Company: LXP
Filing Date: 2025-05-01
Form Type: 10-Q
Source: 0000910108-25-000020
Chunk: 66

Company: LXP Industrial Trust
Filing Date: 2025-05-01
Form: 10-Q
Item: Item 8
Chunk 66
---
 collectability of the lessee's total accounts receivable balance on a lease by lease basis. In addition, tenants in bankruptcy are analyzed and considerations are made in connection with the expected pre-petition and post-petition claims. If a lessee's accounts receivable balance is considered uncollectible, the Company will write-off the receivable balances associated with the lease to rental revenue and cease to recognize lease income, including straight-line rent, unless cash is received. If the Company subsequently determines that it is probable it will collect substantially all of the lessee's remaining lease payments under the lease term; the Company will reinstate the straight-line balance adjusting for the amount related to the period when the lease was accounted for on a cash basis.

17

Table of ContentsLXP INDUSTRIAL TRUST AND CONSOLIDATED SUBSIDIARIESNOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSMarch 31, 2025 and 2024(Unaudited and dollars in thousands, except share/unit and per share/unit data)

The Company elected that the lease and non-lease components in its leases are a single lease component, which is, therefore, being recognized as rental revenue in its unaudited condensed consolidated statements of operations. The primary non-lease service included within rental revenue is common area maintenance services provided as part of the Company’s real estate leases. ASC 842 requires that the Company capitalize, as initial direct costs, only those costs that are incurred due to the execution of a lease. For the three months ended March 31, 2025 and 2024, the Company did not incur any costs that were not incremental to the execution of leases.The Company manages the risk associated with the residual value of its leased properties by including contract clauses that make tenants responsible for surrendering the space in good condition upon lease termination, holding a diversified portfolio, and other activities. The Company does not have residual value guarantees on specific properties.Rental Revenue Classification. The following table presents the Company’s classification of rental revenue for its operating leases and sales-type lease for the three months ended March 31, 2025 and 2024: Three Months Ended March 31,Classification 20252024Fixed$72,890 $70,012 Sales-type lease income— 1,899 Variable(1)15,003 13,296 Total$87,893 $85,207 (1)  Primarily comprised of tenant reimbursements.Future fixed rental receipts for operating