Bear, Stearns & Co. Inc. is acting as sole underwriter for the offering. The offering is being made pursuant to a shelf registration statement that became effective on Oct. 22, 2003. In addition, Lexington will grant to the underwriter a 30-day option to purchase up to an additional 375,000 shares--approximately $20 million--of the preferred stock to cover over-allotments.

The preferred shares will be convertible into Lexington common shares at an initial conversion price of $26.82 per preferred share. This represents a 20.0% premium based on the closing price of $22.35 per Lexington common share on Dec. 2. In addition, the preferred shares will pay a preferred dividend of 6.50% per annum.

Lexington is a real estate investment trust that owns and manages office, industrial and retail properties net-leased to major corporations throughout the United States and provides investment advisory and asset management services to investors in the net lease area. On Friday, the REIT acquired an office facility in Los Angeles for approximately $17.9 million. The facility is a single-story office/flex building containing approximately 83,252 sf located on a 4.4-acre site. It is leased to Playboy Enterprises Inc and Sony Electronics, Inc. In June, Lexington formed a joint venture with an institutional investor advised by AEW Capital Management with the goal of acquiring up to $140 million in single-tenant properties.