LXP
#Right now, we're not looking at that, to be perfectly frank.
The debt maturities over the next couple of years on a secured basis just aren't that significant and we don't see a reason to build up leverage and the cash position for a bond offering when we're still in the process of doing our dispositions.
Between dispositions and cash flow from ops, our mortgages are covered I think quite comfortably in the next couple of years.
If you assume that the New York City land portfolio is sold, the weighted average lease term in the portfolios is about 8.6 years.
Of that $12.3 million, the New York City land deals are $7.6 million of it.
Well, it's principally based on underwriting the credit of the lease.
In other words, this was a credit tenant lease financing where the lenders were essentially buying that bond-like stream of rent.
So the way I would explain it, <UNK>, is if you looked at the IRR of the transaction without factoring in any residual value, our return just from the lease itself, add our construction cost, it was about 6.1%.
But we were able to monetize that stream at a 20-year fixed interest rate of 4.04% because the lenders were essentially investing in the transaction and looking at it specifically as a Dow Chemical bond versus a mortgage on a piece of real estate.
And even after debt service on the facility, the monthly cash flow to us is about $15,000 to $18,000 per month.
Most of it, obviously, most of the rent will be going to debt service.
The value of our lease increased substantially during the construction period and that was reflected in the financing that we were able to get.
About 4.1%, yes.
We acquired it about a year later and, as a result, we were able to get over 90% loan to value financing on the second transaction.
And on the first transaction, we leveraged it at about 70% loan to value.
So it was really the value of the leverage that drove the cap rate on that compared to our expectation for the other three parcels.
Yes.
The model has them being sold at the end of the third quarter, yes.
Some of them do.
We list out on the property chart, <UNK>, that's found on page 30, we list out which ones are levered.
On Roche and Transocean, we hold those free and clear, if that was the question.
So, in 2016, we have the Memphis property that has a mortgage due on it.
So none of our 2017 office roll-overs have mortgages on them.
Morning.
For the remainder.
Well for the six months, we have spent ---+ yes, it's coming in a little less, but it really depends on how much the leasing activity may be ramping up in the six months.
It is a little less than what we said.
Well, in the first half of the year, actually in the last quarter, we had two tenants reimburse us for TIs that we had put out prior in the year, so it was about $2.6 million of cash that we received back.
So that kind of has lowered the amount of TIs and lease commissions we expect to spend for the year because we got the reimbursement.
No, no credit issues.
It was the United States government.
They decided to pay back the TIs instead paying rent on it.
But no, I did not expect that when I did the modeling.
Thank you.
Could you repeat the question.
I didn't hear you.
No, I mean, we enter into maximum guarantee contracts.
The leases are, all the properties were fully leased prior to our taking any type of responsibility, so we feel we're covered pretty well from a construction standpoint.
We use reputable builders, reputable developers, in many cases we'll have bonds, we'll have personal guarantees.
So we're not taking, there's no spec building and we don't feel we're taking any excessive risk.
Well, the investments were opportunistic for us and we will have done well with them and, at the same time, by selling them, we'll end up shedding a lot of leverage from the balance sheet, which I think should work well for the share price.
So there's nothing that we are contemplating that has a similar economic profile going forward.
Multi-tenant from a revenue standpoint is down to less than 3%.
It's 2.8% through the six months.
I would say that those companies that have sort of a unique focus on one specific asset type or niche are not especially competitive to us.
But look, our net lease sector has become very large over the last three or four years, so it is a more competitive landscape in general.
Sure.
Our commentary around the dividend has been consistent this year, which is that we've been managing the Company with a view toward reviewing the dividend sometime in the later half of the year with a bias toward increasing it.
Thanks to all of you again for joining us this morning.
We were very pleased with our results in the second quarter and we continue to be excited about the progress we've made year-to-date and our prospects for good execution through year-end.
We continue to appreciate your participation and support.
If you would like to receive our quarterly supplemental package, please contact <UNK> <UNK> or you can find additional information on our Company at our website, www.lxp.com, and in addition, as always, you may contact me or the other members of our Senior Management Team with any questions.
Thanks again and have a good day.
