"The targeted dividend for 2009 will allow Lexington to retain a significant amount of cash flow, which we expect to use to continue to retire debt and/or preferred securities on advantageous terms," says T. Wilson Eglin, Lexington CEO, in a statement. "The targeted dividend for 2009 equates to a yield of 18.0% based on the closing price of our common shares on Nov. 24, 2008 and reflects, what we believe, is a conservative payout ratio." Since the beginning of '08, Lexington has retired a total of $307.5 million of senior debt and preferred securities at a discounted cost to Lexington of approximately $238.8 million, according to a release.

On Wednesday, Lexington declared a regular common share dividend/distribution for Q4 '08 of $0.18 per share, payable on Jan. 15. The REIT also declared dividends of $0.503125 per Series B cumulative redeemable preferred share, $0.8125 per Series C share and $0.471875 per Series D share.

Additionally, Lexington announced that it intends to complete an inter-company merger with the Lexington Master Limited Partnership by year's end. Eglin tells GlobeSt.com that the merger will save about $1 million annually "and simplify our corporate structure." Each outstanding unit of limited partner interest of the MLP will be exchanged for one common share of Lexington, with the exception of MLP units already held by Lexington, according to a release. As of Wednesday, Lexington owned 91% of the MLP units.