LXP Industrial Trust Q3 FY2025 earnings call

• The transformative sale of two vacant development projects provided immediate earnings accretion and materially reduced leverage. - Aggregate gross sale price of $175 million was a 20% premium to gross book value. - Net proceeds used to repay senior notes improved balance sheet. - Acquired an Atlanta market industrial facility for $30 million. - Announced an annualized dividend increase of $0.02 per share to $0.56 per share on a pre-split basis. - Same-store NOI grew 4% year-to-date and 2% in the third quarter; narrowed full year 2025 same-store NOI growth guidance to 3% to 3.5%.

LXP Industrial Trust had a strong third quarter. The sale of two vacant million square foot development projects in Central Florida and Indianapolis to a user buyer was transformative. Aggregate gross sale price was $175 million, a 20% premium to gross book value. Net proceeds of $151 million were used to repay $140 million of senior notes. Acquired an approximately 157,000 square foot Class A industrial facility in the Atlanta market for $30 million. Target markets (12 in Sunbelt and select lower Midwest states) account for approximately 85% of gross assets. Third quarter market fundamentals improved with target markets outperforming the broader market, contributing significantly to net absorption.

• Revised 2025 adjusted company FFO guidance to $0.63 to $0.64 per share, reflecting accretive impact from sale of development projects and debt repayment. - Narrowed full year 2025 same-store NOI growth guidance to 3% to 3.5%. - Anticipate around 80% retention in occupancy in 2026 and have visibility on lease expirations, with majority in the back half of the year.

• Uncertainty in the disposition timeline of non-target market assets, with $115 million of assets currently being marketed. - Potential impact of fixed rate renewals on mark-to-market outcomes. - Market demand changes could affect asset operation and leasing.

Q: Jon Petersen asked about decision-making on deploying capital for external growth, whether acquisitions or development.

A: T. Wilson Eglin said internal growth is strong with contractual rent escalations, etc., external growth focused on build-to-suit, with possible modest spec development in land bank if tenant demand continues strong, and acquisitions not a current focus but may purchase like the Atlanta asset if tax gain managed.

Q: Todd Thomas inquired about non-target market assets marketing, timeline and disposition cap rate.

A: T. Wilson Eglin said 4 buildings are being marketed, likely to close in December 2025, cap rate low 6s with overall plan landing in 5.5% - 5.75%.

Q: Todd Thomas asked about same-store NOI guidance and mark-to-market in 2026.

A: James Dudley projected about 20% mark-to-market for 2026 remaining lease expirations; Nathan Brunner noted contractual rent escalator near 3%, 2026 expirations at 8.5% ABR with good prospects and Greenville asset to benefit in 2026.

Q: Mitch Germain asked about same-store results and move-outs.

A: Nathan Brunner said delta in same-store between Q2 and Q3 was due to move-outs at end of Q2 and during Q3, with top line contractual rent escalators and renewals/new leasing contributing ~4.75% positive and occupancy drag ~2.7%, Greenville asset would have added 1.8% positive if in pool.

Q: Vince Tibone followed up on same-store NOI guidance.

A: Nathan Brunner said full year guidance was narrowed at high end from 4% to 3.5% as high end required more leasing conversion which hasn't materialized yet but activity is good.

Q: James Kammert asked about Phoenix land and Nissan expirations.

A: Brendan Mullinix said interested in Phoenix data center market exploring power access for development; Nathan Brunner said Nissan's two large expirations in 2027 have 1.5% escalator.