LXP Industrial Trust Q1 Earnings Call Highlights

Key Points

• Management said LXP has executed 3.2 million sq ft of new leases and renewals YTD, leased over 300,000 sq ft of vacancy, and addressed 57% of 2026 expirations with an average cash rental increase of about 25%, with quarter leasing showing base and cash rent bumps up to 34%/24%.
• Development and land‑bank priorities include construction of a 1.2 million‑sq ft speculative project in Phoenix (management prefers to pre‑lease) and 69 acres in Columbus that can support roughly 1.25 million sq ft, with future builds to be funded by opportunistic non‑core asset sales.
• Financially, Q1 adjusted company FFO was about $47 million ($0.80 per share) with stabilized occupancy near 96.6%, the company reiterated 2026 FFO guidance of $3.22–$3.37, and holds $130 million cash, an undrawn $600 million revolver and net debt/EBITDA of 5.1x.

LXP Industrial Trust NYSE: LXP reported first-quarter 2026 results and discussed leasing momentum, development plans, and capital allocation priorities during its earnings call. Management emphasized that, after completing several strategic initiatives in 2025, the company’s 2026 focus is on “creating value in our land bank” while addressing near-term lease expirations and existing vacancy, according to Chairman and CEO Will Eglin.

Leasing activity and market backdrop

Eglin said the company has executed 3.2 million square feet of new leases and renewals year to date, highlighted by activity at a 1.1 million-square-foot facility in the Greenville-Spartanburg market. He also noted that LXP leased more than 300,000 square feet of vacancy and extended the lease on an 850,000-square-foot facility in San Antonio for 10 years.

Eglin pointed to improving U.S. industrial fundamentals, citing “first quarter U.S. net absorption of approximately 40 million sq ft,” which he said was the strongest first quarter in three years. He added that LXP’s target markets accounted for about 72% of that net absorption, with strength in Phoenix, Indianapolis, Houston, Dallas-Fort Worth, Atlanta, and Columbus.

Management said leasing demand has been strongest for large-format buildings, particularly 1 million square feet or larger, and noted rising interest from “data center related tenancy and manufacturing suppliers,” as Eglin described it.

Quarterly leasing outcomes and pipeline

Eglin said leasing volume during the quarter totaled 1.8 million square feet, including the extension at the 1.1 million-square-foot Greenville-Spartanburg facility. He said LXP renewed that lease for an additional four years to 2031 after initially signing a two-year lease in May 2025. Eglin said the extension enhanced the project’s “8% initial cash stabilized yield,” with new cash rent 5% higher than the prior rent and featuring 3% annual increases.

On the remaining 700,000 square feet leased during the quarter, Eglin said LXP achieved base and cash base rental increases of 34% and 24%, respectively.

Chief Financial Officer Nathan Brunner provided additional lease details and said the company has addressed 3.7 million square feet, or 57%, of 2026 lease expirations with an average cash rental increase of about 25%, excluding two fixed-rate renewals. Notable leasing items discussed on the call included:

• Charlotte, North Carolina: Brunner said LXP renewed 352,000 square feet at a 640,000-square-foot facility for three years with 3.5% annual escalators, representing a 42% cash rental increase. He said the remaining 288,000 square feet expires in October 2026 and is being actively marketed.
• Savannah (post-quarter): Brunner said LXP extended a 270,000-square-foot tenant at a multi-tenant property for 10 years with 3% annual escalators, representing a 19% cash rental increase.
• San Antonio (post-quarter, 2027 expiration): Brunner said LXP extended the lease on an 850,000-square-foot facility for 10 years with 2.75% annual escalators. The extension begins in May 2027 and includes a 25% cash rental increase.
• Indianapolis: Brunner said LXP leased 85,000 square feet during the quarter to a tenant involved in data center development, achieving a 34% cash rental increase.
• Houston (post-quarter): Brunner said LXP leased a 250,000-square-foot facility for seven years with 3.75% annual escalators, commencing in June and representing a 25% cash rental increase.

Eglin said LXP is in active discussions on a forward pipeline of 7.4 million square feet covering development and redevelopment leasing, vacancy, and expirations through 2027. Brunner added that the company is encouraged by discussions underway on 4.6 million square feet of 2026 and 2027 lease roll.

Vacancy and expiration color from asset management

During Q&A, Executive Vice President and Director of Asset Management James Dudley described activity around remaining 2026 expirations, saying LXP has “really good activity” and expects “the majority” to renew. He identified several known move-outs, including:

• 97,000 square feet in a multi-tenant building in Columbus
• A 230,000-square-foot move-out in Tampa, which Dudley said is seeing “decent activity”
• 120,000 square feet that moved out in the first quarter in Greenville-Spartanburg, which he said has “really good activity”
• Potential move-outs of 70,000 square feet and a known move-out of 163,000 square feet in Greenville-Spartanburg

Brunner later framed guidance assumptions in terms of occupancy, noting three known move-outs in the second half totaling roughly 550,000 square feet. He said midpoint guidance assumes new leasing activity associated with the move-outs, while the high end of guidance assumes incremental leasing beyond that amount. Brunner also said the company’s guidance remains based on 70% to 80% retention, with a buffer for “unknown situations that come up.”

On large 2027 expirations, including Nissan, Dudley said LXP is in discussions with tenants for its “chunky leases” and expects “a very high rate if not 100% renewal on the big boxes that we have,” including Nissan.

Development and land bank priorities

On development, Eglin said construction is underway at a 1.2 million-square-foot Phoenix project announced previously, and he highlighted tighter large-box availability in the market, saying the remaining 2 million square feet in Phoenix’s West Valley has been leased and there are “no million square foot buildings currently available in the market.” Eglin said LXP is in discussions with a prospective tenant for the Phoenix project but had “nothing to report today,” adding the company would prefer to pre-lease to “de-risk the investment.”

Management also discussed potential development in Columbus. Eglin said LXP has 69 acres at its Etna land sites that can support three facilities totaling roughly 1.25 million square feet. Brendan Mullinix, Chief Investment Officer, said the company is doing pre-development and design work on three different-sized buildings to maintain flexibility, but he also said there was “nothing to announce today.”

Eglin said LXP is also responding to build-to-suit interest at its Columbus and Phoenix sites and has conversations with merchant builder relationships on potential build-to-suits outside the land bank, though he noted nothing was imminent.

Regarding funding, Eglin said future development would be funded through “opportunistic asset sales in our non-target markets.” In response to a question about timing, he said the company would prefer to “match fund sales with stabilized outcomes for development” and hold onto asset income longer rather than selling well ahead of project commencement.

Financial results, guidance, and balance sheet

Brunner said adjusted company FFO in the first quarter was approximately $47 million, or $0.80 per diluted common share, representing 2.6% growth over the first quarter of 2025. He reported same-store NOI growth of 2% and said stabilized portfolio leased occupancy was 96.6% at quarter end and 97.1% leased pro forma for leases signed in April.

The company maintained its full-year guidance ranges, with Brunner reiterating:

• 2026 adjusted company FFO guidance: $3.22 to $3.37 per common share
• 2026 same-store NOI growth guidance: 1.5% to 2.5%

Brunner said second-quarter same-store NOI growth is expected to be lower than the first quarter due to the impact of first-quarter move-outs and the timing of new lease commencements, with stronger growth anticipated in the second half as new leases begin contributing. He reported first-quarter G&A of about $10.3 million and said full-year 2026 G&A is expected to be $39 million to $41 million.

On capital and leverage, Brunner said net debt to annualized adjusted EBITDA was 5.1 times at quarter end. He said LXP had $130 million of cash and an undrawn $600 million revolving credit facility. Brunner also referenced the January recast of the $600 million revolver and $250 million term loan, saying it extended maturities and reduced interest costs.

Brunner said LXP repurchased 325,000 shares during the quarter at an average price of $48.70 per share. During Q&A, Eglin said the company can use liquidity for buybacks opportunistically, but added that development, “especially in Phoenix,” is the larger value driver from management’s perspective.

When asked about $160 million of 6.75% senior notes due in 2028, Brunner said the notes have a make-whole structure and are technically callable but require payment of a premium.

In closing remarks, Eglin said the company remains focused on disciplined capital deployment, leasing the Phoenix speculative project and remaining vacancies, and driving mark-to-market rent growth, adding that management expects its leasing pipeline to produce “strong mark-to-market results” as market conditions improve.

About LXP Industrial Trust NYSE: LXP

LXP Industrial Trust is a real estate investment trust that specializes in the ownership, acquisition and management of industrial properties across North America. The company's portfolio consists of warehouses, distribution centers and manufacturing facilities designed to support supply-chain and logistics operations. By focusing on long-term leasing arrangements, LXP Industrial Trust aims to provide stable income streams while delivering value to tenants through modern, well-positioned industrial space.

The firm's primary business activities include sourcing and under-writing new property investments, overseeing development and redevelopment projects, and implementing asset-management strategies to enhance the performance of its holdings.

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