UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)



x	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September~~March 3031, ~~2015~~2016.



o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _________________ to ________________

Commission File Number 33-04215

LEPERCQ CORPORATE INCOME FUND L.P.

(Exact name of registrant as specified in its charter)



Delaware	13-3779859
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
One Penn Plaza – Suite 4015 New York, NY	10119
(Address of principal executive offices)	(Zip Code)

(212) 692-7200

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer o Non-accelerated filer (Do not check if a smaller reporting company) x

Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

There is no public market for units of Limited Partnership Interest. Accordingly, information with respect to the aggregate market value of units of Limited Partnership Interest has not been supplied.

TABLE OF CONTENTS

PART I. — FINANCIAL INFORMATION
ITEM 1. Financial Statements		3
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1415
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk		1718
ITEM 4. Controls and Procedures		1819
PART II — OTHER INFORMATION
ITEM 1. Legal Proceedings		1920
ITEM 1A. Risk Factors		1920
ITEM 6. Exhibits		2021
SIGNATURES		2223

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited, $000, except unit data)

	September 30, 2015		December 31, 2014
	March 31, 2016		December 31, 2015
Assets:
Real estate, at cost	$	~~932~~1,~~550~~031,059	$	~~910~~1,~~113~~061,606
Real estate - intangible assets	~~165~~189,~~940~~700		~~165~~189,~~940~~700
	1,098,490		1,076,053
Investment in real estate under construction	14,968		9,223
Less: accumulated depreciation and amortization	246,903		226,084
	1,235,727		1,260,529
Real estate, net	851,587		849,969
Less: accumulated depreciation and amortization	254,372		255,024
Cash and cash equivalents	12,496		8,328
Real estate, net	981,355		1,005,505
Restricted cash	2,279		1,614
Cash and cash equivalents	12,809		19,130
Investment in and advances to non-consolidated entities	6,065		4,736
Restricted cash	32,304		2,457
Deferred expenses, net	14,006		13,960
Investment in and advances to non-consolidated entities	5,747		5,924
Loans receivable, net	—		15,448
Deferred expenses, net	7,331		8,459
Rent receivable - current	~~290~~8,207		~~551~~801
Rent receivable - deferred	7789,~~525~~521		5187,~~215~~150
Other assets	2,~~479~~494		21,~~258~~500
Total assets	$	~~966~~1,~~727~~139,768	$	~~948~~1,~~079~~130,926
Liabilities and Partners' Capital:
Liabilities:
Mortgages and notes payable	$	327,874	$	328,351
Mortgages and notes payable, net	$	431,351	$	431,599
Co-borrower debt	~~168~~201,~~350~~053		~~136~~201,~~967~~106
Related party advances, net	34,~~127~~019		113,~~311~~232
Accounts payable and other liabilities	64,~~902~~700		115,~~722~~503
Accrued interest payable	1,~~058~~436		~~1,158~~942
Deferred revenue - including below market leases, net	54,~~272~~913		5,~~219~~306
Distributions payable	2324,~~873~~089		1617,~~599~~214
Prepaid rent	34,~~742~~648		4,~~711~~367
Total liabilities	~~540~~676,~~198~~209		~~516~~669,~~038~~269
Commitments and contingencies
Partners' capital	~~426~~463,~~529~~559		~~432~~461,~~041~~657
Total liabilities and partners' capital	$	~~966~~1,~~727~~139,768	$	~~948~~1,~~079~~130,926

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited, $000, except unit data)

	Three months ended September 30,						Nine months ended September 30,
	Three months ended March 31,
	2015			2014			2015			2014
	2016			2015
Gross revenues:
Rental	$	2831,~~336~~934		$	2729,~~206~~480		$	~~87,587~~		$	~~80,890~~
Tenant reimbursements	2,~~426~~505			2,~~119~~479			~~7,435~~			~~6,513~~
Total gross revenues	3034,~~762~~439			2931,~~325~~959			~~95,022~~			~~87,403~~
Expense applicable to revenues:
Depreciation and amortization	(79,~~308~~438		)	(67,~~883~~233		)	~~(21,847~~		)	~~(20,488~~		)
Property operating	(4,~~244~~203		)	(3,~~914~~952		)	~~(12,412~~		)	~~(10,268~~		)
General and administrative	(2,~~235~~073		)	(12,~~744~~018		)	~~(6,598~~		)	~~(6,033~~		)
Non-operating income	1—			~~924~~14			38			~~2,521~~
Interest and amortization expense	(78,~~200~~339		)	(7,~~105~~401		)	~~(21,918~~		)	~~(21,002~~		)
Debt satisfaction charges, net	—			(9033		)	~~(33~~		)	~~(357~~		)
Income before provision for income taxes, equity in earnings of non-consolidated entities and discontinued operations	9,776			10,513			32,252			31,776
Gains on sales of properties	7,839			—
Provision for income taxes	(8		)	(11		)	(41		)	(72		)
Income before provision for income taxes and equity in earnings of non-consolidated entities	18,225			11,336
Equity in earnings of non-consolidated entities	59			35			135			101
Provision for income taxes	(19		)	(22		)
Income from continuing operations	9,827			10,537			32,346			31,805
Equity in earnings of non-consolidated entities	136			42
Discontinued operations:
Net income	$	18,342		$	11,356
Income from discontinued operations	—			114			—			875
Net income per unit	$	0.22		$	0.16
Provision for income taxes	—			(1		)	—			(15		)
Weighted-average units outstanding	83,241,396			70,682,266
Gain on sale of property	—			17,944			—			17,944
Total discontinued operations	—			18,057			—			18,804
Net income	$	9,827		$	28,594		$	32,346		$	50,609
Income per unit:
Income from continuing operations	$	0.13		$	0.15		$	0.45		$	0.47
Income from discontinued operations	—			0.27			—			0.27
Net income	$	0.13		$	0.42		$	0.45		$	0.74
Weighted-average units outstanding	74,449,266			68,138,463			71,965,530			68,119,929

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN PARTNERS' CAPITAL

(Unaudited, $000, except unit amounts)

Nine Months ended September 30, 2015	Units		Partners' Capital
Three Months ended March 31, 2016	Units		Partners' Capital
Balance December 31, 2015	83,241,396		$	461,657
Changes in co-borrower debt	—		53
Distributions	—		(16,493		)
Net Income	—		18,342
Balance March 31, 2016	83,241,396		$	463,559
Three Months ended March 31, 2015
Balance December 31, 2014	70,682,266		$	432,041
Changes in co-borrower debt	—		(3139,~~383~~009		)
Issuance of units	3,767,000		37,879
Distributions	—		(14,358		)
Distributions	—		(44,354		)
Net Income	—		11,356
Net Income	—		32,346
Balance March 31, 2015	70,682,266		$	390,030
Balance September 30, 2015	74,449,266		$	426,529
Nine Months ended September 30, 2014
Balance December 31, 2013	68,280,702		$	448,067
Changes in co-borrower debt	—		(43,612		)
Issuance of units	2,571,757		27,981
Redemption of units	(170,193	)	(1,962		)
Distributions	—		(41,823		)
Net Income	—		50,609
Balance September 30, 2014	70,682,266		$	439,260

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited, $000)

	Nine Months ended September 30,
	Three Months ended March 31,
	2015			2014
	2016			2015
Net cash provided by operating activities	$	279,~~933~~246		$	298,~~573~~864
Cash flows from investing activities:
Investments in real estate under construction	(95,~~111~~745		)	(18,~~994~~062		)
Capital expenditures	(~~5,901~~228		)	(~~2,827~~775		)
Net proceeds from the sale of properties	—29,817			~~40,836~~—
Principal payments received on loans receivable	3,137			1,018
Investment in loan receivable	—			(69		)
Investment in loan receivable	(318		)	—
Investment in non-consolidated entities	—			(1,249		)
Investment in non-consolidated entities	(1,662		)	(263		)
Distributions from non-consolidated entities in excess of accumulated earnings	176			—
Distributions from non-consolidated entities in excess of accumulated earnings	341			572
Increase in deferred leasing costs	(469		)	(87		)
Increase in deferred leasing costs	(1,062		)	(3,485		)
Change in escrow deposits and restricted cash	(29,847		)	1,067
Change in escrow deposits and restricted cash	(666		)	(38,134		)
Net cash used in investing activities	(6,296		)	(9,175		)
Net cash used in investing activities	(15,242		)	(4,277		)
Cash flows from financing activities:
Distributions to partners	(139,~~368~~617		)	(196,~~808~~623		)
Principal amortization payments	(~~1,072~~362		)	(~~1,406~~432		)
Increase in deferred financing costs	(~~632~~79		)	(55632		)
Principal payments on debt, excluding normal amortization	~~(28,627~~—		)	(928,~~000~~627		)
Proceeds of mortgages and notes payable	~~29,193~~—			—29,193
Related party note payment	~~(8,250~~—		)	—(8,250		)
Related party advances, net	~~14,233~~787			215,~~045~~015
Redemption of OP units	—			(1,962		)
Net cash used in financing activities	(9,271		)	(356		)
Net cash used in financing activities	(8,523		)	(30,186		)
Change in cash and cash equivalents	(6,321		)	(667		)
Change in cash and cash equivalents	4,168			(4,890		)
Cash and cash equivalents, at beginning of period	19,130			8,328
Cash and cash equivalents, at beginning of period	8,328			13,164
Cash and cash equivalents, at end of period	$	12,809		$	7,661
Cash and cash equivalents, at end of period	$	12,496		$	8,274

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Table of Contents

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, $000, except share/unit data)

(1) The Partnership and Financial Statement Presentation

Lepercq Corporate Income Fund L.P. (together with its consolidated subsidiaries, except when the context only applies to the parent entity, the “Partnership”) was organized in 1986 as a limited partnership under the Delaware Revised Uniform Limited Partnership Act. The Partnership's sole general partner, Lex GP-1 Trust (the “General Partner”), is a wholly-owned subsidiary of Lexington Realty Trust (“Lexington”). The Partnership serves as an operating partnership subsidiary for Lexington. On December 30, 2013, another operating partnership subsidiary of Lexington, Lepercq Corporate Income Fund II L.P., was merged with and into the Partnership, with the Partnership as the surviving entity. As of ~~September~~March 3031, ~~2015~~2016, Lexington, through Lex LP-1 Trust, a wholly-owned subsidiary, and the General Partner, owned approximately 9596.0% of the outstanding units of the Partnership.

The Partnership owns a diversified portfolio of equity investments in single-tenant properties and land. As of ~~September~~March 3031, ~~2015~~2016, the Partnership had equity ownership interests in 43 consolidated properties located in 2526 states. A majority of the real properties in which the Partnership had an interest and all land interests are generally subject to net leases or similar leases where the tenant pays all or substantially all of the cost, including cost increases, for real estate taxes, insurance, utilities and ordinary maintenance of the property. However, certain leases provide that the landlord is responsible for certain operating expenses.

The assets and credit of aeach property owner subsidiary of the Partnership with a property subject to a mortgage loan are not available to creditors to satisfy the debt and the other obligations of any other person, including any other property owner subsidiary of the Partnership or any other affiliate.

~~Basis~~The offinancial ~~Presentation~~statements ~~and~~contained ~~Consolidation. The~~in ~~Partnership's~~this ~~unaudited~~Quarterly ~~condensed~~Report ~~consolidated~~on ~~financial~~Form ~~statements~~10-Q ~~are~~(this ~~prepared~~“Quarterly onReport”) for the ~~accrual~~three ~~basis~~months ofended ~~accounting~~March 31, 2016 have been prepared by the Partnership in accordance with U.S. generally accepted accounting principles (“GAAP”). ~~The~~for interim financial ~~statements~~information ~~reflect~~and the ~~accounts~~applicable rules and regulations of the ~~Partnership~~Securities and ~~its~~Exchange ~~consolidated~~Commission ~~subsidiaries~~(“SEC”). ~~The~~Accordingly, ~~Partnership~~they ~~consolidates~~do ~~its~~not ~~wholly-owned~~include ~~subsidiaries,~~all ~~partnerships~~information and ~~joint~~footnotes ~~ventures~~required ~~which~~by itGAAP ~~controls~~for ~~(i)~~complete ~~through~~financial ~~voting~~statements. ~~rights~~However, orin ~~similar~~the ~~rights~~opinion orof ~~(ii)~~management, bythe ~~means~~interim ~~other~~financial ~~than~~statements ~~voting~~include ~~rights~~all ifadjustments, consisting of normal recurring adjustments, necessary for a fair statement of the ~~Partnership~~results isof the ~~primary~~periods ~~beneficiary~~presented. Interim results are not necessarily indicative of athe ~~variable~~results ~~interest~~that ~~entity~~may ~~(“VIE”)~~be expected for the full year. ~~Entities~~These ~~which~~unaudited condensed consolidated financial statements should be read in conjunction with the Partnership's ~~does~~audited ~~not~~consolidated ~~control~~financial statements and ~~entities~~notes ~~which~~thereto ~~are~~included ~~VIEs~~ in ~~which~~ the Partnership's isForm ~~not~~10-K for the ~~primary~~year ~~beneficiary~~ended ~~are~~December 31, ~~accounted~~2015 ~~for~~filed ~~under~~with ~~appropriate~~the ~~GAAP~~SEC on February 25, 2016 (“Annual Report”).

~~The~~Basis ~~financial~~of ~~statements~~Presentation ~~contained~~and inConsolidation. The ~~this~~Partnership's ~~Quarterly~~unaudited ~~Report~~condensed onconsolidated ~~Form~~financial ~~10-Q~~statements ~~(this~~are ~~“Quarterly~~prepared ~~Report”)~~on ~~for~~ the ~~three~~accrual ~~and~~basis ~~nine~~of ~~months~~accounting ~~ended September 30, 2015 have been prepared by the Partnership~~ in accordance with GAAP. ~~for~~The ~~interim~~ financial ~~information~~statements ~~and~~reflect the ~~applicable~~accounts ~~rules and regulations~~ of the ~~Securities~~Partnership and ~~Exchange~~its ~~Commission~~consolidated ~~(“SEC”)~~subsidiaries. ~~Accordingly,~~The ~~they~~Partnership doconsolidates ~~not~~its ~~include~~wholly-owned ~~all~~subsidiaries, ~~information~~partnerships and ~~footnotes~~joint ~~required~~ventures bywhich ~~GAAP~~it ~~for~~controls ~~complete~~(i) ~~financial~~through ~~statements.~~voting ~~However,~~rights inor ~~the~~similar ~~opinion~~rights ofor ~~management,~~(ii) ~~the~~by ~~interim~~means ~~financial~~other ~~statements~~than ~~include~~voting ~~all~~rights ~~adjustments,~~if ~~consisting of normal recurring adjustments, necessary for a fair statement of~~ the ~~results~~Partnership ofis the ~~periods~~primary ~~presented.~~beneficiary ~~Interim results are not necessarily indicative~~ of ~~the~~a ~~results~~variable ~~that~~interest ~~may~~entity ~~be expected for the full year~~(“VIE”). ~~These~~Entities ~~unaudited~~that ~~condensed consolidated financial statements should be read in conjunction with~~ the Partnership's ~~audited~~does ~~consolidated~~not ~~financial~~control ~~statements~~ and ~~notes~~entities ~~thereto~~that ~~included~~are VIEs in which the Partnership's ~~Form~~is ~~10-K~~not ~~for~~ the ~~year~~primary ~~ended~~beneficiary ~~December 31,~~are ~~2014~~accounted ~~filed~~for ~~with~~under ~~the~~appropriate ~~SEC on February 26, 2015 (“Annual Report”)~~GAAP.

Earnings Per Unit. Net income per unit is computed by dividing net income by the weighted-average number of units outstanding during the period. There are no potential dilutive securities.

Unit Redemptions. The Partnership's limited partner units that are issued and outstanding, other than those held by Lexington, are currently redeemable at certain times, only at the option of the holders, for shares of beneficial interests of Lexington, par value $0.0001 per share, classified as common stock (“common shares”), on a one to approximately 1.13 basis, subject to future adjustments. These units are not mandatorily redeemable by the Partnership. As of ~~September~~March 3031, ~~2015~~2016, Lexington's common shares had a closing price of $8.1060 per share. The estimated fair value of these units was $3132,~~209~~854, assuming all outstanding limited partner units not held by Lexington were redeemed on such date.

Allocation of Overhead Expenses. The Partnership does not pay a fee to the General Partner for the day-to-day management of the Partnership. Certain expenses incurred by the General Partner and its affiliates, including Lexington, such as corporate-level interest, amortization of deferred loan costs, payroll and general and administrative expenses are allocated to the Partnership and reimbursed to the General Partner in accordance with the Partnership's partnership agreement. The allocation is based upon gross rental revenues.

Table of Contents

LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, $000, except share/unit data)

Distributions; Allocations of Income and Loss. As provided in the Partnership's partnership agreement, distributions and income and loss for financial reporting purposes are allocated to the partners based on their ownership of units. Special allocation rules included in the partnership agreement affect the allocation of taxable income and loss. The Partnership paid or accrued gross distributions of $4416,~~354~~493 ($0.6220 per weighted-average unit) and $4114,~~823~~358 ($0.6120 per weighted-average unit) to its partners during the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively. Certain units owned indirectly by Lexington are entitled to aggregate annual distributions of $3.25 per unit.

Use of Estimates. The Partnership has made a number of significant estimates and assumptions to prepare these unaudited condensed consolidated financial statements in conformity with GAAP, including, among others, relating to the reporting of assets and liabilities, the disclosure of contingent assets and liabilities and the reported amounts of revenues and expenses ~~to prepare these unaudited condensed consolidated financial statements in conformity with GAAP~~. These estimates and assumptions are based on management's best estimates and judgment. The Partnership evaluates its estimates and assumptions on an ongoing basis using historical experience and other factors. The Partnership adjusts such estimates when facts and circumstances dictate. The most significant estimates made include the recoverability of accounts receivable, allocation of property purchase price to tangible and intangible assets acquired and liabilities assumed, the determination of VIEs and which entities should be consolidated, the determination of impairment of long-lived assets, ~~loans receivable~~ and equity method investments and the useful lives of long-lived assets. Actual results could differ materially from those estimates.

Fair Value Measurements. The Partnership follows the guidance in the Financial Accounting Standards Board ("“FASB"”) Accounting Standards Codification ("“ASC"”) Topic 820, Fair Value Measurements and Disclosures ("“Topic 820"”), to determine the fair value of financial and non-financial instruments. Topic 820 defines fair value, establishes a framework for measuring fair value in GAAP and expands disclosures about fair value measurements. Topic 820 establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels: Level 1 - quoted prices (unadjusted) in active markets that are accessible at the measurement date for assets or liabilities; Level 2 - observable prices that are based on inputs not quoted in active markets, but corroborated by market data; and Level 3 - unobservable inputs, which are used when little or no market data is available. The fair value hierarchy gives the highest priority to Level 1 inputs and the lowest priority to Level 3 inputs. In determining fair value, the Partnership utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible, as well as considering counterparty credit risk.

Acquisition, Development and Construction Arrangements. The Partnership evaluates loans receivable where the Partnership participates in residual profits through loan provisions or other contracts to ascertain whether the Partnership has the same risks and rewards as an owner or a joint venture partner. Where the Partnership concludes that such arrangements are more appropriately treated as an investment in real estate, the Partnership reflects such loan receivable as an equity investment in real estate under construction in the unaudited condensed consolidated balance sheets. In these cases, no interest income is recorded on the loan receivable and the Partnership records capitalized interest during the construction period. In arrangements where the Partnership engages a developer to construct a property or provide funds to a tenant to develop a property, the Partnership will capitalize the funds provided to the developer/tenant and internal costs of interest and real estate taxes, if applicable, during the construction period.

~~Co-borrower~~Restricted ~~Debt~~Cash. In ~~February~~Restricted ~~2013,~~cash ~~the~~is ~~FASB~~comprised ~~issued~~primarily ~~Accounting~~of ~~Standards~~cash ~~Update~~balances ~~2013-04,~~held ~~Obligations~~with ~~Resulting~~Section ~~from~~1031 ~~Joint~~exchange intermediaries and ~~Several~~escrow ~~Liability~~balances ~~Arrangements~~held ~~for~~by ~~Which~~lenders. ~~the~~At ~~Total~~March 31, ~~Amount of the Obligation is Fixed at the Reporting Date~~2016, ~~(“ASU 2013-04”)~~$29,457 ~~requiring~~was ~~recognition~~held ofwith ~~such obligations as the sum of (~~a) ~~the~~Section ~~amount~~1031 ~~the~~exchange ~~reporting~~intermediary ~~entity~~that ~~agreed~~was toreleased ~~pay~~subsequent ~~on the basis of its arrangement among its co-obligors and (b) any additional amount the reporting entity expects~~ to ~~pay~~March 31, ~~on behalf of its co-obligors~~2016. ~~The Partnership early adopted this new guidance in 2013 retrospectively (see note 6).~~

~~Recently~~Co-borrower ~~Issued Accounting Guidance~~Debt. In ~~April~~February ~~2014~~2013, the FASB issued Accounting Standards Update ~~No.~~(“ASU”) ~~2014~~2013-0804, ~~Presentation~~Obligations ofResulting ~~Financial~~from ~~Statements~~Joint ~~(Topic 205)~~ and ~~Property,~~Several ~~Plant~~Liability ~~and~~Arrangements ~~Equipment~~for ~~(Topic~~Which ~~360):~~the ~~Reporting~~Total ~~Discontinued~~Amount ~~Operations and Disclosures~~ of ~~Disposals~~the ofObligation ~~Components~~is ofFixed anat ~~Entity, which changes~~ the ~~criteria~~Reporting ~~for~~Date, ~~reporting~~(“ASU ~~discontinued~~2013-04”), ~~operations~~requiring ~~and~~recognition ~~improves~~of ~~financial~~such ~~statement~~obligations ~~disclosures.~~as ~~Under~~the ~~this~~sum ~~guidance,~~of ~~only disposals representing~~ (a) ~~strategic~~the ~~shift~~amount inthe ~~operations~~reporting ~~that~~entity ~~have~~agreed ato ~~major~~pay ~~effect~~ on anthe ~~organization's~~basis ~~operations~~of ~~and~~its ~~financial~~arrangement ~~results~~among ~~should~~its beco-obligors ~~presented~~and as(b) ~~discontinued~~any ~~operations.~~additional ~~The~~amount ~~Partnership~~the ~~adopted~~reporting ~~this~~entity ~~guidance~~expects ~~effective~~to ~~January~~pay ~~1, 2015. The implementation of this guidance did not have a material impact~~ on ~~the~~behalf ~~Partnership's financial position, results~~ of ~~operations~~its ~~or cash flows~~co-obligors.

Reclassifications. Certain amounts included in the 2015 unaudited condensed consolidated financial statements have been reclassified to conform to the 2016 presentation.

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LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, $000, except share/unit data)

InThe ~~May~~Partnership ~~2014,~~adopted ~~the~~ASU ~~FASB~~2015-03, ~~issued~~Simplifying ~~Accounting~~the ~~Standards~~Presentation ~~Update~~of ~~No.~~Debt ~~2014-09~~Issuance Costs, ~~Revenue~~during ~~from~~the ~~Contracts~~three ~~with~~months ~~Customers~~ended ~~(Topic~~March ~~606)~~31, ~~which~~2016. ASU 2015-03 amends ~~the~~current presentation guidance ~~for~~by ~~revenue~~requiring ~~recognition~~that todebt ~~eliminate~~issuance ~~the~~costs ~~industry-specific~~related ~~revenue~~to ~~recognition~~a ~~guidance~~recognized ~~and~~debt ~~replace~~liability itbe ~~with~~presented ain ~~principle~~the ~~based~~balance ~~approach~~sheet ~~for~~as ~~determining~~a ~~revenue~~direct ~~recognition.~~deduction ~~The~~from ~~effective~~the ~~date~~carrying amount of ~~the~~that ~~new~~debt ~~guidance~~liability, ~~was~~consistent ~~updated~~with bydebt ~~Accounting~~discounts. Prior ~~Standards~~to ~~Update~~the ~~No.~~issuance of ASU 2015-1403, ~~and~~debt isissuance ~~effective~~costs ~~for~~were ~~reporting~~required ~~periods~~to ~~beginning~~be ~~after~~presented ~~December~~as ~~15,~~an ~~2017.~~asset ~~The~~in ~~Partnership~~the isbalance ~~currently~~sheet. As ~~evaluating~~shown in the ~~impact~~table ofbelow, pursuant to the ~~adoption~~guidance ofin ASU 2015-03, the ~~new~~Partnership ~~guidance~~has onreclassified ~~its~~unamortized debt issuance costs associated with certain debt obligations in the Company's previously reported consolidated ~~financial~~balance ~~statements.~~sheet as of December 31, 2015 as follows:

In February 2015, the FASB issued Accounting Standards Update 2015-02, “Consolidation (Topic 810) - Amendments to the Consolidation Analysis,” which provides guidance on the consolidation evaluation for reporting organizations that are required to evaluate whether they should consolidate certain legal entities. In accordance with the guidance, all legal entities are subject to reevaluation under the revised consolidation model. The guidance is effective in the first quarter of 2016 and early adoption is allowed. The Partnership is currently evaluating the impact of the adoption of this new guidance on its consolidated financial statements.



	As previously reported December 31, 2015		Reclassifications			As adjusted December 31, 2015
Deferred expenses, net	$	14,352	$	(5,893	)	$	8,459
Mortgages and notes payable, net	437,492		(5,893		)	431,599

Recently Issued Accounting Guidance. In April ~~2015~~2014, the FASB issued ~~Accounting~~ASU ~~Standards Update 2015~~2014-0308, ~~“Simplifying the~~ Presentation of ~~Debt~~Financial ~~Issuance~~Statements ~~Costs”~~(Topic 205) and Property, ~~which~~Plant ~~requires~~and ~~that~~Equipment ~~debt~~(Topic ~~issuance~~360): ~~costs~~Reporting beDiscontinued ~~presented~~Operations onand ~~the~~Disclosures ~~balance~~of ~~sheet~~Disposals asof aComponents ~~direct~~of ~~deduction~~an ~~from~~Entity, which changes the ~~carrying~~criteria ~~amount~~for ofreporting ~~the~~discontinued ~~related~~operations ~~debt~~and ~~liability~~improves financial statement disclosures. ~~The~~ Under this guidance, isonly ~~effective~~disposals representing a strategic shift in ~~the~~operations ~~first~~that ~~quarter~~have ofa ~~2016~~major effect on an organization's operations and ~~requires~~financial ~~retrospective~~results ~~application~~should be presented as discontinued operations. The Partnership isadopted ~~currently~~this ~~evaluating~~guidance ~~the~~effective ~~impact~~January of1, ~~the~~2015. ~~adoption~~The implementation of this ~~new~~ guidance did not have a material impact on ~~its~~the ~~consolidated~~Partnership's financial ~~statements~~position, results of operations or cash flows.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (2Topic 606) ~~Real~~, ~~Estate~~which amends the guidance for revenue recognition to eliminate the industry-specific revenue recognition guidance and replace it with a principle-based approach for determining revenue recognition. The effective date of the new guidance was updated by ASU 2015-14 and is effective for reporting periods beginning after December 15, 2017. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), which clarifies the implementation guidance on principal versus agent considerations. The Partnership is currently evaluating the impact of the adoption of the new guidance on its consolidated financial statements.

~~The~~In ~~Partnership's~~February ~~real~~2015, ~~estate~~the FASB issued ASU 2015-02, ~~net~~Consolidation (Topic 810) - Amendments to the Consolidation Analysis, ~~consists~~which ofprovides guidance on the ~~following~~consolidation atevaluation ~~September 30,~~for ~~2015~~reporting ~~and~~organizations ~~December 31~~that are required to evaluate whether they should consolidate certain legal entities. In accordance with the guidance, ~~2014:~~all legal entities are subject to reevaluation under the revised consolidation model. The guidance was effective in the first quarter of 2016. The adoption of this new guidance did not have an impact on the Partnership's consolidated financial statements.

	September 30, 2015			December 31, 2014
Real estate, at cost:
Buildings and building improvements	$	576,980		$	552,994
Land, land estates and land improvements	355,101			347,290
Fixtures and equipment	84			84
Construction in progress	385			9,745
Real estate intangibles:
In-place lease values	141,653			141,653
Tenant relationships	20,256			20,256
Above-market leases	4,031			4,031
	1,098,490			1,076,053
Accumulated depreciation and amortization(1)	(246,903		)	(226,084		)
Real estate, net	$	851,587		$	849,969

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which requires lessees to recognize a right of use asset and related lease liability for those leases classified as operating leases at the commencement date and have lease terms of more than 12 months. The accounting applied to lessors under this new guidance is largely unchanged from prior guidance. Lessors in most cases will continue to record operating leases as operating leases and recognize lease income from these leases generally on a straight-line basis over the lease term. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, and interim periods within those years, and requires a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. The Partnership is currently evaluating the impact of the adoption of the new guidance on its consolidated financial statements.

(1) Includes accumulated amortization of real estate intangible assets of $53,970 and $49,917 in 2015 and 2014, respectively.

In addition, the Partnership had below-market leases, net of accumulated accretion, which are included in deferred revenue, of $104 and $247, respectively, as of September 30, 2015 and December 31, 2014.

During the nine months ended September 30, 2014, the Partnership sold its interest in a property for a gross sale price of $41,000 and recognized a gain on sale of property of $17,944.

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LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, $000, except share/unit data)

(32) ~~Loans~~ Real ~~Receivable~~Estate and Real Estate Under Construction

AsThe ~~of December 31, 2014, the~~ Partnership's ~~loans~~real ~~receivable~~estate, ~~were~~net, ~~comprised~~consists of ~~mortgage~~the ~~loans~~following onat ~~real~~March 31, ~~estate.~~2016 and December 31, 2015:

The following is a summary of the Partnership's loans receivable as of December 31, 2014:



	March 31, 2016			December 31, 2015
Real estate, at cost:
Buildings and building improvements	$	680,148		$	705,547
Land, land estates and land improvements	350,384			355,608
Fixtures and equipment	84			84
Construction in progress	443			367
Real estate intangibles:
In-place lease values	165,413			165,413
Tenant relationships	20,256			20,256
Above-market leases	4,031			4,031
Investment in real estate under construction	14,968			9,223
	1,235,727			1,260,529
Accumulated depreciation and amortization⁽¹⁾	(254,372		)	(255,024		)
Real estate, net	$	981,355		$	1,005,505

	Loan carrying-value(1)
Loan	12/31/2014		Interest Rate		Maturity Date
Westmont, IL(2)	$	12,152	6.45	%	10/2015
Southfield, MI(3)	3,296		4.55	%	02/2015
	$	15,448


(1)	Includes accumulated amortization of real estate intangible assets of $56,894 and $55,334 in 2016 and 2015, respectively.

~~(1)~~In ~~Loan~~addition, ~~carrying~~the ~~value~~Partnership ~~includes~~had ~~accrued~~below-market ~~interest~~leases, ~~and is~~ net of ~~origination~~accumulated ~~costs~~accretion, which are included in deferred revenue, of $88 and ~~loan~~$96, ~~losses~~respectively, ifas ~~any~~of March 31, 2016 and December 31, 2015.

~~(2)~~As ~~In July 2015, the Partnership acquired the office property collateral and $2,521 cash collateral and received $1,400 in full settlement~~ of ~~its claim against the borrower. During the nine months ended September 30~~March 31, ~~2015 and 2014~~2016, the Partnership ~~recognized~~had ~~$0 and $1,284 of interest income relating to~~ the ~~impaired~~following ~~loan,~~development ~~respectively.~~arrangement outstanding:

(3) In April 2015, the Partnership acquired the office property from the borrower. During the nine months ended September 30, 2015, the Partnership recognized $14 of interest income relating to the impaired loan.

Location

Property Type

Square Feet

Expected Maximum Commitment

Lease Term (Years)

Estimated Completion Date

GAAP Investment Balance as of 3/31//16

Charlotte, NC

Office

201,000

62,445

1Q 17

14,968

~~Prior~~The ~~to December 31, 2014, the~~ Partnership ~~had~~can ~~two~~give ~~types~~no ofassurances ~~financing receivables: loans receivable secured by commercial real estate and a capitalized financing lease. The Partnership determined~~ that ~~its~~this ~~financing~~development ~~receivables~~arrangement ~~operated~~will ~~within~~be ~~one~~consummated ~~portfolio segment as they were within the same industry and used the same impairment methodology. The capitalized financing lease~~or, ~~for~~if ~~a commercial property located in Greenville~~consummated, ~~South~~will ~~Carolina,~~perform ~~was~~to ~~sold in December 2014. In addition,~~ the Partnership's ~~assesses all financing receivables for impairment, when warranted, based on an individual analysis of each receivable~~expectations.

~~The~~During ~~Partnership's~~the ~~financing~~three ~~receivables~~months ~~operated~~ended ~~within~~March 31, ~~one~~2016, ~~class~~the ofPartnership ~~financing~~sold ~~receivables~~its asinterest ~~these~~in ~~assets~~a ~~(1)~~property ~~were~~for ~~collateralized~~a bygross ~~commercial~~sale ~~real~~price ~~estate~~of $30,050 and ~~(2)~~a ~~similar~~vacant ~~metrics~~land ~~were~~parcel ~~used~~for ~~to monitor the risk and performance of these assets~~$400. The Partnership ~~uses~~recognized ~~credit~~gains ~~quality~~on ~~indicators~~sales toof ~~monitor~~properties ~~financing receivables such as quality~~ of ~~collateral~~$7, ~~the underlying tenant's credit rating and collection experience~~839.

(4) Investments in and Advances to Non-Consolidated Entities

In July 2014, the Partnership acquired a 1.0% interest in an office property in Philadelphia, Pennsylvania for $263. The Partnership accounts for this investment under the cost basis of accounting.

On September 1, 2012, the Partnership acquired a 2% equity interest in Net Lease Strategic Assets Fund L.P. (“NLS”) for cash of $189 and the issuance of 457,211 limited partner units to Lexington. At the date of acquisition, NLS owned 41 properties totaling 5.8 million square feet in 23 states, plus a 40% tenant-in-common interest in an office property.

The Partnership's carrying value in NLS at September 30, 2015 and December 31, 2014 was $5,764 and $4,474, respectively. The Partnership recognized net income from NLS of $127 and $90 in equity in earnings from non-consolidated entities during the nine months ending September 30, 2015 and 2014, respectively. The Partnership contributed $1,623 to NLS during the nine months ended September 30, 2015. In addition, the Partnership received distributions of $460 and $662 from NLS during the nine months ended September 30, 2015 and 2014, respectively.

(5) Fair Value Measurements

The following table presents the Partnership's assets and liabilities from continuing operations measured at fair value on a non-recurring basis during the year ended December 31, 2014, aggregated by the level in the fair value hierarchy within which those measurements fall:

	Balance		Fair Value Measurements Using
Description	December 31, 2014		(Level 1)		(Level 2)		(Level 3)
Impaired loan receivable*	$	3,296	$	—	$	—	$	3,296

*Represents a non-recurring fair value measurement.

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LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, $000, except share/unit data)

~~There~~(3) Investments ~~were~~in noand ~~non-recurring~~Advances ~~measurements~~to ~~from~~Non-Consolidated ~~continuing operations during the nine months ended September 30, 2015.~~Entities

~~The~~In ~~table~~July ~~below~~2014, ~~sets~~the ~~forth~~Partnership ~~the~~acquired ~~carrying~~a ~~amounts~~1.0% ~~and~~interest ~~estimated~~in ~~fair~~an ~~values~~office ofproperty ~~the~~in Philadelphia, Pennsylvania for $263. The Partnership's ~~financial~~accounts ~~instruments~~for asthis ofinvestment ~~September 30,~~under ~~2015~~the ~~and~~cost ~~December 31,~~basis ~~2014:~~of accounting.

	As of September 30, 2015				As of December 31, 2014
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets
Loans Receivable (Level 3)	$	—	$	—	$	15,448	$	16,935
Liabilities
Debt (Level 3)	$	496,224	$	501,032	$	465,318	$	470,281

The Partnership's ~~estimates~~carrying ~~the~~value ~~fair~~in ~~values~~NLS ofat ~~its~~March 31, ~~loans~~2016 ~~receivable~~and byDecember 31, ~~using~~2015 anwas ~~estimated~~$5,445 ~~discounted~~and ~~cash~~$5,622, ~~flow~~respectively. ~~analysis~~The ~~consisting~~Partnership ofrecognized ~~scheduled~~net ~~cash~~income ~~flows~~from ~~and~~NLS ~~discount~~of ~~rate~~$131 ~~estimates~~and to$42 ~~approximate~~in ~~those~~equity ~~that~~in aearnings ~~willing~~from ~~buyer~~non-consolidated ~~and~~entities ~~seller~~during ~~might~~the ~~use~~three ~~and/or~~months ~~the~~ending ~~estimated~~March 31, ~~value~~2016 ofand ~~the~~2015, ~~underlying collateral~~respectively. The ~~fair~~Partnership ~~value~~contributed of$1,249 ~~the~~to ~~Partnership's~~NLS ~~debt~~during isthe ~~estimated~~three bymonths ~~using~~ended aMarch 31, ~~discounted~~2015. ~~cash~~In ~~flow analysis~~addition, ~~based~~the ~~upon~~Partnership ~~estimates~~received distributions of ~~market~~$308 ~~interest~~from ~~rates~~NLS during the three months ended March 31, 2016.

(4) Fair Value Measurements

The following table presents the Partnership's assets and liabilities from continuing operations measured at fair value on a non-recurring basis during the year ended December 31, 2015, aggregated by the level in the fair value hierarchy within which those measurements fall:



	Balance		Fair Value Measurements Using
Description	December 31, 2015		(Level 1)		(Level 2)		(Level 3)
Impaired real estate asset*	$	371	$	—	$	—	$	371

*Represents a non-recurring fair value measurement.

There were no non-recurring measurements during the three months ended March 31, 2016.

The table below sets forth the carrying amounts and estimated fair values of the Partnership's financial instruments as of March 31, 2016 and December 31, 2015:



	As of March 31, 2016				As of December 31, 2015
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Liabilities
Debt (Level 3)	$	632,404	$	650,374	$	632,705	$	650,785

The fair value of the Partnership's debt is estimated by using a discounted cash flow analysis, based upon estimates of market interest rates.

Fair values cannot be determined with precision, may not be substantiated by comparison to quoted prices in active markets and may not be realized upon sale. Additionally, there are inherent uncertainties in any fair value measurement technique, and changes in the underlying assumptions used, including discount rates, liquidity risks and estimates of future cash flows, could significantly affect the fair value measurement amounts.

Cash Equivalents, Restricted Cash, Accounts Receivable and Accounts Payable. The Partnership estimates that the fair value of cash equivalents, restricted cash, accounts receivable and accounts payable approximates carrying value due to the relatively short maturity of the instruments.

(6) Mortgages and Notes Payable and Co-Borrower Debt

The Partnership had outstanding mortgages and notes payable of $327,874 and $328,351 as of September 30, 2015 and December 31, 2014, respectively. Interest rates, including imputed rates, ranged from 4.1% to 6.5% at September 30, 2015, 4.7% to 6.5% at December 31, 2014 and the mortgages and notes payable mature between 2016 and 2027. The weighted-average interest rate at September 30, 2015 and December 31, 2014 was approximately 4.9% and 5.0%, respectively.

In September 2015, Lexington, and the Partnership as co-borrower, entered into a new $905,000 unsecured credit agreement with KeyBank National Association as agent, which replaced Lexington's existing revolving credit facility and term loans. With lender approval, Lexington can increase the size of the new facility to an aggregate $1,810,000. A summary of the significant terms are as follows:

	Prior Maturity Date	NewMaturity Date	Prior Interest Rate	Current Interest Rate
$400,000 Revolving Credit Facility(1)	02/2017	08/2019	LIBOR + 1.15%	LIBOR + 1.00%
$250,000 Term Loan(2)	02/2018	08/2020	LIBOR + 1.35%	LIBOR + 1.10%
$255,000 Term Loan(3)	01/2019	01/2021	LIBOR + 1.75%	LIBOR + 1.10%

(1) Maturity date can be extended to 08/2020 at the Lexington's option. The interest rate ranges from LIBOR plus 0.85% to 1.55% (previously 0.95% to 1.725%). At September 30, 2015, the unsecured revolving credit facility had $73,000 outstanding, outstanding letters of credit of $10,000 and availability of $317,000 subject to covenant compliance.

(2) The interest rate ranges from LIBOR plus 0.90% to 1.75% (previously 1.10% to 2.10%). Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.09% through February 2018 on the $250,000 of outstanding LIBOR-based borrowings.

(3) The interest rate ranges from LIBOR plus 0.90% to 1.75% (previously 1.50% to 2.25%). Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on the $255,000 of outstanding LIBOR-based borrowings.

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LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, $000, except share/unit data)

~~Lexington~~(5) Mortgages ~~was~~and inNotes ~~compliance~~Payable ~~with~~and ~~all~~Co-Borrower ~~applicable financial covenants contained in its corporate level debt agreements at September 30, 2015.~~Debt

InThe ~~accordance~~Company ~~with~~had the ~~guidance~~following ofmortgages ~~ASU~~and ~~2013-04,~~notes ~~the~~payable ~~Partnership, as it is a co-borrower with Lexington, recognizes a proportion of the~~ outstanding ~~amounts of the above mentioned term loans and revolving credit facility~~ as ~~co-borrower debt in the accompanying unaudited condensed consolidated balances sheets. In accordance with the Partnership’s partnership agreement, the Partnership is allocated a portion~~ of ~~these debts based on gross rental revenues, which represents its agreed to obligation. The Partnership's allocated co-borrower debt was $168,350 and $136,967 as of September~~March 3031, ~~2015~~2016 and December 31, ~~2014, respectively. Changes in co-borrower debt are recognized in partners’ capital in the accompanying unaudited condensed consolidated statements of changes in partners’ capital.~~ 2015:



	March 31, 2016			December 31, 2015
Mortgages and notes payable	$	437,130		$	437,492
Unamortized debt issuance costs	(5,779		)	(5,893		)
	$	431,351		$	431,599

Interest rates, including imputed rates, ranged from 4.0% to 6.5% at March 31, 2016 and December 31, 2015, and the mortgages and notes payable mature between 2016 and 2027. The weighted-average interest rate at March 31, 2016 and December 31, 2015 was approximately 4.7%.

Lexington, and the Partnership as co-borrower, have a $905,000 unsecured credit agreement with KeyBank National Association, as agent. With lender approval, Lexington can increase the size of the facility to an aggregate $1,810,000. A summary of the significant terms are as follows:



	Maturity Date	Current Interest Rate
$400,000 Revolving Credit Facility⁽¹⁾	August 2019	LIBOR + 1.00%
$250,000 Term Loan⁽²⁾	August 2020	LIBOR + 1.10%
$255,000 Term Loan⁽³⁾	January 2021	LIBOR + 1.10%


(1)	Maturity date can be extended to August 2020 at the Lexington's option. The interest rate ranges from LIBOR plus 0.85% to 1.55%. At March 31, 2016, the revolving credit facility had $147,000 outstanding and availability of $253,000 subject to covenant compliance.


(2)	The interest rate ranges from LIBOR plus 0.90% to 1.75%. Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.09% through February 2018 on the $250,000 of outstanding LIBOR-based borrowings.


(3)	The interest rate ranges from LIBOR plus 0.90% to 1.75%. Interest-rate swap agreements were previously entered into to fix the LIBOR component at a weighted-average rate of 1.42% through January 2019 on the $255,000 of outstanding LIBOR-based borrowings.

Lexington was in compliance with all applicable financial covenants contained in its corporate level debt agreements at March 31, 2016.

In accordance with the guidance of ASU 2013-04, the Partnership, as it is a co-borrower with Lexington, recognizes a proportion of the outstanding amounts of the above-mentioned term loans and revolving credit facility as co-borrower debt in the accompanying unaudited condensed consolidated balances sheets. In accordance with the Partnership’s partnership agreement, the Partnership is allocated a portion of these debts based on gross rental revenues, which represents its agreed to obligation. The Partnership's allocated co-borrower debt was $201,053 and $201,106 as of March 31, 2016 and December 31, 2015, respectively. Changes in co-borrower debt are recognized in partners’ capital in the accompanying unaudited condensed consolidated statements of changes in partners’ capital.

Mortgages payable and secured loans are generally collateralized by real estate and the related leases. Certain mortgages payable have yield maintenance or defeasance requirements relating to any prepayments. In addition, certain mortgages are cross-collateralized and cross-defaulted.

(7) Concentration of Risk

Subject to the terms of the partnership agreement, the Partnership seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the nine months ended September 30, 2015 and 2014, the following tenants represented greater than 10% of rental revenues from continuing operations:

	2015		2014
SM Ascott LLC(1)	14.9	%	16.1	%
FC-Canal Ground Tenant LLC	12.7	%	13.8	%
AL-Stone Ground Tenant LLC	11.6	%	12.6	%

(1) Tenancy was assigned from LG-39 Ground Tenant LLC in 2015.

The Partnership net leases these individual land parcels to the tenants under non-cancellable 99-year leases. The improvements on these parcels are owned by the tenants under the Partnership leases and currently consist of three high-rise hotels located in New York, NY. The hotels are known as the Element New York Times Square West, the Sheraton Tribeca New York Hotel and the DoubleTree by Hilton Hotel New York City - Financial District, respectively.

Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Partnership believes it mitigates this risk by investing in or through major financial institutions.

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LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, $000, except share/unit data)

(86) ~~Related~~Concentration ~~Party~~of ~~Transactions~~Risk

Subject to the terms of the partnership agreement, the Partnership seeks to reduce its operating and leasing risks through the geographic diversification of its properties, tenant industry diversification, avoidance of dependency on a single asset and the creditworthiness of its tenants. For the three months ended March 31, 2016 and 2015, the following tenants represented greater than 10% of rental revenues from continuing operations:



	2016		2015
SM Ascott LLC⁽¹⁾⁽²⁾	13.6	%	14.7	%
FC-Canal Ground Tenant LLC⁽²⁾	11.7	%	12.6	%
AL-Stone Ground Tenant LLC⁽²⁾	10.6	%	11.5	%
Preferred Freezer Services of Richland, LLC	10.3	%	—


(1)	Tenancy was assigned from LG-39 Ground Tenant LLC in 2015.

(2)

The Partnership net leases these individual land parcels to the tenants under non-cancellable 99-year (original term) leases. The improvements on these parcels are owned by the tenants under the Partnership leases and currently consist of three high-rise hotels located in New York, NY. The hotels are known as the Element New York Times Square West, the Sheraton Tribeca New York Hotel and the DoubleTree by Hilton Hotel New York City - Financial District, respectively.

Cash and cash equivalent balances at certain institutions may exceed insurable amounts. The Partnership believes it mitigates this risk by investing in or through major financial institutions.

(7) Related Party Transactions

The Partnership had the following related party transactions in addition to related party transactions discussed elsewhere in this Quarterly Report and the audited consolidated financial statements in the Annual Report.

As of December 31, 2014, the Partnership had an $8,250 outstanding related party loan owed to Lexington. The loan required interest only payments at a rate of 4.25%. The Partnership satisfied the loan during the ~~nine~~three months ended ~~September~~March 3031, 2015. In addition, the Partnership had outstanding net advances owed to Lexington of $34,~~127~~019 and $3,~~061~~232 as of ~~September~~March 3031, ~~2015~~2016 and December 31, ~~2014~~2015, respectively. The advances are payable on demand. Lexington earned distributions of $4215,~~486~~876 and $3913,~~993~~735 during the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014, respectively. During the nine months ended September 30,~~ 2015 ~~and 2014~~, ~~the Partnership issued 3,767,000 and 2,571,757 units,~~ respectively~~, to Lexington to satisfy outstanding distributions and advances of $37,879 and $27,981, respectively~~.

The Partnership was allocated interest expense by Lexington, in accordance with the partnership agreement, relating to certain lending facilities of $93,~~150~~161 and $73,~~336~~015 for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively.

Lexington, on behalf of the General Partner, pays for certain general administrative and other costs on behalf of the Partnership from time to time. These costs are reimbursable by the Partnership. These costs were approximately $62,~~633~~125 and $52,~~640~~062 for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively.

A Lexington affiliate provides property management services for certain Partnership properties. The Partnership recognized property operating expenses of $~~691~~204 and $~~743~~289 for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively, for aggregate fees and reimbursements charged by the affiliate.

(98) Commitments and Contingencies

In addition to the commitments and contingencies disclosed elsewhere, the Partnership has the following commitments and contingencies.

The Partnership is obligated under certain tenant leases, including its proportionate share for leases for non-consolidated entities, to fund the expansion of the underlying leased properties. ~~During 2014, the Partnership commenced the expansion of the Byhalia, Mississippi property for an estimated cost of $15,300.~~ The Partnership, under certain circumstances, may guarantee to tenants the completion of base building improvements and the payment of tenant improvement allowances and lease commissions on behalf of its subsidiaries.

The Partnership and Lexington are parties to a funding agreement under which each party may be required to fund distributions made on account of OP units or dividends made on account of Lexington common shares. Pursuant to the funding agreement, the parties agreed that, if the Partnership does not have sufficient cash available to make a quarterly distribution to its limited partners in an amount equal to whichever is applicable of (1) a specified distribution set forth in its partnership agreement or (2) the cash dividend payable with respect to a whole or fractional Lexington common share into which the partnership's common units would be converted if they were redeemed for Lexington common shares in accordance with the partnership agreement, Lexington will fund the shortfall. Payments under the agreement will be made in the form of loans to the Partnership and will bear interest at prevailing rates as determined by Lexington in its discretion but no less than the applicable federal rate. The Partnership's right to receive these loans will expire if no OP units remain outstanding and all such loans were repaid. No amounts have been advanced under this agreement.

In May 2014, the Partnership guaranteed $250,000 aggregate principal amount of 4.40% Senior Notes due 2024 (“2024 Senior Notes”) issued by Lexington at an issuance price of 99.883% of the principal amount and in June 2013, the Partnership guaranteed $250,000 aggregate principal amount of 4.25% Senior Notes due 2023 (“ 2023 Senior Notes”) issued by Lexington at an issuance price of 99.026% of the principal amount, collectively the Senior Notes. The Senior Notes are unsecured and pay interest semi-annually in arrears. Lexington may redeem the Senior Notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium.

During 2010, the Partnership guaranteed $115,000 aggregate principal amount of 6.00% Convertible Guaranteed Notes due 2030 (“Guaranteed Notes”) issued by Lexington. The Guaranteed Notes pay interest semi-annually in arrears and mature in January 2030. The holders of the Guaranteed Notes may require Lexington to repurchase their notes in January 2017, January 2020 and January 2025 for cash equal to 100% of the notes to be repurchased, plus any accrued and unpaid interest. The Guaranteed Notes are convertible by the holders under certain circumstances for cash, Lexington common shares or a combination of cash and common shares at Lexington's election. As of September 30, 2015, $12,400 original principal amount of Guaranteed Notes were outstanding.

From time to time, the Partnership is directly or indirectly involved in legal proceedings arising in the ordinary course of the Partnership's business. The Partnership believes, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on the Partnership's business, financial condition and results of operations.

(10) Supplemental Disclosure of Statement of Cash Flow Information

In addition to disclosures discussed elsewhere, during the nine months ended September 30, 2015 and 2014, the Partnership paid $21,001 and $20,284, respectively, for interest and $57 and $100, respectively, for income taxes.

(11) Subsequent Events

Subsequent to September 30, 2015 and in addition to disclosures elsewhere in the unaudited condensed consolidated financial statements, the Partnership entered into an agreement for an office build-to-suit project in Charlotte, North Carolina, subject to a 15-year net lease at an 8.3% initial capitalization rate and 2.0% annual escalations, for a maximum commitment of $62,445 which is expected to be completed in the first quarter of 2017.

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LEPERCQ CORPORATE INCOME FUND L.P. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited, $000, except share/unit data)

In May 2014, the Partnership guaranteed $250,000 aggregate principal amount of 4.40% Senior Notes due 2024 (“2024 Senior Notes”) issued by Lexington at an issuance price of 99.883% of the principal amount and in June 2013, the Partnership guaranteed $250,000 aggregate principal amount of 4.25% Senior Notes due 2023 (“ 2023 Senior Notes”) issued by Lexington at an issuance price of 99.026% of the principal amount, collectively referred to as the Senior Notes. The Senior Notes are unsecured and pay interest semi-annually in arrears. Lexington may redeem the Senior Notes at its option at any time prior to maturity in whole or in part by paying the principal amount of the notes being redeemed plus a premium.

During 2010, the Partnership guaranteed $115,000 aggregate principal amount of 6.00% Convertible Guaranteed Notes due 2030 (“Guaranteed Notes”) issued by Lexington. The Guaranteed Notes pay interest semi-annually in arrears and mature in January 2030. The holders of the Guaranteed Notes may require Lexington to repurchase their notes in January 2017, January 2020 and January 2025 for cash equal to 100% of the notes to be repurchased, plus any accrued and unpaid interest. The Guaranteed Notes are convertible by the holders under certain circumstances for cash, Lexington common shares or a combination of cash and common shares at Lexington's election. As of March 31, 2016, $12,400 original principal amount of Guaranteed Notes were outstanding.

(9) Supplemental Disclosure of Statement of Cash Flow Information

In addition to disclosures discussed elsewhere, during the three months ended March 31, 2016 and 2015, the Partnership paid (received) $7,585 and $7,225, respectively, for interest and $(40) and $(2), respectively, for income taxes.

(10) Subsequent Events

Subsequent to March 31, 2016 and in addition to disclosures elsewhere in the unaudited condensed consolidated financial statements, the Partnership:


•	sold its West 45th Street, New York, New York land investment for a sales price of $37,500, which was subject to a $29,193 aggregate principal mortgage; and


•	sold its property in Lake Forest, California for a sales price of $19,000.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Introduction

When we use the terms “the Partnership,” “we,” “us” and “our,” we mean Lepercq Corporate Income Fund L.P. and all entities owned by us, including non-consolidated entities, except where it is clear that the term means only the parent company. References to Lex GP are to our general partner, Lex GP-1 Trust, a Delaware statutory trust, and references to Lex LP are to Lex LP-1 Trust, a Delaware statutory trust, which hold together approximately 9596.0% of our OP units. When we use the term “Lexington” or “LXP,” we mean Lexington Realty Trust and when we use the term “REIT” we mean real estate investment trust. References herein to ‘‘this Quarterly Report” are to this Quarterly Report on Form 10-Q for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016. The results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015 are not necessarily indicative of the results that may be expected for the full year.

The following is a discussion and analysis of our unaudited condensed consolidated financial condition and results of operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, and significant factors that could affect our prospective financial condition and results of operations. This discussion should be read together with the accompanying unaudited condensed consolidated financial statements and notes thereto and with our consolidated financial statements and notes thereto included in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, or SEC, on February 2625, ~~2015~~2016, which we refer to as our Annual Report. Historical results may not be indicative of future performance.

Forward-Looking Statements. This Quarterly Report, together with other statements and information publicly disseminated by us, contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “believes,” “expects,” “intends,” “anticipates,” “estimates,” “projects,” “may,” “plans,” “predicts,” “will,” “will likely result” or similar expressions. Readers should not rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performances or achievements. In particular, the factors that could cause actual results, performances or achievements to differ materially from current expectations, strategies or plans include, among others, any risks discussed below in this "Management's Discussion and Analysis of Financial Condition and Results of Operations," and under the headings “Risk Factors” in this Quarterly Report and “Risk Factors” and “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report and other periodic reports filed with the SEC. Except as required by law, we undertake no obligation to publicly release any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. Accordingly, there is no assurance that our expectations will be realized.

Critical Accounting Policies.

Management's discussion and analysis of financial condition and results of operations is based upon our unaudited condensed consolidated financial statements, which have been prepared in accordance with GAAP. In preparing our unaudited condensed consolidated financial statements in accordance with GAAP and pursuant to the rules and regulations of the SEC, we make assumptions, judgments and estimates that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosures of contingent assets and liabilities. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis, we evaluate our assumptions, judgments and estimates. ~~Our~~Certain of our accounting policies are discussed under (1) Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report, (2) note 2 to our consolidated financial statements contained in our Annual Report and (3) note 1 to our unaudited condensed consolidated financial statements contained in this Quarterly Report. We believe there have been no material changes to the items that we disclosed as our critical accounting policies under Item 7, “Management's Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report.

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Liquidity

Cash Flows. We believe that cash flows from operations will continue to provide adequate capital to fund our operating and administrative expenses, regular debt service obligations and all distribution payments in accordance with our partnership agreement requirements in both the short-term and long-term. However, without a capital event, which would most likely involve LXP, we do not have the ability to fund balloon payments on maturing mortgages or acquire new investments.

Cash flows from operations as reported in the unaudited condensed consolidated statements of cash flows totaled $~~27.~~9.2 million and $298.69 million during the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively. The ~~decrease~~increase was primarily due to ~~a reduction in~~ operating cash flows ~~from properties sold in the third and fourth quarter of 2014 and the allocation of costs from Lexington, offset in part by operating cash flows~~ generated from an acquired ~~properties~~property in ~~2014~~2015. The underlying drivers that impact working capital and therefore cash flows from operations are the timing of (1) the collection of rents and tenant reimbursements ~~and loan interest payments from borrowers~~, (2) the payment of interest on mortgage debt and (3) operating and general and administrative costs. We believe the net-lease structure of the leases encumbering a majority of the properties in which we have an interest mitigates the risks of the timing of cash flows from operations since the payment and timing of operating costs related to the properties are generally borne directly by the tenant. Collection and timing of tenant rents is closely monitored by management as part of our cash management program.

Net cash used in investing activities totaled $156.23 million and $49.32 million during the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively. Cash provided by investing activities related primarily to proceeds from the sale of properties, ~~principal payments received on loans receivable~~ and distributions from non-consolidated entities in excess of accumulated earnings. Cash used in investing activities related primarily to capital expenditures on real estate properties, investments in real estate under construction, investments in non-consolidated entities, an increase in deferred leasing costs, and an increase in escrow deposits ~~and restricted cash and an investment in a loan receivable~~.

Net cash used in financing activities totaled $89.53 million and $300.24 million during the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, respectively. Cash used in financing activities was primarily attributable to distribution payments, ~~redemption of OP units,~~ an increase in deferred financing costs and debt payments. Cash provided by financing activities was primarily attributable to proceeds of mortgages and notes payable and related party advances, net.

Property Specific Debt. As of ~~September~~March ~~30, 2015 and December~~ 31, ~~2014~~2016, we had $~~327~~15.90 million and $~~328~~8.47 million, ~~respectively,~~ of ~~consolidated~~ property specific debt ~~outstanding. As of September 30, 2015, we had no property specific debt~~ with related balloon payments maturing in ~~2015~~2016 and ~~$15.0~~2017, ~~million of property specific debt with related balloon payments maturing in 2016~~respectively. If a mortgage loan is unable to be refinanced upon maturity, we will be dependent on LXP’s liquidity resources to satisfy such mortgage loan to avoid transferring the underlying property to the lender or selling the underlying property to a third party. During the ~~nine~~three months ended ~~September~~March 3031, 2015, we obtained a $29.2 million non-recourse mortgage, which matures January 2025 and has a fixed interest rate of 4.1%.

Capital Recycling. ~~We did not sell any properties during the nine months ended September 30, 2015.~~ During the ~~nine~~three months ended ~~September~~March 3031, ~~2014~~2016, we disposed of our interest in a property for a gross sales price of $4130.1 million and a vacant parcel of land for $0.4 million.

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Results of Operations

Three months ended ~~September~~March 3031, ~~2015~~2016 compared with the three months ended ~~September~~March 3031, ~~2014~~2015. The increase in total gross revenues of $12.45 million is primarily attributable to an increase in rental revenue. The increase in rental revenue of $12.15 million was primarily due to rental revenue from newly acquired properties and a property expansion and lease termination income of $4.1 million, offset in part by a ~~loss~~reduction in rental revenue of $2.1 million due to a change in occupancy at certain properties.

~~The~~Depreciation ~~increase in general~~ and ~~administrative~~amortization ~~expense~~increased ofby $02.52 million is primarily due to anthe ~~increase~~acquisition inof ~~allocable~~the Richland, Washington property and the acceleration of amortization of lease costs ~~from~~and ~~LXP~~intangible assets due to lease terminations.

~~The~~Interest ~~decrease~~and inamortization ~~non-operating~~increased ~~income of~~ $0.9 million is primarily due to ~~borrower~~the ~~defaults~~financing onof ~~loans~~the ~~receivable~~Richland, ~~coupled~~Washington ~~with~~property, ~~the~~partially ~~sale~~offset ofby athe ~~property~~satisfaction inof ~~2014~~other ~~subject~~non-recourse tomortgage aloans ~~capital~~in ~~lease~~2015.

~~Discontinued~~Gains ~~operations~~on ~~represent~~sales of properties ~~sold~~ during ~~2014~~the orthree ~~held~~months ~~for~~ended ~~sale~~March ~~at December~~ 31, ~~2014~~2016 of $7.8 Wemillion ~~did~~primarily ~~not~~related ~~have~~to ~~any~~the ~~discontinued~~sale ~~operations~~of ~~during~~our ~~the~~property ~~three~~in ~~months~~Palm ~~ended~~Beach ~~September 30~~Gardens, ~~2015~~Florida.

Nine months ended September 30, 2015 compared with the nine months ended September 30, 2014. The increase in total gross revenues of $7.6 million is primarily attributable to an increase in rental revenue of $6.7 million and an increase in tenant reimbursements of $0.9 million. Rental revenue increased primarily due to revenue from newly acquired properties and a property expansion. The increase in tenant reimbursements relates to an increase in reimbursable property costs.

Depreciation and amortization increased $1.4 million primarily due to property acquisitions.

The increase in property operating expense of $2.1 million is primarily due to an increase in vacancy at certain properties and new leases and lease renewals providing that we are responsible for operating expenses.

The decrease in non-operating income of $2.5 million is primarily due to borrower defaults on loans receivable, coupled with the sale of a property in 2014 subject to a capital lease.

The increase in interest and amortization expense of $0.9 million was primarily due to the financing of a New York City land parcel acquired in 2014 and an increase in the allocation of interest from LXP, offset in part by a reduction in interest expense related to mortgages satisfied in 2015 and 2014.

Discontinued operations represent properties sold during 2014 or held for sale at December 31, 2014. We did not have any discontinued operations during the nine months ended September 30, 2015.

Off-Balance Sheet Arrangements

We are co-borrowers or guarantors of corporate borrowing facilities and debt securities of LXP (see notes 65 and 98 to our unaudited condensed consolidated financial statements with respect to debt securities). In addition, we, from time to time, guarantee certain tenant improvement allowances and lease commissions on behalf of subsidiaries when required by the related tenant or lender. However, we do not believe these guarantees are material to us as the obligations under and risks associated with such guarantees are priced into the rent under the lease or the value of the property.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our exposure to market risk relates primarily to our fixed-rate ~~debt~~indebtedness and, to the extent we rely on LXP for liquidity, LXP’s variable-rate ~~debt~~indebtedness. As of ~~September~~March 3031, 2016 and 2015, we had $2145.3 and $27.4 million of consolidated variable-rate co-borrower debt outstanding, which represented 47.31% ofand ~~our long-term indebtedness~~5. ~~There was no variable-rate debt outstanding at September 30~~4%, ~~2014. During the three months ended September 30~~respectively, ~~2015,~~of our ~~variable~~long-~~rate~~term ~~indebtedness~~consolidated ~~had~~aggregate aprincipal ~~weighted-average interest rate of 1~~indebtedness.~~3%.~~ ~~Had~~During the ~~weighted-average interest rate been 100 basis points higher, our interest expense for the~~ three months ended ~~September~~March 3031, ~~2015,~~2016 ~~would have increased by approximately $66 thousand. During the nine months ended September 30, 2015~~ and ~~2014~~2015, our variable-rate indebtedness had a weighted-average interest rate of 1.34% and 1.43%, respectively. Had the weighted-average interest rate been 100 basis points higher, our interest expense for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, would have increased by approximately $~~140~~145 thousand and $411 thousand, respectively.

As of ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015, our aggregate principal consolidated fixed-rate ~~debt~~indebtedness, including co-borrower debt, was $~~475~~592.09 million and $~~463~~477.91 million, respectively, which represented 9592.79% and ~~100~~94.06%, respectively, of our total long-term indebtedness, respectively.

For certain of our financial instruments, fair values are not readily available since there are no active trading markets as characterized by current exchanges between willing parties. Accordingly, we derive or estimate fair values using various valuation techniques, such as computing the present value of estimated future cash flows using discount rates commensurate with the risks involved. However, the determination of estimated cash flows may be subjective and imprecise. Changes in assumptions or estimation methodologies can have a material effect on these estimated fair values. The following fair value was determined using the interest rates that we believe our outstanding fixed-rate debt would warrant as of ~~September~~March 3031, ~~2015~~2016. ~~and~~We believe the fair value is indicative of the interest rate environment as of ~~September~~March 3031, ~~2015~~2016, ~~and~~but this amount does not take into consideration the effects of subsequent interest rate fluctuations. Accordingly, we estimate that the fair value of our fixed-rate ~~debt~~indebtedness, including co-borrower debt, was $~~479~~605.80 million as of ~~September~~March 3031, ~~2015~~2016.

Our interest rate risk objectives are to limit the impact of interest rate fluctuations on cash flows and to lower overall borrowing costs. To achieve these objectives, we manage exposure to fluctuations in market interest rates through the use of fixed-rate debt instruments.

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ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

An evaluation of the effectiveness of the design and operation of our “disclosure controls and procedures” (as defined in Rule 13a-15(e) or 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report was made under the supervision and with the participation of our management, including Lex GP's President and Lex GP's Vice President and Treasurer who are our Principal Executive Officer and our Principal Financial~~/Accounting~~ Officer, respectively. Based upon this evaluation, Lex GP's President and Lex GP's Vice President and Treasurer have concluded that our disclosure controls and procedures (a) are effective to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is timely recorded, processed, summarized and reported and (b) include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including Lex GP's President and Lex GP's Vice President and Treasurer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) during the fiscal quarter to which this report relates that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION


ITEM 1.	Legal Proceedings.

From time to time we are directly and indirectly involved in legal proceedings arising in the ordinary course of our business. We believe, based on currently available information, and after consultation with legal counsel, that although the outcomes of those normal course proceedings are uncertain, the results of such proceedings, in the aggregate, will not have a material adverse effect on our business, financial condition and results of operations.


ITEM 1A.	Risk Factors.

There have been no material changes in our risk factors from those disclosed in our Annual Report which are incorporated herein by reference.

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ITEM 6. Exhibits.

Exhibit No.		Description
3.1	—	Agreement and Plan of Merger dated as of December 23, 2013, by and among Lepercq Corporate Income Fund L.P. (“LCIF”) and Lepercq Corporate Income Fund II L.P. (“LCIF II”) (filed as Exhibit 10.1 to Lexington's Current Report on Form 8-K filed on December 24, 2013)(1)
3.2	—	Sixth Amended and Restated Agreement of Limited Partnership of LCIF, dated as of December 30, 2013 (filed as Exhibit 3.20 to LCIF's Annual Report on Form 10-K for the year ended December 31, 2013 filed on March 17, 2014)(1)
4.1	—	Indenture, dated as of January 29, 2007, among Lexington (as successor by merger), the other guarantors named therein and U.S. Bank National Association, as trustee (“U.S. Bank”) (filed as Exhibit 4.1 to Lexington’s Current Report on Form 8-K filed January 29, 2007 (the “01/29/07 8-K”))(1)
4.2	—	Fourth Supplemental Indenture, dated as of December 31, 2008, among Lexington, the other guarantors named therein and U.S. Bank, as trustee (filed as Exhibit 4.1 to Lexington’s Current Report on Form 8-K filed on January 2, 2009)(1)
4.3	—	Fifth Supplemental Indenture, dated as of June 9, 2009, among Lexington (as successor by merger), the other guarantors named therein and U.S. Bank, as trustee (filed as Exhibit 4.1 to Lexington's Current Report on Form 8-K filed on June 15, 2009)(1)
4.4	—	Sixth Supplemental Indenture, dated as of January 26, 2010 among Lexington, the guarantors named therein and U.S. Bank, as trustee, including the Form of 6.00% Convertible Guaranteed Notes due 2030 (filed as Exhibit 4.1 to Lexington’s Current Report on Form 8-K filed January 26, 2010)(1)
4.5	—	Seventh Supplemental Indenture, dated as of September 28, 2012, among Lexington, certain subsidiaries of Lexington signatories thereto, and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to Lexington's Current Report on Form 8-K filed on October 3, 2012)(1)
4.6	—	Eighth Supplemental Indenture, dated as of February 13, 2013, among Lexington, certain subsidiaries of Lexington signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to Lexington's Current Report on Form 8-K filed on February 13, 2013 (the “02/13/13 8-K”))(1)
4.7	—	Ninth Supplemental Indenture, dated as of May 6, 2013, among Lexington, certain subsidiaries of Lexington signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to Lexington's Current Report on Form 8-K filed on May 8, 2013)(1)
4.8	—	Tenth Supplemental Indenture, dated as of June 10, 2013, among Lexington, certain subsidiaries of Lexington signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.3 to Lexington's Current Report on Form 8-K filed on June 13, 2013 (the “06/13/13 8-K”))(1)
4.9	—	Tenth Supplemental Indenture, dated as of September 30, 2013, among Lexington, certain subsidiaries of Lexington signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to Lexington's Current Report on Form 8-K filed on October 3, 2013)(1)
4.10	—	Indenture, dated as of June 10, 2013, among Lexington, certain subsidiaries of Lexington signatories thereto, and U.S. Bank, as trustee (filed as Exhibit 4.1 to the 06/13/13 8-K)(1)
4.11	—	First Supplemental Indenture, dated as of ~~May~~June 913, ~~2014~~2013, among Lexington, ~~the~~certain ~~Partnership~~subsidiaries of Lexington signatories thereto and U.S. Bank ~~National Association~~, as trustee (filed as Exhibit 4.13 to the ~~Partnership's~~06/13/2013 ~~Current Report on Form~~ 8-K ~~filed May 13, 2014~~)(1)
4.12	—	~~First Supplemental~~ Indenture, dated as of May 209, 2014, among Lexington, the Partnership and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Partnership's Current Report on Form 8-K filed May 2013, 2014)(1)
10.1	—	Credit Agreement, dated as of September 1, 2015, among Lexington, the Partnership, jointly and severally as borrowers, and each of the financial institutions initially a signatory thereto together with their assignees pursuant to Section 12.5 therein, and KeyBank National Association, as agent (filed as Exhibit 10.1 to the Partnership's Current Report on Form 8-K filed September 1, 2015)(1)
4.13		First Supplemental Indenture, dated as of May 20, 2014, among Lexington, the Partnership and U.S. Bank National Association, as trustee (filed as Exhibit 4.1 to the Partnership's Current Report on Form 8-K filed May 20, 2014)(1)
31.1	—	Certification of Principal Executive Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)
31.2	—	Certification of Principal Financial Officer pursuant to rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (2)
32.1	—	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3)
32.2	—	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3)

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32.2	—	Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (3)
101.INS	—	XBRL Instance Document (2, 4)
101.SCH	—	XBRL Taxonomy Extension Schema (2, 4)
101.CAL	—	XBRL Taxonomy Extension Calculation Linkbase (2, 4)
101.DEF	—	XBRL Taxonomy Extension Definition Linkbase Document (2, 4)
101.LAB	—	XBRL Taxonomy Extension Label Linkbase Document (2, 4)
101.PRE	—	XBRL Taxonomy Extension Presentation Linkbase Document (2, 4)


(1)	Incorporated by reference.


(2)	Filed herewith.

(3)

Furnished herewith. This exhibit shall not be deemed "filed" for purposes of Section 11 or 12 of the Securities Act of 1933, as amended (the "Securities Act"), or Section 18 of the Securities Exchanges Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of those sections, and shall not be part of any registration statement to which it may relate, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act or the Exchange Act, except as set forth by specific reference in such filing or document.

(4) The following materials are formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets at ~~September~~March 3031, ~~2015~~2016 and December 31, ~~2014~~2015; (ii) the Unaudited Condensed Consolidated Statements of Operations for the three ~~and nine~~ months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015; (iii) the Unaudited Condensed Consolidated Statements of Changes in Partners' Capital for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015; (iv) the Unaudited Condensed Consolidated Statements of Cash Flows for the ~~nine~~three months ended ~~September~~March 3031, ~~2015~~2016 and ~~2014~~2015; and (v) Notes to Unaudited Condensed Consolidated Financial Statements, detailed tagged.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		Lepercq Corporate Income Fund L.P.
		By:	Lex GP-1 Trust, its General Partner
Dated:	~~November~~May 65, ~~2015~~2016	By:	/s/ T. Wilson Eglin
			T. Wilson Eglin
			President(principal executive officer)

Dated:	~~November~~May 65, ~~2015~~2016	By:	/s/ Patrick Carroll
			Patrick Carroll
			Vice President(principal financial officer and principal accounting officer)
			Vice President and Treasurer(principal financial officer)

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