Good morning and welcome to the Lexington Realty Trust Third Quarter Earnings Conference 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. Please go ahead.

Thank you, operator. Hi and welcome to the Lexington Realty Trust third quarter 2016 conference call. The earnings press release was distributed 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 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 our 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 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 and include the successful consummation of any lease, acquisitions, build-to-suit financing, disposition or other transaction or the final terms of any such transaction. Except as required by law, Lexington does not undertake a duty to update any forward-looking statements. References to adjusted company FFO refer to adjusted company FFO available to all equity holders and unit holders on a fully diluted basis. Operating performance measures of an individual investment are not presented or intended to be viewed as liquidity or performance measures that present a numerical measure of Lexington’s historical or future financial performance, financial position or cash flows. Joining me today to discuss Lexington’s third quarter 2016 results are Will Eglin, Chief Executive Officer; Pat Carroll, Chief Financial Officer and other executive members of management. With that, I will now turn the call over to Will.

Thanks, Heather and good morning everyone. We appreciate you joining our third quarter earnings call today. It was another productive quarter and overall we were very pleased with our operating results. Our execution has been strong as we continue to focus on the key areas of our business, namely sales, leasing, balance sheet management and acquisitions. Leasing spreads were positive for the quarter on leasing volume of 1 million square feet and disposition activity of approximately $400 million was consistent with our expectations. We substantially reduced our leverage to a net debt to adjusted EBITDA of 5.3 times compared to 6.2 times the prior quarter and we ended the quarter with more cash than usual on our balance sheet due to the timing of sales. We purchased one industrial asset in a prime distribution market just outside of Portland, Oregon during the quarter and I would expect you will see more industrial investment activity in the coming quarters. We also increased our quarterly dividend for the first time since 2014. The new annualized dividend of $0.70 per common share represents a $0.02 per common share increase. The most notable disposition during the quarter was the sale of our three remaining New York City land investments, which turned out to be a great success. These investments produced strong cash flow and capital appreciation for our investors while we own them. We sold the investments for approximately $338 million at a better than expected cash cap rate of 4.6% and a GAAP cap rate of 13.6% after initially acquiring them in late 2013 for $302 million. The sale helped us reduce leverage considerably as a result of approximately $213 million of mortgage debt leaving the balance sheet and the cash proceeds allowed us to fully repay our credit facility and fund investments.…

Thanks Will. Hello and good morning everyone. Financial results for the quarter were positive overall. Gross revenues for the quarter ended September 30, 2016 totaled $106.3 million, representing an approximate 1% increase compared with gross revenues of a $105.4 million for the same period in 2015. This was primarily a result of revenue generated from property acquisitions and new leases signed, offset by 2015 and 2016 property sales and lease expirations. We posted a net loss attributable to common shareholders for the quarter ended September 30, 2016 of $26.7 million or $0.11 per diluted share compared to a net loss of $7.6 million or $0.03 per diluted share for the same time period in 2015. During the quarter, we recognized $72.9 million of non-cash impairment charges primarily the result of the sale of our New York City land investments due to the write-off of the deferred rent receivable balance of $91.2 million. This impairment, which totaled $65.5 million led to net loss attributable to common shareholders for the quarter ended September 30, 2016. As Will mentioned previously, we purchased these investments for $302 million in the fourth quarter of 2013 and we sold them in the third quarter of 2016 for $338.2 million. Our 2016 guidance for net income attributable to common shareholders is now expected to be within a range of $0.40 to $0.44 per diluted common share. Keep in mind, this guidance is forward-looking, excludes the impact of certain items and is based on current expectations. Adjusted company FFO for the quarter was $67.5 million or $0.28 per diluted common share compared to $66.9 million or $0.27 per diluted common share for the same time period in 2015. As Will mentioned earlier, we revised our adjusted company FFO 2016 guidance upwards to $1.09 to $1.11 per diluted share…

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.

Thank you. [Operator Instructions] The first question comes from Sheila McGrath with Evercore ISI. Please go ahead.

Yes, good morning. Will, you have made progress in terms of de-leveraging and also shifting the portfolio to longer term lease assets, can you just remind us where you are now and how we should think about goals for 2017?

Yes. If you look at the balance sheet, at the end of last year, we were leveraged 6.7 times net debt to EBITDA, so the de-leveraging has been pronounced down to 5.3 times. I think as we look at the company next year and going forward it looks to me like leverage will probably be somewhere between 5.5 times and under 6 times leveraged. So, that’s a very good position for us to be in. Almost 75% of our NOI is unencumbered. So from a balance sheet flexibility standpoint, we are arguably in the best shape we have ever been in. We still have an interest in adding long-term leases to the portfolio and we have an interest in adding more industrial assets to the portfolio as well to try to not just have a balance between long-term revenue and revenue from leases shorter than 10 years, but also to have a balance between office and industrial and to work towards specifically a balance between office and industrial rollover in the shorter than 10-year lease portfolio. So, in addition to our typical build-to-suit and sale leaseback business, there is probably going to be some purchase activity around warehouse and distribution assets to help us toward those objectives.

Okay, great. And then in terms of when we look at 2017 in terms of dispositions, this year was significant. We obviously aren’t expecting that. But should we expect that funding most new investments will be with dispositions or how should we think about that?

We haven’t given guidance for next year, but right now, we would expect that new investment activity would be funded principally with disposition proceeds. We are still quite focused on capital recycling. So, I think that’s our expectation at this point.

Okay. And last quick question, if you can just review for us for modeling purposes, the point to that you said about the Dow Chemical phasing in, just kind of on timing too?

Well, it’s a four building complex. Three to four buildings will come in, in the fourth quarter. The fourth one will come in, in the first quarter. For a full year, the Dow Chemical has about a $0.02 impact on FFO, so ratably each quarter. I would use that as an estimate for modeling.

Okay, perfect. Thank you.

The next question is from Craig Mailman with KeyBanc Capital Markets. Please go ahead.

Hey, everyone. This is Laura Dickson here with Craig. I was just wondering how you view your cost of capital here. REITs have generally taken a breather since early September. So, curious if this has impacted your appetite for investments if at all?

Well, we have been focused primarily on reinvesting disposition proceeds with the plan coming in at – so far at 5.1% cap rate. It’s been right fairly easy to reinvest the money at the higher going in yields. So, we haven’t contemplated issuing equity to fund any investment activity. So, share prices go up and down, it’s been a very volatile year. But the plan has not been to use equity this year to fund any growth initiatives, but to rely on sale proceeds and pricing we have gotten in the disposition program has been really good. So, that’s I think our view on that. We do have more cash on the balance sheet than usual right now. So, there should be, to the extent we can put that to work, some accretion from that investment activity.

Okay, yes. And that makes sense. And I was just curious outside of New York land sales, can you talk about like the types of buyers that you are seeing for your assets?

It’s a very wide ranging pool of investors that we sell to depending on the asset. We have sold a couple of office buildings with roughly 10 years of lease term to non-traded REITs, but the purchaser of an empty building is a completely different animal. So, the buyer of the New York land was a wealthy family. So, it really runs the gamut depending on what type of property we are selling, the nature of the lease term, how asset management intends that the asset might be. But so far, the depth of buyers and the pricing that we have been getting have been very satisfactory and we have done better this year than we thought we would do when the year began.

Okay, thank you. And then just lastly I was curious so probably got – you said 74% of NOI comes from unencumbered assets, so just curious if you have – if there is like a target range that you would like that to be in?

Honestly, the target was to be between 65% and 70%. So, we have sort of gone beyond what our short-term objectives were. So, my expectation is it will fluctuate, but it should be around 70% going forward.

Okay, great. Thank you.

[Operator Instructions] The next question is from Kyle McGrady with Stifel. Please go ahead.

Along the lines of your Jackson build-to-suit, are there any future build-to-suits or larger scale acquisitions you are planning on a one-off basis and what specific asset classes would you be targeting? Thanks.

Looking at the pipeline, there isn’t a single one-off transaction that’s anywhere near that dollar commitment for Lake Jackson, most of what we tend to look at is in sort of $30 million to $50 million range. And anything that we are looking for purchase that’s subject to lease is industrial. We are interested in adding office to the portfolio to the extent it’s a build-to-suit or sale leaseback where we can get 15 years or 20 years of term. And we will look at warehouse and distribution on shorter lease term than that, but that would be the sole exception.

Alright, great. Thanks.

[Operator Instructions] Ladies and gentlemen, this concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Thanks again, everyone for joining us this morning. We continue to be very pleased with the progress we are making and the solid execution of our business strategy. We are very excited for what’s to come in 2017 and we continue to be very focused on ways to create further shareholder value. We thank you again for your continued participation and support. And if you would like to receive our quarterly supplemental package, please contact Heather Gentry or you can find additional information on the company – on our website at www.lxp.com. And in addition as always, you may contact me or the other members of our senior management team with any questions. Thanks again for joining us today and have a great day.

Thank you, sir. The conference is now concluded. Thank you for attending today’s presentation. You may now disconnect.