Greetings, and welcome to the Lexington Realty Trust First Quarter 2015 Earnings Conference Call. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to turn the floor over to your host, Ms. Gabriela Reyes. Investor Relations. Please begin.

Hello, and welcome to the Lexington Realty Trust First Quarter 2015 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 Investors 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 that 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 and include the successful confirmation of any lease acquisition, build-to-suit financing or other transaction or the final term of any such transaction. 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; Richard Rouse, Vice Chairman and Chief Investment Officer; and Patrick Carroll, Chief Financial Officer. Now I will turn the call over to Will.

Thanks, Gabby, and welcome, everyone, and thank you for joining the call today. I'd like to begin by discussing our operating results and accomplishments for the quarter. For the first quarter of 2015, our Company Funds From Operations were $0.26 per share. During the quarter, we made an extraordinary amount of progress in the key areas of our business that affect our performance, and we will discuss each of these in some detail today. On the investment front, in the first quarter, we invested approximately $21.5 million in ongoing build-to-suit projects, made 5 acquisitions for approximately $197.3 million, placed a forward purchase under contract for $29.7 million and disposed of 3 office properties for approximately $35.2 million, consistent with our portfolio management and capital recycling objectives. These objectives include reducing our exposure to suburban office properties and monetizing multitenant properties upon stabilization of occupancy and transitioning our portfolio so that more revenue is derived from long-term leases. We are pleased to report that as of quarter end, our weighted average lease term was 12.4 years, and approximately 72% of our revenue was derived from leases expiring after 2019. We also had a strong quarter of leasing, executing leases totaling approximately 900,000 square feet and ending the quarter with 96.7% of our square footage leased, a 30-basis-point improvement from last quarter. Renewal rents increased modestly on a GAAP basis, and declined modestly on a cash basis. We had 2 office leases expire, which were not renewed, but announced today that the Lakewood, Colorado property has been leased with rent expected to commence in September. We also want to highlight the ongoing progress with respect to our refinancing strategy as we continue to execute on our plans to unencumber net operating income and extend our weighted average debt maturity while lowering our…

Thanks, Will. During the quarter, Lexington had gross revenues of $108.6 million, comprised primarily of lease rents and tenant reimbursements. The increase compared to the first quarter of 2014 of $4.5 million relates primarily to acquisition and build-to-suit projects coming online, offset in part by sales of properties. For the quarter ended, March 31, 2015, GAAP rents were in excess of cash rents by approximately $5.5 million. On Page 21 of the supplement, we have included our estimates of both cash and GAAP rents for the remainder of 2015 and 2016, the leases in place at March 31, 2015. This disclosure does not assume any tenant releasing of vacant space or tenant lease expansion on properties with scheduled lease expirations. We've also included on Page 21 same-store NOI data and the weighted average lease term of our portfolio as of March 31, 2015 and 2014. Property operating expenses increased $1 million primarily due to an increase in vacancy at certain properties that were previously 100% net leased and the impact of management of certain properties being transit between the tenant and us. Debt satisfaction gain of $10.4 million relates primarily to the deed in lieu completed during the quarter ended March 31, 2015. During the first quarter of 2015, we incurred impairment charges on a property of $1.1 million and recorded gains on sales of properties of $1.7 million. On page 43 of the supplement, we have disclosed selected income statement data for our consolidated, but non-wholly-owned properties and our joint- venture investments. We also have included net noncash interest recognized in the quarter ended March 31, 2015, on Page 44 of the supplement. For the quarter ended March 31, 2015, our interest coverage was approximately 3.3x, and net debt-to-EBITDA of approximately 6.5x. Now turning to the balance sheet. We…

Thanks, Pat. 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.

[Operator Instructions] Our first question is coming from Sheila McGrath of Evercore ISI.

Will, this -- your stock has been under pressure this year and it seems to be below most NAV estimates. I wonder if you could talk about strategic initiatives to attempt to improve the valuation and your thoughts on considering a share buyback?

Sure. Yes, Sheila, if you look over a couple year period, if we look at our company 2 years ago, arguably, we traded at a big premium to net asset value. And today, we probably traded at discount that's comparably big. And yet, during that 2-year period, our office portfolio, we think has gotten much stronger. We have a weighted average lease term overall in our office portfolio of more than 7 years today, and more than half of our revenue is from investment-grade tenants. And many of our rents have been mark-to-market during an environment where it hasn't been so good for landlords. So you are right to point out there's been a precipitous drop in the share price recently, and we think there is a fairly sizable discount between where we trade and the private value of the company's assets. I guess, the easiest way for the shareholders to benefit from that pricing disconnect is via share repurchase. And so that is something that should be on the table for us as we look at ways to add value for shareholders, as long as we could do it in a way that's leverage-neutral and fits into the context of our other funding commitments with respect to build-to-suit. I think beyond that, in spite of what I think is a vastly improved office portfolio, shareholders have been extremely concerned about it, and we're going to continue to do work on the office portfolio. So far, we've been shaping it with one-off dispositions, but it's certainly possible, given the fogginess of the investment sales market and the leverage that's available to private buyers, that we would be more active on the disposition front, and that could be a source of liquidity for share repurchases.

Okay. Is there a current buyback program in place? or not yet?

There is an approved plan, but it would be brought to the board again. It hasn't been approved since, I think, 2007.

Okay. Another -- 2 quick questions. In the release, you mentioned in the commentary, renewal discussions are underway with most of '16 maturities. Could you just help us out there? Of the 16 expirations, are there any known vacancies? And do you feel pretty good about the office re-leasing prospects at this point in '16?

We do. I think that the 2 office leases that would be on the watch list for move outs would be Garland, Texas and Bremerton, Washington. And on the industrial side, we have a facility that we lease to Michelin in Michigan. But beyond that, we think that tenant retention is going to be high and that the net impact of renewal rents will probably be about neutral in relation to expiring rents. So we have a period of time where we think things will stabilize with respect to retention and mark-to-market.

Okay. Last question. On TransAmerica, Sea Harbor, how is the pricing and interest level been since your -- since you kind of lost that -- launched that effort versus your expectations and potential timing of those sales? And are those sales already in your guidance?

Yes, all those sales are in our guidance for the year. Sea Harbor is under contract. The cap rate there is in the low 7s. So we do expect that, that will close later this quarter. We've been in the market with TransAmerica Tower, and there has been very strong investor interest, but we are not at the point of having a contract to announce. So I would, as I think about that sale, that's -- I would think likely a third-quarter event, perhaps early in the third quarter. So those would be 2 significant multitenant dispositions for us that are consistent with our strategy of leasing buildings up to stabilization and then turning them into cash to put back into our single-tenant business. And beyond TransAmerica, we would expect to put our Palm Beach Gardens Florida multitenant property into the market for disposition as well.

Our next question is coming from John Guinee from Stifel. John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: Just following up, Shiela, with you. I think you may have answered the question, but let me get a little explicit more explicit. Is it safe to say you're not issuing common at under $10 a share?

Common, is not on our radar screen. John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. Second, did investors get cold feet on TransAmerica 100 Light Street, given all the wonderful publicity Baltimore received in the last few weeks?

I don't think so. I think investors' view of Baltimore is -- hasn't been changed that much. We've had a great degree of interest and no indications of retrading on valuation on that asset. John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay. And just a curiosity question, Little Stone Brotherhood, Venus, Florida, which is sort of a retirement community, sounds like a possible cult investment. What is it?

A golf course. John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: What?

A golf course.

And why is a golf course named Little Stone Brotherhood?

That's the tenant.

Our next question is coming from Phil DeFelice of Wells Fargo Securities.

Could you provide an update for what you're seeing in the build-to-suit states as far as competition and pricing -- as you try to stabilize the assets?

We're seeing good transaction flow in the build-to-suit area, Phil. There's no question that pricing is competitive. And given the recent move in interest rates and changes in our own share price, we've become a little bit more cautious toward making forward commitments. So the premium available in the forward market has narrowed substantially in relation to straight-up acquisitions. So we think it's prudent to be cautious about forwards, especially looking at forwards that might take 2 years to deliver.

The pipeline is currently close to $400 million. Is there a level that you feel comfortable with at this point?

There are a couple of transactions that we might add to the portfolio from a build-to-suit standpoint, but I would not want to -- in the context of 2016, I would want to probably limit our funding budget to a few hundred million dollars at this point, and we'll see how this move in interest rate affects the market and how the decline in share price for all the public net lease companies affects pricing in that segment as well.

Okay. And then can you talk about your lease expansion during the quarter for that 300,000 square-foot industrial facility in Tunis [ph] Indiana? It looks like the lease was extended just until the end of next year. Was there a reason for this? Beyond the state fadeout [indiscernible], if its stay [ph] beyond that expansion?

Our expectation right now is that it's more likely that Bay Valley [indiscernible] foods will stay longer term, but they were not in a position to renew for longer than 18 months. So our expectation is that they want to stay in the facility, and we are having continuing discussions with them.

Our next question is coming from Gene [indiscernible] of JPMorgan.

Quick question on the 155 [ph] incremental acquisitions for the year, any of that under contract?

We do. That's the preferred freezer facility. That's scheduled to close in the fourth quarter and is on our -- if you go to the supplemental, we have a schedule that shows that as a forward funding commitment.

Got it.Can you just talk about...

On Page 14 supplement.

On Page 14.

Got it. I wasn't aware of the forward. Can you just talk about what component of the portfolio, in your view, is core versus non-core i.e. what you would ultimately want to sell to redeploy?

Well, anything that's in the multitenant piece, we view as a source of liquidity, right? The strategy there is when we have an empty building, if it needs to be converted to multitenant, in most cases, we'll lease it up to stabilization and then turn that into cash. So right now, we have more than a couple of hundred million dollars of real estate there that's has occupancy of -- above 90%. So that would be a logical place for us to focus. We have been selling out of the retail portfolio slowly, but that's a very small component of value. And we have beyond that, an interest in continuing to shape our suburban office portfolio. So it's a smaller part of our business overall and ends up being concentrated in fewer markets that are characterized by having many large corporate users in case we have vacancy.

Got it. And final question on the acquisition environment. Has your focus shifted at all over the course of the last 2 quarters on the kind of product that you're underwriting?

Yes. It's certainly more oriented towards industrial. This is Dick Rouse. Certainly more oriented towards industrial, but keep in mind that we do view developers as our principal clients. So if a developer that we've done business with in the past particularly, brings us an office product, we're not going to just pass it up just because it's office. If it's a long-term lease to a good credit, we'll certainly consider it. But we certainly prefer industrial.

Our next question is a follow-up coming from John Guinee of Stifel. John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: Richmond, Virginia, who's your tenant there? Is that the Midwest vehicle [ph] deal?

No, listen now that's.... John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: Who's the tenant in Richmond, the big office building?

Being built? John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: Yes, yes

It's Maguire Woods, the law firm.

Maguire Woods John W. Guinee - Stifel, Nicolaus & Company, Incorporated, Research Division: Okay, got you. Sorry. All right, okay. The second question, Richmond, Washington preferred freezer services, Detroit Michigan, Chrysler Group, the freezer is $340 a square foot. The Chrysler group is $156 a foot. How much of that is base building? How much of that is specialty improvements? And how good is the credit on these assets -- on these tenants?

Well, Chrysler we do has a very good credit. And recall that preferred freezer services is a 20-year contract with the ConAgra, on that facility, John. So the ultimately credit behind the lease is very strong.

I think the other thing that's deceiving about the transaction is that, that freezer facility is, I believe, 110 feet tall. So it's a clear height of 110 feet versus your normal distribution center, let's say, of 30 feet. So you really need to look at the price per cubic foot as opposed to square foot.

And you've got 250,000 feet there that can be refrigerated down to 10 below. So it is -- it's an expensive building, John.

At this time, I'd like to turn the floor back over to management for any additional or closing comments.

Well, thanks, again, to all of you for joining us this morning. We continue to be very excited about our prospects for 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 Gabriela Reyes. or you can find additional information on the company on our website at www.lxp.com. Thanks again.

Ladies and gentlemen, thank you for your participation. This concludes today's teleconference. You may disconnect your lines at this time, and have a wonderful day.