Company: LXP
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001444838-25-000023
Chunk: 79

Company: LXP Industrial Trust
Filing Date: 2025-02-13
Form: 10-K
Item: Item 7A
Chunk 79
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Table of Contents

Item 7A. Quantitative and Qualitative Disclosure about Market Risk

Our exposure to market risk relates primarily to our variable-rate indebtedness not subject to interest rate swaps and our fixed-rate debt. Our consolidated aggregate principal variable-rate indebtedness not subject to interest rate swaps was $46.6 million at December 31, 2024 and $129.1 million at December 31, 2023, which represented 2.9% and 7.2%, respectively, of our aggregate principal consolidated indebtedness. During the years ended December 31, 2024 and 2023, our variable-rate indebtedness had a weighted-average interest rate of 7.2% and 6.8%, respectively. Had the weighted-average interest rate been 100 basis points higher, our interest expense for 2024 and 2023 would have increased by $1.2 million and $1.7 million, respectively. As of December 31, 2024 and 2023, our aggregate principal consolidated fixed-rate debt was $1.5 billion and $1.7 billion, respectively, which represented 97.1% and 92.8%, respectively, of our aggregate principal indebtedness. 

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 value was determined using the interest rates that we believe our outstanding fixed-rate debt would warrant as of December 31, 2024 and is indicative of the interest rate environment as of December 31, 2024, and does not take into consideration the effects of subsequent interest rate fluctuations. Accordingly, we estimate that the fair value of our fixed-rate debt was $1.4 billion as of December 31, 2024.

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 have historically entered into derivative financial instruments such