Company: LXP
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001444838-25-000023
Chunk: 116

Company: LXP Industrial Trust
Filing Date: 2025-02-13
Form: 10-K
Item: Item 8
Chunk 116
---
 and 2023, no accounts receivable were written off and for the year ended December 31, 2022, the Company wrote off an aggregate of $417 of accounts receivable, net, relating to tenant defaults. 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 consolidated statements of operations. The primary non-lease service included within rental revenue is CAM 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 each of the three years ended December 31, 2024, 2023 and 2022, the Company incurred nominal or no 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 any of its properties.Sales-Type Leases. As of December 31, 2024, the Company had no leases that qualify as a sales-type lease. As of December 31, 2022, the Company entered into one ground lease for an industrial development land parcel located in the Phoenix, Arizona market that was classified as a sales-type lease. At the commencement date of the lease, the Company evaluated the lease classification and classified the lease as a sales-type lease. The lease contained a purchase option starting on the second anniversary date of the lease and ending on the third anniversary date which was determined not reasonably certain to be exercised at lease inception. The Company recognized $36,875 in selling profit from sales-type leases and $4,119 of direct costs to enter into the lease within transaction costs on the consolidated statements of operations. During 2024, the tenant executed the purchase option within their lease and purchased the property for $86,522, which qualified as a lease modification. The Company recognized $14,991 of additional income from a sales-type lease as part of rental revenue in its 2024 consolidated statement of operations, which included $5,604 of estimated development obligations that will be substantially completed subsequent to the execution of the purchase option. In 2022, the Company had two tenants that exercised the purchase option within their lease and purchased the assets for an aggregate price of $34,841. The