LXP Industrial Trust to Buy Phoenix Covered Land Investment for $103 Million
The asset purchase allows LXP to secure an infill industrial redevelopment site in a market driven by advanced manufacturing and data center growth.
LXP Industrial Trust (LXP) agreed to acquire Phoenix Covered Land Investment in a $103 million asset-purchase deal.
The acquisition includes a covered land investment that is expected to generate $82 million in rental payments over the remaining lease term. According to the company, this represents an initial cash yield of 15.7%.
LXP intends to redevelop the site into approximately 400,000 to 450,000 square feet of industrial facilities once the current lease expires. T. Wilson Eglin, Chairman and Chief Executive Officer of LXP, said, “Our recently acquired covered land investment is a premier infill industrial redevelopment opportunity that expands LXP’s presence in the Phoenix market, which is benefiting from favorable demographic trends and business investment in advanced manufacturing and data centers. The rental payments of $82 million over the remaining lease term, representing an initial cash yield of 15.7% is expected to result in an inexpensive land basis that will support attractive development yields at the end of the lease term”.
The move aligns with LXP's ongoing activity in the Phoenix region. The company has previously managed significant land holdings in the market, including the Reems & Olive project, and has placed several first-generation facilities in service in Phoenix, such as the Cotton 303 buildings and the KeHE Distributors facility.
LXP has also maintained a broader redevelopment pipeline, with recent projects in Central Florida and Richmond, Virginia. The Phoenix acquisition signals a continued focus on high-growth industrial hubs where the company can leverage land-banking strategies to lower its long-term cost basis.