LXP Industrial Trust (LXP) risk factors, FY2024 10-K

Risks Related to Our Business

1. 01We are subject to risks related to defaults under, or termination or expiration of, our leases
2. 02Certain of our leases may permit tenants to terminate the leases to which they are a party
3. 03Our ability to fully control the maintenance of our net-leased properties may be limited
4. 04You should not rely on the credit ratings of our tenants
5. 05Our assets may be subject to impairment charges
6. 06Our real estate development activities are subject to additional risks
7. 07A 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
8. 08A significant portion of our leases are long-term and do not have fair market rental rate adjustments, which could negatively impact our income and reduce the amount of funds available to make distributions to shareholders
9. 09Interests in loans receivable are subject to delinquency, foreclosure and loss
10. 10Our inability to carry out our growth strategy could adversely affect our financial condition and results of operations
11. 11Our investment and disposition activity may lead to dilution
12. 12Investment activities may not produce expected results and may be affected by outside factors
13. 13Properties where we have operating responsibilities and multi-tenant properties expose us to additional risks
14. 14Uninsured losses or a loss in excess of insured limits could adversely affect our financial condition
15. 15Cybersecurity incidents may adversely affect our business
16. 16Competition may adversely affect our ability to purchase properties
17. 17We may have limited control over our joint venture investments
18. 18Our ability to change our portfolio is limited because real estate investments are illiquid
19. 19Subject to our fundamental investment policy to maintain our qualification as a REIT, our Board of Trustees will determine our investment and financing policies, growth strategy and our debt, capitalization, distribution, acquisition, disposition and operating policies

Industry and Economic Risks

1. 20In recent years, public health emergencies, including COVID-19, have caused significant and widespread damage to the economy and the financial markets
2. 21Concerns over possible economic recession, high interest rates, bank failures, political dysfunction, geopolitical issues, including military conflicts, trade wars, labor shortages, and inflation may contribute to increased financial market volatility
3. 22International trade disputes and increases in U.S. trade tariffs could adversely impact demand for our properties
4. 23Natural disasters could adversely impact our results
5. 24We are exposed to the potential direct and indirect impacts of climate change

Risks Related to our Indebtedness

1. 25We have a substantial amount of indebtedness
2. 26We have a substantial amount of debt. Our substantial indebtedness could adversely affect our financial condition and our ability to fulfill our obligations under the documents governing our unsecured indebtedness and otherwise adversely impact our business and growth prospects
3. 27We have exposure to market risks relating to increases in interest rates due to our variable-rate debt. An increase in interest rates may increase our costs of borrowing on existing variable-rate indebtedness, leading to a reduction in our earnings
4. 28We have engaged and may engage in hedging transactions that may limit gains or result in losses
5. 29Covenants in certain of the agreements governing our debt could adversely affect our financial condition, investment activities and/or operating activities
6. 30Some of the properties in which we have an interest are subject to a mortgage or other secured notes with balloon payments due at maturity. In addition, our corporate level borrowings require interest only payments with all principal due at maturity
7. 31We face risks associated with returning properties to lenders
8. 32Certain of our indebtedness is subject to cross-default, cross-acceleration and cross-collateral provisions
9. 33The effective subordination of our unsecured indebtedness and any related guaranty may reduce amounts available for payment on our unsecured indebtedness and any related guaranty
10. 34None of our subsidiaries are guarantors of our unsecured debt; therefore assets of our subsidiaries may not be available to make payments on our unsecured indebtedness

Risks Related to Investment in our Equity

1. 35We may change the dividend policy for our common shares in the future
2. 36Securities eligible for future sale may have adverse effects on our share price
3. 37There are certain limitations on a third party's ability to acquire us or effectuate a change in our control

Legal and Regulatory Risks

1. 38We face possible liability relating to environmental matters
2. 39Costs of complying with changes in governmental laws and regulations may adversely affect our results of operations

Risks Related to Our REIT Status

1. 40There can be no assurance that we will remain qualified as a REIT for federal income tax purposes
2. 41We may be subject to the REIT prohibited transactions tax, which could result in significant U.S. federal income tax liability to us
3. 42Distribution requirements imposed by law limit our flexibility
4. 43At any time, the federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. Any of those new laws or interpretations may take effect retroactively and could adversely affect us or you as a debt or equity security holder
5. 44A downgrade in our credit ratings could have a material adverse effect on our business and financial condition
6. 45We are dependent upon key personnel, particularly certain of our executive officers. We do not have employment agreements with our executive officers, but we have entered into severance arrangements with our executive officers that provide certain payments upon specified termination events