LXP 10-Q Quarterly Report Sept. 30, 2023 | Alphaminr
LEXINGTON REALTY TRUST
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LXP 10-Q Quarter ended Sept. 30, 2023

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lxp-20230930
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2023 .
or
☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _________________ to ________________
Commission File Number 1-12386
LXP INDUSTRIAL TRUST
(Exact name of registrant as specified in its charter)
Maryland 13-3717318
(State or other jurisdiction of
incorporation of organization) 		(I.R.S. Employer
Identification No.)
One Penn Plaza, Suite 4015 , New York , NY 10119-4015
(Address of principal executive offices) (zip code)
( 212 ) 692-7200
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Shares of beneficial interest, par value $0.0001 per share, classified as Common Stock LXP New York Stock Exchange
6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share
LXPPRC New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 292,634,575 common shares of beneficial interest, par value $0.0001 per share, as of October 30, 2023.



TABLE OF CONTENTS
PART I. — FINANCIAL INFORMATION
PART II — OTHER INFORMATION

WHERE YOU CAN FIND MORE INFORMATION:
We file and furnish annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission, which we refer to as the SEC. We file and furnish information electronically with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file or furnish electronically with the SEC. The address of the SEC's Internet site is http://www.sec.gov. We also maintain a web site at http://www.lxp.com through which you can obtain copies of documents that we file or furnish with the SEC. The contents of that web site are not incorporated by reference in or otherwise a part of this Quarterly Report on Form 10-Q or any other document that we file or furnish with the SEC.

2

PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)
September 30, 2023 December 31, 2022
Assets:
Real estate, at cost $ 3,706,146 $ 3,691,066
Real estate - intangible assets 318,549 328,607
Land held for development 84,708 84,412
Investments in real estate under construction 380,446 361,924
Real estate, gross 4,489,849 4,466,009
Less: accumulated depreciation and amortization 893,031 800,470
Real estate, net 3,596,818 3,665,539
Assets held for sale 11,691 66,434
Right-of-use assets, net 20,390 23,986
Cash and cash equivalents 35,421 54,390
Restricted cash 211 116
Investments in non-consolidated entities 52,351 58,206
Deferred expenses, net 31,350 25,207
Investment in a sales-type lease, net (allowance for credit loss $ 64 in 2023 and $ 93 in 2022)
62,887 61,233
Rent receivable – current 6,636 3,030
Rent receivable – deferred 78,665 71,392
Other assets 32,584 24,314
Total assets $ 3,929,004 $ 4,053,847
Liabilities and Equity:
Liabilities:
Mortgages and notes payable, net $ 63,390 $ 72,103
Term loan payable, net 299,334 298,959
Senior notes payable, net 990,318 989,295
Trust preferred securities, net 127,769 127,694
Dividends payable 38,304 38,416
Liabilities held for sale 1,083 1,150
Operating lease liabilities 21,269 25,118
Accounts payable and other liabilities 57,296 74,261
Accrued interest payable 10,681 9,181
Deferred revenue - including below-market leases, net 9,889 11,452
Prepaid rent 15,531 15,215
Total liabilities 1,634,864 1,662,844
Commitments and contingencies
Equity:
Preferred shares, par value $ 0.0001 per share; authorized 100,000,000 shares:
Series C Cumulative Convertible Preferred, liquidation preference $ 96,770 ; 1,935,400 shares issued and outstanding
94,016 94,016
Common shares, par value $ 0.0001 per share; authorized 600,000,000 shares, 292,611,107 and 291,719,310 shares issued and outstanding in 2023 and 2022, respectively
29 29
Additional paid-in-capital 3,324,790 $ 3,320,087
Accumulated distributions in excess of net income ( 1,177,212 ) ( 1,079,087 )
Accumulated other comprehensive income
14,362 17,689
Total shareholders’ equity 2,255,985 2,352,734
Noncontrolling interests 38,155 38,269
Total equity 2,294,140 2,391,003
Total liabilities and equity $ 3,929,004 $ 4,053,847
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share data)
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Gross revenues:
Rental revenue $ 83,844 $ 78,274 $ 252,326 $ 234,749
Other revenue 1,578 1,814 5,221 5,392
Total gross revenues 85,422 80,088 257,547 240,141
Expense applicable to revenues:
Depreciation and amortization ( 45,570 ) ( 44,946 ) ( 137,304 ) ( 134,645 )
Property operating ( 14,693 ) ( 13,961 ) ( 45,681 ) ( 42,279 )
General and administrative ( 8,614 ) ( 9,060 ) ( 26,866 ) ( 29,093 )
Non-operating income 394 242 731 353
Interest and amortization expense ( 10,965 ) ( 11,255 ) ( 32,502 ) ( 32,758 )
Debt satisfaction losses, net — ( 119 ) — ( 119 )
Impairment charges — ( 628 ) ( 16,490 ) ( 2,457 )
Change in allowance for credit loss ( 2 ) — 29 —
Gains on sales of properties 7,154 24,841 15,033 52,951
Selling profit from sales-type lease — — — 9,314
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities 13,126 25,202 14,497 61,408
Provision for income taxes ( 220 ) ( 271 ) ( 646 ) ( 951 )
Equity in earnings (losses) of non-consolidated entities ( 5 ) ( 1,340 ) 2,585 15,580
Net income 12,901 23,591 16,436 76,037
Less net income attributable to noncontrolling interests
( 237 ) ( 201 ) ( 654 ) ( 727 )
Net income attributable to LXP Industrial Trust shareholders 12,664 23,390 15,782 75,310
Dividends attributable to preferred shares – Series C ( 1,573 ) ( 1,573 ) ( 4,718 ) ( 4,718 )
Allocation to participating securities ( 52 ) ( 41 ) ( 186 ) ( 151 )
Net income attributable to common shareholders $ 11,039 $ 21,776 $ 10,878 $ 70,441
Net income attributable to common shareholders - per common share basic $ 0.04 $ 0.08 $ 0.04 $ 0.25
Weighted-average common shares outstanding – basic 290,291,609 277,535,717 290,187,124 281,559,058
Net income attributable to common shareholders - per common share diluted $ 0.04 $ 0.08 $ 0.04 $ 0.25
Weighted-average common shares outstanding – diluted
291,253,005 278,521,946 291,148,809 284,609,950
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited and in thousands)

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Net income $ 12,901 $ 23,591 $ 16,436 $ 76,037
Other comprehensive income:
Change in unrealized gain/(loss) on interest rate swaps, net ( 1,423 ) 7,028 ( 2,474 ) 22,844
Company's share of other comprehensive income (loss) of non-consolidated entities ( 415 ) 1,182 ( 853 ) 1,182
Other comprehensive income (loss) ( 1,838 ) 8,210 ( 3,327 ) 24,026
Comprehensive income 11,063 31,801 13,109 100,063
Comprehensive income attributable to noncontrolling interests
( 237 ) ( 201 ) ( 654 ) ( 727 )
Comprehensive income attributable to LXP Industrial Trust shareholders 10,826 31,600 12,455 99,336
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5
LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited and in thousands, except share and per share data)
LXP Industrial Trust Shareholders
Three months ended September 30, 2023
Total Number of Preferred Shares Preferred Shares Number of Common Shares Common Shares Additional Paid-in-Capital Accumulated Distributions in Excess of Net Income Accumulated Other Comprehensive Income/(Loss) Noncontrolling Interests
Balance June 30, 2023
$ 2,318,723 1,935,400 $ 94,016 292,581,929 $ 29 $ 3,322,499 $ ( 1,151,924 ) $ 16,200 $ 37,903
Issuance of partnership interest in real estate 211 — — — — — — — 211
Redemption of noncontrolling OP units for common shares — — — 5,058 — 24 — — ( 24 )
Issuance of common shares and deferred compensation amortization, net 2,267 — — 24,120 — 2,267 — — —
Dividends/distributions ($ 0.125 per common share)
( 38,124 ) — — — — — ( 37,952 ) — ( 172 )
Net income 12,901 — — — — — 12,664 — 237
Other comprehensive loss ( 1,423 ) — — — — — — ( 1,423 ) —
Company's share of other comprehensive loss of non-consolidated entities ( 415 ) — — — — — — ( 415 ) —
Balance September 30, 2023 $ 2,294,140 1,935,400 $ 94,016 292,611,107 $ 29 $ 3,324,790 $ ( 1,177,212 ) $ 14,362 $ 38,155

Three Months Ended September 30, 2022
Balance June 30, 2022
$ 2,259,650 1,935,400 $ 94,016 281,670,437 $ 28 $ 3,189,713 $ ( 1,068,408 ) $ 9,558 $ 34,743
Issuance of partnership interest in real estate 663 — — — — — — — 663
Redemption of noncontrolling OP units for common shares — — — 13,146 — 68 — — ( 68 )
Issuance of common shares and deferred compensation amortization, net 1,916 — — 22,516 — 1,916 — — —
Repurchase of common shares ( 56,958 ) — — ( 5,604,048 ) — ( 56,958 ) — — —
Forfeiture of employee common shares 1 — — ( 1,720 ) — — 1 — —
Dividends/distributions ($ 0.12 per common share)
( 34,561 ) — — — — — ( 34,390 ) — ( 171 )
Net income 23,591 — — — — — 23,390 — 201
Other comprehensive income 7,028 — — — — — — 7,028 —
Company's share of other comprehensive income of non-consolidated entities 1,182 — — — — — — 1,182 —
Balance September 30, 2022 $ 2,202,512 1,935,400 $ 94,016 276,100,331 $ 28 $ 3,134,739 $ ( 1,079,407 ) $ 17,768 $ 35,368
LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited and in thousands, except share and per share data)
LXP Industrial Trust Shareholders
Nine Months Ended September 30, 2023 Total Number of Preferred Shares Preferred Shares Number of Common Shares Common Shares Additional Paid-in-Capital Accumulated Distributions in Excess of Net Income Accumulated Other Comprehensive Income/(Loss) Noncontrolling Interests
Balance December 31, 2022 $ 2,391,003 1,935,400 $ 94,016 291,719,310 $ 29 $ 3,320,087 $ ( 1,079,087 ) $ 17,689 $ 38,269
Issuance of partnership interest in real estate 507 — — — — — — — 507
Redemption of noncontrolling OP units for common shares — — — 9,944 — 49 — — ( 49 )
Issuance of common shares and deferred compensation amortization, net 6,730 — — 1,263,180 — 6,730 — — —
Repurchase of common shares to settle tax obligations ( 2,076 ) — — ( 204,780 ) — ( 2,076 ) — — —
Forfeiture of employee common shares — — — ( 176,547 ) — — — — —
Dividends/distributions ($ 0.375 per common share)
( 115,133 ) — — — — ( 113,907 ) — ( 1,226 )
Net income 16,436 — — — — — 15,782 — 654
Other comprehensive loss ( 2,474 ) — — — — — — ( 2,474 ) —
Company's share of other comprehensive loss of non-consolidated entities ( 853 ) — — — — — — ( 853 ) —
Balance September 30, 2023 $ 2,294,140 1,935,400 $ 94,016 292,611,107 $ 29 $ 3,324,790 $ ( 1,177,212 ) $ 14,362 $ 38,155
Nine Months Ended September 30, 2022
Balance December 31, 2021 $ 2,323,228 1,935,400 $ 94,016 283,752,726 $ 28 $ 3,252,506 $ ( 1,049,434 ) $ ( 6,258 ) $ 32,370
Issuance of partnership interest in real estate 6,444 — — — — — — — 6,444
Redemption of noncontrolling OP units for common shares — — — 33,378 — 177 — — ( 177 )
Purchase of noncontrolling interest in consolidated joint venture ( 27,958 ) — — — — ( 25,058 ) — — ( 2,900 )
Issuance of common shares and deferred compensation amortization, net 44,075 — — 4,557,892 1 44,074 — — —
Repurchase of common shares ( 130,676 ) — — ( 11,702,074 ) ( 1 ) ( 130,675 ) — — —
Repurchase of common shares to settle tax obligations ( 6,285 ) — — ( 410,958 ) — ( 6,285 ) — — —
Forfeiture of employee common shares 9 — — ( 130,633 ) — — 9 — —
Dividends/distributions ($ 0.36 per common share)
( 106,388 ) — — — — — ( 105,292 ) — ( 1,096 )
Net income 76,037 — — — — — 75,310 — 727
Other comprehensive income 22,844 — — — — — — 22,844 —
Company's share of other comprehensive income of non-consolidated entities 1,182 — — — — — — 1,182 —
Balance September 30, 2022 $ 2,202,512 1,935,400 $ 94,016 276,100,331 $ 28 $ 3,134,739 $ ( 1,079,407 ) $ 17,768 $ 35,368
6
LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Nine Months Ended September 30,
2023 2022
Net cash provided by operating activities: $ 153,523 $ 154,113
Cash flows from investing activities:
Acquisition of real estate, including intangible assets ( 15,018 ) ( 132,026 )
Investment in real estate under construction ( 88,058 ) ( 209,862 )
Capital expenditures ( 12,226 ) ( 25,593 )
Net proceeds from sale of properties 73,822 145,906
Principal payments on loans receivable 1,462 20
Investments in non-consolidated entities ( 2,872 ) ( 307 )
Distributions from non-consolidated entities in excess of accumulated earnings 5,836 19,250
Deferred leasing costs ( 1,928 ) ( 4,017 )
Change in real estate deposits, net ( 7,498 ) ( 1,524 )
Net cash used in investing activities ( 46,480 ) ( 208,153 )
Cash flows from financing activities:
Dividends to common and preferred shareholders ( 114,019 ) ( 107,939 )
Principal amortization payments ( 8,928 ) ( 8,416 )
Revolving credit facility borrowings 100,000 210,000
Revolving credit facility payments ( 100,000 ) ( 80,000 )
Deferred financing costs — ( 3,626 )
Cash contributions from noncontrolling interests 507 6,444
Cash distributions to noncontrolling interests ( 1,226 ) ( 1,096 )
Repurchase of common shares to settle tax obligations ( 2,076 ) ( 6,285 )
Purchase of noncontrolling interest — ( 27,958 )
Issuance of common shares, net ( 175 ) 38,436
Repurchase of common shares — ( 127,027 )
Net cash used in financing activities ( 125,917 ) ( 107,467 )
Change in cash, cash equivalents and restricted cash ( 18,874 ) ( 161,507 )
Cash, cash equivalents and restricted cash, at beginning of period 54,506 191,027
Cash, cash equivalents and restricted cash, at end of period $ 35,632 $ 29,520
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents at beginning of period $ 54,390 $ 190,926
Restricted cash at beginning of period 116 101
Cash, cash equivalents and restricted cash at beginning of period $ 54,506 $ 191,027
Cash and cash equivalents at end of period $ 35,421 $ 29,407
Restricted cash at end of period 211 113
Cash, cash equivalents and restricted cash at end of period $ 35,632 $ 29,520
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(1) The Company and Financial Statement Presentation
LXP Industrial Trust (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Company”) is a Maryland real estate investment trust (“REIT”) that owns a portfolio of equity investments focused on single-tenant industrial properties.
As of September 30, 2023, the Company had ownership interests in approximately 115 consolidated real estate properties, located in 19 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries.
The Company believes it has qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain activities from which it was previously precluded in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS are subject to federal income taxes on the income from these activities.
The Company conducts its operations indirectly through (1) property owner subsidiaries, which are single purpose entities, (2) a wholly-owned TRS, Lexington Realty Advisors, Inc., and (3) joint ventures. Property owner subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan agreements secured by properties in which the Company has an interest and lender subsidiaries are lenders under loan agreements where the Company made an investment in a loan asset, but in all cases are separate and distinct legal entities. Each property owner subsidiary is a separate legal entity that maintains separate books and records. The assets and credit of each property owner subsidiary with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other property owner subsidiary or any other affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors.
The unaudited condensed consolidated financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three and nine months ended September 30, 2023 have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 filed with the SEC on February 16, 2023 (“Annual Report”).
Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP.
8

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
As of September 30, 2023, the Company had interests in seven consolidated joint ventures with developers, consisting of five ongoing development projects and two land joint ventures with ownership interests ranging from 80 % to 95.5 %. Each joint venture owns land parcels with the intention of developing industrial properties. The Company determined that the joint ventures are variable interest entities in accordance with the applicable accounting guidance. The Company concluded that it is the primary beneficiary in each of the joint ventures and as such, the joint ventures' operations are consolidated in the Company’s unaudited condensed consolidated financial statements.
In addition, the Company is the primary beneficiary of certain other VIEs as it has a controlling financial interest in these entities. Lepercq Corporate Income Fund L.P. ("LCIF") is a consolidated VIE and the Company, as of September 30, 2023, had an approximate 99 % ownership interest.
The assets of each VIE are only available to satisfy such VIE's respective liabilities. Below is a summary of selected financial data of consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022:
September 30, 2023 December 31, 2022
Real estate, net $ 1,036,258 $ 1,027,009
Total assets $ 1,164,943 $ 1,125,558
Total liabilities $ 33,385 $ 40,200
In addition, the Company acquires, from time to time, properties using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a "reverse 1031 exchange") and, as such, the properties are in the possession of an Exchange Accommodation Titleholder ("EAT") until the reverse 1031 exchange is completed. The EAT is classified as a VIE as it is a “thinly capitalized” entity. The Company consolidates the EAT because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the EAT's economic performance and can collapse the 1031 exchange structure at any time. The assets of the EAT primarily consist of leased property (net real estate and intangibles).
Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of current and deferred accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments, valuation of derivative financial instruments, valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee, the determination of the term and fair value of sales-type leases, the estimated credit losses for investments in sales-type leases and the useful lives of long-lived assets. Actual results could differ materially from those estimates.
Recently Issued Accounting Guidance . In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 is optional, and applies for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR and may be elected over time as reference rate reform activities occur. As of March 31, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation.
9

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
On July 5, 2022, the Company transitioned its benchmark interest rate for its term loan from LIBOR to the Secured Overnight Financing Rate, or SOFR. The Company adopted ASU 2020-04 and the adoption of this standard did not have an impact on the Company's unaudited condensed consolidated financial statements. During the quarter, the Company's Trust Preferred Securities transitioned from LIBOR to SOFR. The impact on the financial statements was immaterial as a result of the transition.

(2) Earnings Per Share
A portion of the Company's non-vested share-based payment awards are considered participating securities and as such, the Company is required to use the two-class method for the computation of basic and diluted earnings per share. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The non-vested share-based payment awards are not allocated losses as the awards do not have a contractual obligation to share in losses of the Company.
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2023 and 2022:
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
BASIC
Net income attributable to common shareholders $ 11,039 $ 21,776 $ 10,878 $ 70,441
Weighted-average number of common shares outstanding - basic
290,291,609 277,535,717 290,187,124 281,559,058
Net income attributable to common shareholders - per common share basic $ 0.04 $ 0.08 $ 0.04 $ 0.25
DILUTED
Net income attributable to common shareholders - basic $ 11,039 $ 21,776 $ 10,878 $ 70,441
Impact of assumed conversions
15 11 ( 63 ) 147
Net income attributable to common shareholders $ 11,054 $ 21,787 $ 10,815 $ 70,588
Weighted-average common shares outstanding - basic
290,291,609 277,535,717 290,187,124 281,559,058
Effect of dilutive securities:
Shares issuable under forward sales agreements
— — — 1,699,789
Unvested share-based payment awards 136,054 139,371 133,032 491,877
Operating partnership units 825,342 846,858 828,653 859,226
Weighted-average common shares outstanding - diluted
291,253,005 278,521,946 291,148,809 284,609,950
Net income attributable to common shareholders - per common share diluted $ 0.04 $ 0.08 $ 0.04 $ 0.25
For per common share amounts, generally all incremental shares are considered anti-dilutive for periods that have a loss from continuing operations attributable to common shareholders. In addition, other common share equivalents may be anti-dilutive in certain periods.
10

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Calculation of dilutive earnings requires certain potentially dilutive shares to be excluded when the inclusion of such shares would be anti-dilutive. The following table summarizes the potentially dilutive shares excluded from the dilutive earnings per share calculation as the inclusion of such shares would be anti-dilutive:
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Unvested share-based payment awards — — — 23,175
Preferred shares - Series C
4,710,570 4,710,570 4,710,570 4,710,570

(3) Investments in Real Estate
The Company acquired or completed and placed in service the following warehouse/distribution facilities during the nine months ended September 30, 2023:
Market Acquired/Placed in Service Date Initial
Cost
Basis
Lease
Expiration Date 		Land Building and Improvements
Phoenix, Arizona (1)
March 2023 $ 37,173 08/2033 $ 7,552 $ 29,621
Dallas, Texas July 2023 15,018 N/A 2,100 12,918
$ 52,191 $ 9,652 $ 42,539
(1)    Initial cost basis excludes certain remaining costs, including developer partner promote, if any.
In 2022, the Company purchased the remaining 13 % of equity owned by a noncontrolling interest in the Fairburn, Georgia warehouse/distribution facility for $ 27,958 . As the Company previously consolidated its interest in the joint venture which owned the property, the acquisition of the noncontrolling ownership interest was recorded as an equity transaction with the difference between the purchase price and carrying balance of $ 25,058 recorded as a reduction in additional paid-in-capital.
11

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
As of September 30, 2023, the details of the development arrangements outstanding are as follows (in $000's, except square feet):
Project (% owned) # of Buildings Market Estimated Sq. Ft.
Estimated Project Cost (1)
GAAP Investment Balance as of 9/30/2023 (2)
LXP Amount Funded as of 9/30/2023 (3)
Actual/Estimated Base Building Completion Date
% Leased as of 9/30/2023
Estimated Placed in Service Date
Development Projects Leased:
ETNA Cubes ( 95 %)
1 Columbus, OH 1,074,840 $ 76,600 $ 64,101 $ 67,927 3Q 2022 100 % 4Q 2023 (4)
Smith Farms ( 90 %)
1 Greenville-Spartanburg, SC 304,884 25,000 21,535 19,745 2Q 2023 100 % 4Q 2023
Cotton 303 ( 93 %)
1 Phoenix, AZ 488,400 55,300 42,814 38,814 4Q 2023 100 % 1Q 2024
3 1,868,124 $ 156,900 $ 128,450 $ 126,486
Development Projects Available for Lease:
Ocala ( 80 %)
1 Central Florida 1,085,280 $ 83,900 $ 79,034 $ 69,317 1Q 2023 — % —
Mt. Comfort ( 80 %)
1 Indianapolis, IN 1,053,360 66,100 63,871 58,071 1Q 2023 — % —
Smith Farms ( 90 %)
1 Greenville-Spartanburg, SC 1,091,888 76,600 71,644 65,595 2Q 2023 — % —
South Shore ( 100 %)
2 Central Florida 270,885 42,500 37,447 34,808 2Q 2023 - 3Q 2023 (5) —
5 3,501,413 $ 269,100 $ 251,996 $ 227,791
8 5,369,537 $ 426,000 $ 380,446 $ 354,277
(1)    Estimated project cost includes estimated tenant improvements and leasing costs and excludes potential developer partner promote, if any.
(2)    Excludes leasing costs.
(3)     Excludes noncontrolling interests' share.
(4)    Subsequent to September 30, 2023, property placed into service.
(5)    Subsequent to September 30, 2023, 57,690 square feet was leased for a five-year term.


As of September 30, 2023, the Company's aggregate investment in development arrangements was $ 380,446 , which included capitalized interest of $ 8,170 for the nine months ended September 30, 2023 and is presented as investments in real estate under construction in the accompanying unaudited condensed consolidated balance sheet. For the nine months ended September 30, 2022, capitalized interest for development arrangements was $ 4,888 .
As of September 30, 2023, the details of the land held for industrial development are as follows (in $000's, except acres):
Project (% owned) Market
Approx. Developable Acres
GAAP Investment Balance as of
9/30/2023
LXP Amount Funded
as of
9/30/2023 (1)
Reems & Olive ( 95.5 %)
Phoenix, AZ 320 $ 77,653 $ 74,913
Mt. Comfort Phase II ( 80 %)
Indianapolis, IN 116 5,323 4,279
ATL Fairburn JV ( 100 %)
Atlanta, GA 14 1,732 1,740
450 $ 84,708 $ 80,932
(1)    Excludes noncontrolling interests' share.

12

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(4) Dispositions and Impairment
During the nine months ended September 30, 2023 and 2022, the Company disposed of its interests in various properties for an aggregate gross disposition price of $ 75,980 and $ 147,345 , respectively, and recognized aggregate gains on sales of properties of $ 15,033 and $ 52,951 , respectively.
The Company had three properties classified as held for sale at September 30, 2023 and December 31, 2022, respectively. Assets and liabilities of the held for sale properties at September 30, 2023 and December 31, 2022 consisted of the following:
September 30, 2023 December 31, 2022
Assets:
Real estate, at cost $ 12,277 $ 131,557
Real estate, intangible assets 7,872 9,942
Accumulated depreciation and amortization ( 9,325 ) ( 76,205 )
Right-of-use assets 508 —
Other 359 1,140
$ 11,691 $ 66,434
Liabilities:
Accounts payable and other liabilities $ 36 $ 637
Operating lease liabilities 515 —
Deferred revenue 84 143
Prepaid rent 448 370
$ 1,083 $ 1,150
The Company assesses on a regular basis whether there are any indicators that the carrying value of its real estate assets may be impaired. Potential indicators may include an increase in vacancy at a property, tenant financial instability, change in the estimated holding period of the asset, the potential sale or transfer of the property in the near future and changes in economic conditions. An asset is determined to be impaired if the asset's carrying value is in excess of its estimated fair value and the Company estimates that its cost will not be recovered.
During the nine months ended September 30, 2023, the Company recognized aggregate impairment charges of $ 16,490 due to potential property sales. The Company recognized an impairment charge on real estate of $ 2,457 during the nine months ended September 30, 2022 due to vacancy at the property.

13

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(5) Fair Value Measurements
The following tables present the Company's assets and liabilities measured at fair value on a recurring and non-recurring basis as of September 30, 2023 and December 31, 2022, aggregated by the level in the fair value hierarchy within which those measurements fall:
Balance Fair Value Measurements Using
Description September 30, 2023 (Level 1) (Level 2) (Level 3)
Interest rate swap assets $ 13,844 $ — $ 13,844 $ —
Balance Fair Value Measurements Using
Description December 31, 2022 (Level 1) (Level 2) (Level 3)
Interest rate swap assets $ 16,318 $ — $ 16,318 $ —
The majority of the inputs used to value the Company's interest rate swaps fall within Level 2 of the fair value hierarchy, such as observable market interest rate curves; however, the credit valuation associated with the interest rate swaps utilizes Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties. As of September 30, 2023 and December 31, 2022, the Company determined that the credit valuation adjustment relative to the overall interest rate swaps was not significant. As a result, all interest rate swaps have been classified in Level 2 of the fair value hierarchy.
The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments, as of September 30, 2023 and December 31, 2022:
As of September 30, 2023 As of December 31, 2022
Carrying
Amount 		Fair Value Carrying
Amount 		Fair Value
Assets
Investment in a sales-type lease, net $ 62,887 $ 63,580 $ 61,233 $ 60,984
Liabilities
Debt $ 1,480,811 $ 1,273,011 $ 1,488,051 $ 1,293,239
The fair value of the Company's investment in a sales-type lease, net is primarily estimated utilizing Level 3 inputs by using a discounted cash flow analysis and an estimate of the unguaranteed residual value.
The fair value of the Company's debt is primarily estimated utilizing Level 3 inputs by using a discounted cash flow analysis, based upon estimates of market interest rates. The Company determines the fair value of its Senior Notes payable using market prices. The inputs used in determining the fair value of these notes are categorized as Level 1 due to the fact that the Company uses quoted market rates to value these instruments. However, the inputs used in determining the fair value could be categorized as Level 2 if trading volumes are low.
Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts.
Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable . The Company estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.

14

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(6) Investments in Non-Consolidated Entities
Below is a schedule of the Company's investments in non-consolidated entities:
Percentage Ownership at Investment Balance as of Equity in earnings (losses) of non-consolidated entities
Investment September 30, 2023 September 30, 2023 December 31, 2022 September 30, 2023 September 30, 2022
NNN MFG Cold JV L.P. ("MFG Cold JV") (1)
20 % $ 21,082 $ 26,592 $ ( 2,418 ) $ ( 1,243 )
NNN Office JV L.P. ("NNN JV") (2)
20 % 15,850 12,900 720 16,870
Etna Park 70, LLC (3)
90 % 13,297 12,975 ( 184 ) ( 101 )
Etna Park East LLC (4)
90 % 2,122 2,126 ( 141 ) ( 90 )
BSH Lessee L.P. (5)
25 % — 3,613 4,608 144
$ 52,351 $ 58,206 $ 2,585 $ 15,580
(1)    MFG Cold JV is a joint venture formed in 2021 that owns special purpose industrial properties formerly owned by the Company.
(2)    NNN JV is a joint venture formed in 2018 that owns office properties formerly owned by the Company. During 2023 and 2022, NNN JV sold one and three assets, respectively, and the Company recognized its share of aggregate gains on sale of $ 1,010 and $ 22,896 , respectively, within equity in earnings of non-consolidated entities within its unaudited condensed consolidated statements of operations.
(3)    Joint venture formed in 2017 with a developer entity to acquire a parcel of land. In the second quarter of 2023, the joint venture commenced development of a 250,020 square foot industrial speculative development project for an estimated cost of $ 29,200 . In July 2023, the Company, through a wholly-owned subsidiary entered into an agreement to fund all of the construction costs to complete the project until a point at which the portion of the improved land can be sub-divided and sold to the Company. As of September 30, 2023, the Company paid approximately $ 8,500 which is accounted for as a deposit on the anticipated purchase of the property. The deposit is included in other assets within the unaudited condensed consolidated balance sheet.
(4)    Joint venture formed in 2019 with a developer entity to acquire a parcel of land.
(5)    A joint venture investment which sold its sole single-tenant, net-leased asset in January 2023 and the Company recognized its share of the gain on sale of $ 4,791 within equity in earnings of non-consolidated entities within its unaudited condensed consolidated statements of operations.
The Company earns advisory fees from certain of these non-consolidated entities for services related to acquisitions, asset management and debt placement. Advisory fees earned from these non-consolidated investments for the nine months ended September 30, 2023 and 2022 were $ 3,328 and $ 4,263 , respectively.

(7) Debt
The Company had the following mortgages and notes payable outstanding as of September 30, 2023 and December 31, 2022:
September 30, 2023 December 31, 2022
Mortgages and notes payable $ 64,226 $ 73,154
Unamortized debt issuance costs ( 836 ) ( 1,051 )
Mortgage notes payable, net $ 63,390 $ 72,103
Interest rates, including imputed rates on mortgages and notes payable, ranged from 3.5 % to 4.3 %, at September 30, 2023 and December 31, 2022, respectively, and all mortgages and notes payable mature between 2023 and 2031 as of September 30, 2023. The weighted-average interest rate at September 30, 2023 and December 31, 2022 was approximately 4.0 %, respectively.
15

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The Company had the following senior notes outstanding as of September 30, 2023 and December 31, 2022:
Issue Date September 30, 2023 December 31, 2022 Interest Rate Maturity Date Issue Price
August 2021 $ 400,000 $ 400,000 2.375 % October 2031 99.758 %
August 2020 400,000 400,000 2.70 % September 2030 99.233 %
May 2014 198,932 198,932 4.40 % June 2024 99.883 %
998,932 998,932
Unamortized debt discount ( 2,910 ) ( 3,228 )
Unamortized debt issuance costs ( 5,704 ) ( 6,409 )
Senior notes payable, net $ 990,318 $ 989,295
Each series of the senior notes is unsecured and requires payment of interest semi-annually in arrears. The Company may redeem the notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus any potential make-whole premium.
The Company has an unsecured credit agreement with KeyBank National Association, as agent. The maturity dates and interest rates as of September 30, 2023, are as follows:

Maturity Date 		Interest Rate
$ 600,000 Revolving Credit Facility (1)
July 2026
SOFR + 0.85 %
$ 300,000 Term Loan (2)
January 2025
Term SOFR + 1.00 %
(1)    Maturity date of the revolving credit facility can be extended to July 2027, subject to certain conditions. The interest rate includes a 0.10 % adjustment. The interest rate spread ranges from 0.725 % to 1.400 %, and the revolving credit facility allows for further reductions upon the achievement of to-be-determined sustainability metrics. At September 30, 2023, the Company had no borrowings outstanding and availability of $ 600,000 , subject to covenant compliance.
(2)    The Term SOFR portion of the interest rate was swapped to obtain a current fixed rate of 2.722 % per annum. The aggregate unamortized debt issuance costs for the term loan was $ 666 and $ 1,041 as of September 30, 2023 and December 31, 2022, respectively.
The Company was compliant with all applicable financial covenants contained in its corporate-level debt agreements at September 30, 2023.
During 2007, the Company issued $ 200,000 original principal amount of Trust Preferred Securities. The Trust Preferred Securities, which are classified as debt, are due in 2037, are open for redemption at the Company's option and bear interest at a variable rate of three-month SOFR plus a 0.26 % adjustment plus a spread of 170 basis points through maturity. The interest rate at September 30, 2023 was 7.331 %. As of September 30, 2023 and December 31, 2022, there was $ 129,120 original principal amount of Trust Preferred Securities outstanding and $ 1,351 and $ 1,426 , respectively, of unamortized debt issuance costs. The variable rate transitioned from LIBOR to SOFR after June 30, 2023.
The Company capitalized $ 8,447 and $ 4,927 of interest expense for the nine months ended September 30, 2023 and 2022, respectively.


16

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(8) Derivatives and Hedging Activities
Risk Management Objective of Using Derivatives . The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk primarily by managing the type, amount, sources, and duration of its debt funding and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company's known or expected cash receipts and its known or expected cash payments principally related to the Company's investments and borrowings.
Cash Flow Hedges of Interest Rate Risk . The Company's objectives in using interest rate derivatives are to add stability to interest expense, to manage its exposure to interest rate movements and therefore manage its cash outflows as it relates to the underlying debt instruments. To accomplish these objectives, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy relating to certain of its variable rate debt instruments. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.
The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. The Company did not incur any ineffectiveness during the nine months ended September 30, 2023 and 2022.
During July 2022, the Company transitioned its four interest rate swap agreements with its counterparties to a benchmark rate of Term SOFR. The swaps were designated as cash flow hedges of the risk in variability attributable to changes in the Term SOFR swap rates on its $ 300,000 SOFR-indexed variable rate unsecured term loan. Accordingly, changes in fair value of the swaps are recorded in other comprehensive income (loss) and reclassified to earnings as interest becomes receivable or payable. The swaps expire coterminous with the maturity of the term loan in January 2025. During the next 12 months, the Company estimates that an additional $ 10,871 will be reclassified as a decrease in interest expense if the swaps remain outstanding.
As of September 30, 2023, the Company had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk:
Interest Rate Derivative Number of Instruments Notional
Interest Rate Swaps 4 $ 300,000
The table below presents the fair value of the Company's derivative financial instruments as well as their classification on the unaudited condensed consolidated balance sheets:
As of September 30, 2023 As of December 31, 2022
Derivatives designated as hedging instruments: Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Interest Rate Swaps Other Assets $ 13,844 Other Assets $ 16,318
17

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The table below presents the effect of the Company's derivative financial instruments on the unaudited condensed consolidated statements of operations for the nine months ended September 30, 2023 and 2022:
Derivatives in Cash Flow Amount of Gain
Recognized in OCI on Derivatives
September 30, 		Amount of (Income) Loss
Reclassified from Accumulated OCI into Income(1)
September 30,
Hedging Relationships 2023 2022 2023 2022
Interest Rate Swaps $ 5,029 $ 21,316 $ ( 7,503 ) $ 1,528
The Company's share of non-consolidated entity's interest rate cap 235 — ( 1,088 ) —
Total $ 5,264 $ 21,316 $ ( 8,591 ) $ 1,528
(1)    Amounts reclassified from accumulated other comprehensive income (loss) to interest expense within the unaudited condensed consolidated statements of operations.
Total interest expense presented in the unaudited condensed consolidated statements of operations, in which the effects of cash flow hedges are recorded was $ 32,502 and $ 32,758 for the nine months ended September 30, 2023 and 2022, respectively.
The Company's agreements with the swap derivative counterparties contain provisions whereby if the Company defaults on the underlying indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, then the Company could also be declared in default of the swap derivative obligation. As of September 30, 2023, the Company had not posted any collateral related to the agreements.

(9) Lease Accounting
Lessor
Operating Leases. The Company’s lease portfolio as a lessor primarily includes general purpose, single-tenant net-leased real estate assets. Most of the Company’s leases require tenants to pay fixed annual rental payments that escalate on an annual basis and variable payments for other operating expenses, such as real estate taxes, insurance, common area maintenance ("CAM"), and utilities, that are based on the actual expenses incurred.
Certain leases allow for the tenant to renew the lease term upon expiration or earlier. Periods covered by a renewal option are included within the lease term only when renewals are deemed to be reasonably certain. Certain leases allow for the tenant to terminate the lease before the expiration of the lease term and certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price upon expiration of the lease term or before.
Accounting guidance under ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease and determining the lease term when the contract has renewal, purchase or early termination provisions.
The Company analyzes its accounts receivable, customer creditworthiness and current economic trends when evaluating the adequacy of the collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectible, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis.

18

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
The Company elected that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service included within rental revenue is CAM services provided as part of the Company’s real estate leases. ASC 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. For the nine months ended September 30, 2023, the Company incurred a nominal amount of costs that were not incremental to the execution of leases. For the nine months ended September 30, 2022, the Company incurred $ 30 of costs that were not incremental to the execution of leases.
The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities . The Company does not have residual value guarantees on specific properties.
Sales-Type Leases. As of September 30, 2023, the Company had one lease that qualified as a sales-type lease.
The Company has one ground lease for a 100 -acre industrial development land parcel located in the Phoenix, Arizona market that is classified as a sales-type lease. At the commencement date of the lease, the Company evaluated the lease classification and classified the lease as a sales-type lease. The lease contains a purchase option in the amount of $ 20.00 per land square foot starting on the second anniversary date of the lease and ending on the third anniversary date. The Company determined that the purchase option is not reasonably certain of being exercised. The lease met the sales-type lease criteria because the present value of the lease payments was equal to substantially all of the fair value of the underlying asset on the lease commencement date. For the nine months ended September 30, 2023, the interest income earned from sales-type leases of $ 5,546 is included in rental revenue in the unaudited condensed consolidated statements of operations.
In 2022, the Company had one tenant that exercised the purchase option within their lease for an aggregate purchase option price of $ 28,000 . The purchase option was not reasonably certain to be exercised at the commencement date of the lease, resulting in a modification of the operating lease. As a result of this modification to the lease, the Company re-evaluated the lease classification and classified the lease as a sales-type lease. The Company recognized an aggregate of $ 9,314 in selling profit from sales-type leases in its unaudited condensed consolidated statements of operations related to this transaction for the nine months ended September 30, 2022. The Company also earned $ 639 in interest income from this sales-type lease in 2022.
Rental Revenue Classification. The following table presents the Company’s classification of rental revenue for its operating leases and sales-type lease for the three and nine months ended September 30, 2023 and 2022:
Three Months Ended September 30, Nine Months Ended September 30,
Classification 2023 2022 2023 2022
Fixed $ 68,849 $ 66,597 $ 205,984 $ 200,326
Sales-type lease income 1,865 359 5,546 639
Variable (1)
13,130 11,318 40,796 33,784
Total $ 83,844 $ 78,274 $ 252,326 $ 234,749
(1)    Primarily comprised of tenant reimbursements.

19

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Future fixed rental receipts for operating and sales-type leases, assuming no new or re-negotiated leases as of September 30, 2023 were as follows:
Operating Sales-Type
2023 - remainder $ 66,047 $ 1,307
2024 253,391 5,263
2025 235,340 5,473
2026 216,334 5,692
2027 180,019 5,920
2028 149,755 6,156
Thereafter 500,883 733,006
Total $ 1,601,769 $ 762,817
Difference between undiscounted cash flow and present value ( 699,866 )
Investment in a sales-type lease $ 62,951
The above minimum lease payments do not include reimbursements to be received from tenants for certain operating expenses and real estate taxes and do not include early termination payments provided for in certain leases, unless such payments are reasonably certain to be received.
Certain leases allow for the tenant to terminate the lease if the property is deemed obsolete, as defined, and upon payment of a termination fee to the landlord, as stipulated in the lease. In addition, certain leases provide the tenant with the right to purchase the leased property at fair market value or a stipulated price.
Lessee
The Company, as lessee, has ground leases, corporate leases for office space, and office equipment leases. All leases were classified as operating leases as of September 30, 2023. The leases have remaining lease terms of up to 37 years. Renewal periods are included in the lease term only when renewal is deemed to be reasonably certain. The lease term also includes periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise the termination option. The Company measures its lease payments by including fixed rental payments and variable rental payments that tie to an index or a rate, such as CPI. The Company recognizes lease expense for its operating leases on a straight-line basis over the lease term and variable lease expense not included in the lease payment measurement as incurred.
The accounting guidance under ASC 842 requires the Company to make certain assumptions and judgments in applying the guidance, including determining whether an arrangement includes a lease, determining the term of a lease when the contract has renewal or termination provisions and determining the discount rate.
The Company determines whether an arrangement is or includes a lease at contract inception by evaluating whether the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. If the Company has the right to obtain substantially all of the economic benefits from and can direct the use of, the identified asset for a period of time, the Company accounts for the contract as a lease.
The Company uses the information available at the lease commencement date to determine the discount rate for any new leases. The Company used a portfolio approach to determine its incremental borrowing rate. Lease contracts were grouped based on similar lease terms and economic environments in a manner in which the Company reasonably expects that the outcome from applying a portfolio approach does not differ materially from an individual lease approach. The Company estimated a collateralized discount rate for each portfolio of leases.
20

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Supplemental information related to operating leases is as follows:
Nine Months Ended
September 30, 2023 September 30, 2022
Weighted-average remaining lease term
Operating leases (years) 9.3 9.4
Weighted-average discount rate
Operating leases 4.1 % 4.0 %
The components of lease expense for the nine months ended September 30, 2023 and 2022 were as follows:
Income Statement Classification Fixed Variable Total
2023:
Property operating $ 2,657 $ 7 $ 2,664
General and administrative 1,144 215 1,359
Total $ 3,801 $ 222 $ 4,023
2022:
Property operating $ 2,657 $ — $ 2,657
General and administrative 1,144 81 1,225
Total $ 3,801 $ 81 $ 3,882
The Company recognized sublease income of $ 2,490 for the nine months ended September 30, 2023 and 2022, respectively.
The following table shows the Company's maturity analysis of its operating lease liabilities as of September 30, 2023:
Operating Leases
2023 - remainder $ 1,257
2024 5,199
2025 5,204
2026 4,174
2027 3,673
2028 1,061
Thereafter 6,440
Total lease payments 27,008
Less: Imputed interest ( 5,224 )
Present value of lease liabilities 21,784
Less: Held for Sale ( 515 )
Present value of lease liabilities, excluding held for sale $ 21,269
21

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)

(10) Allowance for Credit Loss
As of September 30, 2023, the Company had a $ 64 credit loss allowance resulting from an investment in a sales-type lease. There were no allowances for credit losses in 2022. The activity for the credit loss allowance related to the sales-type lease is as follows:
For the Nine Months Ended September 30, 2023
Balance at Beginning of Period Write-Offs General Allowance Balance at End of Period
Allowance for credit loss $ 93 $ — $ ( 29 ) $ 64
As of September 30, 2023, the lessee in the sales-type lease remains current on their obligations to the Company and, therefore, the investment is not on non-accrual status.
The following table details the investment in a sales-type lease as of September 30, 2023:
As of September 30, 2023
Amortized cost Allowance Net Investment Allowance as a % of Amortized Cost
Investment in a sales-type lease $ 62,951 $ ( 64 ) $ 62,887 0.10 %

(11) Concentration of Risk
The Company seeks to reduce its operating and leasing risks through the geographic diversification of its properties in target markets, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, 2023 and 2022, no single tenant represented greater than 10% of rental revenues.
Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Company believes it mitigates this risk by investing in or through major financial institutions.

(12) Equity
Shareholders' Equity:
At-The-Market Offering Program. The Company maintains an At-The-Market offering program ("ATM program") under which the Company can issue common shares, including through forward sales contracts.
During the nine months ended September 30, 2023 and 2022, the Company did not sell shares under the ATM program.
During the nine months ended September 30, 2022, the Company issued 3,649,023 common shares previously sold on a forward basis in the first quarter of 2021 on the maturity date of the contracts and received $ 38,492 of net proceeds. No shares were sold on a forward basis during the nine months ended September 30, 2023.

During 2021, the Company amended the terms of its ATM program, under which the Company may, from time to time, sell up to $ 350,000 of common shares over the term of the program. As of September 30, 2023, common shares with an aggregate value of $ 294,985 remain available for issuance under the ATM program.

22

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Stock Based Compensation. During the nine months ended September 30, 2023 and 2022, the Company issued 70,072 and 47,505 , respectively, of fully vested common shares to non-management members of the Company's Board of Trustees with a fair value of $ 714 and $ 616 , respectively.

Share Repurchase Program. In August 2022, the Company's Board of Trustees authorized the repurchase of up to an additional 10,000,000 common shares under the Company's share repurchase program, which does not have an expiration date. There were no common shares repurchased during the nine months ended September 30, 2023. During the nine months ended September 30, 2022, 11,702,074 common shares were repurchased and retired for an average price of $ 10.84 per share. As of September 30, 2023, 6,874,241 common shares remain available for repurchase under this authorization. The Company records a liability for repurchases that have not yet been settled as of the period end. There were no unsettled repurchases as of September 30, 2023.

Series C Preferred Stock. The Company had 1,935,400 shares of Series C Cumulative Convertible Preferred Stock (“Series C Preferred”) outstanding at September 30, 2023. The shares have a dividend of $ 3.25 per share per annum, have a liquidation preference of $ 96,770 , and the Company, if certain common share prices are achieved, can force conversion into common shares of the Company. As of September 30, 2023, each share was convertible into 2.4339 common shares. This conversion ratio may increase over time if the Company's common share dividend exceeds certain quarterly thresholds.

If certain fundamental changes occur, holders may require the Company, in certain circumstances, to repurchase all or part of their shares of Series C Preferred. In addition, upon the occurrence of certain fundamental changes, the Company will, under certain circumstances, increase the conversion rate by a number of additional common shares or, in lieu thereof, may in certain circumstances elect to adjust the conversion rate upon the shares of Series C Preferred becoming convertible into shares of the public acquiring or surviving company.
The Company may, at the Company's option, cause shares of Series C Preferred to be automatically converted into that number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion right only if, at certain times, the closing price of the Company's common shares equals or exceeds 125 % of the then prevailing conversion price of the Series C Preferred.
Holders of shares of Series C Preferred generally have no voting rights, but will have limited voting rights if the Company fails to pay dividends for six or more quarters and under certain other circumstances. Upon conversion, the Company may choose to deliver the conversion value to investors in cash, common shares, or a combination of cash and common shares.
A summary of the changes in accumulated other comprehensive income (loss) related to the Company's cash flow hedges is as follows:
Nine Months Ended September 30,
2023 2022
Balance at beginning of period $ 17,689 $ ( 6,258 )
Other comprehensive income before reclassifications 5,264 22,469
Amounts of (income) loss reclassified from accumulated other comprehensive income (loss) to interest expense ( 8,591 ) 1,557
Balance at end of period $ 14,362 $ 17,768
Noncontrolling Interests. In conjunction with several of the Company's acquisitions in prior years, sellers were issued limited partner interests in LCIF (“OP units”) as a form of consideration. All OP units, other than OP units owned by the Company, are redeemable for common shares at certain times, at the option of the holders, and are generally not otherwise mandatorily redeemable by the Company. The OP units are classified as a component of permanent equity as the Company has determined that the OP units are not redeemable securities as defined by GAAP. Each OP unit is currently redeemable for approximately 1.13 common shares, subject to future adjustments.
During the nine months ended September 30, 2023 and 2022, 9,944 and 33,378 common shares, respectively, were issued by the Company, in connection with OP unit redemptions, for an aggregate value of $ 49 and $ 177 , respectively.
23

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
As of September 30, 2023, there were approximately 731,000 OP units outstanding other than OP units owned by the Company. All OP units receive distributions in accordance with the LCIF partnership agreement. To the extent that the Company's dividend per common share is less than the stated distribution per OP unit per the LCIF partnership agreement, the distributions per OP unit are reduced by the percentage reduction in the Company's dividend per common share. No OP units have a liquidation preference.
The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests:
Net Income Attributable to
Shareholders and Transfers from Noncontrolling Interests
Nine Months Ended September 30,
2023 2022
Net income attributable to LXP Industrial Trust shareholders $ 15,782 $ 75,310
Transfers from noncontrolling interests:
Increase in additional paid-in-capital for redemption of noncontrolling OP units
49 177
Change from net income attributable to shareholders and transfers from noncontrolling interests
$ 15,831 $ 75,487


(13) Related Party Transactions
There were no related party transactions other than those disclosed elsewhere in these unaudited condensed consolidated financial statements.

(14) Commitments and Contingencies
In addition to the commitments and contingencies disclosed elsewhere, the Company has the following commitments and contingencies.
The Company is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. The Company, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries.
As of September 30, 2023, the Company had six ongoing consolidated development projects and expects to incur approximately $ 23,500 and $ 29,100 of costs during the remainder of 2023 and 2024, respectively, excluding noncontrolling interests' share, to substantially complete the construction and estimated tenant improvements and leasing costs of such projects. Etna Park 70, LLC, a joint venture in which the Company has a 90 % ownership interest, commenced construction of an industrial facility estimated to cost $ 29,200 . During the third quarter, the Company, through a wholly-owned subsidiary entered into an agreement to fund construction of the property until the land is subdivided. As of September 30, 2023, the Company expects to incur approximately $ 9,500 during the remainder of 2023 and 2024, respectively, to complete the development of the facility. As of September 30, 2023, the Company has interests in various industrial land parcels held for development. The Company is unable to estimate the timing of any required funding for the potential development projects on these parcels.
The Company and LCIF are parties to a funding agreement under which the Company may be required to fund distributions made on account of LCIF's OP units. Pursuant to the funding agreement, the parties agreed that, if LCIF does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount in accordance with the partnership agreement, LXP Industrial Trust will fund the shortfall. Payments under the agreement will be made in the form of loans to LCIF and will bear interest at prevailing rates as determined by the Company in its discretion but, no less than the applicable federal rate. LCIF's right to receive these loans will expire if no OP units remain outstanding and all such loans are repaid. No amounts have been advanced under this agreement.
24

LXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2023 and 2022
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
From time to time, the Company is directly or indirectly involved in legal proceedings arising in the ordinary course of business. Management believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Company's business, financial condition and results of operations.

(15) Supplemental Disclosure of Statement of Cash Flow Information
In addition to disclosures discussed elsewhere, during the nine months ended September 30, 2023 and 2022, the Company paid $ 36,990 and $ 33,430 , respectively, for interest and $ 975 and $ 1,218 , respectively, for income taxes.
During the nine months ended September 30, 2023 and 2022, the Company accrued additions for capital projects of $ 20,866 and $ 52,049 , respectively.

(16) Subsequent Events
Subsequent to September 30, 2023, the Company borrowed $ 25,000 on its revolving credit facility.


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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Introduction
Unless stated otherwise or the context otherwise requires, when we use the terms the “Company,” the “Trust,” “LXP,” “we,” “our,” and “us,” we refer collectively to LXP Industrial Trust and its consolidated subsidiaries. All of the Company's interests are held, and all of the property operating activities are conducted through special purposes entities, which we refer to as property owner subsidiaries or lender subsidiaries and are separate and distinct legal entities, but in some instances are consolidated for financial statement purposes and/or disregarded for income tax purposes. References herein to ‘‘this Quarterly Report” are to this Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2023. The results of operations contained herein for the three and nine months ended September 30, 2023 and 2022 are not necessarily indicative of the results that may be expected for a full year.
When we use the term “REIT,” we mean real estate investment trust. All references to 2023 and 2022, refer to the periods ending September 30, 2023 and 2022, respectively and our fiscal year ended December 31, 2022.
When we use the term “GAAP,” we mean United States generally accepted accounting principles in effect from time to time.
When we use the term “common shares,” we mean our shares of beneficial interest par value $0.0001, classified as common stock. When we use the term “Series C Preferred Shares,” we mean our beneficial interest classified as 6.50% Series C Cumulative Convertible Preferred Stock.
When we use the term “base rent,” we mean GAAP rental revenue and ancillary income, excluding billed tenant reimbursements and lease termination income.
When we use “Stabilized Portfolio,” we mean all real estate properties other than acquired or developed properties that have not achieved 90% occupancy within one-year of acquisition or substantial completion. Non-stabilized, substantially completed development projects are classified within investments in real estate under construction.
The following is a discussion and analysis of the unaudited condensed consolidated financial condition and results of operations of LXP Industrial Trust for the three and nine months ended September 30, 2023 and 2022, and significant factors that could affect its prospective financial condition and results of operations. This discussion should be read together with the accompanying unaudited condensed consolidated financial statements of the Company included herein and notes thereto and with the consolidated financial statements and notes thereto included in the Company's most recent Annual Report on Form 10-K, which was filed with the Securities and Exchange Commission, or SEC, on February 16, 2023, which we refer to as the Annual Report. Historical results may not be indicative of future performance.
Forward-Looking Statements . This Quarterly Report, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects,” “may,” “plans,” “predicts,” “will,” “will likely result” or similar expressions. Readers should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. In particular, among the factors that could cause actual results, performances or achievements to differ materially from current expectations, strategies or plans include, among others, those risks discussed below in “Management's Discussion and Analysis of Financial Condition and Results of Operations,” and under the headings “Risk Factors” in this Quarterly Report and under “Risk Factors” in Part I, Item A and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Annual Report and other periodic reports filed by the Company with the SEC. Except as required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Accordingly, there is no assurance that our expectations will be realized.

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Overview
As of September 30, 2023, we had equity ownership interests in approximately 115 consolidated real estate properties, located in 19 states and containing an aggregate of approximately 53.9 million square feet of space, approximately 99.0% of which was leased.
As of September 30, 2023, our portfolio consisted of 110 warehouse/distribution facilities and five other properties. Our warehouse/distribution portfolio is primarily focused in our target markets within the Sunbelt and Midwest. We expect to grow these markets by executing on our development pipeline and opportunistically acquiring facilities in these markets.
Third Quarter 2023 Transaction Summary .
The following summarizes our significant transactions during the three months ended September 30, 2023.
Leasing Activity:
• Entered into new and extended leases encompassing 0.8 million square feet, including leasing one speculative development project containing 0.3 million square feet, located in the Greenville-Spartanburg, South Carolina market. The average fixed rent on the extended lease was $6.19 per square foot compared to the average fixed rent on this lease before extension of $4.90 per square foot. The weighted-average tenant improvements and lease commissions was $1.61 per square foot for new leases.
Investments:
• Completed construction of the core and shell for one warehouse/distribution facility containing 0.1 million square feet in the Central Florida market.
• Invested an aggregate of $36.5 million in development activities, including $23.8 million in six ongoing consolidated development projects.
Capital recycling:
• Disposed of two office properties for an aggregate gross sale price of $48.1 million.
Acquisition/Development Activity:
During the nine months ended September 30, 2023, we acquired or completed and placed in service the following warehouse/distribution assets:
Market Square Feet Initial Capitalized Cost
(millions) 		Acquired/Placed in Service Date Approximate Lease Term
(years) 		% Leased
Phoenix, Arizona 392,278 $ 37.2 March 2023 10.0 100%
Dallas, Texas 124,450 15.0 July 2023 N/A —%
516,728 $ 52.2
Increased financing costs have slowed transaction activity and development starts in our target markets and the markets where we own properties. Proceeds from our dispositions are expected to be used to fund our development obligations and reduce leverage.
As of September 30, 2023, we had six consolidated development projects in process with an aggregate estimated total cost of $426.0 million. We anticipate our remaining funding obligation to substantially complete the construction and estimated tenant improvements and leasing costs of these six projects, exclusive of our joint venture partners' share, to be approximately $52.6 million. However, the risks associated with development, including supply chain issues, could adversely impact our estimates.
Critical Accounting Estimates
Our critical accounting estimates are included in Part II, “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company's Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to these estimates during the nine months ended September 30, 2023.
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Liquidity and Capital Resources
Cash Flows . We believe that cash flows from operations will continue to provide adequate capital to fund our operating and administrative expenses, regular debt service obligations and all dividend payments in accordance with applicable REIT requirements in both the short-term and long-term, however, our cash flow from operations may be negatively affected in the near term if we experience tenant defaults as a result of the effects of the current economic conditions. In addition, we anticipate that cash on hand, borrowings under our unsecured revolving credit facility, capital recycling proceeds, issuances of equity, mortgage proceeds and other debt, as well as other available alternatives, will provide the necessary capital required by our business.
At September 30, 2023, our property owner subsidiaries do not have mortgage maturities with balloon payments due until 2031. In addition, certain of our subsidiaries are obligated to fund the construction of our development projects and we sometimes guaranty these obligations. We believe our property owner subsidiaries have sufficient sources of liquidity to meet these obligations through future cash flows from operations, the credit markets and, if determined appropriate by us, a capital contribution from us from either cash on hand ($35.4 million at September 30, 2023), property sale proceeds and borrowing capacity under our unsecured revolving credit facility ($600.0 million at September 30, 2023, subject to covenant compliance).
Cash flows from operations were $153.5 million for the nine months ended September 30, 2023 as compared to $154.1 million for the nine months ended September 30, 2022. The decrease was primarily related to property sales, partially offset by the impact of cash flow generated from acquiring properties and stabilizing development assets. The underlying drivers that impact our working capital, and therefore cash flows from operations, are the timing of collection of rents, including reimbursements from tenants, payment of interest on debt and payment of operating and general and administrative costs. We believe the net-lease structure of the leases encumbering a majority of the properties in which we have an interest mitigates the risks of the timing of cash flows from operations since the payment and timing of operating costs related to the properties are generally borne directly by the tenant. The collection and timing of tenant rents are closely monitored by management as part of our cash management program.
Net cash used in investing activities totaled $46.5 million and $208.2 million during the nine months ended September 30, 2023 and 2022, respectively. Cash used in investing activities in 2023 related primarily to an acquisition, investments in real estate under construction, capital expenditures, lease costs, investments in non-consolidated entities and changes in real estate deposits, net. Cash used in investing activities primarily related to acquisitions and investments in real estate under construction offset by net proceeds received from the disposition of real estate and distributions from non-consolidated entities. During the nine months ended September 30, 2022, cash used in investing activities included additional acquisition and development activity when compared to 2023. Additional property sales in 2022 compared to 2023 generated more proceeds from sales than in 2023.
Net cash used in financing activities totaled $125.9 million and $107.5 million during the nine months ended September 30, 2023 and 2022, respectively. Cash used in financing activities in 2023 was primarily related to dividend and debt service payments, offset by revolving credit facility borrowings. Cash used in financing activities in 2022 was primarily related to the repurchase of common stock, the purchase of a noncontrolling interest and dividend and debt service payments, offset by common stock issuances and revolving credit facility borrowings.
At-The-Market Offering Program . We maintain an At-The-Market offering program ("ATM program") under which we can issue common shares, including through forward sales contracts.

We did not sell shares under the ATM program during the nine months ended September 30, 2023 and September 30, 2022, respectively.

During the nine months ended September 30, 2022, we settled 3.6 million common shares previously sold on a forward basis on the maturity date of the contract and received $38.5 million of net proceeds. No shares were sold on a forward basis during the nine months ended September 30, 2023.

In February 2021, we amended the terms of our ATM program, under which we may, from time to time, sell up to $350.0 million common shares over the term of the program. As of September 30, 2023, common shares with an aggregate value of $295.0 million remain available for issuance under the ATM program.

The volatility in the capital markets primarily resulting from the effects of the current economic conditions may negatively affect our ability to access the capital markets through our ATM program and other offerings.
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Share Repurchase Program. During 2022, our Board of Trustees authorized the repurchase of an additional 10.0 million common shares under our share repurchase program with no expiration date. We did not repurchase any common shares during the nine months ended September 30, 2023. During the nine months ended September 30, 2022, we repurchased and retired approximately 11.7 million common shares at an average price of $10.84 per share. Approximately 6.9 million common shares remained available for repurchase under the current authorization as of September 30, 2023. We, in the future, may repurchase our common shares in the context of our overall capital plan and to the extent we believe market volatility offers prudent investment opportunities based on our common share price versus net asset value per share.

Dividends. Dividends paid to our common and preferred shareholders were $114.0 million and $107.9 million in the nine months ended September 30, 2023 and 2022, respectively.
We declared a quarterly dividend of $0.125 per common share during the three months ended September 30, 2023, which is an increase of $0.005 per common share from the $0.12 per common share quarterly dividend declared during the three months ended September 30, 2022.
Operating Partnership. As of September 30, 2023, 0.7 million units of limited partner interests, or OP units, in our operating partnership, LCIF, were outstanding not including OP units held by us. Assuming all outstanding OP units not held by us were redeemed on such date, the estimated fair value of such OP units was $7.3 million based on our closing price of $8.90 per common share as of September 30, 2023 and a redemption factor of approximately 1.13 common shares per OP unit. We expect that LCIF will be merged with and into us as of December 31, 2023 and each outstanding OP unit, not including OP units held by us, will be converted into the right to receive our common shares on a 1 for 1.126 basis.
Financings. The following senior notes were outstanding as of September 30, 2023:
Issue Date Face Amount (millions) Interest Rate Maturity Date Issue Price
August 2021 $ 400.0 2.375 % October 2031 99.758 %
August 2020 400.0 2.70 % September 2030 99.233 %
May 2014 198.9 4.40 % June 2024 99.883 %
Senior note payable $ 998.9
Each series of senior notes is unsecured and requires payment of interest semi-annually in arrears. We may redeem the notes at our option at any time prior to maturity in whole or in part by paying the principal amount of the senior notes being redeemed plus any potential make-whole premium.
A summary of the maturity dates and interest rates of our unsecured credit agreement, as of September 30, 2023, are as follows:

Maturity Date 		Current
Interest Rate
$600.0 Million Revolving Credit Facility (1)
July 2026 SOFR + 0.85%
$300.0 Million Term Loan (2)
January 2025 Term SOFR + 1.00%
(1)    Maturity date of the revolving credit facility can be extended to July 2027 at our option, subject to certain conditions. The interest rate includes a 0.10% adjustment. The interest rate spread ranges from SOFR plus 0.725% to 1.40%. At September 30, 2023, we had no borrowings outstanding and availability of $600.0 million, subject to covenant compliance.
(2)    The Term SOFR portion of the interest rate was swapped to obtain a current fixed rate of 2.722%.

As of September 30, 2023, we were compliant with all applicable financial covenants contained in our corporate-level debt agreements.
We also have $129.1 million of outstanding Trust Preferred Securities that are due in 2037. The current interest rate is three-month SOFR plus a 0.26% adjustment plus a spread of 170 basis points.

Development Costs

As of September 30, 2023, we had six ongoing consolidated development projects and expect to incur approximately $23.5 million and $29.1 million of costs during the remainder of 2023 and 2024, respectively, excluding noncontrolling interests' share, to substantially complete the construction of such projects. Etna Park 70, LLC, a joint venture that we have a 90 %
29

ownership interest, commenced construction of an industrial facility estimated to cost $29.2 million. During the third quarter, through our wholly-owned subsidiary, we entered into an agreement to fund construction of the property until the land is subdivided and sold to us. As of September 30, 2023, we expect to incur approximately $9.5 million during the remainder of 2023 and 2024, respectively, to complete the development of the facility. As of September 30, 2023, we had three consolidated and two non-consolidated subsidiaries that owned land parcels held for industrial development. We are unable to estimate the timing of any required funding for potential development projects on these parcels.

Results of Operations
Three months ended September 30, 2023 compared with three months ended September 30, 2022 . The decrease in net income attributable to common shareholders of $10.7 million was primarily due to the items discussed below.
The increase in total gross revenues of $5.3 million was primarily due to an increase of $3.5 million in base rental revenue and a $2.0 million increase in tenant reimbursement income primarily due to acquisitions, properties placed in service and leasing, partially offset by a decrease in rental revenue due to property sales.
The increase in depreciation and amortization expense of $0.6 million was primarily due to properties acquired and/or completed and placed in service subsequent to September 30, 2022.
The increase in property operating expense of $0.7 million was primarily due to an increase in operating expense responsibilities at certain properties.
The decrease in impairment charges of $0.6 million was primarily related to the timing of impairment charges recognized on certain properties during the third quarter of 2022. There were no impairment charges during the third quarter of 2023.
The decrease in gains on sales of properties of $17.7 million was related to the timing of property dispositions.
The increase in equity in earnings (losses) of non-consolidated entities of $1.3 million was primarily due to recognizing our share of gains on sale of one property from the NNN Office JV L.P. in 2023 in the amount of $1.0 million. Additionally, in 2022, we recognized $0.7 million of losses due to property sales and impairment charges related to NNN Office JV L.P.
Nine months ended September 30, 2023 compared with nine months ended September 30, 2022 . The decrease in net income attributable to common shareholders of $59.6 million was primarily due to the items discussed below.
The increase in total gross revenues of $17.4 million was primarily due to an increase of $10.4 million in base rental revenue and a $7.2 million increase in tenant reimbursement income primarily due to acquisitions, properties placed in service and leasing, partially offset by property sales.
The increase in depreciation and amortization expense of $2.7 million was primarily due to properties acquired and/or completed and placed in service subsequent to January 1, 2022.
The increase in property operating expense of $3.4 million was primarily due to an increase in operating expense responsibilities at certain properties.
The decrease of $2.2 million in general and administrative expense is primarily related to a decrease of $2.6 million in costs incurred related to the Board of Trustees' strategic alternatives review and consulting costs related to shareholder activism in 2022. There were no consulting costs incurred related to shareholder activism during the nine months ended September 30, 2023.
The increase in impairment charges of $14.0 million was primarily related to the timing of impairment charges recognized on certain properties. The impairments in 2023 were taken on office assets primarily due to potential sales.
The decrease in gains on sales of properties of $37.9 million was related to the timing of property dispositions.
The decrease in selling profit from sales-type lease of $9.3 million is due to a tenant exercising its purchase option resulting in a change in lease classification from an operating lease to a sales-type lease in 2022 with no comparable transaction in 2023.
The decrease in equity in earnings (losses) of non-consolidated entities of $13.0 million was primarily due to the timing of property sales within our non-consolidated entities.
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Same-Store Results
Same-store net operating income, or NOI, which is a non-GAAP measure, represents the NOI for consolidated properties that were owned, included for the entirety of two comparable reporting periods. We define NOI as operating revenues (rental income (less non-cash GAAP rent adjustments, non-cash income related to sales-type leases and lease termination income, net), and other property income) less property operating expenses. As same-store NOI excludes the change in NOI from acquired and disposed of properties, it highlights operating trends such as occupancy levels, rental rates and operating costs on properties. Other REITs may use different methodologies for calculating same-store NOI, and accordingly same-store NOI may not be comparable to other REITs. Management believes that same-store NOI is a useful supplemental measure of our operating performance. However, same-store NOI should not be viewed as an alternative measure of our financial performance since it does not reflect the operations of our entire portfolio, nor does it reflect the impact of general and administrative expenses, acquisition-related expenses, interest expense, depreciation and amortization costs, other nonproperty income and losses, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, or trends in development and construction activities which are significant economic costs and activities that could materially impact our results from operations. We believe that net income is the most directly comparable GAAP measure to same-store NOI.
The following presents our consolidated same-store NOI, for the three and nine months ended September 30, 2023 and 2022 ($000's):
Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Total cash base rent $ 61,738 $ 59,637 $ 176,270 $ 169,634
Tenant reimbursements 12,200 10,000 33,852 28,566
Property operating expenses (12,595) (11,065) (35,322) (30,581)
Same-store NOI $ 61,343 $ 58,572 $ 174,800 $ 167,619
Our same-store NOI increased for the three and nine months ended September 30, 2023 compared to three and nine months ended September 30, 2022 by 4.7% and 4.3%, respectively, primarily due to an increase in cash base rents. As of September 30, 2023 and 2022, our same-store properties were 99.2% and 99.3% leased, respectively, for the three months and 99.5% and 99.8% leased, respectively, for the nine months.

31

Below is a reconciliation of net income to same-store NOI for periods presented ($000's):

Three Months Ended September 30, Nine Months Ended September 30,
2023 2022 2023 2022
Net income $ 12,901 $ 23,591 $ 16,436 $ 76,037
Interest and amortization expense 10,965 11,255 32,502 32,758
Provision for income taxes 220 271 646 951
Depreciation and amortization 45,570 44,946 137,304 134,645
General and administrative 8,614 9,060 26,866 29,093
Transaction costs — 1 4 56
Non-operating/advisory fee income (1,514) (1,630) (4,059) (4,616)
Gains on sales of properties (7,154) (24,841) (15,033) (52,951)
Impairment charges — 628 16,490 2,457
Selling profit from sales-type lease — — — (9,314)
Debt satisfaction losses, net — 119 — 119
Equity in (earnings) losses of non-consolidated entities 5 1,340 (2,585) (15,580)
Lease termination income, net — (238) — (238)
Straight-line adjustments (2,213) (2,078) (7,938) (8,893)
Lease incentives 109 128 314 391
Amortization of above/below market leases (449) (455) (1,347) (1,416)
Sales-types lease adjustments (556) 13 (1,654) —
NOI $ 66,498 $ 62,110 $ 197,946 $ 183,499
Less NOI:
Acquisitions, developments and dispositions (5,155) (3,538) (23,146) (15,880)
Same-Store NOI $ 61,343 $ 58,572 $ 174,800 $ 167,619


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Funds From Operations
We believe that Funds from Operations, or FFO, which is a non-GAAP measure, is a widely recognized and appropriate measure of the performance of an equity REIT. We believe FFO is frequently used by securities analysts, investors and other interested parties in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing perspective that may not necessarily be apparent from net income.
The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sales of certain real estate assets, gains and losses from change in control and impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. The reconciling items include amounts to adjust earnings from consolidated partially-owned entities and equity in earnings of unconsolidated affiliates to FFO.” FFO does not represent cash generated from operating activities in accordance with GAAP and is not indicative of cash available to fund cash needs.
We present FFO available to common shareholders and unitholders - basic and also present FFO available to all equityholders and unitholders - diluted on a company-wide basis as if all securities that are convertible, at the holder's option, into our common shares, are converted at the beginning of the period. We also present Adjusted Company FFO available to all equityholders and unitholders - diluted which adjusts FFO available to all equityholders and unitholders - diluted for certain items which we believe are not indicative of the operating results of our real estate portfolio. We believe this is an appropriate presentation as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate these measures in a similar fashion, these measures may not be comparable to similarly titled measures as reported by others. These measures should not be considered as an alternative to net income as an indicator of our operating performance or as an alternative to cash flow as a measure of liquidity.
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The following presents a reconciliation of net income attributable to common shareholders to FFO available to common shareholders and unitholders and Adjusted Company FFO available to all equityholders and unitholders for the three and nine months ended September 30, 2023 and 2022 (unaudited and dollars in thousands, except share and per share amounts):
Three Months Ended September 30, Nine Months Ended September 30,
FUNDS FROM OPERATIONS: 2023 2022 2023 2022
Basic and Diluted:
Net income attributable to common shareholders $ 11,039 $ 21,776 $ 10,878 $ 70,441
Adjustments:
Depreciation and amortization - real estate 44,596 44,227 134,484 132,600
Impairment charges - real estate, including our share of non-consolidated entities — 1,256 16,490 7,299
Noncontrolling interests - OP units 15 11 (63) 147
Amortization of leasing commissions 974 719 2,820 2,045
Joint venture and noncontrolling interest adjustment 1,839 2,612 6,168 8,585
Gains on sales of properties, including our share of non-consolidated entities (8,164) (24,842) (20,818) (75,803)
FFO available to common shareholders and unitholders - basic 50,299 45,759 149,959 145,314
Preferred dividends 1,573 1,573 4,718 4,718
Amount allocated to participating securities 52 41 186 151
FFO available to all equityholders and unitholders - diluted 51,924 47,373 154,863 150,183
Selling profit from sales-type lease (1)
— — — (9,314)
Allowance for credit losses 2 — (29) —
Debt satisfaction losses, net, including our share of non-consolidated entities — 119 — 1,614
Non-recurring costs (2)
— 640 4 2,629
Noncontrolling interest adjustments — — 1 —
Adjusted Company FFO available to all equityholders and unitholders - diluted $ 51,926 $ 48,132 $ 154,839 $ 145,112
Per Common Share and Unit Amounts
Basic:
FFO $ 0.17 $ 0.16 $ 0.52 $ 0.51
Diluted:
FFO $ 0.18 $ 0.17 $ 0.52 $ 0.52
Adjusted Company FFO $ 0.18 $ 0.17 $ 0.52 $ 0.50
Weighted-Average Common Shares:
Basic:
Weighted-average common shares outstanding - basic EPS 290,291,609 277,535,717 290,187,124 281,559,058
Operating partnership units (3)
825,342 846,858 828,653 859,226
Weighted-average common shares outstanding - basic FFO 291,116,951 278,382,575 291,015,777 282,418,284
Diluted:
Weighted-average common shares outstanding - diluted EPS 291,253,005 278,521,946 291,148,809 284,609,950
Unvested share-based payment awards — — — 23,175
Preferred shares - Series C 4,710,570 4,710,570 4,710,570 4,710,570
Weighted-average common shares outstanding - diluted FFO 295,963,575 283,232,516 295,859,379 289,343,695
(1) Gain recognized upon exercise of the tenant's purchase option in the lease.
(2) Includes costs related to transactions, strategic alternatives and shareholder activism.
(3) Includes OP units other than OP units held by us.
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Off-Balance Sheet Arrangements
As of September 30, 2023, we had investments in various real estate entities with varying structures. The real estate investments owned by our institutional joint ventures are generally financed with non-recourse debt. Non-recourse debt is generally defined as debt whereby the lenders' sole recourse with respect to borrower defaults is limited to the value of the assets collateralized by the debt. The lender generally does not have recourse against any other assets owned by the borrower or any of the members or partners of the borrower, except for certain specified exceptions listed in the particular loan documents. These exceptions generally relate to "bad boy" acts, including fraud, prohibited transfers and breaches of material representations, and environmental matters. We have guaranteed such obligations for certain of our non-consolidated entities with respect to $469.0 million of such non-recourse debt. We believe the likelihood of making any payments under such guaranties is remote and we generally have an agreement from each partner to reimburse us for its proportionate share of any liability related to a guarantee trigger unless such trigger is caused solely by us.
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ITEM 3. QUANTITATIVE AND QUALITATIVE
DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk relates primarily to our variable-rate indebtedness not subject to interest rate swaps and our fixed-rate debt. Our consolidated aggregate principal variable-rate indebtedness not subject to interest rate swaps was $129.1 million and $259.1 million, respectively, at September 30, 2023 and 2022, which represented 8.7% and 15.9%, respectively, of our aggregate principal consolidated indebtedness. During the three months ended September 30, 2023 and 2022, our variable-rate indebtedness had a weighted-average interest rate of 7.0% and 3.5%, respectively, and had the weighted-average interest rate been 100 basis points higher, our interest expense for the three months ended September 30, 2023 and 2022 would have increased by $0.4 million and $0.6 million, respectively. During the nine months ended September 30, 2023 and 2022, our variable-rate indebtedness had a weighted-average interest rate of 6.7% and 2.7%, respectively, and had the weighted-average interest rate been 100 basis points higher, our interest expense for the nine months ended September 30, 2023 and 2022 would have increased $1.4 million and $1.5 million, respectively. At each of September 30, 2023 and 2022, our aggregate principal consolidated fixed-rate debt was $1.4 billion, respectively, which represented 91.3% and 84.1%, respectively, of our aggregate principal indebtedness.

For certain of our financial instruments, fair values are not readily available since there are no active trading markets as characterized by current exchanges between willing parties. Accordingly, we derive or estimate fair values using various valuation techniques, such as computing the present value of estimated future cash flows using discount rates commensurate with the risks involved. However, the determination of estimated cash flows may be subjective and imprecise. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values, especially given the volatility of the current economic environment. The following fair value was determined using the interest rates that we believe our outstanding fixed-rate indebtedness would warrant as of September 30, 2023. We believe the fair value is indicative of the interest rate environment as of September 30, 2023, but this amount does not take into consideration the effects of subsequent interest rate fluctuations. Accordingly, we estimate that the fair value of our fixed-rate indebtedness was $1.2 billion as of September 30, 2023.

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our overall borrowing costs. To achieve these objectives, we manage our exposure to fluctuations in market interest rates through the use of fixed-rate debt instruments to the extent that reasonably favorable rates are obtainable with such arrangements. We may enter into derivative financial instruments such as interest rate swaps or caps to mitigate our interest rate risk on a related financial instrument or to effectively lock the interest rate on a portion of our variable-rate debt. As of September 30, 2023, we had four interest rate swap agreements (see Note 8 to our unaudited condensed consolidated financial statements contained in this Quarterly Report).

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures . Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as such terms are defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report to determine if such controls and procedures were effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management, including each of our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures were effective as of September 30, 2023.
Changes in Internal Control Over Financial Reporting . There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the fiscal quarter to which this Quarterly Report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on the Effectiveness of Controls . Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations. Internal control over financial reporting is a process that involves human diligence and compliance and is subject to lapses in judgment and breakdowns resulting from human failures. Internal control over financial reporting also can be circumvented by collusion or improper management override. Because of such limitations, there is a risk that material misstatements may not be prevented or detected on a timely basis by
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internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.
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PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
From time to time, we are directly and indirectly involved in legal proceedings arising in the ordinary course of our business, including claims by lenders under non-recourse carve-out guarantees. We believe, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on our business, financial condition and results of operations.

ITEM 1A. Risk Factors.
There have been no material changes in our risk factors from those disclosed in the Annual Report.

ITEM 2. Unregistered Sales of Equity Securities and Use of Proceeds.
The following table summarizes repurchases of our common shares/OP units during the three months ended September 30, 2023 pursuant to publicly announced repurchase plans (1) :
Period (a)
Total Number of Shares/Units Purchased 		(b)
Average Price Paid for Share/Unit
(c)
Total Number of Shares/Units Purchased as Part of Publicly Announced Plans or Programs (1)
(d)
Maximum Number of Shares/Units That May Yet Be Purchased Under the Plans or Programs (1)
July 1 - 31, 2023 — $ — — 6,874,241
August 1 - 31, 2023 — $ — — 6,874,241
September 1 - 30, 2023 — $ — — 6,874,241
Third quarter 2023 — $ — — 6,874,241

(1)    Share repurchase authorization of an additional 10.0 million common shares announced on August 4, 2022, which has no expiration date.
ITEM 3. Defaults Upon Senior Securities - not applicable.
ITEM 4. Mine Safety Disclosures - not applicable.
ITEM 5. Other Information
During the three months ended September 30, 2023, no trustee or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.


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ITEM 6. Exhibits.
Exhibit No. Description
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
—
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—
—
—
—
101.INS — XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document (2, 5)
101.SCH — Inline XBRL Taxonomy Extension Schema (2, 5)
101.CAL — Inline XBRL Taxonomy Extension Calculation Linkbase (2, 5)
101.DEF — Inline XBRL Taxonomy Extension Definition Linkbase Document (2, 5)
101.LAB — Inline XBRL Taxonomy Extension Label Linkbase Document (2, 5)
101.PRE — Inline XBRL Taxonomy Extension Presentation Linkbase Document (2, 5)

(1)    Incorporated by reference.
(2)    Filed herewith.
(3)    Furnished herewith. This exhibit shall not be deemed “filed” for purposes of Section 11 or 12 of the Securities Act of 1933, as amended (the “Securities Act”), or Section 18 of the Securities Exchanges Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of those sections, and shall not be part of any registration statement to which it may relate, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing or document.
(4)    Management contract or compensatory plan or arrangement.
(5)    The following materials from this Quarterly Report on Form 10-Q for the period ended September 30, 2023 are formatted in Inline XBRL (Extensible Business Reporting Language): (i) Unaudited Condensed Consolidated Balance Sheets of the Company; (ii) Unaudited Condensed Consolidated Statements of Operations of the Company; (iii) Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss) of the Company; (iv) Unaudited Condensed Consolidated Statements of Changes in Equity of the Company; (v) Unaudited Condensed Consolidated Statements of Cash Flows of the Company; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements of the Company, detailed tagged.
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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
LXP Industrial Trust
Date: October 31, 2023 By: /s/ T. Wilson Eglin
T. Wilson Eglin
Chief Executive Officer and President
(principal executive officer)
Date: October 31, 2023 By: /s/ Beth Boulerice
Beth Boulerice
Chief Financial Officer, Executive Vice President and Treasurer
(principal financial officer)




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TABLE OF CONTENTS
Part I. - Financial InformationItem 1. Financial StatementsItem 2. Management S Discussion and Analysis Of FinancialItem 3. Quantitative and QualitativeItem 4. Controls and ProceduresPart II - Other InformationItem 1. Legal ProceedingsItem 1A. Risk FactorsItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 3. Defaults Upon Senior Securities - Not ApplicableItem 4. Mine Safety Disclosures - Not ApplicableItem 5. Other InformationItem 6. Exhibits

Exhibits

3.1 Articles of Merger and Amended and Restated Declaration of Trust of the Company, dated December 31, 2006 (filed as Exhibit 3.1 to the Companys Current Report on Form 8-K filed January 8, 2007)(1) 3.2 Articles Supplementary Relating to the Reclassification of 8.05% Series B Cumulative Redeemable Preferred Stock, par value $0.0001 per share, and 7.55% Series D Cumulative Redeemable Preferred Stock, par value $0.0001 per share (filed as Exhibit 3.4 to the Company's Current Report on Form 8-K filed November 21, 2013)(1) 3.3 Articles of Amendment to the Amended and Restated Declaration of Trust, dated as of December 14, 2021 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed on December 16, 2021)(1) 3.4 Articles of Amendment to the Amended and Restated Declaration of Trust, dated as of May 26, 2022 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed on May 27, 2022)(1) 3.5 Third Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the Company's Quarterly Report on from 10-Q filed May 19, 2023)(1) 3.6 Sixth Amended and Restated Agreement of Limited Partnership of LCIF, dated as of December 30, 2013 (filed as Exhibit 3.25 to the Company's Annual Report on Form 10-K filed February 26, 2014)(1) 3.7 First Amendment to Sixth Amended and Restated Agreement of Limited Partnership of LCIF, dated as of July 12, 2021 (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K filed July 16, 2021)(1) 4.1 Specimen of Common Shares Certificate of the Company (filed as Exhibit 4.1 to the Companys Annual Report on Form 10-K for the year ended December 31, 2021)(1) 4.3 Amended and Restated Trust Agreement, dated March 21, 2007, among the Company, The Bank of New York Trust Company, National Association, The Bank of New York (Delaware), the Administrative Trustees (as named therein) and the several holders of the Preferred Securities from time to time (filed as Exhibit 4.1 to the Companys Current Report on Form 8-K filed March 27, 2007 (the 03/27/2007 8-K))(1) 4.4 Junior Subordinated Indenture, dated as of March 21, 2007, between Lexington Realty Trust and The Bank of New York Trust Company, National Association (filed as Exhibit 4.2 to the 03/27/07 8-K)(1) 4.5 Indenture, dated as of June 10, 2013, among the Company, certain subsidiaries of the Company signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed on June 13, 2013)(1) 4.6 First Supplemental Indenture, dated as of September 30, 2013, between the Company and U.S. Bank, as trustee (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K filed on October 3, 2013)(1) 4.7 Indenture, dated as of May 9, 2014, among the Company and U.S. Bank, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 13, 2014)(1) 4.8 First Supplemental Indenture, dated as of May 20, 2014, among the Company, LCIF and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed May 20, 2014)(1) 4.9 Second Supplemental Indenture, dated as of August 28, 2020, among the Company and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed August 28, 2020)(1) 4.10 Third Supplemental Indenture, dated as of August 30, 2021, among the Company and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K filed August 30, 2021)(1) 31.1 Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2) 31.2 Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002(2) 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3) 32.2 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002(3)