LXP Industrial Trust Annual Report 2013

FY2013 Annual Report · LXP Industrial Trust

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Dear Fellow Shareholders,

In 2013, our strategy to reduce indebtedness and strengthen our balance sheet was rewarded with
investment-grade ratings from both Moody’s Investor Services, Inc. and Standard & Poor’s Rating
Services on our first unsecured senior notes offering. These inaugural ratings allowed us to continue
replacing our higher cost secured debt with lower cost unsecured debt, while improving financial
flexibility. Lower financing costs allowed us to more effectively compete for the highest quality long-
term leased assets and we exceeded the acquisition volume forecasted when the year began. These
investments extended our weighted-average lease term and improved the quality of our portfolio and cash
flow, even as we maintained our disciplined underwriting standards, focusing on quality over quantity.

The following is a summary of our 2013 accomplishments:



. We received a senior unsecured debt rating of Baa2 with
a stable outlook from Moody’s Investor Services, Inc. and a senior unsecured debt rating of BBB- with a
stable outlook from Standard & Poor’s Rating Services, which contributed to a reduction in our weighted-
average interest rate on outstanding consolidated indebtedness by approximately 74 basis points,
primarily by refinancing higher interest rate debt.



. We increased our quarterly common share dividend rate by 10% from
$0.15 per share to $0.165 per share beginning with the dividend paid on January 15, 2014, or from $0.60
per share to $0.66 per share on an annualized basis.



Investments. We increased our net assets by approximately $206.3 million as compared to
2012, primarily by completing real estate acquisitions/build-to-suit transactions, including joint venture
investments, for an aggregate capitalized cost of approximately $590.4 million.



We entered into 59 new and renewal leases totaling approximately 5.7 million
square feet and increased overall portfolio occupancy to 97.6% at December 31, 2013, compared to
97.3% at December 31, 2012.



. We generated approximately 30.1% of our rental revenue from
leases ten years or longer, compared to approximately 23.1% for the year ended December 31, 2012. We
improved our lease rollover profile and reduced rental revenue from single-tenant leases scheduled to
expire through 2018 to approximately 36.9% compared to approximately 44.7% at December 31, 2012.
We extended our weighted-average lease term on a cash basis to approximately 11.2 years at December
31, 2013 compared to approximately 6.9 years at December 31, 2012.



. We monetized properties for an aggregate price of approximately
$167.3 million and a weighted-average capitalization rate of 3.6%. Sale proceeds were primarily used to
fund new investments and retire debt.



. We decreased our secured debt to approximately $1.2 billion at
December 31, 2013 compared to $1.7 billion at December 31, 2012, which was equivalent to 23.9% and
36.5% of our total gross assets, respectively.

As we look ahead, we are excited by the opportunities to build an even better company. As part of our
continuing efforts to create shareholder value in 2014, we expect to:



Our objective is to lower our
secured debt to approximately 20% or less of total gross assets. We expect to achieve this objective by
satisfying secured debt as it matures, acquiring new investments without secured debt and procuring

unsecured debt. As of December 31, 2013, we had approximately $368.3 million of debt maturing
through 2015 with a weighted-average interest rate of 5.4%. We believe the current interest rate
environment provides us with a continued opportunity to refinance existing debt on more attractive terms.



. We will continue to be focused on
quality as opposed to quantity. Build-to-suit transactions allow us to acquire new properties subject to
long-term leases, often with annual rent escalations. Our pipeline of build-to-suit transactions, including
forward commitments, continues to be strong, with approximately $366.1 million of build-to-suit
transactions, including forward commitments, under contract.



. Our lease rollover exposure is
primarily in office and industrial assets. Our objective is to manage our ratio of rental revenue from
office assets to rental revenue from industrial assets, each with lease terms shorter than ten years, down to
approximately 2:1 over the next several years. Ultimately this will make our portfolio less capital
intensive to own and operate.



We expect to continue to dispose of non-core and
underperforming assets, including retail, multi-tenant and vacant properties. An on-going part of our
strategy is converting properties previously occupied by a single tenant into multi-tenant properties,
which can support higher valuations upon stabilization.

We believe that we are unique compared to our competitors because of the following attributes:



. As of December 31, 2013, our ratio of debt and preferred stock to

total gross assets was approximate 43%. We expect to maintain this ratio between 40-45% for 2014.



. We increased our common share dividend by 65% over the last

four years and we believe we have capacity for further dividend growth over time.



. We generally retain more funds from operations than our peer
group, which allows us to reinvest more of our cash flow in new assets, reduce debt and improve our
growth prospects over time.



. Our portfolio is strategically diversified by geography, property type
and tenant industry. We expect our diversification to continue to improve as we grow. As of
December 31, 2013, we had equity ownership interests in approximately 220 consolidated real estate
properties, located in 41 states and containing an aggregate of approximately 40.7 million square feet of
space, approximately 97.6% of which was leased. In 2013, no tenant/guarantor represented greater than
3.4% of our annual base GAAP rental revenue.



. Lexington offers a compelling investment proposition with
attractive value based on our funds from operations multiple and the private market valuation of our
assets.

I would like to thank our shareholders for their continued support, our employees for another year of hard
work and success and our tenants for the opportunity to meet their real estate needs.

Sincerely,

T. WILSON EGLIN
Chief Executive Officer, President and a Trustee
April 7, 2014

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

(Mark One)

For the fiscal year ended December 31, 2013
or

For the transition period from _________________ to ________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to
be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files). Yes

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the

definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated filer

(Do not check if a smaller reporting company) Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes

The aggregate market value of the shares of beneficial interest, par value $0.0001 per share, classified as common stock (“common shares”) of the registrant
held by non-affiliates as of June 28, 2013, which was the last business day of the registrant's most recently completed second fiscal quarter, was $2,453,413,854
based on the closing price of the common shares on the New York Stock Exchange as of that date, which was $11.68 per share.

Number of common shares outstanding as of February 25, 2014 was 229,236,491.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information contained in the Definitive Proxy Statement for registrant's Annual Meeting of Shareholders, to be held on May 20, 2014, is incorporated
by reference in this Annual Report on Form 10-K in response to Part III, Items 10, 11, 12, 13 and 14, which will be filed with the Securities and Exchange
Commission not later than 120 days after the end of the fiscal year covered by this Annual Report on Form 10-K.

Business
Risk Factors
Unresolved Staff Comments
Properties
Legal Proceedings
Mine Safety Disclosures

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity

Securities

Selected Financial Data
Management's Discussion and Analysis of Financial Condition and Results of Operations
Quantitative and Qualitative Disclosures about Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Controls and Procedures
Other Information

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Certain Relationships and Related Transactions, and Director Independence
Principal Accounting Fees and Services

ITEM 1.
ITEM 1A.
ITEM 1B.
ITEM 2.
ITEM 3.
ITEM 4.

ITEM 5.

ITEM 6.
ITEM 7.
ITEM 7A.
ITEM 8.
ITEM 9.
ITEM 9A.
ITEM 9B.

ITEM 10.
ITEM 11.
ITEM 12.
ITEM 13.
ITEM 14.

ITEM 15.

Exhibits, Financial Statement Schedules

3
10
23
24
37
37

40
41
58
59
104
104
104

105
105
105
105
105

106

When we use the terms “Lexington,” the “Company,” “we,” “us” and “our,” we mean Lexington Realty Trust and all entities
owned by us, including non-consolidated entities, except where it is clear that the term means only the parent company or only the
parent company and consolidated entities. All interests in properties are held through special purpose entities, which we refer to as
property owner subsidiaries or lender subsidiaries, which are separate and distinct legal entities, but in some instances are consolidated
for financial statement purposes and/or disregarded for income tax purposes.

References herein to this Annual Report are to this Annual Report on Form 10-K for the fiscal year ended December 31, 2013.
When we use the term “REIT” we mean real estate investment trust. All references to 2013, 2012 and 2011 refer to our fiscal years
ended, or the dates, as the context requires, December 31, 2013, December 31, 2012 and December 31, 2011, respectively.

Management of our interests in properties is generally conducted through Lexington Realty Advisors, Inc., a taxable REIT

subsidiary, which we refer to as LRA, or through a property management joint venture subsidiary.

When we use the term “GAAP” we mean United States generally accepted accounting principles.

This Annual Report, together with other statements and information publicly disseminated by us contain certain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of
the Securities Exchange Act of 1934, as amended, or the Exchange Act. We intend such forward-looking statements to be covered
by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and
include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based
on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words
“believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects,” “may,” “plans,” “predicts,” “will,” “will likely result” or
similar expressions. Readers should not rely on forward-looking statements since they involve known and unknown risks, uncertainties
and other factors which are, in some cases, beyond our control and which could materially affect actual results, performances or
achievements. In particular, among the factors that could cause actual results, performances or achievements to differ materially
from current expectations, strategies or plans include, among others, those risks discussed below under “Risk Factors” in Part I,
Item 1A of this Annual Report and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in
Part II, Item 7 of this Annual Report. Except as required by law, we undertake no obligation to publicly release the results of any
revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect
the occurrence of unanticipated events. Accordingly, there is no assurance that our expectations will be realized.

Business

We are a Maryland REIT that owns a diversified portfolio of equity and debt investments in single-tenant properties and land.
A majority of these properties and all land interests are subject to net or similar leases, where the tenant bears all or substantially all
of the costs, including cost increases, for real estate taxes, utilities, insurance and ordinary repairs. We also provide investment
advisory and asset management services to investors in the single-tenant area.

As of December 31, 2013, we had equity ownership interests in approximately 220 consolidated real estate properties, located
in 41 states and containing an aggregate of approximately 40.7 million square feet of space, approximately 97.6% of which was
leased. In 2013, 2012 and 2011, no tenant/guarantor represented greater than 10% of our annual base rental revenue.

In addition to our shares of beneficial interest, par value $0.0001 per share, classified as common stock, which we refer to as
common shares, as of December 31, 2013, we had one outstanding class of beneficial interest classified as preferred stock, which
we refer to as preferred shares: our 6.50% Series C Cumulative Convertible Preferred Stock, par value $0.0001 per share, which we
refer to as our Series C Preferred Shares. Our common shares and Series C Preferred Shares are traded on the New York Stock
Exchange, or NYSE, under the symbols “LXP” and “LXPPRC”, respectively.

We elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, which
we refer to as the Code, commencing with our taxable year ended December 31, 1993. We intend to continue to qualify as a REIT.
If we qualify for taxation as a REIT, we generally will not be subject to federal corporate income taxes on our net taxable income
that is currently distributed to our common shareholders.

Our predecessor, Lexington Corporate Properties, Inc., was organized in the state of Delaware in October 1993 upon the
combination of two investment programs, Lepercq Corporate Income Fund L.P., which we refer to as LCIF, and Lepercq Corporate
Income Fund II L.P., which we refer to as LCIF II, which were formed to acquire net-lease real estate assets providing current income.
Our predecessor was merged into Lexington Corporate Properties Trust, a Maryland statutory REIT, on December 31, 1997. On
December 31, 2006, Lexington Corporate Properties Trust changed its name to Lexington Realty Trust and was the successor in a
merger with Newkirk Realty Trust, or Newkirk, which we refer to as the Newkirk Merger. All of Newkirk's operations were conducted,
and all of its assets were held, through its master limited partnership, subsequently named The Lexington Master Limited Partnership,
which we refer to as the MLP. As of December 31, 2008, the MLP was merged with and into us.

We are structured as an umbrella partnership REIT, or UPREIT, as a portion of our business has been conducted through our
operating partnership subsidiaries: (1) LCIF and (2) LCIF II. We refer to these subsidiaries as our operating partnerships and to
limited partner interests in these operating partnerships as OP units. On December 30, 2013, LCIF II was merged with and into LCIF,
with LCIF as the surviving entity. We are party to a funding agreement with LCIF under which we may be required to fund distributions
made on account of OP units. The UPREIT structure enables us to acquire properties through an operating partnership by issuing
OP units to a seller of property, as a form of consideration in exchange for the property. The outstanding OP units are generally
redeemable for our common shares on a one OP unit for approximately 1.13 common shares basis, or, at our election in certain
instances, cash. We believe that this structure facilitates our ability to raise capital and to acquire portfolio and individual properties
by enabling us to structure transactions which may defer tax gains for a contributor of property. Prior to the effective date of the
LCIF and LCIF II merger, there were approximately 3.6 million OP units outstanding which were convertible into approximately
4.1 million common shares, assuming we satisfied redemptions entirely with common shares. Approximately 0.2 million former
LCIF II OP units elected or were deemed to elect the cash consideration in the LCIF and LCIF II merger, by the February 1, 2014
deadline, and were converted into the right to receive such cash consideration.

Our business continues to be impacted in a number of ways by the continued uncertainty in the overall economy and volatility
in the capital markets. We encourage you to read “Risk Factors” in Part I, Item 1A of this Annual Report for a discussion of certain
risks we are facing and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item
7 of this Annual Report for a detailed discussion of the trends we believe are impacting our business.

General. Our current business strategy is focused on enhancing our cash flow growth and stability, growing our portfolio with
attractive long-term leased investments and maintaining a strong and flexible balance sheet to allow us to act on opportunities as
they arise. Our core assets consist of general purpose, single-tenant net-leased office and industrial assets and land investments
subject to long-term leases, in well-located and growing markets or which are critical to the tenant's business, but may also include
other asset types subject to long-term net-leases, such as retail facilities, schools and medical facilities. We attempt to manage residual
value risk associated with such other asset types by acquiring such assets primarily through joint ventures or disposing of such assets
when there is sufficient remaining lease term to generate favorable sale prices. We believe our strategy of investing in core assets
will provide shareholders with dividend growth and capital appreciation.

We implement our strategy by (1) recycling capital in compliance with regulatory and contractual requirements, (2) refinancing
or repurchasing outstanding indebtedness when advisable, including refinancing secured debt with unsecured debt, (3) effecting
strategic transactions, portfolio and individual property acquisitions and dispositions, (4) expanding existing properties, (5) executing
new leases with tenants, (6) extending lease maturities in advance of or at expiration and (7) exploring new business lines and
operating platforms. Additionally, we may continue to enter into joint ventures and co-investment programs with third-party investors
as a means of mitigating risk, creating additional growth and expanding the revenue realized from advisory and asset management
activities as situations warrant.

Portfolio diversification is central to our investment strategy as we seek to create and maintain an asset base that provides steady,
predictable and growing cash flows while being insulated against rising property operating expenses, regional recessions, industry-
specific downturns and fluctuations in property values and market rent levels. Regardless of capital market and economic conditions,
we intend to stay focused on (1) enhancing operating results, (2) improving portfolio quality, (3) mitigating risks relating to interest
rates and real estate cycles and (4) implementing strategies where our management skills and real estate expertise can add value. We
attempt to maintain a portfolio of properties that provide for income and capital appreciation. The proportion of total return generated
from rental income versus capital appreciation will vary by asset type, lease term, contractual rental escalations and market location.
We believe that our business strategy will continue to improve our liquidity and strengthen our overall balance sheet while creating
meaningful shareholder value.

In 2013, we became an issuer of investment-grade rated debt, which lowered our financing costs. We maintain a strong balance
sheet primarily by (1) financing property acquisitions with non-recourse mortgage debt or unsecured corporate level borrowings at
what we believe are favorable rates, (2) issuing equity when market conditions are favorable, (3) selling non-core and underperforming
assets and (4) extending debt maturities and refinancing debt at lower rates.

Investments. Our management has established a broad network of contacts to source investments, including major corporate
tenants, developers and brokers. Prior to effecting any investment, our underwriting includes analyzing the (1) property's design,
construction quality, efficiency, functionality and location with respect to the immediate sub-market, city and region, (2) lease integrity
with respect to term, rental rate increases, corporate guarantees and property maintenance provisions, (3) present and anticipated
conditions in the local real estate market and (4) prospects for selling or re-leasing the property on favorable terms in the event of a
vacancy. To the extent of information publicly available or made available to us, we also evaluate each potential tenant's financial
strength, growth prospects, competitive position within its respective industry and a property's strategic location and function within
a tenant's operations or distribution systems. We believe that our comprehensive underwriting process is critical to the assessment
of long-term profitability of any investment by us.

We seek investments from (1) creditworthy companies in sale-leaseback transactions for properties that are integral to the sellers'/
tenants' ongoing operations, (2) developers of newly constructed properties built to suit the needs of a corporate tenant by financing
the project during the construction phase and/or agreeing to purchase the property upon completion of construction and occupancy
by the tenant and (3) sellers of properties subject to an existing lease. We believe that our geographical diversification and acquisition
experience will allow us to continue to compete effectively for such investments.

Strategic Transactions with Other Real Estate Investment Companies. We seek to capitalize on the unique investment experience
of our management team as well as their network of relationships in the industry to achieve appropriate risk-adjusted yields through
strategic transactions. Accordingly, we occasionally pursue the (1) acquisition of portfolios of assets and equity interests in companies
with a significant number of single-tenant assets, including through mergers and acquisitions activity, and (2) participation in strategic
partnerships, co-investment programs and joint ventures.

We believe that entering into co-investment programs and joint ventures with institutional investors and other real estate
investment companies may mitigate our risk in certain assets and increase our return on equity to the extent we earn management
or other fees. However, investments in co-investment programs and joint ventures limit our ability to make unilateral investment
decisions relating to the assets and limit our ability to deploy capital. See Part I, Item 1A “Risk Factors”, below.

There are numerous commercial developers, real estate companies, financial institutions, such as banks and insurance companies,
and other investors with greater financial or other resources that compete with us in seeking properties for acquisition and tenants
who will lease space in these properties. Our competitors include other REITs, pension funds, banks, private companies and
individuals.

Tenant Relations and Lease Compliance. We endeavor to maintain close contact with the tenants in the properties in which we
have an interest in order to understand their financial strength and future real estate needs. We monitor the financial, property
maintenance and other lease obligations of the tenants in properties in which we have an interest, through a variety of means, including
periodic reviews of financial statements that we have access to and physical inspections of the properties.

Extending Lease Maturities. Our property owner subsidiaries seek to extend tenant leases in advance of the lease expiration in

order for us to maintain a balanced lease rollover schedule and high occupancy levels.

Revenue Enhancing Property Expansions. Our property owner subsidiaries undertake expansions of properties based on lease
requirements, tenant requirements or marketing opportunities. We believe that selective property expansions can provide attractive
rates of return.

Capital Recycling. Subject to regulatory and contractual requirements, we generally sell our interests in properties when we
believe that the return realized from selling a property will exceed the expected return from continuing to hold such property and/
or there is a better use of the capital to be received upon sale.

We continue to recycle capital with a focus on capturing the value of our non-core assets and reducing our exposure to suburban
office properties. Our objectives are to achieve a better balance between office and industrial asset revenue for lease terms shorter
than ten years and make investments in core assets with lease terms longer than ten years.

Occasionally, we provide seller financing as a means of efficiently disposing of an asset. As a result, if a buyer defaults under

the seller financing, we will once again be the owner of the underlying asset.

Conversion to Multi-Tenant. If one of our property owner subsidiaries is unable to renew a single-tenant lease or if it is unable
to find a replacement single tenant, we either attempt to sell our interest in the property or the property owner subsidiary may seek
to market the property for multi-tenant use. When appropriate, we seek to sell our interests in these multi-tenant properties.

Property Management. From time to time, our property owner subsidiaries use property managers to manage certain properties.
Our property management joint venture with an unaffiliated third party manages substantially all of these properties. We believe this
joint venture provides us with (1) better management of our assets, (2) better tenant relationships, (3) revenue-enhancing opportunities
and (4) cost efficiencies.

General. Since becoming a public company, our principal sources of financing have been the public and private equity and debt

markets, property specific debt, revolving loans, corporate level term loans, issuance of OP units and undistributed cash flows.

Property Specific Debt. Our property owner subsidiaries historically financed their assets with non-recourse secured debt.
However, beginning in 2008, the availability of single asset non-recourse financing became limited. As a result, we began to rely
more on corporate level borrowings. Our property owner subsidiaries now seek non-recourse secured debt on a limited basis including
when credit tenant lease financing is available. Credit tenant lease financing allows us to significantly or fully leverage the rental
stream from an investment at, what we believe are, attractive rates.

Corporate Level Borrowings. As previously noted, we also use corporate level borrowings, such as revolving loans, term loans,
and debt offerings. We expect to finance more of our operations with such corporate level borrowings as (1) non-recourse secured
debt matures and (2) such corporate level borrowings are available on favorable terms. In 2013, we received a senior unsecured debt
rating of Baa2 with a stable outlook from Moody’s Investor Services, Inc., or Moody’s, and a senior unsecured debt rating of BBB-
with a stable outlook from Standard & Poor’s Rating Services, or S&P. Obtaining these ratings has lowered our debt financing costs.
See - “Summary of 2013 Transactions and Recent Developments - Financings,” below.

Deleveraging and Interest Rate Reduction. In recent years, we have reduced our weighted-average interest rate and used our
capital to deleverage our balance sheet by refinancing, satisfying and repurchasing indebtedness primarily taking advantage of the
low interest rate environment by obtaining corporate level borrowings and credit tenant lease financings at attractive rates and using
a portion of the proceeds to retire higher rate debt. As a result, our interest expense has been reduced. Our objective is to maintain
a debt and preferred share to gross assets ratio of 40% to 45%. This ratio may increase over such levels at certain times due to the
timing of financings.

From time to time, we raise capital by issuing common shares through (1) our At-The-Market, or ATM, offering program,
initiated in 2013, (2) underwritten public offerings, (3) block trades and (4) our direct share purchase plan. The proceeds from our
common share offerings are generally used for working capital, including to fund investments and to retire indebtedness.

During 2013, we repurchased and retired all outstanding shares of our 7.55% Series D Cumulative Redeemable Preferred Stock,
par value $0.0001 per share, which we refer to as Series D Preferred Shares. We also make repurchases of our preferred shares in
individual transactions when we believe the discount to the liquidation preference is attractive.

Certain members of our management have been in the business of investing in single-tenant net-lease properties since 1973.
This experience has enabled us to provide advisory services to various net-lease investors, including institutional investors and high
net-worth individuals. With the termination of certain of our co-investment programs in 2007 and our acquisition of NLS in 2012,
advisory fees have declined in recent years. If and when we increase our co-investment joint venture activity, we expect advisory
fees to increase.

In 2012, LRA entered into an agreement to arrange for up to $100.0 million of investments on behalf of a third-party investor.
Under the agreement, we will be a co-investor with a target to contribute 15% to each venture.We granted the third-party investor
an exclusivity, until May 2015 and subject to certain conditions, on investment opportunities for (1) properties with a lease due to
expire in less than 10 years, and (2) properties that are dedicated to non-office and non-warehouse/distribution uses, including
properties with tenants in the medical, hospital and health care industries.

Under various federal, state and local environmental laws, statutes, ordinances, rules and regulations, an owner of real property
may be liable for the costs of removal or remediation of certain hazardous or toxic substances at, on, in or under such property as
well as certain other potential costs relating to hazardous or toxic substances. These liabilities may include government fines and
penalties and damages for injuries to persons and adjacent property. Such laws often impose liability without regard to whether the
owner knew of, or was responsible for, the presence or disposal of such substances. Although generally the tenants of the properties
in which we have an interest are primarily responsible for any environmental damage and claims related to the leased premises, in
the event of the bankruptcy or inability of a tenant of such premises to satisfy any obligations with respect to such environmental
liability, a property owner subsidiary may be required to satisfy such obligations. In addition, as the owner of such properties, a
property owner subsidiary may be held directly liable for any such damages or claims irrespective of the provisions of any lease.

From time to time, in connection with the conduct of our business and generally upon acquisition of a property and prior to
surrender by a tenant, the property owner subsidiary authorizes the preparation of a Phase I and, when recommended, a Phase II
environmental report with respect to its properties. Based upon such environmental reports and our ongoing review of the properties
in which we have an interest, as of the date of this Annual Report, we are not aware of any environmental condition with respect to
any of the properties in which we have an interest which we believe would be reasonably likely to have a material adverse effect on
our financial condition and/or results of operations. There can be no assurance, however, that (1) the discovery of environmental
conditions, the existence or severity of which were previously unknown, (2) changes in law, (3) the conduct of tenants or (4) activities
relating to properties in the vicinity of the properties in which we have an interest, will not expose us to material liability in the future.
Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions
on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations
of the tenants of properties in which we have an interest, which would adversely affect our financial condition and/or results of
operations.

In recent years, we have incurred non-cash impairment charges primarily related to (1) sales and other dispositions, or the
possible sale or disposition, of assets at below book value and (2) vacancies of certain assets. In addition, we may continue to take
similar non-cash impairment charges, which could be material in amount, due to (1) the current economic environment and (2) the
implementation of our current business strategy, which may include sales of properties acquired in the Newkirk Merger that have a
high cost basis because of our common share price at the time of the Newkirk Merger. Furthermore, we may take an impairment
charge on a property subject to a non-recourse secured mortgage reducing the book value of such property to its estimated fair value
which may be below the balance of the mortgage on our balance sheet. Upon foreclosure or other disposition of such property, we
may recognize a gain on debt satisfaction equal to the difference between the fair value of the property and the balance of the mortgage.

The following summarizes certain of our transactions during 2013, including transactions disclosed elsewhere and in our other

periodic reports.

Sales/Dispositions. With respect to sales/disposition activity, we:

–

disposed of our interests in properties to unaffiliated third parties for an aggregate gross disposition price of $117.8
million; and

conveyed in foreclosure or via deed-in-lieu of foreclosure properties for full satisfaction of the related aggregate
$49.5 million non-recourse mortgages.

Acquisitions/Investments. With respect to acquisitions/investments, we:

–

purchased ten properties for an aggregate cost of $440.4 million;

completed four build-to-suit transactions for an aggregate capitalized cost, including the buyout of a joint venture
partner, of $105.5 million;

formed two joint ventures, one, in which we hold a 15% interest, acquired a portfolio of veterinary hospitals for
$39.5 million, and the other, in which we invested $5.0 million, owns an office property investment in Baltimore,
Maryland;

closed on a construction loan for a commitment of $85.0 million of which $35.4 million was funded in 2013;

–

continue to fund four on-going build-to-suit transactions not yet completed at December 31, 2013 with an aggregate
estimated cost of $189.7 million of which $76.8 million was invested as of December 31, 2013; and

entered into a forward commitment to acquire a build-to-suit industrial property in Lewisburg, Tennessee for an
estimated cost of $12.8 million. The property is subject to a 12-year net lease.

The 2013 consolidated property investments of $545.9 million discussed above have a weighted-average lease term by cash
rents of approximately 54.3 years and an initial weighted-average cap rate of 6.2%. The weighted-average lease term is primarily
impacted by the New York land transaction; excluding this transaction, the weighted-average lease term by cash rent was approximately
18.8 years.

Leasing. Our property owner subsidiaries entered into 59 new leases and lease extensions encompassing an aggregate 5.7 million

square feet, ending the year with our overall portfolio leased at 97.6% as of December 31, 2013.

Financing. With respect to financing activities, we:

–

issued $250.0 million aggregate principal amount of 4.25% Senior Notes due 2023, or 4.25% Senior Notes, which
are unsecured and rated investment grade by Moody’s and S&P;

refinanced our $300.0 million secured revolving credit facility with a $300.0 million unsecured revolving credit
facility with KeyBank National Association, which we refer to as KeyBank, as agent. We also increased the
availability from $300.0 million to $400.0 million. The unsecured revolving credit facility matures in February
2017 but can be extended until February 2018 at our option. The unsecured revolving credit facility bears interest
at LIBOR plus 0.95% to 1.725% based on our unsecured debt investment-grade credit rating from S&P and Moody’s;

in connection with the refinancing discussed above, we also procured a five-year $250.0 million unsecured term
loan facility from KeyBank as agent. The unsecured term loan matures in February 2018 and requires regular
payments of interest only at interest rates ranging from LIBOR plus 1.10% to 2.10% based on our unsecured debt
investment-grade rating from S&P and Moody’s;

amended our $255.0 million secured term loan agreement maturing in 2019 to release the collateral securing such
term loan;

converted $54.9 million aggregate original principal amount of 6.00% Convertible Guaranteed Notes due 2030,
or 6.00% Convertible Notes, for approximately 7.9 million common shares and aggregate cash payments of $3.3
million plus accrued and unpaid interest;

entered into interest rate swap agreements to fix the LIBOR component of $151.0 million in term loan borrowings
at a weighted-average rate of 1.05%;

amended all agreements governing corporate level debt to release all subsidiary guarantors except LCIF;

retired $437.0 million in property non-recourse mortgage debt with a weighted-average interest rate of 5.8%; and

obtained $253.5 million in non-recourse mortgage financings with an initial weighted-average interest rate of
4.51%.

Capital. With respect to capital activities, we:

–

implemented an ATM offering program under which we may issue up to $100.0 million in common shares over
the term of the program and we issued 3.4 million common shares under this program raising gross proceeds of
$36.9 million;

issued an aggregate 36.0 million common shares in two public offerings and under our direct share purchase plan,
raising net proceeds of approximately $399.6 million; and

repurchased and retired all outstanding Series D Preferred Shares (6.2 million shares) for an aggregate purchase
price of approximately $155.6 million, including accrued and unpaid dividends.

Subsequent to December 31, 2013, we:

–

acquired the completed industrial property in Rantoul, Illinois for an aggregate capitalized cost of $41.1 million;

–

purchased an office property in Parachute, Colorado for approximately $13.9 million. The property is subject to
a 19-year net lease;

borrowed $99.0 million under our term loan maturing in 2018 and entered into an interest rate swap agreement
fixing the LIBOR component of the borrowing at 1.155%;

entered into a forward commitment to acquire a build-to-suit office property in Auburn Hills, Michigan for
approximately $40.0 million. The property will be subject to a 14-year net lease;

repaid all borrowings under our line of credit; and

commenced a registered exchange offer to exchange any and all outstanding 4.25% Senior Notes issued in June
2013 for an equal principal amount of new 4.25% Senior Notes due 2023 that have been registered under the
Securities Act of 1933, as amended, or the Securities Act.

Employees. As of December 31, 2013, we had 47 full-time employees. Lexington Realty Trust is a master employer and employee

costs are allocated to subsidiaries as applicable.

Industry Segments. We primarily operate in one industry segment, single-tenant real estate assets.

Web Site. Our Internet address is www.lxp.com. We make available, free of charge, on or through the investors section of our
web site or by contacting our Investor Relations Department, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q
and Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Exchange Act, as well as proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish
it to, the SEC. Also posted on our web site, and available in print upon request of any shareholder to our Investor Relations Department,
are our amended and restated declaration of trust and amended and restated by-laws, charters for the Audit Committee, Compensation
Committee and Nominating and Corporate Governance Committee of our Board of Trustees, our Corporate Governance Guidelines,
and our Code of Business Conduct and Ethics governing our trustees, officers and employees (which contains our whistle blower
procedures). Within the time period required by the SEC and the NYSE, we will post on our web site any amendment to the Code
of Business Conduct and Ethics and any waiver applicable to any of our trustees or executive officers. In addition, our web site
includes information concerning purchases and sales of our equity securities by our executive officers and trustees as well as disclosure
relating to certain non-GAAP financial measures (as defined in the SEC's Regulation G) that we may make public orally,
telephonically, by webcast, by broadcast or by similar means from time to time. Information contained on our web site or the web
site of any other person is not incorporated by reference into this Annual Report or any of our other filings or furnishings with the
SEC.

Our Investor Relations Department can be contacted at Lexington Realty Trust, One Penn Plaza, Suite 4015, New York, New

York 10119-4015, Attn: Investor Relations, by telephone: (212) 692-7200, or by e-mail: ir@lxp.com.

Principal Executive Offices. Our principal executive offices are located at One Penn Plaza, Suite 4015, New York, New York

10119-4015; our telephone number is (212) 692-7200.

NYSE CEO Certification. Our Chief Executive Officer made an unqualified certification to the NYSE with respect to our

compliance with the NYSE corporate governance listing standards in 2013.

Factors

Set forth below are material factors that may adversely affect our business and operations.

Wleases.

We focus our acquisition activities on real estate properties that are net leased to single tenants. Therefore, the financial failure
of, or other default by, a single tenant under its lease is likely to cause a significant or complete reduction in the operating cash flow
generated by the property leased to that tenant and might decrease the value of that property and result in a non-cash impairment
charge. In addition, our property owner subsidiary will be responsible for 100% of the operating costs following a vacancy at a single-
tenant building.

Wtenants.

Revenues from several tenants and/or their guarantors constitute a significant percentage of our base rental revenues. The default,
financial distress or bankruptcy of any of the tenants and/or guarantors of these properties could cause interruptions in the receipt
of lease revenues and/or result in vacancies, which would reduce the property owner subsidiary's revenues and increase operating
costs until the affected property is re-let, and could decrease the ultimate sale value of that property. Upon the expiration or other
termination of the leases that are currently in place with respect to these properties, the property owner subsidiary may not be able
to re-lease the vacant property at a comparable lease rate, at all, or without incurring additional expenditures in connection with the
re-leasing. See “Management's Discussion and Analysis of Financial Conditions and Results of Operations - Overview - Leasing
Trends” in Part II, Item 7 of this Annual Report for further discussion.

Ytenants.

Some of our tenants are rated by Moody's, Fitch, Inc. and/or S&P. Any such credit ratings are subject to ongoing evaluation by
these credit rating agencies and we cannot assure you that any such ratings will not be changed or withdrawn by these rating agencies
in the future if, in their judgment, circumstances warrant. If these rating agencies assign a lower-than-expected rating or reduce or
withdraw, or indicate that they may reduce or withdraw the credit rating of a tenant, the value of our investment in any properties
leased by such tenant could significantly decline. Furthermore, in a bankruptcy, leases are treated differently than unsecured debt.

charges.

We periodically evaluate our real estate investments and other assets for impairment indicators. The judgment regarding the
existence of impairment indicators is based on GAAP, which include a variety of factors such as market conditions, the status of
significant leases, the financial condition of major tenants and other factors that could affect the cash flow or value of an investment.
During 2013, 2012 and 2011, we incurred $34.6 million, $10.0 million and $117.4 million, respectively, of non-cash impairment
charges, excluding loan losses recorded on loans receivable. A substantial portion of these impairments related to assets acquired in
the Newkirk Merger that had a relatively high cost basis because of our common share price at the time of the Newkirk Merger. We
may continue to take similar non-cash impairment charges, which could affect the implementation of our current business strategy.
These impairments could have a material adverse effect on our financial condition and results of operations.

Furthermore, we may take an impairment charge on a property subject to a non-recourse secured mortgage which reduces the
book value of such property to its fair value, which may be below the balance of the mortgage on our balance sheet. Upon foreclosure
or other disposition, we may be required to recognize a gain on debt satisfaction equal to the difference between the fair value of the
property and the balance of the mortgage.

delinquencyloss.

Our interests in loans receivable are generally non-recourse and secured by real estate properties owned by borrowers that were
unable to obtain similar financing from a commercial bank. These loans are subject to many risks including delinquency. The ability
of a borrower to repay a loan secured by a real estate property is typically and primarily dependent upon the successful operation of
such property rather than upon the existence of independent income or assets of the borrower. If a borrower were to default on a
loan, it is possible that we would not recover the full value of the loan as the collateral may be non-performing.

In 2013, we foreclosed on one of our loans receivable, which was secured by an office property in Schaumburg, Illinois. The
loan had an outstanding balance of $21.6 million (not including default interest and other penalties), which we believe was less than
the estimated fair value of the property. Also, as of December 31, 2013, the tenant of the property in Westmont, Illinois, which we
sold in 2007 but issued a purchase mortgage to the buyer, terminated its lease effective November 2013. Accordingly, we reduced
our carrying value to an estimated fair value of $12.6 million and recorded a loan loss of $13.9 million.

Wspace.

Upon the expiration of current leases for space located in properties in which we have an interest, our property owner subsidiaries
may not be able to re-let all or a portion of such space, or the terms of re-letting (including the cost of concessions to tenants and
leasing commissions) may be less favorable than current lease terms or market rates. If our property owner subsidiaries are unable
to promptly re-let all or a substantial portion of the space located in their respective properties, or if the rental rates a property owner
subsidiary receives upon re-letting are significantly lower than current rates, our earnings and ability to satisfy our debt service
obligations and to make expected distributions to our shareholders may be adversely affected due to the resulting reduction in rent
receipts and increase in property operating costs. There can be no assurance that our property owner subsidiaries will be able to retain
tenants in any of our properties upon the expiration of leases.

Wsuf
shares.

Our ability to make payments on and to refinance our indebtedness, to make distributions on our common shares and to fund
our operations, working capital and capital expenditures, depends on our ability to generate cash in the future. To a certain extent,
our cash flow is subject to general economic, industry, financial, competitive, operating, legislative, regulatory and other factors,
many of which are beyond our control. We cannot assure you that our business will generate sufficient cash flow from operations
or that future sources of cash will be available to us in an amount sufficient to enable us to pay amounts due on our indebtedness or
to make distributions on our common shares and fund our other liquidity needs. Additionally, if we incur additional indebtedness in
connection with future acquisitions or development projects or for any other purpose, our debt service obligations could increase.

We may need to refinance all or a portion of our indebtedness on or before maturity. Our ability to refinance our indebtedness

or obtain additional financing will depend on, among other things:

(cid:127)

our financial condition and market conditions at the time; and

restrictions in the agreements governing our indebtedness.

As a result, we may not be able to refinance any of our indebtedness on commercially reasonable terms, or at all. If we do not
generate sufficient cash flow from operations, and additional borrowings or refinancings or proceeds of asset sales or other sources
of cash are not available to us, we may not have sufficient cash to enable us to meet all of our obligations. Accordingly, if we cannot
service our indebtedness, we may have to take actions such as seeking additional equity, or delaying strategic acquisitions and
alliances or capital expenditures, any of which could have a material adverse effect on our operations. We cannot assure you that we
will be able to effect any of these actions on commercially reasonable terms, or at all.

afoperations.

Our growth strategy is based on the acquisition and development of additional properties and related assets. In the context of
our business plan, “development” generally means an expansion or renovation of an existing property or the financing and/or
acquisition of a newly constructed build-to-suit property. For newly constructed build-to-suit properties, we may (1) provide a
developer with either a combination of financing for construction of a build-to-suit property or a commitment to acquire a property
upon completion of construction of a build-to-suit property and commencement of rent from the tenant or (2) acquire a property
subject to a lease and engage a developer to complete construction of a build-to-suit property as required by the lease.

Our plan to grow through the acquisition and development of new properties could be adversely affected by trends in the real
estate and financing businesses. The consummation of any future acquisitions will be subject to satisfactory completion of an extensive
valuation analysis and due diligence review and to the negotiation of definitive documentation. Our ability to implement our strategy
may be impeded because we may have difficulty finding new properties and investments at attractive prices that meet our investment
criteria, negotiating with new or existing tenants or securing acceptable financing. If we are unable to carry out our strategy, our
financial condition and results of operations could be adversely affected. Acquisitions of additional properties entail the risk that
investments will fail to perform in accordance with expectations, including operating and leasing expectations.

Redevelopment and new project development are subject to numerous risks, including risks of construction delays, cost overruns
or force majeure events that may increase project costs, new project commencement risks such as the receipt of zoning, occupancy
and other required governmental approvals and permits, and the incurrence of development costs in connection with projects that
are not pursued to completion.

Some of our acquisitions and developments may be financed using the proceeds of periodic equity or debt offerings, lines of
credit or other forms of secured or unsecured financing that may result in a risk that permanent financing for newly acquired projects
might not be available or would be available only on disadvantageous terms. If permanent debt or equity financing is not available
on acceptable terms to refinance acquisitions undertaken without permanent financing, further acquisitions may be curtailed, or cash
available to satisfy our debt service obligations and distributions to shareholders may be adversely affected.

affactors.

Acquisitions of commercial properties entail certain risks, such as (1) underwriting assumptions such as occupancy, rental rates
and expenses may differ from estimates, (2) the properties may become subject to environmental liabilities that we were unaware
of at the time we acquired the property despite any environmental testing, (3) we may have difficulty obtaining financing on acceptable
terms or paying the operating expenses and debt service associated with acquired properties prior to sufficient occupancy and (4)
projected exit strategies may not come to fruition due to a variety of factors such as market conditions at time of dispositions.

We may not be successful in identifying suitable real estate properties or other assets that meet our acquisition criteria. We may
also fail to complete acquisitions or investments on satisfactory terms. Failure to identify or complete acquisitions could slow our
growth, which could, in turn, have a material adverse effect on our financial condition and results of operations.

Wactivities.

From time to time, we engage in, or provide capital to developers who are engaged in, build-to-suit activities. We face uncertainties,
associated with a developer's performance and timely completion of a project, including the performance or timely completion by
contractors and subcontractors. If a developer, contractor or subcontractor fails to perform, we may resort to legal action to compel
performance, remove the developer or rescind the purchase or construction contract.

A developer's performance may also be affected or delayed by conditions beyond the developer's control. We attempt to mitigate

such conditions by providing for penalties and related grace periods in the underlying lease.

We may incur additional risks when we make periodic progress payments or other advances to developers before completion
of construction. These and other factors can result in increased costs of a project or loss of our investment. We also rely on third-
party construction managers and/or engineers to monitor the construction activities.

We rely on rental income and expense projections and estimates of the fair market value of a property upon completion of
construction when agreeing upon a purchase price at the time we acquire the property, which may be up to two years prior to the
estimated date of completion. If our projections are inaccurate or markets change, we may pay more than the fair value of a property.

risks.

Our multi-tenant properties involve risks not typically encountered in real estate properties which are operated by a single tenant.
The ownership of multi-tenant properties could expose us to the risk that a sufficient number of suitable tenants may not be found
to enable the property to operate profitably and provide a return to us. This risk may be compounded by the failure of existing tenants
to satisfy their obligations due to various factors. These risks, in turn, could cause a material adverse impact to our results of operations
and business.

Multi-tenant properties are also subject to tenant turnover and fluctuation in occupancy rates, which could affect our operating
results. Furthermore, multi-tenant properties expose us to the risk of potential "CAM slippage," which may occur when the actual
cost of taxes, insurance and maintenance at the property exceeds the operating expenses paid by tenants and/or the amounts budgeted.

Wmatters.

Under various federal, state and local environmental laws, statutes, ordinances, rules and regulations, as an owner of real property,
our property owner subsidiaries may be liable for the costs of removal or remediation of certain hazardous or toxic substances at,
on, in or under the properties in which we have an interest as well as certain other potential costs relating to hazardous or toxic
substances. These liabilities may include government fines and penalties and damages for injuries to persons and adjacent property.
These laws may impose liability without regard to whether we knew of, or were responsible for, the presence or disposal of those
substances. This liability may be imposed on our property owner subsidiaries in connection with the activities of an operator of, or
tenant at, the property. The cost of any required remediation, removal, fines or personal or property damages, and our liability
therefore, could be significant and could exceed the value of the property and/or our aggregate assets. In addition, the presence of
those substances, or the failure to properly dispose of or remove those substances, may adversely affect a property owner subsidiary's
ability to sell or rent that property or to borrow using that property as collateral, which, in turn, would reduce our revenues and ability
to satisfy our debt service obligations and to make distributions.

A property can also be adversely affected either through physical contamination or by virtue of an adverse effect upon value
attributable to the migration of hazardous or toxic substances, or other contaminants that have or may have emanated from other
properties. Although the tenants of the properties in which we have an interest are primarily responsible for any environmental
damages and claims related to the leased premises, in the event of the bankruptcy or inability of any of the tenants of the properties
in which we have an interest to satisfy any obligations with respect to the property leased to that tenant, our property owner subsidiary
may be required to satisfy such obligations. In addition, we may be held directly liable for any such damages or claims irrespective
of the provisions of any lease.

From time to time, in connection with the conduct of our business, our property owner subsidiaries authorize the preparation of
Phase I environmental reports and, when recommended, Phase II environmental reports, with respect to their properties. There can
be no assurance that these environmental reports will reveal all environmental conditions at the properties in which we have an
interest or that the following will not expose us to material liability in the future:

(cid:127)

the discovery of previously unknown environmental conditions;

changes in law;

activities of tenants; or

activities relating to properties in the vicinity of the properties in which we have an interest.

Changes in laws increasing the potential liability for environmental conditions existing on properties or increasing the restrictions
on discharges or other conditions may result in significant unanticipated expenditures or may otherwise adversely affect the operations
of the tenants of the properties in which we have an interest, which could adversely affect our financial condition or results of
operations.

business.

Legal proceedings arising in the ordinary course of our business require time and effort. The outcomes of legal proceedings are
subject to significant uncertainty. In the event that we are unsuccessful defending or prosecuting these proceedings, as applicable,
we may incur a judgment or fail to realize an award of damages that could have an adverse effect on our financial condition.

afcondition.

We carry comprehensive liability, fire, extended coverage and rent loss insurance on certain of the properties in which we have
an interest, with policy specifications and insured limits that we believe are customary for similar properties. However, with respect
to those properties where the leases do not provide for abatement of rent under any circumstances, we generally do not maintain rent
loss insurance. In addition, certain of our leases require the tenant to maintain all insurance on the property, and the failure of the
tenant to maintain the proper insurance could adversely impact our investment in a property in the event of a loss. Furthermore, there
are certain types of losses, such as losses resulting from wars, terrorism or certain acts of God, that generally are not insured because
they are either uninsurable or not economically insurable. Should an uninsured loss or a loss in excess of insured limits occur, we
could lose capital invested in a property as well as the anticipated future revenues from a property, while remaining obligated for
any mortgage indebtedness or other financial obligations related to the property. Any loss of these types could adversely affect our
financial condition and results of operations.

ef
liquidity.

The types of terrorist attacks since 2001, on-going and future military conflicts and the continued unrest in the Middle East may
affect commodity prices and interest rates, among other things. An increase in interest rates may increase our costs of borrowing,
leading to a reduction in our earnings. An increase in the price of oil will also cause an increase in our operating costs, which may
not be reimbursed by our tenants. Also, terrorist acts could result in significant damages to, or loss of, our properties or the value
thereof.

We and the tenants of the properties in which we have an interest may be unable to obtain adequate insurance coverage on
acceptable economic terms for losses resulting from acts of terrorism. Our lenders may require that we carry terrorism insurance
even if we do not believe this insurance is necessary or cost effective. We may also be prohibited under the applicable lease from
passing all or a portion of the cost of such insurance through to the tenant. Should an act of terrorism result in an uninsured loss or
a loss in excess of insured limits, we could lose capital invested in a property as well as the anticipated future revenues from a
property, while remaining obligated for any mortgage indebtedness or other financial obligations related to the property. Any loss
of these types could adversely affect our financial condition.

afproperties.

There are numerous commercial developers, real estate companies, financial institutions, such as banks and insurance companies,
and other investors, such as pension funds, private companies and individuals, with greater financial and other resources than we
have that compete with us in seeking investments and tenants. Due to our focus on single-tenant properties located throughout the
United States, and because most competitors are often locally and/or regionally focused, we do not always encounter the same
competitors in each market. Our competitors include other REITs, financial institutions, insurance companies, pension funds, private
companies and individuals. This competition may result in a higher cost for properties and lower returns and impact our ability to
grow.

efef
price.

Section 404 of the Sarbanes-Oxley Act of 2002 requires annual management assessments of the effectiveness of our internal
control over financial reporting. If we fail to maintain the adequacy of our internal control over financial reporting, as such standards
may be modified, supplemented or amended from time to time, we will be required to disclose such failure and our financial reporting
may not be relied on by most investors. Moreover, effective internal control, particularly related to revenue recognition, is necessary
for us to produce reliable financial reports and to maintain our qualification as a REIT and is important in helping prevent financial
fraud. If we cannot provide reliable financial reports or prevent fraud, our business and operating results could be harmed, our REIT
qualification could be jeopardized, investors could lose confidence in our reported financial information and the trading price of our
debt and equity securities could drop significantly.

Winvestments.

Our joint venture investments involve risks not otherwise present for investments made solely by us, including the possibility
that our partner might, at any time, become bankrupt, have different interests or goals than we do, or take action contrary to our
expectations, its previous instructions or our instructions, requests, policies or objectives, including our policy with respect to
maintaining our qualification as a REIT. Other risks of joint venture investments include impasses on decisions, such as a sale,
because neither we nor our partner has full control over the joint venture. Also, there is no limitation under our organizational
documents as to the amount of funds that may be invested in joint ventures.

illiquid.

Investments in real estate are relatively illiquid and, therefore, our ability to change our portfolio promptly in response to changed
conditions is limited. Our Board of Trustees may establish investment criteria or limitations as it deems appropriate, but currently
does not limit the number or type of properties in which we may seek to invest or on the concentration of investments in any one
geographic region.

af
interest.

GAAP is subject to interpretation by various bodies formed to promulgate and interpret appropriate accounting principles such
as the Financial Accounting Standards Board. A change in these principles or interpretations could have a significant effect on our
reported financial results, could affect the reporting of transactions completed before the announcement of a change and could affect
the business practices and decisions of the tenants of properties in which we have an interest.

Wlosses.

We have used derivatives to hedge certain of our liabilities and we currently have interest rate swap agreements in place. As of
December 31, 2013, we have aggregate interest rate swap agreements on $406.0 million of borrowings. The counterparties of these
arrangements are major financial institutions; however, we are exposed to credit risk in the event of non-performance by the
counterparties. This has certain risks, including losses on a hedge position, which may reduce the return on our investments. Such
losses may exceed the amount invested in such instruments. In addition, counterparties to a hedging arrangement could default on
their obligations. We may have to pay certain costs, such as transaction fees or breakage costs, related to hedging transactions.

Tapproval.

Subject to our fundamental investment policy to maintain our qualification as a REIT and invest in core assets, our Board of
Trustees will determine our investment and financing policies, growth strategy and our debt, capitalization, distribution, acquisition,
disposition and operating policies.

Our Board of Trustees may revise or amend these strategies and policies at any time without a vote by shareholders. Changes
made by our Board of Trustees may not serve the interests of debt or equity security holders and could adversely affect our financial
condition or results of operations, including our ability to satisfy our debt service obligations, distribute cash to shareholders and
qualify as a REIT. Accordingly, shareholders' control over changes in our strategies and policies is limited to the election of trustees.

Wpersonnel.

We are dependent upon key personnel whose continued service is not guaranteed. We are dependent on certain of our executive
officers for business direction. We have employment agreements, which expire in January 2015, with each of T. Wilson Eglin, our
Chief Executive Officer and President, E. Robert Roskind, our Chairman, Richard J. Rouse, our Vice Chairman and Chief Investment
Officer, and Patrick Carroll, our Executive Vice President, Chief Financial Officer and Treasurer. However, an employment agreement
does not itself prevent an employee from resigning.

Our inability to retain the services of any of our key personnel or our loss of any of their services could adversely impact our

operations. We do not have key man life insurance coverage on our executive officers.

us.

E. Robert Roskind, our Chairman, beneficially owns a significant number of OP units, and as a result, may face different and
more adverse tax consequences than our other shareholders will if we sell our interests in certain properties or reduce mortgage
indebtedness on certain properties. Our Chairman may, therefore, have different objectives than us and our debt and equity security
holders regarding the appropriate pricing and timing of any sale of such properties or reduction of mortgage debt. In the event of an
appearance of a conflict of interest and in accordance with our policy regarding related party transactions, Mr. Roskind is required
to recuse himself from any decision making or seek a waiver of our Code of Business Conduct and Ethics, which will be reviewed
by the non-conflicted members of our Board of Trustees or the Audit Committee of the Board of Trustees.

In addition, Mr. Roskind's employment agreement with us permits Mr. Roskind to spend approximately one third of his business
time on the affairs of The LCP Group L.P. and its affiliates. While Mr. Roskind is required to prioritize his business time to address
our needs ahead of The LCP Group L.P., Mr. Roskind and The LCP Group L.P. may engage in a wide variety of activities in the real
estate business which may result in conflicts of interest with respect to matters affecting us.

afoperations.

We cannot predict what laws or regulations may be enacted in the future, how future laws or regulations will be administered
or interpreted, or how future laws or regulations will affect our properties. Compliance with new laws or regulations, or stricter
interpretation of existing laws, may require us or our tenants to incur significant expenditures, impose significant liability, restrict
or prohibit business activities and could cause a material adverse effect on our results of operations.

af
prospects.

We have a substantial amount of debt. We are more leveraged than certain of our competitors. We have incurred, and may
continue to incur, direct and indirect indebtedness in furtherance of our activities. Neither our declaration of trust nor any policy
statement formerly adopted by our Board of Trustees limits either the total amount of indebtedness that we may incur, and accordingly,
we could become even more highly leveraged. As of December 31, 2013, our total consolidated indebtedness was approximately
$2.1 billion and we had approximately $443.4 million available for us to borrow under our principal credit agreement, subject to
covenant compliance.

Our substantial indebtedness could adversely affect our financial condition and results of operations and have important

consequences to us and our debt and equity security holders. For example, it could:

(cid:127) make it more difficult for us to satisfy our indebtedness and debt service obligations and adversely affect our

ability to pay distributions;

(cid:127)

increase our vulnerability to adverse economic and industry conditions;

require us to dedicate a substantial portion of our cash flow from operations to the payment of interest on and
principal of our indebtedness, thereby reducing the availability of cash to fund working capital, capital expenditures
and other general corporate purposes;

limit our ability to borrow money or sell stock to fund our development projects, working capital, capital
expenditures, general corporate purposes or acquisitions;

restrict us from making strategic acquisitions or exploiting business opportunities;

place us at a disadvantage compared to competitors that have less debt; and

limit our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate.

In addition, the agreements that govern our current indebtedness contain, and the agreements that may govern any future
indebtedness that we may incur may contain, financial and other restrictive covenants that will limit our ability to engage in activities
that may be in our long-term best interests. Our failure to comply with those covenants could result in an event of default that, if not
cured or waived, could result in the acceleration of our debt.

efprofitability
securities.

We have exposure to market risks relating to increases in interest rates due to our variable-rate debt. An increase in interest rates
may increase our costs of borrowing on existing variable-rate indebtedness, leading to a reduction in our earnings. As of December 31,
2013, we had $48.0 million outstanding in consolidated variable-rate indebtedness that was not subject to an interest rate swap
agreement. The level of our variable-rate indebtedness, along with the interest rate associated with such variable-rate indebtedness,
may change in the future and materially affect our interest costs and earnings. In addition, our interest costs on our fixed-rate
indebtedness may increase if we are required to refinance our fixed-rate indebtedness upon maturity at higher interest rates.

Furthermore, the public valuation of our common shares is related primarily to the earnings that we derive from rental income
with respect to the properties in which we have an interest and not from the underlying appraised value of the properties themselves.
As a result, interest rate fluctuations and capital market conditions can affect the market value of our common shares. For instance,
if interest rates rise, the market price of our common shares may decrease because potential investors seeking a higher yield than
they would receive from our common shares may sell our common shares in favor of higher yielding securities. In addition, fixed
rate debt securities generally decline in value as market rates rise because the premium, if any, over market interest rates will decline.

af
efus.

In recent years, the United States credit markets have experienced significant dislocations and liquidity disruptions which have
caused the spreads on prospective debt financings to widen considerably. These circumstances have materially impacted liquidity
in the debt markets, making financing terms for borrowers less attractive, and in certain cases have resulted in the unavailability of
certain types of debt financing. Continued uncertainty in the credit markets may negatively impact our ability to access additional
debt financing on reasonable terms, which may negatively affect our ability to make acquisitions. A prolonged downturn in the credit
markets may cause us to seek alternative sources of potentially less attractive financing and may require us to adjust our business
plan accordingly. In addition, these factors may make it more difficult for us to sell properties or may adversely affect the price we
receive for properties that we do sell, as prospective buyers may experience increased costs of capital or difficulties in obtaining
capital. These events in the credit markets have also had an adverse effect on other financial markets in the United States, which
may make it more difficult or costly for us to raise capital through the issuance of our common shares or preferred shares. These
disruptions in the financial markets may have other adverse effects on us or the economy in general.

af
activities.

Our unsecured revolving credit facility, unsecured term loans and indentures governing our 4.25% Senior Notes and 6.00%
Convertible Notes contain certain cross-default and cross-acceleration provisions as well as customary restrictions, requirements
and other limitations on our ability to incur indebtedness and consummate mergers, consolidations or sales of all or substantially all
of our assets. Our ability to borrow under both our unsecured revolving credit facility and our unsecured term loan is also subject to
compliance with certain other covenants. In addition, failure to comply with our covenants could cause a default under the applicable
debt instrument and we may then be required to repay such debt with capital from other sources. Under those circumstances other
sources of capital may not be available to us or be available only on unattractive terms. Additionally, our ability to satisfy current or
prospective lenders' insurance requirements may be adversely affected if lenders generally insist upon greater insurance coverage
against acts of terrorism than is available to us in the marketplace or on commercially reasonable terms.

We rely on debt financing, including borrowings under our unsecured revolving credit facility, unsecured term loan, debt
securities, and debt secured by individual properties, for working capital, including to finance our investment activities. If we are
unable to obtain financing from these or other sources, or to refinance existing indebtedness upon maturity, our financial condition
and results of operations could be adversely affected.

Aafcondition.

The credit ratings assigned to our debt could change based upon, among other things, our results of operations and financial
condition or the real estate industry generally. These ratings are subject to ongoing evaluation by credit rating agencies, and we
cannot assure you that any rating will not be changed or withdrawn by a rating agency in the future if, in its judgment, circumstances
warrant. Moreover, these credit ratings do not apply to our common shares and are not recommendations to buy, sell or hold any
other securities. Any downgrade of our debt could materially adversely affect the market price of our debt securities and our common
shares. If any of the credit rating agencies that have rated our debt downgrades or lowers its credit rating, or if any credit rating
agency indicates that it has placed any such rating on a so-called “watch list” for a possible downgrading or lowering or otherwise
indicates that its outlook for that rating is negative, it could also have a material adverse effect on our costs and availability of capital,
which could in turn have a material adverse effect on our financial condition, results of operations, cash flows and our ability to
satisfy our debt service obligations and to make dividends and distributions on our common shares and preferred shares.

Wrefinancings.

A significant number of the properties in which we have an interest are subject to mortgage or other secured notes with balloon
payments due at maturity. In addition, our corporate level borrowings require interest only payments with all principal due at maturity.

As of December 31, 2013, the consolidated scheduled balloon payments, for the next five calendar years, are as follows ($ in

millions):

Year
2014
2015
2016
2017
2018

Non-Recourse
Property-Specific
Balloon Payments

Corporate Recourse
Balloon Payments

$
$
$
$
$

93.0
275.3
148.6
68.7
18.2

$
$
$
$
$

0
0
0
77.0 (1)
151.0

(1) Assumes 6.00% Convertible Notes due in January 2030 are put to us in 2017.

The ability to make the scheduled balloon payment on a non-recourse mortgage note will depend upon (1) in the event we
determine to contribute capital, our cash balances and the amount available under our unsecured credit facility and (2) the property
owner subsidiary's ability either to refinance the related mortgage debt or to sell the related property. If the property owner subsidiary
is unable to refinance or sell the related property, the property may be conveyed to the lender through foreclosure or other means or
the property owner subsidiary may declare bankruptcy.

Wlenders.

A significant number of the properties in which we have an interest are subject to non-recourse mortgages, which generally
provide that a lender's only recourse upon an event of default is to foreclose on the property. During 2013, four properties in which
we had an interest, were sold via deed-in-lieu of foreclosure or in foreclosure. As a result, we lost all of our interest in these properties
and any future opportunities to re-tenant these properties. The loss of a significant number of properties to foreclosure or bankruptcy
could adversely affect our financial condition and results of operations, relationships with lenders and ability to obtain additional
financing in the future.

In addition, a lender may attempt to trigger a carve out to the non-recourse nature of a mortgage loan. To the extent a lender is
successful, the ability of our property owner subsidiary to return the property to the lender may be inhibited and we may be liable
for all or a portion of such loan.

provisions.

As of December 31, 2013, the mortgages on certain of our properties were cross-collateralized. To the extent that any of the
properties in which we have an interest are cross-collateralized, any default by the property owner subsidiary under the mortgage
note relating to one property will result in a default under the financing arrangements relating to any other property that also provides
security for that mortgage note or is cross-collateralized with such mortgage note.

In addition, substantially all of our corporate level borrowings contain cross-default and/or cross-acceleration provisions, which

may be triggered if we default on certain indebtedness in excess of certain thresholds.

ef
guaranty.

The holders of our secured debt may foreclose on the assets securing such debt, reducing the cash flow from the foreclosed
property available for payment of unsecured debt and any related guaranty. The holders of any of our secured debt also would have
priority over unsecured creditors in the event of a bankruptcy, liquidation or similar proceeding.

occur.

As of December 31, 2013, only we and/or LCIF are borrowers or a guarantor of our unsecured indebtedness. In the event of a
bankruptcy, liquidation or reorganization of any of our non-guarantor subsidiaries, holders of non-guarantor subsidiary debt, including
trade creditors, will generally be entitled to payment of their claims from the assets of non-guarantor subsidiaries before any assets
are made available for distribution to us or any of the subsidiary guarantors.

In addition, any subsidiary guarantor, including LCIF, will be deemed released if such subsidiary guarantor’s obligations as a
borrower or guarantor under our principal credit agreement terminates pursuant to the terms of our principal credit agreement or if
our principal credit agreement is amended to remove certain or all of the subsidiary guarantors as borrowers or guarantors. To the
extent any of our unsecured indebtedness is no longer guaranteed by any of our subsidiaries in the future, such debt will be our
obligations exclusively. All of our assets are held through our operating partnership and our other subsidiaries. Consequently, our
cash flow and our ability to meet our debt service obligations depends in large part upon the cash flow of our subsidiaries and the
payment of funds by our subsidiaries to us in the form of distributions or otherwise.

guarantor.

Under the federal bankruptcy law and comparable provisions of state fraudulent transfer laws, a guarantee could be voided, or
claims in respect of a guarantee could be subordinated to all other debts of that guarantor if, among other things, the guarantor, at
the time it incurred the debt evidenced by its guarantee:

(cid:127)

issued the guarantee to delay, hinder or defraud present or future creditors; or

received less than reasonably equivalent value or fair consideration for the incurrence of such guarantee, and:

(cid:127) was insolvent or rendered insolvent by reason of such incurrence;

(cid:127) was engaged or about to engage in a business or transaction for which the guarantor’s remaining

unencumbered assets constituted unreasonably small capital to carry on its business; or

(cid:127)

intended to incur, or believed that it would incur, debts beyond its ability to pay the debts as they
mature.

In addition, any payment by that guarantor pursuant to its guarantee could be voided and required to be returned to the guarantor,

or to a fund for the benefit of the creditors of the guarantor.

The measures of insolvency for purposes of these fraudulent transfer laws will vary depending upon the law applied in any
proceeding to determine whether a fraudulent transfer has occurred. Generally, however, a guarantor would be considered insolvent
if, at the time it incurred the debt:

(cid:127)

the sum of its debts, including contingent liabilities, was greater than the fair saleable value of all of its assets;

the present fair saleable value of its assets was less than the amount that would be required to pay its probable
liability on its existing debts, including contingent liabilities, as they become absolute and mature; or

(cid:127)

it could not pay its debts as they become due.

We cannot be sure as to the standards that a court would use to determine whether or not any guarantor was solvent at the relevant
time, or, regardless of the standard that the court uses, that the issuance of such guaranty would not be voided or any such guaranty
would not be subordinated to that of such guarantor’s other debt. If a case were to occur, any such guaranty could also be subject to
the claim that, since the guaranty was incurred for our benefit, and only indirectly for the benefit of such guarantor, the obligations
of such guarantor were incurred for less than fair consideration. A court could thus void the obligations under the guarantees or
subordinate the guarantees to such guarantor’s other debt or take other action detrimental to holders of our unsecured indebtedness.

purposes.

We believe that we have met the requirements for qualification as a REIT for federal income tax purposes beginning with our
taxable year ended December 31, 1993, and we intend to continue to meet these requirements in the future. However, qualification
as a REIT involves the application of highly technical and complex provisions of the Code, for which there are only limited judicial
or administrative interpretations. The Code provisions and income tax regulations applicable to REITs are more complex than those
applicable to corporations. The determination of various factual matters and circumstances not entirely within our control may affect
our ability to continue to qualify as a REIT. No assurance can be given that we have qualified or will remain qualified as a REIT. In
addition, no assurance can be given that legislation, regulations, administrative interpretations or court decisions will not significantly
change the requirements for qualification as a REIT or the federal income tax consequences of such qualification. If we do not qualify
as a REIT, we would not be allowed a deduction for distributions to shareholders in computing our net taxable income. In addition,
our income would be subject to tax at the regular corporate rates. We also could be disqualified from treatment as a REIT for the
four taxable years following the year during which qualification was lost. Cash available to satisfy our debt service obligations and
distributions to our shareholders would be significantly reduced or suspended for each year in which we do not qualify as a REIT.
In that event, we would not be required to continue to make distributions. Although we currently intend to continue to qualify as a
REIT, it is possible that future economic, market, legal, tax or other considerations may cause us, without the consent of the
shareholders, to revoke the REIT election or to otherwise take action that would result in disqualification.

W
us.

A REIT will incur a 100% tax on the net income from a prohibited transaction. Generally, a prohibited transaction includes a
sale or disposition of property held primarily for sale to customers in the ordinary course of a trade or business. While we believe
that the dispositions of our assets pursuant to our investment strategy should not be treated as prohibited transactions, whether a
particular sale will be treated as a prohibited transaction depends on the underlying facts and circumstances. We have not sought and
do not intend to seek a ruling from the Internal Revenue Service regarding any dispositions. Accordingly, there can be no assurance
that our dispositions of such assets will not be subject to the prohibited transactions tax. If all or a significant portion of those
dispositions were treated as prohibited transactions, we would incur a significant U.S. federal income tax liability, which could have
a material adverse effect on our financial position, results of operations and cash flows.

flexibility.

To maintain our status as a REIT for federal income tax purposes, we are generally required to distribute to our shareholders at
least 90% of our taxable income for that calendar year. Our taxable income is determined without regard to any deduction for dividends
paid and by excluding net capital gains. To the extent that we satisfy the distribution requirement but distribute less than 100% of
our taxable income, we will be subject to federal corporate income tax on our undistributed income. In addition, we will incur a 4%
nondeductible excise tax on the amount, if any, by which our distributions in any year are less than the sum of (i) 85% of our ordinary
income for that year, (ii) 95% of our capital gain net income for that year and (iii) 100% of our undistributed taxable income from
prior years. We intend to continue to make distributions to our shareholders to comply with the distribution requirements of the Code
and to reduce exposure to federal income and nondeductible excise taxes. Differences in timing between the receipt of income and
the payment of expenses in determining our taxable income and the effect of required debt amortization payments could require us
to borrow funds on a short-term basis in order to meet the distribution requirements that are necessary to achieve the tax benefits
associated with qualifying as a REIT.

efus.

At any time, the federal income tax laws governing REITs or the administrative interpretations of those laws may be amended.
Any of those new laws or interpretations may take effect retroactively and could adversely affect us or you as a debt and/or equity
security holder. REIT dividends generally are not eligible for the reduced rates currently applicable to certain corporate dividends
(unless attributable to dividends from taxable REIT subsidiaries and otherwise eligible for such rates). As a result, investment in
non-REIT corporations may be relatively more attractive than investment in REITs. This could adversely affect the market price of
our shares.

Wfuture.

We currently expect to pay an aggregate annual dividend of $0.66 per common share with respect to the 2014 taxable year.
However, the decision to declare and pay dividends on our common shares in the future, as well as the timing, amount and composition
of any such future dividends, will be at the sole discretion of our Board of Trustees in light of conditions then existing, including
our earnings, financial condition, capital requirements, debt maturities, the availability of debt and equity capital, applicable REIT
and legal restrictions and the general overall economic conditions and other factors. The actual dividend payable will be determined
by our Board of Trustees based upon the circumstances at the time of declaration and the actual dividend payable may vary from
such expected amount. Any change in our dividend policy could have a material adverse effect on the market price of our common
shares.

efprice.

We have an unallocated universal shelf registration statement, pursuant to which we maintain an ATM program, and we also
maintain a direct share purchase plan, pursuant to which we may issue additional common shares. In addition, after giving effect to
the LCIF and LCIF II merger, as of December 31, 2013, an aggregate of approximately 5.8 million of our common shares were
issuable upon the exercise of employee share options and upon the exchange of OP units. There were also approximately 4.2 million
common shares underlying our 6.00% Convertible Notes as of December 31, 2013, which is subject to increase upon certain events,
including if we pay a quarterly common share dividend in excess of $0.10 per common share. Depending upon the number of such
securities issued, exercised or exchanged at one time, an issuance, exercise or exchange of such securities could be dilutive to or
otherwise adversely affect the interests of holders of our common shares.

efcontrol.

Limitations imposed to protect our REIT status. In order to protect against the loss of our REIT status, among other purposes,
our declaration of trust limits any shareholder from owning more than 9.8% in value of our outstanding equity shares, defined as
common shares or preferred shares, subject to certain exceptions. These ownership limits may have the effect of precluding acquisition
of control of us. Our Board of Trustees has granted a limited waiver of the ownership limits to BlackRock, Inc.

Severance payments under employment agreements. Substantial termination payments may be required to be paid under the
provisions of employment agreements with certain of our executives upon a change of control and the subsequent termination of the
executive. We have entered into employment agreements with four of our executive officers which provide that, upon the occurrence
of a change in control of us (including a change in ownership of more than 50% of the total combined voting power of our outstanding
securities, the sale of all or substantially all of our assets, dissolution, the acquisition, except from us, of 20% or more of our voting
shares or a change in the majority of our Board of Trustees), if those executive officers are terminated without cause, as defined,
those executive officers may be entitled to severance benefits based on their current annual base salaries and trailing average of
recent annual cash bonuses as defined in the employment agreements. Accordingly, these payments may discourage a third party
from acquiring us.

Our ability to issue additional shares. Our declaration of trust authorizes 400,000,000 common shares, 100,000,000 preferred
shares and 500,000,000 excess shares. Our Board of Trustees is authorized to cause us to issue these shares without shareholder
approval. Our Board of Trustees may establish the preferences and rights of any such class or series of additional shares, which could
have the effect of delaying or preventing someone from taking control of us, even if a change in control were in shareholders' best
interests. At December 31, 2013, in addition to common shares, we had outstanding 1,935,400 Series C Preferred Shares. Our Series
C Preferred Shares include provisions, such as increases in dividend rates or adjustments to conversion rates, that may deter a change
of control. The establishment and issuance of shares of our existing series of preferred shares or a future class or series of shares
could make a change of control of us more difficult.

Maryland Business Combination Act. The Maryland General Corporation Law, as applicable to Maryland REITs, establishes
special restrictions against “business combinations” between a Maryland REIT and “interested shareholders” or their affiliates unless
an exemption is applicable. An interested shareholder includes a person who beneficially owns, and an affiliate or associate of the
trust who, at any time within the two-year period prior to the date in question was the beneficial owner of, 10% or more of the voting
power of our then-outstanding voting shares, but a person is not an interested shareholder if the Board of Trustees approved in advance
the transaction by which he otherwise would have become an interested shareholder, which approval may be conditioned by the
Board of Trustees. Among other things, Maryland law prohibits (for a period of five years) a merger and certain other transactions
between a Maryland REIT and an interested shareholder, or an affiliate of an interested shareholder. The five-year period runs from
the most recent date on which the interested shareholder became an interested shareholder. Thereafter, any such business combination
must be recommended by the Board of Trustees and approved by two super-majority shareholder votes unless, among other conditions,
the common shareholders receive a minimum price (as defined in the Maryland General Corporation Law) for their shares and the
consideration is received in cash or in the same form as previously paid by the interested shareholder for its shares. The statute
permits various exemptions from its provisions, including business combinations that are exempted by the Board of Trustees prior
to the time that the interested shareholder becomes an interested shareholder. The business combination statute could have the effect
of discouraging offers to acquire us and of increasing the difficulty of consummating any such offers, even if such acquisition would
be in shareholders' best interests. In connection with the Newkirk Merger, Vornado Realty Trust, which we refer to as Vornado, was
granted a limited exemption from the definition of “interested shareholder.”

Maryland Control Share Acquisition Act. Maryland law provides that a holder of “control shares” of a Maryland REIT acquired
in a “control share acquisition” has no voting rights with respect to such shares except to the extent approved by a vote of two-thirds
of the votes entitled to be cast on the matter under the Maryland Control Share Acquisition Act. Shares owned by the acquirer, by
our officers or by employees who are our trustees are excluded from shares entitled to vote on the matter. “Control Shares” means
voting shares that, if aggregated with all other shares previously acquired by the acquirer or in respect of which the acquirer is able
to exercise or direct the exercise of voting power (except solely by virtue of a revocable proxy), would entitle the acquirer to exercise
voting power in electing trustees within one of the following ranges of voting power: one-tenth or more but less than one-third, one-
third or more but less than a majority or a majority or more of all voting power. Control shares do not include shares the acquiring
person is then entitled to vote as a result of having previously obtained shareholder approval. A “control share acquisition” means
the acquisition of issued and outstanding control shares, subject to certain exceptions. If voting rights of control shares acquired in
a control share acquisition are not approved at a shareholders meeting or if the acquiring person does not deliver an acquiring person
statement as required under the statute, then, subject to certain conditions and limitations, the issuer may redeem any or all of the
control shares for fair value, except those for which voting rights have been previously approved. If voting rights of such control
shares are approved at a shareholders meeting and the acquirer becomes entitled to vote a majority of the shares entitled to vote, all
other shareholders may exercise appraisal rights. Any control shares acquired in a control share acquisition which are not exempt
under our by-laws will be subject to the Maryland Control Share Acquisition Act. The Maryland Control Share Acquisition Act does
not apply to shares acquired in a merger, consolidation or statutory share exchange if the Maryland REIT is a party to the transaction,
or to acquisitions approved or exempted by the declaration of trust or by-laws of the Maryland REIT. Our amended and restated by-
laws contain a provision exempting from the Maryland Control Share Acquisition Act any and all acquisitions by any person of our
shares. We cannot assure you that this provision will not be amended or eliminated at any time in the future.

ef
us.

For us to qualify as a REIT for federal income tax purposes, among other requirements, not more than 50% of the value of our
outstanding capital shares may be owned, directly or indirectly, by five or fewer individuals (as defined for federal income tax
purposes to include certain entities) during the last half of each taxable year, and these capital shares must be beneficially owned by
100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year
(in each case, other than the first such year for which a REIT election is made). Our amended and restated declaration of trust includes
certain restrictions regarding transfers of our capital shares and ownership limits.

Actual or constructive ownership of our capital shares in violation of the restrictions or in excess of the share ownership limits
contained in our amended and restated declaration of trust would cause the violative transfer or ownership to be void or cause the
shares to be transferred to a charitable trust and then sold to a person or entity who can own the shares without violating these limits.
As a result, if a violative transfer were made, the recipient of the shares would not acquire any economic or voting rights attributable
to the transferred shares. Additionally, the constructive ownership rules for these limits are complex, and groups of related individuals
or entities may be deemed a single owner and consequently in violation of the share ownership limits.

However, these restrictions and limits may not be adequate in all cases to prevent the transfer of our capital shares in violation
of the ownership limitations. The ownership limits discussed above may have the effect of delaying, deferring or preventing someone
from taking control of us, even though a change of control could involve a premium price for the common shares or otherwise be in
shareholders' best interests.

fluctuations.

Since January 1, 2011, the closing sale price of our common shares on the NYSE (composite) has ranged from $13.64 to $5.96
per share. The market price of our common shares may fluctuate in response to company-specific and general market events and
developments, including those described in this Annual Report. In addition, our leverage may impact investor demand for our common
shares, which could have a material effect on the market price of our common shares.

StafComments

There are no unresolved written comments that were received from the SEC staff 180 days or more before the end of our

fiscal year relating to our periodic or current reports under the Securities Exchange Act of 1934.

Properties

General. As of December 31, 2013, we had equity ownership interests in approximately 220 consolidated real estate properties
containing approximately 40.7 million square feet of rentable space, which were approximately 97.6% leased based upon net rentable
square feet. Generally, all properties in which we have an interest are held through at least one property owner subsidiary.

The properties in which we have an interest are generally subject to net or similar leases; however, in certain leases, the property
owner subsidiaries are responsible for roof, structural and other repairs. In addition, certain of the properties in which we have an
interest are subject to leases in which the landlord is responsible for a portion of the real estate taxes, utilities and general maintenance.
Furthermore, the property owner subsidiaries are or will be responsible for all operating expenses of any vacant properties, and the
property owner subsidiaries may be responsible for a significant amount of operating expenses of multi-tenant properties.

Ground Leases. Certain of the properties in which we have an interest are subject to long-term ground leases where either the
tenant of the building on the property or a third party owns and leases the underlying land to the property owner subsidiary. Certain
of these properties are economically owned through the holding of industrial revenue bonds primarily for real estate tax abatement
purposes and as such, neither ground lease payments nor bond interest payments are made or received, respectively. For certain of
the properties held under a ground lease, the ground lessee has a purchase option. At the end of these long-term ground leases, unless
extended or the purchase option exercised, the land together with all improvements thereon reverts to the landowner.

Leverage. As of December 31, 2013, we had outstanding mortgages and notes payable and corporate level debt of approximately

$2.1 billion with a weighted-average interest rate of approximately 4.7% and a weighted-average maturity of 7.0 years.

Property Charts. The following tables list our properties by type, their locations, the primary tenant/guarantor, the net rentable

square feet, the expiration of the primary lease term and percent leased, as applicable, as of December 31, 2013.

12209 W. Markham St.

Little Rock

Entergy Arkansas, Inc.

36,311

10/31/2015

100%

2211 South 47th St.

Phoenix

Avnet, Inc.

176,402

2/28/2023

100%

5201 West Barraque St.

Pine Bluff

Entergy Arkansas Inc.

27,189

10/31/2015

100%

19019 North 59th Ave.

Glendale

8555 South River Pkwy.

Tempe

1440 East 15th St.

Tucson

Honeywell International Inc.

252,300

7/15/2019

100%

DA Nanomaterials L.L.C. / Air Products and Chemicals,
Inc.

95,133

6/30/2022

100%

CoxCom, LLC

28,591

7/31/2022

100%

275 S. Valencia Ave.

Brea

Bank of America, National Association

637,503

7/1/2023

100%

26210 and 26220 Enterprise
Court

Lake Forest

Apria Healthcare, Inc. (Apria Healthcare Group, Inc.)

100,012

1/31/2022

100%

3333 Coyote Hill Rd.

Palo Alto

Xerox Corporation

202,000

12/14/2023

100%

9201 E. Dry Creek Rd.

Centennial

The Shaw Group, Inc.

128,500

9/30/2017

100%

1110 Bayfield Dr.

Colorado Springs CO

Honeywell International Inc.

166,575

11/30/2016

100%

3940 South Teller St.

Lakewood

MoneyGram Payment Systems, Inc.

68,165

3/31/2015

100%

1315 West Century Dr.

Louisville

Global Healthcare Exchange, Inc. (Global Healthcare
Exchange, LLC)

106,877

4/30/2017

100%

100 Barnes Rd.

Wallingford

3M Company

44,400

6/30/2018

100%

5600 Broken Sound Blvd.

Boca Raton

12600 Gateway Blvd.

Fort Myers

550 Business Center Dr.

Lake Mary

600 Business Center Dr.

Lake Mary

9200 South Park Center
Loop

Orlando

Sandlake Rd./Kirkman Rd.

Orlando

4400 Northcorp Pkwy.

Palm Beach
Gardens

10419 North 30th St.

Tampa

Canon Solutions America, Inc. (Océ -USA Holding, Inc.)

143,290

2/14/2020

100%

Alta Resources Corp.

63,261

6/30/2023

100%

JPMorgan Chase Bank, National Association

125,920

9/30/2015

100%

JPMorgan Chase Bank, National Association

125,155

9/30/2015

100%

Corinthian Colleges, Inc.

59,927

9/30/2020

100%

Lockheed Martin Corporation

184,000

4/30/2018

100%

Office Suites Plus Properties, Inc.

18,400

4/30/2014

100%

Time Customer Service, Inc. (Time Incorporated)

132,981

6/30/2020

100%

2223 N. Druid Hills Rd.

Atlanta

Bank of America, N.A. (Bank of America Corporation)

6,260

12/31/2019

100%

956 Ponce de Leon Ave.

Atlanta

Bank of America, N.A. (Bank of America Corporation)

3,900

12/31/2019

100%

4545 Chamblee-Dunwoody
Rd.

Chamblee

Bank of America, N.A. (Bank of America Corporation)

4,565

12/31/2019

100%

201 W. Main St.

Cumming

Bank of America, N.A. (Bank of America Corporation)

14,208

12/31/2019

100%

1066 Main St.

Forest Park

Bank of America, N.A. (Bank of America Corporation)

14,859

12/31/2019

100%

825 Southway Dr.

Jonesboro

Bank of America, N.A. (Bank of America Corporation)

4,894

12/31/2019

100%

3500 N. Loop Court

McDonough

Litton Loan Servicing LP

62,218

8/31/2018

100%

1698 Mountain Industrial
Blvd.

Stone Mountain

Bank of America, N.A. (Bank of America Corporation)

5,704

12/31/2019

100%

3265 E. Goldstone Dr.

Meridian

101 E. Erie St.

Chicago

850 & 950 Warrenville Rd.

Lisle

231 N. Martingale Rd.

Schaumburg

500 Jackson St.

Columbus

10300 Kincaid Dr.

Fishers

10475 Crosspoint Blvd.

Indianapolis

VoiceStream PCS Holding, LLC / T-Mobile PCS
Holdings, LLC (T-Mobile USA, Inc.)

77,484

6/28/2019

100%

Draftfcb, Inc. (Interpublic Group of Companies, Inc.)

230,704

3/15/2014

91%

National-Louis University

99,414

12/31/2019

100%

CEC Educational Services, LLC (Career Education
Corporation)

317,198

12/31/2022

100%

Cummins, Inc.

390,100

7/31/2019

100%

Roche Diagnostics Operations, Inc.

193,000

1/31/2020

100%

John Wiley & Sons, Inc.

141,416

10/31/2019

97%

9601 Renner Blvd.

Lenexa

VoiceStream PCS II Corporation (T-Mobile USA, Inc.)

77,484

10/31/2019

100%

5200 Metcalf Ave.

Overland Park

Swiss Re America Holding Corporation / Westport
Insurance Corporation

320,198

12/22/2018

100%

4455 American Way

Baton Rouge

New Cingular Wireless PCS, LLC

70,100

10/31/2017

100%

147 Milk St.

Boston

Harvard Vanguard Medical Associates, Inc.

52,337

12/31/2022

100%

33 Commercial St.

Foxboro

Invensys Systems, Inc. (Siebe, Inc.)

164,689

6/30/2015

100%

First Park Dr.

Oakland

Omnipoint Holdings, Inc. (T-Mobile USA, Inc.)

78,610

8/31/2020

100%

26555 Northwestern Hwy.

Southfield

Federal-Mogul Corporation

187,163

1/31/2015

100%

9201 Stateline Rd.

Kansas City

Swiss Re America Holding Corporation / Westport
Insurance Corporation

155,925

4/1/2019

100%

3943 Denny Ave.

Pascagoula

Huntington Ingalls Incorporated

94,841

10/31/2018

100%

700 US Hwy. Route 202-206 Bridgewater

333 Mount Hope Ave.

Rockaway

1415 Wyckoff Rd.

Wall

29 S. Jefferson Rd.

Whippany

Biovail Pharmaceuticals, Inc. (Valeant Pharmaceuticals
International, Inc.)

115,558

10/31/2014

100%

BASF Corporation

95,500

9/30/2014

100%

New Jersey Natural Gas Company

157,511

6/30/2021

100%

CAE SimuFlite, Inc. (CAE Inc.)

123,734

11/30/2021

100%

180 S. Clinton St.

Rochester

Frontier Corporation

226,000

12/31/2014

100%

2000 Eastman Dr.

Milford

Siemens Corporation

221,215

4/30/2016

100%

500 Olde Worthington Rd. Westerville

InVentiv Communications, Inc.

97,000

9/30/2015

100%

2999 Southwest 6th St.

Redmond

VoiceStream PCS I, LLC / T-Mobile West Corporation (T-
Mobile USA, Inc.)

275 Technology Dr.

Canonsburg

2550 Interstate Dr.

Harrisburg

1701 Market St.

Philadelphia

1460 Tobias Gadsen Blvd.

Charleston

333 Three D Systems Circle Rock Hill

420 Riverport Rd.

Kingport

2401 Cherahala Blvd.

Knoxville

104 & 110 S. Front St.

Memphis

3965 Airways Blvd.

Memphis

4001 International Pkwy.

Carrollton

4201 Marsh Ln.

Carrollton

77,484

1/31/2019

100%

107,872

12/31/2014

100%

89,350

12/31/2018

69%

98%

ANSYS, Inc.

AT&T Services, Inc.

Morgan, Lewis & Bockius LLP

304,037

1/31/2021

Hagemeyer North America, Inc.

50,076

7/8/2020

100%

3D Systems Corporation

80,028

8/31/2021

100%

Kingsport Power Company

42,770

6/30/2018

100%

AdvancePCS, Inc. / CaremarkPCS, L.L.C.

59,748

5/31/2020

100%

Hnedak Bobo Group, Inc.

37,229

10/31/2016

100%

Federal Express Corporation

521,286

6/19/2019

100%

Motel 6 Operating, LP (Accor S.A.)

138,443

7/31/2015

100%

Carlson Restaurants Inc. (Carlson, Inc.)

130,000

11/30/2022

100%

11511 Luna Rd.

Farmers Branch

Haggar Clothing Co. (Texas Holding Clothing Corporation
and Haggar Corp.)

180,507

4/30/2016

100%

1200 Jupiter Rd.

Garland

2529 West Thorne Dr.

Houston

820 Gears Rd.

Houston

1311 Broadfield Blvd.

Houston

16676 Northchase Dr.

Houston

6555 Sierra Dr.

Irving

8900 Freeport Pkwy.

Irving

3711 San Gabriel

Mission

Raytheon Company

278,759

5/31/2016

100%

Baker Hughes, Incorporated

65,500

9/27/2015

100%

Ricoh Americas Corporation

78,895

1/31/2018

100%

Transocean Offshore Deepwater Drilling, Inc. (Transocean
Sedco Forex, Inc.)

155,040

3/31/2021

100%

Kerr-McGee Oil & Gas Corporation (Kerr-McGee
Corporation)

101,111

7/31/2014

100%

TXU Energy Retail Company, LLC (Texas Competitive
Electric Holdings Company, LLC)

247,254

3/31/2023

100%

Nissan Motor Acceptance Corporation (Nissan North
America, Inc.)

268,445

3/31/2023

100%

VoiceStream PCS II Corporation / T-Mobile USA, Inc. / T-
Mobile West Corporation

75,016

6/30/2015

100%

6200 Northwest Pkwy.

San Antonio

United HealthCare Services, Inc. / PacifiCare
Healthsystems, LLC

142,500

11/30/2017

100%

1600 Eberhardt Rd.

Temple

2050 Roanoke Rd.

Westlake

Nextel of Texas, Inc. (Nextel Finance Company)

108,800

1/31/2016

100%

TD Auto Finance LLC

130,290

12/31/2016

100%

100 East Shore Dr.

Glen Allen

Capital One, National Association

68,118

12/31/2017

100%

120 East Shore Dr.

Glen Allen

Capital One Services, LLC

77,045

12/31/2018

100%

400 Butler Farm Rd.

Hampton

Nextel Communications of the Mid-Atlantic, Inc. (Nextel
Finance Company)

100,632

12/31/2014

100%

13651 McLearen Rd.

Herndon

United States of America

159,644

5/30/2018

100%

13775 McLearen Rd.

Herndon

Orange Business Services U.S., Inc. (Equant N.V.)

136,617

7/31/2020

100%

2800 Waterford Lake Dr.

Midlothian

Alstom Power, Inc.

99,057

12/31/2021

100%

1400 Northeast McWilliams
Rd.

Bremerton

Nextel West Corporation (Nextel Finance Company)

60,200

7/14/2016

100%

22011 Southeast 51st St.

Issaquah

5150 220th Ave.

Issaquah

Spacelabs Medical, Inc. / OSI Systems, Inc.
(Instrumentarium Corporation)

95,600

12/14/2014

100%

106,944

12/14/2014

100%

11,100,978

99.5%

The 2013 net effective annual cash rent for the office portfolio as of December 31, 2013 was $14.41 per square foot and the weighted-
average remaining lease term was 5.0 years.

3030 North 3rd St.

Phoenix

CopperPoint Mutual Insurance Company

252,400 12/31/2029

100%

Office

2005 E. Technology Cir.

Tempe

Infocrossing, Inc.

Office

60,000 12/31/2025

100%

9655 Maroon Circle

Englewood

TriZetto Corporation

Office

166,912

4/30/2028

100%

6277 Sea Harbor Dr.

Orlando

Wyndham Vacation Ownership, Inc.
(Wyndham Worldwide Corporation)

Office

359,514 10/31/2025

87%

2910 Bush Lake Blvd.

Tampa

BluePearl Holdings, LLC

Office

2,500 12/31/2033

100%

3000 Bush Lake Blvd.

Tampa

BluePearl Holdings, LLC

Office

17,000 12/31/2033

100%

832 N. Westover Blvd.

Albany

Gander Mountain Company

Retail

45,064 11/30/2028

100%

2500 Patrick Henry Pkwy.

McDonough

Georgia Power Company

Office

111,911

6/30/2025

100%

11201 Renner Blvd.

Lenexa

United States of America

Office

169,585 10/31/2027

100%

10000 Business Blvd.

Dry Ridge

Dana Light Axle Products, LLC (Dana
Holding Corporation and Dana Limited)

Industrial

336,350

6/30/2025

100%

730 North Black Branch Rd.

Elizabethtown

750 North Black Branch Rd.

Elizabethtown

301 Bill Bryan Rd.

Hopkinsville

4010 Airpark Dr.

Owensboro

KY Metalsa Structural Products, Inc. / Dana
Structural Products, LLC (Dana Holding
Corporation and Dana Limited)

Industrial

167,770

6/30/2025

100%

Industrial

539,592

6/30/2025

100%

Industrial

424,904

6/30/2025

100%

Industrial

211,598

6/30/2025

100%

5001 Greenwood Rd.

Shreveport

Libbey Glass Inc. (Libbey Inc.)

Industrial

646,000 10/31/2026

100%

70 Mechanic St.

Foxboro

Invensys Systems, Inc. (Siebe, Inc.)

Office

251,924

6/30/2024

100%

12000 & 12025 Tech Center
Dr.

Livonia

Kelsey-Hayes Company (TRW Automotive
Inc.)

Office

180,230 12/31/2024

100%

3902 Gene Field Rd.

St. Joseph

Boehringer Ingelheim Vetmedica, Inc.
(Boehringer Ingelheim USA Corporation)

Office

98,849

6/30/2027

100%

459 Wingo Rd.

Byhalia

Asics America Corporation (Asics
Corporation)

Industrial

513,734

3/31/2026

100%

671 Washburn Switch Rd.

Shelby

Clearwater Paper Corporation

Industrial

673,518

5/31/2031

100%

11707 Miracle Hills Dr.

Omaha

Infocrossing, Inc.

Office

85,200 11/30/2025

100%

1331 Capital Ave.

Omaha

The Gavilon Group, LLC

Office

127,810 11/30/2033

100%

121 Technology Dr.

Durham

Heidelberg Americas, Inc. (Heidelberg
Drackmaschinen AG) (2021) / Goss
International America, Inc. (Goss
International Corporation) (2026)

Industrial

500,500

3/30/2026

100%

6226 West Sahara Ave.

Las Vegas

Nevada Power Company

282,000

1/31/2029

100%

Office

29-01 Borden Ave. & 29-10
Hunters Point Ave.

Long Island City NY

FedEx Ground Package Systems, Inc.
(Federal Express Corporation)

Industrial

140,330

3/31/2028

100%

8-12 Stone St.

New York

Al-Stone Ground Tenant LLC

350 and 370-272 Canal St.

New York

FC-Canal Ground Tenant LLC

309-313 West 39th St.

New York

LG-39 Ground Tenant LLC

Land

N/A 10/31/2112

100%

N/A 10/31/2112

100%

N/A 10/31/2112

100%

351 Chamber Dr.

Chillicothe

The Kitchen Collection, Inc.

Industrial

475,218

6/30/2026

100%

10590 Hamilton Ave.

Cincinnati

The Hillman Group, Inc.

Industrial

264,598 12/31/2027

100%

5500 New Albany Rd.

Columbus

Evans, Mechwart, Hambleton & Tilton, Inc.

Office

104,807 12/29/2026

100%

2221 Schrock Rd.

Columbus

OH MS Consultants, Inc.

Office

42,290

7/6/2027

100%

7005 Cochran Rd.

Glenwillow

Royal Appliance Mfg. Co.

Industrial

458,000

7/31/2025

100%

1700 Millrace Dr.

Eugene

250 Rittenhouse Circle

Bristol

Oregon Research Institute / Educational
Policy Improvement Center

Office

80,011 11/30/2027

100%

Northtec LLC (The Estée Lauder Companies
Inc.)

Industrial

241,977 11/30/2026

100%

25 Lakeview Dr.

Jessup

TMG Health, Inc.

Office

150,000

8/7/2027

100%

590 Ecology Ln.

Chester

Boral Stone Products LLC (Boral Limited)

Industrial

420,597

7/14/2025

100%

1362 Celebration Blvd.

Florence

MED3000, Inc.

Office

32,000

2/14/2024

100%

3476 Stateview Blvd.

Fort Mill

Wells Fargo Bank, N.A.

Office

169,083

5/31/2024

100%

3480 Stateview Blvd.

Fort Mill

Wells Fargo Bank, N.A.

Office

169,218

5/31/2024

100%

400 E. Stone Ave.

Greenville

Canal Insurance Company

Office

128,041 12/31/2029

100%

1409 Centerpoint Blvd.

Knoxville

Alstom Power, Inc.

Office

84,404 10/31/2024

100%

601 & 701 Experian Pkwy.

Allen

1401 Nolan Ryan Pkwy.

Arlington

10001 Richmond Ave.

Houston

Experian Information Solutions, Inc. / TRW,
Inc. (Experian Holdings, Inc.)

Office

292,700

3/14/2025

100%

Triumph Aerostructures, LLC (Triumph
Group, Inc.)

Baker Hughes Incorporated (2015) /
Schlumberger Holdings Corp. (2025)

Office

161,808

1/31/2025

69%

Office

554,385

9/30/2025

100%

13930 Pike Rd.

Missouri City

Vulcan Construction Materials, LP (Vulcan
Materials Company)

Land/
Infrastructure

N/A 4/30/2032

100%

13901/14035 Industrial Rd.

Houston

Industrial Terminals Management, L.L.C.
(Maritime Holdings (Delaware) LLC)

Industrial

132,449

3/31/2038

100%

19311 SH 249

Houston

BluePearl Holdings, LLC

Office

12,622 12/31/2033

100%

25500 State Hwy. 249

Tomball

Parkway Chevrolet, Inc. (Raymond Durdin
& Jean W. Durdin)

77,076

8/31/2026

100%

Specialty

175 Holt Garrison Pkwy.

Danville

Home Depot USA, Inc.

Land

N/A 1/31/2029

100%

9803 Edmonds Way

Edmonds

Pudget Consumers Co-op d/b/a PCC Natural
Markets

Retail

35,459

8/31/2028

100%

2424 Alpine Rd.

Eau Claire

Silver Spring Foods, Inc. (Huntsinger Farms,
Inc.)

Industrial

159,000

4/30/2027

100%

500 Kinetic Dr.

Huntington

AMZN WVCS (Amazon.com, Inc.)

Office

68,693 11/30/2026

100%

10,679,631

99.1%

The 2013 net effective annual cash rent for the long-term lease portfolio as of December 31, 2013 was $9.26 per square foot, excluding
land investments, and the weighted-average remaining lease term was 24.4 years.

2415 U.S. Hwy 78 East

Moody

CEVA Logistics U.S., Inc. (CEVA Logistics Holdings,
B.V. / PostNL N.V.)

595,346

12/31/2017

100%

109 Stevens St.

Jacksonville

2455 Premier Dr.

Orlando

3102 Queen Palm Dr.

Tampa

Wagner Industries, Inc.

168,800

1/31/2014

100%

Walgreen Co. / Walgreen Eastern Co.

205,016

3/31/2016

100%

Time Customer Service, Inc. (Time Incorporated)

229,605

6/30/2020

100%

359 Gateway Dr.

Lavonia

TI Group Automotive Systems, LLC (TI Automotive Ltd.)

133,221

5/31/2020

100%

1420 Greenwood Rd.

McDonough

Versacold USA, Inc.

296,972

10/31/2017

100%

3600 Army Post Rd.

Des Moines

7500 Chavenelle Rd.

Dubuque

2935 Van Vactor Dr.

Plymouth

3686 S. Central Ave.

Rockford

749 Southrock Dr.

Rockford

HP Enterprise Services, LLC

405,000

4/30/2017

100%

The McGraw-Hill Companies, Inc.

330,988

6/30/2017

100%

Bay Valley Foods, LLC

300,500

6/30/2015

100%

Jacobson Warehouse Company, Inc. (Jacobson Distribution
Company, Inc. and Jacobson Transportation Company,
Inc.) / Pierce Packaging Co.

Jacobson Warehouse Company, Inc. (Jacobson Distribution
Company, Inc. and Jacobson Transportation Company,
Inc.)

90,000

12/31/2016

100%

150,000

12/31/2015

100%

1901 Ragu Dr.

Owensboro

Unilever Supply Chain, Inc. (Unilever United States, Inc.)

443,380

12/19/2020

100%

5417 Campus Dr.

Shreveport

The Tire Rack, Inc.

257,849

3/31/2022

100%

113 Wells St.

North Berwick

United Technologies Corporation

972,625

4/30/2019

100%

6938 Elm Valley Dr.

Kalamazoo

904 Industrial Rd.

Marshall

1601 Pratt Ave.

Marshall

43955 Plymouth Oaks Blvd. Plymouth

Dana Commercial Vehicle Products, LLC (Dana Holding
Corporation and Dana Limited)

150,945

10/25/2021

100%

Tenneco Automotive Operating Company, Inc. (Tenneco,
Inc.)

246,508

9/30/2018

100%

Autocam Corporation

58,707

12/31/2023

100%

Tower Automotive Operations USA I, LLC / Tower
Automotive Products Inc. (Tower Automotive, Inc.)

290,133

10/31/2017

100%

7111 Crabb Rd.

Temperance

Michelin North America, Inc.

744,570

7/31/2016

100%

1700 47th Ave North

Minneapolis

Owens Corning / Owens Corning Roofing and Asphalt,
LLC

18,620

6/30/2015

100%

7670 Hacks Cross Rd.

Olive Branch

MAHLE Clevite, Inc. (MAHLE Industries, Incorporated)

268,104

2/28/2016

100%

324 Industrial Park Rd.

Franklin

SKF USA Inc.

72,868

12/31/2014

100%

1133 Poplar Creek Rd.

Henderson

Staples, Inc. / Corporate Express, Inc.

196,946

6/30/2016

100%

250 Swathmore Ave.

High Point

Steelcase Inc.

244,851

9/30/2017

100%

2880 Kenny Biggs Rd.

Lumberton

Quickie Manufacturing Corporation

423,280

11/30/2021

100%

2203 Sherrill Dr.

Statesville

Ozburn-Hessey Logistics, LLC (OHH Acquisition
Corporation)

639,800

12/31/2017

100%

736 Addison Rd.

Erwin

Corning, Incorporated

408,000

11/30/2016

100%

1650 - 1654 Williams Rd.

Columbus

ODW Logistics, Inc.

772,450

6/30/2018

100%

191 Arrowhead Dr.

Hebron

Owens Corning Insulating Systems, LLC

250,410

5/31/2014

100%

200 Arrowhead Dr.

Hebron

Owens Corning Insulating Systems, LLC

400,522

5/31/2014

100%

10345 Philipp Pkwy.

Streetsboro

L'Oreal USA S/D, Inc. (L'Oreal USA, Inc.)

649,250

10/17/2019

100%

50 Tyger River Dr.

Duncan

101 Michelin Dr.

Laurens

477 Distribution Pkwy.

Collierville

900 Industrial Blvd.

Crossville

120 South East Pkwy Dr.

Franklin

3350 Miac Cove Rd.

Memphis

3456 Meyers Ave.

Memphis

3820 Micro Dr.

Millington

19500 Bulverde Rd.

San Antonio

2425 Hwy. 77 North

Waxahachie

Plastic Omnium Auto Exteriors, LLC

221,833

9/30/2018

100%

Michelin North America, Inc.

1,164,000

1/31/2017

100%

Federal Express Corporation / FedEx Techconnect, Inc.

126,213

5/31/2021

100%

Dana Commercial Vehicle Products, LLC

222,200

9/30/2016

100%

Essex Group, Inc. (United Technologies Corporation)

289,330

12/31/2018

100%

Mimeo.com, Inc.

140,079

9/30/2020

77%

Sears, Roebuck and Co. / Sears Logistics Services

780,000

2/28/2017

100%

Ingram Micro L.P. (Ingram Micro Inc.)

701,819

9/30/2021

100%

Elsevier STM Inc. (Reed Elsevier Inc.)

559,258

3/31/2016

100%

James Hardie Building Products, Inc. (James Hardie NV &
James Hardie Industries NV)

335,610

3/31/2020

100%

291 Park Center Dr.

Winchester

Kraft Foods Global, Inc.

344,700

5/31/2016

100%

15,300,308

99.8%

The 2013 net effective annual cash rent for the industrial portfolio as of December 31, 2013 was $3.62 per square foot and the
weighted-average remaining lease term was 4.3 years.

13430 North Black Canyon
Fwy.

Phoenix

Multi-tenanted

Office

138,940

Various

100%

2706 Media Center Dr.

Los Angeles

Sony Electronics Inc.

Office

83,252

8/31/2015

24%

4200 Northcorp Pkwy.

Palm Beach
Gardens

King St./1042 Fort St. Mall

Honolulu

Multi-tenanted

Office

95,065

Various

36%

Office

77,459

Various

69%

100 Light St.

Baltimore

Multi-tenanted

Office

476,459

Various

95%

3165 McKelvey Rd.

Bridgeton

BJC Health System

Office

51,065 12/31/2018

50%

200 Lucent Ln.

Cary

Vacant

Office

124,944

N/A

265 Lehigh St.

Allentown

2210 Enterprise Dr.

Florence

6050 Dana Way

Antioch

207 Mockingbird Ln.

Johnson City

1501 Nolan Ryan Pkwy.

Arlington

810 Gears Rd.

Houston

Pennsylvania School of Business, Inc.

Office

71,055

9/30/2021

32%

Multi-tenanted

Vacant

Office

176,557

Various

70%

Industrial

672,629

Various

79%

Office

61,245

Various

46%

Office

74,739

Office

78,895

N/A

140 East Shore Dr.

Glen Allen

Multi-tenanted

Office

76,885

Various

92%

2,259,189

66.4%

The 2013 net effective annual cash rent for the multi-tenant portfolio as of December 31, 2013 was $10.13 per square foot and the
weighted-average remaining lease term was 7.0 years.

255 Northgate Dr.

Manteca

Kmart Corporation

107,489

12/31/2018

100%

12080 Carmel Mountain Rd.

San Diego

Kmart Corporation

107,210

12/31/2018

100%

10340 U.S. 19

Port Richey

1150 W. Carl Sandburg Dr.

Galesburg

5104 North Franklin Rd.

Lawrence

Kingswere Furniture, LLC

53,820

10/31/2018

100%

Kmart Corporation

94,970

12/31/2018

100%

Marsh Supermarkets, Inc. / Marsh Supermarkets,
LLC

28,721

10/31/2018

100%

24th St. West & St. John's Ave.

Billings

Safeway, Inc.

40,800

5/31/2015

100%

US 221 & Hospital Rd.

Jefferson

Food Lion, LLC / Delhaize America, Inc.

34,555

2/28/2023

100%

291 Talbert Blvd.

Lexington

Food Lion, LLC / Delhaize America, Inc.

23,000

2/28/2018

100%

835 Julian Ave.

Thomasville

Mighty Dollar, LLC

23,767

9/30/2018

100%

130 Midland Ave.

Port Chester

A&P Real Property, LLC (Pathmark Stores, Inc.)

59,000

10/31/2018

100%

21082 Pioneer Plaza Dr.

Watertown

Kmart Corporation

120,727

12/31/2018

100%

4831 Whipple Avenue N.W.

Canton

Best Buy Co., Inc.

46,350

2/26/2018

100%

1084 East Second St.

Franklin

Marsh Supermarkets, LLC / Crystal Food Services,
LLC

29,119

10/31/2014

100%

5350 Leavitt Rd.

Lorain

Kmart Corporation

193,193

12/31/2018

100%

N.E.C. 45th St/Lee Blvd.

Lawton

Associated Wholesale Grocers, Inc. / Safeway, Inc.

30,757

3/31/2019

100%

11411 N. Kelly Ave.

Oklahoma City

American Golf Corporation

13,924

12/31/2017

100%

6910 S. Memorial Hwy.

Tulsa

Toys "R" Us, Inc. / Toys “R” Us-Delaware, Inc.

43,123

5/31/2016

100%

S. Carolina 52/52 Bypass

Moncks Corner

Vacant

23,000

N/A

1600 E. 23rd St.

Chattanooga

1053 Mineral Springs Rd.

Paris

1610 South Westmoreland Ave.

Dallas

BI- LO, LLC

The Kroger Co.

42,130

6/30/2017

100%

31,170

7/1/2018

100%

Malone's Food Stores, Ltd.

70,910

3/31/2017

100%

3211 W. Beverly St.

Staunton

Food Lion, LLC / Delhaize America, Inc.

23,000

2/28/2018

100%

97 Seneca Trail

Fairlea

Kmart Corporation

90,933

12/31/2018

100%

1,331,668

40,671,774

98.3%

97.6%

The 2013 net effective annual cash rent for the retail/specialty portfolio as of December 31, 2013 was $4.38 per square foot and the
weighted-average remaining lease term was 4.4 years.

The 2013 net effective annual cash rent for the consolidated portfolio as of December 31, 2013 was $8.43 per square foot, excluding
land investments, and the weighted-average remaining lease term was 11.2 years.

Route 64 W. & Junction 333 Russellville

Entergy Arkansas Inc. / Entergy Services, Inc.

Office

191,950

5/9/2016

100%

607 & 611 Lumsden
Professional Ct.
4525 Ulmerton Rd.

100 Gander Way

455 Abernathy Rd.

Brandon

Clearwater

Palm Beach
Gardens
Atlanta

820 Frontage Rd.

Northfield

101 E. Washington Blvd.

Fort Wayne

BluePearl Holdings, LLC

Office

8,500 10/31/2033

100%

3,000 10/31/2033

100%

Gander Mountain Company

Retail

120,000

3/31/2028

100%

BluePearl Holdings, LLC

Office

32,000 10/31/2033

100%

14,000 10/31/2033

100%

American Electric Power

Office

299,516 10/31/2016

100%

201-215 N. Charles St.

Baltimore

201 NC Leasehold LLC

29080 Inkster Rd.

Southfield

4126 Parkcard Rd.

Ann Arbor

BluePearl Holdings, LLC

3201 Quail Springs Pkwy.

Oklahoma City OK

18839 McKay Blvd.

Humble

AT&T Corp. / AT&T Services, Inc. / New
Cingular Wireless Services, Inc.

Triumph Rehabilitation Hospital of Northeast
Houston, LLC (RehabCare Group, Inc.)

Land

Office

N/A 8/31/2112

100%

38,000 10/31/2033

100%

3,500 10/31/2033

100%

Office

128,500 11/30/2015

100%

Specialty

55,646

1/31/2029

100%

894,612

100%

The 2013 net effective annual rent for the non-consolidated portfolio as of December 31, 2013 was $18.93 per square foot, excluding
land investments, and the weighted-average remaining lease term was 11.2 years.

The following chart sets forth certain information regarding lease expirations for the next ten years in our consolidated portfolio:

Year
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023

Number of
Lease Expirations
41
35
31
20
35
30
15
14
7
8

Square Feet
2,286,287
1,743,569
4,398,234
5,403,121
3,836,386
3,624,092
2,180,475
2,841,597
981,120
1,644,731

Annual Rent ($000)
24,845
$
20,645
28,533
25,105
30,972
31,896
20,639
28,120
9,581
21,899

Percentage of
Annual Rent

6.9%
5.8%
8.0%
7.0%
8.6%
8.9%
5.8%
7.9%
2.7%
6.1%

The following chart sets forth the 2013 annual GAAP base rent ($000) based on the credit rating of our consolidated tenants at
December 31, 2013(1):

Investment Grade

Non-investment Grade

Unrated

GAAP Base Rent

Percentage

167,292

49,466

149,760

366,518

45.6%

13.5%

40.9%

100.0%

(1) Credit ratings are based upon either tenant, guarantor or parent/sponsor. Generally, all multi-tenant assets are included in
unrated. See Item 1A “Risk Factors”, above.

Proceedings

From time to time we are directly and indirectly involved in legal proceedings arising in the ordinary course of our business.
We believe, based on currently available information, and after consultation with legal counsel, that although the outcomes of those
normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect
on our business, financial condition and results of operations.

Disclosures

Not applicable.

EquityStockholder Securities

Market Information. Our common shares are listed for trading on the NYSE under the symbol “LXP”. The following table sets
forth the high and low sales prices as reported by the NYSE (composite) for our common shares for each of the periods indicated
below:

For the Quarters Ended:
December 31, 2013
September 30, 2013
June 30, 2013
March 31, 2013
December 31, 2012
September 30, 2012
June 30, 2012
March 31, 2012

High

Low

11.98
12.98
13.82
12.19
10.50
10.29
9.19
9.34

10.05
11.09
11.08
10.47
8.84
8.44
7.82
7.34

The per common share closing price on the NYSE (composite) was $11.21 on February 25, 2014.

Holders. As of February 25, 2014, we had approximately 3,454 common shareholders of record.

Dividends. Since our predecessor's formation in 1993, we have made quarterly distributions without interruption.

The common share dividends paid in each quarter for the last five years are as follows:

2013

Quarters Ended
March 31,
June 30,
September 30,
December 31,
_________________________________________
(1) Aggregate dividend paid 90% in our common shares and 10% in cash.

0.15
0.15
0.15
0.15

$
$
$
$

2012

2011

2010

0.125
0.125
0.125
0.150

$
$
$
$

0.115
0.115
0.115
0.115

$
$
$
$

0.10
0.10
0.10
0.10

$
$
$
$

2009
0.18
0.18 (1)
0.18 (1)
0.18 (1)

During 2009, we issued an aggregate 13,304,198 common shares in lieu of cash payments of common share dividends during
the quarters ended June 30, September 30 and December 31, 2009 in accordance with Internal Revenue Service Revenue Procedure
2008-68.

While we intend to continue paying regular quarterly dividends to holders of our common shares, the authorization of future
dividend declarations will be at the discretion of our Board of Trustees and will depend on our actual cash flow, our financial condition,
capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as our Board
of Trustees deems relevant. The actual cash flow available to pay dividends will be affected by a number of factors, including, among
others, the risks discussed under “Risk Factors” in Part I, Item 1A and “Management's Discussion and Analysis of Financial Condition
and Results of Operations” in Part II, Item 7 of this Annual Report.

We do not believe that the financial covenants contained in our debt instruments will have any adverse impact on our ability to
pay dividends in the normal course of business to our common and preferred shareholders or to distribute amounts necessary to
maintain our qualification as a REIT.

Direct Share Purchase Plan. We maintain a direct share purchase plan, which has two components, (i) a dividend reinvestment
component and (ii) a direct share purchase component. Under the dividend reinvestment component, common shareholders and
holders of OP units may elect to automatically reinvest their dividends and distributions to purchase our common shares free of
commissions and other charges. We currently offer a 5.0% discount on the common shares reinvested under the dividend reinvestment
component. Under the direct share purchase component, our current investors and new investors can make optional cash purchases
of our common shares. The administrator of the plan, Computershare Trust Company, N.A., purchases common shares for the accounts
of the participants under the plan, at our discretion, either directly from us, on the open market or through a combination of those
two options. In 2013, 2012 and 2011, we issued approximately 1.5 million, 1.0 million and 1.1 million common shares, respectively,
under the plan, raising net proceeds of $16.5 million, $8.5 million and $8.4 million, respectively.

ATM Program. In January 2013, we implemented an ATM program, under which we may, from time to time, sell up to $100.0
million in common shares over the term of the program. As of December 31, 2013, we issued 3,409,927 common shares under this
ATM program at a weighted-average issue price of $10.82 per common share, generating gross proceeds of approximately $36.9
million. We used the proceeds from the ATM program for general working capital, which included investments and to repay
indebtedness. As of December 31, 2013, we had approximately $63.1 million in common shares available for issuance under the
ATM program.

Equity Compensation Plan Information. The following table sets forth certain information, as of December 31, 2013, with respect

to our 2011 Equity-Based Award Plan under which our equity securities are authorized for issuance as compensation.

Equity compensation plans approved
by security holders

Equity compensation plans not
approved by security holders

Total

1,955,701

—

1,955,701

6.95

—

6.95

3,486,552

—

3,486,552

As previously disclosed, we issued an aggregate 7.9 million common shares upon conversion of $54.9 million original principal

amount of our 6.00% Convertible Notes at the then stated conversion rates during 2013.

In June 2013, we issued $250.0 million aggregate principal amount of 4.25% Senior Notes in a private offering in reliance on
the exemptions from registration provided by Section 4(2) of the Securities Act and Rule 144A and Regulation S under the Securities
Act.

The following table summarizes common shares/OP units that were authorized to be repurchased during the fourth quarter of

2013 pursuant to publicly announced repurchase plans:

October 1-31, 2013
November 1-30, 2013
December 1-31, 2013
Fourth Quarter 2013

—
—
—
—

1,056,731
1,056,731
1,056,731
1,056,731

— $
—
—
— $

—
—
—
—

_________________________
(1) Share repurchase plan most recently announced on December 17, 2007, which plan has no expiration date.

On December 30, 2013, LCIF II was merged with and into LCIF and 170,193 OP units were converted into the right to receive

approximately $2.0 million in aggregate cash.

In addition, during 2013, we repurchased and retired all outstanding (approximately 6.2 million) Series D Preferred Shares for

an aggregate purchase price of approximately $155.6 million, including accrued and unpaid dividends.

Data

The following sets forth our selected consolidated financial data as of and for each of the years in the five-year period ended
December 31, 2013. The selected consolidated financial data should be read in conjunction with Item 7 “Management's Discussion
and Analysis of Financial Condition and Results of Operations” below, and the Consolidated Financial Statements and the related
notes set forth in Item 8 “Financial Statements and Supplementary Data”, below. ($000's, except per share data)

Total gross revenues
Expenses applicable to revenues
Interest and amortization expense
Income (loss) from continuing operations
Total discontinued operations
Net income (loss)
Net income (loss) attributable to Lexington Realty

Trust

Net income (loss) attributable to common

shareholders

Income (loss) from continuing operations per

common share - basic

Income (loss) from discontinued operations - basic

Net income (loss) per common share - basic

Income (loss) from continuing operations per

common share - diluted

Income (loss) from discontinued operations per

common share - diluted

Net income (loss) per common share - diluted
Cash dividends declared per common share
Net cash provided by operating activities
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities
Ratio of earnings to combined fixed charges and

preferred dividends

Real estate assets, net, including real estate -

intangible assets

Investments in and advances to non-consolidated

entities
Total assets
Mortgages, notes payable, credit facility and term

loans, including discontinued operations

Shareholders' equity
Total equity
Preferred share liquidation preference

_________

398,440
(236,467)
(91,271)
(14,148)
18,011
3,863

330,180
(208,339)
(93,677)
182,994
1,644
184,638

292,298
(200,107)
(101,401)
(2,132)
(87,646)
(89,778)

285,268
(194,579)
(111,322)
(5,805)
(31,605)
(37,410)

298,013
(196,224)
(114,387)
(133,290)
(77,982)
(211,272)

1,630

180,316

(79,584)

(32,960)

(210,152)

(14,089)

156,821

(103,721)

(58,096)

(242,876)

(0.15)
0.08
(0.07)

(0.15)

0.08
(0.07)
0.615
206,304
(597,583)
434,516

0.99

—

0.99

0.93

—
0.93
0.55
163,810
(134,103)
(59,394)

(0.20)
(0.48)
(0.68)

(0.20)

(0.48)
(0.68)
0.47
180,137
(24,813)
(144,257)

(0.26)
(0.18)
(0.44)

(0.26)

(0.18)
(0.44)
0.415
164,751
(24,783)
(141,189)

(1.52)

(0.70)

(2.22)

(1.52)

(0.70)
(2.22)
0.64
159,307
111,967
(285,207)

N/A

3,425,420

3,165,085

2,746,976

2,977,100

3,282,561

18,442
3,772,281

27,129
3,418,203

39,330
3,026,820

21,252
3,283,768

4,757
3,528,617

2,055,807
1,515,738
1,539,483
96,770

1,878,208
1,306,730
1,333,165
251,770

1,662,375
1,111,846
1,170,203
322,032

1,778,077
1,228,928
1,304,901
338,760

2,072,738
1,157,441
1,246,008
338,760

N/A - Ratio is below 1.0, deficit of $21,974, $21,196, $47,935, $47,046 and $12,703 exists at December 31, 2013, 2012, 2011,
2010 and 2009, respectively.

All years have been adjusted to reflect the impact of operating properties sold during the years ended December 31, 2013, 2012,

2011, 2010 and 2009, which are reflected in discontinued operations in the Consolidated Statements of Operations.

and Operations

In this discussion, we have included statements that may constitute “forward-looking statements” within the meaning of the safe
harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are not historical facts but
instead represent only our beliefs regarding future events, many of which, by their nature, are inherently uncertain and outside our
control. These statements may relate to our future plans and objectives, among other things. By identifying these statements for you
in this manner, we are alerting you to the possibility that our actual results may differ, possibly materially, from the anticipated results
indicated in these forward-looking statements. Important factors that could cause our results to differ, possibly materially, from those
indicated in the forward-looking statements include, among others, those discussed above in “Risk Factors” in Part I, Item 1A of
this Annual Report and “Cautionary Statements Concerning Forward-Looking Statements” in Part I, of this Annual Report.

General. We are a Maryland REIT that owns a diversified portfolio of equity and debt investments in single-tenant properties
and land. A majority of these properties and all land interests are subject to net or similar leases, where the tenant bears all or
substantially all of the costs, including cost increases, for real estate taxes, utilities, insurance and ordinary repairs.

As of December 31, 2013, we had equity ownership interests in approximately 220 consolidated real estate properties, located

in 41 states and encompassing approximately 40.7 million square feet, approximately 97.6% of which was leased.

Our revenues and cash flows are generated predominantly from property rent receipts. As a result, growth in revenues and cash
flows is directly correlated to our ability to (1) acquire income producing real estate assets and (2) re-lease properties that are vacant,
or may become vacant, at favorable rental rates.

In recent years, we have seen an increase in acquisition opportunities and strengthening in the availability of capital. However,
our business continues to be subject to the uncertainty and volatility in the capital markets, which may (1) lead to a need to preserve
capital, generate additional liquidity and improve our overall financial flexibility, (2) limit our ability to find attractive financing,
(3) create challenges in acquiring suitable property investments and (4) impact tenant demand with respect to future space needs.
However, it is difficult for us to predict when, or if, these conditions may arise.

In an effort to diversify our risk, we invest across the United States in properties leased to tenants in various industries, including
finance/insurance, technology, service, energy and transportation/logistics. However, industry declines, to the extent we have
concentration, and general economic declines could negatively impact our results of operations and cash flows.

Portfolio Management. During the year ended December 31, 2013, we generated approximately 30.1% of our rental revenue
from leases ten years or longer, compared to approximately 23.1% for the year ended December 31, 2012. Our objective is to generate
at least half of our rental revenue from leases ten years or longer, which we expect to achieve primarily through capital recycling of
assets with shorter-term leases and acquiring new investments with leases longer than ten years.

At December 31, 2013, our rental revenue from single-tenant leases scheduled to expire through 2018 has been reduced to
approximately 36.9% compared to approximately 44.7% at December 31, 2012. We believe we no longer have concentrated risk of
lease rollover in any one year. In addition, we extended our weighted-average lease term on a cash basis to approximately 11.2 years
at December 31, 2013 compared to approximately 6.9 years at December 31, 2012. This was primarily due to our acquisition volume
in 2013, including the addition of long-term land leases to our portfolio. However, certain of the long-term leases have tenant purchase
options.

In recent years, demand for space in the suburban office market has not been as strong as demand for space in the industrial
market. We believe this is due to a continuing trend of downsizing of corporate office employment. In addition, industrial assets
generally require less capital to maintain and re-lease than office assets. As of December 31, 2013, the ratio of rental revenue from
office assets to the rental revenue from industrial assets, each with lease terms shorter than ten years, was approximately 3:1. Our
objective is to manage this ratio down to approximately 2:1 over the next several years, which we expect to accomplish partly through
sales of office assets and growing our portfolio. While we continue to see challenges in the suburban office market, we believe
vacant office values have increased over the last several years. This has allowed us to dispose of certain vacant properties at higher
than expected values.

Business Strategy. Our current business strategy is focused on enhancing our cash flow growth and stability, growing our portfolio
with attractive long-term leased investments and maintaining a strong and flexible balance sheet to allow us to act on opportunities
as they arise. See “Business” in Part I, Item 1 of this Annual Report for a detailed description of our current business strategy.

We believe a positive impact continues to result from our business strategy. In 2013, we increased our net assets by approximately
$206.3 million as compared to 2012. In 2013, we completed real estate acquisitions/build-to-suit transactions, including joint venture
investments, for an aggregate capitalized cost of approximately $590.4 million and reduced our weighted-average interest rate on
outstanding consolidated indebtedness by approximately 74 basis points primarily by refinancing higher interest rate debt. Since
2008, we reduced our overall consolidated indebtedness by $338.6 million primarily (1) by repurchasing our debt and (2) through
the sale, transfer or other disposition of properties to third parties and lenders. Our secured debt decreased to approximately $1.2
billion at December 31, 2013 compared to $1.7 billion at December 31, 2012, which was 23.9% and 36.5% of total gross assets,
respectively. Our objective is to lower our secured debt to approximately 20% or less of total gross assets. We expect to achieve
this objective by satisfying secured debt as it matures and acquiring new investments without secured debt. We believe this will also
allow us to further lower our financing costs and improve our cash flow, financial flexibility and credit metrics.

We expect our business strategy will enable us to continue to improve our liquidity and strengthen our overall balance sheet.
We believe liquidity and a strong balance sheet will allow us to take advantage of attractive investment opportunities as they arise,
which will create meaningful shareholder value.

Investment Trends. Making investments in income producing single-tenant net-leased real estate assets is one of our primary
focuses. The challenge we face is finding investments that will provide an attractive return without compromising our real estate
underwriting criteria. We believe we have access to acquisition opportunities due to our relationships with developers, brokers,
corporate users and sellers. When we acquire real estate assets, we look for commercial real estate assets or land interests subject to
a long-term net-lease which have one or more of the following characteristics (1) a credit-worthy tenant, (2) adaptability to a variety
of users, including multi-tenant use, (3) an attractive geographic location, and (4) the potential for capital appreciation.

Our acquisition volume consists primarily of sale-leaseback transactions and build-to-suit transactions whereby we (1) provide
capital to developers who are engaged in build-to-suit transactions and/or commit to purchase the property from developers upon
completion or (2) acquire a property subject to a single-tenant net-lease and engage a developer to complete construction of a build-
to-suit property as required by the lease. We believe these arrangements offer developers and/or tenants access to capital while
simultaneously providing us with attractive risk-adjusted projected yields.

We generally mitigate our cost exposure by requiring purchase agreements, development agreements and/or loan agreements
to specify a maximum price and/or loan commitment amount prior to our investment. Cost overruns are generally the responsibility
of the developer, or in some cases the prospective tenant. To further mitigate risk, we believe we perform stringent underwriting
procedures such as, among other items, (1) requiring payment and performance bonds and/or completion guarantees from developers
and/or contractors; (2) engaging third-party construction consultants and/or engineers to monitor construction progress and quality;
(3) only hiring developers with a proven history of performance; (4) requiring developers to provide financial statements and in some
cases personal guarantees from principals; (5) obtaining and reviewing detailed plans and construction budgets; (6) requiring a long-
term tenant lease to be executed prior to funding; and (7) securing liens on the property to the extent of construction funding.

The following is a summary of our property acquisitions and build-to-suit transactions for the year ended December 31, 2013:

Property Acquisitions

Location

Property Type

Square Feet
(000's)

Capitalized Cost
(millions)

Houston, TX(1)
New York, NY(2)
Danville, VA
Various(3)
Omaha, NE

Industrial

Land

Office

132
$
— $
— $
$
40

128

300

81.4

302.0

4.7

13.1

39.1

440.3

Lease Term
(Years)
25

Date Acquired

1Q 2013

4Q 2013

(1) Asset consists of a deep-water intermodal industrial terminal and existing structures on approximately 90 acres.
(2)
(3)

Includes three properties.
Includes four properties.

Completed Build-to-Suit Transactions

Location

Long Island City, NY
Denver, CO(1)
Tuscaloosa, AL(2)
Albany, GA(3)

Property
Type
Industrial
Office
Retail
Retail

Square Feet
(000's)

Capitalized Cost
(millions)

140
167
42
45
394

$
$
$
$
$

42.1
38.4
8.7
7.4
96.6

Lease Term
(Years)
15
15
15
15

Date Acquired
1Q 2013
2Q 2013
2Q 2013
4Q 2013

Capitalized Cost
Per Square Foot
300.18
$
229.89
$
206.10
$
164.48
$

(1)
(2)
(3)

Includes $3.8 million of tenant related costs.
Includes leasing costs of $0.3 million. Property was sold in September 2013.
Includes leasing costs of $0.3 million.

On-going Build-to-Suit Transactions

Location

Bingen, WA
Las Vegas, NV
Richmond, VA
Rantoul, IL

Property
Type
Industrial
Industrial
Office
Industrial

Expected
Maximum
Commitment/
Contribution
(millions)

Square Feet
(000's)

124
180
279
813
1,396

$
$
$
$
$

18.9
29.6
98.6
42.6
189.7

Lease
Term
(years)
12
20
15
20

Estimated
Completion
Date
2Q 14
3Q 14
3Q 15
1Q 14

Costs Incurred as
of 12/31/13(1)
(millions)

$
$
$
$
$

6.4
14.8
16.7
38.9
76.8

(1) Balance includes equity credits received.

In addition, during 2013, we deposited $0.6 million toward the purchase of a to-be-built industrial property in Lewisburg,
Tennessee for an estimated cost of $12.8 million. Substantial completion of the property is expected to occur in the second quarter
of 2014. We can provide no assurance with respect to the completion, acquisition, cost or timing of these on-going build-to-suit and
forward purchase transactions.

The following is a summary of our property acquisitions and completed build-to-suit transactions for the year ended December

31, 2012:

Property Acquisitions

Location

Missouri City, TX(1)
Phoenix, AZ

Property Type
Land/Infrastructure
Office

Square Feet
(000's)

Capitalized Cost
(millions)

— $
$
$

252
252

23.0
53.2
76.2

Lease Term
(Years)
20
17

Date Acquired
2Q 2012
4Q 2012

(1) Consists of a 152 acre industrial site with various structures, including storage areas and a rail spur.

Completed Build-to-Suit Transactions

Location
Huntington, WV
Florence, SC
Shreveport, LA
Jessup, PA(1)
Saint Joseph, MO
Valdosta, GA(2)
Opelika, AL(2)
Eugene, OR

Property
Type

Square Feet
(000's)

Capitalized Cost
(millions)

Office
Office
Industrial
Office
Office
Retail
Retail
Office

69
32
258
150
99
51
52
80
791

$
$
$
$
$
$
$
$
$

12.6
5.1
12.9
24.9
17.6
8.3
8.3
17.6
107.3

Lease Term
(Years)
15
12
10
15
15
15
15
15

Date Acquired
1Q 2012
1Q 2012
2Q 2012
3Q 2012
3Q 2012
3Q 2012
4Q 2012
4Q 2012

Capitalized Cost
Per Square Foot
182.81
$
159.18
$
50.19
$
136.12
$
177.76
$
161.69
$
160.24
$
219.44
$

(1) Capitalized cost includes $4.5 million funded by the tenant.
(2)

Includes leasing costs of $0.5 million for Valdosta and $0.4 million for Opelika. Properties were sold in 2013.

Loan Investments. We invest in loan assets secured by single-tenant real estate assets, which (1) we feel comfortable owning
for our investment should the borrower default for reasons other than an underlying tenant default or (2) are necessary for an efficient
disposition of our equity interest in the property. The following is a summary of our outstanding loan investments at December 31,
2013 and 2012:

Loan
Norwalk, CT(2)
Homestead, FL(3)
Schaumburg, IL
Westmont, IL
Southfield, MI
Austin, TX
Kennewick, WA(4)
Other

$
$
$
$
$
$
$
$
$

Loan carrying-value(1)
(millions)

12/31/2013

12/31/2012

28.2
10.2

$
$
— $
$
$
$
$
$
$

12.6
6.6
2.4
37.0
2.4
99.4

3.5
8.0
21.9
26.9
7.4
2.0
—
2.8
72.5

Interest Rate
7.50%
7.50%
20.00%
6.45%
4.55%
16.00%
9.00%
8.00%

Maturity Date
11/2014
08/2014
01/2012
10/2015
02/2015
10/2018
05/2022
2021-2022

(1) Loan carrying value includes accrued interest and is net of origination costs, loan losses and fee eliminations, if any.
(2) We are committed to lend up to $32.6 million.
(3) We are committed to lend up to $10.7 million.
(4) We are committed to lend up to $85.0 million. During construction, advances accrue interest at 6.5% per annum. Estimated construction

completion is March 2014.

In 2013, we foreclosed on our loan receivable that was secured by an office property in Schaumburg, Illinois. The loan had an
outstanding balance of $21.6 million (not including default interest and other penalties), which we believe was less than the estimated
fair value of the property.

Also in 2013, the tenant of the property in Westmont, Illinois, which we sold in 2007 and issued a purchase mortgage to the
buyer, exercised its option to terminate its lease effective November 2013 and as a result we recognized a loan loss of $13.9 million
in 2013 on the outstanding loan receivable.

Despite the current economic uncertainty, we have seen an increase in our acquisition pipeline, mostly consisting of build-to-
suit transactions. We have several commitments and letters of intent for future acquisitions as of the first quarter of 2014. We currently
expect investment activity to be approximately $300.0 - $350.0 million for 2014, which includes approximately $200.0 - $225.0
million of build-to-suit transactions with the remaining being immediately deliverable investments. However, we are seeing increased
competition for build-to-suit transactions and we can provide no assurances that any of these transactions will be consummated or,
if consummated, will be successful.

Leasing Trends. Re-leasing properties that are currently vacant or as leases expire at favorable effective rates is one of our
primary asset management focuses. The primary risks associated with re-tenanting properties are (1) the period of time required to
find a new tenant, (2) whether rental rates will be lower than previously received, (3) the significance of leasing costs such as
commissions and tenant improvement allowances and (4) the payment of capital expenditures and operating costs such as real estate
taxes, insurance and maintenance with no offsetting revenue.

Our property owner subsidiaries seek to mitigate these risks by (1) staying in close contact with our tenants during the lease
term in order to assess the tenant's current and future occupancy needs, (2) maintaining relationships with local brokers to determine
the depth of the rental market and (3) retaining local expertise to assist in the re-tenanting of a property. However, no assurance can
be given that once a property becomes vacant it will subsequently be re-let. Generally, a tenant in a single-tenant office property
commences lease extension discussions well in advance of lease expiration. If the lease has a year or less remaining until expiration,
there is a high likelihood that the tenant will not extend the lease for the entire property.

If a property cannot be re-let to a single user and the property can be adapted to multi-tenant use, we determine whether the
costs of adapting the property to multi-tenant use outweigh the benefit of funding operating costs while searching for a single-tenant.

Certain of the long-term leases on properties in which we have an ownership interest contain provisions that may mitigate the
adverse impact of inflation on our operating results. Such provisions include clauses entitling us to receive (1) scheduled fixed base
rent increases and (2) base rent increases based upon the consumer price index. In addition, a majority of the leases on the single-
tenant properties in which we have an ownership interest require tenants to pay operating expenses, including maintenance, real
estate taxes, insurance and utilities, thereby reducing our exposure to increases in costs and operating expenses. In addition, the
leases on single-tenant properties in which we have an ownership interest are generally structured in a way that minimizes our
responsibility for capital improvements. However, certain of our leases provide for some level of landlord responsibility for capital
repairs and replacements, the cost of which is generally factored into the rental rate.

Since 2008, tenants have been more aggressive in lease and lease renewal negotiations with respect to rental rates, tenant
concessions and landlord responsibilities. As a result, the obligations of our property owner subsidiaries on new leases and newly
renewed or extended leases have generally increased to include, among other items, some form of responsibility for capital repairs
and replacements.

During 2013, we entered into 59 new leases and lease extensions encompassing approximately 5.7 million square feet. The
average GAAP base rent on these extended leases was approximately $6.88 per square foot compared to the average GAAP base
rent on these leases before extension of $6.95 per square foot. The weighted-average cost of tenant improvements and lease
commissions during 2013 was approximately $17.27 per square foot for new leases and $3.16 per square foot for extended leases.
We expect renewal rents to be lower than expiring rents and aggregate tenant improvement allowances and leasing costs to also
decrease from their current levels in the future.

We continue to monitor the credit of tenants of properties in which we have an interest by (1) subscribing to S&P and Moody's,
so that we can monitor changes in the ratings of our rated tenants, (2) reviewing financial statements that are publicly available or
that are required to be delivered to us under the applicable lease, (3) monitoring news reports regarding our tenants and their respective
businesses and (4) monitoring the timeliness of rent collections. Under current bankruptcy law, a tenant can generally assume or
reject a lease within a certain number of days of filing its bankruptcy petition. If a tenant rejects the lease, a landlord's damages,
subject to availability of funds from the bankruptcy estate, are generally limited to the greater of (1) one year's rent and (2) the rent
for 15%, of the remaining term of the lease not to exceed three years rent.

During 2013, we conveyed in foreclosure or via a deed-in-lieu of foreclosure four properties in which we had an interest as we
deemed the non-recourse mortgages encumbering the properties were in excess of the value of the property collateral. Two vacant
properties in which we had an interest were disposed of in foreclosure in 2012. Our property owner subsidiaries may convey properties
to lenders or the property owner subsidiary may declare bankruptcy in the future if a property owner subsidiary is unable to refinance,
re-let or sell its vacated property or if a tenant renews at a lower rent or a new tenant pays a lower rent that does not justify a value
of the property in excess of the mortgage balance.

Impairment charges. During 2013, 2012 and 2011, we incurred impairment charges on our assets, excluding loan receivables,
of $34.6 million, $10.0 million and $117.4 million, respectively, due primarily to the assets being sold below their carrying value
and a deterioration in economic conditions since the acquisition of such assets. These real estate assets were primarily non-core assets
including retail properties, under performing and multi-tenant properties. In addition, in 2013, we recognized a loan loss of $13.9
million relating to a loan receivable secured by a property in Westmont, Illinois.

Given the continued uncertainty in general economic conditions, we cannot estimate if we will incur, or the amount of, future

impairment charges on our assets. See Part I, Item 1A “Risk Factors”, of this Annual Report.

Critical Accounting Policies. Our accompanying consolidated financial statements have been prepared in accordance with GAAP,
which require our management to make estimates that affect the amounts of revenues, expenses, assets and liabilities reported and
related disclosures of contingent assets and liabilities. A summary of our significant accounting policies which are important to the
portrayal of our financial condition and results of operations is set forth in note 2 to the Consolidated Financial Statements beginning
on page 70 of this Annual Report and incorporated by reference herein.

The following is a summary of our critical accounting policies, which require some of management's most difficult, subjective

and complex judgments.

Basis of Presentation and Consolidation. Our consolidated financial statements are prepared on the accrual basis of accounting.
The financial statements reflect our accounts and the accounts of our consolidated subsidiaries. We consolidate our wholly-owned
subsidiaries, partnerships and joint ventures which we control through (1) voting rights or similar rights or (2) by means other than
voting rights if we are the primary beneficiary of a variable interest entity, which we refer to as a VIE. Entities which we do not
control and entities which are VIEs in which we are not the primary beneficiary are generally accounted for by the equity method.
Significant judgments and assumptions are made by us to determine whether an entity is a VIE such as those regarding an entity's
equity at risk, the entity's equity holders' obligations to absorb anticipated losses and other factors. In addition, the determination of
the primary beneficiary of a VIE requires judgment to determine the party that has (1) power over the significant activities of the
VIE and (2) an obligation to absorb losses or the right to receive benefits that could be potentially significant to the VIE.

Judgments and Estimates. Our management has made a number of estimates and assumptions relating to the reporting of assets
and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses to prepare our
consolidated financial statements in conformity with GAAP. These estimates and assumptions are based on our management's best
estimates and judgment. Our management evaluates its estimates and assumptions on an ongoing basis using historical experience
and other factors, including the current economic environment. The current economic environment has increased the degree of
uncertainty inherent in these estimates and assumptions. Our management adjusts such estimates when facts and circumstances
dictate. The most significant estimates made include the recoverability of accounts receivable, allocation of property purchase price
to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and entities that should be consolidated,
the determination of impairment of long-lived assets, loans receivable and equity method investments, valuation and impairment of
assets held by equity method investees, valuation of derivative financial instruments and the useful lives of long-lived assets.

The fair value of the tangible assets of an acquired property (which includes land, building and improvements and fixtures and
equipment) is determined by valuing the property as if it were vacant. The “as-if-vacant” value is then allocated to land and building
and improvements based on our management's determination of relative fair values of these assets. Factors considered by our
management in performing these analyses include an estimate of carrying costs during the expected lease-up periods considering
current market conditions and costs to execute similar leases. In estimating carrying costs, our management includes real estate taxes,
insurance and other operating expenses and estimates of lost rental revenue during the expected lease-up periods based on current
market demand. Our management also estimates costs to execute similar leases including leasing commissions.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-
market lease values are recorded based on the difference between the current in-place lease rent and management's estimate of current
market rents. Below-market lease intangibles are recorded as part of deferred revenue and amortized into rental revenue over the
non-cancelable periods and bargain renewal periods of the respective leases. Above-market leases are recorded as part of intangible
assets and amortized as a direct charge against rental revenue over the non-cancelable portion of the respective leases.

The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationship values, is measured
by the excess of (1) the purchase price paid for a property over (2) the estimated fair value of the property as if vacant, determined
as set forth above. This aggregate value is allocated between in-place lease values and tenant relationship values based on
management's evaluation of the specific characteristics of each tenant's lease. The value of in-place leases is amortized to expense
over the remaining non-cancelable periods and any bargain renewal periods of the respective leases. The value of tenant relationships
is amortized to expense over the applicable lease term plus expected renewal periods.

Revenue Recognition. We recognize lease revenue on a straight-line basis over the term of the lease unless another systematic
and rational basis is more representative of the time pattern in which the use benefit is derived from the leased property. Renewal
options in leases with rental terms that are lower than those in the primary term are excluded from the calculation of straight line
rent if the renewals are not reasonably assured. In those instances in which we fund tenant improvements and the improvements are
deemed to be owned by us, revenue recognition will commence when the improvements are substantially completed and possession
or control of the space is turned over to the tenant. When we determine that the tenant allowances are lease incentives, we commence
revenue recognition when possession or control of the space is turned over to the tenant for tenant work to begin. The lease incentive
is recorded as a deferred expense and amortized as a reduction of revenue on a straight-line basis over the respective lease term.
Determining if a tenant allowance is a lease incentive requires significant judgment. We recognize lease termination payments as a
component of rental revenue in the period received, provided that there are no further obligations under the lease; otherwise the lease
termination payment is amortized on a straight-line basis over the remaining obligation period. All above-market lease assets, below-
market lease liabilities and deferred rent assets or liabilities for terminated leases are charged against or credited to rental revenue
in the period the lease is terminated. All other capitalized lease costs and lease intangibles are accelerated via amortization expense
to the date of termination.

Gains on sales of real estate are recognized based on the specific timing of the sale as measured against various criteria related
to the terms of the transactions and any continuing involvement associated with the properties. If the sales criteria are not met, the
gain is deferred and the finance, installment or cost recovery method, as appropriate, is applied until the sales criteria are met. To
the extent we sell a property and retain a partial ownership interest in the property, we recognize gain to the extent of the third-party
ownership interest.

Accounts Receivable. We continuously monitor collections from our tenants and would make a provision for estimated losses

based upon historical experience and any specific tenant collection issues that we have identified.

Impairment of Real Estate. We evaluate the carrying value of all tangible and intangible real estate assets for possible impairment
when an event or change in circumstance has occurred that indicates its carrying value may not be recoverable. The evaluation
includes estimating and reviewing anticipated future undiscounted cash flows to be derived from the asset. If such cash flows are
less than the asset's carrying value, an impairment charge is recognized to the extent by which the asset's carrying value exceeds the
estimated fair value. Estimating future cash flows is highly subjective and such estimates could differ materially from actual results.

Impairment of Equity Method Investments. We assess whether there are indicators that the value of our equity method investments
may be impaired. An investment's value is impaired if we determine that a decline in the value of the investment below its carrying
value is other-than-temporary. The assessment of impairment is highly subjective and involves the application of significant
assumptions and judgments about our intent and ability to recover our investment given the nature and operations of the underlying
investment, including the level of our involvement therein, among other factors. To the extent impairment has occurred, the loss is
measured as the excess of the carrying amount of the investment over the estimated value of the investment.

Loans Receivable. We evaluate the collectability of both interest and principal of each of our loans, if circumstances warrant,
to determine whether the loan is impaired. A loan is considered to be impaired, when based on current information and events, it is
probable that we will be unable to collect all amounts due according to the existing contractual terms. Significant judgments are
required in determining whether impairment has occurred. When a loan is considered to be impaired, the amount of the loss accrual
is calculated by comparing the recorded investment to the value determined by discounting the expected future cash flows at the
loan's effective interest rate, the loan's observable current market price or the fair value of the underlying collateral. Interest on
impaired loans is recognized on a cash basis.

Acquisition, Development and Construction Arrangements. We evaluate loans receivable where we participate in residual profits
through loan provisions or other contracts to ascertain whether we have the same risks and rewards as an owner or a joint venture
partner. Where we conclude that such arrangements are more appropriately treated as an investment in real estate, we reflect such
loan receivable as an equity investment in real estate under construction in the Consolidated Balance Sheets. In these cases, no interest
income is recorded on the loan receivable and we record capitalized interest during the construction period. In arrangements where
we engage a developer to construct a property or provide funds to a tenant to develop a property, we will capitalize the funds provided
to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period.

The accounting for these critical accounting policies and implementation of accounting guidance issued in the future involves
the making of estimates based on current facts, circumstances and assumptions which could change in a manner that would materially
affect management's future estimates with respect to such matters. Accordingly, future reported financial conditions and results could
differ materially from financial conditions and results reported based on management's current estimates.

General. Since becoming a public company, our principal sources of liquidity have been (1) undistributed cash flows generated
from our investments, (2) the public and private equity and debt markets, including issuances of OP units, (3) property specific debt,
(4) corporate level borrowings, (5) commitments from co-investment partners and (6) proceeds from the sales of our investments.

Our ability to incur additional debt to fund acquisitions is dependent upon our existing leverage, the value of the assets we are
attempting to leverage and general economic and credit market conditions, which may be outside of management's control or influence.

Cash Flows. We believe that cash flows from operations will continue to provide adequate capital to fund our operating and
administrative expenses, regular debt service obligations and all dividend payments in accordance with REIT requirements in both
the short-term and long-term. In addition, we anticipate that cash on hand, corporate level borrowings, capital recycling proceeds,
issuances of equity and debt, mortgage proceeds and our other principal sources of liquidity, will be available to provide the necessary
capital required to fund our operations and allow us to grow.

Cash flows from operations as reported in the Consolidated Statements of Cash Flows totaled $206.3 million for 2013, $163.8
million for 2012 and $180.1 million for 2011. Cash flows from operations increased in 2013 primarily due to an increase in acquisitions,
offset by yield maintenance payments made on debt satisfactions. Cash flow from operations in 2011 was primarily impacted by the
receipt of a lease termination payment on our Lenexa, Kansas property. The underlying drivers that impact working capital and
therefore cash flows from operations are the timing of (1) the collection of rents and tenant reimbursements, loan interest payments
from borrowers, and advisory fees, and (2) the payment of interest on mortgage debt and operating and general and administrative
costs. We believe the net-lease structure of the leases encumbering a majority of the properties in which we have an interest mitigates
the risks of the timing of cash flows from operations since the payment and timing of operating costs related to the properties are
generally borne directly by the tenant. Collection and timing of tenant rents is closely monitored by management as part of our cash
management program.

Net cash used in investing activities totaled $597.6 million in 2013, $134.1 million in 2012 and $24.8 million in 2011. Cash
provided by investing activities related primarily to proceeds from the sale of properties, collection of loans receivable, distributions
from non-consolidated entities in excess of accumulated earnings, proceeds from the sale of interests in non-consolidated entities
and changes in escrow deposits and restricted cash. Cash used in investing activities related primarily to investments in real estate
properties, co-investment programs and loans receivable and an increase in deferred leasing costs, deposits and restricted cash.
Therefore, the fluctuation in investing activities relates primarily to the timing of investments and dispositions.

Net cash provided by (used in) financing activities totaled $434.5 million in 2013, $(59.4) million in 2012 and $(144.3) million
in 2011. Cash provided by financing activities was primarily attributable to net proceeds from the issuance of common shares,
contributions from noncontrolling interests and non-recourse mortgages and corporate borrowings. Cash used in financing activities
related primarily to dividend and distribution payments, repurchases of preferred shares, forward equity commitment payments, net,
purchase of a noncontrolling interest, an increase in deferred financing costs and debt payments and repurchases.

Public and Private Equity and Debt Markets. We access the public and private equity and debt markets when we (1) believe
conditions are favorable and (2) have a compelling use of proceeds. During 2013, 2012 and 2011, we raised net proceeds of
approximately $434.9 million, $162.7 million and $99.7 million, respectively, through the issuance of common shares, including
option exercises. During 2013, we raised net proceeds of approximately $247.6 million through the issuance of investment-grade
rated 4.25% Senior Notes. We primarily used these proceeds to fund investments and retire indebtedness.

During 2007, we issued an aggregate $450.0 million of 5.45% Exchangeable Guaranteed Notes due in 2027. From 2008 through
2012, we repurchased and retired all notes for $358.1 million in cash and 1.6 million common shares having a value at issuance of
$23.5 million (or $14.50 per share).

During 2010, we issued $115.0 million aggregate principal amount of 6.00% Convertible Notes. The notes pay interest semi-
annually in arrears and mature in January 2030. The holders of the notes may require us to repurchase their notes in January 2017,
January 2020 and January 2025 for cash equal to 100% of the principal of the notes to be repurchased, plus any accrued and unpaid
interest. We may not redeem any notes prior to January 2017, except to preserve our REIT status. Thereafter, we may redeem the
notes for cash equal to 100% of the principal of the notes to be redeemed, plus any accrued and unpaid interest. As of the date of
filing this Annual Report, the notes have a conversion rate of 147.8206 common shares per $1,000 principal amount of the notes,
representing a conversion price of approximately $6.76 per common share. The conversion rate is subject to adjustment under certain
circumstances, including increases in our dividend rate above a certain threshold and the issuance of stock dividends. The notes are
convertible by the holders under certain circumstances for cash, common shares or a combination of cash and common shares at our
election. During 2013 and 2012, holders of the notes converted an aggregate of $54.9 million and $31.1 million, respectively, of
notes for 7.9 million and 4.5 million common shares, respectively, and an aggregate cash payment by us of $3.3 million and $2.4
million, respectively, plus accrued and unpaid interest.

During 2013, 2012 and 2011, we repurchased and retired all outstanding 8.05% Series B Cumulative Redeemable Preferred
Stock, par value $0.0001 per share, which we refer to as Series B Preferred Shares, (approximately 3.2 million) and Series D Preferred
Shares (approximately 6.2 million) and approximately 0.2 million Series C Preferred Shares for an aggregate purchase price of $240.5
million, which was at a $1.5 million discount to the liquidation preferences of the preferred shares.

During 2008, we entered into a forward equity commitment to purchase 3.5 million of our common shares at a price of $5.60
per share and we agreed to make floating payments during the term of the forward purchase at LIBOR plus 250 basis points per
annum and we retained all cash dividend payments. We prepaid $15.6 million of the $19.6 million purchase price during 2008 and
2009. We settled the commitment in October 2011 for a cash payment of approximately $4.0 million and retired approximately 4.0
million common shares.

We may access these markets and other markets in the future to implement our business strategy and to fund future growth.
However, the continued general economic uncertainty and the volatility in these markets makes accessing these markets challenging.

UPREIT Structure. Our UPREIT structure permits us to effect acquisitions by issuing OP units to a property owner as a form
of consideration in exchange for the property. Substantially all outstanding OP units are redeemable by the holder at certain times
on a one OP unit for approximately 1.13 common shares basis or, at our election, with respect to certain OP units, cash. Substantially
all outstanding OP units require us to pay quarterly distributions to the holders of such OP units equal to the dividends paid to our
common shareholders on an as redeemed basis and the remaining OP units have stated distributions in accordance with their applicable
partnership agreement. To the extent that our dividend per share is less than a stated distribution per unit per the applicable partnership
agreement, the stated distributions per unit are reduced by the percentage reduction in our dividend. We are party to a funding
agreement with our operating partnership under which we may be required to fund distributions made on account of OP units. No
OP units have a liquidation preference. The number of common shares that will be outstanding in the future should be expected to
increase, and income (loss) attributable to noncontrolling interests should be expected to decrease (increase), as such OP units are
redeemed for our common shares.

Prior to the effective date of the LCIF and LCIF II merger, there were 3.6 million OP units outstanding which were convertible
into 4.1 million common shares assuming we satisfied redemptions entirely with common shares. Approximately 0.2 million former
LCIF II OP units elected or were deemed to elect the cash consideration in the LCIF and LCIF II merger by the February 1, 2014
deadline and were converted into the right to receive such cash consideration.

As a result of the general deterioration in real estate values which commenced in 2008, few sellers of real estate have been

seeking OP units as a form of consideration.

Property Specific Debt. As of December 31, 2013, our property owner subsidiaries have related balloon payments of $93.0
million and $275.3 million maturing in 2014 and 2015, respectively. With respect to mortgages encumbering properties where the
expected lease rental revenues are sufficient to provide an estimated property value in excess of the mortgage balance, we believe
our property owner subsidiaries have sufficient sources of liquidity to meet these obligations through future cash flows from operations,
the credit markets and, if determined appropriate by us, a capital contribution from us from either cash on hand ($77.3 million at
December 31, 2013) or borrowing capacity on our primary credit facility ($443.4 million as of December 31, 2013).

In the event that the estimated property value is less than the mortgage balance, the mortgages encumbering the properties in
which we have an interest are generally non-recourse to us and the property owner subsidiaries, such that a property owner subsidiary
may, if appropriate, satisfy a mortgage obligation by transferring title of the property to the lender or permitting a lender to foreclose.
There are significant risks associated with conveying properties to lenders through foreclosure which are described in "Risk Factors"
in Part I, Item 1A of this Annual Report.

We expect to continue to use property specific, non-recourse mortgages in certain situations as we believe that by properly
matching a debt obligation, including the balloon maturity risk, with the terms of a lease, our cash-on-cash returns increase and the
exposure to residual valuation risk is reduced. However, the current economic environment has impacted our ability to obtain property
specific debt on favorable terms in many cases. In 2008, property specific mortgage lending nearly ceased. Since then, the number
of lenders and available loan proceeds have diminished significantly. In addition, the required loan to value ratios have decreased
and the covenants, including required reserve amounts, have increased. Accordingly, we expect to primarily use corporate level
borrowings to finance our acquisitions and debt maturities.

In 2013 and 2012, we obtained, through consolidated property owner subsidiaries, $253.5 million and $121.0 million, respectively,

in non-recourse mortgage loans with interest rates ranging from 3.7% to 4.7% and maturity dates ranging from 2017 to 2027.

Corporate Borrowings. In June 2013, we issued $250.0 million aggregate principal amount of 4.25% Senior Notes due 2023 at
an issuance price of 99.026% of the principal amount. The notes are unsecured, pay interest semi-annually in arrears and mature in
June 2023. We may redeem the notes at our option at any time prior to maturity in whole or in part by paying the principal amount
of the notes being redeemed plus a premium. We recognized an aggregate initial discount of $2.4 million upon issuance of the notes
which will be recognized as additional interest expense over the term of the notes. The notes are rated Baa2 and BBB- by Moody’s
and S&P, respectively.

On February 12, 2013, we refinanced our $300.0 million secured revolving credit facility with a $300.0 million unsecured
revolving credit facility with KeyBank, as agent. The unsecured revolving credit facility matures in February 2017 but can be extended
until February 2018 at our option. The unsecured revolving credit facility bore interest at LIBOR plus 1.50% to 2.05% based on our
leverage ratio, as defined therein. Since we have obtained an investment-grade unsecured debt rating from both Moody’s and S&P,
the interest rate under the unsecured revolving credit facility ranges from LIBOR plus 0.95% to 1.725% (1.15% as of December 31,
2013) depending on our unsecured investment-grade debt rating. During 2013, we increased availability under the unsecured revolving
credit facility from $300.0 million to $400.0 million. At December 31, 2013, the unsecured revolving credit facility had $48.0 million
outstanding, outstanding letters of credit of $7.6 million and availability of $344.4 million, subject to covenant compliance.

In connection with the refinancing discussed above, we also procured a five-year $250.0 million unsecured term loan facility
from KeyBank, as agent. The unsecured term loan matures in February 2018, required regular payments of interest only at interest
rates ranging from LIBOR plus 1.45% to 2.00% dependent on our leverage ratio, as defined therein and may be prepaid without
penalty. Since we have obtained an investment-grade unsecured debt rating from both Moody’s and S&P, the interest rate under the
unsecured term loan ranges from LIBOR plus 1.10% to 2.10% (1.35% as of December 31, 2013) depending on our unsecured
investment-grade debt rating. As of December 31, 2013, we have entered into aggregate interest rate swap agreements to fix the
LIBOR component at a weighted-average rate of 1.05% through February 2018 on the $151.0 million outstanding. At December 31,
2013, the unsecured term loan had availability of $99.0 million, subject to covenant compliance.

During 2012, we procured a $255.0 million secured term loan from Wells Fargo Bank, National Association, as agent. The term
loan was secured by ownership interest pledges by certain subsidiaries that collectively owned a borrowing base of properties. The
term loan matures in January 2019 and required regular payments of interest only at interest rates that ranged from LIBOR plus
2.00% to 2.85% dependent on our leverage ratio, as defined therein. Since we have obtained an investment-grade unsecured debt
rating from both Moody’s and S&P, the interest rate under the term loan ranges from 1.50% to 2.25% (1.75% as of December 31,
2013) depending on our unsecured investment-grade debt rating. We may prepay outstanding borrowings under the term loan at a
premium through January 12, 2016 and at par thereafter. We entered into interest rate swap agreements to fix the LIBOR component
at a weighted-average rate of 1.42% on the $255.0 million of term loan LIBOR-based debt through January 2019. In February 2013,
we amended the term loan to release the collateral as security.

As of December 31, 2013, we were in compliance with the financial covenants contained in the revolving credit facility, term

loan agreements and indenture governing our 4.25% Senior Notes.

In March 2008, we obtained $25.0 million and $45.0 million original principal amount secured term loans from KeyBank. The
loans were fully satisfied in January 2012 with proceeds from the secured term loan and our credit facility. Also in January 2012,
we fully satisfied the remaining $62.2 million original principal amount outstanding of our 5.45% Exchangeable Guaranteed Notes
due in 2027 obtained in 2007.

During 2007, we issued $200.0 million in Trust Preferred Securities, which bear interest at a fixed rate of 6.804% through April
2017 and thereafter at a variable rate of three month LIBOR plus 170 basis points through maturity. These securities are (1) classified
as debt, (2) due in 2037 and (3) currently redeemable by us. As of December 31, 2013 and 2012, there were $129.1 million of these
securities outstanding.

While property specific mortgages have become harder to obtain, corporate level borrowings have generally been available and

we expect this to continue to be the case in the near future.

Co-investment Programs and Joint Ventures. We believe that entering into co-investment programs and joint ventures with
institutional investors and other real estate companies is a good way to access private capital while mitigating our risk in certain
assets and increasing our return on equity to the extent we earn management or other fees. However, investments in co-investment
programs and joint ventures limit our ability to make investment decisions unilaterally relating to the assets and limit our ability to
deploy capital. If we continue to grow, we expect to enter into co-investment programs and joint ventures primarily with respect to
assets that we ordinarily would not have invested in such, as non-core assets. We believe this mitigates our exposure to the risks
inherent in non-core assets. In 2013, we entered into two joint ventures which invested in a fee interest and the related office building
improvements of a property in Baltimore, Maryland and a portfolio of six veterinary office properties, respectively.

Capital Recycling. Part of our strategy to effectively manage our balance sheet involves pursuing and executing well on property
dispositions and recycling of capital. During 2013, we disposed of our interests in properties for a gross price of $117.8 million.
These proceeds were used to retire indebtedness encumbering properties in which we have an interest and make investments. In
addition, in 2013 we disposed of our interest in four properties via foreclosure or deed-in-lieu of foreclosure in full satisfaction of
an aggregate of $49.5 million of related non-recourse mortgages. We currently expect disposition activity to equal our estimated
acquisition activity for 2014, with a focus on multi-tenant and some single-tenant office sales.

Liquidity Needs. Our principal liquidity needs are the contractual obligations set forth under the heading “Contractual

Obligations,” below, and the payment of dividends to our shareholders and distributions to the holders of OP units.

As of December 31, 2013, we had approximately $2.1 billion of indebtedness, consisting of mortgages and notes payable
outstanding, credit facility borrowings, term loans, 4.25% Senior Notes, 6.00% Convertible Notes and Trust Preferred Securities,
with a weighted-average interest rate of approximately 4.7%. The ability of a property owner subsidiary to make debt service payments
depends upon the rental revenues of its property and its ability to refinance the mortgage related thereto, sell the related property, or
access capital from us or other sources. A property owner subsidiary's ability to accomplish such goals will be affected by numerous
economic factors affecting the real estate industry, including the risks described under "Risk Factors" in Part I, Item 1A of this Annual
Report.

If we are unable to satisfy our contractual obligations and other operating costs with our cash flow from operations, we intend
to use borrowings and proceeds from issuances of equity or debt securities. If a property owner subsidiary is unable to satisfy its
contractual obligations and other operating costs, it may default on its obligations and lose its assets in foreclosure or through
bankruptcy proceedings.

We elected to be taxed as a REIT under Sections 856 through 860 of the Code, commencing with our taxable year ended
December 31, 1993. If we qualify for taxation as a REIT, we generally will not be subject to federal corporate income taxes on our
net taxable income that is currently distributed to shareholders.

In connection with our intention to continue to qualify as a REIT for federal income tax purposes, we expect to continue paying
regular dividends to our shareholders. These dividends are expected to be paid from operating cash flows and/or from other sources.
Since cash used to pay dividends reduces amounts available for capital investments, we generally intend to maintain a conservative
dividend payout ratio, reserving such amounts as we consider necessary for the maintenance or expansion of properties in our
portfolio, debt reduction, the acquisition of interests in new properties as suitable opportunities arise, and such other factors as our
Board of Trustees considers appropriate.

We paid approximately $135.5 million in cash dividends to our common and preferred shareholders in 2013. Although our
property owner subsidiaries receive the majority of our base rental payments on a monthly basis, we intend to continue paying
dividends quarterly. Amounts accumulated in advance of each quarterly distribution are invested by us in short-term money market
or other suitable instruments.

General. Due to the net-lease structure of a majority of our investments, our property owner subsidiaries historically have not
incurred significant expenditures in the ordinary course of business to maintain the properties in which we have an interest. However,
particularly since 2008, as leases have expired, our property owner subsidiaries have incurred costs in extending the existing tenant
leases, re-tenanting the properties with a single-tenant, or converting the property to multi-tenant use. The amounts of these
expenditures can vary significantly depending on tenant negotiations, market conditions and rental rates.

Single-Tenant Properties. We do not anticipate significant capital expenditures at the single-tenant properties in which we have
an interest that are subject to net or similar leases since the tenants at these properties generally bear all or substantially all of the
cost of property operations, maintenance and repairs. However, at certain properties subject to net leases, our property owner
subsidiaries are responsible for replacement and/or repair of certain capital items, which may or may not be reimbursed. In addition,
at certain single-tenant properties that are not subject to a net lease, our property owner subsidiaries have a level of property operating
expense responsibility, which may or may not be reimbursed.

Multi-Tenant Properties. Primarily as a result of non-renewals at single-tenant net-lease properties, we have interests in multi-
tenant properties in our consolidated portfolio. While tenants are generally responsible for increases over base year expenses, our
property owner subsidiaries are generally responsible for the base-year expenses and capital expenditures at these properties.

Vacant Properties. To the extent there is a vacancy in a property, our property owner subsidiary would be obligated for all
operating expenses, including real estate taxes and insurance. If a property is vacant for an extended period of time, our property
owner subsidiary may incur substantial capital expenditure costs to re-tenant the property.

Property Expansions. Under certain leases, tenants have the right to expand the facility located on a property in which we have
an interest. In the past, our property owner subsidiary has generally funded, and in the future our property owner subsidiary intends
to generally fund, these property expansions with either additional secured borrowings, the repayment of which was, and will be,
funded out of rental increases under the leases covering the expanded properties or capital contributions from us.

Ground Leases. The tenants of properties in which we have an interest generally pay the rental obligations on ground leases
either directly to the fee holder or to our property owner subsidiary as increased rent. However, our property owner subsidiaries are
responsible for these payments under certain leases and at vacant properties.

Environmental Matters.Based upon management's ongoing review of the properties in which we have an interest, management
is not aware of any environmental condition with respect to any of these properties, which would be reasonably likely to have a
material adverse effect on us. There can be no assurance, however, that (1) the discovery of environmental conditions, which were
previously unknown, (2) changes in law, (3) the conduct of tenants or (4) activities relating to properties in the vicinity of the properties
in which we have an interest, will not expose us to material liability in the future. Changes in laws increasing the potential liability
for environmental conditions existing on properties or increasing the restrictions on discharges or other conditions may result in
significant unanticipated expenditures or may otherwise adversely affect the operations of the tenants of properties in which we have
an interest.

Year ended December 31, 2013 compared with December 31, 2012. The increase in total gross revenues in 2013 of $68.3 million
was primarily attributable to an increase in rental revenue of $66.6 million and an increase in tenant reimbursements of $2.6 million,
offset in part by a decrease in advisory and incentive fees of $1.0 million.

The increase in rental revenue was primarily due to (1) 2013 and 2012 property acquisition revenue of $62.1 million, including
$27.3 million from NLS properties acquired on September 1, 2012, (2) increased occupancy revenue from the Transmerica Tower
in Baltimore, Maryland of $0.7 million and (3) $1.9 million of revenue recognized on our office property in Orlando, Florida due to
the commencement of a new lease.

The decrease in interest and amortization expense of $2.4 million was primarily due to (1) a reduction in the weighted-average
interest rate on outstanding indebtedness, offset by greater debt outstanding, and (2) retirement of debt which had corresponding
debt discount amortization.

Depreciation and amortization increased $22.0 million primarily due to the acquisition of real estate properties in 2013 and

2012.

The increase in property operating expense of $6.2 million was primarily due to an increase in occupancy at certain multi-tenant

properties which had an increase in costs and the acquisition of properties with operating expense obligations.

The increase in general and administrative expense of $5.0 million was primarily due to a $4.5 million increase in personnel

costs.

Non-operating income increased $1.7 million primarily due to the investment in new loans receivable in 2013, offset by reduced
interest income earned on a loan receivable secured by an office property in Schaumburg, Illinois, which we foreclosed on in 2013.

The litigation reserve of $2.8 million in 2012 relates to a litigation that has been settled with a payment by us of $2.8 million.

The increase in debt satisfaction charges, net, of $15.9 million was primarily due to the conversion of $54.9 million of 6.00%

Convertible Notes in 2013 and the timing of mortgage payoffs and related yield maintenance charges.

The gain on acquisition of $167.9 million primarily represents the gain recognized in 2012 due to the increase in fair value of

our investment in NLS at the date of acquisition of the remaining interest in NLS.

Impairment charges and loan loss increased by $31.3 million due to the timing of triggering events on properties held and used
in operations and a $13.9 million loan loss recognized in 2013 on our loan receivable collateralized by an office property in Westmont,
Illinois.

The increase in the provision for income taxes of $2.3 million primarily relates to the tax incurred on the internal transfer of an

industrial property from our taxable REIT subsidiary to the REIT.

The decrease in equity in earnings (losses) of non-consolidated entities of $21.7 million was primarily due to (1) a $13.3 million
decrease in earnings from NLS primarily due to the consolidation of NLS on September 1, 2012, (2) a $7.9 million reduction due
to the sale of our interests in Concord and CDH CDO in 2012 and (3) a $0.9 million impairment charge recognized in 2013 on an
investment in a non-consolidated entity, offset in part by an increase in earnings from various joint ventures of $0.4 million.

Discontinued operations represent properties sold or held for sale. The increase in net income from discontinued operations of
$16.4 million was primarily due to an increase in gains on sales of properties of $11.2 million, an increase in debt satisfaction gains,
net of $9.1 million and a $4.8 million decrease in loss from discontinued operations, offset in part by an increase in impairment
charges of $7.2 million and a $1.6 million increase in provision for income taxes.

The decrease in net income attributable to noncontrolling interests of $2.1 million was primarily due to a decrease in earnings

by non-wholly owned entities.

The decrease in net income attributable to common shareholders of $170.9 million was primarily due to the items discussed

above and a reduction in preferred dividends of $7.3 million due to the repurchase of preferred shares.

The increase in net income or decrease in net loss in future periods will be closely tied to the level of acquisitions made by us.
Without acquisitions, the sources of growth in net income are limited to index adjusted rents (such as the consumer price index),
reduced interest expense on amortizing mortgages and variable rate indebtedness and by controlling other variable overhead costs.
However, there are many factors beyond management's control that could offset these items including, without limitation, increased
interest rates and tenant monetary defaults and the other risks described in this Annual Report.

Year ended December 31, 2012 compared with December 31, 2011. The increase in total gross revenues in 2012 of $37.9 million
was primarily attributable to an increase in rental revenue of $38.8 million, offset in part by a decrease in tenant reimbursements and
advisory and incentive fees of $0.8 million and $0.2 million, respectively.

The increase in rental revenue was primarily due to (1) 2012 and 2011 property acquisition revenue of $24.8 million, including
$14.1 million from NLS properties acquired on September 1, 2012, (2) increased occupancy revenue from the Transmerica Tower
in Baltimore, Maryland of $7.5 million and (3) $3.3 million of revenue recognized on our office property in Orlando, Florida due to
the commencement of a new lease.

The decrease in interest and amortization expense of $7.7 million was primarily due to (1) a reduction in the weighted-average
interest rate on outstanding indebtedness, (2) retirement of debt which had corresponding debt discount amortization, (3) lower
deferred financing cost amortization and (4) greater interest capitalized.

Depreciation and amortization increased $6.6 million primarily due to the acquisition of real estate properties in 2012 and 2011
offset by (1) the acceleration of amortization on certain lease intangible assets due to tenant lease terminations and (2) assets becoming
fully amortized in 2012.

The increase in property operating expense of $1.6 million was primarily due to an increase in occupancy at certain multi-tenant

properties which had an increase in costs and the acquisition of properties with operating expense obligations.

The increase in general and administrative expense of $1.7 million was primarily due to a $2.1 million increase in personnel

costs.

Non-operating income decreased $6.2 million primarily due to the satisfaction of notes receivable resulting in less interest earned

and reduced interest income earned on a note receivable that was in default secured by an office property in Schaumburg, Illinois.

The change in the value of our forward equity commitment of $2.0 million was primarily due to the settlement of the commitment

in October 2011.

The litigation reserve of $2.8 million in 2012 relates to a litigation that has been settled with a payment by us of $2.8 million.

The increase in debt satisfaction charges, net, of $9.5 million was primarily due to the conversion of $31.1 million 6.00%
Convertible Notes in 2012 and the write-off of deferred financing costs relating to the satisfaction of the $60.6 million term loans
during the first quarter of 2012.

The gain on acquisition of $167.9 million primarily represents the gain recognized in 2012 due to the increase in fair value of

our investment in NLS at the date of acquisition of the remaining interest in NLS.

Impairment charges decreased by $12.7 million due to the timing of triggering events on properties held and used in operations.

The increase in the provision for income taxes of $1.8 million was primarily the result of the write-off of a deferred tax liability
relating to the transfer of certain assets from our wholly-owned taxable REIT subsidiary to the REIT itself during the first quarter
of 2011.

The decrease in equity in earnings (losses) of non-consolidated entities of $8.8 million was primarily due to (1) a $9.3 million
decrease in earnings from NLS primarily due to the consolidation of NLS on September 1, 2012, (2) a $1.4 million reduction due
to the consolidation in 2012 of a previously non-consolidated property and (3) a reduction in earnings from various joint ventures
of $1.5 million, offset by a $1.8 million increase in earnings recognized on our interests in Concord and CDH CDO and a $1.6 million
impairment charge recognized in 2011 on an investment in a non-consolidated entity.

Discontinued operations represent properties sold or held for sale. The increase in net income from discontinued operations of
$89.3 million was primarily due to a decrease in impairment charges of $94.7 million, an increase in gains on sales of properties of
$6.7 million and a decrease in debt satisfaction charges, net, of $0.4 million, offset in part by a $12.6 million increase in loss from
discontinued operations.

The increase in net income attributable to noncontrolling interests of $14.5 million was primarily due to a decrease in impairment

charges incurred by non-wholly owned entities.

The increase in net income attributable to common shareholders of $260.5 million was primarily due to the items discussed

above.

Same-Store Results

Same-store results include all consolidated properties except properties acquired and sold in 2013 and 2012. Our historical same-
store occupancy was 97.6% at December 31, 2013 compared to 98.3% at December 31, 2012. The following presents our consolidated
same-store net operating income, or NOI, for the years ended December 31, 2013 and 2012 ($000):

Total base rent
Tenant reimbursements and other
Property operating expenses
Same-store NOI - Cash basis

270,770
28,520
(57,394)
241,896

268,624
27,950
(54,309)
242,265

2013

2012

The change in our same-store NOI from 2012 to 2013 was a decrease of 0.2%. This was primarily due to an increase in property
operating expenses due to the timing of new tenant leases and the establishment of base years for certain tenants. While our same-
store NOI declined year-to-year, we expect this trend to reverse as a result of our fixed annual base rent escalations, which are in
approximately half of the leases in our consolidated portfolio.

Funds From Operations

We believe that Funds from Operations, or FFO, which is a non-GAAP measure, is a widely recognized and appropriate measure
of the performance of an equity REIT. We believe FFO is frequently used by securities analysts, investors and other interested parties
in the evaluation of REITs, many of which present FFO when reporting their results. FFO is intended to exclude GAAP historical
cost depreciation and amortization of real estate and related assets, which assumes that the value of real estate diminishes ratably
over time. Historically, however, real estate values have risen or fallen with market conditions. As a result, FFO provides a performance
measure that, when compared year over year, reflects the impact to operations from trends in occupancy rates, rental rates, operating
costs, development activities, interest costs and other matters without the inclusion of depreciation and amortization, providing
perspective that may not necessarily be apparent from net income.

The National Association of Real Estate Investment Trusts, or NAREIT, defines FFO as “net income (or loss) computed in
accordance with GAAP, excluding gains (or losses) from sales of property, plus real estate depreciation and amortization and after
adjustments for unconsolidated partnerships and joint ventures.” NAREIT clarified its computation of FFO to exclude impairment
charges on depreciable real estate owned directly or indirectly. FFO does not represent cash generated from operating activities in
accordance with GAAP and is not indicative of cash available to fund cash needs.

We present Reported Company FFO, which differs from FFO as it includes our OP units, our Series C Preferred Shares, and
our 6.00% Convertible Notes, because these securities are convertible, at the holder's option, into our common shares. Management
believes this is appropriate and relevant to securities analysts, investors and other interested parties because we present Reported
Company FFO on a company-wide basis as if all securities that are convertible, at the holder's option, into our common shares, are
converted. We also present Company FFO, as adjusted, which adjusts Reported Company FFO for certain items which we believe
are non-recurring and not indicative of the operating results of our real estate portfolio. We believe this is an appropriate presentation
as it is frequently requested by security analysts, investors and other interested parties. Since others do not calculate funds from
operations in a similar fashion, Reported Company FFO and Company FFO, as adjusted, may not be comparable to similarly titled
measures as reported by others. Reported Company FFO and Company FFO, as adjusted, should not be considered as an alternative
to net income as an indicator of our operating performance or as an alternative to cash flow as a measure of liquidity.

The following presents a reconciliation of net income (loss) attributable to Lexington Realty Trust shareholders to Reported
Company FFO and Company FFO, as adjusted, for each of the years in the three year period ended December 31, 2013 (unaudited
and dollars in thousands, except per share amounts):

Net income (loss) attributable to Lexington Realty Trust shareholders
Adjustments:

Depreciation and amortization
Impairment charges - real estate, including nonconsolidated joint venture

real estate

Noncontrolling interests - OP units
Amortization of leasing commissions
Joint venture and noncontrolling interest adjustment
Preferred dividends - Series B & D
Gains on sales of properties, net of tax
Gain on sale - joint venture investment
Gain on acquisition
Interest and amortization on 6.00% Convertible Notes

Debt satisfaction charges, net
Impairment loss - loan receivable
Forward equity commitment
Gain on loan sales - joint venture
Litigation reserve
Other

Basic:
Reported Company FFO
Company FFO, as adjusted

Diluted:
Reported Company FFO
Company FFO, as adjusted

Weighted-average common shares outstanding - EPS basic
6.00% Convertible Notes
Non-vested share-based payment awards
Operating Partnership Units
Preferred Shares - Series C
Weighted-average common shares outstanding - basic
Adjustments:

Forward equity commitment settlement

Weighted-average common shares outstanding - basic, as adjusted

Weighted-average common shares outstanding - basic
Options - Incremental shares
Weighted-average common shares outstanding - diluted
Adjustments:

Forward equity commitment settlement

Weighted-average common shares outstanding - diluted, as adjusted

2013

2012

2011

1,630

180,316

(79,584)

$
$

175,023

163,890

35,485
1,157
5,562
2,264
(3,543)
(21,755)
—
—
3,113
198,936
16,442
13,939
—
—
—
795
230,112

0.89
1.02

0.88
1.02

$
$

2013
209,797,238
5,578,043
404,768
4,146,931
4,710,570
224,637,550

9,969
1,192
4,838
560
(14,001)
(13,291)
(7,000)
(167,864)
8,953
167,562
9,658
—
—
—
2,775
603
180,598

0.91
0.98

2012
159,109,424
15,805,245
244,366
4,438,708
4,712,421
184,310,164

$
$

160,689

122,254
578
3,918
(23,309)
(17,852)
(6,557)
—
—
9,307
169,444
561
—
(2,030)
(1,927)
—
3,966
170,014

0.95
0.97

2011
152,473,336
16,232,862
130,684
4,725,798
5,043,521
178,606,201

—
224,637,550

—
184,310,164

(2,760,608)
175,845,593

224,637,550
806,962
225,444,512

184,310,164
306,449
184,616,613

178,606,201
208,463
178,814,664

—
225,444,512

—
184,616,613

(2,760,608)
176,054,056

As of December 31, 2013, we had investments in various real estate entities with varying structures. The real estate investments
owned by these entities are generally financed with non-recourse debt. Non-recourse debt is generally defined as debt whereby the
lenders' sole recourse with respect to borrower defaults is limited to the value of the assets collateralized by the debt. The lender
generally does not have recourse against any other assets owned by the borrower or any of the members or partners of the borrower,
except for certain specified exceptions listed in the particular loan documents. These exceptions generally relate to "bad boy" acts,
including fraud and breaches of material representations. We have guaranteed such obligations for certain of our property owner
subsidiaries and joint ventures.

The following summarizes our principal contractual obligations as of December 31, 2013 ($000's):

Mortgages and notes payable(1)
Credit facility borrowings(2)
Term loans payable
Senior notes payable(3)
Convertible notes payable(4)
Trust preferred securities
Interest payable - fixed rate(5)
Operating lease obligations(6)

2014

2015

2016

2017

2018

$ 123,212

$ 301,591

$ 168,899

89,035

37,764

2019 and
Thereafter
$ 476,988

Total

$ 1,197,489

—

—
—

—

—
—

—

—
—

—

92,442

6,448

79,160

6,411

68,183

4,962

48,000

—
—

28,991

—

53,353

4,875

—

151,000
—

—

43,862

4,645

—

255,000
250,000

—

129,120

155,947

39,484

48,000

406,000
250,000

28,991

129,120

492,947

66,825

$ 222,102

$ 387,162

$ 242,044

$ 224,254

$ 237,271

$1,306,539

$ 2,619,372

1. Includes balloon payments.
2. Excludes $7.6 million in outstanding letters of credit.
3. Amounts exclude debt discount of $2.3 million.
4. Matures in 2030, however holders have the right to redeem the notes on 01/15/17, 01/15/20 and 01/15/25. Amounts exclude debt discount of $1.5 million.
5. Includes variable-rate debt subject to interest rate swap agreements.
6. Includes ground lease payments and office rents. Amounts disclosed do not include rents that adjust to fair market value. In addition, certain ground lease

payments due under bond leases allow for a right of offset between the lease obligation and the debt service and accordingly are not included.

In addition, we guarantee certain tenant improvement allowances and lease commissions on behalf of certain property owner
subsidiaries when required by the related tenant or lender. However, we do not believe these guarantees are material to us as the
obligations under and risks associated with such guarantees are priced into the rent under the lease or the value of the property.

Our exposure to market risk relates primarily to our variable rate debt and fixed rate debt. As of December 31, 2013, we had
$48.0 million of consolidated variable rate indebtedness not subject to an outstanding interest rate swap agreement. As of December 31,
2012, there was no consolidated variable rate indebtedness not subject to an interest rate swap agreement outstanding. During 2013
and 2012, our variable rate indebtedness had a weighted-average interest rate of 2.0% and 2.5%, respectively. Had the weighted-
average interest rate been 100 basis points higher, our interest expense for 2013 and 2012 would have been increased by approximately
$1.1 million and $0.6 million, respectively. As of December 31, 2013 and 2012, our consolidated fixed rate debt was approximately
$2.0 billion and $1.9 billion, respectively, which represented 97.7% and 100.0%, respectively, of total long-term indebtedness in
each year.

For certain of our financial instruments, fair values are not readily available since there are no active trading markets as
characterized by current exchanges between willing parties. Accordingly, we derive or estimate fair values using various valuation
techniques, such as computing the present value of estimated future cash flows using discount rates commensurate with the risks
involved. However, the determination of estimated cash flows may be subjective and imprecise. Changes in assumptions or estimation
methodologies can have a material effect on these estimated fair values. The following fair values were determined using the interest
rates that we believe our outstanding fixed rate debt would warrant as of December 31, 2013 and are indicative of the interest rate
environment as of December 31, 2013, and do not take into consideration the effects of subsequent interest rate fluctuations.
Accordingly, we estimate that the fair value of our fixed rate debt is $2.0 billion as of December 31, 2013.

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on earnings and cash flows and to lower our
overall borrowing costs. To achieve these objectives, we manage our exposure to fluctuations in market interest rates through the
use of fixed rate debt instruments to the extent that reasonably favorable rates are obtainable with such arrangements. We generally
enter into derivative financial instruments such as interest rate swaps or caps to mitigate our interest rate risk on a related financial
instrument or to effectively lock the interest rate on a portion of our variable rate debt. As of December 31, 2013, we have eight
interest rate swap agreements in our consolidated portfolio.

Management's Annual Report on Internal Control Over Financial Reporting
Reports of Independent Registered Public Accounting Firm
Consolidated Balance Sheets as of December 31, 2013 and 2012
Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2013, 2012 and 2011
Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and 2011
Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011
Notes to Consolidated Financial Statements
Financial Statement Schedule
Schedule III - Real Estate and Accumulated Depreciation and Amortization

Page
60
61
63
64
65
66
69
70

Our management is responsible for establishing and maintaining adequate internal control over financial reporting and for
performing an assessment of the effectiveness of internal control over financial reporting as of December 31, 2013. Our system
of internal control over financial reporting was designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation and fair presentation of published financial statements in accordance with U.S. generally accepted
accounting principles. Our system of internal control over financial reporting includes policies and procedures that (1) pertain to
the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in
accordance with U.S. generally accepted accounting principles, and that receipts and expenditures are being made only in
accordance with authorizations of our management and the members of our Board of Trustees; and (3) provide reasonable assurance
regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material
effect on our financial statements.

All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined
to be effective can provide only reasonable assurance that financial statements are fairly presented in accordance with U.S. generally
accepted accounting principles.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2013. In
assessing the effectiveness of our internal control over financial reporting, management used as guidance the criteria established
in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission
in 1992. Based upon the assessment performed, management believes that our internal control over financial reporting is effective
as of December 31, 2013.

Our independent registered public accounting firm, KPMG LLP, independently assessed the effectiveness of our internal

control over financial reporting. KPMG LLP has issued a report which is included on page 62 of this Annual Report.

The Trustees and Shareholders
Lexington Realty Trust:

We have audited the accompanying consolidated balance sheets of Lexington Realty Trust and subsidiaries (the
“Company”) as of December 31, 2013 and 2012, and the related consolidated statements of operations, comprehensive
income (loss), changes in equity, and cash flows for each of the years in the three-year period ended December 31,
2013. In connection with our audits of the consolidated financial statements, we also have audited the accompanying
financial statement schedule III. These consolidated financial statements and financial statement schedule are the
responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial
statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of Lexington Realty Trust and subsidiaries as of December 31, 2013 and 2012, and the results of
their operations and their cash flows for each of the years in the three-year period ended December 31, 2013, in
conformity with U.S. generally accepted accounting principles. Also in our opinion, the related financial statement
schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly,
in all material respects, the information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), Lexington Realty Trust’s internal control over financial reporting as of December 31, 2013, based on criteria
established in Internal Control - Integrated Framework (1992) issued by the Committee of Sponsoring Organizations
of the Treadway Commission (COSO), and our report dated February 26, 2014 expressed an unqualified opinion on
the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG LLP

New York, New York
February 26, 2014

The Trustees and Shareholders
Lexington Realty Trust:

We have audited Lexington Realty Trust’s (the “Company’s”) internal control over financial reporting as of
December 31, 2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by the
Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is
responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness
of internal control over financial reporting, included in the accompanying Management’s Annual Report on Internal
Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over
financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United
States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining
an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit
also included performing such other procedures as we considered necessary in the circumstances. We believe that our
audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A company’s internal control over financial reporting includes those
policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly
reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions
are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations
of management and trustees of the company; and (3) provide reasonable assurance regarding prevention or timely
detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on
the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as
of December 31, 2013, based on criteria established in Internal Control - Integrated Framework (1992) issued by the
Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United
States), the consolidated balance sheets of Lexington Realty Trust and subsidiaries as of December 31, 2013 and 2012,
and the related consolidated statements of operations, comprehensive income (loss), changes in equity, and cash flows
for each of the years in the three-year period ended December 31, 2013, and the related financial statement schedule
III, and our report dated February 26, 2014 expressed an unqualified opinion on those consolidated financial statements
and financial statement schedule.

New York, New York
February 26, 2014

/s/ KPMG LLP

Real estate, at cost
Real estate - intangible assets
Investments in real estate under construction

Less: accumulated depreciation and amortization

Real estate, net

Cash and cash equivalents
Restricted cash
Investment in and advances to non-consolidated entities
Deferred expenses (net of accumulated amortization of $28,587 in 2013 and $24,402 in 2012)
Loans receivable, net
Rent receivable - current
Rent receivable – deferred
Other assets
Total assets

Liabilities:
Mortgages and notes payable
Credit facility borrowings
Term loans payable
Senior notes payable
Convertible notes payable
Trust preferred securities
Dividends payable
Accounts payable and other liabilities
Accrued interest payable
Deferred revenue - including below market leases (net of accumulated accretion of $40,740 in 2013

and $44,706 in 2012)

Prepaid rent
Total liabilities

Commitments and contingencies
Equity:
Preferred shares, par value $0.0001 per share; authorized 100,000,000 shares,

Series C Cumulative Convertible Preferred, liquidation preference $96,770 and 1,935,400 shares

issued and outstanding

Series D Cumulative Redeemable Preferred, liquidation preference $155,000; 6,200,000 shares

issued and outstanding

Common shares, par value $0.0001 per share; authorized 400,000,000 shares, 228,663,022 and

178,616,664 shares issued and outstanding in 2013 and 2012, respectively

Additional paid-in-capital
Accumulated distributions in excess of net income
Accumulated other comprehensive income (loss)

Total shareholders’ equity

Noncontrolling interests

Total equity

Total liabilities and equity

2013

2012

3,812,294
762,157
74,350
4,648,801
1,223,381
3,425,420
77,261
19,953
18,442
66,827
99,443
10,087
19,473
35,375
3,772,281

1,197,489
48,000
406,000
247,707
27,491
129,120
40,018
39,642
9,627

69,667
18,037
2,232,798

3,564,466
685,914
65,122
4,315,502
1,150,417
3,165,085
34,024
26,741
27,129
57,549
72,540
7,355
—
27,780
3,418,203

1,415,961
—
255,000
—
78,127
129,120
31,351
70,367
11,980

79,908
13,224
2,085,038

94,016

—

149,774

23
2,717,787
(1,300,527)
4,439
1,515,738
23,745
1,539,483
3,772,281

18
2,212,949
(1,143,803)
(6,224)
1,306,730
26,435
1,333,165
3,418,203

The accompanying notes are an integral part of these consolidated financial statements.

Gross revenues:

Rental
Advisory and incentive fees
Tenant reimbursements
Total gross revenues
Expense applicable to revenues:

Depreciation and amortization
Property operating
General and administrative
Non-operating income
Interest and amortization expense
Debt satisfaction gains (charges), net
Change in value of forward equity commitment
Gain on acquisition
Litigation reserve
Impairment charges and loan loss
Income (loss) before benefit (provision) for income taxes, equity in
earnings (losses) of non-consolidated entities and discontinued
operations

Benefit (provision) for income taxes
Equity in earnings (losses) of non-consolidated entities

Income (loss) from continuing operations

Discontinued operations:

Income (loss) from discontinued operations
Provision for income taxes
Debt satisfaction gains (charges), net
Gains on sales of properties
Impairment charges
Total discontinued operations

Net income (loss)

Less net (income) loss attributable to noncontrolling interests
Net income (loss) attributable to Lexington Realty Trust shareholders
Dividends attributable to preferred shares – Series B – 8.05% rate
Dividends attributable to preferred shares – Series C – 6.50% rate
Dividends attributable to preferred shares – Series D – 7.55% rate
Allocation to participating securities
Deemed dividend – Series B
Redemption discount – Series C
Deemed dividend – Series D
Net income (loss) attributable to common shareholders
Income (loss) per common share – basic:

Income (loss) from continuing operations
Income (loss) from discontinued operations
Net income (loss) attributable to common shareholders

Weighted-average common shares outstanding – basic
Income (loss) per common share – diluted:

Income (loss) from continuing operations
Income (loss) from discontinued operations
Net income (loss) attributable to common shareholders

Weighted-average common shares outstanding – diluted
Amounts attributable to common shareholders:
Income (loss) from continuing operations
Income (loss) from discontinued operations
Net income (loss) attributable to common shareholders

2013

2012

2011

366,591
855
30,994
398,440

299,956
1,806
28,418
330,180

(174,272)
(62,195)
(28,973)
8,515
(91,271)
(25,397)
—
—
—
(35,579)

(10,732)
(3,259)
(157)
(14,148)

(761)
(1,735)
8,955
24,472
(12,920)
18,011
3,863
(2,233)
1,630
—
(6,290)
(3,543)
(656)
—
—
(5,230)
(14,089) $

(0.15) $
0.08
(0.07) $

209,797,238

(0.15) $
0.08
(0.07) $

209,797,238

(152,296)
(56,043)
(23,933)
6,825
(93,677)
(9,480)
—
167,864
(2,775)
(4,262)

162,403
(940)
21,531
182,994

(5,599)
(163)
(178)
13,291
(5,707)
1,644
184,638
(4,322)
180,316
(2,298)
(6,290)
(11,703)
(1,087)
(2,346)
229
—
156,821

0.99
—
0.99
159,109,424

0.93
—
0.93
179,659,826

(31,777) $
17,688
(14,089) $

156,709
112
156,821

261,117
2,012
29,169
292,298

(145,712)
(54,395)
(22,190)
12,985
(101,401)
45
2,030
—
—
(17,008)

(33,348)
882
30,334
(2,132)

6,951
(113)
(606)
6,557
(100,435)
(87,646)
(89,778)
10,194
(79,584)
(6,149)
(6,655)
(11,703)
(368)
(95)
833
—
(103,721)

(0.20)
(0.48)
(0.68)
152,473,336

(30,194)
(73,527)
(103,721)

The accompanying notes are an integral part of these consolidated financial statements.

Net income (loss)

Other comprehensive income (loss):

Change in unrealized gain (loss) on interest rate swaps, net

Other comprehensive income (loss)

Comprehensive income (loss)

Comprehensive (income) loss attributable to noncontrolling interests

Comprehensive income (loss) attributable to Lexington Realty Trust

shareholders

2013

2012

2011

3,863

184,638

(89,778)

10,663
10,663

14,526
(2,233)

(8,162)
(8,162)
176,476
(4,322)

2,044
2,044
(87,734)
10,194

12,293

172,154

(77,540)

The accompanying notes are an integral part of these consolidated financial statements.

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Cash flows from operating activities:
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

2013

2012

2011

3,863

$ 184,638

(89,778)

Depreciation and amortization
Gain on acquisition
Gains on sales of properties
Debt satisfaction charges, net
Impairment charges and loan losses
Straight-line rents
Other non-cash (income) expense, net
Equity in earnings (losses) of non-consolidated entities
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Deferred taxes, net
Increase (decrease) in accounts payable and other liabilities
Change in rent receivable and prepaid rent, net
Decrease in accrued interest payable
Other adjustments, net
Net cash provided by operating activities:

Cash flows from investing activities:

Investment in real estate, including intangible assets
Investment in real estate under construction
Capital expenditures
Acquisition of remaining interest in NLS, net of cash acquired of $8,107
Net proceeds from sale of properties
Principal payments received on loans receivable
Investment in loans receivable
Investments in and advances to non-consolidated entities, net
Proceeds from sale of interest in non-consolidated entity
Distributions from non-consolidated entities in excess of accumulated earnings
Increase in deferred leasing costs
Change in escrow deposits and restricted cash
Real estate deposits

Net cash used in investing activities

Cash flows from financing activities:

Dividends to common and preferred shareholders
Repurchase of exchangeable notes
Proceeds from senior notes
Conversion of convertible notes
Principal amortization payments
Principal payments on debt, excluding normal amortization
Change in revolving credit facility borrowing, net
Increase in deferred financing costs
Proceeds of mortgages and notes payable
Proceeds from term loans
Contributions from noncontrolling interests
Cash distributions to noncontrolling interests
Purchase of a noncontrolling interest
Repurchase of preferred shares
Payments on forward equity commitment, net
Issuance of common shares, net

Net cash provided by (used in) financing activities

Change in cash and cash equivalents
Cash and cash equivalents, at beginning of year
Cash and cash equivalents, at end of year

183,833
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(24,472)
3,989
48,499
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(106,009)
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(238)
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(34,446)
(347,122)
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(21,531)
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(598)
(1,325)
(2,473)
(2,547)
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(113,262)
(49,952)
(1,331)
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(62,150)
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(31,252)
(288,094)
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255,000
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(29,687)
63,711
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(6,364)
(30,334)
11,549
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19,929
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180,137

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(69,755)
(32,426)
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46,867
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(19,940)
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5,900
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(3,405)
(1,821)
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(105,266)
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(2,313)
99,730
(144,257)
11,067
52,644
63,711

The accompanying notes are an integral part of these consolidated financial statements.

($000, except share/unit data)

(1)

The Company

Lexington Realty Trust (together with its consolidated subsidiaries, except when the context only applies to the parent entity,
the “Company”) is a self-managed and self-administered Maryland statutory real estate investment trust (“REIT”) that owns
a diversified portfolio of equity and debt investments in single-tenant properties and land. The Company also provides
investment advisory and asset management services to investors in the single-tenant area. As of December 31, 2013 and
2012, the Company had equity ownership interests in approximately 220 consolidated properties located in 41 states. A
majority of the real properties in which the Company had an interest and all land interests are generally subject to net leases
or similar leases where the tenant pays all or substantially all of the cost, including cost increases, for real estate taxes,
insurance, utilities and ordinary maintenance of the property. However, certain leases provide that the landlord is responsible
for certain operating expenses.

The Company believes it has qualified as a REIT under the Internal Revenue Code of 1986, as amended (the “Code”).
Accordingly, the Company will not be subject to federal income tax, provided that distributions to its shareholders equal at
least the amount of its REIT taxable income as defined under the Code. The Company is permitted to participate in certain
activities from which it was previously precluded in order to maintain its qualification as a REIT, so long as these activities
are conducted in entities which elect to be treated as taxable REIT subsidiaries (“TRS”) under the Code. As such, the TRS
are subject to federal income taxes on the income from these activities.

The Company conducts its operations either directly or indirectly through (1) property owner subsidiaries and lender
subsidiaries, (2) operating partnerships in which the Company is the sole unit holder of the general partner and the sole unit
holder of the limited partner that holds a majority of the limited partner interests (“OP units”) or (3) Lexington Realty
Advisors, Inc. (“LRA”), a wholly-owned TRS. As of December 31, 2013, the Company controlled one operating partnership:
Lepercq Corporate Income Fund L.P. (“LCIF”). On December 30, 2013, another operating partnership, Lepercq Corporate
Income Fund II L.P. (“LCIF II”), was merged with and into LCIF, with LCIF as the surviving entity. Property owner
subsidiaries are landlords under leases for properties in which the Company has an interest and/or borrowers under loan
agreements secured by properties in which the Company has an interest and lender subsidiaries are lenders under loan
agreements where the Company made an investment in a loan asset, but in all cases are separate and distinct legal entities.

(2)

Summary of Significant Accounting Policies

Basis of Presentation and Consolidation. The Company's consolidated financial statements are prepared on the accrual
basis of accounting in accordance with U.S. generally accepted accounting principles (“GAAP”). The financial statements
reflect the accounts of the Company and its consolidated subsidiaries. The Company consolidates its wholly-owned
subsidiaries, partnerships and joint ventures which it controls (i) through voting rights or similar rights or (ii) by means
other than voting rights if the Company is the primary beneficiary of a variable interest entity ("VIE"). Entities which the
Company does not control and entities which are VIEs in which the Company is not the primary beneficiary are accounted
for under appropriate GAAP.

If an investment is determined to be a VIE, the Company performs an analysis to determine if the Company is the primary
beneficiary of the VIE. GAAP requires a VIE to be consolidated by its primary beneficiary. The primary beneficiary is the
party that has a controlling financial interest in an entity. In order for a party to have a controlling financial interest in an
entity, it must have (1) the power to direct the activities of a VIE that most significantly impact the entity's economic
performance and (2) the obligation to absorb losses or the right to receive benefits of an entity that could potentially be
significant to the VIE.

Consolidated Variable Interest Entity. The Company's consolidated VIE was determined to be a VIE primarily because the
entity's equity holders' obligation to absorb losses is protected. The Company determined that it was the primary beneficiary
of the VIE because it has a controlling financial interest in the entity.

($000, except share/unit data)

The Company's wholly-owned entity which owns an office building in Greenville, South Carolina is a VIE and is consolidated
by the Company. The tenant has an option to purchase the property on December 31, 2014 at fair market value, but not for
less than $10,710 and not for greater than $11,550. If the tenant does not exercise the purchase option, the Company has
the right to require the tenant to purchase the property for $10,710.

Non-Consolidated Variable Interest Entities. At December 31, 2013 and 2012, the Company held variable interests in certain
non-consolidated VIEs; however, the Company was not the primary beneficiary of these VIEs as the Company does not
have a controlling financial interest in the entities. The Company has certain acquisition commitments and/ or acquisition,
development and construction arrangements with VIEs. The Company is obligated to fund certain amounts as discussed
in note 4.

Earnings Per Share. Basic net income (loss) per share is computed by dividing net income (loss) reduced by preferred
dividends and amounts allocated to certain non-vested share-based payment awards, if applicable, by the weighted-average
number of common shares outstanding during the period. Diluted net income (loss) per share amounts are similarly computed
but include the effect, when dilutive, of in-the-money common share options, OP units and put options of certain convertible
securities.

Use of Estimates. Management has made a number of significant estimates and assumptions relating to the reporting of
assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses
to prepare these consolidated financial statements in conformity with GAAP. These estimates and assumptions are based
on management's best estimates and judgment. Management evaluates its estimates and assumptions on an ongoing basis
using historical experience and other factors, including the current economic environment. The current economic
environment has increased the degree of uncertainty inherent in these estimates and assumptions. Management adjusts such
estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts
receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the
determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets,
loans receivable and equity method investments, valuation of derivative financial instruments and the useful lives of long-
lived assets. Actual results could differ materially from those estimates.

Fair Value Measurements. The Company follows the guidance in the Financial Accounting Standards Board ("FASB")
Accounting Standards Codification ("ASC") Topic 820, Fair Value Measurements and Disclosures ("Topic 820"), to
determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework
for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value
hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted
prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable
prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable
inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level
1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Company utilizes valuation techniques that
maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as
considering counterparty credit risk. The Company has formally elected to apply the portfolio exception within Topic 820
with respect to measuring counterparty risk for all of its derivative transactions subject to master netting arrangements.

Revenue Recognition. The Company recognizes lease revenue on a straight-line basis over the term of the lease unless
another systematic and rational basis is more representative of the time pattern in which the use benefit is derived from the
leased property. Renewal options in leases with rental terms that are lower than those in the primary term are excluded from
the calculation of straight-line rent if the renewals are not reasonably assured. If the Company funds tenant improvements
and the improvements are deemed to be owned by the Company, revenue recognition will commence when the improvements
are substantially completed and possession or control of the space is turned over to the tenant. If the Company determines
that the tenant allowances are lease incentives, the Company commences revenue recognition when possession or control
of the space is turned over to the tenant for tenant work to begin. The lease incentive is recorded as a deferred expense and
amortized as a reduction of revenue on a straight-line basis over the respective lease term. The Company recognizes lease
termination fees as rental revenue in the period received and writes off unamortized lease-related intangible and other lease-
related account balances, provided there are no further Company obligations under the lease. Otherwise, such fees and
balances are recognized on a straight-line basis over the remaining obligation period with the termination payments being
recorded as a component of rent receivable-deferred or deferred revenue on the Consolidated Balance Sheets.

($000, except share/unit data)

Gains on sales of real estate are recognized based upon the specific timing of the sale as measured against various criteria
related to the terms of the transactions and any continuing involvement associated with the properties. If the sales criteria
are not met, the gain is deferred and the finance, installment or cost recovery method, as appropriate, is applied until the
sales criteria are met. To the extent the Company sells a property and retains a partial ownership interest in the property,
the Company recognizes gain to the extent of the third-party ownership interest.

Accounts Receivable. The Company continuously monitors collections from tenants and makes a provision for estimated
losses based upon historical experience and any specific tenant collection issues that the Company has identified. As of
December 31, 2013 and 2012, the Company's allowance for doubtful accounts was not significant.

Purchase Accounting and Acquisition of Real Estate. The fair value of the real estate acquired, which includes the impact
of fair value adjustments for assumed mortgage debt related to property acquisitions, is allocated to the acquired tangible
assets, consisting of land, building and improvements and identified intangible assets and liabilities, consisting of the value
of above-market and below-market leases, other value of in-place leases and value of tenant relationships, based in each
case on their fair values. Acquisition costs are expensed as incurred and are included in property operating expense in the
accompanying Consolidated Statement of Operations. Also, noncontrolling interests acquired are recorded at estimated fair
market value.

The fair value of the tangible assets of an acquired property (which includes land, building and improvements and fixtures
and equipment) is determined by valuing the property as if it were vacant. The “as-if-vacant” value is then allocated to land
and building and improvements based on management's determination of relative fair values of these assets. Factors
considered by management in performing these analyses include an estimate of carrying costs during the expected lease-
up periods considering current market conditions and costs to execute similar leases. In estimating carrying costs,
management includes real estate taxes, insurance and other operating expenses and estimates of lost rental revenue during
the expected lease-up periods based on current market demand. Management also estimates costs to execute similar leases
including leasing commissions.

In allocating the fair value of the identified intangible assets and liabilities of an acquired property, above-market and below-
market lease values are recorded based on the difference between the current in-place lease rent and management's estimate
of current market rents. Below-market lease intangibles are recorded as part of deferred revenue and amortized into rental
revenue over the non-cancelable periods and bargain renewal periods of the respective leases. Above-market leases are
recorded as part of intangible assets and amortized as a direct charge against rental revenue over the non-cancelable portion
of the respective leases.

The aggregate value of other acquired intangible assets, consisting of in-place leases and tenant relationship values, is
measured by the excess of (1) the purchase price paid for a property over (2) the estimated fair value of the property as if
vacant, determined as set forth above. This aggregate value is allocated between in-place lease values and tenant relationship
values based on management's evaluation of the specific characteristics of each tenant's lease. The value of in-place leases
is amortized to expense over the remaining non-cancelable periods and any bargain renewal periods of the respective leases.
The value of tenant relationships is amortized to expense over the applicable lease term plus expected renewal periods.

Depreciation is determined by the straight-line method over the remaining estimated economic useful lives of the properties.
The Company generally depreciates its real estate assets over periods ranging up to 40 years.

Impairment of Real Estate. The Company evaluates the carrying value of all tangible and intangible real estate assets held
for investment for possible impairment when an event or change in circumstance has occurred that indicates its carrying
value may not be recoverable. The evaluation includes estimating and reviewing anticipated future undiscounted cash flows
to be derived from the asset. If such cash flows are less than the asset's carrying value, an impairment charge is recognized
to the extent by which the asset's carrying value exceeds its estimated fair value, which may be below the balance of any
non-recourse financing. Estimating future cash flows and fair values is highly subjective and such estimates could differ
materially from actual results.

($000, except share/unit data)

Investments in Non-Consolidated Entities. The Company accounts for its investments in 50% or less owned entities under
the equity method, unless consolidation is required. If the Company's investment in the entity is insignificant and the
Company has no influence over the control of the entity then the entity is accounted for under the cost method.

Impairment of Equity Method Investments. The Company assesses whether there are indicators that the value of its equity
method investments may be impaired. An impairment charge is recognized only if the Company determines that a decline
in the value of the investment below its carrying value is other-than-temporary. The assessment of impairment is highly
subjective and involves the application of significant assumptions and judgments about the Company's intent and ability to
recover its investment given the nature and operations of the underlying investment, including the level of the Company's
involvement therein, among other factors. To the extent an impairment is deemed to be other-than-temporary, the loss is
measured as the excess of the carrying amount of the investment over the estimated fair value of the investment.

Loans Receivable. Loans held for investment are intended to be held to maturity and, accordingly, are carried at cost, net
of unamortized loan origination costs and fees, loan purchase discounts, and net of an allowance for loan losses when such
loan is deemed to be impaired. Loan origination costs and fees and loan purchase discounts are amortized over the term of
the loan. The Company considers a loan impaired when, based upon current information and events, it is probable that it
will be unable to collect all amounts due for both principal and interest according to the contractual terms of the loan
agreement. Significant judgments are required in determining whether impairment has occurred. The Company performs
an impairment analysis by comparing either the present value of expected future cash flows discounted at the loan's effective
interest rate, the loan's observable current market price or the fair value of the underlying collateral to the net carrying value
of the loan, which may result in an allowance and corresponding loan loss charge. Interest income is recorded on a cash
basis for impaired loans.

Acquisition, Development and Construction Arrangements. The Company evaluates loans receivable where the Company
participates in residual profits through loan provisions or other contracts to ascertain whether the Company has the same
risks and rewards as an owner or a joint venture partner. Where the Company concludes that such arrangements are more
appropriately treated as an investment in real estate, the Company reflects such loan receivable as an equity investment in
real estate under construction in the Consolidated Balance Sheets. In these cases, no interest income is recorded on the loan
receivable and the Company records capitalized interest during the construction period. In arrangements where the Company
engages a developer to construct a property or provide funds to a tenant to develop a property, the Company will capitalize
the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the
construction period.

Properties Held For Sale. Assets and liabilities of properties that meet various held for sale criteria, including whether it is
probable that a sale will occur within 12 months, are presented separately in the Consolidated Balance Sheets, with assets
and liabilities being separately stated. The operating results of these properties are reflected as discontinued operations in
the Consolidated Statements of Operations. Properties classified as held for sale are carried at the lower of net carrying
value or estimated fair value less costs to sell and depreciation and amortization are no longer recognized. Properties that
do not meet the held for sale criteria are accounted for as operating properties.

Deferred Expenses. Deferred expenses consist primarily of debt and leasing costs. Debt costs are amortized using the straight-
line method, which approximates the interest method, over the terms of the debt instruments and leasing costs are amortized
over the term of the related lease.

Derivative Financial Instruments. The Company accounts for its interest rate swap agreements in accordance with FASB
ASC Topic 815, Derivatives and Hedging ("Topic 815"). In accordance with Topic 815, these agreements are carried on
the balance sheet at their respective fair values, as an asset if fair value is positive, or as a liability if fair value is negative.
If the interest rate swap is designated as a cash flow hedge, the effective portion of the interest rate swap's change in fair
value is reported as a component of other comprehensive income (loss); the ineffective portion, if any, is recognized in
earnings as an increase or decrease to interest expense.

($000, except share/unit data)

Upon entering into hedging transactions, the Company documents the relationship between the interest rate swap agreement
and the hedged item. The Company also documents its risk-management policies, including objectives and strategies, as
they relate to its hedging activities. The Company assesses, both at inception of a hedge and on an on-going basis, whether
or not the hedge is highly effective. The Company will discontinue hedge accounting on a prospective basis with changes
in the estimated fair value reflected in earnings when (1) it is determined that the derivative is no longer effective in offsetting
cash flows of a hedged item (including forecasted transactions), (2) it is no longer probable that the forecasted transaction
will occur or (3) it is determined that designating the derivative as an interest rate swap is no longer appropriate. The
Company does and may continue to utilize interest rate swap and cap agreements to manage interest rate risk, but does not
anticipate entering into derivative transactions for speculative trading purposes.

Stock Compensation. The Company maintains an equity participation plan. Non-vested share grants generally vest either
based upon (1) time, (2) performance and/or (3) market conditions. Options granted under the plan in 2010 vest over a five-
year period and expire ten years from the date of grant. Options granted under the plan in 2008 vest upon attainment of
certain market performance measures and expire ten years from the date of grant. All share-based payments to employees,
including grants of employee stock options, are recognized in the Consolidated Statements of Operations based on their
fair values.

Tax Status. The Company has made an election to qualify, and believes it is operating so as to qualify, as a REIT for federal
income tax purposes. Accordingly, the Company generally will not be subject to federal income tax, provided that
distributions to its shareholders equal at least the amount of its REIT taxable income as defined under Sections 856 through
860 of the Code.

The Company is permitted to participate in certain activities from which it was previously precluded in order to maintain
its qualification as a REIT, so long as these activities are conducted in entities which elect to be treated as taxable REIT
subsidiaries under the Code. As such, the Company is subject to federal and state income taxes on the income from these
activities.

Income taxes, primarily related to the Company's taxable REIT subsidiaries, are accounted for under the asset and liability
method. Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences
between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating
loss and tax credit carry-forwards. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the
year in which those temporary differences are expected to be recovered or settled.

Cash and Cash Equivalents. The Company considers all highly liquid instruments with original maturities of three months
or less from the date of purchase to be cash equivalents.

Restricted Cash. Restricted cash is comprised primarily of cash balances held in escrow with lenders.

Environmental Matters. Under various federal, state and local environmental laws, statutes, ordinances, rules and regulations,
an owner of real property may be liable for the costs of removal or remediation of certain hazardous or toxic substances at,
on, in or under such property as well as certain other potential costs relating to hazardous or toxic substances. These liabilities
may include government fines, penalties and damages for injuries to persons and adjacent property. Such laws often impose
liability without regard to whether the owner knew of, or was responsible for, the presence or disposal of such substances.
Although most of the tenants of properties in which the Company has an interest are primarily responsible for any
environmental damage and claims related to the leased premises, in the event of the bankruptcy or inability of the tenant
of such premises to satisfy any obligations with respect to such environmental liability, or if the tenant is not responsible,
the Company's property owner subsidiary may be required to satisfy any such obligations, should they exist. In addition,
the property owner subsidiary, as the owner of such a property, may be held directly liable for any such damages or claims
irrespective of the provisions of any lease. As of December 31, 2013, the Company was not aware of any environmental
matter relating to any of its investments that would have a material impact on the consolidated financial statements.

Segment Reporting. The Company operates generally in one industry segment, single-tenant real estate assets.

Reclassifications. Certain amounts included in prior years' financial statements have been reclassified to conform to the
current year presentation, including certain statement of operations captions including activities for properties sold during
2013, which are presented as discontinued operations.

($000, except share/unit data)

Recently Issued Accounting Guidance. In February 2013, the Financial Accounting Standards Board issued Accounting
Standards Update No. 2013-02: Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of
Accumulated Other Comprehensive Income, to improve the transparency of reporting the reclassifications of significant
amounts out of accumulated other comprehensive income. This guidance requires entities to present the effects on the line
items of net income of significant reclasses from accumulated other comprehensive income, either where net income is
presented or in the notes, as well as cross-reference to other disclosures currently required under GAAP for other
reclassification items (that are not required under GAAP) to be reclassified directly to net income in their entirety in the
same reporting period. The new disclosure requirements are effective for annual reporting periods beginning after December
15, 2012. The new disclosures are required for both interim and annual reporting. The implementation of this guidance did
not have an impact on the Company's financial position, results of operations or cash flows.

(3)

Earnings Per Share

A significant portion of the Company's non-vested share-based payment awards are considered participating securities and
as such, the Company is required to use the two-class method for the computation of basic and diluted earnings per share.
Under the two-class computation method, net losses are not allocated to participating securities unless the holder of the
security has a contractual obligation to share in the losses. The non-vested share-based payment awards are not allocated
losses as the awards do not have a contractual obligation to share in losses of the Company.

The following is a reconciliation of the numerators and denominators of the basic and diluted earnings per share computations
for each of the years in the three-year period ended December 31, 2013:

BASIC
Income (loss) from continuing operations attributable to common

shareholders

Income (loss) from discontinued operations attributable to common

shareholders

Net income (loss) attributable to common shareholders

Weighted-average number of common shares outstanding
Income (loss) per common share:

Income (loss) from continuing operations
Income (loss) from discontinued operations
Net income (loss) attributable to common shareholders

2013

2012

2011

(31,777) $

156,709

(30,194)

17,688
(14,089) $

112
156,821

(73,527)
(103,721)

209,797,238

159,109,424

152,473,336

(0.15) $
0.08
(0.07) $

0.99
—
0.99

(0.20)
(0.48)
(0.68)

($000, except share/unit data)

DILUTED:

Income (loss) from continuing operations attributable to common

shareholders

Impact of assumed conversions:

Share Options

Operating Partnership Units

6.00% Convertible Guaranteed Notes

Income (loss) from continuing operations attributable to common

shareholders

Income (loss) from discontinued operations attributable to common

shareholders

Impact of assumed conversions:

Operating Partnership Units

2013

2012

2011

(31,777) $

156,709

(30,194)

—

1,585

8,953

—

(31,777)

167,247

(30,194)

17,688

112

(73,527)

—

(392)

—

Income (loss) from discontinued operations attributable to common

shareholders

Net income (loss) attributable to common shareholders

17,688
(14,089) $

(280)
166,967

(73,527)
(103,721)

Weighted-average common shares outstanding - basic
Effect of dilutive securities:

Share Options
Operating Partnership Units
6.00% Convertible Guaranteed Notes

Weighted-average common shares outstanding

Income (loss) per common share:

Income (loss) from continuing operations
Income (loss) from discontinued operations
Net income (loss) attributable to common shareholders

209,797,238

159,109,424

152,473,336

—
306,449
—
4,438,708
— 15,805,245
179,659,826

209,797,238

—
—
—
152,473,336

(0.15) $
0.08
(0.07) $

0.93
—
0.93

(0.20)
(0.48)
(0.68)

For per common share amounts, all incremental shares are considered anti-dilutive for periods that have a loss from continuing
operations attributable to common shareholders. In addition, other common share equivalents may be anti-dilutive in certain
periods.

($000, except share/unit data)

(4)

Investments in Real Estate and Real Estate Under Construction

The Company's real estate, net, consists of the following at December 31, 2013 and 2012:

Real estate, at cost:

Buildings and building improvements
Land, land estates and land improvements
Fixtures and equipment
Construction in progress

Real estate intangibles:
In-place lease values
Tenant relationships
Above-market leases

Investments in real estate under construction

Accumulated depreciation and amortization(1)
Real estate, net

2013

2012

3,008,709
793,418
5,861
4,306

486,743
172,640
102,774
74,350
4,648,801
(1,223,381)
3,425,420

2,969,050
581,199
7,705
6,512

401,503
179,655
104,756
65,122
4,315,502
(1,150,417)
3,165,085

(1)

Includes accumulated amortization of real estate intangible assets of $447,764 and $412,349 in 2013 and 2012, respectively. The estimated
amortization of the above real estate intangible assets for the next five years is $44,003 in 2014, $34,932 in 2015, $28,640 in 2016, $25,239 in 2017
and $21,498 in 2018.

The Company had below-market leases, net of accumulated accretion, which are included in deferred revenue, of $59,781
and $71,513, respectively as of December 31, 2013 and 2012. The estimated accretion for the next five years is $5,176 in
2014, $4,489 in 2015, $3,380 in 2016, $2,935 in 2017 and $2,911 in 2018.

The Company, through property owner subsidiaries, completed the following acquisitions and build-to-suit transactions
during 2013 and 2012:

2013:

Property
Type

Location

Acquisition/
Completion
Date

Initial
Cost Basis

Lease
Expiration

Land and
Land
Estate

Building and
Improvements

Above Market
Lease Value

Lease in-place
Value

Real Estate Intangibles

Industrial
Office (1)
Retail(2)
Land(3)

Land
Retail(4)
Office(5)

Office

Industrial

Long Island City, NY February 2013

Houston, TX

March 2013

Denver, CO

April 2013

Tuscaloosa, AL

May 2013

— $

42,124

03/2028

81,400

03/2038

34,547

04/2028

8,397

05/2028

15,055

2,207

2,793

New York, NY

October 2013

$ 302,000

10/2112

$ 224,935

Danville, VA

October 2013

4,727

01/2029

Albany, GA

November 2013 $

7,074

11/2028

Various

December 2013

Omaha, NE

December 2013

13,144

12/2033

39,125

11/2033

3,454

1,468

1,522

2,058

$ 532,538

$ 253,492

42,124

57,949

26,724

5,604

— $

5,606

10,374

32,343

180,724

— $

673

— $

673

—

8,396

5,616

—

77,065

600

—

1,248

4,724

97,649

Weighted-average life of intangible assets (years)

15.3

82.5

(1) The Company incurred additional tenant related costs of $3,825.
(2) The Company incurred leasing costs of $323. The property was sold in September 2013.
(3)
(4) The Company incurred leasing costs of $338.
(5)

Includes three properties.

Includes four properties. One property was under construction at December 31, 2013, $1,969 of construction in progress costs are included in building
and improvements above.

In addition, during 2013, the Company deposited $638 toward the purchase of a to-be-built industrial property in Lewisburg,
Tennessee for an estimated cost of $12,767. Substantial completion of the property is expected to occur in the second quarter
of 2014 although there can be no assurance that the acquisition will be consummated.

($000, except share/unit data)

2012:

Real Estate Intangibles

Property Type

Location

Acquisition/
Completion Date

Initial Cost
Basis

Lease
Expiration

Land and
Land
Estate

Building and
Improvements

Lease
in-place
Value

Tenant
Relationships
Value

Office

Huntington, WV

January 2012

Florence, SC

February 2012

Land/
Infrastructure Missouri City, TX April 2012

Industrial

Shreveport, LA

June 2012

Retail

Office

Retail

Office

Valdosta, GA(1)

August 2012

Jessup, PA

August 2012

Saint Joseph, MO September 2012

Opelika, AL(1)

November 2012

Phoenix, AZ

December 2012

Eugene, OR

December 2012

12,558

11/2026

5,094

02/2024

23,000

04/2032

12,941

03/2022

7,791

08/2027

24,917

08/2027

17,571

06/2027

7,978

11/2027

53,200

12/2029

17,558

11/2027

182,608

1,368

774

14,555

1,078

2,128

2,520

607

1,446

5,585

1,541

31,602

9,527

$ 1,405

3,629

505

5,895

$ 2,135

10,134

$ 1,590

5,663

— $

17,656

$ 3,336

14,004

$ 2,528

6,532

— $

36,099

$ 8,956

13,099

$ 2,414

122,238

$ 22,869

258

186

415

139

—

1,405

432

—

2,560

504

5,899

Weighted-average life of intangible assets (years)

15.7

16.0

(1) Incurred leasing costs of $488 for Valdosta and $355 for Opelika. Properties were sold in 2013.

The Company recognized aggregate acquisition expenses of $812 and $947 in 2013 and 2012, respectively, which are
included in property operating expenses within the Company's Consolidated Statements of Operations.

The Company is engaged in various forms of build-to-suit development activities. The Company, through lender subsidiaries
and property owner subsidiaries, may enter into the following acquisition, development and construction arrangements: (1)
lend funds to construct build-to-suit projects subject to a single-tenant lease and agree to purchase the properties upon
completion of construction and commencement of a single-tenant lease, (2) hire developers to construct built-to-suit projects
on owned properties leased to single tenants, (3) fund the construction of build-to-suit projects on owned properties pursuant
to the terms in single-tenant lease agreements or (4) enter into purchase and sale agreements with developers to acquire
single-tenant build-to-suit properties upon completion. As of December 31, 2013, the Company had the following
development arrangements outstanding:

Location

Property Type

Square Feet

Expected
Maximum
Commitment/
Contribution
($ millions)

Lease Term
(Years)

Estimated
Completion Date

Rantoul, IL

Bingen, WA

Las Vegas, NV

Industrial

Richmond, VA

Office

813,000

124,000

180,000

279,000

1,396,000

42.6

18.9

29.6

98.6

189.7

1Q 14

2Q 14

3Q 14

3Q 15

The Company has variable interests in certain developer entities constructing the facilities but is not the primary beneficiary
of the entities as the Company does not have a controlling financial interest. As of December 31, 2013 and 2012, the
Company's aggregate investment in development arrangements was $74,350 and $65,122, respectively, which includes
$1,472 and $1,291 of interest capitalized during 2013 and 2012, respectively, and is presented as investments in real estate
under construction in the accompanying Consolidated Balance Sheets.

($000, except share/unit data)

On September 1, 2012, the Company, together with an operating partnership subsidiary, acquired the remaining common
equity interest in Net Lease Strategic Assets Fund L.P. (“NLS”) from Inland American (Net Lease) Sub, LLC (“Inland”)
that the Company did not already own for a cash payment of $9,438 and the assumption of all outstanding liabilities.
Immediately prior to the acquisition, the Company owned 15% of NLS's common equity and 100% of NLS's preferred
equity and its investment balance in NLS was $40,047. At the date of acquisition, NLS owned 41 properties totaling 5.8
million square feet in 23 states, plus a 40% tenant-in-common interest in an office property. The Company's investment in
NLS had previously been accounted for under the equity method and is now consolidated. The acquisition resulted in a
remeasurement of the net assets acquired to fair value. The Company engaged an independent third party to determine the
fair value of the assets acquired and liabilities assumed.

The following table summarizes the allocation of the fair value of amounts recognized for each major class of assets and
liabilities:

Real estate assets
Lease related intangible assets
Cash
Other assets

Total acquired assets

Secured debt
Other liabilities, including below-market leases

Total assumed liabilities

Fair value of acquired net assets (represents 100% interest)

325,310
124,330
8,107
36,179

493,926

252,517
23,686

276,203

217,723

The Company recognized a gain on the transaction in the Consolidated Statement of Operations of $167,864 primarily
related to the revaluation of the Company's equity interest in NLS for the difference between its carrying value in NLS and
the fair value of its ownership interest at acquisition. The noncontrolling interest share of the fair value of the net assets
acquired was $373.

Intangible assets and liabilities recorded in connection with the above acquisition are set forth as follows:

In-place leases
Tenant relations
Above-market leases
Total intangible assets acquired

Below-market leases

6.2
4.6
8.4

2.7

59,819
24,828
39,683
124,330

1,529

The Company recognized gross revenues from continuing operations of $42,576 and $14,504 and net losses of $4,419 and
$1,667 from NLS properties in 2013 and 2012, respectively.

($000, except share/unit data)

The following unaudited condensed consolidated pro forma information is presented as if the Company acquired the
remaining equity in NLS on January 1, 2011. The information excludes activity that is non-recurring and not representative
of future activity, primarily the gain on acquisition of $167,864 and acquisition costs of $230 for 2012. The information
presented below is not necessarily indicative of what the actual results of operations would have been had the transaction
been completed on January 1, 2011, nor does it purport to represent the Company's future operations:

Gross revenues

Net income (loss) attributable to
Lexington Realty Trust shareholders
Net loss attributable to common
shareholders
Net loss per common share - basic and
diluted

2012
$ 372,603

2011
$ 356,918

$ (111,787)

$ (22,985)

$ (135,924)

(0.14)

(0.89)

(5)

Sales of Real Estate and Discontinued Operations

For the years ended December 31, 2013, 2012 and 2011, the Company disposed of its interests in certain properties (excluding
Pemlex LLC, see note 9) generating aggregate net proceeds of $75,519, $142,022 and $124,039, respectively, which resulted
in gains on sales of $24,472, $13,291 and $6,557, respectively. For the years ended December 31, 2013, 2012 and 2011,
the Company recognized net debt satisfaction gains (charges) relating to these properties of $8,955, $(178) and $(606),
respectively. These gains (charges) are included in discontinued operations.

At December 31, 2013 and 2012, the Company had no properties classified as held for sale.

The following presents the operating results for the properties sold and held for sale during the years ended December 31,
2013, 2012 and 2011:

Year Ending December 31,
2012

2011

2013

Total gross revenues
Pre-tax net income (loss), including gains on sales

$
$

7,577
19,746

$
$

22,591
1,807

$
$

44,247
(87,533)

(6)

Impairment of Real Estate Investments

The Company assesses on a regular basis whether there are any indicators that the carrying value of real estate assets may
be impaired. Potential indicators may include an increase in vacancy at a property, tenant reduction in utilization of a
property, tenant financial instability and the potential sale of the property in the near future. An asset is determined to be
impaired if the asset's carrying value is in excess of its estimated fair value.

During 2013, 2012 and 2011, the Company recognized aggregate impairment charges of $21,640, $4,262 and $17,008,
respectively, on real estate assets classified in continuing operations. The Company has explored the possible disposition
of some non-core properties, including retail, underperforming and multi-tenant properties and determined that the expected
undiscounted cash flows based upon revised estimated holding periods of certain of these properties were below the current
carrying values. Accordingly, the Company reduced the carrying value of these properties to their estimated fair values.

During 2013, 2012 and 2011, the Company recognized $12,920, $5,707 and $100,435, respectively, of impairment charges
in discontinued operations, relating to real estate assets that were ultimately disposed of below their carrying value.

($000, except share/unit data)

(7)

Loans Receivable

As of December 31, 2013 and 2012, the Company's loans receivable, including accrued interest and net of origination fees
and loan loss reserves are comprised primarily of first and second mortgage loans and mezzanine loans on real estate
aggregating $99,443 and $72,540, respectively.

The following is a summary of our loans receivable as of December 31, 2013 and 2012:

Loan
Norwalk, CT(2)
Homestead, FL(3)
Schaumburg, IL(4)
Westmont, IL(5)
Southfield, MI

Austin, TX
Kennewick, WA(6)
Other

Loan carrying-value(1)

12/31/2013

12/31/2012

Interest Rate

Maturity Date

28,186

10,239

—

12,610

6,610

2,389
37,030
2,379
99,443

3,479

8,036

21,885

26,902

7,364

2,038
—
2,836
72,540

7.50%

20.00%

6.45%

4.55%

16.00%
9.00%
8.00%

11/2014

08/2014

01/2012

10/2015

02/2015

10/2018
05/2022
2021-2022

(1) Loan carrying value includes accrued interest and is net of origination costs, loan losses and fee eliminations, if any.
(2) The Company is committed to lend up to $32,600.
(3) The Company is committed to lend up to $10,660.
(4) Borrower defaulted on the loan. The Company did not record interest of $2,939 and $2,647 in 2013 and 2012, respectively, representing the interest
earned since default. In 2013, the Company foreclosed on the borrower and acquired the office property collateral which is net leased through
December 2022.

(5) Borrower is delinquent on debt service payments. Tenant at office property collateral terminated its lease. The Company recognized an impairment
of $13,939 during 2013. During 2013, the Company recognized $1,737 of interest income relating to the impaired loan and the loan had an average
recorded investment value of $25,562. At December 31, 2013, the impaired loan receivable had a net carrying value of $12,610 and a contractual
unpaid balance of $26,549.

(6) The Company is committed to lend up to $85,000. During construction advances accrue interest at 6.5% per annum. Estimated construction completion

is March 2014.

The Company has two types of financing receivables: loans receivable and a capitalized financing lease. The Company
determined that its financing receivables operate within one portfolio segment as they are both within the same industry
and use the same impairment methodology. The Company's loans receivable are secured by commercial real estate assets
and the capitalized financing lease is for a commercial office property located in Greenville, South Carolina. In addition,
the Company assesses all financing receivables for impairment, when warranted, based on an individual analysis of each
receivable.

The Company's financing receivables operate within one class of financing receivables as these assets are collateralized by
commercial real estate and similar metrics are used to monitor the risk and performance of these assets. The Company's
management uses credit quality indicators to monitor financing receivables such as quality of collateral, the underlying
tenant's credit rating and collection experience. As of December 31, 2013, the financing receivables were performing as
anticipated other than the Westmont, Illinois loan as discussed above and there were no other significant delinquent amounts
outstanding.

($000, except share/unit data)

(8)

Fair Value Measurements

The following tables present the Company's assets and liabilities from continuing operations measured at fair value on a
recurring basis as of December 31, 2013 and 2012 and non-recurring basis during the year ended December 31, 2013 and
2012, aggregated by the level in the fair value hierarchy within which those measurements fall:

Description

2013

(Level 1)

(Level 2)

(Level 3)

Fair Value Measurements Using

Interest rate swap assets
Impaired real estate assets*
Impaired loan receivable*
Impaired investments in and advances to non-

consolidated entities*

$
$
$

*Represents a non-recurring fair value measurement.

4,439
12,549
12,610

683

$
$
$

— $
— $
— $

— $

4,439

$
— $
— $

—
12,549
12,610

— $

683

Description

2012

(Level 1)

(Level 2)

(Level 3)

Interest rate swap liability
Impaired real estate assets*

$
$

(6,556) $
$
3,327

— $
— $

(6,556) $
— $

—
3,327

Fair Value Measurements Using

*Represents a non-recurring fair value measurement.

The table below sets forth the carrying amounts and estimated fair values of the Company's financial instruments as of
December 31, 2013 and 2012:

Assets
Loans Receivable (Level 3)

Liabilities
Debt (Level 3)

As of December 31, 2013

As of December 31, 2012

Carrying
Amount

Fair Value

Carrying
Amount

Fair Value

99,443

95,734

72,540

61,734

$ 2,055,807

$ 2,028,558

$ 1,878,208

$ 1,835,157

The majority of the inputs used to value the Company's interest rate swap asset (liability) fall within Level 2 of the fair
value hierarchy, such as observable market interest rate curves; however, the credit valuation associated with the interest
rate swap liability utilizes Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default
by the Company and its counterparties. As of December 31, 2013 and 2012, the Company determined that the credit valuation
adjustment relative to the overall interest rate swap asset (liability) is not significant. As a result, the entire interest rate swap
asset (liability) has been classified in Level 2 of the fair value hierarchy.

The Company estimates the fair value of its real estate assets, including non-consolidated real estate assets, by using income
and market valuation techniques. The Company may estimate fair values using market information such as broker opinions
of value, recent sales data for similar assets or discounted cash flow models, which primarily rely on Level 3 inputs. The
cash flow models include estimated cash inflows and outflows over a specified holding period. These cash flows may include
contractual rental revenues, projected future rental revenues and expenses and forecasted tenant improvements and lease
commissions based upon market conditions determined through discussion with local real estate professionals, experience
the Company has with its other owned properties in such markets and expectations for growth. Capitalization rates and
discount rates utilized in these models are estimated by management based upon rates that management believes to be within
a reasonable range of current market rates for the respective properties based upon an analysis of factors such as property
and tenant quality, geographical location and local supply and demand observations. To the extent the Company under
estimates forecasted cash outflows (tenant improvements, lease commissions and operating costs) or over estimates
forecasted cash inflows (rental revenue rates), the estimated fair value of its real estate assets could be overstated.

($000, except share/unit data)

The Company estimates the fair values of its loans receivable by using an estimated discounted cash flow analysis consisting
of scheduled cash flows and discount rate estimates to approximate those that a willing buyer and seller might use and/or
the estimated value of the underlying collateral. The fair value of the Company's debt is estimated by using a discounted
cash flow analysis, based upon estimates of market interest rates.

Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets
and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique,
and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows,
could significantly affect the fair value measurement amounts.

Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Company estimates that the fair value
of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the
relatively short maturity of the instruments.

(9)

Investment in and Advances to Non-Consolidated Entities

In October 2013, the Company formed a joint venture, in which the Company has a 15.0% interest, that acquired a portfolio
of veterinary hospitals for $39,456, which are net leased for a 20-year term. The acquisition was partially funded by a
$18,791 non-recourse mortgage loan with a fixed interest rate of 4.01% and maturity of November 2018.

In August 2013, the Company invested $5,000 in a joint venture, which acquired the fee interest and the related office
building improvements of a property in Baltimore, Maryland. Beginning in October 2015, the Company has the right to
require the redemption of its interest in the joint venture in exchange for a distribution to the Company of the fee interest,
which is currently leased for a 99-year term to the joint venture.

In July 2013, the Company acquired its consolidated joint venture partners' interest in an industrial facility in Long Island
City, New York for a payment of $8,918, which was recorded as a distribution to the partner in accordance with GAAP.

During 2012, the Company formed two joint ventures in which it has a minority interest. One joint venture acquired a retail
property in Palm Beach Gardens, Florida for $29,750 which was net leased for an approximate 15-year term. The Company
had a 36% interest in the venture and provided a $12,000 non-recourse mortgage loan to the venture which was repaid in
full in February 2013. The Company received a distribution of $2,557 in March 2013, a portion of which represented a
return of capital reducing the Company's ownership interest to 25%.

The second joint venture, in which the Company has a 15% interest, acquired a 100% economic interest in an inpatient
rehabilitation hospital in Humble, Texas for $27,750, which was net leased for an approximate 17-year term. The acquisition
was partially funded by a non-recourse mortgage with an original principal amount of $15,260, which bears interest at a
fixed rate of 4.7% and matures in May 2017.

In July 2012, the Company sold its interest in Pemlex LLC, a consolidated subsidiary, for $13,218 in connection with its
restructuring. No gain or loss was recognized in the transaction as the investment was sold at its cost basis.

The Company's investments in Concord Debt Holding LLC and CDH CDO LLC were valued at zero and the Company
recognized income on the cash basis. During 2012, the Company sold all of its interest in Concord Debt Holding LLC and
CDH CDO LLC for $7,000 in cash.

Other. During 2013 and 2011, the Company recognized other-than-temporary impairment charges on a non-consolidated
joint venture acquired in the merger with Newkirk due to changes in the Company's estimate of net proceeds to be received
upon liquidation of the joint venture. Accordingly, the Company recognized $925 and $1,559, respectively, in impairment
charges in equity in earnings (losses) of non-consolidated entities.

($000, except share/unit data)

The Company's remaining equity method investments consist of interests in six partnerships with ownership percentages
ranging between 27% and 40%, which own primarily net-leased properties. All profits, losses and cash flows are distributed
in accordance with the respective partnership agreements. The partnerships are encumbered by $27,793 in mortgage debt
(the Company's proportionate share is $9,737) with interest rates ranging from 5.2% to 10.6% with a weighted-average rate
of 7.2% and maturity dates ranging from 2015 to 2016.

LRA earns advisory fees from certain of these non-consolidated entities, including NLS, for services related to acquisitions,
asset management and debt placement. Advisory fees earned from these non-consolidated investments were $512, $875
and $804 for the years ended December 31, 2013, 2012 and 2011, respectively.

(10) Mortgages and Notes Payable

The Company had outstanding mortgages and notes payable of $1,197,489 and $1,415,961 as of December 31, 2013 and
2012, respectively. Interest rates, including imputed rates on mortgages and notes payable, ranged from 3.6% to 8.5% at
December 31, 2013 and the mortgages and notes payable mature between 2014 and 2027. Interest rates, including imputed
rates, ranged from 3.6% to 8.5% at December 31, 2012. The weighted-average interest rate at December 31, 2013 and 2012
was approximately 5.3% and 5.6%, respectively.

On February 12, 2013, the Company refinanced its $300,000 secured revolving credit facility with a $300,000 unsecured
revolving credit facility with KeyBank National Association (“KeyBank”), as agent. The unsecured revolving credit facility
matures in February 2017 but can be extended until February 2018 at the Company’s option. The unsecured revolving credit
facility bore interest at LIBOR plus 1.50% to 2.05% based on the Company’s leverage ratio, as defined therein. Since the
Company has obtained an investment-grade unsecured debt rating from both Moody’s Investor Services, Inc. (“Moody’s”)
and Standard & Poor’s Rating Services (“S&P”), the interest rate under the unsecured revolving credit facility ranges from
LIBOR plus 0.95% to 1.725% (1.15% as of December 31, 2013) depending on the Company's unsecured investment-grade
debt rating. In addition, the Company increased its availability under the unsecured revolving credit facility from $300,000
to $400,000. At December 31, 2013, the unsecured revolving credit facility had $48,000 outstanding, outstanding letters of
credit of $7,644 and availability of $344,356, subject to covenant compliance.

In connection with the refinancing discussed above, the Company also procured a 5-year $250,000 unsecured term loan
facility from KeyBank, as agent. The unsecured term loan matures in February 2018, required regular payments of interest
only at interest rates ranging from LIBOR plus 1.45% to 2.00% dependent on the Company's leverage ratio, as defined
therein and can be prepaid without penalty. Since the Company has obtained an investment-grade unsecured debt rating
from both Moody’s and S&P, the interest rate under the unsecured term loan ranges from LIBOR plus 1.10% to 2.10%
(1.35% as of December 31, 2013) depending on the Company’s unsecured investment-grade debt rating. In 2013, the
Company entered into interest rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.05%
through February 2018 on the $151,000 of outstanding LIBOR-based borrowings (see note 22).

During 2012, the Company procured a $255,000 secured term loan from Wells Fargo Bank, National Association (“Wells
Fargo”), as agent. The term loan matures in January 2019. The term loan required regular payments of interest only at
interest rates ranging from LIBOR plus 2.00% to 2.85% dependent on the Company's leverage ratio, as defined therein.
Since the Company has obtained an investment-grade unsecured debt rating from both Moody’s and S&P, the interest rate
under the secured term loan ranges from LIBOR plus 1.50% to 2.25% (1.75% as of December 31, 2013) depending on the
Company's unsecured investment-grade debt rating. The Company may prepay any outstanding borrowings under the term
loan facility at a premium through January 12, 2016 and at par thereafter. During 2012, the Company entered into interest
rate swap agreements to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on the
$255,000 of outstanding LIBOR-based borrowings. The term loan was initially secured by ownership interest pledges by
certain subsidiaries that collectively owned a borrowing base of properties.

The unsecured revolving credit facility and the unsecured term loans are subject to financial covenants, which the Company
was in compliance with at December 31, 2013.

The Company had $25,000 and $35,551 secured term loans with KeyBank, which were satisfied in January 2012 and the
Company recognized debt satisfaction charges of $1,578 as a result of the satisfaction.

($000, except share/unit data)

Included in the Consolidated Statements of Operations, the Company recognized debt satisfaction gains (charges), net,
excluding discontinued operations, of $(11,861), $(16) and $45 for the years ended December 31, 2013, 2012 and 2011,
respectively, due to the satisfaction of mortgages and notes payable other than those disclosed elsewhere in these financial
statements. In addition, the Company capitalized $2,397, $3,062 and $1,792 in interest, including discontinued operations,
for the years ended 2013, 2012 and 2011, respectively.

Mortgages payable and secured loans are generally collateralized by real estate and the related leases. Certain mortgages
payable have yield maintenance or defeasance requirements relating to any prepayments. In addition, certain mortgages are
cross-collateralized and cross-defaulted.

Scheduled principal and balloon payments for mortgages, notes payable, credit facility borrowings and term loans for the
next five years and thereafter are as follows:

Year ending
December 31,
2014
2015
2016
2017
2018
Thereafter

Total

123,212
301,591
168,899
137,035
188,764
731,988
1,651,489

(11)

Senior Notes, Convertible Notes, Exchangeable Notes and Trust Preferred Securities

In June 2013, the Company issued $250,000 aggregate principal amount of 4.25% Senior Notes due 2023 (“Senior Notes”)
at an issuance price of 99.026% of the principal amount. The Senior Notes are unsecured, pay interest semi-annually in
arrears and mature in June 2023. The Company may redeem the notes at its option at any time prior to maturity in whole
or in part by paying the principal amount of the notes being redeemed plus a premium. The Company issued these Senior
Notes at an initial discount of $2,435 which is being recognized as additional interest expense over the term of the Senior
Notes. The Senior Notes are rated Baa2 and BBB- by Moody’s and S&P, respectively.

During 2010, the Company issued $115,000 aggregate principal amount of 6.00% Convertible Guaranteed Notes. The
notes pay interest semi-annually in arrears and mature in January 2030. The holders of the notes may require the Company
to repurchase their notes in January 2017, January 2020 and January 2025 for cash equal to 100% of the notes to be
repurchased, plus any accrued and unpaid interest. The Company may not redeem any notes prior to January 2017, except
to preserve its REIT status. As of the date of filing this Annual Report, the notes have a conversion rate of 147.8206
common shares per one thousand principal amount of the notes, representing a conversion price of approximately $6.76
per common share. The conversion rate is subject to adjustment under certain circumstances, including increases in the
Company's dividend rate above a certain threshold and the issuance of stock dividends. The notes are convertible by the
holders under certain circumstances for cash, common shares or a combination of cash and common shares at the
Company's election. The notes are convertible prior to the close of business on the second business day immediately
preceding the stated maturity date, at any time beginning in January 2029 and also upon the occurrence of specified
events. During 2013 and 2012, $54,905 and $31,104 aggregate principal amount of the notes were converted for 7,944,673
and 4,487,060 common shares and an aggregate cash payment of $3,270 and $2,427 plus accrued and unpaid interest,
respectively. The Company recognized aggregate debt satisfaction charges of $13,536 and $7,842, during 2013 and 2012,
respectively, relating to the conversions.

In 2013, the Company obtained the release of all guarantees, other than the Company's operating partnership, under the
indentures for the Senior Notes and the 6.00% Convertible Guaranteed Notes, the term loan agreements and the unsecured
revolving credit facility.

During 2007, the Company issued an aggregate $450,000 of 5.45% Exchangeable Guaranteed Notes due in 2027. During
2012, the Company repurchased and retired all remaining outstanding original principal amount of the notes for a cash
payment of $62,150. This resulted in debt satisfaction charges, net of $44.

($000, except share/unit data)

Below is a summary of additional disclosures related to the 6.00% Convertible Guaranteed Notes and the 5.45%
Exchangeable Guaranteed Notes.

Balance Sheets:

Principal amount of debt component

Unamortized discount

Carrying amount of debt component

Carrying amount of equity component

Effective interest rate

Period through which discount is being amortized,

put date

Aggregate if-converted value in excess of

aggregate principal amount

6.00% Convertible Guaranteed Notes

December 31, 2013

December 31, 2012

28,991
(1,500)
27,491
(26,032)
8.1%

01/2017

14,296

83,896
(5,769)
78,127

3,654

8.1%

01/2017

42,579

Statements of Operations:
6.00% Convertible Guaranteed Notes

Coupon interest
Discount amortization

5.45% Exchangeable Guaranteed Notes

Coupon interest
Discount amortization

2013

2012

2011

2,296
658
2,954

— $
—
— $

6,634
1,868
8,502

188
34
222

6,900
1,938
8,838

3,387
664
4,051

During 2007, the Company issued $200,000 original principal amount of Trust Preferred Securities. The Trust Preferred
Securities, which are classified as debt, are due in 2037, were open for redemption at the Company's option commencing
April 2012 and bear interest at a fixed rate of 6.804% through April 2017 and thereafter, at a variable rate of three month
LIBOR plus 170 basis points through maturity. As of December 31, 2013 and 2012, there was $129,120 original principal
amount of Trust Preferred Securities outstanding.

Scheduled principal payments for these debt instruments for the next five years and thereafter are as follows:

Year ending
December 31,

2014
2015
2016
2017(1)
2018
Thereafter

Debt discounts

Total

—
—
—
28,991
—
379,120
408,111
(3,793)
404,318

(1) Although the 6.00% Convertible Guaranteed Notes mature in 2030, the notes can be put to the Company in 2017.

($000, except share/unit data)

(12)

Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives. The Company is exposed to certain risks arising from both its business
operations and economic conditions. The Company principally manages its exposures to a wide variety of business and
operational risks through management of its core business activities. The Company manages economic risks, including
interest rate, liquidity, and credit risk primarily by managing the type, amount, sources, and duration of its debt funding and
the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage
exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts,
the value of which are determined by interest rates. The Company's derivative financial instruments are used to manage
differences in the amount, timing, and duration of the Company's known or expected cash receipts and its known or expected
cash payments principally related to the Company's investments and borrowings.

Cash Flow Hedges of Interest Rate Risk. The Company's objectives in using interest rate derivatives are to add stability to
interest expense, to manage its exposure to interest rate movements and therefore manage its cash outflows as it relates to
the underlying debt instruments. To accomplish these objectives the Company primarily uses interest rate swaps as part of
its interest rate risk management strategy relating to certain of its variable rate debt instruments. Interest rate swaps designated
as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making
fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded
in accumulated other comprehensive income (loss) and is subsequently reclassified into earnings in the period that the
hedged forecasted transaction affects earnings. The ineffective portion of the change in fair value of the derivatives is
recognized directly in earnings.

The Company has designated the interest rate swap agreements with its counterparties as cash flow hedges of the risk of
variability attributable to changes in the LIBOR swap rates on $406,000 of LIBOR-indexed variable-rate secured term
loans. Accordingly, changes in the fair value of the swaps are recorded in other comprehensive income (loss) and reclassified
to earnings as interest becomes receivable or payable. In 2012, the Company settled the 2008 interest rate swap agreement
with KeyBank for $3,539. The Company had a credit balance of $1,837 in accumulated other comprehensive income at the
settlement date which was amortized into earnings on a straight-line basis through February 2013.

Amounts reported in accumulated other comprehensive income (loss) related to derivatives will be reclassified to interest
expense as interest payments are made on the aggregate $406,000 term loans. During the next 12 months, the Company
estimates that an additional $4,344 will be reclassified as an increase to interest expense if the swaps remain outstanding.

As of December 31, 2013, the Company had the following outstanding interest rate derivatives that were designated as cash
flow hedges of interest rate risk:

Interest Rate Derivative

Number of Instruments

Interest Rate Swaps

Notional

$406,000

Derivatives Not Designated as Hedges. The Company does not use derivatives for trading or speculative purposes. During
2008, the Company entered into a forward purchase equity commitment with a financial institution to finance the repurchase
of 3,500,000 common shares of the Company at $5.60 per share under the Company's common share repurchase plan as
approved by the Company's Board of Trustees. The Company recognized earnings during 2011 of $2,030, primarily relating
to the increase in the fair value of the common shares held as collateral. The Company settled this commitment in October
2011 through a cash payment of $4,024 and retired 3,974,645 common shares.

($000, except share/unit data)

The table below presents the fair value of the Company's derivative financial instruments as well as their classification on
the Consolidated Balance Sheets as of December 31, 2013 and 2012.

As of December 31, 2013

As of December 31, 2012

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Derivatives designated as hedging
instruments:

Interest Rate Swap Asset (Liability)

Other Assets

4,439

Accounts Payable and
Other Liabilities

$ (6,556)

The tables below present the effect of the Company's derivative financial instruments on the Consolidated Statements of
Operations for 2013 and 2012:

Derivatives in Cash Flow

Amount of Gain (Loss)
Recognized
in OCI on Derivative
(Effective Portion)
December 31,

Hedging Relationships

2013

2012

Interest Rate Swap

7,559

(8,886)

Location of
Loss
Reclassified
from
Accumulated
OCI into
Income
(Effective
Portion)
Interest
expense

Amount of Loss Reclassified
from Accumulated OCI into
Income (Effective Portion)
December 31,

2013

2012

3,104

724

The Company's agreements with the swap derivative counterparties contain provisions whereby if the Company defaults
on the underlying indebtedness, including default where repayment of the indebtedness has not been accelerated by the
lender, then the Company could also be declared in default of the swap derivative obligation. As of December 31, 2013,
the Company had not posted any collateral related to the agreements.

(13)

Leases
Lessor:

Minimum future rental receipts under the non-cancelable portion of tenant leases, assuming no new or re-negotiated leases,
for the next five years and thereafter are as follows:

Year ending
December 31,
2014
2015
2016
2017
2018
Thereafter

Total
362,743
334,370
303,455
272,390
249,645
5,767,751
$ 7,290,354

The above minimum lease payments do not include reimbursements to be received from tenants for certain operating
expenses and real estate taxes and do not include early termination payments provided for in certain leases.

Certain leases allow for the tenant to terminate the lease if the property is deemed obsolete, as defined, and upon payment
of a termination fee to the landlord, as stipulated in the lease. In addition, certain leases provide the tenant with the right to
purchase the leased property at fair market value or a stipulated price.

($000, except share/unit data)

Lessee:

The Company holds, through property owner subsidiaries, leasehold interests in various properties. Generally, the ground
rents on these properties are either paid directly by the tenants to the fee holder or reimbursed to the Company as additional
rent. Certain properties are economically owned through the holding of industrial revenue bonds and as such neither ground
lease payments nor bond debt service payments are made or received, respectively. For certain of these properties, the
Company has an option to purchase the fee interest.

Minimum future rental payments under non-cancelable leasehold interests, excluding leases held through industrial revenue
bonds and lease payments in the future that are based upon fair market value, for the next five years and thereafter are as
follows:

Year ending
December 31,
2014
2015
2016
2017
2018
Thereafter

Total

5,229
5,203
4,907
4,861
4,645
39,484
64,329

Rent expense for the leasehold interests, including discontinued operations, was $1,284, $1,198 and $776 in 2013, 2012
and 2011, respectively.

The Company leases its corporate headquarters. The lease expires December 2015, with fixed rent of $1,153 per annum.
The Company is also responsible for its proportionate share of operating expenses and real estate taxes above a base year.
As an incentive to enter the lease, the Company received a payment of $845 which it is amortizing as a reduction of rent
expense. In addition, the Company leases office space for its regional offices. The minimum lease payments for the Company's
regional offices are $66 for 2014, $55 for 2015 and 2016 and $14 for 2017. Rent expense for 2013, 2012 and 2011 was
$1,338, $1,029 and $1,392, respectively.

(14)

Concentration of Risk

The Company seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant
industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the years
ended December 31, 2013, 2012 and 2011, no single tenant represented greater than 10% of rental revenues.

Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Company believes it mitigates
this risk by investing in or through major financial institutions.

(15)

Equity

Shareholders' Equity:

During 2013, 2012 and 2011, the Company issued 36,012,313, 18,289,557 and 11,109,760 common shares, respectively,
through public offerings and under its direct share purchase plan, raising net proceeds of approximately $399,566, $164,429
and $98,953 respectively. During 2013, the Company implemented an At-The-Market offering program under which the
Company may issue up to $100,000 in common shares over the term of this program. The Company issued 3,409,927
common shares under this program during 2013 and generated aggregate gross proceeds of $36,884. The proceeds from
these issuances were primarily used for general working capital, to fund investments and retire indebtedness.

($000, except share/unit data)

The Company had 1,935,400 shares of Series C Cumulative Convertible Preferred Stock (“Series C Preferred”), outstanding
at December 31, 2013. The shares have a dividend of $3.25 per share per annum, have a liquidation preference of $96,770,
and the Company, if certain common share prices are achieved, can force conversion into common shares of the Company.
As of the date of filing this Annual Report, each share is currently convertible into 2.4339 common shares. This conversion
ratio may increase over time if the Company's common share dividend exceeds certain quarterly thresholds.

If certain fundamental changes occur, holders may require the Company, in certain circumstances, to repurchase all or part
of their shares of Series C Preferred. In addition, upon the occurrence of certain fundamental changes, the Company will,
under certain circumstances, increase the conversion rate by a number of additional common shares or, in lieu thereof, may
in certain circumstances elect to adjust the conversion rate upon the shares of Series C Preferred becoming convertible into
shares of the public acquiring or surviving company.

The Company may, at the Company's option, cause shares of Series C Preferred to be automatically converted into that
number of common shares that are issuable at the then prevailing conversion rate. The Company may exercise its conversion
right only if, at certain times, the closing price of the Company's common shares equals or exceeds 125% of the then
prevailing conversion price of the Series C Preferred.

Investors in shares of Series C Preferred generally have no voting rights, but will have limited voting rights if the Company
fails to pay dividends for six or more quarters and under certain other circumstances. Upon conversion, the Company may
choose to deliver the conversion value to investors in cash, common shares, or a combination of cash and common shares.

During 2013, 2012 and 2011, the Company issued 1,893,409, 643,450 and 609,182 of its common shares, respectively, to
certain employees and trustees. Typically, trustee share grants vest immediately. Employee share grants generally vest
ratably, on anniversaries of the grant date, however, in certain situations vesting is cliff-based after a specific number of
years and/or subject to meeting certain performance criteria (see note 16).

During 2013, 2012 and 2011, the Company repurchased/redeemed and retired the following shares of its preferred stock:

8.05% Series B Cumulative Redeemable Preferred Stock:

Shares redeemed and retired
Redemption cost (2012)(1)/repurchase cost (2011)
Deemed dividend(2)

6.50% Series C Cumulative Convertible Preferred Stock:

Shares repurchased and retired
Repurchase cost
Discount (Deemed negative dividend)(2)

7.55% Series D Cumulative Redeemable Preferred Stock:

Shares redeemed and retired
Redemption cost(1)
Deemed dividend(2)

$
$

2013

2012

2011

—
— $
— $

—
— $

— $

2,740,874
69,459
2,346

$
$

419,126
10,217
95

34,800
$
1,462
(229) $

125,000
5,239
(833)

6,200,000

155,621
5,230

$
$

—

— $
— $

—

—
—

(1) Includes accrued and unpaid dividends.
(2) Represents the difference between the redemption/repurchase cost and historical GAAP cost. Accordingly, net income (loss) was adjusted for the

deemed dividends/deemed negative dividends to arrive at net income (loss) attributable to common shareholders.

($000, except share/unit data)

Accumulated other comprehensive income (loss) as of December 31, 2013 and 2012 represented $4,439 and $(6,224),
respectively, of unrealized gain (loss) on interest rate swaps, net.

Changes in Accumulated Other Comprehensive Income (Loss)

Gains and Losses
on Cash Flow Hedges

Balance December 31, 2012

Other comprehensive income before reclassifications

Amounts of loss reclassified from accumulated other

comprehensive loss to interest expense

Balance December 31, 2013

(6,224)
7,559

3,104
4,439

Noncontrolling Interests:

In conjunction with several of the Company's acquisitions in prior years, sellers were issued OP units as a form of
consideration. All OP units, other than OP units owned by the Company, are redeemable for common shares at certain times,
at the option of the holders, and are generally not otherwise mandatorily redeemable by the Company. The OP units are
classified as a component of permanent equity as the Company has determined that the OP units are not redeemable securities
as defined by GAAP. Each OP unit is currently redeemable for approximately 1.13 common shares, subject to future
adjustments.

During 2013, 2012 and 2011, 202,241, 257,427 and 398,927 common shares, respectively, were issued by the Company,
in connection with OP unit redemptions, for an aggregate value of $1,053, $1,343 and $2,187, respectively.

Prior to the effective date of the LCIF and LCIF II merger (December 30, 2013), there were approximately 3,618,000 OP
units outstanding other than OP units owned by the Company (see note 22). All OP units receive distributions in accordance
with their respective partnership agreements. To the extent that the Company's dividend per common share is less than the
stated distribution per OP unit per the applicable partnership agreement, the distributions per OP unit are reduced by the
percentage reduction in the Company's dividend per common share. No OP units have a liquidation preference.

The following discloses the effects of changes in the Company's ownership interests in its noncontrolling interests:

Net income (loss) attributable to Lexington Realty Trust shareholders
Transfers from noncontrolling interests:

Increase in additional paid-in-capital for redemption of noncontrolling

OP units

Net Income (Loss) Attributable to Shareholders and
Transfers from Noncontrolling Interests

2013

2012

2011

1,630

180,316

(79,584)

1,053

1,343

2,187

Change from net income (loss) attributable to shareholders and transfers

from noncontrolling interests

2,683

181,659

(77,397)

($000, except share/unit data)

(16)

Benefit Plans

The Company maintains an equity award plan pursuant to which qualified and non-qualified options may be issued. No
common share options were issued in 2013, 2012 and 2011. The Company granted 1,248,501, 1,265,500 and 2,000,000
common share options on December 31, 2010 (“2010 options”), January 8, 2010 (“2009 options”) and December 31, 2008
(“2008 options”), respectively, at an exercise price of $7.95, $6.39 and $5.60, respectively. The 2010 options (1) vest 20%
annually on each December 31, 2011 through 2015 and (2) terminate on the earlier of (x) six months of termination of
service with the Company and (y) December 31, 2020. The 2009 options (1) vest 20% annually on each December 31, 2010
through 2014 and (2) terminate on the earlier of (x) six months of termination of service with the Company and (y) December
31, 2019. The 2008 options (1) vested 50% following a 20-day trading period where the average closing price of a common
share of the Company on the New York Stock Exchange (“NYSE”) is $8.00 or higher and vested 50% following a 20-day
trading period where the average closing price of a common share of the Company on the NYSE is $10.00 or higher, and
(2) terminate on the earlier of (x) termination of service with the Company or (y) December 31, 2018. As a result of the
share dividends paid in 2009, each of the 2008 options is exchangeable for approximately 1.13 common shares at an exercise
price of $4.97 per common share.

The Company engaged third parties to value the options as of each option's respective grant date. The third parties determined
the value to be $2,422 and $2,771 for the 2010 options and 2009 options, respectively, using the Black-Scholes model and
$2,480 for the 2008 options using the Monte Carlo model. The options are considered equity awards as they are settled
through the issuance of common shares. As such, the options were valued as of the grant date and do not require subsequent
remeasurement. There were several assumptions used to fair value the options including the expected volatility in the
Company's common share price based upon the fluctuation in the Company's historical common share price. The more
significant assumptions underlying the determination of fair value for options granted were as follows:

Weighted-average fair value of options granted
Weighted-average risk-free interest rate
Weighted-average expected option lives (in years)
Weighted-average expected volatility
Weighted-average expected dividend yield

2010
Options

2009
Options

2008
Options

1.94
2.54%
6.50
49.00%
7.40%

2.19
3.29%
6.70
59.08%
6.26%

1.24
1.33%
3.60
59.94%
14.40%

The Company recognizes compensation expense relating to these options over an average of 5.0 years for the 2010 options
and 2009 options and 3.6 years for the 2008 options. The Company recognized $1,037, $1,197 and $1,384 in compensation
expense in 2013, 2012 and 2011 respectively. The Company has unrecognized compensation costs of $1,518 relating to the
outstanding options as of December 31, 2013. The intrinsic value of an option is the amount by which the market value of
the underlying common share at the date the option is exercised exceeds the exercise price of the option. The total intrinsic
value of options exercised for the years ended December 31, 2013, 2012 and 2011 were $8,607, $1,603 and $2,100,
respectively.

Share option activity during the years indicated is as follows:

Balance at December 31, 2010

Exercised

Balance at December 31, 2011

Exercised

Balance at December 31, 2012

Exercised
Forfeited

Balance at December 31, 2013

Number of
Shares

Weighted-Average
Exercise Price
Per Share

4,389,605
(501,324)
3,888,281
(408,201)
3,480,080
(1,519,179)
(5,200)
1,955,701

6.23
5.16
6.36
5.73
6.44
5.77
7.47
6.95

As of December 31, 2013, the aggregate intrinsic value of options that were outstanding and exercisable was $4,288.

($000, except share/unit data)

Non-vested share activity for the years ended December 31, 2013 and 2012, is as follows:

Balance at December 31, 2011

Granted
Vested

Balance at December 31, 2012

Granted

Vested

Forfeited

Balance at December 31, 2013

Number of
Shares

Weighted-Average
Value Per Share

1,179,585
606,500
(320,639)
1,465,446

1,829,400
(770,229)
(3,571)
2,521,046

8.13
9.75
8.86
8.64

10.52

7.14

9.21

10.46

As of December 31, 2013, of the remaining 2,521,046 non-vested shares, 2,445,906 are subject to time-based vesting and
75,140 are subject to performance-based vesting. At December 31, 2013, there are 3,486,552 awards available for grant.
The Company has $22,426 in unrecognized compensation costs relating to the non-vested shares that will be charged to
compensation expense over an average of approximately 4.4 years.

The Company has established a trust for certain officers in which vested common shares granted for the benefit of the
officers are deposited. The officers exert no control over the common shares in the trust and the common shares are available
to the general creditors of the Company. As of December 31, 2013 and 2012, there were 427,531 common shares in the
trust.

The Company sponsors a 401(k) retirement savings plan covering all eligible employees. The Company makes a discretionary
matching contribution on a portion of employee participant salaries and, based on its profitability, may make an additional
discretionary contribution at each fiscal year end to all eligible employees. These discretionary contributions are subject to
vesting under a schedule providing for 25% annual vesting starting with the first year of employment and 100% vesting
after four years of employment. Approximately $298, $279 and $308 of contributions are applicable to 2013, 2012 and
2011, respectively.

During 2013, 2012 and 2011, the Company recognized $7,145, $3,030 and $2,062, respectively, in expense relating to
scheduled vesting and issuance of common share grants.

(17)

Related Party Transactions

In addition to related party transactions discussed elsewhere in this Annual Report, the Company has an indemnity obligation
to Vornado Realty Trust, one of its significant shareholders, with respect to actions by the Company that affect Vornado
Realty Trust's status as a REIT.

All related party acquisitions, sales and loans were approved by the independent members of the Company's Board of
Trustees or the Audit Committee.

During 2011, the Company advanced an aggregate $20,077 to NLS entities in the form of interest bearing, non-recourse
mortgage notes to satisfy maturing non-recourse mortgages. These advances were satisfied in full in 2011.

The Company leases certain properties to entities in which Vornado Realty Trust, a significant shareholder, has an interest.
During 2013, 2012 and 2011, the Company recognized $744, $842 and $864, respectively, in rental revenue, including
discontinued operations, from these properties. The Company leases its corporate office from an affiliate of Vornado Realty
Trust. Rent expense for this property was $1,225, $919 and $1,281 in 2013, 2012 and 2011, respectively.

In 2012, the Company's Board of Trustees granted a waiver of the Company's Code of Business Conduct and Ethics to
allow the Company to enter into a joint venture with an affiliate of its Chairman, which intends to raise capital from foreign
investors seeking entry into the United States of America. As of the date of filing this Annual Report, no joint venture
agreement has been entered into by the Company with the affiliate of its Chairman.

($000, except share/unit data)

(18)

Income Taxes

The benefit (provision) for income taxes relates primarily to the taxable income of the Company's taxable REIT subsidiaries.
The earnings, other than in taxable REIT subsidiaries, of the Company are not generally subject to federal income taxes at
the Company level due to the REIT election made by the Company.

Income taxes have been provided for on the asset and liability method. Under the asset and liability method, deferred income
taxes are recognized for the temporary differences between the financial reporting basis and the tax basis of assets and
liabilities.

The Company's benefit (provision) for income taxes for the years ended December 31, 2013, 2012 and 2011 is summarized
as follows:

Current:
Federal
State and local
NOL utilized
Deferred:
Federal
State and local

2013

2012

2011

(1,445) $
(1,675)
586

(595)
(130)
(3,259) $

(371) $

(1,156)
401

141
45
(940) $

(440)
(1,043)
566

1,399
400
882

Net deferred tax assets of $106 and $858 are included in other assets on the accompanying Consolidated Balance Sheets at
December 31, 2013 and 2012, respectively. These net deferred tax assets relate primarily to differences in the timing of the
recognition of income (loss) between GAAP and tax and net operating loss carry forwards.

The income tax benefit (provision) differs from the amount computed by applying the statutory federal income tax rate to
pre-tax operating income as follows:

Federal provision at statutory tax rate (34%)
State and local taxes, net of federal benefit
Other

2013

2012

2011

164
22
(3,445)
(3,259) $

(573) $
(110)
(257)
(940) $

(580)
(100)
1,562
882

For the years ended December 31, 2013, 2012 and 2011, the “other” amount is comprised primarily of state taxes of $1,362,
$1,042 and $917, respectively, the write-off of deferred tax liabilities (asset) of $(150), $0 and $3,535, respectively, and
permanent differences of $1,936, $37, and $17, respectively, relating to the transfer of certain assets of the Company's
taxable subsidiaries.

As of December 31, 2013, the Company had no net operating loss carry forwards for income taxes and $1,635 as of
December 31, 2012.

($000, except share/unit data)

A summary of the average taxable nature of the Company's common dividends for each of the years in the three-year period
ended December 31, 2013, is as follows:

Total dividends per share
Ordinary income
Qualifying dividend
Capital gain
25% rate gain
Return of capital

2013

2012

2011

0.60
35.53%
4.11%
2.09%
—
58.27%
100.00%

0.525
95.68%
0.99%
—
—
3.33%
100.00%

0.46
47.33%
1.11%
—
—
51.56%
100.00%

A summary of the average taxable nature of the Company's dividend on shares of its Series B Cumulative Redeemable
Preferred Stock for each of the years in the three-year period ended December 31, 2013, is as follows:

Total dividends per share
Ordinary income
15% rate - qualifying dividend
15% rate gain
25% rate gain

2013

2012

— $ 1.341667
—
—
—
—
—

98.98%
1.02%
—
—
100.00%

2011
2.0125
97.70%
2.30%
—
—
100.00%

A summary of the average taxable nature of the Company's dividend on shares of its Series C Preferred for each of the years
in the three-year period ended December 31, 2013, is as follows:

Total dividends per share
Ordinary income
Qualifying dividend
Capital gain
25% rate gain
Return of capital

2013

2012

2011

3.25
85.14%
9.85%
5.01%
—
—
100.00%

3.25
98.98%
1.02%
—
—
—
100.00%

3.25
97.70%
2.30%
—
—
—
100.00%

A summary of the average taxable nature of the Company's dividend on shares of its Series D Cumulative Redeemable
Preferred Stock for the years in the three-year period ended December 31, 2013, is as follows:

Total dividends per share
Ordinary income
Qualifying dividend
Capital gain
25% rate gain

2013
$ 1.043368

85.14%
9.85%
5.01%
—
100.00%

2012

1.8875

98.98%
1.02%
—
—
100.00%

2011
$ 1.76498(1)
97.70 %
2.30 %
—
—
100.00 %

_________
(1)
2011.

Of the total dividend paid in January 2011, $0.12252 was allocated to 2010 and $0.349355 was allocated to

($000, except share/unit data)

(19)

Commitments and Contingencies

In addition to the commitments and contingencies disclosed elsewhere, the Company has the following commitments and
contingencies.

The Company is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated
entities, to fund the expansion of the underlying leased properties. The Company, under certain circumstances, may guarantee
to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease
commissions on behalf of its subsidiaries. As of December 31, 2013, the Company had three outstanding guarantees for (1)
the completion of the base building improvements and the payment of a related tenant improvement allowance for an office
property in Orlando, Florida, which the unfunded amounts were estimated to be $57, (2) the payment of a tenant improvement
allowance of $234 for a property in Allen, Texas and (3) the full payment of the base building improvement, tenant
improvement allowance and lease commissions for an office property in Herndon, Virginia, which the unfunded amounts
were estimated to be $2,077.

From time to time, the Company is directly or indirectly involved in legal proceedings arising in the ordinary course of
business. Management believes, based on currently available information, and after consultation with legal counsel, that
although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate,
will not have a material adverse effect on the Company's business, financial condition and results of operations.

Other. Four of our executive officers have employment contracts and are entitled to severance benefits upon termination
by the Company without cause or termination by the executive officer with good reason, in each case, as defined in the
employment contract.

(20)

Supplemental Disclosure of Statement of Cash Flow Information

In addition to disclosures discussed elsewhere, during 2013, 2012 and 2011, the Company paid $92,788, $101,262 and
$103,427, respectively, for interest and $4,666, $1,018 and $1,289, respectively, for income taxes.

During 2013, the Company sold its interests in two properties, which included the assumption of the related non-recourse
mortgage debt of $40,356. In addition, the Company conveyed its interests in four properties to lenders in full satisfaction
of the aggregate $49,510 non-recourse mortgage notes payable.

During 2012, the Company sold its interest in a property, which included the assumption of the related non-recourse mortgage
debt of $8,921. In addition, the Company conveyed its interests in two properties to lenders in full satisfaction of the
aggregate $12,409 non-recourse mortgage notes payable.

In October 2011, the Company acquired control of a joint venture, Pemlex LLC, and recorded land and building assets of
$9,006, lease intangible assets of $6,294, other assets, net, of $107 and a $574 noncontrolling interest.

During 2011, the Company sold interests in three properties, which included the assumption of the aggregate related non-
recourse debt of $28,648 and $3,003 in seller financing.

($000, except share/unit data)

(21)

Unaudited Quarterly Financial Data

Total gross revenues(1)

Net income (loss)

Net income (loss) attributable to common shareholders

Net income (loss) attributable to common shareholders -

basic per share

Net income (loss) attributable to common shareholders -

diluted per share

2013

3/31/2013

6/30/2013

9/30/2013

12/31/2013

94,121
$
(2,123) $
(7,295) $

97,763

96,950

7,832
$
(849) $

5,155

2,978

(0.04) $

— $

0.01

(0.04) $

— $

0.01

109,606
(7,001)
(8,923)

(0.04)

3/31/2012

6/30/2012

9/30/2012

12/31/2012

2012

Total gross revenues(1)
Net income (loss)
Net income (loss) attributable to common shareholders
Net income (loss) attributable to common shareholders -

basic per share

Net income (loss) attributable to common shareholders -

diluted per share

$
$
$

$
75,360
5,478
$
(2,187) $

$
78,961
5,626
$
(3,392) $

83,800
175,289
168,943

(0.01) $

(0.02) $

1.09

(0.01) $

(0.02) $

0.96

$
$
$

92,059
(1,755)
(7,039)

(0.04)

_____________
(1) All periods have been adjusted to reflect the impact of properties sold during the years ended December 31, 2013 and 2012, and properties classified

as held for sale, which are reflected in discontinued operations in the Consolidated Statements of Operations.

The sum of the quarterly income (loss) attributable to common shareholders and per common share amounts may not equal
the full year amounts primarily because the computations of amounts allocated to participating securities and the weighted-
average number of common shares of the Company outstanding for each quarter and the full year are made independently.

(22)

Subsequent Events

Subsequent to December 31, 2013 and in addition to disclosures elsewhere in the financial statements:

(cid:127)

the Company acquired the completed 813,000 square foot industrial property in Rantoul, Illinois for an approximate
capitalized cost of $41,100;

the Company purchased an office property in Parachute, Colorado for $13,928. The property is subject to an
approximate 19-year net lease;

the Company borrowed $99,000 on the unsecured term loan and entered into an interest rate swap agreement to
fix the LIBOR component at a rate of 1.155% through February 2018;

the Company entered into a forward commitment to acquire a build-to-suit office property in Auburn Hills, Michigan
for $40,025. The property will be subject to a 14-year net lease;

the Company repaid all outstanding borrowings on its line of credit; and

in connection with the merger of LCIF II with and into LCIF, former LCIF II partners representing 170,193 OP
units elected or were deemed to elect to receive $1,962 in aggregate cash for such OP units.

Office

Little Rock, AR

— $

1,353 $

2,260 $

3,613 $

434

Dec-06

1980

Pine Bluff, AR

Glendale, AZ

Phoenix, AZ

Tempe, AZ

Tucson, AZ

Brea, CA

Lake Forest, CA

Palo Alto, CA

Centenial, CO

Colorado Springs, CO

Lakewood, CO

Louisville, CO

Wallingford, CT

Boca Raton, FL

Fort Meyers, FL

Lake Mary, FL

Orlando, FL

Palm Beach Gardens,
FL

Tampa, FL

Atlanta, GA

Chamblee, GA

Cumming, GA

Forest Park, GA

Jonesboro, GA

McDonough, GA

Stone Mountain, GA

Clive, IA

Meridian, ID

Chicago, IL

Lisle, IL

Schaumburg, IL

Columbus, IN

Fishers, IN

Indianapolis, IN

Lenexa, KS

Overland Park, KS

Baton Rouge, LA

Boston, MA

Foxboro, MA

Oakland, ME

Southfield, MI

Kansas City, MO

Pascagoula, MS

Bridgewater, NJ

Rockaway, NJ

Wall, NJ

Whippany, NJ

Rochester, NY

(2)

Milford, OH

—

58,256

—

10,008

—

20,101

—

9,748

—

10,156

29,730

9,767

—

11,564

10,232

35,297

—

12,764

—

9,259

—

16,831

—

14,292

14,900

21,847

14,578

17,544

—

271

9,418

4,666

—

681

37,269

3,442

12,398

4,851

2,748

1,569

3,657

1,049

4,290

795

4,535

4,438

3,538

586

4,066

2,018

1,014

870

770

1,558

668

778

693

672

1,158

2,255

5,155

3,236

5,007

235

2,808

1,700

2,828

4,769

1,252

3,814

2,231

551

—

2,433

618

1,415

4,646

8,985

4,063

645

3,124

603

8,260

19,966

12,148

4,037

50,441

13,769

16,977

15,187

12,554

8,857

9,605

4,773

17,160

2,941

14,830

15,103

9,046

35,012

17,212

7,950

269

187

186

1,368

1,242

146

6,405

276

—

7,797

46,180

13,692

21,553

45,729

19,360

17,918

6,075

41,956

10,919

16,040

25,653

8,774

12,124

20,154

3,677

6,802

20,428

26,961

19,711

26,042

16,140

874

17,678

24,632

12,148

4,718

87,710

17,211

29,375

20,038

15,302

10,426

13,262

5,822

21,450

3,736

19,365

19,541

12,584

35,598

21,278

9,968

1,283

1,057

956

2,926

1,910

924

7,098

948

1,158

10,052

51,335

16,928

26,560

45,964

22,168

19,618

8,903

46,725

12,171

19,854

27,884

9,325

12,124

22,587

4,295

8,217

25,074

35,946

23,774

26,687

19,264

Sep-12

870

Sep-12

7,659

May-00

566

232

14,667

4,059

16,931

4,691

3,532

4,874

2,164

1,292

4,666

359

4,302

4,280

4,049

6,359

Sep-12

Jun-07

Mar-02

Dec-06

May-07

Jun-07

Apr-05

Sep-08

Dec-03

Feb-03

Apr-05

Jun-07

Jan-07

Dec-06

5,467

May-98

529

233

190

191

521

352

167

343

172

—

535

13,497

Sep-12

Dec-06

Sep-12

Dec-06

Jun-04

Sep-12

Jun-07

3,175

Dec-06

357

8,379

4,830

11,325

384

10,188

2,813

2,661

11,753

480

6,695

4,877

307

—

4,536

10,467

5,776

4,929

4,798

Oct-13

Dec-06

Jun-07

Apr-05

Sep-12

Jun-07

May-07

Mar-07

Dec-04

Sep-12

Jul-04

Jun-07

Sep-12

Dec-06

Jan-04

Nov-06

Dec-06

Jun-07

1964/1972/
1988

1986/1997/
2000

1997

1998

1988

1983

2001

1973/1982

3, 4 & 13

7, 20 & 24

6 & 40

10, 11, 15 & 36

7, 10 & 30

10 & 40

2001/2002

10 & 40

1980/2002

2002

2, 3, 12 & 40

1987/2006

8, 9 & 40

1977/1993

8 & 40

1983/2002

1998

1996

1999

2003

1982

1996

1986

1972

1975

1972

1968/1982

1969

1971

2007

1973

N/A

2004

1986

1984

1979/1989/
2010

1980/2006

1999

2004

5, 10 & 32

4, 7 & 40

5, 12 & 40

8 - 40

8 & 27

6, 11 & 40

N/A

7 & 37

15 & 40

3 & 40

7, 9 & 30

3 - 40

6 - 40

7, 12 & 37

1980/2005

12 & 40

1997

1910

1982/1987

4, 6 & 40

10 & 40

16 & 40

2005

8, 12 & 40

1966/1989

7, 16 & 40

1963/2003

12 & 40

1995

1, 9 & 31

1985/2004

8, 15 & 40

2002/2004

1983

2006/2008

22 & 40

20 & 40

1988/2000

8, 10, 15 & 40

1991/1998

5 - 40

Office

Westerville, OH

Redmond, OR

Canonsburg, PA

Harrisburg, PA

Philadelphia, PA

Charleston, SC

Rock Hill, SC

Kingsport, TN

Knoxville, TN

Memphis, TN

Carrollton, TX

Farmers Branch, TX

Garland, TX

Houston, TX

Irving, TX

Mission, TX

San Antonio, TX

Temple, TX

Westlake, TX

Glen Allen, VA

Hampton, VA

Herndon, VA

Midlothian, VA

Bremerton, WA

Issaquah, WA

Long Term Lease - Office

Phoenix, AZ

Long Term Lease - Office

Tempe, AZ

Long Term Lease - Office

Englewood, CO

Long Term Lease - Office

Orlando, FL

Long Term Lease - Office

Tampa, FL

Long Term Lease - Office

Tampa, FL

Long Term Lease - Specialty Albany, GA

Long Term Lease - Office

McDonough, GA

Long Term Lease - Office

Lenexa, KS

Long Term Lease - Industrial Dry Ridge, KY

Long Term Lease - Industrial

Elizabethtown, KY

Long Term Lease - Industrial

Elizabethtown, KY

Long Term Lease - Industrial Hopkinsville, KY

Long Term Lease - Industrial Owensboro, KY

Long Term Lease - Industrial

Shreveport, LA

Long Term Lease - Office

Foxboro, MA

Long Term Lease - Office

Livonia, MI

Long Term Lease - Office

St Joseph, MO

Long Term Lease - Industrial Byhalia, MS

Long Term Lease - Industrial

Shelby, NC

Long Term Lease - Office

Omaha, NE

Long Term Lease - Office

Omaha, NE

(3)

(4)

(5)

(4)

—

9,092

8,044

43,989

7,350

—

3,686

—

12,341

19,130

18,435

—

11,620

14,866

3,453

—

5,571

11,515

8,253

—

12,222

—

10,686

9,339

6,164

30,714

—

7,520

—

11,690

39,871

3,393

13,144

2,473

7,684

2,919

19,000

—

15,000

—

7,962

2,085

2,064

1,055

900

13,209

1,189

551

513

621

464

5,291

1,789

3,427

3,984

2,218

1,875

1,500

800

490

7,476

4,889

2,556

2,800

227

2,361

1,543

2,333

5,127

9,409

1,100

1,655

5,126

6,268

5,585

—

2,207

11,498

895

146

1,468

1,443

6,909

560

890

352

631

393

860

3,791

935

607

1,006

1,421

2,058

2,566

9,265

8,316

10,910

10,676

55,289

8,724

4,313

403

6,282

4,467

97,032

18,157

22,050

27,308

8,473

10,732

14,683

26,962

2,813

43,932

29,701

2,911

15,585

8,181

23,221

19,503

10,683

24,640

12,853

12,685

5,445

13,778

16,058

36,099

9,442

27,851

66,673

5,496

559

5,607

11,234

41,615

12,553

26,868

4,862

16,154

11,956

21,840

5,405

13,714

14,004

21,483

18,862

32,343

8,324

11,350

10,380

11,965

11,576

68,498

9,913

4,864

916

6,903

4,931

102,323

19,946

25,477

31,292

10,691

12,607

16,183

27,762

3,303

51,408

34,590

5,467

18,385

8,408

25,582

21,046

13,016

29,767

22,262

13,785

7,100

18,904

22,326

41,684

9,442

30,058

78,171

6,391

705

7,075

12,677

48,524

13,113

27,758

5,214

16,785

12,349

22,700

9,196

14,649

14,611

22,489

20,283

34,401

10,890

6, 13 & 40

8 & 40

2, 9, 15 & 40

2000

2004

1996

1998

1957/1997

4 - 40

2005

2006

1981

2002

1871/1999

1985/2007

2003

2000

1980

2000

2003

2000

5, 6 & 14

1, 5, 7 & 40

20 & 40

13 & 40

19 & 40

8 & 40

4, 5 & 18

4, 5, 13 & 40

14, 15 & 40

10, 11, 20 & 40

1982/1999

3, 9 & 25

2003

1999

2003

2000

2001

2000

1999

1987

1985/1999

2000

2002

1987

1992

6 - 40

12 & 40

3, 8 & 35

6, 11 & 40

3, 10, 12 & 40

4 - 40

5 - 40

5, 10 & 40

9 - 40

6, 7, 15 & 40

4, 13 & 40

3, 6, 8 & 40

8 & 40

1986/2011

10, 17, & 40

1998

2013

30 & 40

15, 19 & 40

1984/2012

3, 5, 10,13 & 25

1999

2013

1999

2007

1988/1999

1995/2001

2001

1987/2006

1998/2001

Mar-07

2006

Sep-12

May-11

Jun-11

Dec-13

Nov-05

1965/1967/
1971

1987/1988/
1990

2012

2011

2013

1995

20 & 38

20 & 35

15 & 40

3, 11 & 38

5, 14, 15 & 40

22 & 40

25 & 40

2, 6 & 20

2 - 34

15 & 40

11, 20 & 40

20 & 40

30 & 40

2,197

478

3,392

7,704

26,401

May-07

Sep-12

May-07

Apr-05

Jun-05

2,707

Nov-06

May-11

Sep-12

Nov-06

Dec-06

Jun-04

Jun-07

Sep-12

Apr-05

Sep-12

May-07

June-07

Sep-12

Apr-05

Sep-12

May-07

Jun-07

Mar-00

Dec-99

Jun-07

Apr-05

Sep-12

Jun-07

Dec-12

Dec-05

Apr-13

Dec-06

Dec-13

Oct-13

Sep-12

Jul-08

Jun-05

288

411

1,313

17,689

7,078

6,231

7,874

835

5,481

6,912

14,771

376

13,661

8,465

267

9,218

583

7,288

6,917

3,709

7,818

4,041

5,550

366

4,414

4,969

1,083

2,310

780

36,411

597

8,124

3,708

7,937

1,437

5,015

3,992

3,708

893

984

588

1,432

1,766

—

2,057

Long Term Lease - Industrial Durham, NH

Long Term Lease - Office

Las Vegas, NV

Long Term Lease - Industrial

Long Island City,
NY

Long Term Lease - Land

New York, NY

Long Term Lease - Land

New York, NY

Long Term Lease - Land

New York, NY

Long Term Lease - Industrial Chillicothe, OH

Long Term Lease - Industrial Cincinnati, OH

Long Term Lease - Office

Columbus, OH

Long Term Lease - Office

Columbus, OH

(6)

—

69,330

80,893

63,277

—

Long Term Lease - Industrial Glenwillow, OH

15,865

Long Term Lease - Office

Eugene, OR

Long Term Lease - Industrial Bristol, PA

Long Term Lease - Office

Jessup, PA

Long Term Lease - Industrial Chester, SC

Long Term Lease - Office

Florence, SC

Long Term Lease - Office

Fort Mill, SC

Long Term Lease - Office

Fort Mill, SC

Long Term Lease - Office

Knoxville, TN

Long Term Lease - Office

Allen, TX

Long Term Lease - Office

Arlington, TX

Long Term Lease - Industrial Houston, TX

Long Term Lease - Office

Houston, TX

Long Term Lease - Office

Houston, TX

Long Term Lease - land/
infrastructure

Missouri City, TX

Long Term Lease - Specialty

Tomball, TX

Long Term Lease - Land

Danville, VA

Long Term Lease - Retail

Edmonds, WA

Long Term Lease - Industrial

Eau Claire, WI

Long Term Lease - Office

Huntington, WV

Industrial

(2)

Moody, AL

Jacksonville, FL

Orlando, FL

Tampa, FL

Lavonia, GA

McDonough, GA

Des Moines, IA

Dubuque, IA

Rockford, IL

Plymouth, IN

Owensboro, KY

Shreveport, LA

North Berwick, ME

Kalamazoo, MI

Marshall, MI

Plymouth, MI

Temperance, MI

Minneapolis, MN

Olive Branch, MS

Franklin, NC

—

9,952

—

6,867

—

29,706

—

9,102

—

6,500

—

8,251

22,782

—

9,520

—

6,439

6,032

—

7,433

15,901

—

320

3,464

12,099

—

73,148

86,569

65,218

735

1,049

1,594

432

2,228

1,541

2,508

2,520

1,629

774

1,798

3,601

1,079

5,591

1,274

15,055

481

16,613

14,555

3,174

3,453

—

421

1,368

654

573

1,030

2,160

171

2,463

1,528

2,052

371

509

254

819

1,078

1,383

1,942

143

2,296

3,040

1,886

198

296

18,094

53,164

42,624

—

9,021

8,784

10,481

2,773

24,530

13,098

15,863

17,678

8,470

3,629

26,038

15,340

11,072

25,421

13,817

57,949

2,352

58,226

5,895

7,405

—

3,947

5,590

9,527

9,943

1,592

10,869

7,347

7,657

24,291

14,247

8,443

2,573

5,289

7,969

2,439

10,134

32,397

14,169

4,302

900

13,398

14,924

1,922

10,276

1,320

100

21,558

65,263

42,624

73,148

86,569

65,218

9,756

9,833

12,075

3,205

26,758

14,639

18,371

20,198

10,099

4,403

27,836

18,941

12,151

31,012

15,091

73,004

2,833

74,839

20,450

10,579

3,453

3,947

6,011

10,895

10,597

2,165

11,899

9,507

7,828

26,754

15,775

10,495

2,944

5,798

8,223

3,258

11,212

33,780

16,111

4,445

940

15,694

17,964

3,808

10,474

1,616

4,198

9,511

Jun-07

Dec-06

1986/2003

1983/1994

2,357

Mar-13

2013

N/A

1995/1998

6, 15 & 26

1991

2005

1999/2006

1996

2012

10, 14 & 40

7, 12, 15, 25 &
40

1983/1987

10, 16, 30 & 40

2012

13, 15 & 40

2001/2005

9, 13 & 34

2012

2004

2002

1997

12 & 40

11, 15 & 40

5, 11, 20 & 40

11, 14 & 40

1981/1983

6, 7, 11 & 25

2003

1, 12 & 40

Various

11, 12, 16 & 35

2002

11, 20 & 31

1976/1984

10 & 40

N/A

2005

N/A

1981

13, 14 & 40

N/A

1993/2004

10, 15 & 28

2011

2004

1959/1967

1980

1986

2005

14 & 40

15 & 40

1 - 40

9 - 40

8, 12 & 40

2000/2007

2000

2001

1998

1992

5, 11 & 34

11, 12 & 40

2000/2003

3, 6 & 34

1975/1995

2012

8,10 & 40

1965/1980

10 & 40

1999/2004

8, 9 & 40

1968/1972/
2008

4, 6 & 10

1979

12, 20 & 40

1996/1998

1978/1993

2, 5 & 40

2003

1989

1996

3, 29 & 40

8, 15 & 40

2, 8 & 29

—

999

1,497

786

173

Oct-13

Oct-11

Dec-06

Dec-10

Jul-11

4,673

Dec-06

459

4,902

991

413

202

12,503

4,066

5,027

3,686

1,040

1,353

12,841

1,404

375

—

814

317

621

5,160

308

2,145

5,456

288

4,519

781

2,305

529

1,015

392

704

559

5,923

759

630

648

4,160

3,304

6,260

Dec-12

Mar-98

Aug-12

Sep-12

Feb-12

Nov-04

Dec-02

Mar-05

May-11

Sep-12

Mar-13

Dec-13

Mar-04

Apr-12

Sep-12

Oct-13

Dec-06

Sep-12

Jan-12

Feb-04

Sep-12

Dec-06

Jul-88

Sep-12

Dec-06

Sep-12

Jul-03

Dec-06

Sep-12

Dec-06

Jun-12

Dec-06

Sep-12

Aug-87

Jun-07

Sep-12

Dec-04

Sep-12

Nov-01

1998/2006

Industrial

Multi-tenanted

Retail

Henderson, NC

High Point, NC

Lumberton, NC

Statesville, NC

(2)

Erwin, NY

Columbus, OH

Hebron, OH

Streetsboro, OH

Duncan, SC

Laurens, SC

Collierville, TN

Crossville, TN

Franklin, TN

Memphis, TN

Millington, TN

San Antonio, TX

Waxahachie, TX

Winchester, VA

Phoenix, AZ

Los Angeles, CA

Palm Beach
Gardens, FL

Honolulu, HI

Baltimore, MD

Bridgeton, MO

Cary, NC

Allentown, PA

Florence, SC

Antioch, TN

Johnson City, TN

Arlington, TX

Houston, TX

Glen Allen, VA

Manteca, CA

San Diego, CA

Port Richey, FL

Galesburg, IL

Lawrence, IN

Billings, MT

Jefferson, NC

Lexington, NC

Thomasville, NC

Port Chester, NY

Watertown, NY

Canton, OH

Franklin, OH

Lorain, OH

Lawton, OK

Oklahoma City, OK

Tulsa, OK

Moncks Corner, SC

Chattanooga, TN

Paris, TN

—

13,158

8,720

—

18,223

—

10,281

—

55,000

—

6,473

856

546

—

480

—

805

—

1,212

—

1,488

1,330

405

891

1,648

1,990

1,063

1,681

2,441

884

5,552

714

545

—

1,054

1,553

723

2,482

652

3,823

1,831

5,110

787

8,259

37,564

1,853

5,342

1,052

3,235

3,847

1,214

589

1,875

818

2,082

—

1,376

560

404

273

832

208

3,841

386

884

722

1,893

663

1,782

447

487

247

5,953

11,183

12,049

16,771

10,810

10,580

4,271

7,184

25,092

8,626

21,177

4,783

6,999

5,673

11,538

12,326

19,383

38,535

13,045

12,276

14,892

10,911

7,441

12,513

12,454

17,662

12,458

12,570

5,334

8,865

27,533

9,510

26,729

5,497

7,544

5,673

12,592

13,879

20,106

41,017

13,697

16,099

16,723

16,021

1,805

4,696

2,713

3,767

543

2,435

1,286

2,389

5,666

1,486

4,768

1,224

2,806

686

11,366

2,653

8,305

17,553

9,190

2,765

1,939

5,835

Jul-04

Dec-06

Sep-12

Dec-06

Dec-97

Dec-01

Jun-07

Dec-05

Jan-06

Sep-12

Feb-88

Dec-06

Apr-05

Jul-04

Dec-03

Jun-07

Nov-01

Dec-04

2,894

3,681

1,156

May-98

15,609

193,423

6,322

20,525

2,555

16,316

13,890

10,962

6,971

12,454

11,148

8,546

13,310

3,040

2,926

2,141

2,048

955

2,261

769

9,087

5,548

4,418

1,721

8,917

1,951

2,694

2,879

1,523

1,443

794

1,301

40,865

867

5,073

179

3,869

995

1,696

480

5,477

3,663

1,318

2,286

532

566

313

184

179

251

237

1,115

1,071

Dec-06

Jun-07

Sep-12

May-04

May-07

Dec-06

Sep-12

Apr-05

Jun-07

May-07

Dec-06

May-07

Dec-06

May-07

Nov-01

Dec-06

1,433

May-07

343

179

2,198

285

140

Dec-06

Sep-12

Dec-96

Dec-06

7,350

155,859

4,469

15,183

1,503

13,081

10,043

9,748

6,382

10,579

10,330

6,464

13,310

1,664

2,366

1,737

1,775

884

1,429

561

5,246

5,162

3,534

999

7,024

1,288

912

2,432

1,510

956

547

101

2002

18 & 40

1998/2006

1999/2002

3, 15 & 40

2006

1973

1999

2000

2004

4, 8 & 34

1, 2, 5 & 40

12, 20, 25 & 40

2005/2008

1991/1993

2, 5 & 40

1984/2012

9, 14, 21 & 40

1989/2006

17 & 40

1970/1983

1, 4 & 12

1987

1973

1997

2001

8 &15

9, 10, 16 & 40

17 & 40

1996/2000

10, 16 & 40

2001

1981/2009

2000

1996

1979/2002

1973/2009

1981

1999

1980

1998

1999

1979

2003

2000

1993

1980

1992

1983

1981

1993

1982

1993

1995

1961/1978

1993

1984

1991/1996

1981

1982

1983/1995

1982

4 & 40

5 - 40

13 & 40

8 - 40

5 & 40

5 - 40

2, 20 & 40

5, 9 & 18

10, 20 & 40

5 - 40

9, 10, 20, 25 &
40

1, 12 & 40

4, 5, 13 & 40

5 - 40

23 & 40

12 & 40

4, 19, & 36

23 & 40

5 & 13

14 & 24

Retail

Construction in progress

Dallas, TX

Staunton, VA

Fairlea, WV

—

565

—

861

1,028

501

—

2,362

326

1,985

—

3,223

1,354

2,486

4,306

282

381

—

Dec-06

May-07

1960

1971

1993/1999

12 & 40

—

Subtotal

1,188,489

793,418

3,014,570

3,812,294

775,617

(1)

9,000

1,197,489 $

793,418 $

3,014,570 $

3,812,294 $

775,617

(1) Property is classified as a capital lease.
(2) Properties are cross-collateralized.
(3) Properties are cross-collateralized.
(4) Properties are cross-collateralized.
(5) Properties are cross-collateralized.
(6) Properties are cross-collateralized.

102

(A) The initial cost includes the purchase price paid directly or indirectly by the Company. The total cost basis of the
Company's properties at December 31, 2013 for federal income tax purposes was approximately $4.6 billion.

2013

2012

2011

3,564,466

3,172,246

3,363,586

492,437
(212,771)
(31,741)
(97)
3,812,294

540,847
(138,041)
(10,553)
(33)
3,564,466

143,382
(230,397)
(103,727)
(598)
3,172,246

738,068

638,368

122,057

119,067

(84,508)
—

(19,367)
—

775,617

738,068

601,239

114,247

(76,939)
(179)
638,368

Reconciliation of real estate, at cost:

Balance at the beginning of year

Additions during year

Properties sold during year

Properties impaired during the year

Other reclassifications

Balance at end of year

Reconciliation of accumulated depreciation and amortization:

Balance at the beginning of year

Depreciation and amortization expense

Accumulated depreciation and amortization of properties sold

and impaired during year

Other reclassifications

Balance at end of year

103

and Disclosure

Not applicable.

Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in
Rule 13a-15(e) or 15d-15(e) under the Exchange Act), as of the end of the period covered by this Annual Report was made under
the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer
who are our Principal Executive Officer and our Principal Financial/Accounting Officer, respectively. Based upon this evaluation,
our Chief Executive Officer and our Chief Financial Officer have concluded that our disclosure controls and procedures (a) are
effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is timely
recorded, processed, summarized and reported and (b) include, without limitation, controls and procedures designed to ensure that
information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated
to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions
regarding required disclosure.

Reporting

Management's Report on Internal Control Over Financial Reporting, which appears on page 60 of this Annual Report, is

incorporated herein by reference.

Firm

The Report of our Independent Registered Public Accounting Firm constituting the Attestation Report of our Independent

Registered Public Accounting Firm, which appears on page 62 of this Annual Report, is incorporated herein by reference.

Reporting

There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during
the fourth quarter ended December 31, 2013 that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.

Information

Not applicable.

104

OfGovernance

The following sets forth certain information relating to our executive officers:

Age 68

Age 49

Age 50

Age 53

Mr. Roskind, our Chairman since March 2008, previously served as Co-Vice Chairman
from December 2006 to March 2008, Chairman from October 1993 to December 2006
and Co-Chief Executive Officer from October 1993 to January 2003. He founded The
LCP Group, L.P., a real estate advisory firm, in 1973 and has been its Chairman since
1976. Mr. Roskind also serves as Chairman of Crescent Hotels and Resorts and Live In
America Financial Services LLC.

Mr. Rouse, our Vice Chairman since March 2008 and our Chief Investment Officer since
January 2003, previously served as one of our trustees from October 1993 to May 2010,
our Co-Vice Chairman from December 2006 to March 2008, our President from October
1993 to April 1996 and our Co-Chief Executive Officer from October 1993 to January
2003.

Mr. Eglin has served as our Chief Executive Officer since January 2003, our President
since April 1996 and as a trustee since May 1994. He served as one of our Executive
Vice Presidents from October 1993 to April 1996 and our Chief Operating Officer from
October 1993 to December 2010.

Mr. Carroll has served as our Chief Financial Officer since May 1998, our Treasurer
since January 1999 and one of our Executive Vice Presidents since January 2003. Prior
to joining us, Mr. Carroll was, from 1986 to 1998, in the real estate practice of Coopers
& Lybrand L.L.P., a public accounting firm that was one of the predecessors of
PricewaterhouseCoopers LLP.

Mr. Wood served as our Chief Accounting Officer from October 1993 to December
2010, and has served as one of our Vice Presidents and our Secretary since 1993 and
our Chief Tax Compliance Officer since January 2011.

The information relating to our Code of Business Conduct and Ethics, is included in Part I, Item 1 of this Annual Report. The
information relating to our trustees, including the audit committee of our Board of Trustees and our Audit Committee financial expert,
and certain information relating to our executive officers will be in our Definitive Proxy Statement for our 2014 Annual Meeting of
Shareholders, which we refer to as our Proxy Statement, and is incorporated herein by reference.

Compensation

The information required to be furnished pursuant to this item will be set forth under the appropriate captions in the Proxy

Statement, and is incorporated herein by reference.

Management Matters

The information required to be furnished pursuant to this item will be set forth under the appropriate captions in the Proxy

Statement, and is incorporated herein by reference.

The information required to be furnished pursuant to this item will be set forth under the appropriate captions in the Proxy
Statement, and is incorporated herein by reference. In addition, certain information regarding related party transactions is set forth
in note 17 to the Consolidated Financial Statements beginning on page 93 of this Annual Report.

Services

The information required to be furnished pursuant to this item will be set forth under the appropriate captions in the Proxy

Statement, and is incorporated herein by reference.

105

Schedules

(a)(1) Financial Statements
(2) Financial Statement Schedule
(3) Exhibits

Exhibit No.

Description

59
98
106

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

3.9

— Articles of Merger and Amended and Restated Declaration of Trust of the Company, dated December

31, 2006 (filed as Exhibit 3.1 to the Company’s Current Report on Form 8-K filed January 8, 2007 (the
“01/08/07 8-K”))(1)

— Articles Supplementary Relating to the 7.55% Series D Cumulative Redeemable Preferred Stock, par

value $.0001 per share (filed as Exhibit 3.3 to the Company’s Registration Statement on Form 8A filed
February 14, 2007 (the “02/14/07 Registration Statement”))(1)

— Articles Supplementary Relating to the Reclassification of 8.05% Series B Cumulative Redeemable
Preferred Stock, par value $0.0001 per share, and 7.55% Series D Cumulative Redeemable Preferred
Stock, par value $0.0001 per share (filed as Exhibit 3.4 to the Company's Current Report on Form 8-K
filed November 21, 2013)(1)

— Amended and Restated By-laws of the Company (filed as Exhibit 3.2 to the 01/08/07 8-K)(1)

— First Amendment to Amended and Restated By-laws of the Company (filed as Exhibit 3.1 to the

Company’s Current Report on Form 8-K filed November 20, 2009)(1)

— Fifth Amended and Restated Agreement of Limited Partnership of Lepercq Corporate Income Fund L.P.

(“LCIF”), dated as of December 31, 1996, as supplemented (the “LCIF Partnership Agreement”) (filed
as Exhibit 3.3 to the Company’s Registration Statement on Form S-3/A filed September 10, 1999 (the
“09/10/99 Registration Statement”))(1)

— Amendment No. 1 to the LCIF Partnership Agreement dated as of December 31, 2000 (filed as Exhibit
3.11 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2003, filed
February 26, 2004 (the “2003 10-K”))(1)

— First Amendment to the LCIF Partnership Agreement effective as of June 19, 2003 (filed as Exhibit 3.12

to the 2003 10-K)(1)

— Second Amendment to the LCIF Partnership Agreement effective as of June 30, 2003 (filed as Exhibit

3.13 to the 2003 10-K)(1)

3.10

— Third Amendment to the LCIF Partnership Agreement effective as of December 31, 2003 (filed as

Exhibit 3.13 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2004,
filed on March 16, 2005 (the “2004 10-K”))(1)

3.11

3.12

3.13

3.14

3.15

3.16

3.17

3.18

3.19

— Fourth Amendment to the LCIF Partnership Agreement effective as of October 28, 2004 (filed as
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed November 4, 2004)(1)

— Fifth Amendment to the LCIF Partnership Agreement effective as of December 8, 2004 (filed as Exhibit

10.1 to the Company’s Current Report on Form 8-K filed December 14, 2004 (the “12/14/04 8-K”))(1)

— Sixth Amendment to the LCIF Partnership Agreement effective as of June 30, 2003 (filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K filed January 3, 2005 (the “01/03/05 8-K”))(1)

— Seventh Amendment to the LCIF Partnership Agreement (filed as Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed November 3, 2005)(1)

— Eighth Amendment to the LCIF Partnership Agreement effective as of March 26, 2009 (filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K filed April 27, 2009 (the “4/27/09 8-K”)(1)

— Second Amended and Restated Agreement of Limited Partnership of Lepercq Corporate Income Fund II

L.P. (“LCIF II”), dated as of August 27, 1998 the (“LCIF II Partnership Agreement”) (filed as Exhibit
3.4 to the 09/10/99 Registration Statement)(1)

— First Amendment to the LCIF II Partnership Agreement effective as of June 19, 2003 (filed as Exhibit

3.14 to the 2003 10-K)(1)

— Second Amendment to the LCIF II Partnership Agreement effective as of June 30, 2003 (filed as Exhibit

3.15 to the 2003 10-K)(1)

— Third Amendment to the LCIF II Partnership Agreement effective as of December 8, 2004 (filed as

Exhibit 10.2 to 12/14/04 8-K)(1)

106

3.20

3.21

3.22

3.23

3.24

3.25

4.1

4.2

4.3

4.4

4.5

4.6

4.7

4.8

4.9

4.10

4.11

4.12

4.13

4.14

4.15

4.16

— Fourth Amendment to the LCIF II Partnership Agreement effective as of January 3, 2005 (filed as

Exhibit 10.2 to 01/03/05 8-K)(1)

— Fifth Amendment to the LCIF II Partnership Agreement effective as of July 23, 2006 (filed as Exhibit

99.5 to the Company’s Current Report on Form 8-K filed July 24, 2006)(1)

— Sixth Amendment to the LCIF II Partnership Agreement effective as of December 20, 2006 (filed as

Exhibit 10.1 to the Company’s Current Report on Form 8-K filed December 22, 2006)(1)

— Seventh Amendment to the LCIF II Partnership Agreement effective as of March 26, 2009 (filed as

Exhibit 10.2 to the 4/27/09 8-K)(1)

— Agreement and Plan of Merger dated as of December 23, 2013, by and among LCIF and LCIF II (filed

as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on December 24, 2013)(1)

— Sixth Amended and Restated Agreement of Limited Partnership of LCIF, dated as of December 30, 2013

(2)

— Specimen of Common Shares Certificate of the Company (filed as Exhibit 4.1 to the Company’s Annual

Report on Form 10-K for the year ended December 31, 2006)(1)

— Form of 6.50% Series C Cumulative Convertible Preferred Stock certificate (filed as Exhibit 4.1 to the

Company’s Registration Statement on Form 8A filed December 8, 2004)(1)

— Form of 7.55% Series D Cumulative Redeemable Preferred Stock certificate (filed as Exhibit 4.1 to the

02/14/07 Registration Statement)(1)

— Indenture, dated as of January 29, 2007, among the Company (as successor by merger), the other

guarantors named therein and U.S. Bank National Association, as trustee (“U.S. Bank”) (filed as Exhibit
4.1 to the Company’s Current Report on Form 8-K filed January 29, 2007 (the “01/29/07 8-K”))(1)

— Amended and Restated Trust Agreement, dated March 21, 2007, among the Company, The Bank of New
York Trust Company, National Association (“BONY”), The Bank of New York (Delaware), the
Administrative Trustees (as named therein) and the several holders of the Preferred Securities from time
to time (filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on March 27, 2007 (the
“03/27/2007 8-K”))(1)

— Junior Subordinated Indenture, dated as of March 21, 2007, between Lexington Realty Trust and BONY

(filed as Exhibit 4.2 to the 03/27/07 8-K)(1)

— Fourth Supplemental Indenture, dated as of December 31, 2008, among the Company, the other

guarantors named therein and U.S. Bank, as trustee (filed as Exhibit 4.1 to the Company’s Current
Report on Form 8-K filed on January 2, 2009)(1)

— Fifth Supplemental Indenture, dated as of June 9, 2009, among the Company (as successor to the MLP),
the other guarantors named therein and U.S. Bank, as trustee (filed as Exhibit 4.1 to the Company's
Current Report on Form 8-K filed on June 15, 2009)(1)

— Sixth Supplemental Indenture, dated as of January 26, 2010 among the Company, the guarantors named
therein and U.S. Bank, as trustee, including the Form of 6.00% Convertible Guaranteed Notes due 2030
(filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed January 26, 2010)(1)

— Seventh Supplemental Indenture, dated as of September 28, 2012, among the Company, certain

subsidiaries of the Company signatories thereto, and U.S. Bank National Association, as trustee (filed as
Exhibit 4.1 to the Company's Current Report on Form 8-K filed on October 3, 2012)(1)

— Eight Supplemental Indenture, dated as of February 13, 2013, among the Company, certain subsidiaries
of the Company signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to the Company's
Current Report on Form 8-K filed on February 13, 2013 (the “02/13/13 8-K”))(1)

— Ninth Supplemental Indenture, dated as of May 6, 2013, among the Company, certain subsidiaries of the

Company signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to the Company's Current
Report on Form 8-K filed on May 8, 2013)(1)

— Tenth Supplemental Indenture, dated as of June 10, 2013, among the Company, certain subsidiaries of
the Company signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.3 to the Company's
Current Report on Form 8-K filed on June 13, 2013 (the “06/13/13 8-K”))(1)

— Tenth Supplemental Indenture, dated as of September 30, 2013, among the Company, certain

subsidiaries of the Company signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to the
Company's Current Report on Form 8-K filed on October 3, 2013)(the “10/3/13 8-K”))(1)

— Indenture, dated as of June 10, 2013, among the Company, certain subsidiaries of the Company
signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to the 06/13/13 8-K)(1)

— First Supplemental Indenture, dated as of September 30, 2013, among the Company, certain subsidiaries

of the Company signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.2 to the 10/3/13 8-K)
(1)

107

10.1

10.2

10.3

10.4

10.5

10.6

10.7

10.8

10.9

10.10

10.11

10.12

10.13

10.14

10.15

10.16

10.17

— 1994 Employee Stock Purchase Plan (filed as Exhibit D to the Company’s Definitive Proxy Statement

dated April 12, 1994)(1, 4)

— The Company’s 2011 Equity-Based Award Plan (filed as Exhibit 10.1 to the Company's Current Report

on Form 8-K/A filed June 22, 2011)(1, 4)

— Form of Compensation Agreement (Long-Term Compensation) between the Company and each of the
following officers: Richard J. Rouse and Patrick Carroll (filed as Exhibit 10.15 to the 2004 10-K)(1, 4)

— Form of Compensation Agreement (Bonus and Long-Term Compensation) between the Company and

each of the following officers: E. Robert Roskind and T. Wilson Eglin (filed as Exhibit 10.16 to the
2004 10-K)(1, 4)

— Form of Share Option Award Agreement (filed as Exhibit 10.3 to the Company’s Current Report on

Form 8-K/A filed on November 24, 2010)(1, 4)

— Form of 2010 Share Option Award Agreement (filed as Exhibit 10.2 to the Company’s Current Report

on Form 8-K/A filed November 24, 2010)(1, 4)

— Form of December 2010 Share Option Award Agreement (filed as Exhibit 10.1 to the Company’s

Current Report on Form 8-K filed January 6, 2011(1, 4)

— Amended and Restated Rabbi Trust Agreement, originally dated January 26, 1999 (filed as Exhibit 10.2

to the 01/02/09 8-K)(1, 4)

— Form of 2011 Nonvested Share Agreement (filed as Exhibit 10.1 to the Company's Current Report on

Form 8-K filed on January 6, 2012 (the "01/06/12 8-K")(1, 4)

— Form of Nonvested Share Agreement (filed as Exhibit 10.1 to the Company's Current Report on Form 8-

K filed on December 26, 2012)(1, 4)

— Employment Agreement, dated as of January 15, 2012, between the Company and E. Robert Roskind

(filed as Exhibit 10.10 to the Company's Annual Report on Form 10-K for the year ended December 31,
2011 (the "2011 10-K"))(1, 4)

— Employment Agreement, dated as of January 15, 2012, between the Company and T. Wilson Eglin (filed

as Exhibit 10.11 to the 2011 10-K)(1, 4)

— Employment Agreement, dated as of January 15, 2012, between the Company and Richard J. Rouse

(filed as Exhibit 10.12 to the 2011 10-K)(1, 4)

— Employment Agreement, dated as of January 15, 2012, between the Company and Patrick Carroll (filed

as Exhibit 10.13 to the 2011 10-K)(1, 4)

— Long-Term Nonvested Share Agreement dated as of January 12, 2012, between the Company and T.

Wilson Eglin (filed as Exhibit 10.14 to the 2011 10-K)(1, 4)

— Form of Long-Term Retention Nonvested Share Agreement (filed as Exhibit 10.1 to the Company's

Current Report on Form 8-K filed on January 11, 2013)(1, 4))

— Form of Amended and Restated Indemnification Agreement between the Company and certain officers
and trustees (filed as Exhibit 10.20 to the Company’s Quarterly Report Form 10-Q for the quarter ended
September 30, 2008)(1)

10.18

— Second Amended and Restated Credit Agreement, dated as of February 12, 2013 among the Company

and LCIF as borrowers, KeyBank National Association (“Key”), as agent, and each of the financial
institutions initially a signatory thereto (filed as Exhibit 10.1 to the 02/13/13 8-K)(1)

10.19

10.20

10.21

— Amended and Restated Term Loan Agreement, dated as of February 13, 2013 among the Company and
LCIF, as borrowers, Wells Fargo Bank, National Association (“Wells”), as agent, and each of the
financial institutions initially a signatory thereto (filed as Exhibit 10.2 to the 02/13/13 8-K)(1)

— Funding Agreement, dated as of July 23, 2006, by and between LCIF and the Company (filed as Exhibit

99.4 to the Company's Current Report on Form 8-K filed on July 24, 2006)(1)

— Letter Agreement among the Company (as successor by merger), Apollo Real Estate Investment Fund

III, L.P., NKT Advisors LLC, Vornado Realty Trust, VNK Corp., Vornado Newkirk LLC, Vornado MLP
GP LLC and WEM-Brynmawr Associates LLC (filed as Exhibit 10.15 to Amendment No. 5 to Newkirk
Registration Statement on Form S-11/A filed October 28, 2005 (“Amendment No. 5 to NKT’s S-11”))
(1)

10.22

— Amendment to the Letter Agreement among the Company (as successor by merger), Apollo Real Estate

Investment Fund III, L.P., NKT Advisors LLC, Vornado Realty Trust, Vornado Realty L.P., VNK Corp.,
Vornado Newkirk LLC, Vornado MLP GP LLC, and WEM-Brynmawr Associates LLC (filed as Exhibit
10.25 to Amendment No. 5 to NKT’s S-11)(1)

10.23

— Second Amended and Restated Ownership Limit Waiver Agreement (Vornado), dated as of December 6,

2010, between the Company and Vornado Realty, L.P. (together with certain affiliates) (filed as Exhibit
10.1 to the Company’s Current Report on Form 8-K filed on December 6, 2010)(1)

108

10.24

— First Amendment to Second Amended and Restated Credit Agreement, dated as of September 30, 2013,
among the Company and LCIF, as borrowers, Key, as agent, and each of the financial institutions
signatory thereto (filed as Exhibit 10.1 to the 10/13/13 8-K)(1)

10.25

— First Amendment to Amended and Restated Term Loan Agreement, dated as of September 30, 2013,

among the Company and LCIF, as borrowers, Wells, as agent, and each of the financial institutions
signatory thereto (filed as Exhibit 10.2 to the 10/13/13 8-K)(1)

10.26

— Second Amendment to Second Amended and Restated Credit Agreement, dated as of December 30,

2013, among the Company and LCIF, as borrowers, Key, as agent, and each of the financial institutions
signatory thereto (filed as Exhibit 10.1 to the Company's Current Report on Form 8-K filed January 6,
2014 (the “01/06/14” 8-K))(1)

10.27

— Second Amendment to Amended and Restated Term Loan Agreement, dated as of December 30, 2013,
among the Company and LCIF, as borrowers, Wells, as agent, and each of the financial institutions
signatory thereto (filed as Exhibit 10.2 to the 01/06/14 8-K)(1)

10.28

— Ownership Limitation Waiver Agreement (BlackRock), dated as of November 18, 2010 (filed as of

Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on November 24, 2010 (the “11/24/10
8-K”)(1)

10.29

— Ownership Limitation Waiver Agreement (Cohen & Steers), dated as of November 18, 2010 (filed as

Exhibit 10.2 to the 11/24/10 8-K)(1)

10.30

— First Amendment to Ownership Limitation Waiver Agreement (Cohen & Steers), dated as of April 19,
2011 (filed as Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 25, 2011)(1)

10.31

— Amended and Restated Registration Rights Agreement, dated as of November 3, 2008, between the

Company and Vornado Realty, L.P. and Vornado LXP LLC (filed as Exhibit 10.3 to the 11/06/08 8-K)(1)

10.32

— Agreement Regarding Disposition of Property and Other Matters, dated April 27, 2012, among the

Company, LMLP GP LLC, Inland American (Net Lease) Sub, LLC and NLSAF (filed as Exhibit 10.1 to
the Company's Current Report on Form 8-K filed on April 30, 2012)(1)

10.33

— Interest Purchase and Sale Agreement, dated as of August 31, 2012, among the Company, LCIF and

Inland American (Net Lease) Sub, LLC, LMLP GP LLC and Net Lease Strategic Assets Fund L.P. (filed
as Exhibit 10.1 to the Company's Current Report on Form 8-K filed on September 6, 2012)(1)

10.34

— Equity Distribution Agreement, dated as of January 11, 2013, among the Company and LCIF, on the one

hand, and Jefferies & Company, Inc., on the other hand (filed as Exhibit 1.1 to the Company's Current
Report on Form 8-K filed on January 14, 2013 (the “01/14/13 8-K”))(1)

10.35

10.36

31.1

31.2

32.1

32.2

— Equity Distribution Agreement, dated as of January 11, 2013, among the Company and LCIF, on the one
hand, and KeyBanc Capital Markets Inc., on the other hand (filed as Exhibit 1.2 to the 01/14/13 8-K)(1)

— Registration Rights Agreement, dated as of June 10, 2013, among the Company, certain subsidiaries of
the Company signatory thereto and U.S. Bank, as trustee (filed as Exhibit 4.2 to the 6/13/13 8-K)(1)

— Statement of Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends (2)

— Amended and Restated Code of Business Conduct and Ethics (filed as Exhibit 14.1 to the Company's

Current Report on Form 8-K filed on December 8, 2010)(1)

— List of subsidiaries (2)

— Consent of KPMG LLP (2)

— Power of Attorney (included on signature page)

— Certification of Chief Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange

Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)

— Certification of Chief Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange

Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)

— Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

Section 906 of the Sarbanes-Oxley Act of 2002 (3)

— Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to

101.INS

101.SCH

101.CAL

Section 906 of the Sarbanes-Oxley Act of 2002 (3)

— XBRL Instance Document (2, 5)

— XBRL Taxonomy Extension Schema (2, 5)

— XBRL Taxonomy Extension Calculation Linkbase (2, 5)

109

101.DEF

101.LAB

101.PRE

— XBRL Taxonomy Extension Definition Linkbase Document (2, 5)

— XBRL Taxonomy Extension Label Linkbase Document (2, 5)

— XBRL Taxonomy Extension Presentation Linkbase Document (2, 5)

(1)
(2)
(3)

(4)
(5)

Incorporated by reference.
Filed herewith.
This exhibit shall not be deemed "filed" for purposes of Section 11 or 12 of the Securities Act of 1933, as amended
(the "Securities Act"), or Section 18 of the Securities Exchanges Act of 1934, as amended (the "Exchange Act"), or
otherwise subject to the liabilities of those sections, and shall not be part of any registration statement to which it may
relate, and shall not be incorporated by reference into any registration statement or other document filed under the
Securities Act or the Exchange Act, except as set forth by specific reference in such filing or document.
Management contract or compensatory plan or arrangement.
Attached as Exhibit 101 to this Annual Report on Form 10-K are the following materials, formatted in XBRL
(Extensible Business Reporting Language): (i) the Consolidated Balance Sheets at December 31, 2013 and 2012; (ii)
the Consolidated Statements of Operations for the years ended December 31, 2013, 2012 and 2011; (iii) the
Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31, 2013, 2012 and 2011;
(iv) the Consolidated Statements of Changes in Equity for the years ended December 31, 2013, 2012 and 2011; (v) the
Consolidated Statements of Cash Flows for the years ended December 31, 2013, 2012 and 2011; and (vi) Notes to
Consolidated Financial Statements tagged as blocks of text.

110

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.

SIGNATURES

Dated: February 26, 2014

Lexington Realty Trust

By:

/s/ T. Wilson Eglin

T. Wilson Eglin
Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints T.
Wilson Eglin and Patrick Carroll, and each of them severally, his true and lawful attorney-in-fact with power of substitution and
resubstitution to sign in his name, place and stead, in any and all capacities, to do any and all things and execute any and all
instruments that such attorney may deem necessary or advisable under the Securities Exchange Act of 1934 and any rules, regulations
and requirements of the U.S. Securities and Exchange Commission in connection with this Annual Report on Form 10-K and any
and all amendments hereto, as fully for all intents and purposes as he might or could do in person, and hereby ratifies and confirms
all said attorneys-in-fact and agents, each acting alone, and his substitute or substitutes, may lawfully do or cause to be done by
virtue hereof. Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the date indicated.

/s/ E. Robert Roskind
E. Robert Roskind

/s/ Richard J. Rouse
Richard J. Rouse

/s/ T. Wilson Eglin
T. Wilson Eglin

/s/ Patrick Carroll
Patrick Carroll

/s/ Paul R. Wood
Paul R. Wood

/s/ Harold First
Harold First

/s/ Richard S. Frary
Richard S. Frary

/s/ James Grosfeld
James Grosfeld

/s/ Kevin W. Lynch
Kevin W. Lynch

Chairman

Vice Chairman
and Chief Investment Officer

Chief Executive Officer, President and Trustee
(principal executive officer)

Chief Financial Officer, Executive Vice President and Treasurer
(principal financial officer and principal accounting officer)

Vice President, Chief Tax Compliance Officer
and Secretary

Trustee

Each dated: February 26, 2014

111

(This page intentionally left blank)

Exhibit 31.1

I, T. Wilson Eglin, certify that:

I have reviewed this report on Form 10-K of Lexington Realty Trust;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present
in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the
periods presented in this report;

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as
defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the registrant and have:

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be
designed under our supervision, to ensure that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared;

designed such internal control over financial reporting, or caused such internal control over financial reporting
to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted
accounting principles;

evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our
conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered
by this report based on such evaluation; and

disclosed in this report any change in the registrant's internal control over financial reporting that occurred during
the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report)
that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over
financial reporting; and

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over
financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons
performing the equivalent functions):

all significant deficiencies and material weaknesses in the design or operation of internal control over financial
reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize
and report financial information; and

any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.

February 26, 2014

/s/ T. Wilson Eglin

T. Wilson Eglin
Chief Executive Officer

Exhibit 31.2

I, Patrick Carroll, certify that:

I have reviewed this report on Form 10-K of Lexington Realty Trust;

any fraud, whether or not material, that involves management or other employees who have a significant role
in the registrant's internal control over financial reporting.

February 26, 2014

/s/ Patrick Carroll

Patrick Carroll

Chief Financial Officer

Exhibit 32.1

In connection with the Annual Report of Lexington Realty Trust (the “Trust”) on Form 10-K for the period ended December 31,
2013 as filed with the Securities and Exchange Commission on the date hereof, I, T. Wilson Eglin, Chief Executive Officer of the
Trust, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

(2) The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results
of operations of the issuer.

/s/ T. Wilson Eglin

T. Wilson Eglin
Chief Executive Officer
February 26, 2014

Exhibit 32.2

In connection with the Annual Report of Lexington Realty Trust (the “Trust”) on Form 10-K for the period ended December 31,
2013 as filed with the Securities and Exchange Commission on the date hereof, I, Patrick Carroll, Chief Financial Officer of the
Trust, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Annual Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of
1934; and

(2) The information contained in the Annual Report fairly presents, in all material respects, the financial condition and results
of operations of the issuer.

/s/ Patrick Carroll

Patrick Carroll

Chief Financial Officer

February 26, 2014

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(1, 3, 4), Financial Consultant

(1, 2, 3, 4), Founding Partner, Tallwood Associates, Inc

(2, 3, 4), Private Investor

(1, 2, 4, 5), Principal, The Townsend Group

1 Audit Committee Member
2 Compensation Committee Member
3Nominating and Corporate Governance Committee Member
4 Independent Trustee
5 Lead Trustee

Chairman

Chief Executive Officer, President and a Trustee

Vice Chairman, Chief Investment Officer and a
Trustee

Chief Financial Officer, Executive Vice President
and Treasurer

Executive Vice President, General Counsel and
Secretary

Our Investor Relations Department can be
contacted at:

Lexington Realty Trust
One Penn Plaza, Suite 4015
New York, New York 10119-4015
Attn: Investor Relations,
Telephone: (212) 692-7200
E-mail: ir@lxp.com.

Our Annual Meeting of Shareholders is
scheduled for Tuesday, May 20, 2014 at
10:00 a.m., at the offices of Paul Hastings
LLP, 75 East 55th Street, New York, NY.

Reference is made to “Risk Factors” in our
Annual Report on Form 10-K for the year
is
ended December 31, 2013, which
included herein, for discussion of certain
factors that might cause actual results to
differ materially from those set forth in any
forward-looking statements included herein.

Lexington Realty Trust
One Penn Plaza, Suite 4015
New York, NY 10119-4015
Tel: (212) 692-7200
Fax: (212) 594-6600

Chicago, Illinois
Dallas, Texas

Our web site is located at www.lxp.com.
Information contained on our web site or
the web site of any other person is not
incorporated by reference into this annual
report or any of our filings with the
Securities and Exchange Commission.

We filed the certifications required by
Section 302 of the Sarbanes-Oxley Act of
2002 as an exhibit to our Annual Report
on Form 10-K for
the year ended
December 31, 2013, which is included
herein. In addition, in 2013we submitted
an unqualified certification required by
section 303A.12(a) of
the Listed
Company Manual of the New York Stock
Exchange.

Computershare
PO Box 30170
College Station, TX 77842-3170
Tel: (800) 850-3948 (toll-free)
www-us.computershare.com/investor

Overnight correspondence:
Computershare
211 Quality Circle, Suite 210
College Station, TX 77845

New York Stock Exchange Symbol:

LXP Common
LXPPRC Preferred

transfer

Information
regarding our Dividend
Reinvestment Plan may be obtained from
our
registrar,
agent
Computershare. Answers to many of your
shareholder questions and requests for
forms are available by visiting www-
us.computershare.com/investor.

and

KPMG LLP
New York, NY