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Exclusive: All-Cash Buys To Fuel LXP's Strategy in '09

Free and clear purchases of sale-leaseback assets with minimum lease terms of 15 years is now an LXP cornerstone.

By Michelle Napoli | Updated on February 05, 2009

New York City-With the commercial mortgage market barely giving off a faint pulse, all-cash buys are an increasing focus for some property investors who have the means. Free and clear purchases of sale-leaseback assets with minimum lease terms of 15 years is now the cornerstone of Lexington Realty Trust’s acquisition strategy, chief investment officer and vice chairman Richard J. Rouse exclusively tells GlobeSt.com.

“Our intent is to buy properties on longer term leases so if it takes three, four, five years–who knows–we’ll still have at least 10 years left, if not a little longer, when that [mortgage] market returns,” Rouse says.

It used to be that 15 or 20-year leases were the norm in the sale-leaseback arena. But in recent years, cheap and plentiful CMBS debt fueled shorter term net lease property acquisitions, while it was largely highly leveraged buyers who could compete on 15-plus-year deals. Now the pendulum is swinging back.

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