LXP Industrial Trust Q4 FY2024 earnings call

• Investment activity: Sold remaining consolidated office assets, divested four industrial assets, and sold a ground lease property in Phoenix; redeployed proceeds into build-to-suit and Class A properties in Sunbelt markets. • Leasing: Completed 4.5 million square feet of volume, strong rental increases, same-store NOI growth of 5% in 2024, and 4.1% in Q4 2024. • Balance sheet: Capitalized on market window to execute interest rate swaps, locked in fixed rates on 97% of debt through 2026, reduced leverage to 5.9 times net debt to adjusted EBITDA. • Big box development leasing: Activity picked up, vacancies in big boxes expected to lease in 2025 with average mark-to-market of ~45%. • 2025 outlook: Cautiously optimistic, focus on resolving remaining vacancies, markets in Sunbelt and Lower Midwest have resilient fundamentals.

In the fourth quarter, total gross revenues were approximately $101 million. Adjusted company FFO in Q4 was $0.16 per diluted common share, and full-year 2024 adjusted company FFO was $0.64 per share. Leasing volume in the quarter was nearly 1 million square feet with base and cash-based rental increases of approximately 66% and 43% respectively. Same-store NOI increased 4.1% in Q4 compared to the same period in 2023. For 2025, same-store NOI growth is expected to be within 3%-4%. Revenue contribution from different segments isn't explicitly broken down by percentage in a way that's distinct, but leasing and investment activities are key components.

• 2025 adjusted company FFO guidance range: $0.61 to $0.65 per diluted common share, impacted by big box leasing, higher interest expense on term loans (all-in rate up from ~2.7% to ~4.3%), lower interest income, and less benefit from capitalization of interest. • Same-store NOI growth expected to be within 3%-4% in 2025, considering various leasing assumptions.

• Uncertainty in leasing outcomes, especially with remaining big box vacancies and potential lower tenant retention. • Impact of big box leasing on funds from operations. • Interest rate changes affecting interest expense and income. • Uncertain market environment with slow decision-making by tenants.

Q: Todd Thomas with KeyBanc Capital Markets asked about larger boxes, environment, and yield expectations.

A: James Dudley discussed increased activity in January, broad range of tenants interested, and Brendan Mullinix mentioned yield stabilization around 6% for remaining development pipeline.

Q: Vince Tibone with Green Street asked about competitive landscape for 1 million square foot development projects and near-term capital allocation.

A: James Dudley provided details on competition in markets like Greenville and Central Florida, and Will Eglin talked about focus on 12 target markets, build-to-suit, and working to reduce leverage to 5 times.

Q: James Kammert with Evercore ISI asked about guidance headwinds.

A: Beth Boulerice explained higher interest expense on term loans and reduced capitalized interest as factors contributing to lower end of guidance.

Q: Jyoti Yadav on for Mitch Germain asked about land bank and build-to-suit.

A: Brendan Mullinix stated focus remains on build-to-suit, with most activity in Phoenix land bank.