LXP Industrial Trust

Good morning and welcome to the Lexington Realty Trust first quarter 2020 earnings conference call and webcast. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the call over to Heather Gentry, Investor Relations. Please go ahead.

Thank you, Operator. Welcome to Lexington Realty Trust's first quarter 2020 conference call and webcast. The earnings release was distributed this morning, and both the release and quarterly supplemental are available on our website at www.lxp.com in the Investors section and will be furnished to the SEC on a Form 8-K. Certain statements made during this conference call regarding future events and expected results may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Lexington believes that these statements are based on reasonable assumptions. However, certain factors and risks including those included in today's earnings press release and those described in reports that Lexington files with the SEC from time to time could cause Lexington's actual results to differ materially from those expressed or implied by such statements. Except as required by law, Lexington does not undertake a duty to update any forward-looking statements. In the earnings press release and quarterly supplemental disclosure package, Lexington has reconciled all non-GAAP financial measures to the most directly comparable gap measure. Any references in these documents to adjusted company FFO refer to adjusted company funds from operations available to all equity holders and unit holders on a fully diluted basis. Operating performance measures of an individual investment are not intended to be viewed as presenting a numerical measure of Lexington's historical or future financial performance, financial position, or cash flows. On today's call, Will Eglin, Chairman and CEO, and Beth Boulerice, CFO, will provide a recent business update and commentary on first quarter results. Executive Vice Presidents Brendan Mullinix, Lara Johnson, and James Dudley will be available during the question and answer portion of our call. I will now turn the call over to Will.

Thanks, Heather. Good morning, everyone. First and foremost, we hope you and your families are staying safe and healthy during this unprecedented and challenging time. There are considerable uncertainties facing the global economy and some parts of the REIT industry, and we are working diligently in this environment to mitigate any potential impact on our business and take full advantage of new opportunities that we believe our company is so well positioned to act upon. The COVID-19 pandemic has created a few challenges, but our company is operating well and our portfolio performance has been extremely resilient. We acted early in March to ensure the safety and health of our employees by transitioning to a complete work from home arrangement. All in all, it has proven quite effective. In addition to smoothly moving to a virtual work environment, our employees have donated over $100,000 to charities and provided considerable financial assistance to help the family of one of our employees who lost both her father and husband in successive weeks. To me, there are no finer corporate citizens than ours, and I could not be prouder. A significant asset of our company is our longstanding relationships with our tenants, and our communications remain open and active. To date, we have fared extremely well with our consolidated cash base rent collections, with 99.8% of April rents collected and May rent collections are higher than at the same date in April. As expected, we have received rent relief requests from some of our tenants and we are amenable to deferring rent in the context of negotiating lease modifications that we believe may preserve or enhance value. Every situation is different with some tenants needing financial assistance and most others, in our view, being opportunistic in their requests. At quarter end, our overall portfolio was 97.2% leased, up slightly when compared to last quarter, and our weighted average lease term of 8.3 years is working in our favor in a defensive climate. We have minimal lease expirations for the remainder of 2020, with only 2.4% of our overall revenue subject to renewal, and our outlook on leasing outcomes in 2021 remain largely unchanged at this time. We will provide updates accordingly as the year progresses. We continue to focus on our core business objectives, and we are pleased to have completed the bulk of our transition to an industrial REIT. While we cannot estimate the full impact that COVID-19 will have on our overall business, we believe our risk is mitigated as a result of this transition, and our emphasis on warehouse and distribution facilities has generated strong shareholder returns relative to other sectors. In January and February, we purchased $195 million of high-quality industrial assets with a robust weighted average lease term of nine years. and strong submarkets of Chicago, Phoenix and Dallas. Subsequent to quarter end, we acquired an industrial property in Savannah for approximately $35 million, which was match funded through a small equity raise off of our ATM. Fortunately, we did not have substantial investment commitments in place at pre-pandemic valuations, and we have capital to invest at higher yields as a result.