Lexington Realty CEO Says REIT Expects More Sale-Leaseback Deals

T. Wilson Eglin, president and CEO of Lexington Realty Trust (NYSE: LXP), joined REIT.com for a CEO Spotlight video interview during REITWeek 2015: NAREIT’s Investor Forum, held in New York.

Lexington owns a diversified portfolio of equity and debt interests in single-tenant commercial properties and land. The company has increased its dividend 70 percent during the past four years. Eglin explained the factors behind that growth.

Lexington had a strong rebound in its cash flow coming out of the financial crisis, driven by refinancing savings and an “uncommonly good investment environment,” he said.  Furthermore, yields were attractive, particularly in the build-to-suit segment, he said.

“That created a lot of cash flow momentum and dividend growth,” Eglin said.

As the company disposes of non-core assets, Eglin said Lexington would look to expand in states with a favorable business environment. “That tends to be what drives our investment decisions,” he said.

Meanwhile, Eglin said he expects to see continued interest from a variety of companies in sale-leaseback transactions. Also, low interest rates offer an opportunity for companies to lock in attractive long-term occupancy costs, Eglin said. “Right now, we think it’s an uncommonly good time for sale-leaseback financing and we’re hopeful that leads to additional growth opportunities.”