Good morning and welcome to the Lexington Realty Trust third quarter 2010 earnings conference call. At this time, all participants have been placed in a listen-only mode and the floor will be open for your questions following the presentation. It is now my pleasure to turn the conference over to your host, Ms. Ashley Fillmore. Please go ahead, ma'am.

Hello. And welcome to the Lexington Realty Trust third quarter conference call. The earnings press release was distributed over the wire this morning and the release and supplemental disclosure package will be furnished on a Form 8-K. In the press release and supplemental disclosure package, Lexington has reconciled all historical non-GAAP financial measures to the most directly comparable GAAP measure in accordance with Reg G requirements. If you did not receive a copy, these documents are available on Lexington's website at www.lxp.com in the Investor Relations section. Additionally, we are hosting a live webcast of today's call which you can access in the same section. At this time, we would like to inform you that certain statements made during this conference call which are not historical may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Lexington believes the expectations reflected in any forward-looking statements are based on reasonable assumptions, Lexington can give no assurance that its expectations will be attained. Factors and risks that could cause actual results to differ materially from those expressed or implied by forward-looking statements are detailed in today's press release and from time to time in Lexington's filings with the SEC. Lexington does not undertake a duty to update any forward-looking statements. Joining me today from management are Will Eglin, Chief Executive Officer, Robert Roskind, Chairman, Patrick Carroll, Chief Financial Officer and other members of management.

Thanks, Ashley. And welcome, everyone and thank you for joining the call today. I'd like to begin by discussing our operating results and Lexington generated very strong results in its real estate portfolio for the third quarter of 2010. We continue to execute well in all of our key areas including leasing, capital recycling through dispositions and refinancing, balance sheet management and operating efficiency. For the quarter our reported funds from operations were $0.25 per share, an 8.7% improvement compared to last quarter, after deducting several items as detailed in the earnings release. These items added several million dollars to our funds from operations. Based on our strong results, the execution of our business plan this year and our confidence in our future prospects, we announced this morning a 15% increase in our common share dividend. This is expected to be a most welcome development in an environment of low-dividend yields. In the third quarter, we continued to monetize assets and execute on our capital recycling initiatives. Total disposition activity for the quarter was approximately $69.7 million at a weighted average cap rate of 0.6%. Our strategy is to continue with our capital recycling effort by selling non-core properties, particularly our multi-tenant properties, in order to create additional liquidity and focus our portfolio strategy on our core single-tenant, office and industrial properties. So far in the fourth quarter, we have sold one vacant 200,000 square foot industrial property for $6.1 million, bringing our total volume for the year to $155.1 million at a weighted average cap rate of 4.1%. We are currently marketing approximately $165 million of properties for sale and would expect to market another $120 million for sale over the next year, as we seek to accelerate and substantially complete the sale of our multi-tenant properties. In addition,…

Thanks, Will. During the quarter, Lexington had gross revenues of $87.8 million comprised primarily of lease rents and tenant reimbursements. Under GAAP, we're required to recognize revenue on a straight-line basis over the non-cancelable lease term, plus any periods covered by a bargain renewal option. In addition, the amortizations of above and below market leases are included directly in rental revenue. In the quarter, GAAP rents were in excess of cash rents by approximately $200,000 including the effect of above and below-market leases. We have also included on Page 40 in the supplement our estimates of both cash and GAAP rents for the remainder of 2010 through 2014. We recorded a $4.9 million non-cash gain related to our forward equity commitment entered into in 2008 as a result of the change in our share price from June 30, 2010 to September 30, 2010. We also recorded a $1.1 million in impairment charges in gains on sale of $2 million related to properties we disposed of. On Page 38 of the supplement, we have disclosed selected income statement data for our consolidated, but non-wholly owned properties in our joint venture investments. Our G&A decreased .$0.2 million in the third quarter of 2010 compared with the third quarter of 2009, the primary driver for this due to the increase our lower professional fees. Interest expense decreased $0.9 million due to the deleveraging of the balance sheet. Now turning to our balance sheet, our balance sheet is strong as we have continued to increase our financial flexibility. We have $92.4 million of cash at quarter end including cash classified as restricted. These restricted cash balances relate to money held with lenders as desperate deposits on our mortgages. At quarter end, we had about $1.9 billion of debt outstanding which had a weighted average interest rate of about 5.82%. Included in intangibles is the allocation of the purchase price of properties related to in-place and above market leases and customer relationships in accordance with FAS141. We also have about $98 million in below-market lease liabilities on the balance sheet. A significant component of other assets and liabilities is included on Page 39 of the supplement. During the quarter ended September 30, 2010, we capitalized $2 million in lease costs, 200,000 in TI costs and $5.1 million in capital improvements, including about $2.8 million spent on Transamerica Tower. On Pages 28 through 32 of the supplement we disclosed the details of all consolidated mortgages maturing through 2014. Now I'll turn the call back over to Will.

Thanks, Pat. In summary, this was a great quarter for Lexington on every level and we are pleased with our progress and the investment opportunities we are uncovering. Occupancy increased; leasing continues to be consistent with our expectations. Our balance sheet and debt maturity profile are significantly improved and we have been able to source several investment opportunities that we believe are very attractive. We continue to have a high degree of success in selling properties and unlocking significant value that we do not believe is reflected in our share price. Sales continue to be a great value proposition for shareholders and we have accelerated our property sale efforts accordingly. Our objectives through next year will be to substantially finish our multi-tenant sales and we would hope to have the majority of sales completed by midyear, generating net proceeds during the year in excess of $200 million. Net disposition proceeds will be used to retire our 2011 debt maturities totaling $49.9 million and the $32.3 million currently outstanding on our credit line and to fund growth initiatives with any excess capital available to retire additional debt. Accordingly, including scheduled principal amortization, we believe our leverage will decline meaningfully through 2011 as it has in 2010. We believe any capital that comes out of our net leased strategic asset funds joint venture would further strengthen our liquidity, perhaps materially so and provide substantial capital to retire additional debt or to grow. We believe we have very good visibility on generating surplus capital relative to our debt maturities through next year and can easily fund our current pipeline of investment opportunities with internally-generated capital. Operator, I have no further comments at this time. So we are ready for you to conduct the question-and-answer portion of the call.

Absolutely. (Operator Instructions) And we will hear from Sheila McGrath with Keefe, Bruyette & Woods. Sheila McGrath – Keefe, Bruyette & Woods: Yes. Good morning. Will, I have a few questions. You continue to talk about asset sales to deleverage. I'm just wondering what leverage level you're trying to operate the company at and how far – how much more debt do you want to pay down to get there?

Well, we're heading toward leverage of about 50%, Sheila. If we look as we get into the second half of next year via the sale program, I think that we can – especially, if we're able to create liquidity in the NL SAF joint venture, we should be able to get our leverage down to about 50%. Sheila McGrath – Keefe, Bruyette & Woods: Actually, that was my next question. On the joint venture, you said it's on your books at $60 million, but you could get $180 million of liquidity. Can you just remind us the timing of that and how the mechanics of that'll work?

Sure. In that joint venture, there is a buy sell in mid-2012, but we and our partner have an interest in trying to sell the assets in that joint venture now, simply because yields are low and cap rates are low. So we think now is the time to try to maximize a value for both of us as investors. If you look at that portfolio, it throws off about $57 million of net rent and it has about $318.6 million of debt. All these numbers are as of September 30 this year and our preferred capital position is about $180 million presently. So if you look at the – obviously, the debt gets paid off first, but if you look at the debt plus our preferred, it totals about $500 million. And so that means as long as the properties can be sold for less than a little bit above an 11% cap rate or better, we'll get our capital out. So we do believe that there's equity behind us and all things being equal for us to be able to recover our capital next year versus in 2012, I think is a real positive. And that asset has been on our books for only about $60 million as a result of a carryover basis from when the venture was formed. Sheila McGrath – Keefe, Bruyette & Woods: So it will require dispositions of all the assets for you to get the 180 back?

That's correct. Sheila McGrath – Keefe, Bruyette & Woods: Okay. Last question – can you remind us on the forward equity commitment when the timing – when the timing – that'll be settled and the impact for LXP on FFO, when that settles?

We take it out of the FFO because the forward commitment is our – is ownership in our own stock, so in our report – when we reconcile to what we report as FFO we back out that gain. It has to be settled by October 2011. Sheila McGrath – Keefe, Bruyette & Woods: So that you'll just pay the debt off. How much debt was there on that again?

What's left today, the liability is $4 million and the counter party is holding a little over $4 million of our stock as collateral for the $4 million liability. Sheila McGrath – Keefe, Bruyette & Woods: Okay. Thank you.

And our next question will come from Anthony Paolone with JPMorgan. Anthony Paolone – JPMorgan: Thanks. Will, a lot of the assets you guys have been selling have been vacant, so it's been really like it's kind of no cap rate, but in that 165 that you have being marketed now and the $120 million keyed up for next year it seems, what's the split between maybe the vacant assets versus operating assets? And maybe give a sense as to cap rates.

Well, we have in that pipeline a couple of assets that are close to full occupancy, one being a single tenant building and the other being a property with two tenants but very high occupancy anyway. I think factoring in the vacancy and selling some multi tenant where our average occupancy is in the mid-60s right now, overall cap rate in the mid-5s on the forward pipeline I think is achievable in today's market. Anthony Paolone – JPMorgan: Okay. So that's on the whole $285 million roughly?

Yes. I mean, it may be lumpy from quarter-to-quarter, but when we look back a year from now, I think that's about where it comes out. Anthony Paolone – JPMorgan: Okay. Is 100 Light Street in that group for being contemplated right now?

Yes. I mean, looking at selling 100 Light Street next year is certainly part of our plan. We've made very good leasing progress there we have some good prospects. If we can make some more progress, I think we'll get a better valuation on the sale but holding the multi tenant assets is not part of the strategy, so that we're hopeful that that's a liquidity event next year. And that property has no debt on it and it doesn't support any of our borrowing base on our credit facility. So that would be a shot of unrestricted liquidity that could be pretty sizeable. Anthony Paolone – JPMorgan: Is that in the $120 million that you mentioned?

Yes, yes. Anthony Paolone – JPMorgan: It is, okay. And then on the CapEx side, I think Pat, you mentioned it was five any change on the capital side with the, I think, $2 or $3 million of that coming from Light Street this quarter. (A), did I get that number right and then (B), I'm wondering what the rest of that came from. And then I guess the last thought on that would be what does that CapEx look like going forward?

You did get the numbers right, Tony. It was like $5 million; $2.8 million of it was on the Transamerica Tower. The rest of it is just as the properties are maturing, we are putting some money into the assets. So I mean, it's – on the whole portfolio, I mean, its spread pretty widely over the whole portfolio. The only one that has significant concentration was the Transamerica Tower. Anthony Paolone – JPMorgan: Okay. And then last question, the dividend increase, how much of that was due to just your business performing well and seeing what you're seeing in the future versus having to do with tax reasons?

Without getting specific about what our tax expectations were for next year, we were in a position where we're going to have upward pressure on our taxable income, but we also took into account the nature of our cash flows and where our payout ratio would be in relation to funds from operations. So it was, I think, a combination of two things, the business being more healthy but also expecting that there would be upward pressure on taxable into next year. Anthony Paolone – JPMorgan: Okay. Thank you, nice job.

And the next question will come from Todd Stender with Wells Fargo Securities. Todd Stender – Wells Fargo Securities: Hi, thanks, guys. I was just going – I guess staying on the disposition side, any difference in the buyer profile for those assets, guys that buy vacant properties or the buyers that'll buy fully leased properties?

I don't think there's been – I mean, the sales market continues to be pretty good. If anything, there's – with more cap rate compression that we're seeing suggests that there's even more buyers. So I wouldn't say that there's a meaningful difference in sort of the composition of who's looking at these assets, but we put an asset in the market the other day for sale and within a week, we had 45 confidentiality agreements signed. So that reminded us of the sale process that we had on 255 California Street in the third quarter which ended up being an incredibly great execution for us. So it still seems to us like there's very, very strong investor demand. Todd Stender – Wells Fargo Securities: And just switching gears to the build to-suit stuff, it seems like the investment window for these types of opportunities should appear to be open for some time. Do you share that same expectation that that'll be kind of your blueprint for your pipeline at least for new investments for next year?

Yes. I mean, that's really where the opportunity is for us right now where we can exploit what we hope is hopefully a great deal more activity and construction financing is not easy to come by. So our ability to play in the forward area on build-to-suit is leading to some great investment options for us and having the ability to add long-term leases in a way that's accretive to our cash flows and extends our weighted average lease term and makes our portfolio younger is really, really a tremendous benefit in terms of creating more durable cash flow for us. Todd Stender – Wells Fargo Securities: Thanks. And last question, the lease that you're signing – you will be signing with Clearwater Paper on your Shelby, North Carolina, development, the initial cap rate is 8.9 are there any rent escalators in there?

Yes. That's 2% annually. Todd Stender – Wells Fargo Securities: Fix, okay. Thank you.

(Operator Instructions). Your next question will come from John Guinee with Stifel.

Okay. Thank you. A bunch of nickel and dime questions. First on Page 20, which is your multi tenant assets, is that essentially the entire list of what you'll be selling or are any excluded?

No. I mean, everything on there is viewed as a sale candidate, John. There may be at least one single tenant asset that gets sold and we do continue to have a lot of our single tenant retail on the market, but that's been – as we've talked about, a less great [ph] market for sales, but looking at the multi tenant page, yes, they're all either in the market for sale or expected to make their way there. John Guinee – Stifel Nicolaus: Okay. And that's per the earlier question on averages sort of a 5.5 cap when it's all said and done, the lending with full fledge…

Exactly. We’re factoring it in – yes, because we do have a couple of fully vacant industrial buildings, John that would be in the mix of forward sales. And then the fully leased stuff will trade at a higher cap rate, but they'll roughly offset. John Guinee – Stifel Nicolaus: Okay. And then Linens n Things has that sold yet or is that on the – within the…

No, that's under contract for sale and the issue there is it's taken a while to get the mortgage assumption approved by the next buyer. John Guinee – Stifel Nicolaus: Okay.

And so that's – and we've had a couple of other buildings with mortgages on them where it's – even the timing of the sales has been a little bit longer than we would have thought, simply because it's very time consuming to get mortgages assumed right now. John Guinee – Stifel Nicolaus: You're having problems getting mortgages assumed on a vacant building?

Well, mortgage services are very busy right now. John Guinee – Stifel Nicolaus: Okay.

So, yes, it's taking longer than expected. John Guinee – Stifel Nicolaus: Okay. And the two buildings in New Kingdom which you stopped paying debt service on, are those for sale or will they go – are they in the $285 million?

Yes, they are. John Guinee – Stifel Nicolaus: Okay. And then you have a – we noticed on a footnote somewhere here you have a lease term fee of $6.8 million on Farmington Hills. How's that being treated?

It's being recognized into revenue through the life of the term of the shortened lease, so through December of 2011, that property also had an above market lease that will – the amortization of that gets accelerated. So the impact for the quarter on a going forward basis is a couple of hundred thousand dollars. John Guinee – Stifel Nicolaus: Okay. You mean they offset each other?

They were almost – they were very close to being the same number, yes. John Guinee – Stifel Nicolaus: Okay. So there wasn't a material impact in this quarter of that property?

And there wasn't a material impact in this quarter and there won't be a material impact because of that transaction through 2011, that's right. John Guinee – Stifel Nicolaus: Okay. And then the University of Utah asset, that $37 million, is that entirely off the balance sheet?

No. Although, I think economically it is a sale, we weren't allowed to deconsolidate the property because real estate has different rules as opposed to any other type of asset. So the debt is still in my – is still on our balance sheet and the asset's still on our balance sheet, so it's a 100% leveraged asset. Economically it's a sale. Lexington doesn't get any additional net cash flows from it of any significance. It's like 30,000 a year or something like that; it would be really diminimus, but economically it's a sale but it is still on our balance sheet. John Guinee – Stifel Nicolaus: Okay. So when you're looking at your debt numbers, you should effectively deduct it by $37 million?

I think that's the right way to look at it, John.

That's exactly the right way to look at it, John because there was a land lease asset where we had no residual value and we monetized the whole stream, so you're absolutely right in looking at it that way. John Guinee – Stifel Nicolaus: Okay. And then just out of curiosity, your deal up in Maine, is that a nine year amortization on the lease?

Yes, that's right. John Guinee – Stifel Nicolaus: The amortization matches the lease term, so to get someone to lend on it there's zero residual when UT lease expires.

Well, the way that we maximize the benefits of the financing was to make it essentially a credit transaction which would be a fully amortizing loan and the inexpensive interest rate reflects that it's a credit play without residual value exposure, that's right. John Guinee – Stifel Nicolaus: Got you, okay. And then going to quickly to Page 11, this is more out of curiosity, the Transamerica Life Company lease shows a new cash rent per annum of about 2135 and a new GAAP rent of $30.30 and the difference is $1.2 million a year. First, are those gross or net numbers and then, two how did the difference between cash and GAAP become so significant?

Well, first, they are gross numbers, John. The reason for the difference is that there is a free rent period at the beginning and that number isn't the annual number for every year. It's the 12 months after the lease commences. So the lease, we expect to start recognizing to get that revenue on 11/1/2011. Those numbers reflect the next 12 months, so where there's a free rent period in, so that's why the cash rents are lower than the GAAP rents. John Guinee – Stifel Nicolaus: So you expect to start collecting rent on a GAAP basis 11/1/2011 or a cash basis?

The rents will commence on 11/1. We'll start recognizing GAAP revenue on that, but there is a period of free rent that the cash won't be coming in on 11/1. That's exactly right. John Guinee – Stifel Nicolaus: Okay. So for a buyer, they're going to see that cash income stream somewhere in 2012 or 2013?

'12. John Guinee – Stifel Nicolaus: Okay. Wonderful job, guys. Thank you.

Thank you, John.

And clearly, there are no further questions in the queue. (Operator Instructions) And there appear to be no further questions. I'll turn the floor back to our speakers.

Well, thanks to all of you again for joining us this morning. We're very excited about our prospects for the balance of this year and beyond. And as always, we appreciate your participation and support. If you would like to receive our quarterly supplemental package, please contact Ashley Fillmore or you can find additional information on our company at our website, www.lxp.com. And in addition, you may contact me or any of the other members of our senior management team with any questions. Thanks again and have a good day, everyone.

And again, that does conclude today's teleconference. Thank you for your participation.