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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 March 31, 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)
Maryland 13-3717318
(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 class Trading Symbol(s) Name of each exchange on which registered
Shares of beneficial interest, par value $0.0001 per share, classified as Common Stock LXP New York Stock Exchange
6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share
LXPPRC New 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 filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging 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: 259,005,835 common shares of beneficial interest, par value $0.0001 per share, as of May 4, 2020.



TABLE OF CONTENTS

PART I. — FINANCIAL INFORMATION    
 
3
4
5
6
7
8
 
26
 
35
 
35
PART II — OTHER INFORMATION    
 
36
 
36
 
39
 
39
39
 
39
 
40
 
42

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)
March 31, 2020 December 31, 2019
 (unaudited)
Assets:  
Real estate, at cost $ 3,473,384    $ 3,320,574   
Real estate - intangible assets 420,843    409,756   
Investments in real estate under construction 18,298    13,313   
Real estate, gross 3,912,525    3,743,643   
Less: accumulated depreciation and amortization 914,600    887,629   
Real estate, net 2,997,925    2,856,014   
Assets held for sale 7,873    —   
Operating right-of-use assets, net 37,201    38,133   
Cash and cash equivalents 83,525    122,666   
Restricted cash 6,533    6,644   
Investments in non-consolidated entities 57,210    57,168   
Deferred expenses, net 19,749    18,404   
Rent receivable – current 3,646    3,229   
Rent receivable – deferred 67,205    66,294   
Other assets 12,585    11,708   
Total assets $ 3,293,452    $ 3,180,260   
Liabilities and Equity:    
Liabilities:    
Mortgages and notes payable, net $ 377,703    $ 390,272   
Revolving credit facility borrowings 130,000    —   
Term loan payable, net 297,565    297,439   
Senior notes payable, net 497,079    496,870   
Trust preferred securities, net 127,421    127,396   
Dividends payable 31,720    32,432   
Liabilities held for sale 18    —   
Operating lease liabilities 38,293    39,442   
Accounts payable and other liabilities 42,479    29,925   
Accrued interest payable 13,992    7,897   
Deferred revenue - including below-market leases, net 19,446    20,350   
Prepaid rent 15,066    13,518   
Total liabilities 1,590,782    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, 255,232,130 and 254,770,719 shares issued and outstanding in 2020 and 2019, respectively
26    25   
Additional paid-in-capital 2,982,363    2,976,670   
Accumulated distributions in excess of net income (1,374,286)   (1,363,676)  
Accumulated other comprehensive loss (18,924)   (1,928)  
Total shareholders’ equity 1,683,195    1,705,107   
Noncontrolling interests 19,475    19,612   
Total equity 1,702,670    1,724,719   
Total liabilities and equity $ 3,293,452    $ 3,180,260   
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
Table of Contents

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share data)
Three Months Ended March 31,
  2020 2019
Gross revenues:    
Rental revenue $ 78,735    $ 79,975   
Other revenue 2,092    1,273   
Total gross revenues 80,827    81,248   
Expense applicable to revenues:    
Depreciation and amortization (40,509)   (37,595)  
Property operating (10,276)   (10,567)  
General and administrative (7,825)   (8,527)  
Non-operating income 190    481   
Interest and amortization expense (14,795)   (17,208)  
Debt satisfaction gains (charges), net 1,393    (103)  
Impairment charges —    (588)  
Gains on sales of properties 9,805    20,957   
Income before provision for income taxes and equity in earnings of non-consolidated entities
18,810    28,098   
Provision for income taxes (653)   (437)  
Equity in earnings of non-consolidated entities 263    619   
Net income 18,420    28,280   
Less net income attributable to noncontrolling interests
(266)   (253)  
Net income attributable to Lexington Realty Trust shareholders
18,154    28,027   
Dividends attributable to preferred shares – Series C (1,572)   (1,572)  
Allocation to participating securities (46)   (50)  
Net income attributable to common shareholders $ 16,536    $ 26,405   
   
Net income attributable to common shareholders - per common share basic
$ 0.07    $ 0.11   
Weighted-average common shares outstanding – basic 253,038,161    232,538,495   
Net income attributable to common shareholders - per common share diluted
$ 0.06    $ 0.11   
Weighted-average common shares outstanding – diluted
257,347,277    236,142,143   
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
Table of Contents

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited and in thousands)
Three Months Ended March 31,
  2020 2019
Net income $ 18,420    $ 28,280   
Other comprehensive income (loss):    
Change in unrealized loss on interest rate swaps, net
(16,996)   (76)  
Other comprehensive loss (16,996)   (76)  
Comprehensive income 1,424    28,204   
Comprehensive income attributable to noncontrolling interests
(266)   (253)  
Comprehensive income attributable to Lexington Realty Trust shareholders
$ 1,158    $ 27,951   
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
Table of Contents

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

Three Months Ended March 31, 2020 Lexington Realty Trust Shareholders  
  Total Preferred Shares Common Shares Additional Paid-in-Capital Accumulated Distributions in Excess of Net Income Accumulated Other Comprehensive Loss Noncontrolling 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 estate 421    —    —    —    —    —    421   
Redemption of noncontrolling OP units for common shares —    —    —    428    —    —    (428)  
Issuance of common shares and deferred compensation amortization, net 18,931    —    1    18,930    —    —    —   
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    —    —    —    1    —    —   
Dividends/distributions (29,161)   —    —    —    (28,765)   —    (396)  
Net income 18,420    —    —    —    18,154    —    266   
Other comprehensive loss (16,996)   —    —    —    —    (16,996)   —   
Balance March 31, 2020 $ 1,702,670    $ 94,016    $ 26    $ 2,982,363    $ (1,374,286)   $ (18,924)   $ 19,475   


Three Months Ended March 2019 Lexington Realty Trust Shareholders  
  Total Preferred Shares Common Shares Additional Paid-in-Capital Accumulated Distributions in Excess of Net Income Accumulated 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 —    —    —    156    —    —    (156)  
Issuance of common shares and deferred compensation amortization, net 1,710    —    —    1,710    —    —    —   
Repurchase of common shares (958)   —    —    (958)   —    —    —   
Repurchase of common shares to settle tax obligations (3,942)   —    (1)   (3,941)   —    —    —   
Forfeiture of employee common shares 5    —    —    —    5    —    —   
Dividends/distributions (26,363)   —    —    —    (25,471)   —    (892)  
Net income 28,280    —    —    —    28,027    —    253   
Other comprehensive loss (76)   —    —    —    —    (76)   —   
Balance March 31, 2019 $ 1,345,334    $ 94,016    $ 23    $ 2,769,822    $ (1,534,539)   $ —    $ 16,012   

6
Table of Contents

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Three Months Ended March 31,
  2020 2019
Net cash provided by operating activities: $ 45,665    $ 47,621   
Cash flows from investing activities:    
Acquisition of real estate, including intangible assets (195,560)   (57,991)  
Investment in real estate under construction (4,820)   —   
Capital expenditures (2,383)   (4,455)  
Net proceeds from sale of properties 22,380    79,283   
Investments in non-consolidated entities (1,080)   (418)  
Distributions from non-consolidated entities in excess of accumulated earnings 1,293    4,705   
Increase in deferred leasing costs (3,774)   (1,124)  
Change in real estate deposits, net 727    (190)  
Net cash provided by (used in) investing activities (183,217)   19,810   
Cash flows from financing activities:    
Dividends to common and preferred shareholders (29,477)   (45,329)  
Principal amortization payments (5,848)   (7,389)  
Principal payments on debt, excluding normal amortization —    (254)  
Revolving credit facility borrowings 130,000    —   
Deferred financing costs —    (3,678)  
Payment of early extinguishment of debt charges —    (1)  
Cash contributions from noncontrolling interests 421    —   
Cash distributions to noncontrolling interests (396)   (892)  
Repurchases to settle tax obligations (2,623)   (3,961)  
Issuance of common shares, net 17,265    —   
Repurchase of common shares (11,042)   (3,598)  
Net cash provided by (used in) financing activities 98,300    (65,102)  
Change in cash, cash equivalents and restricted cash (39,252)   2,329   
Cash, cash equivalents and restricted cash, at beginning of period 129,310    177,247   
Cash, cash equivalents and restricted cash, at end of period $ 90,058    $ 179,576   
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, cash equivalents and restricted cash at beginning of period $ 129,310    $ 177,247   
Cash and cash equivalents at end of period $ 83,525    $ 170,289   
Restricted cash at end of period 6,533    9,287   
Cash, cash equivalents and restricted cash at end of period $ 90,058    $ 179,576   
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
March 31, 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 diversified portfolio of equity investments in single-tenant commercial properties.
As of March 31, 2020, the Company had ownership interests in approximately 135 consolidated real estate properties, located in 30 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 months ended March 31, 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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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 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 March 31, 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 March 31, 2020 and December 31, 2019:
March 31, 2020 December 31, 2019
Real estate, net $ 608,089    $ 592,372   
Total assets $ 663,811    $ 645,623   
Mortgages and notes payable, net $ 76,110    $ 82,978   
Total liabilities $ 97,601    $ 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 downturn 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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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 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 is 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 is 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 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 is 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
March 31, 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.

The Company is evaluating the election to apply such relief to avoid performing a lease by lease analysis for the lease concessions that may be (1) granted as relief due to the COVID-19 pandemic and (2) result in the cash flows remaining substantially the same or less. The Lease Modification Q&A has no material impact on the Company's consolidated financial statements as of and for the three months ended March 31, 2020. However, its future impact to the Company 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 such concessions.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 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 months ended March 31, 2020 and 2019:
  Three Months Ended March 31,
  2020 2019
BASIC    
Net income attributable to common shareholders
$ 16,536    $ 26,405   
Weighted-average number of common shares outstanding - basic
253,038,161    232,538,495   
 
Net income attributable to common shareholders - per common share basic
$ 0.07    $ 0.11   
DILUTED
Net income attributable to common shareholders - basic
$ 16,536    $ 26,405   
Impact of assumed conversions
107    1   
Net income attributable to common shareholders
$ 16,643    $ 26,406   
Weighted-average common shares outstanding - basic
253,038,161    232,538,495   
Effect of dilutive securities:
Unvested share-based payment awards and options
1,160,994    53,274   
OP Units
3,148,122    3,550,374   
Weighted-average common shares outstanding - diluted
257,347,277    236,142,143   
Net income attributable to common shareholders - per common share diluted
$ 0.06    $ 0.11   
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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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 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 three months ended March 31, 2020:
Property
Type 		Market Acquisition
Date 		Initial
Cost
Basis 		Primary
Lease
Expiration 		Land Building and Improvements Lease in-place Value Intangible
Industrial Chicago, IL January 2020 $ 53,642    11/2029 $ 3,681    $ 45,817    $ 4,144   
Industrial Phoenix, AZ January 2020 19,164    12/2025 1,614    16,222    1,328   
Industrial Chicago, IL January 2020 39,153    12/2029 1,788    34,301    3,064   
Industrial Dallas, TX February 2020 83,495    8/2029 4,500    71,635    7,360   
$ 195,454    $ 11,583    $ 167,975    $ 15,896   

The Company is engaged in two consolidated development projects. As of March 31, 2020, the Company's aggregate investment in the development arrangements was $18,298, which included capitalized interest of $188 and is presented as investments in real estate under construction in the accompanying consolidated balance sheets.
As of March 31, 2020, the details of the development arrangements outstanding (in $000's, except square feet):
Project (% owned) Market Property Type Estimated Sq. Ft. Estimated Project Cost GAAP Investment Balance as of
3/31/2020 		Amount Funded as of
3/31/2020 		Estimated Completion Date
Fairburn (90%)
Atlanta, GA Industrial 910,000    $ 53,812    $ 14,641    $ 11,474    4Q 2020
Richenbacker (100%)
Columbus, OH Industrial 320,000    20,300    3,657    3,421    1Q 2021
$ 74,112    $ 18,298    $ 14,895   

(4)Dispositions and Impairment
During the three months ended March 31, 2020 and 2019, the Company disposed of its interests in various properties for an aggregate gross disposition price of $29,605 and $79,300, respectively, and recognized aggregate gains on sales of properties of $9,805 and $20,957, respectively. Included in the 2020 dispositions is an office property in Charleston, South Carolina which was conveyed to the lender in forgiveness of the mortgage loan encumbering the property. The balance of the non-recourse mortgage loan was in excess of the value of the property collateral, resulting in a debt satisfaction gain of $1,393.
As of March 31, 2020, the Company had one property classified as held for sale because it met the criteria included under the held for sale accounting guidance and a sale to a third party within the next 12 months was deemed probable. As of December 31, 2019, the Company had no properties met the held for sale criteria.


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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Assets and liabilities of the held for sale property as of March 31, 2020 consisted of the following:
March 31, 2020
Assets:
Real estate, at cost $ 9,325   
Real estate, intangible assets 3,975   
Accumulated depreciation and amortization (6,456)  
Rent receivable - deferred (131)  
Other 1,160   
$ 7,873   
Liabilities:
Accounts payable and other liabilities $ 15   
Prepaid rent 3   
$ 18   
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 downturn 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 three months ended March 31, 2020, the Company recorded no impairment charges. During the three months ended March 31, 2019, the Company recognized aggregate impairment charges on real estate properties of $588. Included in the impairment charges recognized during the three months ended March 31, 2019, are impairment charges of $339 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 March 31, 2020 and December 31, 2019, aggregated by the level in the fair value hierarchy within which those measurements fall:
  Balance Fair Value Measurements Using
Description March 31, 2020 (Level 1) (Level 2) (Level 3)
Interest rate swap liabilities $ (18,924)   $ —    $ (18,924)   $ —   

  Balance Fair Value Measurements Using
Description December 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. Fair value as of the date of the impairment.
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 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 March 31, 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 as of March 31, 2020 and December 31, 2019:

  As of March 31, 2020 As of December 31, 2019
  Carrying
Amount 		Fair Value Carrying
Amount 		Fair Value
Liabilities        
Debt $ 1,429,768    $ 1,312,977    $ 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.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(6)Investments in Non-Consolidated Entities
Below is a schedule of the Company's investments in non-consolidated entities:
Percentage Ownership at Investment Balance as of
Investment March 31, 2020 March 31, 2020 December 31, 2019
NNN Office JV LP ("NNN JV") (1) 20% $ 38,413    $ 39,288   
Etna Park 70 LLC (2) 90% 8,670    8,352   
Etna Park East LLC (3) 90% 5,058    4,310   
Other (4) 25% 5,069    5,218   
$ 57,210    $ 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 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 historic cost of $3,008. The Company acquired control of the 57-acre parcel via the purchase of the Company's joint venture partners' interest.
(3) Joint venture formed in 2019 with a developer entity to acquire a 129.6-acre parcel of land and pursue industrial build-to-suit opportunities. The Company determined it is not the primary beneficiary.
(4) As of March 31, 2020, represents one joint venture investment, which owns a single-tenant, net-leased asset.
During the three months ended March 31, 2020, NNN JV sold one asset and the Company recognized a gain on the transaction of $550 within equity in earnings of non-consolidated entities within its consolidated statement of operations. In conjunction with this property sale, NNN JV received net proceeds of $3,419 after the satisfaction of $12,960 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 $803, which is included in equity in earnings on non-consolidated entities within its consolidated statement of operations.

(7)Debt
The Company had the following mortgages and notes payable outstanding as of March 31, 2020 and December 31, 2019:
March 31, 2020 December 31, 2019
Mortgages and notes payable $ 381,193    $ 393,872   
Unamortized debt issuance costs (3,490)   (3,600)  
$ 377,703    $ 390,272   
Interest rates, including imputed rates on mortgages and notes payable, ranged from 3.5% to 6.5%, respectively, at March 31, 2020 and December 31, 2019, and all mortgages and notes payables mature between 2020 and 2036 as of March 31, 2020. The weighted-average interest rate was 4.5% at each of March 31, 2020 and December 31, 2019.
As of March 31, 2020, the Company had two non-recourse mortgage loans that were in default with an outstanding aggregate principal balance of $50,525. Each mortgage loan is secured by a vacant office property (Overland Park, Kansas and Boca Raton, Florida).
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The Company had the following senior notes outstanding as of March 31, 2020 and December 31, 2019:
Issue Date March 31, 2020 December 31, 2019 Interest Rate Maturity Date Issue Price
May 2014 $ 250,000    $ 250,000    4.40  % June 2024 99.883  %
June 2013 250,000    250,000    4.25  % June 2023 99.026  %
500,000    500,000   
Unamortized debt discount (894)   (963)  
Unamortized debt issuance cost (2,027)   (2,167)  
$ 497,079    $ 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.
The Company has an unsecured credit agreement with KeyBank National Association, as agent. A summary of the significant terms, as of March 31, 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 line of credit can be extended to February 2024 at the Company's option. The interest rate ranges from LIBOR plus 0.775% to 1.45%. At March 31, 2020, the Company had $130,000 borrowings outstanding and availability of $470,000, 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 $2,435 and $2,561 as of March 31, 2020 and December 31, 2019, respectively.

The Company was compliant with all applicable financial covenants contained in its corporate-level debt agreements at March 31, 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 March 31, 2020 was 3.470%. As of March 31, 2020 and December 31, 2019, there was $129,120 original principal amount of Trust Preferred Securities outstanding and $1,699 and $1,724, respectively, of unamortized debt issuance costs.
Capitalized interest recorded during the three months ended March 31, 2020 and 2019 was $292 and $19, respectively.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(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.
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 three months ended March 31, 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 March 31, 2021, the Company estimates that an additional $4,194 will be reclassified as an increase to interest expense if the swaps remain outstanding.
Interest Rate Derivative Number of Instruments Notional
Interest Rate Swaps 4 $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 March 31, 2020 As of December 31, 2019
  Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Derivatives designated as hedging instruments
Interest Rate Swaps Accounts Payable and Other Liabilities $ (18,924)   Accounts Payable and Other Liabilities $ (1,928)  
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The table below presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the three months ended March 31, 2020 and 2019.
Derivatives in Cash Flow Amount of Gain (Loss)
Recognized in OCI on Derivatives
March 31, 		Amount of (Income) Loss
Reclassified from Accumulated OCI into Income
March 31,
Hedging Relationships 2020 2019 2020 2019
Interest Rate Swaps $ (17,039)   $ 1    $ 43    $ (77)  
(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 $14,795 and $17,208 for the three months ended March 31, 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 March 31, 2020, the Company had not posted any collateral related to the agreements.

(9) Lease Accounting
The following is a summary of the Company's accounting for leases as of and during the three-month period ended March 31, 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.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
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. As of March 31, 2020 the Company wrote off deferred rent receivable 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. Additionally, as of March 31, 2020, the Company reserved $1,243 of deferred rent receivable, as a reduction of rental revenue, related to a tenant with rent collectability concerns. The Company determined that collection of the deferred rent receivable was not probable at this time. There were no accounts receivable reserved as a reduction to rental revenue as of March 31, 2019.
The Company determined that the lease and non-lease components in its leases are a single lease component and is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service that 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 March 31, 2020 and 2019, the Company incurred $50 and $127, 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 months ended March 31, 2020 and 2019:
Three Months Ended
Classification March 31, 2020 March 31, 2019
Fixed $ 71,265    $ 72,709   
Variable(1)
7,470    7,266   
Total $ 78,735    $ 79,975   
(1) Primarily comprised of tenant reimbursements.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Future fixed rental receipts for leases, assuming no new or re-negotiated leases as of March 31, 2020 were as follows:
2020 - remainder $ 206,963   
2021 265,348   
2022 253,783   
2023 252,396   
2024 221,167   
2025 199,534   
Thereafter 1,281,301   
Total $ 2,680,492   
Lessee
The Company has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of March 31, 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:
Three Months Ended
March 31, 2020 March 31, 2019
Weighted-average remaining lease term
Operating leases (years) 12.1 12.7
Weighted-average discount rate
Operating leases 4.1  % 4.1  %
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)

The components of lease expense for the three months ended March 31, 2020 and 2019 were as follows:
Income Statement Classification Fixed Variable Total
2020:
Property operating $ 995    $ —    $ 995   
General and administrative 341    26    367   
Total $ 1,336    $ 26    $ 1,362   
2019:
Property operating $ 997    $ —    $ 997   
General and administrative 300    18    318   
Total $ 1,297    $ 18    $ 1,315   
The Company recognized sublease income of $941 for both the three months ended March 31, 2020 and 2019.
The following table shows the Company's maturity analysis of its operating lease liabilities as of March 31, 2020:
Operating Leases
2020 - remainder $ 3,689   
2021 5,060   
2022 5,135   
2023 5,279   
2024 5,301   
2025 5,301   
Thereafter 20,320   
Total lease payments $ 50,085   
Less: Imputed interest (11,792)  
Present value of lease liabilities $ 38,293   

(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 three months ended March 31, 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.

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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)

(11)Equity
Shareholders' Equity:
During the three months ended March 31, 2020 and 2019, the Company granted common shares to certain employees as follows:

Three Months Ended March 31,
2020 2019
Performance Shares(1)
Shares granted:
Index - 1Q 232,993    276,063   
Peer - 1Q 232,987    276,058   
Grant date fair value per share:(2)
Index - 1Q $ 6.59    $ 5.05   
Peer - 1Q $ 5.97    $ 4.67   
Non-Vested Common Shares:(3)
Shares issued 243,270    277,460   
Grant date fair value $ 2,581    $ 2,270   
(1) The shares vest based on the Company's total shareholder return growth after a three-year measurement period relative to an index and a group of Company peers. Dividends are not paid on these grants until earned. Once the performance criteria are met and the actual number of shares earned is determined, such shares vest immediately. During the three months ended March 31, 2020, 122,779 of the 452,737 performance shares issued in 2017 vested.
(2) The fair value of grants was determined at the grant date using a Monte Carlo simulation model.
(3) The shares vest ratably over a three-year service period.

In addition, during the three months ended March 31, 2020 and 2019, the Company issued 11,675 and 32,316, respectively, of fully vested common shares to non-management members of the Company's Board of Trustees with a fair value of $125 and $264, respectively.

The Company maintains an At-The-Market offering program ("ATM program") under which the Company can issue common shares. Under the ATM program, the Company may enter into forward sales agreements with agents. During the three months ended March 31, 2020, the Company issued 1,559,714 common shares under its ATM program and generated net proceeds of $17,266. As of March 31, 2020, common shares with an aggregate value of $278,551 remain available for issuance under the ATM program. The Company did not issue common shares under its ATM offering program during the three months ended March 31, 2019.

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 three months ended March 31, 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 March 31, 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 period end. There were no unsettled repurchases as of March 31, 2020.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:
Three Months Ended March 31,
2020 2019
Balance at beginning of period $ (1,928)   $ 76   
Other comprehensive income (loss) before reclassifications (17,039)   1   
Amounts of (income) loss reclassified from accumulated other comprehensive income to interest expense
43    (77)  
Balance at end of period $ (18,924)   $ —   
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 March 31, 2020, there were approximately 2,750,000 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
Three Months Ended March 31,
  2020 2019
Net income attributable to Lexington Realty Trust shareholders $ 18,154    $ 28,027   
Transfers from noncontrolling interests:
Increase in additional paid-in-capital for redemption of noncontrolling OP units
428    156   
Change from net income attributable to shareholders and transfers from noncontrolling interests
$ 18,582    $ 28,183   

(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.
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LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2020 and 2019
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
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 three months ended March 31, 2020 and 2019, the Company paid $7,658 and $9,855, respectively, for interest and $472 and $418, respectively, for income taxes.

As a result of the foreclosure of an office property in South Carolina, there was a non-cash change of $6,830 and $5,429 in mortgages and notes payable and real estate, net, respectively.

(15)Subsequent Events
Subsequent to March 31, 2020, the Company:
•disposed of one property for a gross sales price of $10,700;
•sold 3,761,874 shares under its ATM program for gross proceeds of $37,619. The proceeds were primarily used to acquire an industrial asset; and
•acquired one industrial asset for a cost of approximately $34,700.
On March 11, 2020, the World Health Organization declared the outbreak of coronavirus ("COVID-19") a pandemic. The continued spread of COVID-19 has caused disruptions in businesses and contributed to the significant volatility in global stock markets over the past few weeks. While the effects of the COVID-19 pandemic to the Company are unknown at this time, it could have a negative impact to the Company’s future results of operations, cash flows and financial condition.

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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 months ended March 31, 2020. The results of operations contained herein for the three months ended March 31, 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 months ended March 31, 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 diversified portfolio of equity investments in single-tenant commercial properties.
As of March 31, 2020, we had ownership interests in approximately 135 consolidated real estate properties, located in 30 states and containing an aggregate of approximately 55.0 million square feet of space, approximately 97.2% 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 of four industrial assets during the three months ended March 31, 2020, have resulted in our percentage of gross book value from industrial assets, excluding held for sale assets, to increase to 83.2% as of March 31, 2020.
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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. Our management continues to monitor events and is taking steps to mitigate the potential impact and risks to us.
We believe our business, including leasing, acquisition and disposition activity, and the business of our tenants will have near term impact as a result of COVID-19. Current travel restriction and social distancing requirements are expected to continue to disrupt business operation, including acquisitions, dispositions and leasing transactions. Starting in March 2020, we have received, and expect to continue to receive, rent relief requests from certain tenants.

We expect leasing activity to primarily consist of rent relief negotiations in the near term. We believe the rent relief requests generally fall into two categories:

1.Tenants whose operations have been impacted and we believe will require some form of relief to continue their operations and
2.Large and/or creditworthy tenants who have made what appear to us to be opportunistic relief requests.

We may grant deferrals and intend to seek extended lease term, increased rent and/or favorable lease modifications as consideration in granting relief. Absent material tenant defaults, we do not expect any material impact to our rental revenues resulting from rent relief requests. However, we can give no assurances on the outcomes of the negotiation of relief packages, the success of any tenant’s financial prospects or the amount of relief requests that we will ultimately receive or grant.

We expect acquisition and disposition activity to be at reduced levels in the near term due primarily to challenges conducting due diligence while travel restrictions and social distancing measures are in place. Furthermore, we expect potential purchasers of our properties to obtain debt financing is expected to be limited in the near term. We believe it is too early to determine the long-term effect on acquisition and disposition activity of the COVID-19 pandemic.

While we are currently unable to estimate the impact COVID-19 will have on our financial condition, we believe that the effects of COVID-19 will be mitigated because of our focus on warehouse and distribution industrial properties and the diversity of our tenant base, both geographically and by industry exposure.

First Quarter 2020 Transaction Summary.
The following summarizes our significant transactions during the three months ended March 31, 2020.
Leasing Activity:
During the first quarter of 2020, we entered into new leases and lease extensions encompassing 0.3 million square feet. The average fixed rent on these extended leases was $21.54 per square foot compared to the average fixed rent on these leases before extension of $25.54 per square foot. The weighted-average lease term for these lease extensions was 14.2 years. The weighted-average cost of tenant improvements and lease commissions was $0.92 per square foot for new leases and $65.77 per square foot for extended leases.
Investments/Capital Recycling:
•Acquired four industrial properties for an aggregate cost of $195.5 million.
•Disposed of our interests in two consolidated properties for an aggregate gross disposition price of $29.6 million.
Debt:
•Satisfied $6.8 million of non-recourse debt related to one asset sold in foreclosure.
•Borrowed $130.0 million on our unsecured revolving credit facility.
Equity:
•Issued 1.6 million common shares under our At-the-Market offering program and generated net proceeds of $17.3 million.
•Repurchased 1.3 million common shares at an average price of $8.28 per common share.

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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 downturn 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 will be negatively affected in the near term as a result of our granting tenant rent relief packages or 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 March 31, 2020, we had $50.5 million and $10.4 million of property-specific mortgage balloon debt due in 2020 and 2021, respectively. All of the 2020 balloon debt relates to mortgages that are in default. We believe we have sufficient sources of liquidity to meet obligations we are required to meet through cash on hand ($83.5 million at March 31, 2020), property sale proceeds, borrowing capacity under our unsecured revolving credit facility ($470.0 million at March 31, 2020), which expires in 2023, but can be extended by us to 2024, and future cash flows from operations.
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 $45.7 million for the three months ended March 31, 2020 as compared to $47.6 million for the three months ended March 31, 2019. The decrease was primarily related to the impact of property sales and vacancies partially offset by cash flows generated from acquired properties. 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. Collection and timing of tenant rents are closely monitored by management as part of our cash management program.
Net cash provided by (used in) investing activities totaled $(183.2) million and $19.8 million during the three months ended March 31, 2020 and 2019, respectively. Cash provided by investing activities related primarily to proceeds from the sale of properties and distributions from non-consolidated entities. 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.
Net cash provided by (used in) financing activities totaled $98.3 million and $(65.1) million during the three months ended March 31, 2020 and 2019, respectively. Cash used in financing activities was primarily attributable to dividend and distribution payments, repayment of debt obligations and repurchases of common shares. Cash provided by financing activities related primarily to revolving credit facility borrowings and issuances of common shares.

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ATM Program:

We maintain an At-The-Market offering program ("ATM program") under which we can issue common shares. Under the ATM program, we may enter into forward sales agreements with agents. As of March 31, 2020, we have not entered into any forward sale agreements. During the first quarter of 2020, we issued approximately 1.6 million common shares under the ATM program and generated net proceeds of $17.3 million. As of March 31, 2020, common shares having an aggregate value of $278.6 million remain available for issuance under the ATM program.

The volatility caused by the current economic downturn resulting from the effects of the COVID-19 pandemic may negatively affected our ability to access the capital markets through our ATM program and other offerings.

Dividends. Dividends paid to our common and preferred shareholders were $29.5 million and $45.3 million in the three months ended March 31, 2020 and 2019, respectively.
We declared a quarterly dividend of $0.105 per common share during the three months ended March 31, 2020, which is an increase from the $0.1025 per common shares quarterly dividend declared during the three months ended March 31, 2019.
UPREIT Structure. As of March 31, 2020, 2.7 million 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 $30.7 million based on our closing price of $9.93 per common share as of March 31, 2020 and a redemption factor of approximately 1.13 common shares per OP unit.
Financings. The following senior notes were outstanding as of March 31, 2020:
Issue Date Face Amount ($000) Interest Rate Maturity Date Issue Price
May 2014 $ 250,000    4.40  % June 2024 99.883  %
June 2013 250,000    4.25  % June 2023 99.026  %
$ 500,000   
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.
We have an unsecured credit agreement with KeyBank National Association, as agent. A summary of the significant terms, as of March 31, 2020, is as follows:

Maturity Date 		Current
Interest Rate
$600.0 Million Revolving Credit Facility(1)
February 2023 LIBOR + 0.90%
$300.0 Million Term Loan(2)
January 2025 LIBOR + 1.00%
(1) Maturity date of the line of credit can be extended to February 2024 at our option. The interest rate ranges from LIBOR plus 0.775% to 1.45%. At March 31, 2020, we had $130.0 million borrowings outstanding and availability of $470.0 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 March 31, 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 March 31, 2020 compared with three months ended March 31, 2019.
The decrease in net income attributable to common shareholders of $9.9 million was primarily due to the items discussed below.
The decrease in total gross revenues of $0.4 million was primarily a result of a decrease in rental revenue. Rental revenue decreased $1.2 million primarily as a result of property sales, partially offset by an increase in rental revenue from asset acquisitions that occurred subsequent to the first quarter of 2019. The decrease in total gross revenues was partially offset by an increase in other revenue of $0.8 million primarily due to an incentive fee earned upon the sale of a property that we managed for a third-party real estate owner.
The increase in depreciation and amortization expense of $2.9 million was primarily due to acquisition activity.
The decrease in general and administrative expenses of $0.7 million was primarily due to a decrease in professional fees.
The decrease in interest and amortization expense $2.4 million related primarily to a decrease in the amount of our debt outstanding and a decrease in our overall borrowing rate.
The increase in debt satisfaction gains (charges), net, of $1.5 million is primarily related to the foreclosure of our Charleston, South Carolina property in 2020.
The decrease in impairment charges of $0.6 million related to the timing of impairment charges recognized on certain properties during 2019. The impairments were primarily due to potential sales, vacancies and lack of leasing prospects. There were no impairment charges in 2020.
The decrease in gains on sales of properties of $11.2 million related to the timing of property dispositions.
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 downturn primarily caused by the COVID-19 outbreak, 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.
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 three months ended March 31, 2020 and 2019 ($000's):
Three Months Ended March 31,
2020 2019
Total cash base rent $ 58,108    $ 58,179   
Tenant reimbursements 6,121    6,113   
Property operating expenses (7,692)   (7,616)  
Same-store NOI $ 56,537    $ 56,676   

Our reported same-store NOI decreased from the first three months of 2019 to the first three months of 2020 by 0.2%.

The decrease in same-store NOI between periods primarily related to a decrease in cash base rent and an increase in non-reimbursed operating expenses, which was primarily attributable to property vacancies and renewals or retenanting of properties at lower rental rates in order to obtain long-term leases. 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):
Three Months Ended March 31,
2020 2019
Net income 18,420    $ 28,280   
Interest and amortization expense 14,795    17,208   
Provision for income taxes 653    437   
Depreciation and amortization 40,509    37,595   
General and administrative 7,825    8,527   
Transaction costs 21    —   
Non-operating and fee income (1,889)   (1,327)  
Gains on sales of properties (9,805)   (20,957)  
Impairment charges —    588   
Debt satisfaction (gains) charges, net (1,393)   103   
Equity in (earnings) of non-consolidated entities (263)   (619)  
Lease termination income (141)   (1,070)  
Straight-line adjustments (1,419)   (2,330)  
Lease incentives 269    273   
Amortization of above/below market leases (295)   (6)  
NOI 67,287    66,702   
Less NOI:
Acquisitions and dispositions (10,830)   (9,735)  
Properties in default / other 80    (291)  
Same-Store NOI $ 56,537    $ 56,676   


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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.

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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 months ended March 31, 2020 and 2019 (unaudited and dollars in thousands, except share and per share amounts):
Three Months Ended March 31,
2020 2019
FUNDS FROM OPERATIONS:
Basic and Diluted:
Net income attributable to common shareholders
$ 16,536    $ 26,405   
Adjustments:
Depreciation and amortization 39,717    36,867   
Impairment charges - real estate
—    588   
Noncontrolling interests - OP units 107    1   
Amortization of leasing commissions 792    728   
Joint venture and noncontrolling interest adjustment 2,214    2,533   
Gains on sales of properties, including non-consolidated entities
(10,354)   (21,605)  
FFO available to common shareholders and unitholders - basic 49,012    45,517   
Preferred dividends 1,572    1,572   
Amount allocated to participating securities 46    50   
FFO available to all equityholders and unitholders - diluted 50,630    47,139   
Transaction costs 21    —   
Debt satisfaction (gains) charges, net, including non-consolidated entities
(1,372)   103   
Adjusted Company FFO available to all equityholders and unitholders - diluted
$ 49,279    $ 47,242   

Per Common Share and Unit Amounts
Basic:
FFO $ 0.19    $ 0.19   
Diluted:
FFO
$ 0.19    $ 0.20   
Adjusted Company FFO
$ 0.19    $ 0.20   

Weighted-Average Common Shares:
Basic:
Weighted-average common shares outstanding - basic EPS 253,038,161    232,538,495   
Operating partnership units(1)
3,148,122    3,550,374   
Weighted-average common shares outstanding - basic FFO 256,186,283    236,088,869   
Diluted:
Weighted-average common shares outstanding - diluted EPS 257,347,277    236,142,143   
Unvested share-based payment awards and options 24,799    16,499   
Preferred shares - Series C 4,710,570    4,710,570   
Weighted-average common shares outstanding - diluted FFO 262,082,646    240,869,212   
(1) Includes all OP units other than OP units held by us.
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Off-Balance Sheet Arrangements
As of March 31, 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.
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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 $259.1 million and $429.1 million at March 31, 2020 and 2019, respectively, which represented 18.0% and 28.7%, respectively, of our aggregate principal consolidated indebtedness. During the three-month periods ended March 31, 2020 and 2019, our variable-rate indebtedness had a weighted-average interest rate of 3.0% and 3.8%, respectively. Had the weighted-average interest rate been 100 basis points higher, our interest expense for the three months ended March 31, 2020 and 2019 would have increased by $0.5 million and $1.0 million, respectively. As of March 31, 2020 and 2019, our aggregate principal consolidated fixed-rate debt was $1.2 billion and $1.1 billion, respectively, which represented 82.0% and 71.3%, 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 March 31, 2020. We believe the fair value is indicative of the interest rate environment as of March 31, 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 $1.1 billion as of March 31, 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 March 31, 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 March 31, 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.
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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 other than the following:
The current outbreak of COVID-19, or the future outbreak of any other highly infectious or contagious diseases, could adversely impact or cause disruption to our business, financial condition, results of operations and cash flows. Further, the spread of the COVID-19 outbreak has caused severe disruptions in the U.S. and global economy, may further disrupt financial markets and could potentially create widespread business continuity issues.
In recent years the outbreaks of a number of diseases, including Avian Bird Flu, H1N1, and various other "super bugs," have increased the risk of a pandemic. In December 2019, a novel strain of coronavirus (COVID-19) was reported to have surfaced in Wuhan, China. COVID-19 has since spread to over 100 countries, including the United States. COVID-19 has also spread to every state in the United States where we own and operate our properties and have our corporate headquarters and regional office. 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.
The potential impact and duration of COVID-19 or another pandemic could have repercussions across regional and global economies and financial markets. The outbreak of COVID-19 in many countries continues to adversely impact global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving and, as cases of the virus have continued to be identified in additional countries, many countries, including the United States, have reacted by instituting quarantines and restrictions on travel and commerce. Many states and cities, including where we own properties, have also reacted by instituting quarantines, restrictions on travel, "shelter in place" rules, restrictions on types of business that may continue to operate, and/or restrictions on types of construction projects that may continue. In addition, some cities and states have taken actions purporting to require the forbearance of rent payments and to limit landlord remedies with respect to rent payment defaults. We expect additional states and cities to implement similar restrictions. The duration of such restrictions is currently unknown. Furthermore, loosening of the restrictions and unrest in certain areas of the United States may result in additional cases of COVID-19. Such actions have and may create disruption in global supply chains and adversely impact a number of industries, including industries in which our tenants participate.
Our and our tenants' ability to successfully operate could be adversely affected as a result of the effects of COVID-19 or another pandemic due to, among other factors:
•a general decline in business activity and demand which would adversely affect our ability or desire to grow our industrial portfolio or to continue to sell non-core / office assets which have recently served as an additional source of liquidity for us;
•our ability to operate, which may cause our business and operating results to decline or impact our ability to comply with regulatory obligations leading to reputational harm and regulatory issues or fines;
•the continued service and availability of personnel, including our executive officers and our ability to recruit, attract and retain skilled personnel—to the extent our management or personnel are impacted in significant numbers by the outbreak of pandemic or epidemic disease and are not available or allowed to conduct work, our business and operating results may be negatively impacted;
•difficulty accessing debt and equity capital on attractive terms, or at all, and a severe disruption and instability in the global financial markets or deterioration in credit and financing conditions may affect our or our tenants' ability to access capital necessary to fund business operations or replace or renew maturing liabilities on a timely basis, and may adversely affect the valuation of financial assets and liabilities, any of which could affect our ability to meet liquidity and capital expenditure requirements or have a material adverse effect on our business, financial condition, results of operations and cash flows;
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•a deterioration in our and our tenants' ability to operate or operate in affected areas, or delays in the supply of products or services from our and our tenants' vendors that are needed for us and our tenants to operate effectively;
•our tenants' ability to pay rent on their leases or our inability to lease space in our properties on favorable terms; and
•our ability to ensure business continuity in the event our continuity of operations plan is not effective or is improperly implemented or deployed during a disruption.

The rapid development and fluidity of this situation precludes any prediction as to the ultimate adverse impact of COVID-19. Nevertheless, the COVID-19 outbreak, and future pandemics, could have a significant adverse impact on economic and market conditions of economies around the world, including the United States, and trigger a period of global economic slowdown or global recession which would present material uncertainty and risk with respect to our performance, financial condition, results of operations and cash flows.

We are subject to risks involving our leases and tenants.

We focus our acquisition activities on industrial real estate properties that are net leased to single tenants, and certain of our tenants and/or their guarantors constitute a significant percentage of our base rental revenues. Therefore, the financial failure of, or other default by, a single tenant under its lease is likely to cause a significant or complete reduction in the operating cash flow generated by the property leased to that tenant and might decrease the value of that property and result in a non-cash impairment charge. If the tenant represents a significant portion of our base rental revenues, the impact on our financial position may be material. Further, in any such event, our property owner subsidiary will be responsible for 100% of the operating costs following a vacancy at a single-tenant building. Upon the expiration or other termination of leases that are currently in place, the property owner subsidiary may not be able to re-lease the vacant property at all or at a comparable lease rate without incurring additional expenditures in connection with the re-leasing, which may be material in amount.

The demand for industrial space in the United States is generally related to the level of economic output. Accordingly, the outbreak of COVID-19 that began in the fourth quarter of 2019 has led to an economic slowdown in the United States and reduced economic output. The extent to which federal, state or local governmental authorities grant rent relief or other relief or enact amnesty programs applicable to our tenants in response to the COVID-19 outbreak may exacerbate the negative impacts of a slowdown or recession. The concentration of our investments, among other factors, in industrial assets may expose us to the risk of economic downturns specific to industrial assets to a greater extent than if our investments were diversified among property types.

Further, adverse economic conditions, including as a result of COVID-19, may have an impact on the results of operations and financial condition of our tenants and result in requests for rent relief or deferral and a resulting decline in rent or an increased incidence of default under existing leases of our properties. In response to COVID-19, we may have tenants decline to extend their leases upon expiration, fail to make rental payments when due, become insolvent or declare bankruptcy. However, as the full impact of COVID-19 cannot yet be determined, it is not yet possible to assess how many of our tenants may seek relief or otherwise fail to pay rent or defer the payment of rent. Bankruptcy filings by or relating to any of our tenants could bar us from collecting pre-bankruptcy debts from that tenant (including tenants whose business and operations are severely impacted by COVID-19 pandemic), unless we receive an order permitting us to do so from the bankruptcy court. Under current bankruptcy law, a tenant can generally assume or reject a lease within a certain number of days of filing its bankruptcy petition. If a tenant rejects the lease, a landlord's damages, subject to availability of funds from the bankruptcy estate, are generally limited to the greater of (1) one year's rent and (2) the rent for 15% of the remaining term of the lease, not to exceed three years. Any unsecured claim we hold against a bankrupt entity may be paid only to the extent that funds are available and only in the same percentage as is paid to all other holders of unsecured claims. We may recover substantially less than the full value of any unsecured claims, which would harm our financial condition.

In addition, in the event we modify a lease to provide rent deferral in exchange for an extension of the lease term or other consideration, we may have near term earnings dilution.

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Our inability to carry out our growth strategy could adversely affect our financial condition and results of operations.

Our growth strategy is based on the acquisition and development of additional properties and related assets. In the context of our business plan, “development” generally means an expansion or renovation of an existing property or the financing and/or acquisition of a newly constructed build-to-suit property and/or the development of a land parcel. For newly constructed properties, we may (1) provide a developer with either a combination of financing for construction of a property or a commitment to acquire a property upon completion of construction of a property and commencement of rent from the tenant, (2) acquire a property subject to a lease and engage a developer to complete construction of a property as required by the lease, or (3) partner with a developer to acquire and develop or acquire on our own and engage a developer to develop land and pursue industrial development opportunities.
Our plan to grow through the acquisition and development of new properties could be adversely affected by trends in the real estate and financing businesses, including, without limitation, the effects of the recent COVID-19 outbreak. The consummation of any future acquisitions will be subject to satisfactory completion of an extensive valuation analysis and due diligence review and to the negotiation of definitive documentation, which may be difficult to complete due to travel restrictions and social distancing measures resulting from the recent COVID-19 outbreak. Our ability to implement our strategy may be impeded because we may have difficulty finding new properties and investments at attractive prices that meet our investment criteria, negotiating with new or existing tenants or securing acceptable financing. If we are unable to carry out our strategy, our financial condition and results of operations could be adversely affected. Acquisitions of additional properties entail the risk that investments will fail to perform in accordance with expectations, including operating and leasing expectations.
Some of our acquisitions and developments may be financed using the proceeds of periodic equity or debt offerings, lines of credit or other forms of secured or unsecured financing which we intend to replace with permanent mortgage financing following closing or development. There is a risk that permanent financing for newly acquired projects might not be available or would be available only on disadvantageous terms. If permanent debt or equity financing is not available on acceptable terms to refinance acquisitions undertaken without permanent financing as a result to the economic impact of COVID-19 or otherwise, further acquisitions may be curtailed, or cash available to satisfy our debt service obligations and distributions to shareholders may be adversely affected.

The trading price of our common shares has been, and may continue to be, subject to significant fluctuations.

The market price of our common shares may fluctuate in response to company-specific and general market events and developments, including those described in our Annual Report, in this Quarterly Report and in our other periodic reports. In addition, our leverage may impact investor demand for our common shares, which could have a material effect on the market price of our common shares.
Furthermore, the public valuation of our common shares is related primarily to the earnings that we derive from rental income with respect to the properties in which we have an interest and not from the underlying appraised value of the properties themselves. As a result, interest rate fluctuations and capital market conditions can affect the market value of our common shares. For instance, if interest rates rise, the market price of our common shares may decrease because potential investors seeking a higher yield than they would receive from our common shares may sell our common shares in favor of higher yielding securities.
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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 March 31, 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)
January 1 - 31, 2020 —    $ —    —    10,306,255   
February 1 - 29, 2020 —    —    —    10,306,255   
March 1 - 31, 2020 1,329,940    8.28    1,329,940    8,976,315   
First quarter 2020 1,329,940    $ 8.28    1,329,940    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.

On May 5, 2020, we amended and restated the executive severance policy agreements under the Lexington Realty Trust Executive Severance Plan adopted January 14, 2018 (the “Executive Severance Plan”) primarily to remove the requirement that vesting of non-vested shares subject to performance-based vesting conditions be prorated based on the number of completed days in the performance period if the termination occurs within a specified timeframe relative to a change in control and to make certain other clarifying changes. The foregoing summary of the amendments to the severance policy agreements is qualified in its entirety by reference to the form of Executive Severance Policy Agreement, a copy of which is attached hereto as Exhibit 10.1.
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ITEM 6.Exhibits.
Exhibit No.       Description
         
3.1
  —  
3.2
  —  
3.3
  —  
3.4
  —  
3.5
—
3.6
—
3.7
  —  
4.1
  —  
4.2
  —  
4.3
  —  
4.4
  —  
4.5
  —  
4.6
  —  
4.7
  —  
4.8
  —  
4.9
  —  
—
—
—
—
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—
—
—
—
—
  —  
  —  
  —  
  —  
101.INS — XBRL 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.SCH — Inline XBRL Taxonomy Extension Schema (2, 5)
101.CAL — Inline XBRL Taxonomy Extension Calculation Linkbase (2, 5)
101.DEF — Inline XBRL Taxonomy Extension Definition Linkbase Document (2, 5)
101.LAB — Inline XBRL Taxonomy Extension Label Linkbase Document (2, 5)
101.PRE — Inline 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 March 31, 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.
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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: May 7, 2020 By: /s/ T. Wilson Eglin
    T. Wilson Eglin
   
Chief Executive Officer and President
(principal executive officer)
     
Date: May 7, 2020 By: /s/ Beth Boulerice
    Beth Boulerice
   
Chief Financial Officer, Executive Vice President and Treasurer
(principal financial officer)




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Exhibit 10.1
EXECUTIVE SEVERANCE POLICY AGREEMENT

This executive severance policy agreement (this “Policy Agreement”) is hereby entered into by and between [•] (the “Executive”) and Lexington Realty Trust (the “Company”).

If the Executive’s employment is terminated by the Company without “Cause” or the Executive terminates employment for “Good Reason,” then the Executive shall be entitled to receive the following (collectively, the “Without Cause or Good Reason Severance Benefits”):

•a severance payment equal to [for T. Wilson Eglin: two and one half (2.5) times] [for all other executive officers designated by the Board: two (2) times]: the sum of (i) the Executive’s annual base salary at termination (or if Executive resigned for Good Reason on account of a reduction in annual base salary, Executive’s annual base salary immediately prior to such reduction); (ii) the average of the Executive’s last two annual cash incentive awards (the “Average Award”), and (iii) a pro rata annual bonus determined by multiplying the Average Award by a fraction equal to the number of days Executive was employed during the calendar year of termination divided by 365, paid in a lump sum on the 60th day following Executive’s termination of employment; and
•continuation at the Company’s expense of medical, dental, disability, life insurance and other employee welfare benefits provided to the Executive and/or the Executive’s dependents immediately prior to the Executive’s termination of employment (“Group Healthcare Benefits”) for a period of [for T. Wilson Eglin, two and one half (2.5) years] [for all other executive officers designated by the Board: two (2) years] following the date of termination, or if the Executive is ineligible for such Group Healthcare Benefits or if providing such Group Healthcare Benefits would result in adverse tax consequences under Section 105(h) of the Code or any similar law, then a lump sum payment of the cash equivalent of the premiums or other contributions that the Company would otherwise pay to continue coverage of such Group Healthcare Benefits based on the premiums or other contributions in effect at the Executive’s termination of employment, paid on the 60th day following Executive’s termination of employment.

If the Executive’s employment is terminated on account of death or by the Company on account of “Disability,” the Executive or the Executive’s estate or designated beneficiaries shall be entitled to receive the following (collectively, the “Death or Disability Severance Benefits”):

•a benefit payment equal to (i) one (1) times the Executive’s base salary at termination; and (ii) a pro rata annual bonus determined by multiplying the Average Award by a fraction equal to the number of days Executive was employed during the calendar year of termination divided by 365, paid in a lump sum on the 60th day following Executive’s termination of employment; and
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•continuation at the Company’s expense of Group Healthcare Benefits for a period of two (2) years following the date of termination, or if the Executive is ineligible for such Group Healthcare Benefits or if providing them would result in adverse tax consequences under Section 105(h) of the Code or any similar law, then a lump sum payment of the cash equivalent of the premiums or other contributions that the Company would otherwise pay to continue coverage based on the premiums or other contributions in effect at the Executive’s termination of employment, paid in a lump sum on the 60th day following Executive’s termination of employment.

Additionally, upon a termination of the Executive’s employment under all the circumstances described above (a) other than in connection with a Change in Control as described in clause (b) below, (i) all then outstanding and non-vested time-based awards under any equity award plan of the Company (“Non-Vested Time Awards”) shall accelerate and become fully vested, (ii) the end of the performance periods for all then outstanding and non-vested but earned performance-based awards under any equity award plan of the Company (“Non-Vested Performance Awards”) shall be the earlier of the date of such termination and the end of the performance period and a pro rata amount of any of such awards then deemed to be earned awards (determined by the number of completed days of the performance period for such award divided by the total number of days in such performance period) shall accelerate, become fully earned and vested, and (iii) all then outstanding and vested unexercised share option awards (“Option Awards”) shall terminate on the six month anniversary of such termination of employment (but in no event later than the maximum term of such option), and (b)  upon a termination of the Executive’s employment following the 30th day prior to the earlier of (x) the date a letter of intent ultimately leading to the signing of a definitive agreement giving rise to a Change in Control, or (y) in the absence of a letter of intent, the date of a definitive agreement giving rise to a Change in Control, (i) all Non-Vested Time Awards shall accelerate and become fully vested, (ii) the end of the performance periods for all Non-Vested Performance Awards shall be the earlier of the date of such termination and the end of the performance period and 100% any such awards deemed to be earned awards shall accelerate, become fully vested, and (ii) all Option Awards shall terminate on the six month anniversary of such termination of employment (but in no event later than the maximum term of such option). The benefits described in this paragraph are part of the Without Cause or Good Reason Severance Benefits or the Death or Disability Severance Benefits, as the case may be.

If the Executive’s employment is terminated by the Company with “Cause” or the Executive’s employment is terminated by the Executive without “Good Reason,” then the Executive shall not be entitled to any payments hereunder and all non-vested awards under any equity award plan of the Company shall be forfeited and terminate, except that regardless for the reason of Executive’s termination of employment, Executive shall be entitled to receive the following:
•any earned but unpaid base salary for the period prior to termination and any earned but unpaid bonuses relating to any bonus period which has ended at the time of such termination; and
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•any rights to which the Executive is entitled in accordance with any applicable plan or program provisions under any employee benefit plan, program or arrangement, fringe benefit or incentive plan.

Notwithstanding anything to the contrary contained in this Policy Agreement, Executive shall not be entitled to receive either the Without Cause or Good Reason Severance Benefits or the Death or Disability Severance Benefits, as the case may be, (1) unless Executive or in the case of Executive’s death or Disability (the Executor of Executive’s estate or the Executive’s guardian) signs a general release in the form prescribed by the Company (the “General Release”), which shall be substantially in the form attached as Exhibit A, and the General Release becomes effective and irrevocable by the 55th day following Executive’s termination of employment or (2) if the Executive’s employment with the Company terminates due to mandatory retirement policy of the Company applicable to “Bona Fide Executives” under the ADEA (as defined in the General Release).
“Cause” is defined as (i) the Executive’s commission, conviction of, plea of nolo contendere to, or written admission of the commission of, a felony (but not a traffic infraction or similar offense); (ii) any act by the Executive involving moral turpitude, fraud or misrepresentation with respect to the Company or its Affiliates or the Executive’s duties for the Company or its affiliates; or (iii) gross negligence or willful misconduct on the part of the Executive in the performance of the Executive’s duties as an employee, officer or member of the Company or its affiliates (that in only the case of gross negligence results in a material economic harm to the Company).
“Change in Control” shall have the meaning ascribed to such term in (i) the Company’s Amended and Restated 2011 Equity-Based Award Plan with respect to any equity awards governed thereby or (ii) any other equity award plan then governing equity awards subject to the terms thereof and of this Policy Agreement.
“Disability” is defined as the mental or physical incapacity of the Executive such that (i) the Executive is receiving long-term disability benefits under a Company-sponsored long-term disability policy or (ii) if clause (i) does not apply, the Executive has been incapable as a result of illness, disease, mental or physical disability, disorder, infirmity, or impairment or similar cause of performing the Executive’s essential duties and responsibilities for any period of 180 days (whether or not consecutive) in any consecutive 365 day period, which shall be determined by an approved medical doctor selected by the Company and the Executive. If the Company and the Executive cannot agree on a medical doctor, each party shall select a medical doctor and the two doctors shall select a third who shall be the approved medical doctor for this purpose.
“Good Reason” is defined as the occurrence of the following events without the Executive’s written consent: (i) a material reduction of the Executive’s authority, duties and responsibilities, or the assignment to the executive officer of duties materially inconsistent with the Executive’s position or positions with the Company; or (ii) a reduction in the Executive’s rate of base salary. However, an event that otherwise would constitute Good Reason shall not constitute Good Reason unless (a) Executive provides the Company with written notice, no later than 30 days after the initial occurrence of such event constituting Good Reason, indicating an
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intent to resign due to such event; (b) the Company does not in fact cure such event within 90 days of receiving such written notice; and (c) Executive actually terminates employment during the 30 day period after the end of the 90-day cure period.

Any provision of this Policy Agreement to the contrary notwithstanding, if any of the payments or benefits provided for in this Policy Agreement, together with any other payments which Executive has a right to receive from the Company or any of its affiliates, (i) constitute a “parachute payment”, as defined in Section 280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”), and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then the collective payments to be made hereunder (the “Payment”) shall be equal to the Reduced Amount.  The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment (after reduction) being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount (i.e., the amount determined by clause (x) or by clause (y)), after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Executive’s receipt, on an after-tax basis, of the greater economic benefit notwithstanding that all or some portion of the Payment may be subject to the Excise Tax.  If a reduction in a Payment is required pursuant to the preceding sentence and the Reduced Amount is determined pursuant to clause (x) of the preceding sentence, the reduction shall occur in the manner (the “Reduction Method”) that results in the greatest economic benefit for Executive. If you receive a Payment for which the Reduced Amount was determined pursuant to clause (x) of this paragraph and the Internal Revenue Service determines thereafter that some portion of the Payment is subject to the Excise Tax, you shall promptly return to the Company a sufficient amount of the Payment (after reduction pursuant to clause (x) of the first paragraph of this Section) so that no portion of the remaining Payment is subject to the Excise Tax.  For the avoidance of doubt, if the Reduced Amount was determined pursuant to clause (y) of this paragraph, you shall have no obligation to return any portion of the Payment pursuant to the preceding sentence.
Notwithstanding the foregoing, if the Reduction Method would result in any portion of the Payment being subject to taxes pursuant to Section 409A (as defined below) that would not otherwise be subject to taxes pursuant to Section 409A, then the Reduction Method shall be modified so as to avoid the imposition of taxes pursuant to Section 409A as follows:  (A) as a first priority, the modification shall preserve to the greatest extent possible, the greatest  economic benefit for Executive as determined on an after-tax basis; (B) as a second priority, Payments that are contingent on future events (e.g., being terminated without cause), shall be reduced (or eliminated) before Payments that are not contingent on future events; and (C) as a third priority, Payments that are “deferred compensation” within the meaning of Section 409A shall be reduced (or eliminated) before Payments that are not deferred compensation within the meaning of Section 409A.
Any reduction to the Payment hereunder pursuant to the foregoing shall be determined by the Company based on the advice of its tax advisor.
The Payment made to Executive under this Agreement shall be reduced by any applicable withholding taxes or other amounts required to be withheld by law or contract.
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This Policy Agreement is intended to meet, or be exempt from, the requirements of Section 409A of the Code and the regulations and interpretive guidance promulgated thereunder (collectively, “Section 409A”), with respect to amounts subject thereto, and shall be interpreted and construed consistent with that intent. No expenses eligible for reimbursement, or in-kind benefits to be provided, during any calendar year shall affect the amounts eligible for reimbursement in any other calendar year, to the extent subject to the requirements of Section 409A, and no such right to reimbursement or right to in-kind benefits shall be subject to liquidation or exchange for any other benefit. For purposes of Section 409A, each payment in a series of installment payments provided under this Policy Agreement shall be treated as a separate payment. Any payments to be made under this Policy Agreement upon a termination of employment shall only be made upon a “separation from service” under Section 409A as determined by the Company based on the advice of its tax advisor. If amounts payable under this Policy Agreement do not qualify for exemption from Section 409A at the time of Executive’s separation from service and therefore are deemed deferred compensation subject to the requirements of Section 409A on the date of such separation from service, then if Executive is a “specified employee” under Section 409A, as determined by the Company based on the advice of its tax advisor, on the date of Executive’s separation from service, payment of the amounts hereunder shall be delayed for a period of six months from the date of Executive’s separation from service if required by Section 409A. The accumulated postponed amount shall be paid in a lump sum within 10 days after the end of the six-month period. If Executive dies during the postponement period prior to payment of the postponed amount, the amounts withheld on account of Section 409A shall be paid to Executive’s estate or designated beneficiaries within 10 days after the date of Executive’s death.
Any portion of the Payment hereunder may be deferred to the extent reasonably necessary to preserve deductibility under Section 162(m) of the Internal Revenue Code of 1986, as amended.
This Policy Agreement shall be binding upon and inure to the benefit of the Company and its successors and assigns. Notwithstanding anything else in this Policy Agreement to the contrary, the Company will assign this Policy Agreement to and all rights hereunder shall inure to the benefit of any person, firm or corporation resulting from the reorganization of the Company or succeeding to the business or assets of the Company by purchase, merger or consolidation.
This Policy Agreement is designed to be an “employee welfare benefit plan,” as defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”). This Plan also is designed to be a “top hat” welfare benefit plan under Section 104(a)(3) of ERISA and, if ever considered a “pension plan,” it shall be a top hat pension plan.
If any contest or dispute shall arise between the Company and Executive regarding or as a result of any provision of this Policy Agreement, the Company shall reimburse Executive for all legal fees and expenses reasonably incurred by Executive in connection with such contest or dispute, but only if Executive is successful in respect of substantially all of Executive’s claims pursued or defended in connection with such contest or dispute. Such reimbursement shall be made as soon as practicable, and not more than 60 days, following the resolution of such contest or dispute (whether or not appealed).
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To the extent U.S. Federal law does not apply, this Policy Agreement shall be governed by and construed in accordance with the laws of the State of New York. The parties agree that exclusive venue for any litigation, action or proceeding arising from or relating to this Policy Agreement shall lie in the state or federal courts located in New York County, New York and each of the parties expressly waives any right to contest such venue for any reason whatsoever.

The Executive may not assign Executive’s interest in this Policy Agreement.

This Policy Agreement constitutes the entire agreement between the parties hereto, and all prior understandings, agreements or undertakings between the parties concerning Executive’s termination of employment and severance benefits or the other subject matters of this Agreement are superseded in their entirety by this Agreement, including, without limitation, any employment agreements, severance policies or severance policy agreements.
[Signature Page Follows]
 

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In consideration of the premises and agreements set forth herein and the employment of the Executive, the undersigned agrees to be bound by this Policy Agreement.

LEXINGTON REALTY TRUST
By:______________________________
Name:
Title:
Date:
ACKNOWLEDGED AND AGREED:
______________________________
[Executive]
Date:












 
[Signature Page to Executive Severance Policy Agreement]


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EXHIBIT A
GENERAL RELEASE
THIS GENERAL RELEASE (this “Release”), dated as of                     , 201__, by [ ], residing at the address set forth on the signature page hereof (“Executive”). Capitalized terms used herein but not defined shall have the meanings set forth in the Severance Policy Agreement, dated as of _________ __, 20__ (the “Severance Agreement”), by and between the Company and Executive.
WHEREAS, the Severance Agreement provides that, in consideration for certain payments and benefits payable to Executive in connection with certain terminations of Executive’s employment with the Company, Executive shall fully and finally release the Company and its subsidiaries and affiliates (collectively, the “Company Group”) from all claims relating to Executive’s employment relationship with the Company and the termination of such relationship.
Accordingly, the Executive agrees as follows:
1.Release.
a.General Release. In consideration of the Company’s obligations under the Severance Agreement and for other valuable consideration, Executive hereby releases and forever discharges the Company Group and each of their respective officers, employees, trustees, directors and agents (collectively, the “Released Parties”) from any and all known and unknown claims, actions and causes of action (collectively, “Claims”), including, without limitation, any Claims arising under (a) the Sarbanes-Oxley Act of 2002, 18 U.S.C. § 1514; Sections 748(h)(i), 922(h)(i) and 1057 of the Dodd-Frank Wall Street and Consumer Protection Act (the “Dodd Frank Act”), 7 U.S.C. § 26(h), 15 U.S.C. § 78u-6(h)(i) and 12 U.S.C. § 5567(a) but excluding from this release any right Executive may have to receive a monetary award from the SEC as an SEC Whistleblower, pursuant to the bounty provision under Section 922(a)-(g) of the Dodd Frank Act, 7 U.S.C. Sec. 26(a)-(g), or directly from any other federal or state agency pursuant to a similar program, or (b) any applicable federal, state, local or foreign law, that Executive may have, or in the future may possess arising out of (x) Executive’s employment relationship with and service as a trustee, director, employee, officer or manager of the Company Group, and the termination of such relationship or service, or (y) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date hereof; provided, however, that the release set forth in this Section 1(a) shall not apply to (i) the obligations of the Company under the Severance Agreement and (ii) the obligations of the Company to continue to provide trustee/director and officer indemnification to Executive as provided in the declaration of trust, bylaws or other governing documents for the Company. Executive further agrees that the payments and benefits described in the Severance Agreement shall be in full satisfaction of any and all claims for payments or benefits, whether express or implied, that Executive may have against the Company Group arising out of Executive’s employment relationship, Executive’s service as a trustee, director, employee, officer or manager of the Company Group and the termination thereof. The provision of the payments and benefits described in the Severance Agreement shall not be deemed an admission of liability or wrongdoing by the Company Group. [If applicable: This Section 1(a) does not apply to any Claims that Executive may have as of the
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date Executive signs this Release arising under the federal Age Discrimination in Employment Act of 1967, as amended, and the applicable rules and regulations promulgated thereunder (“ADEA”). Claims arising under ADEA are addressed in Section 1(b) of this Release.]
b.[If applicable: Specific Release of ADEA Claims. In consideration of the payments and benefits provided to Executive under the Severance Agreement, Executive hereby releases and forever discharges the Company Group and each of their respective officers, employees, trustees, directors and agents from any and all Claims that Executive may have as of the date Executive signs this Release arising under ADEA. By signing this Release, Executive hereby acknowledges and confirms the following: (a) Executive is hereby advised by the Company in connection with Executive’s termination to consult with an attorney of Executive’s choice prior to signing this Release and to have such attorney explain to Executive the terms of this Release, including, without limitation, the terms relating to Executive’s release of claims arising under ADEA; (b) Executive has been given a period of not fewer than 21 days to consider the terms of this Release and to consult with an attorney of Executive’s choosing with respect thereto; and (c) Executive is providing the release and discharge set forth in this Section 1(b) only in exchange for consideration in addition to anything of value to which Executive is already entitled.]
c.Representation. Executive hereby represents that Executive has not instituted, assisted or otherwise participated in connection with, any action, complaint, claim, charge, grievance, arbitration, lawsuit or administrative agency proceeding, or action at law or otherwise against any member of the Company Group or any of their respective officers, employees, trustees, directors, shareholders or agents.
2.Cessation of Payments. To the maximum extent permitted by applicable law, in the event that Executive (a) files any charge, claim, demand, action or arbitration with regard to Executive’s employment, compensation or termination of employment under any federal, state or local law, or an arbitration under any industry regulatory entity, except in either case for a claim for breach of the Severance Agreement or failure to honor the obligations set forth therein or (b) breaches any of the covenants or obligations contained in or incorporated into the Severance Agreement, the Company shall be entitled to cease making any payments due pursuant to the Severance Agreement.
3.Voluntary Assent. Executive affirms that Executive has read this Release, and understands all of its terms, including the full and final release of claims set forth in Sections 1(a) and 1(b). Executive further acknowledges that (a) Executive has voluntarily entered into this Release; (b) Executive has not relied upon any representation or statement, written or oral, not set forth in this Release; (c) the only consideration for signing this Release is as set forth in the Severance Agreement; and (d) this document gives Executive the opportunity and encourages Executive to have this Release reviewed by Executive’s attorney and/or tax advisor.
4. Revocation. This Release may be revoked by Executive within the seven-day period commencing on the date Executive signs this Release (the “Revocation Period”). In the event of any such revocation by Executive, all obligations of the Company under the Retirement Agreement shall terminate and be of no further force and effect as of the date of such revocation.
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No such revocation by Executive shall be effective unless it is in writing and signed by Executive and received by the Company prior to the expiration of the Revocation Period.
5.Miscellaneous.
a.Severability. As the provisions of this Release are independent of and severable from each other, the Company and Executive agree that if, in any action before any court or agency legally empowered to enforce this Release, any term, restriction, covenant, or promise hereof is found to be unreasonable or otherwise unenforceable, then such decision shall not affect the validity of the other provisions of this Agreement, and such invalid term, restriction, covenant, or promise shall also be deemed modified to the extent necessary to make it enforceable.
b.Notice. For purposes of this Release, notices, demands and all other communications provided for in this Release shall be in writing and shall be deemed to have been duly given when received if delivered in person, the next business day if delivered by overnight commercial courier (e.g., Federal Express), or the third business day if mailed by United States certified mail, return receipt requested, postage prepaid, to the following addresses:
If to the Company, to:
Lexington Realty Trust
One Penn Plaza, Suite 4015
New York, NY 10119-4015
Attn: Lead Independent Trustee

with a copy to:
Lexington Realty Trust
One Penn Plaza, Suite 4015
New York, NY 10119-4015
Attention: General Counsel
If to Executive, to at the address set forth on the signature page hereof.
Either party may change its address for notices in accordance with this Section 5(b) by providing written notice of such change to the other party.
c.Governing Law and Venue. This Release shall be governed by and construed in accordance with the laws of the State of New York. The Executive agrees that exclusive venue for any litigation, action or proceeding arising from or relating to this Release shall lie in the state or federal courts located in New York County, New York and the Executive expressly waives any right to contest such venue for any reason whatsoever.
d.Benefits; Binding Effect. This Release shall be binding upon the Executive and its heirs, personal representatives, legal representatives and successors. This Release shall inure to the benefit of the Company and its legal representatives, successors and, in the case of a sale of all or substantially all of the Company’s assets, or upon any merger, consolidation or reorganization of the Company, the Company’s assigns.
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e.Entire Agreement. This Release and the Severance Agreement constitute the entire agreement between the Executive and the Company, and all prior understandings, agreements or undertakings between the Executive and the Company concerning Executive’s termination of employment or the other subject matters of this Agreement are superseded in their entirety by this Release and the Severance Agreement.

f.Waivers and Amendments. This Release may be amended, superseded, canceled, renewed or extended, and the terms hereof may be waived, only by a written instrument signed by the Executive and the Company. No delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of the Company of any such right, power or privilege nor any single or partial exercise of any such right, power or privilege, preclude any other or further exercise thereof or the exercise of any other such right, power or privilege.

g.Interpretation. As Executive has had the opportunity to consult with legal counsel, no provision of this Release shall be construed against or interpreted to the disadvantage of the Company by reason of the Company having, or being deemed to have, drafted, devised, or imposed such provision.

h.Incorporation of Recitals. The recitals set forth in the beginning of this Release are hereby incorporated into the body of this Release as if fully set forth herein.
[Signature Page Follows]
 

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IN WITNESS WHEREOF, the Executive has signed Executive’s name as of the day and year first above written.

              ___________________________
              Executive:

Executive’s Address:







 
[Signature Page to Release]
1




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.

May 7, 2020
/s/ T. Wilson Eglin
T. Wilson Eglin
Chief Executive Officer



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.

May 7, 2020
/s/ Beth Boulerice
Beth Boulerice
Chief Financial Officer



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 March 31, 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
May 7, 2020




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 March 31, 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
May 7, 2020