Months before Lexington and Newkirk announced their merger agreement, Lexington was looking for a way to increase its value. Eglin says it looked into selling the company but realized the $23 per share it expected to receive for a sale significantly undervalued the company. "Pre-merger, because of our size, the market was discounting our value," Eglin says, adding that the focus on single-tenant assets made some uneasy as several leases ending around the same time could have an impact on the company's over all performance.

So, instead of selling Lexington, the two companies came together; Newkirk bringing 160 properties to the merger and significantly diversifying the portfolio to more than 350 properties in 44 states. Single-tenant office remains the major focus followed by industrial and then retail properties. The diversification of Lexington's portfolio, Eglin says offers inherent value to the shareholders. Also, with many more properties should several leases roll at once the portfolio's vacancy rate takes a smaller hit.

Additionally, a diversification of markets geographically protects Lexington against being heavily impacted by a down-turn in any one area of the country.

Eglin says the decision to merge was well-timed. As it continues to become more expensive to be a public company and the acquisition market is increasingly difficult to tap, the merger was a solution to getting larger. The assets on Lexington's balance sheet went up 50% or more, according to Eglin. The company's dividends are slated to increase later this year, marking the 14th consecutive year of increases.

Eglin did not allude to any specific properties Lexington might sell but says he expects between $100 million and $200 million of dispositions in the normal course of business. Even with 160 new properties, and a difficult acquisition market, Eglin did not rule out purchase additional properties in the near future. "The only thing difficult is finding properties to acquire at dividends that make sense," he says.

Lexington and Newkirk's merger closed at the beginning of January, as reported by GlobeSt.com. The $4.6-billion deal was first reported in July 2006 and received shareholder approval in November.