1165460--3/17/2008--Lexington_Master_Limited

related topics

{loan, real, estate}

{investment, property, distribution}

{acquisition, growth, future}

{debt, indebtedness, cash}

{loss, insurance, financial}

{condition, economic, financial}

{provision, law, control}

{interest, director, officer}

{control, financial, internal}

{capital, credit, financial}

{cost, regulation, environmental}

{tax, income, asset}

We are subject to risks involved in single tenant leases. We rely on revenues derived from major tenants. We could become more highly leveraged, resulting in increased risk of default on our obligations and in an increase in debt service requirements which could adversely affect our financial condition and results of operations and our ability to pay distributions. Market interest rates could have an adverse effect on our borrowing costs and net income. Recent disruptions in the financial markets could affect our ability to obtain debt financing on reasonable terms and have other adverse effects on us. We face risks associated with refinancing. We face uncertainties relating to lease renewals and re-letting of space. Certain of our properties are cross-collateralized. We face possible liability relating to environmental matters. Uninsured losses or a loss in excess of insured limits could adversely affect our financial condition. Competition may adversely affect our ability to purchase properties. Our failure to maintain effective internal controls could have a material adverse effect on our business and operating results. We may have limited control over our co-investment programs and joint venture investments. Investments by our co-investment programs may conflict with our ability to make attractive investments. Certain of Lexington s trustees and officers may face conflicts of interest with respect to sales and refinancings. Our ability to change our portfolio is limited because real estate investments are illiquid. Lexington may not be able to successfully implement and complete the strategic restructuring plan Our inability to carry out our growth strategy could adversely affect our financial condition and results of operations. Concentration of ownership by certain investors. We are dependent upon Lexington and its personnel and the terms of Mr. Ashner s employment agreement with Lexington affects our ability to make certain investments. Distribution requirements imposed by law limit our flexibility. Lexington s Declaration of Trust and applicable law may hinder any attempt to acquire it and, because it is the sole owner of our general partner, us. Risks Specific to Our Investment in Concord Concord invests in subordinate mortgage-backed securities which are subject to a greater risk of loss than senior securities. Concord may hold the most junior class of mortgage-backed securities which are subject to the first risk of loss if any losses are realized on the underlying mortgage loans. Concord s warehouse facilities and its CDO financing agreements may limit its ability to make investments. The repurchase agreements that Concord uses to finance its investments may require it to provide additional collateral. Concord s future investment grade CDOs, if any, will be collateralized with loan assets and debt securities that are similar to those collateralizing its existing investment grade CDO, and any adverse market trends are likely to adversely affect the issuance of future CDOs as well as Concord s CDOs in general. Credit ratings assigned to Concord s investments are subject to ongoing evaluations and we cannot assure you that the ratings currently assigned to Concord s investments will not be downgraded. The use of CDO financings with coverage tests may have a negative impact on Concord s operating results and cash flows. If credit spreads widen, the value of Concord s assets may suffer. Prepayments can increase, adversely affecting yields on Concord s investments. Concord may not be able to issue CDO securities, which may require Concord to seek more costly financing for its real estate loan assets or to liquidate assets. The recent capital market crisis has made financings through CDOs difficult. The lack of a CDO market may require us to make a larger equity investment in Concord. Concord may not be able to access financing sources on favorable terms, or at all, which could adversely affect its ability to execute its business plan and its ability to make distributions. Concord may make investments in assets with lower credit quality, which will increase our risk of losses.

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1165460--3/17/2008--Lexington_Master_Limited_Partnership