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Lexington Eyes $1.2B Disposition Program

NEW YORK CITY-The plan includes $350 million of retail properties, most of which the locally based REIT acquired through its Newkirk merger.

By Melissa Kress | Updated on June 05, 2007

NEW YORK CITY-Disposition is moving to center stage at Lexington Realty Trust. After a strategic review process started in 2005, and a highly publicized merger with Newkirk Realty Trust at the end of 2006, the locally based REIT is ready to shift its focus.

Speaking at Nareit’s REITWeek 2007, CEO T. Wilson Eglin said Lexington has identified 109 retail buildings–worth a total $350 million–and 31 other assets–worth $850 million–it intends to place on the selling block. The total disposition reaches $1.2 billion.Lexington acquired most of the 109 retail assets as a result of its $4.6-billion merger with Newkirk, which closed in the fourth quarter of 2006. Eglin explained he expects to sell most of the properties with cap rates in the 6s, with higher cap rates in smaller markets.

The REIT also earmarked several specialty assets, including call centers and distribution facilities, it wants to move off balance sheet in a joint venture, Eglin added. He expects the company to venture with a single investor as opposed to multiple investors, he added.

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