2024-04-08 17:42:37 ET
Summary
- 54 million square foot Class A warehouse/distribution portfolio.
- Reasonable 14 P/FFO valuation, with 5.9% dividend.
- Underperformed vs. peers over 1, 3, and 5 years.
- We speculate that good assets, reasonable valuation, and underperformance might create an attractive M&A target for larger industrial REITs, and discuss some possibilities.
Investment Thesis
LXP Industrial Trust ( LXP ) is an industrial REIT. Their 112 building, 54 million square foot portfolio of modern single-tenant warehouse and distribution industrial properties is focused in the Sunbelt and Midwest.
Currently trading at 13% above the low and 45% below the high for the last three-year period, with a reasonable 14 P/FFO, and offering a 5.87% dividend yield, LXP might merit investor consideration.
However, LXP has underperformed peer REITs for years, and the market does not appear enthusiastic about performance going forward.
The mix of good assets, reasonable valuation, and underperformance vs. peers, coupled with the consolidation trend in REITs, suggests that LXP may be more valuable as an M&A acquisition for another industrial REIT than as an independent REIT....
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For further details see:
LXP Industrial Trust: A Speculative Case For M&A