LXP Third-Quarter 2026 Net Income Rises $55.7 Million

The Tip Desk · November 8, 2026 · 4 min read

Third-quarter 2026 rental revenue rose $4.0 million year over year. A $94.5 million property-sale gain helped lift net income attributable to common shareholders by $55.7 million, partially offset by a $5.6 million increase in merger costs.

LXP Industrial Trust (LXP) reported a $4.0 million year-over-year increase in rental revenue for the three months ended September 30, 2026, while net income attributable to common shareholders increased $55.7 million. The company said the increase in net income was driven primarily by a $94.5 million gain on the sale of three properties, versus a $44.1 million gain on five properties and $2.1 million of insurance recoveries a year earlier, partially offset by a $5.6 million increase in merger-related transaction costs.

Shareholders approved on October 26, 2026 a merger into Leopard Merger Sub LLC, which will survive the merger and is an indirect subsidiary of Leopard REIT LLC. Both entities are Brookfield affiliates. Under the agreement, common shareholders will receive $61.20 a share in cash. The company expects the transaction to close on November 2, 2026, and has suspended its regular common quarterly dividend effective immediately under the merger agreement.

The industrial REIT sold its interest in three properties encompassing six warehouse and distribution facilities for $156.6 million, including a vacant 252,351-square-foot development project in Chester, Virginia, for $30.0 million. It purchased the remaining equity interests in a joint venture that owns three facilities for $10.9 million.

Rental revenue rose $4.0 million year over year, with a $7.5 million increase from acquisitions, properties placed in service and leasing, partially offset by a $3.5 million decrease from property sales and vacancies. Depreciation and amortization expense declined $0.9 million, primarily due to property sales. Interest and amortization expense fell $2.7 million, including a $2.4 million decrease tied to Senior Notes due 2028 that were partially repaid in 2025 and a $0.6 million increase in capitalized interest from higher development activity.

Leasing completed 4.2 million square feet of new second-generation leases and extensions, increasing base and cash base rents by 42.8% and 34.3%, respectively, excluding leases with fixed-rate renewals and tenant improvement reimbursements.

The portfolio shrank to approximately 107 consolidated properties, 51.8 million square feet of rentable space and 97.0% leased as of September 30, 2026, from 109 properties, 53.3 million square feet and 97.4% leased at June 30, 2026. The company said the portfolio primarily consists of Class A warehouse and distribution investments in 12 target markets in the Sunbelt and lower Midwest.

No common or preferred dividends were declared in the three months ended September 30, 2026, versus a $0.675 a share quarterly common dividend declared in the year-ago quarter. Although the merger agreement permits regular Series C preferred dividends, the company did not declare a third-quarter preferred dividend; cumulative dividends in arrears will be included in the cash paid in a planned second-step merger of the surviving entity’s Series C preferred units.

Cash on hand was $110.3 million at September 30, 2026. The $600.0 million revolving credit facility had no borrowings outstanding. Secured debt principal was $45.6 million. Unsecured debt totaled $1.311 billion, including a $250.0 million term loan, $960.0 million of senior notes and $101.0 million of trust preferred securities. The company said it had provided notice that, upon closing, the parent intends to redeem all classes of senior notes and the trust preferred securities.

Consolidated development and redevelopment projects included in real estate under construction were $129.9 million at September 30, 2026. The company expects to incur approximately $124.8 million of remaining costs, excluding noncontrolling interests’ share, potential developer incentive fees or partner buyouts, and infrastructure work, on consolidated and non-consolidated land parcels held for development.

The surviving entity will be wholly owned by the parent, other than outstanding Series C preferred shares. Each common share will be cancelled and converted into the right to receive $61.20 in cash. Each Series C preferred share will convert into one surviving-entity Series C preferred unit, which the parent intends to exchange for the $50.00 liquidation preference plus cumulative dividends in arrears and accrued unpaid dividends through the closing date.