Lexington Ramps Up Deleveraging Strategy

NEW YORK CITY-Lexington Realty Trust’s board of directors has targeted an annualized dividend level for 2009, which the company says will allow it to retain around $63 million of capital. In a release, the locally based REIT says it expects to use the $63 million to accelerate its deleveraging strategy and further strengthen its balance sheet.

“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.