LexingtonRealty Trust divested its three remaining land parcels underneaththree hotels in New York City for a gross sales price of about $338.2 million.
The price reflects a GAAP capitalization rate of 13.6% and acash capitalization rate of 4.6%.
CEO and President T. Wilson Eglin said in a news releasethat: "[T]he sale has reduced our leverage considerably and produced cashto retire the outstanding balance on our revolving credit facility and fundother growth opportunities."
BH Properties, which was tipped to be buying the landparcels, was under contract to acquire the fee interest for the three hotels.The buyer assumed approximately $213.1 million of mortgage debt in connectionwith the sale.
Lexington noted in the release that it expects to registeran estimated noncash impairment charge of approximately $65.0 million in thethird quarter, primarily related to the writing off of the deferred rent receivableit recognized under GAAP.
The hotels, namely Element New York Times Square West at 311W. 39th St., Sheraton Tribeca New York Hotel at 372 Canal St. and DoubleTreeFinancial District at 8 Stone St., total 1,179 rooms and occupy more than480,000 square feet.
Lexington had purchased the land parcels $302 million in2013.