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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 4, 1997
LEXINGTON CORPORATE PROPERTIES, INC.
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(Exact Name of Registrant as specified in its charter)
MARYLAND 1-12386 13-3717318
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(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) Identification No.)
355 LEXINGTON AVENUE, NEW YORK, NEW YORK 10017
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code:
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(212) 692-7260
NOT APPLICABLE
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On February 4, 1997, Lexington Corporate Properties, Inc. (the
"Company") announced that it would vigorously contest a motion filed in
California state court by Ross Stores, Inc. which seeks to confirm an
arbitration decision issued in connection with Ross Store's exercise of a
purchase option to acquire the Company's Newark, California property. The
arbitration decision which the Company plans to contest would allow Ross Stores
to purchase the Newark, California property for $24.8 million on September 1,
1997. A copy of the Company's press release with respect to this matter is
annexed hereto as Exhibit 7(c)(1), which is hereby incorporated by reference.
Item 7. Financial Statements, Pro Forma Information and Exhibits.
(c) Exhibits
1. Press Release, dated February 4, 1997, issued by Lexington
Corporate Properties Inc.
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EXHIBIT INDEX
Exhibit No. Description
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7(c)(1) Press Release, dated February 4, 1997, issued by Lexington
Corporate Properties Inc.
3
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LEXINGTON CORPORATE PROPERTIES, INC.
By: /s/T. Wilson Eglin
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T. Wilson Eglin
President and Chief Operating Officer
Date: February 4, 1997
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Exhibit 7(c)(1)
RE:
LEXINGTON CORPORATE PROPERTIES, INC.
355 LEXINGTON AVENUE
NEW YORK, NY 10017
[FRB LETTERHEAD]
FOR FURTHER INFORMATION:
AT THE COMPANY AT FINANCIAL RELATIONS BOARD
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T. Wilson Eglin Laurie Berman Stephanie Mishra Gil Faggen
President (General Info.) (Analyst Info.) (Media Info.)
(212) 692-7260 (212) 661-8030 (312) 266-7800 (212) 661-8030
FOR IMMEDIATE RELEASE
February 4, 1997
LEXINGTON CORPORATE PROPERTIES, INC.
TO CONTEST ARBITRATION
New York, NY -- February 4, 1997 -- Lexington Corporate Properties, Inc.
(NYSE:LXP), a real estate investment trust, today announced that Ross Stores,
Inc. has filed a motion in California state court to confirm an arbitration
decision issued in connection with its exercise of an option to acquire
Lexington's Newark, California property. Lexington intends vigorously to
contest the motion on several grounds, including the failure of the arbitrator
to disclose material information. Ross currently leases the property in dispute.
The arbitration decision which Lexington plans to contest would allow
Ross to purchase the property for $24.8 million on or about September 1, 1997.
If the sale occurred, Lexington would recognize a gain on the sale of
approximately $400,000. However, because Lexington does not believe that it
would be able to achieve a rate of return on reinvestment of the sale proceeds
which would fully offset the $3.25 million of annual rental revenue currently
generated by the property, the sale, if concluded, would be expected to result
in decreases in Lexington's net income and funds from operations. Management
believes that one or more transactions currently contemplated by the Company
should have the effect of offsetting any such decreases. For example, Lexington
intends to lower interest expense by refinancing, or otherwise prepaying,
mortgage debt secured by its property in Salt Lake City, Utah. This debt
currently bears interest a 12.90% per year, has a current outstanding balance of
approximately $22.8 million and requires annual debt service payments of
approximately $4.3 million, or 18.9% of the outstanding balance.
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COMMENTS FROM MANAGEMENT
Commenting on the pending motion, T. Wilson Eglin, President and Chief
Operating Officer, said "As we continue to implement our business plan, grow
our portfolio and refinance existing debt on more favorable terms, the
financial effect of any potential property sale should be mitigated. While we
are hopeful, based on the facts, that the court will ultimately rule in our
favor, we considered the possibility of a negative outcome prior to increasing
our quarterly common stock dividend from $0.28 per share to $0.29 per share."
Lexington Corporate Properties, Inc. is a self-managed and
self-administered real estate investment trust that owns and manages a 5.3
million square foot portfolio of 39 triple-net-lease properties, and minority
interests in two additional properties. The Company's properties, which are
located in 23 states, include warehouses, distribution centers, manufacturing
facilities and office and retail properties net-leased to tenants such as ITT
Hartford, Honeywell, Federal Express and Wal-Mart. Shares of Lexington common
stock closed Tuesday, February 4, 1997, at $14.625 per share. Lexington, which
pays an annualized dividend of $1.16 per share, has approximately 10.1 million
preferred and common shares outstanding and approximately 2.5 million operating
partnership units outstanding, substantially all of which carry a current
distribution level at or below the level paid in respect of the Company's
common stock and which are exchangeable into common stock.
For more information on Lexington Corporate Properties, via fax at no charge,
dial 1-800-PRO-INFO and enter company code 093 or ticker symbol LXP.
# # #
This release contains certain forward-looking statements which involve known
and unknown risks, uncertainties or other factors not under the Company's
control which may cause actual results, performance or achievements of the
Company to be materially different from the results, performance, or other
expectations implied by these forward-looking statements. These factors
include, but are not limited to, those detailed in the Company's periodic
filings with the Securities and Exchange Commission.
