Company: LXP
Filing Date: 2025-02-13
Form Type: 10-K
Source: 0001444838-25-000023
Chunk: 22

Company: LXP Industrial Trust
Filing Date: 2025-02-13
Form: 10-K
Item: Item 1A
Chunk 22
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 the financial condition of major tenants and other factors that could affect the cash flow or value of an investment. Based on this evaluation, we may, from time to time, take non-cash impairment charges. These impairments could have a material adverse effect on our financial condition and results of operations. If we take an impairment charge on a property subject to a non-recourse secured mortgage and reduce the book value of such property below the balance of the mortgage on our balance sheet, upon foreclosure or other disposition, we may be required to recognize a gain on debt satisfaction.

Our real estate development activities are subject to additional risks.

Development activities generally require various government and other approvals, which we may not receive. We rely on third-party construction managers and/or engineers to monitor certain construction activities. If we engage or partner with a developer, we rely on the developer to monitor construction activities and our interests may not be aligned. In addition, development activities, including speculative development and redevelopment and renovation of vacant properties, are subject to risks including, but not limited to:

•unsuccessful development opportunities could cause us to incur direct expenses;

•construction costs of a project may exceed original estimates, possibly making the project less profitable than originally estimated or unprofitable; 

•time required to complete the construction of a project or to lease up the completed project may be greater than originally anticipated, thereby adversely affecting our cash flow and liquidity; 

•legal action to compel performance of contractors, developers or partners may cause delays and our costs may not be reimbursed;

•we may not be able to find tenants to lease the space built on a speculative basis or in a redeveloped or renovated building, which will impact our cash flow and ability to finance or sell such properties;

•there may be gaps in warranty obligations of our developers and contractors and the obligations to a tenant;

•occupancy rates and rents of a completed project may not be sufficient to make the project profitable; and 

•favorable financing sources to fund development activities may not be available.

Our development activities are subject to risks related to supply-chain disruptions and inflation, which increase costs and may delay completion. In addition, we hold land for development and we are unable to estimate any further costs to develop such land until we commit to develop any such land.

A tenant’s bankruptcy proceeding may result in the re-characterization of related sale-leaseback transactions or in the restructuring of the tenant's payment obligations to us, either of which could adversely affect our financial condition.

We have entered and may continue to enter into sale-