Lexington Realty Trust (NYSE:LXP) Q1 2018 Earnings Conference Call - Final Transcript
May 08, 2018 • 08:30 am ET
Good morning, and welcome to the Lexington Realty Trust First Quarter Earnings Call and Webcast. All participants will be in listen-only mode. [Operator Instructions]. Please note this event is being recorded.
I would now like to turn the conference over to Heather Gentry, Investor Relations. Please go ahead.
Heather T. Gentry
Thank you, Operator. Welcome to the Lexington Realty Trust first quarter 2018 conference call and webcast. The earnings release was distributed this morning, and both the release and quarterly supplemental disclosure package are available on our website at www.lxp.com in the Investors section, and will be furnished to the SEC on Form 8-K.
Certain statements made during this conference call regarding future events and expected results may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Lexington believes that these statements are based on reasonable assumptions. However, certain factors and risks, including those included in today's earnings press release, and those described in the reports that Lexington files with the SEC from time-to-time could cause Lexington's actual results to differ materially from those expressed or implied by such statements. Except as required by law, Lexington does not undertake a duty to update any forward-looking statements.
In the earnings press release and quarterly supplemental disclosure package, Lexington has reconciled all non-GAAP financial measures to the most directly comparable GAAP measure. Any references in these documents to adjusted company FFO refer to adjusted company funds from operations available to all equity-holders and unit holders on a fully diluted basis. Operating performance measures of an individual investment are not intended to be viewed as presenting a numerical measure of Lexington's historical or future financial performance, financial position or cash flow.
On today's conference call, Will Eglin, CEO; Pat Carroll, CFO; and Executive Vice Presidents, Brendan Mullinix, Lara Johnson and James Dudley will provide commentary around first quarter results.
I will now turn the call over to Will.
T. Wilson Eglin
Thanks, Heather, and good morning everyone. Our first quarter 2018 results were solid as we continue to execute on our business plan. Both GAAP and cash rents increased on leased renewals during the quarter. Our portfolio lease percentage remains high, and same-store NOI was slightly up. Revenue from our industrial properties increased to 48% of total revenue during the quarter, and now exceeds office revenue. This percentage is up significantly from 25% at the end of 2013.
During the quarter, we disposed of approximately $63 million of primarily office assets. We remain highly motivated to reduce our exposure to suburban office and continue to explore various ways to accomplish this most efficiently. Our objective is to best maximize the value of our office portfolio while investor demand for yield-producing product continues to be strong.
Despite some dilution to current cash flow, we believe that having a more favorable risk-adjusted longer-term growth profile is worth the tradeoff as we continue to add more industrial product to our portfolio and dispose of non-core assets. We intend to use disposition proceeds to fund new industrial investments,