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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 2021.
or
Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the transition period from _________________ to ________________
Commission File Number 1-12386
 LEXINGTON REALTY TRUST
(Exact name of registrant as specified in its charter)
Maryland13-3717318
(State or other jurisdiction of
incorporation of organization)
(I.R.S. Employer
Identification No.)
One Penn Plaza, Suite 4015, New York, NY 10119-4015
(Address of principal executive offices) (zip code)
(212) 692-7200
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Shares of beneficial interest, par value $0.0001 per share, classified as Common StockLXPNew York Stock Exchange
6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share
LXPPRCNew York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth
company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No
Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: 282,817,432 common shares of beneficial interest, par value $0.0001 per share, as of November 2, 2021.



TABLE OF CONTENTS
PART I. — FINANCIAL INFORMATION  
 
 
 
 
PART II — OTHER INFORMATION  
 
 
 
 
 
 
 

WHERE YOU CAN FIND MORE INFORMATION:
We file and furnish annual, quarterly and current reports, proxy statements and other information with the Securities and Exchange Commission, which we refer to as the SEC. You may read and copy any materials that we file or furnish with the SEC at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. We file and furnish information electronically with the SEC. The SEC maintains an Internet site that contains reports, proxy and information statements and other information regarding issuers that file or furnish electronically with the SEC. The address of the SEC's Internet site is http://www.sec.gov. We also maintain a web site at http://www.lxp.com through which you can obtain copies of documents that we file or furnish with the SEC. The contents of that web site are not incorporated by reference in or otherwise a part of this Quarterly Report on Form 10-Q or any other document that we file or furnish with the SEC.

2

PART I. - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited and in thousands, except share and per share data)
September 30, 2021December 31, 2020
Assets: 
Real estate, at cost$3,721,870 $3,514,564 
Real estate - intangible assets402,365 409,293 
Investments in real estate under construction185,704 75,906 
Real estate, gross4,309,939 3,999,763 
Less: accumulated depreciation and amortization911,410 884,465 
Real estate, net3,398,529 3,115,298 
Assets held for sale30,145 16,530 
Right-of-use assets, net29,067 31,423 
Cash and cash equivalents 150,077 178,795 
Restricted cash373 626 
Investments in non-consolidated entities51,021 56,464 
Deferred expenses, net13,289 15,901 
Rent receivable – current 1,998 2,899 
Rent receivable – deferred 71,317 66,959 
Other assets 12,661 8,331 
Total assets$3,758,477 $3,493,226 
Liabilities and Equity:  
Liabilities:  
Mortgages and notes payable, net $115,633 $136,529 
Term loan payable, net298,320 297,943 
Senior notes payable, net987,590 779,275 
Trust preferred securities, net127,570 127,495 
Dividends payable34,283 35,401 
Liabilities held for sale1,122 790 
Operating lease liabilities30,109 32,515 
Accounts payable and other liabilities 59,681 55,208 
Accrued interest payable5,638 6,334 
Deferred revenue - including below-market leases, net15,490 17,264 
Prepaid rent14,679 13,335 
Total liabilities1,690,115 1,502,089 
Commitments and contingencies
Equity:  
Preferred shares, par value $0.0001 per share; authorized 100,000,000 shares:
  
Series C Cumulative Convertible Preferred, liquidation preference $96,770; 1,935,400 shares issued and outstanding
94,016 94,016 
Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 282,638,707 and 277,152,450 shares issued and outstanding in 2021 and 2020, respectively
28 28 
Additional paid-in-capital3,239,850 3,196,315 
Accumulated distributions in excess of net income(1,276,134)(1,301,726)
Accumulated other comprehensive loss(10,891)(17,963)
Total shareholders’ equity2,046,869 1,970,670 
Noncontrolling interests21,493 20,467 
Total equity2,068,362 1,991,137 
Total liabilities and equity$3,758,477 $3,493,226 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited and in thousands, except share and per share data)
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Gross revenues:    
Rental revenue$82,353 $83,592 $254,570 $243,421 
Other revenue1,064 922 2,945 3,712 
Total gross revenues83,417 84,514 257,515 247,133 
Expense applicable to revenues:    
Depreciation and amortization(45,359)(40,555)(130,579)(120,869)
Property operating(11,406)(11,343)(33,966)(31,895)
General and administrative(8,363)(7,232)(24,695)(22,612)
Non-operating income472 40 953 314 
Interest and amortization expense(12,210)(13,649)(35,170)(42,610)
Debt satisfaction gains (losses), net(13,222)17,557 (13,222)18,950 
Impairment charges(2,048)(6,175)(2,048)(7,792)
Gains on sales of properties16,122 20,878 104,767 41,876 
Income before provision for income taxes and equity in earnings (losses) of non-consolidated entities
7,403 44,035 123,555 82,495 
Provision for income taxes(270)(286)(986)(1,361)
Equity in earnings (losses) of non-consolidated entities(75)(131)(249)35 
Net income7,058 43,618 122,320 81,169 
Less net income attributable to noncontrolling interests
(420)(1,714)(1,962)(2,245)
Net income attributable to Lexington Realty Trust shareholders
6,638 41,904 120,358 78,924 
Dividends attributable to preferred shares – Series C(1,573)(1,573)(4,718)(4,718)
Allocation to participating securities(37)(46)(170)(118)
Net income attributable to common shareholders$5,028 $40,285 $115,470 $74,088 
    
Net income attributable to common shareholders - per common share basic
$0.02 $0.15 $0.42 $0.28 
Weighted-average common shares outstanding – basic278,124,204 274,696,046 276,379,718 264,211,668 
Net income attributable to common shareholders - per common share diluted
$0.02 $0.15 $0.41 $0.28 
Weighted-average common shares outstanding – diluted
282,048,458 276,022,762 278,581,849 265,446,221 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited and in thousands)
Three Months Ended September 30,Nine Months Ended September 30,
 2021202020212020
Net income$7,058 $43,618 $122,320 $81,169 
Other comprehensive income (loss):    
Change in unrealized income (loss) on interest rate swaps, net1,150 1,043 7,072 (17,759)
Other comprehensive income (loss)1,150 1,043 7,072 (17,759)
Comprehensive income8,208 44,661 129,392 63,410 
Comprehensive income attributable to noncontrolling interests
(420)(1,714)(1,962)(2,245)
Comprehensive income attributable to Lexington Realty Trust shareholders
$7,788 $42,947 $127,430 $61,165 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited and in thousands)
Three Months Ended September 30, 2021Lexington Realty Trust Shareholders
TotalPreferred SharesCommon SharesAdditional Paid-in-CapitalAccumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive LossNoncontrolling Interests
Balance June 30, 2021$2,051,369 $94,016 $28 $3,195,040 $(1,250,735)$(12,041)$25,061 
Issuance of partnership interest in real estate5,965 — — — — — 5,965 
Redemption of noncontrolling OP units for common shares— — — 202 — — (202)
Redemption of noncontrolling OP units for real estate(22,305)— — (12,919)— — (9,386)
Issuance of common shares and deferred compensation amortization, net57,527 — — 57,527 — — — 
Dividends/distributions(32,402)— — — (32,037)— (365)
Net income7,058 — — — 6,638 — 420 
Other comprehensive income1,150 — — — — 1,150 — 
Balance September 30, 2021$2,068,362 $94,016 $28 $3,239,850 $(1,276,134)$(10,891)$21,493 

Three Months Ended September 30, 2020Lexington Realty Trust Shareholders
TotalPreferred SharesCommon SharesAdditional Paid-in-CapitalAccumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive LossNoncontrolling Interests
Balance June 30, 2020$1,892,186 $94,016 $28 $3,185,458 $(1,386,001)$(20,730)$19,415 
Issuance of partnership interest in real estate398 — — — — — 398 
Redemption of noncontrolling OP units for common shares— — — 150 — — (150)
Issuance of common shares and deferred compensation amortization, net8,143 — — 8,143 — — — 
Dividends/distributions(31,039)— — — (30,651)— (388)
Net income43,618 — — — 41,904 — 1,714 
Other comprehensive income1,043 — — — — 1,043 — 
Balance September 30, 2020$1,914,349 $94,016 $28 $3,193,751 $(1,374,748)$(19,687)$20,989 


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
(Unaudited and in thousands)
Nine Months Ended September 30, 2021Lexington Realty Trust Shareholders
TotalPreferred SharesCommon SharesAdditional Paid-in-CapitalAccumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive LossNoncontrolling Interests
December 31, 2020$1,991,137 $94,016 $28 $3,196,315 $(1,301,726)$(17,963)$20,467 
Issuance of partnership interest in real estate11,050 — — — — — 11,050 
Redemption of noncontrolling OP units for common shares— — — 670 — — (670)
Redemption of noncontrolling OP units for real estate(22,305)— — (12,919)— — (9,386)
Issuance of common shares and deferred compensation amortization, net60,469 — — 60,469 — — — 
Repurchase of common shares to settle tax obligations(5,120)— — (5,120)— — — 
Forfeiture of employee common shares2 — — — 2 — — 
Dividends/distributions(96,263)— — — (94,768)— (1,495)
Net income122,320 — — — 120,358 — 1,962 
Other comprehensive income7,072 — — — — 7,072 — 
Reallocation of noncontrolling interests— — — 435 — — (435)
Balance September 30, 2021$2,068,362 $94,016 $28 $3,239,850 $(1,276,134)$(10,891)$21,493 

Nine Months Ended September 30, 2020Lexington Realty Trust Shareholders
TotalPreferred SharesCommon SharesAdditional Paid-in-CapitalAccumulated Distributions in Excess of Net IncomeAccumulated Other Comprehensive LossNoncontrolling Interests
Balance December 31, 2019$1,724,719 $94,016 $25 $2,976,670 $(1,363,676)$(1,928)$19,612 
Issuance of partnership interest in real estate1,285 — — — — — 1,285 
Redemption of noncontrolling OP units for common shares— — — 632 — — (632)
Issuance of common shares and deferred compensation amortization, net230,117 — 3 230,114 — — — 
Repurchase of common shares(11,042)— — (11,042)— — — 
Repurchase of common shares to settle tax obligations(2,623)— — (2,623)— — — 
Forfeiture of employee common shares1 — — — 1 — — 
Dividends/distributions(91,518)— — — (89,997)— (1,521)
Net income81,169 — — — 78,924 — 2,245 
Other comprehensive loss(17,759)— — — — (17,759)— 
Balance September 30, 2020$1,914,349 $94,016 $28 $3,193,751 $(1,374,748)$(19,687)$20,989 
6

LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited and in thousands)
Nine Months Ended September 30,
 20212020
Net cash provided by operating activities:$167,405 $152,466 
Cash flows from investing activities:  
Acquisition of real estate, including intangible assets(392,586)(429,834)
Investment in real estate under construction(119,885)(21,561)
Capital expenditures(9,371)(15,328)
Net proceeds from sale of properties181,242 99,740 
Investment in loans receivable(1,497) 
Investments in non-consolidated entities(975)(6,152)
Distributions from non-consolidated entities in excess of accumulated earnings6,170 6,843 
Deferred leasing costs(5,546)(4,791)
Change in real estate deposits, net(1,658)461 
Net cash used in investing activities(344,106)(370,622)
Cash flows from financing activities:  
Dividends to common and preferred shareholders(95,885)(87,966)
Proceeds from mortgage loans 11,610  
Principal amortization payments(10,571)(16,132)
Principal payments on debt, excluding normal amortization(10,567) 
Revolving credit facility borrowings215,000 170,000 
Revolving credit facility payments(215,000)(170,000)
Proceeds from issuance of senior notes399,032 396,932 
Repurchase of senior notes(188,756)(112,312)
Deferred financing costs(3,977)(3,803)
Payments for early extinguishment of debt(12,217)(9,477)
Cash contributions from noncontrolling interests10,560 1,285 
Cash distributions to noncontrolling interests(1,495)(1,521)
Repurchases to settle tax obligations(5,120)(2,623)
Issuance of common shares, net55,116 225,122 
Repurchase of common shares (11,042)
Net cash provided by financing activities147,730 378,463 
Change in cash, cash equivalents and restricted cash(28,971)160,307 
Cash, cash equivalents and restricted cash, at beginning of period179,421 129,310 
Cash, cash equivalents and restricted cash, at end of period$150,450 $289,617 
Reconciliation of cash, cash equivalents and restricted cash:
Cash and cash equivalents at beginning of period$178,795 $122,666 
Restricted cash at beginning of period626 6,644 
Cash, cash equivalents and restricted cash at beginning of period$179,421 $129,310 
Cash and cash equivalents at end of period$150,077 $287,920 
Restricted cash at end of period373 1,697 
Cash, cash equivalents and restricted cash at end of period$150,450 $289,617 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 and 2020
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(1) The Company and Financial Statement Presentation
Lexington Realty Trust (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Company”) is a Maryland real estate investment trust (“REIT”) that owns a portfolio of equity investments focused on single-tenant industrial properties.
As of September 30, 2021, the Company had ownership interests in approximately 140 consolidated real estate properties, located in 28 states. The properties in which the Company has an interest are primarily net leased to tenants in various industries.
The Company believes it has qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”). Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain activities from which it was previously precluded in order to maintain its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS are subject to federal income taxes on the income from these activities.
The Company conducts its operations indirectly through (1) property owner subsidiaries, which are single purpose entities, (2) a wholly-owned TRS, Lexington Realty Advisors, Inc. (“LRA”), and (3) joint ventures. Property owner subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan agreements secured by properties in which the Company has an interest and lender subsidiaries are lenders under loan agreements where the Company made an investment in a loan asset, but in all cases are separate and distinct legal entities. Each property owner subsidiary is a separate legal entity that maintains separate books and records. The assets and credit of each property owner subsidiary with a property subject to a mortgage loan are not available to creditors to satisfy the debt and other obligations of any other person, including any other property owner subsidiary or any other affiliate. Consolidated entities that are not property owner subsidiaries do not directly own any of the assets of a property owner subsidiary (or the general partner, member or managing member of such property owner subsidiary), but merely hold partnership, membership or beneficial interests therein, which interests are subordinate to the claims of such property owner subsidiary's (or its general partner's, member's or managing member's) creditors.
The financial statements contained in this Quarterly Report on Form 10-Q (this “Quarterly Report”) for the three and nine months ended September 30, 2021 have been prepared by the Company in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and the applicable rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all information and footnotes required by GAAP for complete financial statements. However, in the opinion of management, the interim financial statements include all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation of the results of the periods presented. Interim results are not necessarily indicative of the results that may be expected for the full year. These unaudited condensed consolidated financial statements should be read in conjunction with the Company's audited consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on February 18, 2021 (“Annual Report”).
Basis of Presentation and Consolidation. The Company's unaudited condensed consolidated financial statements are prepared on the accrual basis of accounting in accordance with GAAP. The financial statements reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates the wholly-owned subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the Company does not control and entities which are VIEs in which the Company is not a primary beneficiary are accounted for under appropriate GAAP.
During the nine months ended September 30, 2021, the Company acquired interests in four joint ventures with developers, with ownership interests ranging from 80% to 93%. Each joint venture acquired land parcels to develop industrial properties. The Company determined that the joint ventures are variable interest entities in accordance with the applicable accounting guidance. The Company concluded that it is the primary beneficiary in each of the joint ventures and as such, the joint ventures' operations are consolidated in the Company’s financial statements.
8


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 and 2020
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
In addition, the Company is the primary beneficiary of certain VIEs as it has a controlling financial interest in these entities. Lepercq Corporate Income Fund L.P. ("LCIF") and ATL Fairburn L.P. ("Fairburn JV"), are consolidated and the Company, as of September 30, 2021, had an approximate 99% and 87% interest, respectively, are VIEs.
The assets of each VIE are only available to satisfy such VIE's respective liabilities. As of September 30, 2021 and December 31, 2020, the VIEs' mortgages and notes payable were non-recourse to the Company. Below is a summary of selected financial data of the consolidated VIEs for which the Company is the primary beneficiary included in the unaudited condensed consolidated balance sheets as of September 30, 2021 and December 31, 2020:
September 30, 2021December 31, 2020
Real estate, net$655,464 $569,461 
Total assets$706,320 $679,786 
Mortgages and notes payable, net$25,616 $25,600 
Total liabilities$47,065 $40,974 
In addition, the Company acquires, from time to time, properties using a reverse like-kind exchange structure pursuant to Section 1031 of the Internal Revenue Code (a "reverse 1031 exchange") and, as such, the properties are in the possession of an Exchange Accommodation Titleholder ("EAT") until the reverse 1031 exchange is completed. The EAT is classified as a VIE as it is a “thinly capitalized” entity. The Company consolidates the EAT because it is the primary beneficiary as it has the ability to control the activities that most significantly impact the EAT's economic performance and can collapse the 1031 exchange structure at any time. The assets of the EAT primarily consist of leased property (net real estate and intangibles).
Revenue Recognition. The Company recognizes lease revenue on a straight-line basis over the term of the lease unless another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Revenue is recognized on a contractual basis for leases with escalations tied to a consumer price index with no floor. The Company evaluates the collectability of its rental payments and recognizes revenue on a cash basis when the Company believes it is no longer probable that it will receive substantially all of the remaining lease payments. Renewal options in leases with rental terms that are lower than those in the primary term are excluded from the calculation of straight-line rent if the renewals are not reasonably certain. If the Company funds tenant improvements and the improvements are deemed to be owned by the Company, revenue recognition will commence when the improvements are substantially completed and possession or control of the space is turned over to the tenant. If the Company determines that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being recorded as a component of rent receivable-deferred on the unaudited condensed consolidated balance sheets.
Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare these unaudited condensed consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors, including the current economic environment. Management adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of current and deferred accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets and equity method investments, valuation of derivative financial instruments, valuation of awards granted under compensation plans, the determination of the incremental borrowing rate for leases where the Company is the lessee and the useful lives of long-lived assets. Actual results could differ materially from those estimates.
9


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 and 2020
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
Cost Capitalization. The Company capitalizes interest and direct and indirect project costs associated with the initial construction of a property up to the time the property is substantially complete and ready for its intended use within investments in real estate under construction in the unaudited condensed consolidated balance sheets. In addition, the Company capitalizes operating costs, including real estate taxes, insurance and utilities, that have been allocated to vacant space based on the square footage of the portion of the building not held available for immediate occupancy during the extended lease-up periods after the construction of the building shell has been completed if costs are being incurred to ready the vacant space for its intended use. If costs and activities incurred to ready the vacant space cease, then cost capitalization is also discontinued until such activities are resumed. Once construction has been completed on a vacant space, project costs are no longer capitalized.
Restricted Cash. Restricted cash is comprised primarily of cash balances held by lenders and operating cash reserves held at one property.
Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("Topic 820"), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820 with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements.
The Company estimates the fair value of its real estate assets, including non-consolidated real estate assets, by using income and market valuation techniques. The Company may estimate fair values using market information such as recent sale contracts (Level 2 inputs) or recent sale offers or discounted cash flow models, which primarily rely on Level 3 inputs. The cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease commissions based upon market conditions determined through discussion with local real estate professionals, experience the Company has with its other owned properties in such markets and expectations for growth. Capitalization rates and discount rates utilized in these models are estimated by management based upon rates that management believes to be within a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property and tenant quality, geographical location and local supply and demand observations.
Recently Issued Accounting Guidance. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts that reference the London Interbank Offered Rate, or LIBOR, or another reference rate expected to be discontinued because of reference rate reform. The guidance in ASU 2020-04 is optional, applies for a limited period of time to ease the potential burden in accounting for (or recognizing the effect of) reference rate reform on financial reporting, in response to concerns about structural risks of interbank offered rates, and, particularly, the risk of cessation of LIBOR and may be elected over time as reference rate reform activities occur. As of March 31, 2020, the Company has elected to apply the hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.
10


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 and 2020
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
In July 2021, the FASB issued ASU 2021-05, Leases (Topic 842): Lessors-Certain Leases with Variable Lease Payments, to amend the guidance to provide alternative accounting for sales type and direct finance leases with variable lease payments. The amendments in ASU 2021-05 amend the accounting guidance to allow lessors to classify and account for a lease with variable leases payments that do not depend on a reference index or a rate as an operating lease if certain criteria are met. The standard is effective for fiscal years beginning after December 15, 2021 with early adoption permitted. The Company does not currently have any leases that are classified as sales-type or direct finance leases. Therefore, the Company determined that it will apply the amendment on a prospective basis to applicable leases that commence or are modified on or after July 1, 2021.

(2)Earnings Per Share
A portion of the Company's non-vested share-based payment awards are considered participating securities and as such, the Company is required to use the two-class method for the computation of basic and diluted earnings per share. Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the security has a contractual obligation to share in the losses. The non-vested share-based payment awards are not allocated losses as the awards do not have a contractual obligation to share in losses of the Company.
The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations for the three and nine months ended September 30, 2021 and 2020:
 Three Months Ended September 30,Nine months ended September 30,
 2021202020212020
BASIC  
Net income attributable to common shareholders
$5,028 $40,285 $115,470 $74,088 
Weighted-average number of common shares outstanding - basic
278,124,204 274,696,046 276,379,718 264,211,668 
 
Net income attributable to common shareholders - per common share basic
$0.02 $0.15 $0.42 $0.28 
DILUTED
Net income attributable to common shareholders
$5,028 $40,285 $115,470 $74,088 
Weighted-average common shares outstanding - basic
278,124,204 274,696,046 276,379,718 264,211,668 
Effect of dilutive securities:
Shares issuable under forward sales agreements
2,765,030  1,290,968  
Unvested share-based payment awards and options1,159,224 1,326,716 911,163 1,234,553 
Weighted-average common shares outstanding - diluted
282,048,458 276,022,762 278,581,849 265,446,221 
Net income attributable to common shareholders - per common share diluted
$0.02 $0.15 $0.41 $0.28 
For per common share amounts, all incremental shares are considered anti-dilutive for periods that have a loss from continuing operations attributable to common shareholders. In addition, other common share equivalents may be anti-dilutive in certain periods.
11


LEXINGTON REALTY TRUST AND CONSOLIDATED SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2021 and 2020
(Unaudited and dollars in thousands, except share/unit and per share/unit data)
(3)Investments in Real Estate
The Company completed the following warehouse/distribution acquisition and development transactions during the nine months ended September 30, 2021:
Market(1)
Acquisition/Completion
Date
Initial
Cost
Basis
Primary
Lease
Expiration at Acquisition Date
LandBuilding and ImprovementsLease in-place Value IntangibleAbove (Below) Market Lease Intangible, net
Indianapolis, INJanuary 2021$14,310 12/2024$1,208 $12,052 $1,035 $15 
Indianapolis, INJanuary 202114,120 08/20251,162 11,825 1,133  
Central FloridaJanuary 202122,358 05/20311,416 19,910 1,032  
Columbus, OH(2)
March 2021(2)
19,517 03/20242,800 16,717   
Houston, TXMay 202128,292 08/20284,272 22,295 1,725  
Houston, TXMay 202137,686 12/20266,489 28,470 2,727  
Houston, TXMay 202111,512 08/20241,792 9,089 631  
Cincinnati/Dayton, OHJune 202118,674 06/20231,109 16,477 1,088  
Central FloridaJune 202148,593 N/A2,610 45,983   
Greenville-Spartanburg, SCJune 202136,903 09/20252,376 32,121 2,406  
Greenville-Spartanburg, SCJune 202123,812 06/20261,329 21,419 1,064  
Greenville-Spartanburg, SCJuly 202129,421 04/20292,819 24,508 2,094  
Greenville-Spartanburg, SCJuly 202126,106 12/20291,169 23,070 1,867  
Greenville-Spartanburg, SC(3)
July 202118,394 N/A1,020 17,374   
Greenville-Spartanburg, SCJuly 202131,646 09/20261,710 27,817 2,119  
Columbus, OHAugust 202129,265 11/20292,251 25,184 1,830  
$410,609 $35,532 $354,311 $20,751 $15 
(1)    A land parcel located in Hebron, OH was also purchased for $371.
(2)    Development project substantially completed and placed into service in March 2021.
(3)    Subsequent to acquisition, property fully leased for 5.5 years.

As of September 30, 2021, the details of the warehouse/distribution real estate under construction are as follows (in $000's, except square feet):
Project (% owned)# of BuildingsMarketEstimated Sq. Ft. Estimated Project Cost
GAAP Investment Balance as of 9/30/2021
Amount Funded as of 9/30/2021(3)
Estimated Building Completion Date
% Leased as of 9/30/2021
Approximate Lease Term (Years)
Fairburn (87%)(1)(2)
1Atlanta, GA907,675 $53,800 $47,551 $43,900 2Q 2021 %