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No. of Recommendations: 9
LXP hasn't released the 10K as yet, but looking through 3Q18, CF's were not doing well.

For 3Q18, using rolling 4Q periods, the Dividend-to-Net CFFO (CFFO minus preferred div minus dist to Non-Controlling Interests) had risen to 77%, which is not bad for a Net Lease REIT, but it had been progressing upward from the mid 60% range over the past 4 quarters. What is the most worrisome is the interest expense as a % of CFFO plus Interest, which had jumped up to 27%. This is unsustainably high. In my experience, any ratio between 25% and 30% that is not on its way down as the debt-financed investments become more profitable, will lead to a dividend cut. LXP's interest expense ratios were upwards of 30% over past 8Q, but were headed down to low 20% range, which is good, but then popped back up over the past two 4Q periods. Not good.

Revenue/share and CFFO/share were flat and had declined by a penny, respectively, also not good. The most recent 8k summary shows nominal revenues had dropped to ($MM) $87.251, down from $99.958 for 3Q18. I haven't seen the number of outstanding basic shares for the 4Q18, but this much drop in Revenue is definitely not good.

2 years ago when I bought shares, it sounded as though management had put itself on good footing with its insertion into office properties in an expanding and promising economic growth cycle and the 7.6% current yield seemed like a good bet. Fortunately, I followed my rule of limiting such high yield to <1% of portfolio income......

And while on the topic of Net Lease REITs, although I hold no shares, I'd be cautious of WPC. Thru 4Q18, per share data are flat and interest expense ratio as defined above, jumped up to 25.9% from 24.3% and payout ratio has hit 90% after dropping to the low 80% range a couple of years ago, it has been steadily climbing.

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