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LXP Industrial Trust (LXP)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 results were operationally steady with Adjusted Company FFO of $0.16/share flat year/year and quarter/quarter, while GAAP EPS rose to $0.12 on sizable property gains and leverage reduction from asset sales; portfolio occupancy improved to 96.8% and net debt/Adj EBITDA fell to 5.2x .
  • 2025 guidance tightened upward: net income per share raised to $0.25–$0.26 (from $0.13–$0.15 in Q2), and Adjusted Company FFO narrowed to $0.63–$0.64 (from $0.62–$0.64), reflecting accretion from a $175M sale of two vacant developments and subsequent $140M bond tender .
  • Capital allocation catalysts: 3.7% dividend hike to $0.14 (pre-split), a completed 1-for-5 reverse split, and deleveraging via partial tender of 6.75% 2028 notes; additional non-target asset sales (~$115M) are being marketed, potentially at low-6% caps .
  • S&P Global consensus vs prints: revenue and EBITDA were slightly below consensus; Primary EPS “actual” from S&P was negative vs negative consensus due to methodology differences, while company-reported GAAP EPS was positive on gains—REIT investors should anchor on FFO/AFFO ($0.16/share) . S&P Global values marked with “*” (see Estimates Context).

What Went Well and What Went Wrong

  • What Went Well

    • Balance sheet and occupancy inflection: net debt/Adj EBITDA improved to 5.2x; stabilized portfolio leased rose to 96.8% following the two-project sale and the earlier Greenville/Spartanburg lease-up . CEO: “The transaction…is approximately 6% accretive to earnings while reducing leverage to 5.2x…leading to increased occupancy of approximately 97% at quarter-end” .
    • Capital recycling at attractive valuations: sold two vacant developments for $175M (20% premium to book), driving ~$12M annual P&L tailwind (interest + opex savings), and repaid $140M of 2028 notes via tender; 3.7% common dividend increase .
    • Pricing power and rent growth intact: year-to-date same-store NOI +4.0% (Q3 +2.0%), average annual escalators up to 2.9%, and healthy mark-to-market on 2026–2030 expirations (management cites ~20% for 2026 remaining and ~30% on certain vacancies) .

  • What Went Wrong

    • Modest revenue/EBITDA under consensus and sequential revenue downtick: Q3 revenue $86.9M vs Q2 $87.7M; slight miss vs S&P Global revenue and EBITDA consensus (see tables) . S&P Global values marked with “*”.
    • Same-store NOI guide trimmed at the high end (now 3.0–3.5% from 3.0–4.0%) as move-outs take longer to backfill; vacancy mix created a Q3 drag despite robust escalators and renewals .
    • Near-term rollover and fixed renewals temper MTM upside in places (e.g., Nissan 2027 fixed renewals at 1.5% escalators), and some larger 2026 expirations are back-half weighted, prolonging conversion timelines .

Financial Results

Q3 2025 vs prior periods (GAAP and REIT metrics)

MetricQ3 2024Q2 2025Q3 2025
Total Gross Revenues ($M)$85.57 $87.72 $86.90
GAAP Diluted EPS ($)$0.02 $0.09 $0.12
Net Income to Common ($M)$4.69 $27.45 $34.62
Adjusted Company FFO/share ($)$0.16 $0.16 $0.16
Same-Store NOI YoY Growth—4.7% 2.0% (Q3); 4.0% YTD

Q3 2025 vs S&P Global consensus (per share and $M)

MetricConsensus (Q3 2025)Actual (Q3 2025)
Primary EPS ($)-0.052*-0.194*
Revenue ($M)87.11*86.90*
EBITDA ($M)61.15*60.17*

Values marked with * retrieved from S&P Global.

Margins and credit

MetricQ3 2024Q3 2025
Net Income Margin % (NI to common / Revenues)5.5% (4.689/85.57) 39.8% (34.616/86.90), boosted by $46.2M gains
EBITDA Margin % (S&P EBITDA/Revenue)—69.2% (60.17/86.90)*
Net Debt / Adjusted EBITDA (LTM)—5.2x

KPIs

KPIQ1 2025Q2 2025Q3 2025
Stabilized Portfolio % Leased93.3% 94.1% 96.8%
Avg Annual Rent Escalation——2.9%
Same-Store NOI YoY5.2% 4.7% 2.0% (quarter); 4.0% YTD
Leases Executed YTD (sq ft)1.1M extension noted 2.4M combined 2.9M combined; +30.8% Base / +30.1% Cash Base on 2nd gen
Cash$70.9M $71.0M $229.7M
Debt (GAAP)$1.49B $1.44B $1.49B; WA rate 3.9%

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net Income per diluted share (pre-split)FY 2025$0.13–$0.15 (7/30/25) $0.25–$0.26 (10/30/25) Raised
Adjusted Company FFO per share (pre-split)FY 2025$0.62–$0.64 (7/30/25) $0.63–$0.64 (10/30/25) Tightened up
Same-Store NOI GrowthFY 20253.0–4.0% (prior commentary) 3.0–3.5% Narrowed lower high end
Common DividendQuarterly$0.135 (pre-split) $0.14 (pre-split); +3.7% Raised
Capital Actions2025—Repurchase $140M of 6.75% 2028s via tender; ~75% proration Executed

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1–Q2 2025)Current Period (Q3 2025)Trend
Portfolio occupancy & new leasingQ1: lease extensions (1.1M sf), 93.3% stabilized leased ; Q2: 1.1M sf Greenville leased, 94.1% stabilized 96.8% stabilized; post-quarter 1.1M sf of renewals/new; Indy 380k sf 10-yr at +34% rent Improving occupancy; healthy renewals
Deleveraging & capital recyclingQ1: $50M term loan paydown ; Q2: TPS repurchase, asset sale $175M sale at 20% premium; $140M tender; net debt/Adj EBITDA 5.2x Accelerated deleveraging
Same-store NOIQ1: +5.2% ; Q2: +4.7% +2.0% in Q3; 2025 guide 3–3.5% (from 3–4%) Moderating near-term on vacancy timing
Rent escalators & MTM—Avg escalators 2.9%; 2026 MTM ~20% remaining; ~30% on certain move-outs Positive pricing power
External growth vs redevelopmentsQ2: selective acquisitions (1031), redevelopment starts Focus on build-to-suit/spec within land bank; acquisitions opportunistic; marketing ~$115M for sale Disciplined, recycle to core
Data center optionality (Phoenix land)—Exploring power options; watching market tightening Optionality improving

Management Commentary

  • CEO Will Eglin on accretive sale and balance sheet: “The gross sale price of $175 million represents a 20% premium… and is approximately 6% accretive to earnings while reducing leverage to 5.2x net debt to Adjusted EBITDA… leading to increased occupancy of approximately 97% at quarter-end” .
  • CFO Nathan Brunner on P&L impact and guidance: “Interest and property operating cost savings total approximately $12 million per year or $0.04 per share, which represents 6% accretion versus our adjusted company FFO in the third quarter… we increased the midpoint and tightened the range of our 2025 adjusted company FFO guidance to $0.63 to $0.64” .
  • CEO on strategy: focus on 12 target markets, bulk logistics, and land bank for build-to-suit/spec as demand and absorption improve across Sunbelt and lower Midwest markets .

Q&A Highlights

  • Capital deployment: Management prioritizes internal growth (contractual escalators, occupancy gains) and build-to-suit; acquisitions only to manage taxes or where highly accretive .
  • Dispositions pipeline: ~$115M of non-target assets marketed; potential low-6% cap rates; could close by year-end .
  • Lease rollovers and MTM: 2026 remaining expirations projected ~20% MTM; subsequent events reduced 2026 ABR at-risk to ~8.5%; retention ~80% expected; some fixed renewals (e.g., Nissan in 2027 at 1.5% escalators) weigh on headline MTM .
  • Same-store NOI guide: narrowed to 3–3.5% reflecting time to convert vacancies; no bad debt; rent collections intact .
  • Phoenix data center optionality: pursuing power solutions; conventional warehouse fundamentals tightening; optionality preserved .

Estimates Context

  • S&P Global consensus comparison indicates slight misses on revenue and EBITDA and a larger negative Primary EPS “actual” vs consensus; these EPS figures differ materially from company GAAP EPS due to REIT accounting (depreciation and exclusion/inclusion of gains). REIT investors typically anchor on FFO/AFFO; LXP posted Adjusted Company FFO of $0.16/share in Q3, flat YoY . S&P Global values marked with “*” in the tables; Values retrieved from S&P Global.

Key Takeaways for Investors

  • The $175M development sale and $140M bond tender were high-quality de-risking moves: leverage improved to 5.2x and occupancy to ~97%, with ~6% earnings accretion cited by management—supportive for multiple/credit and dividend sustainability .
  • Core operating momentum remains resilient: same-store NOI +4.0% YTD; escalators at 2.9%; 2026–2030 expirations carry attractive MTM potential even factoring fixed renewals .
  • Guidance reset is constructive: GAAP EPS guided up sharply and FFO per share tightened higher, implying confidence in the P&L impact of capital recycling and leasing .
  • Near-term watch items: conversion of Q2/Q3 vacancies, pace of non-target dispositions (pricing low-6% caps), and execution on 2026 back-half-heavy roll .
  • Capital returns and optics: dividend raised 3.7%; reverse split completed; tender reduced higher-coupon debt—these are incremental catalysts for sentiment and indexability screens .
  • For trading: expect the narrative to focus on deleveraging/occupancy beats and accretion from asset sales vs minor consensus misses on revenue/EBITDA. Stock moves likely key off incremental leasing updates and asset sale proceeds/uses .