CapLease Announces Third Quarter 2012 Results

  CapLease Announces Third Quarter 2012 Results

Business Wire

NEW YORK -- November 09, 2012

CapLease, Inc. (NYSE: LSE), a real estate investment trust (REIT) focused on
owning and managing single-tenant commercial real estate properties, today
announced its results for the third quarter ended September 30, 2012. Net loss
to common stockholders was $(1.3) million, and funds from operations, or FFO,
as adjusted for items affecting comparability, was $11.5 million.

Third Quarter 2012 and Subsequent Event Highlights:

  *FFO of $0.17 Per Share As Adjusted for Comparability
  *Secures $20 Million Build-to-Suit Property
  *Investment Activity for 2012 Exceeds $100 Million
  *Common Dividend as Previously Announced Raised 8% from Second Quarter

Paul McDowell, Chairman and Chief Executive Officer, stated, “We continued to
make steady progress on our business plan during the third quarter. We
maintained acquisition momentum through a new $20 million build-to-suit
project, increasing our total new investment activity for 2012 to over $100
million. We also extended the maturity of the $106 million Nestlé mortgage
debt and more than half of the $35 million of convertible senior notes. The
additional term on these debt obligations provide us with significant
financial flexibility and further enhances our capacity to support our
pipeline of new investment opportunities as we build on our growth for the
remainder of the year and beyond.”

Third Quarter 2012 Results:

                                                       For the Three Months
                                                     
                                                       Ended September 30,
(Amounts in thousands, except per share amounts)      2012        2011
Funds from operations                                 $ 10,909   $ 10,466 
Per Share                                             $ 0.16     $ 0.15   
Items that affect comparability (income) expense:                 
Gain on investments other than real property, net        (300   )     (3,861 )
Loss on extinguishment of debt, net                      –            3,698
Debt modification costs                                  916          –
Property acquisition costs                             13        74     
Funds from operations, as adjusted for comparability  $ 11,538   $ 10,377 
Per Share                                             $ 0.17     $ 0.15   
                                                                             

For the quarter ended September 30, 2012, the Company grew total revenues two
percent to $41.8 million. The increase in total revenues reflects growth in
the owned property portfolio, offset in part by the impact of the
collateralized debt obligation and other mortgage asset sales during 2011.
Rental revenue was up nine percent for the 2012 period, reflecting the new
properties acquired.

FFO adjusted for items that affect comparability was $11.5 million, or $0.17
per share, compared to $10.4 million, or $0.15 per share, in the comparable
period in 2011. The approximate 13% FFO per share increase was driven
primarily by the improvement in revenue due to property portfolio growth and
the benefit from a reduction in interest expense.

Net loss to common stockholders for the third quarter of 2012 was $(1.3)
million, or $(0.02) per share, compared to net loss of $(14.8) million, or
$(0.22) per share, in the comparable period in 2011. 2011 results included
$13.4 million of net losses from discontinued operations, reflecting
properties that have been disposed of.

New Property Investment:

During the third quarter, the Company entered into a new build-to-suit
arrangement to construct a state-of-the-art 311,730 square foot distribution
warehouse in Ashland, Virginia outside of Richmond for Vitamin Shoppe
Industries, Inc. (NYSE: VSI).

The Company entered into a net lease with Vitamin Shoppe for a 15 year term
which will commence upon completion of construction. Acquisition of the
approximately 43 acre land site along with the commencement of construction
occurred during the third quarter. The project is expected to be completed
during the second quarter of 2013. When complete, the Company’s total
investment is expected to be about $20 million and its average capitalization
rate will be approximately 8% over the lease term.

The Company also continued to fund construction of a Tulsa, Oklahoma
build-to-suit project for Cimarex Energy Co. during the third quarter of 2012.
Construction of the 324,000 square foot Class A office building remains on
budget and on schedule with delivery of floors to the tenant scheduled to
begin later this year, and completion of construction scheduled for the first
quarter of 2013. The Company has funded its entire $24 million commitment to
the total $55 million project, and the remaining project costs are being
funded through a non-recourse construction loan obtained from the Bank of
Oklahoma. When complete, the Company’s average capitalization rate will be in
excess of 10% over a 12 year lease term.

Nestlé Warehouse/Distribution Properties and Mortgage Debt:

During the third quarter, the Company extended the mortgage debt on three
Nestlé warehouses located in Breinigsville, PA, Lathrop, CA and Fort Wayne,
IN. The Company obtained an up to five year extension on the $106 million
securitized first mortgage note that was scheduled to mature in August. The
five year term includes borrower extension options, with the last two years of
borrower options subject to re-tenanting the Fort Wayne property by August
2015. The Company is continuing to actively market the Fort Wayne property for
re-lease to several potential prospects at the end of Nestlé’s lease term in
December 2012.

New $10 Million Term Loan:

During October, the Company added a new banking relationship with KeyBank
National Association by obtaining a new three year $10 million secured term
loan from the bank. Proceeds from the new term loan were used to replace and
terminate the Company’s borrowing facility with Wells Fargo that was scheduled
to mature in July 2013. The new term loan includes two successive one year
extension options that will allow the Company to further extend the loan until
October 2017, and is secured principally by fully amortizing mortgage notes on
various Company owned real properties.

Capital Activity:

During the third quarter and early part of the fourth, the Company raised
approximately $25.4 million of net proceeds through the sale of preferred
stock through its “at-the-market” (ATM) offering program. The Company issued
242,282 shares of 8.125% Series A Cumulative Redeemable Preferred Stock, and
776,073 shares of 8.375% Series B Cumulative Redeemable Preferred Stock. The
Company utilized some of the offering proceeds to retire a portion of the
convertible senior notes, and expects to use the remaining proceeds to
continue to grow its investment portfolio and for other general corporate
purposes. The Company did not issue any common stock through its ATM or
otherwise during the quarter.

Convertible Senior Notes:

The Company’s only other 2012 debt maturity was the remaining $35 million of
its 7.5% convertible senior notes which could be put to the Company by the
holders on October 1. We tendered for the notes during September, and $15.8
million of the notes were validly surrendered by the holders and purchased by
us and retired on the put date. The remaining approximately $19.2 million of
notes remain outstanding and cannot be put to us again for another five years
though we may call the debt at any time.

Nine Month Results:

                                                      For the Nine Months
                                                    
                                                      Ended September 30,
(Amounts in thousands, except per share amounts)     2012         2011
Funds from operations                                $ 42,048    $ 27,204 
Per Share                                            $ 0.63      $ 0.42   
Items that affect comparability (income) expense:                 
Gain on investments other than real property, net       (1,009  )     (648   )
(Gain) loss on extinguishment of debt, net              (11,012 )     3,698
Debt modification costs                                 916           –
Property acquisition costs                            321        217    
Funds from operations, as adjusted for               $ 31,264    $ 30,471 
comparability
Per Share                                            $ 0.47      $ 0.47   
                                                                             

For the nine months ended September 30, 2012, the Company reported total
revenues of $120.5 million, compared to total revenues of $123.4 million in
the comparable period of 2011. The total revenue decline reflects the impact
of the 2011 CDO and other asset sales, offset in part by the growth in the
owned property portfolio. Rental revenue was up seven percent for the 2012
period, reflecting the new properties acquired.

FFO adjusted for items that affect comparability was $31.3 million, or $0.47
per share, compared to $30.5 million, or $0.47 per share, in the comparable
period in 2011. The Company has grown the owned property portfolio by about
$150 million since September 30, 2011. Bolstered by that strong portfolio
growth, per share FFO as adjusted was unchanged year over year, even after
including the impact of 2011 asset sales and lower leverage. During 2011, we
significantly reduced our investments in mortgage assets and overall leverage
level through the strategic sale of the Company’s collateralized debt
obligation at a gain.

Net loss to common stockholders for the nine months ended September 30, 2012
was $(9.7) million, or $(0.15) per share, compared to net loss of $(22.8)
million, or $(0.35) per share, in the comparable period in 2011. Net loss to
common stockholders for the 2012 period includes the net impact of other gains
and losses and losses from discontinued operations, or a net loss of $4.6
million. Net loss to common stockholders for the 2011 period includes the net
impact of other gains and losses and losses from discontinued operations, or a
net loss of $17.9 million.

Portfolio:

Over 95% of the Company’s portfolio is invested in owned properties,
representing approximately $1.8 billion before depreciation and amortization
at September 30, 2012. The weighted average tenant credit rating on the
Company’s single tenant owned property portfolio is A- from Standard & Poor’s.

Approximately 90% of the Company’s single tenant owned property portfolio is
leased to investment grade tenants.

The weighted average remaining lease term on the Company’s single tenant owned
property portfolio is approximately six years, exclusive of the 15 year lease
on the Vitamin Shoppe build-to-suit property and the 12 year lease on the
Cimarex build-to-suit property. The Company includes leases on development
properties in its remaining lease term statistics upon rent commencement.

References to the Company’s single tenant owned property portfolio exclude the
two Omaha, Nebraska properties which are no longer leased primarily by a
single tenant.

Balance Sheet:

At September 30, 2012, the Company’s assets included $1.8 billion in owned
real property investments before depreciation and amortization, $29 million in
loan investments, and $60 million in commercial mortgage-backed securities.
The Company continues to have strong liquidity with about $24 million of cash
on hand currently, and $46 million of additional borrowing capacity under its
revolving credit agreement.

The Company’s leverage on its owned property portfolio was approximately 60%
as of September 30, 2012. CapLease expects its leverage to continue to
decrease over time, primarily as a result of scheduled principal amortization
on our debt which, net of principal collected on our debt investments,
averages about $30 million annually through 2014, and expected lower or no
leverage on new asset acquisitions.

Dividends:

During the third quarter of 2012, the Company declared a cash dividend on its
common stock in the amount of $0.07 per share, representing an 8% increase
from the second quarter of 2012. The level of CapLease’s common dividend is
determined by the operating results of each quarter, economic conditions,
capital requirements, and other operating trends. The Board of Directors will
consider the dividend at its next scheduled Board meeting in December.

The Company also declared a cash dividend of $0.5078125 on its 8.125% Series A
Cumulative Redeemable Preferred Stock, and a cash dividend of $0.5234375 on
its 8.375% Series B Cumulative Redeemable Preferred Stock.

2012 Guidance:

CapLease is affirming its previously disclosed full year 2012 guidance range
of $0.59 to $0.62 per share of FFO as adjusted for comparability, and $(0.12)
to $(0.09) of earnings per share (EPS).

CapLease is also affirming its full year 2012 guidance range of $0.68 to $0.71
per share of cash available for distribution (CAD). The difference between CAD
and FFO guidance is driven primarily by cash rents exceeding straight-line
rents during 2012.

The Company’s guidance estimates do not include property acquisition costs and
debt modification costs but otherwise include the impact of the various
transactions that have been completed during 2012, including the property
acquisitions, financings, debt extensions and capital raises described in this
press release. However, the Company’s guidance estimates assume no additional
asset investment or disposition activity, and no additional capital raising
activities for 2012.

As a reminder, the Company’s FFO as adjusted guidance also assumes no gains or
losses associated with asset sales or debt extinguishment, no portfolio
impairments or losses, and no other gains or charges that may occur during the
year, and include assumptions with respect to interest rate levels on its
floating rate facilities, the level of property operating expenses and general
and administrative expenses.

The factors described in the Forward-Looking and Cautionary Statements section
of this release could cause actual results to differ materially from our
guidance.

Conference Call:

CapLease will hold a conference call and webcast to discuss the Company’s
third quarter 2012 results at 10:00 a.m. (Eastern Time) today. Hosting the
call will be Paul H. McDowell, Chairman and Chief Executive Officer, and Shawn
P. Seale, Senior Vice President and Chief Financial Officer.

Interested parties may listen to the conference call by dialing (877) 705-6003
or (201) 493-6725 for international participants. A simultaneous webcast of
the conference call may be accessed by logging onto the Company’s website at
www.caplease.com.

A replay of the conference call will be available on the Internet at
www.streetevents.com and the Company’s website for approximately fourteen days
following the call. A recording of the call also will be available beginning
after 1:00 pm (Eastern Time) today by dialing (877) 870-5176 or (858) 384-5517
for international participants. To access the telephonic replay, please enter
conference ID 402770.

Non-GAAP Financial Measures:

Funds from operations (FFO) and cash available for distribution (CAD) are
non-GAAP financial measures. The Company believes FFO and CAD are useful
additional measures of the Company’s financial performance, as these measures
are commonly used by the investment community in evaluating the performance of
an equity REIT. The Company also believes that these measures are useful
because they adjust for a variety of non-cash items (like depreciation and
amortization, in the case of FFO, and depreciation and amortization,
stock-based compensation and straight-line rent adjustments, in the case of
CAD). FFO and CAD should not be considered as alternatives to net income or
earnings per share determined in accordance with GAAP as an indicator of the
Company’s operating performance or as an alternative to cash flow as a measure
of liquidity. Since all companies and analysts do not calculate FFO and CAD in
a similar fashion, the Company’s calculation of FFO and CAD may not be
comparable to similarly titled measures reported by other companies.

The Company calculates FFO consistent with the NAREIT definition, or net
income (computed in accordance with GAAP), excluding gains (or losses) from
sales of property and impairment losses on depreciable real estate, plus real
estate-related depreciation and amortization, and after adjustments for
unconsolidated partnerships and joint ventures. Real estate-related
depreciation includes amortization of capitalized leasing expenses, tenant
allowances or improvements, and excludes amortization of deferred financing
costs.

The Company calculates CAD by further adjusting FFO to exclude straight-line
rent adjustments, stock-based compensation, above or below market rent
amortization and non-cash interest income and expense, and to include routine
capital expenditures on investments in real property and capitalized interest
expense (if any). The Company will also adjust its CAD computations to exclude
certain non-cash or unusual items. For example, CAD for the 2012 and 2011
periods have been adjusted to exclude non-recurring gains or losses on
investments and any gain or loss on extinguishment of debt.

The Company also discloses FFO as adjusted for items that affect
comparability, as it believes this measure is a useful proxy for existing
portfolio performance and, therefore, provides a meaningful presentation of
operating performance. Items that affect comparability currently include gains
or losses on the Company’s debt investments which, unlike gains or losses on
owned properties, are not excluded from FFO under the NAREIT definition, gain
or loss on debt extinguishment, debt modification costs and property
acquisition costs. FFO as adjusted for items that affect comparability should
not be considered as an alternative to net income or earnings per share
determined in accordance with GAAP as an indicator of our operating
performance or as an alternative to cash flow as a measure of liquidity. It
also differs from the NAREIT’s definition of FFO and may not be comparable to
similarly titled measures reported by other companies.

The Company’s leverage ratios, which are among the financial metrics used by
management to review and analyze CapLease’s debt, are also non-GAAP financial
measures. Leverage ratios are a widely used financial measure by the real
estate investment community, especially for REITs. We measure our leverage
ratios by dividing total debt by total assets, as adjusted. We measure total
assets, as adjusted, at historical cost before depreciation and amortization
on owned properties. Therefore, our leverage ratios do not account for any
fluctuations in value, up or down, that may have occurred since we acquired
our owned properties. Other companies including other REITs may compute
leverage ratios in a different manner and, therefore, our leverage ratios may
not be comparable to similarly titled measures reported by other companies.

Forward-Looking and Cautionary Statements:

This press release contains projections of future results and other
forward-looking statements that involve a number of trends, risks and
uncertainties and are made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The following important
factors could cause actual results to differ materially from those projected
in such forward-looking statements.

  *payment defaults on one or more of our asset investments;
  *increases in our financing costs (including as a result of LIBOR rate
    increases), our general and administrative costs and/or our property
    expenses; and
  *our failure to comply with our debt obligations.

Developments in any of those areas could cause actual results to differ
materially from results that have been or may be projected. For a more
detailed discussion of the trends, risks and uncertainties that may affect our
operating and financial results and our ability to achieve the financial
objectives discussed in this press release, readers should review the
Company’s most recent Annual Report on Form 10-K, including the section
entitled “Risk Factors,” and the Company’s other periodic filings with the
SEC. Copies of these documents are available on our web site at
www.caplease.com and on the SEC’s website at www.sec.gov. We caution that the
foregoing list of important factors is not complete and we do not undertake to
update any forward-looking statement.

About the Company:

CapLease, Inc. is a real estate investment trust, or REIT, that primarily owns
and manages a diversified portfolio of single tenant commercial real estate
properties subject to long-term leases to high credit quality tenants.

CapLease, Inc. and Subsidiaries
Consolidated Statements of Operations
For the three and nine months ended September 30, 2012 and September 30, 2011
(Unaudited)
                                                  
                          For the Three Months       For the Nine Months

                          Ended September 30,        Ended September 30,
(Amounts in thousands,
except per share         2012        2011         2012         2011
amounts)
Revenues:                                                       
Rental revenue            $ 35,137     $ 32,362      $ 101,815     $ 95,302
Interest income from        1,921        4,774         6,026         17,386
loans and securities
Tenant reimbursements       4,552        3,574         11,939        10,072
Other revenue             182       156        693        601     
Total revenues            41,792    40,866     120,473    123,361 
Expenses:
Interest expense            16,723       19,147        50,666        59,197
Property expenses           7,209        6,600         20,242        19,174
General and                 2,754        2,558         8,604         8,050
administrative expenses
General and
administrative              830          796           2,441         2,264
expenses-stock based
compensation
Depreciation and
amortization expense on     12,166       11,676        35,878        34,538
real property
Other expenses            930       38         962        167     
Total expenses            40,612    40,815     118,793    123,390 
Other gains (losses):
Gain on investments,        300          3,861         1,009         648
net
Gain (loss) on
extinguishment of debt,   –         (3,698  )   11,012     (3,698  )
net
Total other gains         300       163        12,021     (3,050  )
(losses)
Income (loss) from          1,480        214           13,701        (3,079  )
continuing operations
Discontinued
operations:
Loss from discontinued      (6     )     (727    )     (1,372  )     (2,188  )
operations
Gain (loss) on              –            1,426         (15,229 )     1,426
investments
Provision for loss on     –         (14,119 )   –          (14,119 )
property investment
Total discontinued        (6     )   (13,420 )   (16,601 )   (14,881 )
operations
Net income (loss)
before non-controlling
interest in                 1,474        (13,206 )     (2,900  )     (17,960 )
consolidated
subsidiaries
Non-controlling
interest in               5         36         23         55      
consolidated
subsidiaries
Net income (loss)           1,479        (13,170 )     (2,877  )     (17,905 )
Dividends allocable to    (2,731 )   (1,627  )   (6,812  )   (4,882  )
preferred shares
Net loss allocable to    $ (1,252 )  $ (14,797 )  $ (9,689  )  $ (22,787 )
common stockholders
                                                                   
Income (loss) per
common share, basic and
diluted:
Income (loss) from        $ (0.02  )   $ (0.02   )   $ 0.10        $ (0.12   )
continuing operations
Loss from discontinued   $ –        $ (0.20   )  $ (0.25   )  $ (0.23   )
operations
Net loss per common
share, basic and          $ (0.02  )   $ (0.22   )   $ (0.15   )   $ (0.35   )
diluted
Weighted average number
of common shares            66,767       67,615        66,616        64,238
outstanding, basic and
diluted
Dividends declared per    $ 0.070      $ 0.065       $ 0.20        $ 0.195
common share
Dividends declared per    $ 0.508      $ 0.508       $ 1.523       $ 1.523
preferred A share
Dividends declared per    $ 0.523      $ –           $ 1.024       $ –
preferred B share
                                                                             

CapLease, Inc. and Subsidiaries
Consolidated Balance Sheets
As of September 30, 2012 and December 31, 2011
                                                              
                                                 As Of           As Of
(Amounts in thousands, except share and per
share amounts)                                  September 30,  December 31,

                                                 2012            2011
Assets
Real estate investments, net                     $ 1,457,284     $ 1,401,526
Loans held for investment, net                     28,569          33,139
Commercial mortgage-backed securities              59,904          59,435
Cash and cash equivalents                          40,192          71,160
Other assets                                     89,018       76,363    
Total Assets                                    $ 1,674,967   $ 1,641,623 
Liabilities and Equity
Mortgages on real estate investments             $ 986,629       $ 972,924
Credit agreements                                  48,097          70,668
Secured term loan                                  76,100          88,142
Convertible senior notes                           35,007          34,522
Other long-term debt                             30,930       30,930    
Total Debt Obligations                           1,176,763    1,197,186 
Intangible liabilities on real estate              33,579          35,219
investments
Accounts payable and other liabilities             28,055          17,371
Dividends and distributions payable              7,532        5,946     
Total Liabilities                                1,245,929    1,255,722 
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 100,000,000
shares authorized:
Series A cumulative redeemable preferred,
liquidation preference $25.00 per share,           78,649          73,880
3,401,107 and 3,204,900 shares issued and
outstanding, respectively
Series B cumulative redeemable preferred,
liquidation preference $25.00 per share,           51,800          –
2,140,913 and 0 shares issued and outstanding,
respectively
Common stock, $0.01 par value, 500,000,000
shares authorized, 66,766,965 and 66,275,535       668             663
shares issued and outstanding, respectively
Additional paid in capital                         300,522         321,303
Accumulated other comprehensive loss             (3,653    )   (11,051   )
Total Stockholders' Equity                       427,986      384,795   
Non-controlling interest in consolidated         1,052        1,106     
subsidiaries
Total Equity                                     429,038      385,901   
Total Liabilities and Equity                    $ 1,674,967   $ 1,641,623 
                                                                             

CapLease, Inc. and Subsidiaries
Reconciliation of Net Loss to Funds from Operations and Cash Available for
Distribution (unaudited)
For the three and nine months ended September 30, 2012 and September 30, 2011
                                                  
                          For the Three Months       For the Nine Months

                          Ended September 30,        Ended September 30,
(Amounts in thousands,
except per share         2012        2011         2012         2011
amounts)
Net loss allocable to     $ (1,252 )  $ (14,797 )   $ (9,689  )  $ (22,787 )
common stockholders
Add (deduct):
Non-controlling
interest in                 (5     )     (36     )     (23     )     (55     )
consolidated
subsidiaries
Depreciation and
amortization expense on     12,166       11,676        35,878        34,538
real property
Depreciation and
amortization expense on     –            930           653           2,815
discontinued operations
(Gain) loss on property
sales on discontinued       –            (1,426  )     15,229        (1,426  )
operations
Provision for loss on
property investment on    –         14,119     –          14,119  
discontinued operations
Funds from operations     10,909    10,466     42,048     27,204  
Add (deduct):
Straight-lining of          3,210        (3,038  )     11,261        3,271
rents
General and
administrative              830          796           2,441         2,264
expenses-stock based
compensation
Amortization of above       (227   )     420           (612    )     1,258
and below market leases
Non-cash interest           131          299           852           1,048
income and expenses
Routine capital
expenditures on real        (476   )     (138    )     (1,007  )     (1,473  )
estate investments
Gain on investments
other than real             (300   )     (3,861  )     (1,009  )     (648    )
property, net
Loss (gain) on
extinguishment of debt,   –         3,698      (11,012 )   3,698   
net
Cash available for       $ 14,077   $ 8,642     $ 42,962    $ 36,622  
distribution
                                                                   
Weighted average number
of common shares            66,767       67,615        66,616        64,238
outstanding, basic and
diluted
Weighted average number   156       156        156        156     
of OP units outstanding
Weighted average number
of common shares and OP   66,923    67,771     66,772     64,394  
units outstanding,
diluted
                                                                             
Net loss per common
share, basic and          $ (0.02  )   $ (0.22   )   $ (0.15   )   $ (0.35   )
diluted
Funds from operations     $ 0.16       $ 0.15        $ 0.63        $ 0.42
per share
Cash available for        $ 0.21       $ 0.13        $ 0.64        $ 0.57
distribution per share
                                                                             

CapLease, Inc. and Subsidiaries
Overall Company Leverage (unaudited)
As of September 30, 2012 and December 31, 2011
                                                             
                                                 Sep 30, 2012   Dec 31, 2011
Debt                                             unaudited
  Mortgages on real estate investments           $ 986,629       $ 972,924
  Credit agreements                                48,097          70,668
  Secured term loan                                76,100          88,142
  Convertible senior notes                         35,007          34,522
 Other long-term debt                           30,930       30,930    
Total Debt                                       $ 1,176,763   $ 1,197,186 
                                                                 
Assets
  Total assets                                   $ 1,674,967     $ 1,641,623
  Accumulated depreciation and amortization on     285,718         268,209
  owned properties
  Intangible liabilities on real estate            (33,579   )     (35,219   )
  investments
  Prepaid expenses and deposits                    (1,899    )     (1,381    )
  Accrued rental income                            (34,575   )     (41,387   )
  Deferred rental income                           4,451           2
  Debt issuance costs, net                         (5,865    )     (3,889    )
 Other                                          (471      )   (712      )
Total Assets, as adjusted                        $ 1,888,747   $ 1,827,247 
                                                                 
Leverage (Total Debt/Total Assets, as              62        %     66        %
adjusted)
                                                                             

CapLease, Inc. and Subsidiaries
Leverage by Segment (unaudited)
As of September 30, 2012
                                                                 
              Mortgage   Secured   Credit
                         Term      Agreement
(in           Debt       Loan      Debt        Total       Investment   Leverage
thousands)               Debt                  Debt        (1)
Owned         $          $         $ 45,594    $           $            60%
Properties    986,629    19,141                1,051,364   1,757,331
Debt          –          56,959    2,503       59,462      89,035       67%
Investments
                                                                        

Contact:

Investor Relations/Media Contact:
ICR, LLC
Brad Cohen, 212-217-6393
bcohen@icrinc.com