lex8k.htm
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549

FORM 8-K

Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 10, 2007

LEXINGTON REALTY TRUST
(Exact Name of Registrant as Specified in Its Charter)
 
 
 
Maryland
1-12386
13-3717318
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer Identification Number)
 
THE LEXINGTON MASTER LIMITED PARTNERSHIP
(Exact Name of Registrant as Specified in Its Charter)
     
Delaware
0-50268
11-3636084
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer Identification Number)

One Penn Plaza, Suite 4015, New York, New York
10119-4015
(Address of Principal Executive Offices)
(Zip Code)

(212) 692-7200
(Registrant's Telephone Number, Including Area Code)

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligations of the registrant under any of the following provisions

___           Written communications pursuant to Rule 425 under the Securities Act (17 CFT|R 230.425)

___           Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
___           Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
___           Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 
Item 1.01. Entry into a Material Definitive Agreement.
 
On August 10, 2007, Lexington Realty Trust (the “Trust”), through The Lexington Master Limited Partnership (the “Partnership”) and LMLP GP LLC, a wholly-owned subsidiary of the Partnership (“LMLP GP”), entered into a limited partnership agreement of Net Lease Strategic Assets Fund L.P. (the “Co-Investment Program”), dated as of August 10, 2007 (the “Partnership Agreement”), among LMLP GP, as the general partner, the Partnership, as a limited partner, and Inland American (Net Lease) Sub, LLC (“Inland”), a wholly-owned subsidiary of Inland American Real Estate Trust, Inc.
 
The Co-Investment Program was formed to invest in specialty single-tenant net leased assets in the United States.
 
In connection with the formation of the Co-Investment Program, the Partnership agreed to contribute six single tenant net leased assets to the Co-Investment Program pursuant to a contribution agreement, dated as of August 10, 2007 (the “Contribution Agreement”).
 
Also, in connection with the formation of the Co-Investment Program, the Trust and certain of its subsidiaries agreed to sell and the Co-Investment Program agreed to purchase, 47 primarily single tenant net leased assets pursuant to a purchase and sale agreement, dated as of August 10, 2007 (the “Purchase Agreement”).
 
The contribution of the six assets and the purchase and sale of the 47 assets, values the 53 assets at approximately $940.0 million.  The table below contains selected information about the 53 assets.  Upon the closing of the acquisition of the 53 assets, the Partnership and Inland will make initial capital contributions to the Co-Investment Program, with the Partnership’s initial capital contribution consisting of cash and the six previously mentioned assets, so that the Partnership and Inland will have percentage interests in the Co-Investment Program of 15% and 85%, respectively.
 
The acquisition of each of the 53 assets by the Co-Investment Program is subject to satisfaction of conditions precedent to closing, including obtaining financing on certain terms, obtaining certain consents and waivers, the continuing financial solvency of the tenants, certain other customary conditions, and, in the case of one asset, the acquisition of the asset by the Trust.  Accordingly, neither the Trust nor the Partnership can provide any assurance that the acquisition by the Co-Investment Program will be completed. In the event that the Co-Investment Program does not acquire any of the 53 assets by March 1, 2008, the Co-Investment Program will be terminated.
 
In addition to the initial capital contributions, the Partnership and Inland intend to invest an additional $22.5 million and $127.5 million, respectively, in the Co-Investment Program to acquire additional specialty single-tenant net leased assets.  Assuming mortgage financing of 70% of acquisition cost, the Co-Investment Program will acquire up to $1.4 billion of assets when, and if, fully funded.
 
Inland and the Partnership are entitled to a return on their respective investments equal to 9% per annum, with Inland’s return having a priority over the Partnership’s return. Following, the 9%
 
per annum, Inland and the Partnership are entitled to a return of the capital each invested, with Inland’s return of capital having a priority over the Partnership’s return of capital.  Once all capital has been returned, the Partnership will receive certain incentive distributions.
 
The Partnership Agreement provides each partner with a right of first offer for transfers if either the Partnership or Inland desires to sell its interest in the Co-Investment Program or cause the Co-Investment Program to sell a certain asset.  In addition, the Partnership Agreement contains a buy/sell arrangement in the event either the Partnership or Inland desires to buy the other partner’s interest in the Co-Investment Program or sell its interest in the Co-Investment Program.
 
The Trust’s wholly-owned taxable real estate investment trust subsidiary, Lexington Realty Advisors, Inc. (“LRA”), has entered into a management agreement with the Co-Investment Program whereby LRA will receive (1) a partnership management fee of 0.375% of the equity capital, (2) a property management fee of up to 3.0% of actual gross revenues from certain assets for which the landlord is obligated to provide property management services (contingent upon the recoverability under the applicable lease), and (3) an acquisition fee of 0.5% of the gross purchase price of each acquired asset by the Co-Investment Program under the terms of the Partnership Agreement.
 
The foregoing description is qualified in its entirety by reference to the Partnership Agreement, the Contribution Agreement, the Purchase Agreement and the Management Agreement, which are respectively attached as Exhibit 10.1, 10.2 and 10.3 to this Current Report on Form 8-K.
 
 
 
 
Property Location
 
 
 
Tenant/(Guarantor)
 
Net
Rentable
Square
Feet
 
Current
Term Lease Expiration
 
Estimated
2008 Cash
Rent, Base
(000s)
Mortgage
Balance at
June 30, 2007
 (000s)
5201 W. Barraque Street
Pine Bluff, Arkansas
Entergy Services, Inc.
27,189
10/31/2010
$192
--
19019 North 59th Avenue
Glendale, Arizona
Honeywell, Inc.
252,300
07/15/2011
2,452
$14,179
8555 South River Parkway
Tempe, Arizona
ASM Lithography Holding NV
95,133
06/30/2013
2,242
13,430
2005 East Technology Circle
Tempe, Arizona
(i)Structure, LLC (Infocrossing, Inc.)
60,000
12/31/2025
1,128
8,367
1440 East 15th Street
Tucson, Arizona
Cox Communications, Inc.
28,591
09/30/2016
465
2,280
10419 North 30th Street
Tampa, Florida
Time Customer Service, Inc. (Time, Inc.)
132,981
07/31/2010
1,573
7,997
2500 Patrick Henry Parkway
McDonough, Georgia
Georgia Power Company
111,911
06/30/2015
1,464
12,288
Westbridge Business Park
McDonough, Georgia (1)
Litton Loan Servicing LP (Credit—Based Asset Servicing and Securitization LLC)
62,000
08/31/2017
1,100
--
3265 East Goldstone Drive
Meridian, Idaho
Voicestream PCS II Corporation
(T-Mobile USA, Inc.)
77,484
06/28/2019
1,227
10,156
9601 Renner Boulevard
Lenexa, Kansas
Voicestream PCS II Corporation
(T-Mobile USA, Inc.)
77,484
11/01/2019
1,248
10,391
 
 
70 Mechanic Street
Foxboro, Massachusetts
Invensys Systems, Inc.
(Siebe, Inc.)
251,914
07/01/2014
2,991
14,182
First Park Drive
Oakland, Maine
Omnipoint Holdings, Inc.
(T-Mobile USA, Inc.)
78,610
08/31/2020
1,240
10,300
12000 & 12025 Tech Center Dr.
Livonia, Michigan
(Kelsey-Hayes Company
180,230
04/30/2014
1,957
10,532
3943 Denny Avenue
Pascagoula, Mississippi
Northrop Grumman Systems Corporation
94,841
10/31/2013
655
--
11707 Miracle Hills Drive
Omaha, Nebraska
(i)Structure, LLC (Infocrossing, Inc.)
86,800
11/30/2025
1,167
8,859
29 South Jefferson Road
Whippany, New Jersey
CAE SimuFlite, Inc.
76,363
11/30/2021
2,291
16,764
3201 Quail Springs Pkwy.
Oklahoma City, Oklahoma (2)
AT&T Wireless Services, Inc./
Jordan Associates
128,500
11/30/2010
685
14,749
2999 SW 6th Street
Redmond, Oregon
Voicestream PCS I LLC
 (T-Mobile USA, Inc.)
77,484
01/31/2019
1,435
9,678
265 Lehigh Street
Allentown, Pennsylvania
Wachovia
71,230
10/31/2010
248
--
420 Riverport Road
Kingsport, Tennessee
American Electric Power
42,770
06/30/2013
390
--
2401 Cherahala Boulevard
Knoxville, Tennessee
Advance PCS, Inc.
59,748
05/31/2013
900
5,054
1401 & 1501 Nolan Ryan Pkwy.
Arlington, Texas
Siemens Dematic Postal Automation, L.P.
236,547
01/31/2014
2,385
21,012
601 & 701 Experian Pkwy.
Allen, Texas
Experian Information Solutions, Inc.
(TRW Inc.)
292,700
10/15/2010
3,624
30,582
1200 Jupiter Road
Garland, Texas (3)
Raytheon Company
278,759
05/31/2011
911
--
2529 West Thorne Drive
Houston, Texas
Baker Hughes, Inc.
65,500
09/27/2015
810
7,218
26410 McDonald Road
The Woodlands, Texas
Montgomery County Management Company LLC
41,000
10/31/2019
718
7,500
3711 San Gabirel
Mission, Texas
Voicestream PCS II Corporation (T-Mobile USA, Inc.)
75,016
06/30/2015
900
6,359
12645 W. Airport Road
Sugar Land, Texas
Baker Hughes, Inc.
165,836
09/27/2015
1,952
16,372
11555 University Blvd.
Sugar Land, Texas
KS Management Services, LLP (St. Luke’s Episcopal Health System Corporation)
72,683
11/30/2020
1,114
9,812
1600 Eberhardt Road
Temple, Texas
Nextel of Texas
108,800
01/31/2016
1,523
8,820
6455 State Hwy 303 NE
Bremerton, Washington
Nextel West Corporation
 
60,200
05/14/2016
1,085
6,519
109 Stevens Street
Jacksonville, Florida
Unisource Worldwide, Inc.
168,800
09/30/2009
624
--
359 Gateway Drive
Lavonia, Georgia
TI Group Automotive Systems, LLC
133,221
05/31/2000
1,200
9,798
3600 Army Post Rd.
Des Moines, Iowa
EDS Information Services LLC (Electronic Data Systems Corporation)
405,000
04/30/2012
2,825
22,510
3600 Southgate Drive
Danville, Illinois (4)
Sygma Network, Inc.
(Sysco Corporation)
205,150
10/31/2022
1,745
6,228
2935 Van Vactor Drive
Plymouth, Indiana
Bay Valley Foods, LLC
300,500
06/30/2015
777
6,615
10000 Business Boulevard
Dry Ridge, Kentucky
Dana Corporation
336,350
06/30/2025
1,346
10,910
 
 
730 N. Black Branch Road
Elizabethtown, Kentucky
Dana Corporation
167,770
06/30/2025
537
4,312
750 N. Black Branch Road
Elizabethtown, Kentucky
Dana Corporation
539,592
06/30/2025
2,838
23,029
301 Bill Bryan Boulevard
Hopkinsville, Kentucky
Dana Corporation
424,904
06/30/2025
1,687
13,606
4010 Airpark Drive
Owensboro, Kentucky
Dana Corporation
251,041
06/30/2025
1,208
9,925
6938 Elm Valley Drive
Kalamazoo, Michigan
Dana Corporation
150,945
10/31/2021
1,843
17,359
904 Industrial Road
Marshall, Michigan
Tenneco Automotive Operating Company, Inc.
(Tenneco Automotive, Inc.)
195,640
08/17/2010
619
--
1901 49th Avenue
Minneapolis, Minnesota
Owens Corning Roofing and
Asphalt, LLC
18,620
06/30/2015
583
--
324 Industrial Park Road
Franklin, North Carolina
SKF USA, Inc.
72,868
12/31/2014
395
1,532
736 Addison Road
Erwin, New York
Corning, Inc.
408,000
11/30/2016
1,095
9,548
590 Ecology Lane
Chester, South Carolina
Owens Corning
420,597
07/14/2025
2,185
13,232
120 S.E. Parkway Drive
Franklin, Tennessee
United Technologies Corp.
289,330
12/31/2008
1,474
--
9220 Grogans Mill Road
The Woodlands, Texas
Baker Hughes, Inc.
275,750
09/27/2015
2,934
25,608
2424 Alpine Road
Eau Claire, Wisconsin
Silver Spring Gardens, Inc.
(Huntsinger Farms, Inc.)
159,000
03/31/2027
930
--
101 Creger Drive
Ft. Collins, Colorado
Lithia Motors
10,000
05/31/2012
275
--
11411 N. Kelly Avenue
Oklahoma City, Oklahoma
American Golf Corporation
13,924
12/31/2017
475
--
25500 State Hwy 249
Tomball, Texas
Parkway Chevrolet, Inc.
77,076
08/31/2026
1,258
9,354
 
Total
 8,494,682
 
 $70,925
 $466,966
 
_________________
(1)  
The Trust is currently under contract to purchase this asset.  Neither the Trust nor the Partnership can provide any assurance that the Trust will acquire this asset and subsequently sell this asset to the Co-Investment Program.
(2)  
The Trust is selling its 40% tenancy-in-common interest in this asset.  Estimated 2008 rent and mortgage balance represent the Trust’s proportionate share.
(3)  
The Partnership is contributing its 60.5% interest in this asset.  Estimated 2008 rent and mortgage balance represent the Partnership’s proportionate share.
(4)  
Reflects expansion which is expected to be completed by December 31, 2007.
 

Item 8.01.          Other Events.

On August 13, 2007, the Trust issued a press release announcing the formation of the Co-Investment Program.  A copy of the press release issued August 13, 2007, is attached as Exhibit 99.1 to this Current Report on Form 8-K.

Item 9.01.          Financial Statements and Exhibits.

(d)         Exhibits

10.1
 
Limited Partnership Agreement, dated as of August 10, 2007, among LMLP GP LLC, The Lexington Master Limited Partnership and Inland American (Net Lease) Sub, LLC
10.2
Contribution Agreement, dated as of August 10, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P.
10.3
Purchase and Sale Agreement, dated as of August 10, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P.
10.4
Management Agreement, dated as of August 10, 2007, between Net Lease Strategic Assets Fund L.P. and Lexington Realty Advisors, Inc.
99.1
Press Release issued August 13, 2007
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

   Lexington Realty Trust  
 Date: August 16, 2007     
 
By:
  /s/ T. Wilson Eglin  
     T. Wilson Eglin  
     Chief Executive Officer  
 
 
   The Lexington Master Limited Partnership  
     
   By: Lex GP-1 Trust, its general partner  
 Date: August 16, 2007     
       
 
By:
  /s/ T. Wilson Eglin  
     T. Wilson Eglin  
     President  
 
 
Exhibit Index

 
10.1
 
Limited Partnership Agreement, dated as of August 10, 2007, among LMLP GP LLC, The Lexington Master Limited Partnership and Inland American (Net Lease) Sub, LLC
10.2
Contribution Agreement, dated as of August 10, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P.
10.3
Purchase and Sale Agreement, dated as of August 10, 2007, between The Lexington Master Limited Partnership and Net Lease Strategic Assets Fund L.P.
10.4
Management Agreement, dated as of August 10, 2007, between Net Lease Strategic Assets Fund L.P. and Lexington Realty Advisors, Inc.
99.1
Press Release issued August 13, 2007