25 %June 202399.026 %
787,688 500,000 
Unamortized debt discount(3,619)(963)
Unamortized debt issuance cost(5,126)(2,167)
$778,943 $496,870 
Schedule of Line of Credit Facilities A summary of the significant terms, as of September 30, 2020, is as follows:

Maturity Date
Current
Interest Rate
$600,000 Revolving Credit Facility(1)
February 2023
LIBOR + 0.90%
$300,000 Term Loan(2)
January 2025
LIBOR + 1.00%
(1)     Maturity date of the revolving credit facility can be extended to February 2024 at the Company's option. The interest rate ranges from LIBOR plus 0.775% to 1.45%. At September 30, 2020, the Company had no borrowings outstanding and availability of $600,000, subject to covenant compliance.
(2) The LIBOR portion of the interest rate was swapped to obtain a current fixed rate of 2.732% per annum. The aggregate unamortized debt issuance costs for the term loan was $2,183 and $2,561 as of September 30, 2020 and December 31, 2019, respectively.
v3.20.2
Derivatives and Hedging Activities (Tables)
9 Months Ended
Sep. 30, 2020
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Schedule of Derivative Instruments
Interest Rate DerivativeNumber of InstrumentsNotional
Interest Rate Swaps4$300,000
Fair Value of the Company's Derivative Financial Instruments and Classification on the Balance Sheets
The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the condensed consolidated balance sheets:
 As of September 30, 2020As of December 31, 2019
 Balance Sheet LocationFair ValueBalance Sheet LocationFair Value
Derivatives designated as hedging instruments
Interest Rate SwapsAccounts Payable and Other Liabilities$(19,687)Accounts Payable and Other Liabilities$(1,928)
Effect of the Company's Derivative Financial Instruments on the Statements of Operation
The table below presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2020 and 2019.
Derivatives in Cash FlowAmount of Gain (Loss)
Recognized in OCI on Derivatives
September 30,
Amount of (Income) Loss
Reclassified from Accumulated OCI into Income (1)
September 30,
Hedging Relationships2020201920202019
Interest Rate Swaps$(19,934)$(5,326)$2,175 $(299)
(1)    Amounts reclassified from accumulated other comprehensive income (loss) to interest expense within the unaudited condensed consolidated statement of operations.
v3.20.2
Lease Accounting (Tables)
9 Months Ended
Sep. 30, 2020
Leases [Abstract]  
Operating Lease, Lease Income
The following table presents the Company’s classification of rental revenue for its operating leases for the three and nine months ended September 30, 2020 and 2019:
Three Months EndedNine Months Ended
Classification September 30, 2020September 30, 2019September 30, 2020September 30, 2019
Fixed$74,902 $73,396 $219,542 $218,808 
Variable(1)
8,690 6,929 23,879 20,250 
Total$83,592 $80,325 $243,421 $239,058 
(1)    Primarily comprised of tenant reimbursements.
Lessor, Operating Lease, Payments to be Received, Maturity
Future fixed rental receipts for leases, assuming no new or re-negotiated leases as of September 30, 2020 were as follows:
2020 - remainder$71,930 
2021281,421 
2022270,067 
2023269,224 
2024238,853 
2025212,486 
Thereafter1,280,114 
Total$2,624,095 
Assets and Liabilities, Lessee
Supplemental information related to operating leases is as follows:
Nine Months Ended
September 30, 2020September 30, 2019
Weighted-average remaining lease term
Operating leases (years)12.312.4
Weighted-average discount rate
Operating leases4.2 %4.1 %
Lease, Cost
The components of lease expense for the nine months ended September 30, 2020 and 2019 were as follows:
Income Statement Classification FixedVariableTotal
2020:
Property operating$2,985 $— $2,985 
General and administrative1,012 76 1,088 
Total$3,997 $76 $4,073 
2019:
Property operating$2,988 $— $2,988 
General and administrative1,007 85 1,092 
Total$3,995 $85 $4,080 
Lessee, Operating Lease, Liability, Maturity
The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2020:
Operating Leases
2020 - remainder$1,241 
20215,117 
20225,211 
20235,355 
20245,377 
20255,377 
Thereafter21,389 
Total lease payments$49,067 
Less: Imputed interest(11,729)
Present value of operating lease liabilities$37,338 
v3.20.2
Equity (Tables)
9 Months Ended
Sep. 30, 2020
Equity [Abstract]  
Schedule of common share issuance The following table summarizes common share issuances under the ATM program for the nine months ended September 30, 2020 and 2019, respectively:
Nine months ended September 30, 2020
Shares Sold Net Proceeds
2020 ATM Issuances5,950,882$61,032
Nine months ended September 30, 2019
Shares SoldNet Proceeds
2019 ATM Issuances3,020,190$31,083
Schedule of Accumulated Other Comprehensive Income (Loss)
A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:
Nine Months Ended September 30,
20202019
Balance at beginning of period$(1,928)$76 
Other comprehensive loss before reclassifications(19,934)(5,326)
Amounts of (income) loss reclassified from accumulated other comprehensive income to interest expense
2,175 (299)
Balance at end of period$(19,687)$(5,549)
Consolidation, Less than Wholly Owned Subsidiary, Parent Ownership Interest, Effects of Changes, Net
The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests:

Net Income Attributable to
Shareholders and Transfers from Noncontrolling Interests
Nine Months Ended September 30,
 20202019
Net income attributable to Lexington Realty Trust shareholders$78,924 $194,679 
Transfers from noncontrolling interests:
Increase in additional paid-in-capital for redemption of noncontrolling OP units
632 504 
Change from net income attributable to shareholders and transfers from noncontrolling interests
$79,556 $195,183 
v3.20.2
The Company and Financial Statement Presentation - Additional Information (Details)
9 Months Ended
Sep. 30, 2020
term
state
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of properties | term 135
Number of states in which entity has interests | state 29
Variable Interest Entity, Primary Beneficiary | NNN Office Joint Venture  
Variable Interest Entity [Line Items]  
VIE, ownership percentage 90.00%
LCIF | Variable Interest Entity, Primary Beneficiary  
Variable Interest Entity [Line Items]  
VIE, ownership percentage 97.00%
v3.20.2
The Company and Financial Statement Presentation - Schedule of Variable Interest Entities (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Variable Interest Entity [Line Items]    
Real estate, net $ 2,987,681 $ 2,856,014
Total assets 3,621,851 3,180,260
Total liabilities 1,707,502 1,455,541
Variable Interest Entity, Primary Beneficiary    
Variable Interest Entity [Line Items]    
Real estate, net 599,701 592,372
Total assets 676,938 645,623
Mortgages and notes payable, net 44,008 82,978
Total liabilities $ 61,802 $ 101,901
v3.20.2
Earnings Per Share (Details) - USD ($)
$ / shares in Units, $ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
BASIC        
Net income attributable to common shareholders $ 40,285 $ 141,560 $ 74,088 $ 189,657
Weighted-average number of common shares outstanding - basic 274,696,046 236,285,216 264,211,668 233,833,340
Net income (loss) attributable to common shares outstanding - basic (in dollars per share) $ 0.15 $ 0.60 $ 0.28 $ 0.81
DILUTED        
Impact of assumed conversions $ 0 $ 1,573 $ 0 $ 0
Net income attributable to common shareholders $ 40,285 $ 143,133 $ 74,088 $ 189,657
Effect of dilutive securities:        
Unvested share-based payment awards (in shares) 1,326,716 359,503 1,234,553 178,303
Preferred shares - Series C (in shares) 0 4,710,570 0 0
Weighted-average common shares outstanding - diluted (in shares) 276,022,762 241,355,289 265,446,221 234,011,643
Net income (loss) attributable to common shareholders - per common share diluted (in dollars per share) $ 0.15 $ 0.59 $ 0.28 $ 0.81
v3.20.2
Investments in Real Estate - Schedule of Real Estate Acquisitions (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Dec. 31, 2019
Real Estate [Line Items]    
Initial Cost Basis $ 429,799  
Land 31,118  
Building and Improvements 365,682  
Lease in-place Value Intangible 32,999  
Investments in real estate under construction 41,948 $ 13,313
Capitalized interest 578  
Chicago, IL | Industrial Property | Chicago, Illinois, Industrial Property Expiring November 2029    
Real Estate [Line Items]    
Initial Cost Basis 53,642  
Land 3,681  
Building and Improvements 45,817  
Lease in-place Value Intangible 4,144  
Chicago, IL | Industrial Property | Chicago, Illinois, Industrial Property Expiring December 2029    
Real Estate [Line Items]    
Initial Cost Basis 39,153  
Land 1,788  
Building and Improvements 34,301  
Lease in-place Value Intangible 3,064  
Phoenix, AZ | Industrial Property | Phoenix, Arizona, Industrial Property Expiring December 2025    
Real Estate [Line Items]    
Initial Cost Basis 19,164  
Land 1,614  
Building and Improvements 16,222  
Lease in-place Value Intangible 1,328  
Dallas, TX | Industrial Property | Dallas, Texas, Industrial Property Expiring August 2029    
Real Estate [Line Items]    
Initial Cost Basis 83,495  
Land 4,500  
Building and Improvements 71,635  
Lease in-place Value Intangible 7,360  
Dallas, TX | Industrial Property | Dallas, Texas, Industrial Property Expiring June 2030    
Real Estate [Line Items]    
Initial Cost Basis 10,731  
Land 1,308  
Building and Improvements 8,466  
Lease in-place Value Intangible 957  
Savannah, GA | Industrial Property | Savannah, Georgia, Industrial Property Expiring July 2027    
Real Estate [Line Items]    
Initial Cost Basis 34,753  
Land 1,689  
Building and Improvements 30,346  
Lease in-place Value Intangible 2,718  
Savannah, GA | Industrial Property | Savannah, Georgia, Industrial Property Expiring June 2025    
Real Estate [Line Items]    
Initial Cost Basis 30,448  
Land 2,560  
Building and Improvements 25,697  
Lease in-place Value Intangible 2,191  
Savannah, GA | Industrial Property | Savannah, Georgia, Industrial Property Expiring August 2025    
Real Estate [Line Items]    
Initial Cost Basis 9,130  
Land 1,070  
Building and Improvements 7,448  
Lease in-place Value Intangible 612  
Savannah, GA | Industrial Property | Savannah, Georgia, Industrial Property Expiring July 2026    
Real Estate [Line Items]    
Initial Cost Basis 40,908  
Land 3,775  
Building and Improvements 34,322  
Lease in-place Value Intangible 2,811  
Houston, TX | Industrial Property | Houston, Texas, Industrial Property Expiring April 2025    
Real Estate [Line Items]    
Initial Cost Basis 20,949  
Land 2,202  
Building and Improvements 17,101  
Lease in-place Value Intangible 1,646  
Ocala, FL | Industrial Property | Ocala, Florida, Industrial Property Expiring Aug 2030    
Real Estate [Line Items]    
Initial Cost Basis 58,283  
Land 4,113  
Building and Improvements 49,904  
Lease in-place Value Intangible 4,266  
DC/Baltimore, MD | Industrial Property | DC/Baltimore, Industrial Property Expiring Nov 2024    
Real Estate [Line Items]    
Initial Cost Basis 29,143  
Land 2,818  
Building and Improvements 24,423  
Lease in-place Value Intangible $ 1,902  
v3.20.2
Investments in Real Estate - Schedule of Real Estate Properties Development (Details)
$ in Thousands
9 Months Ended
Sep. 30, 2020
USD ($)
ft²
Dec. 31, 2019
USD ($)
Real Estate [Line Items]    
Estimated Project Cost $ 3,439,314 $ 3,320,574
GAAP Investment Balance as of 9/30/2020 41,948 $ 13,313
Real Estate Investment    
Real Estate [Line Items]    
Estimated Project Cost 74,112  
GAAP Investment Balance as of 9/30/2020 41,948  
Amount Funded as of 9/30/2020 $ 30,776  
Atlanta, Georgia    
Real Estate [Line Items]    
Project ownership percentage 90.00%  
Atlanta, Georgia | Real Estate Investment    
Real Estate [Line Items]    
Estimated Sq. Ft. | ft² 910,000  
Estimated Project Cost $ 53,812  
GAAP Investment Balance as of 9/30/2020 30,638  
Amount Funded as of 9/30/2020 $ 22,543  
Columbus, Ohio    
Real Estate [Line Items]    
Project ownership percentage 100.00%  
Columbus, Ohio | Real Estate Investment    
Real Estate [Line Items]    
Estimated Sq. Ft. | ft² 320,000  
Estimated Project Cost $ 20,300  
GAAP Investment Balance as of 9/30/2020 11,310  
Amount Funded as of 9/30/2020 $ 8,233  
v3.20.2
Dispositions and Impairment - Additional Information (Details)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
term
property
Sep. 30, 2019
USD ($)
Sep. 30, 2020
USD ($)
impairment_charge
term
property
Sep. 30, 2019
USD ($)
Dec. 31, 2019
property
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Number of properties disposed | term 135   135    
Debt satisfaction gain     $ 29,016 $ 4,415  
Number of real estate properties held for sale | property 5   5   0
Number of impairment charges | impairment_charge     2    
Asset impairment charges $ 6,175 $ 673 $ 7,792 2,355  
Properties in Charleston, SC and Overland Park, KS | Disposal Group, Disposed of by Sale, Not Discontinued Operations          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Number of properties disposed | property 2   2    
Transferred Property | Office Building          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Aggregate gross disposition price     $ 140,573 448,900  
Sold Properties          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Gain on sale of properties     41,876 176,662  
Houston, TX          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Asset impairment charges     1,617    
Watertown, New York          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Asset impairment charges       2,106  
Albany, Georgia          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Asset impairment charges       $ 249  
Kalamazoo, Michigan          
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]          
Asset impairment charges     $ 6,175    
v3.20.2
Dispositions and Impairment - Schedule of Properties Held for Sale (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Liabilities:    
Liabilities held for sale $ 179,052 $ 0
Disposal Group, Held-for-sale, Not Discontinued Operations    
Assets:    
Real estate, at cost 180,981  
Real estate, intangible assets 5,361  
Accumulated depreciation and amortization (38,405)  
Rent receivable - deferred 8,066  
Other 3,207  
Assets held for sale 159,210  
Liabilities:    
Mortgages and notes payable, net 177,784  
Accounts payable and other liabilities 680  
Accrued interest payable 322  
Prepaid rent 266  
Liabilities held for sale $ 179,052  
v3.20.2
Fair Value Measurements - Schedule Fair Value Measurements Inputs (Details)
Sep. 30, 2020
USD ($)
Dec. 31, 2019
USD ($)
Holding Period    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Property held-for-sale, measurement input 10  
Capitalization Rates | Minimum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Property held-for-sale, measurement input 0.080  
Capitalization Rates | Maximum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Property held-for-sale, measurement input 0.090  
Discount Rates | Minimum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Property held-for-sale, measurement input 0.090  
Discount Rates | Maximum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Property held-for-sale, measurement input 0.120  
Fair Value, Recurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest rate swap liabilities $ (19,687,000) $ (1,928,000)
Fair Value, Recurring | Fair Value Measurements Using Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest rate swap liabilities 0 0
Fair Value, Recurring | Fair Value Measurements Using Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest rate swap liabilities (19,687,000) (1,928,000)
Fair Value, Recurring | Fair Value Measurements Using Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Interest rate swap liabilities 0 0
Fair Value, Nonrecurring    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Impaired property held for sale 8,742,000  
Impaired real estate assets   4,846,000
Fair Value, Nonrecurring | Fair Value Measurements Using Level 1    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Impaired property held for sale 0  
Impaired real estate assets   0
Fair Value, Nonrecurring | Fair Value Measurements Using Level 2    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Impaired property held for sale 0  
Impaired real estate assets   0
Fair Value, Nonrecurring | Fair Value Measurements Using Level 3    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Impaired property held for sale $ 8,742,000  
Impaired real estate assets   $ 4,846,000
v3.20.2
Fair Value Measurements - Fair Value by Balance Sheet Grouping (Details) - Fair Value Measurements Using Level 3 - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Carrying Amount    
Liabilities    
Carrying value of debt $ 1,361,953 $ 1,311,977
Fair Value    
Liabilities    
Fair value of debt $ 1,375,415 $ 1,276,589
v3.20.2
Investments in Non-Consolidated Entities - Schedule of Investment in Non-Consolidated Entities (Details)
$ in Thousands
1 Months Ended 9 Months Ended
Feb. 28, 2019
USD ($)
Dec. 31, 2018
USD ($)
a
Sep. 30, 2020
USD ($)
partnership
officeAsset
Sep. 30, 2019
USD ($)
officeAsset
Dec. 31, 2019
USD ($)
a
Dec. 31, 2017
a
Investments in and Advances to Affiliates [Line Items]            
Investment balance     $ 56,489   $ 57,168  
Number of joint venture interests | partnership     1      
Non-consolidated Real Estate Entity            
Investments in and Advances to Affiliates [Line Items]            
Ownership percentage 15.00%          
NNN Office JV LP            
Investments in and Advances to Affiliates [Line Items]            
Ownership percentage     20.00%      
Investment balance     $ 32,723   39,288  
Etna Park 70 LLC            
Investments in and Advances to Affiliates [Line Items]            
Ownership percentage     90.00%      
Investment balance     $ 11,352   8,352  
Area of land (in acres) | a   57       151
Payments to acquire interest in joint venture   $ 3,008        
Etna Park East LLC            
Investments in and Advances to Affiliates [Line Items]            
Ownership percentage     90.00%      
Investment balance     $ 7,391   $ 4,310  
Area of land (in acres) | a         129.6  
Other Joint Ventures            
Investments in and Advances to Affiliates [Line Items]            
Ownership percentage     25.00%      
Investment balance     $ 5,023   $ 5,218  
Mortgages | NNN Office JV LP            
Investments in and Advances to Affiliates [Line Items]            
Non-recourse mortgage loan     $ 40,800 $ 101,520    
NNN Office Joint Venture Properties            
Investments in and Advances to Affiliates [Line Items]            
Aggregate gain on sale of properties $ 824          
NNN Office Joint Venture Properties | NNN Office JV LP            
Investments in and Advances to Affiliates [Line Items]            
Number of properties sold | officeAsset     2 4    
Aggregate gain on sale of properties     $ 557 $ 3,529    
Aggregate gross disposition price     $ 8,504 $ 45,208    
Office Building            
Investments in and Advances to Affiliates [Line Items]            
Proceeds from sale of joint venture $ 2,317          
v3.20.2
Debt - Schedule of Mortgages and Notes Payable (Details) - Mortgages and Notes Payable - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Debt Instrument [Line Items]    
Mortgages and notes payable $ 159,686 $ 393,872
Unamortized debt issuance costs (1,963) (3,600)
Long-term debt $ 157,723 $ 390,272
v3.20.2
Debt - Additional Information (Details)
3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
loan
Sep. 30, 2019
USD ($)
Sep. 30, 2020
USD ($)
loan
Sep. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2007
USD ($)
Debt Instrument [Line Items]            
Debt default, number of loans | loan 1   1      
Debt default, amount $ 18,413,000   $ 18,413,000      
Gain (loss) on extinguishment of debt 17,557,000 $ (4,424,000) 18,950,000 $ (4,527,000)    
Capitalized interest     $ 1,112,000 $ 251,000    
Senior Notes Due 2023            
Debt Instrument [Line Items]            
Repurchase of debt 61,244,000          
Senior Notes Due 2024            
Debt Instrument [Line Items]            
Repurchase of debt 51,068,000          
Senior Notes Due 2023 and 2024            
Debt Instrument [Line Items]            
Prepayment penalties 9,477,000          
Accrued interest 1,024,000          
Gain (loss) on extinguishment of debt $ 10,066,000          
Mortgages and Notes Payable            
Debt Instrument [Line Items]            
Weighted average interest rate 4.70%   4.70%   4.50%  
Mortgages and notes payable $ 159,686,000   $ 159,686,000   $ 393,872,000  
Mortgages and Notes Payable | Lake Jackson, Texas Property, Mortgages and Notes Payable            
Debt Instrument [Line Items]            
Stated interest rate 4.04%   4.04%      
Mortgages and notes payable $ 179,110,000   $ 179,110,000      
Senior Notes            
Debt Instrument [Line Items]            
Mortgages and notes payable 787,688,000   787,688,000   500,000,000  
Unamortized debt discount $ 3,619,000   $ 3,619,000   963,000  
Senior Notes | Senior Notes Due 2030            
Debt Instrument [Line Items]            
Stated interest rate 2.70%   2.70%      
Mortgages and notes payable $ 400,000,000   $ 400,000,000   0  
Percentage of issuance price 99.233%   99.233%      
Unamortized debt discount $ 3,068,000   $ 3,068,000      
Trust Preferred Securities | 6.804% Trust Preferred Securities            
Debt Instrument [Line Items]            
Stated interest rate           6.804%
Face amount of debt instrument           $ 200,000,000
Interest rate, effective percentage 1.968%   1.968%      
Principal amount outstanding $ 129,120,000   $ 129,120,000   129,120,000  
Unamortized debt issuance costs $ 1,650,000   $ 1,650,000   $ 1,724,000  
Trust Preferred Securities | London Interbank Offered Rate (LIBOR) | 6.804% Trust Preferred Securities            
Debt Instrument [Line Items]            
Basis spread on variable rate     1.70%      
Minimum | Mortgages and Notes Payable            
Debt Instrument [Line Items]            
Stated interest rate 3.50%   3.50%   3.50%  
Maximum | Mortgages and Notes Payable            
Debt Instrument [Line Items]            
Stated interest rate 6.50%   6.50%   6.50%  
v3.20.2
Debt - Schedule of Debt Instrument Redemption (Details) - Senior Notes - USD ($)
Sep. 30, 2020
Dec. 31, 2019
Debt Instrument [Line Items]    
Face amount of senior notes $ 787,688,000 $ 500,000,000
Unamortized debt discount (3,619,000) (963,000)
Unamortized debt issuance costs (5,126,000) (2,167,000)
Long-term debt 778,943,000 496,870,000
Senior Notes Due 2030    
Debt Instrument [Line Items]    
Face amount of senior notes $ 400,000,000 0
Stated interest rate 2.70%  
Percentage of issuance price 99.233%  
Unamortized debt discount $ (3,068,000)  
Senior Notes Due 2024    
Debt Instrument [Line Items]    
Face amount of senior notes $ 198,932,000 250,000,000
Stated interest rate 4.40%  
Percentage of issuance price 99.883%  
Senior Notes Due 2023    
Debt Instrument [Line Items]    
Face amount of senior notes $ 188,756,000 $ 250,000,000
Stated interest rate 4.25%  
Percentage of issuance price 99.026%  
v3.20.2
Debt - Schedule of Credit Agreement Terms (Details) - USD ($)
9 Months Ended
Sep. 30, 2020
Dec. 31, 2019
Jul. 31, 2019
Feb. 28, 2019
Unsecured Term Loan        
Debt Instrument [Line Items]        
Unamortized debt issuance costs $ 2,183,000 $ 2,561,000    
Unsecured Revolving Credit Facility, Expiring February 2023 | Unsecured Revolving Credit Facility        
Debt Instrument [Line Items]        
Maximum borrowing capacity       $ 600,000,000
Revolving credit facility borrowings 0      
Remaining borrowing capacity 600,000,000      
Unsecured Term Loan, Expiring January 2025 | Unsecured Term Loan        
Debt Instrument [Line Items]        
Face amount of debt instrument $ 300,000,000      
Stated interest rate     2.732%  
London Interbank Offered Rate (LIBOR) | Unsecured Revolving Credit Facility, Expiring February 2023 | Unsecured Revolving Credit Facility        
Debt Instrument [Line Items]        
Basis spread on variable rate 0.90%      
London Interbank Offered Rate (LIBOR) | Unsecured Revolving Credit Facility, Expiring February 2023 | Unsecured Revolving Credit Facility | Minimum        
Debt Instrument [Line Items]        
Basis spread on variable rate 0.775%      
London Interbank Offered Rate (LIBOR) | Unsecured Revolving Credit Facility, Expiring February 2023 | Unsecured Revolving Credit Facility | Maximum        
Debt Instrument [Line Items]        
Basis spread on variable rate 1.45%      
London Interbank Offered Rate (LIBOR) | Unsecured Term Loan, Expiring January 2025 | Unsecured Term Loan        
Debt Instrument [Line Items]        
Basis spread on variable rate 1.00%      
v3.20.2
Derivatives and Hedging Activities (Details)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Sep. 30, 2020
USD ($)
Sep. 30, 2019
USD ($)
Dec. 31, 2019
USD ($)
Jul. 31, 2019
USD ($)
instrument
Derivative [Line Items]            
Gain (loss) to be reclassified during next 12 months $ 4,830   $ 4,830      
Interest expense 13,649 $ 16,481 42,610 $ 50,715    
Interest Rate Swap | Designated as Hedging Instrument | Accounts Payable and Other Liabilities            
Derivative [Line Items]            
Derivative liability $ (19,687)   (19,687)   $ (1,928)  
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging            
Derivative [Line Items]            
Number of instruments | instrument           4
Notional amount           $ 300,000
Interest Rate Swap | Designated as Hedging Instrument | Cash Flow Hedging | Interest Expense            
Derivative [Line Items]            
Amount of gain (loss) recognized in OCI on derivatives     (19,934) (5,326)    
Amount of (income) loss reclassified from accumulated OCI into income     $ 2,175 $ (299)    
v3.20.2
Lease Accounting - Additional Information (Details) - USD ($)
$ in Thousands
1 Months Ended 9 Months Ended
Feb. 29, 2020
Sep. 30, 2020
Sep. 30, 2019
Lessee, Lease, Description [Line Items]      
Receivable deemed uncollectable     $ 1,452
Lease execution costs   $ 67 163
Remaining lease term   43 years  
Renewal term   53 years  
Sublease income   $ 2,824 $ 2,823
COVID-19 Pandemic      
Lessee, Lease, Description [Line Items]      
Receivables writeoff   1,383  
Receivable deemed uncollectable   $ 177  
Columbus, Ohio      
Lessee, Lease, Description [Line Items]      
Receivables writeoff $ 615    
Minimum      
Lessee, Lease, Description [Line Items]      
Renewal term   5 years  
Maximum      
Lessee, Lease, Description [Line Items]      
Renewal term   10 years  
v3.20.2
Lease Accounting - Lease Income (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Leases [Abstract]        
Fixed $ 74,902 $ 73,396 $ 219,542 $ 218,808
Variable 8,690 6,929 23,879 20,250
Total $ 83,592 $ 80,325 $ 243,421 $ 239,058
v3.20.2
Lease Accounting - Future Fixed Rental Receipts (Details)
$ in Thousands
Sep. 30, 2020
USD ($)
Leases [Abstract]  
2020 - remainder $ 71,930
2021 281,421
2022 270,067
2023 269,224
2024 238,853
2025 212,486
Thereafter 1,280,114
Total $ 2,624,095
v3.20.2
Lease Accounting - Supplemental Balance Sheet Information (Details)
Sep. 30, 2020
Sep. 30, 2019
Leases [Abstract]    
Weighted-average remaining lease term, operating leases (years) 12 years 3 months 18 days 12 years 4 months 24 days
Weighted-average discount rate, operating leases 4.20% 4.10%
v3.20.2
Lease Accounting - Components of Lease Expense (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Lessee, Lease, Description [Line Items]    
Fixed $ 3,997 $ 3,995
Variable 76 85
Total 4,073 4,080
Property Operating Expense    
Lessee, Lease, Description [Line Items]    
Fixed 2,985 2,988
Variable 0 0
Total 2,985 2,988
General and Administrative Expense    
Lessee, Lease, Description [Line Items]    
Fixed 1,012 1,007
Variable 76 85
Total $ 1,088 $ 1,092
v3.20.2
Lease Accounting - Operating Lease Liabilities Maturity (Details) - USD ($)
$ in Thousands
Sep. 30, 2020
Dec. 31, 2019
Leases [Abstract]    
2020 - remainder $ 1,241  
2021 5,117  
2022 5,211  
2023 5,355  
2024 5,377  
2025 5,377  
Thereafter 21,389  
Total lease payments 49,067  
Less: Imputed interest (11,729)  
Present value of operating lease liabilities $ 37,338 $ 39,442
v3.20.2
Equity - Additional Information (Details)
$ / shares in Units, $ in Thousands
9 Months Ended
Sep. 30, 2020
USD ($)
$ / shares
shares
Sep. 30, 2019
USD ($)
$ / shares
shares
Dec. 31, 2018
shares
Jul. 31, 2015
shares
Equity [Line Items]        
Authorized amount (in shares)     10,000,000 10,000,000
Treasury stock acquired (in shares) 1,329,940 441,581    
Treasury stock acquired, average cost (in dollars per share) | $ / shares $ 8.28 $ 8.13    
Shares remaining available for repurchase (in shares) 8,976,315      
OP unit equivalent in common shares 1.13      
Partners' capital account (in units) 2,711,000      
Share-based Payment Arrangement        
Equity [Line Items]        
Shares granted (in shares) 35,880 54,726    
Grant date fair value | $ $ 375 $ 470    
At-The-Market Program        
Equity [Line Items]        
Common shares amount available for issuance | $ $ 189,584      
Number of shares sold 5,950,882 3,020,190    
Proceeds from sale of stock | $ $ 61,032 $ 31,083    
At-The-Market Program | Forward Contracts        
Equity [Line Items]        
Number of shares to be settled on a forward basis (in shares) 3,875,751      
Weighted average forward contract price | $ / shares $ 11.23      
Underwritten Offering        
Equity [Line Items]        
Number of shares sold 17,250,000 10,000,000    
Sale of stock (in dollars per share) | $ / shares $ 9.60 $ 10.09    
Proceeds from sale of stock | $ $ 164,000 $ 100,749    
v3.20.2
Equity - Changes in Other Comprehensive Income (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Beginning Balance $ 1,724,719 $ 1,346,678
Ending Balance 1,914,349 1,591,035
AOCI Attributable to Parent    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Beginning Balance (1,928) 76
Ending Balance (19,687) (5,549)
Accumulated Net Gain (Loss) from Cash Flow Hedges Including Portion Attributable to Noncontrolling Interest    
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]    
Other comprehensive loss before reclassifications (19,934) (5,326)
Amounts of (income) loss reclassified from accumulated other comprehensive income to interest expense $ 2,175 $ (299)
v3.20.2
Equity - Effects of Changes in Noncontrolling Interests (Details) - USD ($)
$ in Thousands
3 Months Ended 9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Sep. 30, 2020
Sep. 30, 2019
Equity [Abstract]        
Net income attributable to Lexington Realty Trust shareholders $ 41,904 $ 143,319 $ 78,924 $ 194,679
Transfers from noncontrolling interests:        
Increase in additional paid-in-capital for redemption of noncontrolling OP units     632 504
Change from net income attributable to shareholders and transfers from noncontrolling interests     $ 79,556 $ 195,183
v3.20.2
Supplemental Disclosure of Statement of Cash Flow Information (Details) - USD ($)
$ in Thousands
9 Months Ended
Sep. 30, 2020
Sep. 30, 2019
Other Significant Noncash Transactions [Line Items]    
Interest paid $ 34,818 $ 40,798
Income taxes paid, net 1,525 1,321
South Carolina and Kansas    
Other Significant Noncash Transactions [Line Items]    
Non-cash charge in mortgage 38,942  
Non-cash charge in notes payable and real estate 14,188  
Owensboro, Kentucky and Orlando, Florida    
Other Significant Noncash Transactions [Line Items]    
Lease obligation incurred 719  
Right-of-use asset obtained $ 719  
Richland, Washington    
Other Significant Noncash Transactions [Line Items]    
Non-recourse mortgage loan   $ 110,000
v3.20.2
Subsequent Events Additional Information (Details)
$ / shares in Units, $ in Thousands
1 Months Ended 9 Months Ended
Nov. 05, 2020
USD ($)
property
$ / shares
shares
Sep. 30, 2020
$ / shares
shares
Forward Contracts | At-The-Market Program    
Subsequent Event [Line Items]    
Number of shares to be settled on a forward basis (in shares) | shares   3,875,751
Weighted average forward contract price   $ 11.23
Subsequent Event    
Subsequent Event [Line Items]    
Number of properties disposed | property 3  
Proceeds from sale of properties | $ $ 39,634  
Dividends declared (in dollars per share/unit) $ 0.1075  
Increase in dividends declared per share/unit (in percentage) 0.024  
Subsequent Event | Forward Contracts | At-The-Market Program    
Subsequent Event [Line Items]    
Number of shares to be settled on a forward basis (in shares) | shares 153,441  
Weighted average forward contract price $ 11.03  
Subsequent Event | Phoenix, AZ    
Subsequent Event [Line Items]    
Real estate investment property, estimated cost | $ $ 72,000  
Lease term 15 years