Lexington Realty Trust has disposed of a 21-office asset portfolio for $726 million to a joint venture between affiliates of Davidson Kempner Capital Management and Lexington.
DKCM is a U.S.-registered investment firm based in New York with affiliate offices in London, Hong Kong and Dublin. Following the transaction, Lexington’s percentage of industrial assets based on consolidated revenue is expected to increase to 60 percent from 44 percent at year-end 2017.
“This transaction marks a major step forward as we execute on our strategy to efficiently recycle capital out of suburban office properties and concentrate our portfolio on single-tenant net-leased industrial properties,” said T. Wilson Eglin, CEO of Lexington. “We intend to use transaction proceeds to continue to acquire high-quality industrial properties and repay our revolving credit facility and other debt, which we believe is the best path to create meaningful long-term shareholder value.”
The joint venture is 80 percent owned by affiliates of DKCM with Lexington retaining a 20 percent interest. Additionally, Lexington will collect asset management fees to manage the properties and will participate in a promote structure created by the joint venture.
The properties are 98.6 percent leased and are comprised of approximately 3.8 million square feet.
