CapLease Announces Fourth Quarter and Full Year 2012 Results

  CapLease Announces Fourth Quarter and Full Year 2012 Results

Business Wire

NEW YORK -- February 15, 2013

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 fourth quarter and full year ended December 31,
2012. Net loss to common stockholders for 2012 was $(11.7) million, and funds
from operations, or FFO, as adjusted for items affecting comparability, was
$42.0 million.

2012 Highlights:

  *FFO of $0.62 Per Share As Adjusted for Comparability Reaches High End of
    Guidance
  *Investment Activity for 2012 Approximates $190 Million
  *Extended 1.9 Million Square Feet of Maturing Leases
  *Repurchased or Extended $152 Million of Maturing Debt
  *Raised $110 Million of New Common and Preferred Equity
  *Common Dividend Increased 15%

Paul McDowell, Chairman and Chief Executive Officer, stated, “We made strong
progress on our business plan during 2012. We continued to build acquisition
momentum with the addition of about $190 million of new property acquisitions
comprising 1.2 million square feet while aggressively managing our portfolio
by extending lease maturities and maturing debt obligations. The progress we
made allowed us to significantly increase the cash dividend on our common
stock and positions us well for further growth in 2013 and beyond.”

Full Year 2012 Results:

                                                       For the Twelve Months

                                                       Ended December 31,
(Amounts in thousands, except per share amounts)        2012       2011
Funds from operations                                  $ 52,341    $ 56,260
Per Share                                              $ 0.78      $ 0.87
Items that affect comparability (income) expense:                 
Gain on investments other than real property, net        (1,009)      (648)
(Gain) loss on extinguishment of debt, net               (10,790)     3,698
Debt modification costs                                  916          –
(Gain) loss on extinguishment of debt on discontinued    –            (18,861)
operations
Property acquisition costs                              544        410
Funds from operations, as adjusted for comparability   $ 42,002    $ 40,859
Per Share                                              $ 0.62      $ 0.63

For the year ended December 31, 2012, the Company produced total revenues of
$162.0 million, compared to $162.3 million in 2011. Strong growth in the owned
property portfolio offset the impact of the 2011 collateralized debt
obligation (CDO) and other asset sales. Rental revenue was up seven percent
for the 2012 period, reflecting the new properties acquired. During 2011, we
significantly reduced our investments in mortgage assets and overall leverage
level through the strategic sale of the Company’s CDO at a gain.

FFO adjusted for items that affect comparability was $42.0 million, or $0.62
per share, compared to $40.9 million, or $0.63 per share, in 2011. Strong
growth in the owned property portfolio largely offset the impact of the 2011
asset sales as well as lower leverage.

Net loss to common stockholders for 2012 was $(11.7) million, or $(0.17) per
share, compared to net loss of $(8.3) million, or $(0.13) per share, 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 $(4.8) million, and dividends to preferred share holders of $10.0 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 $(2.0) million, and dividends to preferred share holders of $6.5 million.

Fourth Quarter 2012 Results:

                                                         For the Three Months

                                                         Ended December 31,
(Amounts in thousands, except per share amounts)          2012     2011
Funds from operations                                    $ 10,292  $ 29,057
Per Share                                                $ 0.15    $ 0.44
Items that affect comparability (income) expense:                 
Loss on extinguishment of debt, net                        221        –
(Gain) loss on extinguishment of debt on discontinued      –          (18,861)
operations
Property acquisition costs                                222      193
Funds from operations, as adjusted for comparability     $ 10,735  $ 10,389
Per Share                                                $ 0.16    $ 0.16

For the quarter ended December 31, 2012, the Company grew total revenues seven
percent to $41.6 million. The increase in total revenues reflects growth in
the owned property portfolio. Rental revenue was up eight percent for the 2012
period, reflecting the new properties acquired.

FFO adjusted for items that affect comparability was $10.7 million, or $0.16
per share, for the fourth quarter of 2012, compared to $10.4 million, or $0.16
per share, in the 2011 period.

Net loss to common stockholders for the fourth quarter of 2012 was $(2.0)
million, or $(0.03) per share, compared to net income of $14.4 million, or
$0.22 per share, in the comparable period in 2011. Fourth quarter 2011 net
income to common stockholders includes the net impact of discontinued
operations, or a net gain of $15.9 million, driven primarily by gain on debt
extinguishment on a property that was transferred to the lender in full
satisfaction of the related non-recourse mortgage debt.

New Property Investments:

During the year, the Company acquired or committed to acquire approximately
$190 million of new property assets, including approximately $80 million of
properties added during December which will begin to increase our revenue and
earnings results during 2013. The eight new properties added during 2012
including one build-to-suit transaction comprise 1.2 million square feet. Our
average capitalization rate across the properties is about 8.5% and average
spread to the actual or anticipated cost of debt is about 450 basis points.
During the year, we added a number of very high credit quality tenants to the
portfolio, such as Becton, Dickinson & Company, Praxair, Inc., AT&T Services,
Inc. and Comcast Corporation. Lease maturities for the new properties are all
at or beyond our portfolio average of six years, and the properties are all
located in good markets with strong growth prospects. For more details
regarding these new acquisitions please see our prior press releases
describing each transaction and our Form 10-K for the year ended December 31,
2012 which will include when filed a summary table of all of our owned
properties.

Portfolio Management:

During 2012, we extended 1.9 million square feet of leases, including five
year agreements through December 2017 on the warehouse properties we own in
Breinigsville, PA and Lathrop, CA. The Breinigsville, PA property was extended
with the existing tenant Nestlé Holdings, Inc., and the Lathrop, CA property
was extended with the subtenant Del Monte Corporation. Our lease with Nestlé
at the Fort Wayne, IN property expired on December 31, 2012, and the Company
is continuing to actively market the property for re-lease.

We also extended $125 million of maturing debt during 2012, including the
extension of the $106 million securitized first mortgage note on the
Breinigsville, PA, Lathrop, CA and Fort Wayne, IN warehouse properties for up
to five years. The Company also repurchased the $11 million junior mortgage
note on the same warehouse properties for a purchase price including costs of
$2 million.

At December 31, 2012, the Company’s investment portfolio included $1.9 billion
of primarily single tenant commercial real estate properties. The weighted
average tenant credit rating across the owned property portfolio is A- from
Standard & Poor’s, and the average remaining lease term is approximately six
years.

The property portfolio comprises 12.1 million square feet and includes a
variety of office, warehouse, retail and other property types. The Company
owns 71 properties in 25 states with 43 different tenants. As of December 31,
2012, the occupancy rate across the owned property portfolio was 92.9%, with
the vacant space comprised principally of the approximately 765,000 square
foot vacant warehouse in Fort Wayne, IN.

New $100 Million Revolving Credit Facility and $10 Million Term Loan:

During 2012, the Company strengthened its bank lending relationships with the
addition of two new borrowing facilities.

During June, the Company added a new $100 million secured revolving credit
agreement with Wells Fargo Bank, N.A. which is expected to be the Company’s
primary short–term borrowing facility for the foreseeable future. This three
year facility will provide the Company with significant financing and
refinancing flexibility as new properties are added to the portfolio and
mortgage debt on properties already owned mature. The facility was initially
collateralized with a pool of 16 otherwise unencumbered real properties. The
Company is in the process of adding two recent property acquisitions totaling
$26.1 million in purchase price to the borrowing base, and expects to add
additional real estate properties to the collateral pool and increase the
facility size over time. The Company’s borrowings under the facility will bear
interest at prevailing LIBOR rates plus 275 basis points.

The Company also obtained a three year $10 million secured term loan from
KeyBank National Association. 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 Company expects to cultivate and
grow the relationship with KeyBank over time as it continues to refinance and
extend maturing debt.

Capital Activity:

During 2012, the Company raised approximately $110 million of net proceeds
through the sale of common stock and preferred stock. Other than the sale of
2,000,000 shares of 8.375% Series B Cumulative Redeemable Preferred Stock
during April, all of the sales were executed through the Company’s
“at-the-market” offering program. The Company raised net proceeds of (i) $32.2
million through the issuance of 6,891,080 shares of common stock at an average
price of $4.76 per share and (ii) $77.8 million through the issuance of
242,282 shares of 8.125% Series A Cumulative Redeemable Preferred Stock and
2,941,073 shares of 8.375% Series B Cumulative Redeemable Preferred Stock. The
Company has fully utilized the proceeds from equity issuances during 2012,
with $98.9 million used to fund purchases of or improvements to owned
properties and the balance utilized to reduce indebtedness.

Balance Sheet:

At December 31, 2012, the Company’s assets included $1.9 billion in owned real
property investments before depreciation and amortization, $27 million in loan
investments, and $62 million in commercial mortgage-backed securities. The
Company continues to have strong liquidity with about $53 million of cash on
hand currently, and $14 million of additional borrowing capacity under its
revolving credit agreement which will grow to about $30 million of capacity
once the recent property acquisitions discussed above are added to the
borrowing base.

The Company’s leverage on its owned property portfolio was approximately 59%
as of December 31, 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 fourth quarter of 2012, the Company declared a cash dividend on its
common stock in the amount of $0.075 per share, representing a 15% total
increase for 2012, and a 7% increase from the third quarter of 2012. The level
of CapLease’s common dividend is determined by the Company’s operating
results, economic conditions, capital requirements, and other operating
trends.

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.

2013 Guidance:

CapLease expects full year 2013 FFO to be in the range of $0.55 to $0.60 per
share, and earnings per share (EPS) to be in the range of $(0.07) to $(0.03).
The difference between FFO and EPS is primarily depreciation and amortization
expense on real property.

The expected decline in our year-over-year per share FFO reflects rent
roll-downs at the two warehouses properties in Breinigsville, PA and Lathrop,
CA under their new leases, and expected downtime and property expenses
associated with the Fort Wayne, IN and other 2013 expected property vacancies.
New property investments from 2012, the completion of our two existing
build-to-suit projects, and expected new investments for 2013 will offset the
decline to a large degree, but not completely during 2013. As we re-lease the
properties that have lease terminations this year, those new leases will add
to earnings in future years.

We expect to continue our acquisition momentum in 2013. For a variety of
reasons we do not forecast the timing, quantity and returns relating to that
acquisition activity. Our guidance projections are based primarily on our
existing portfolio. The Company’s guidance estimates also assume no
disposition activity and no gains or losses associated with asset sales or
debt extinguishment, no share repurchase activity, no portfolio impairments or
losses, and no other gains or charges that may occur during the year. The
guidance also includes our current estimates with respect to additional
capital needs, the timing and terms of re-leasing maturing leases, interest
rate levels on our floating rate facility, 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
fourth quarter and full year 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) 407-3982
or (201) 493-6780 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 408365.

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.

  *our ability to re-let vacant space on favorable terms in a timely manner;
  *our ability to refinance or extend maturing debt obligations on favorable
    terms or at all;
  *payment defaults on one or more of our asset investments;
  *the impact to earnings associated with potential asset dispositions and
    debt repayments;
  *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 twelve months ended December 31, 2012 and December 31, 2011

                               For the Three Months    For the Twelve Months
                                                     
                               Ended December 31,      Ended December 31,
(Amounts in thousands, except   2012      2011      2012       2011
per share amounts)
Revenues:                                                        
Rental revenue                 $ 35,312    $ 32,693    $ 137,126    $ 127,995
Interest income from loans and   1,740       2,270       7,768        19,655
securities
Tenant reimbursements            4,348       3,828       16,287       13,900
Other revenue                   168       192       861        793
Total revenues                  41,568    38,983    162,042    162,343
Expenses:
Interest expense                 16,471      17,398      67,137       76,595
Property expenses                7,556       6,567       27,798       25,741
General and administrative       3,039       2,531       11,642       10,581
expenses
General and administrative
expenses-stock based             759         522         3,200        2,785
compensation
Depreciation and amortization    12,311      11,775      48,189       46,313
expense on real property
Other expenses                  39        32        1,001      199
Total expenses                  40,175    38,825    158,967    162,214
Other gains (losses):
Gain on investments, net         –           –           1,009        648
Gain (loss) on extinguishment   (221)     –         10,790      (3,698)
of debt, net
Total other gains (losses)      (221)     –         11,799     (3,050)
Income (loss) from continuing    1,172       158         14,874       (2,921)
operations
Discontinued operations:
Loss from discontinued           –           (610)       (1,372)      (2,798)
operations
Gain (loss) on investments       –           –           (15,229)     1,426
Provision for loss on property   –           (2,304)     –            (16,423)
investment
Gain on extinguishment of debt  –         18,861    –          18,861
Total discontinued operations   –         15,947    (16,601)    1,066
Net income (loss) before
non-controlling interest in      1,172       16,105      (1,727)      (1,855)
consolidated subsidiaries
Non-controlling interest in     4         (35)      27         20
consolidated subsidiaries
Net income (loss)                1,176       16,070      (1,700)      (1,835)
Dividends allocable to          (3,191)   (1,627)   (10,003)   (6,510)
preferred shares
Net income (loss) allocable to $ (2,015)  $ 14,443   $ (11,703)   $ (8,345)
common stockholders
                                                                    
Income (loss) per common
share, basic and diluted:
Income (loss) from continuing  $ (0.03)    $ (0.02)    $ 0.08       $ (0.15)
operations
Income (loss) from             $ –        $ 0.24     $ (0.25)    $ 0.02
discontinued operations
Net income (loss) per common   $ (0.03)    $ 0.22      $ (0.17)     $ (0.13)
share, basic and diluted
Weighted average number of
common shares outstanding,       68,625      66,303      67,121       64,758
basic and diluted
Dividends declared per common  $ 0.075     $ 0.065     $ 0.275      $ 0.260
share
Dividends declared per         $ 0.508     $ 0.508     $ 2.031      $ 2.031
preferred A share
Dividends declared per         $ 0.523     $ –         $ 1.547      $ –
preferred B share

CapLease, Inc. and Subsidiaries
Consolidated Balance Sheets
As of December 31, 2012 and December 31, 2011

                                                   As Of          As Of
(Amounts in thousands, except share and per share
amounts)                                           December 31,  December 31,

                                                   2012           2011
Assets                                                          
Real estate investments, net                       $  1,541,416   $  1,401,526
Loans held for investment, net                        26,972         33,139
Commercial mortgage-backed securities                 62,318         59,435
Cash and cash equivalents                             30,177         71,160
Other assets                                         89,560       76,363
Total Assets                                       $  1,750,443  $  1,641,623
Liabilities and Equity
Mortgages on real estate investments               $  1,012,075   $  972,924
Credit agreements                                     67,655         70,668
Secured term loan                                     72,417         88,142
Convertible senior notes                              19,210         34,522
Other long-term debt                                 30,930       30,930
Total Debt Obligations                               1,202,287    1,197,186
Intangible liabilities on real estate investments     33,032         35,219
Accounts payable and other liabilities                27,926         17,371
Dividends and distributions payable                  8,826        5,946
Total Liabilities                                    1,272,071    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, 3,447,182 79,776         73,880
and 3,204,900 shares issued and outstanding,
respectively
Series B cumulative redeemable preferred,
liquidation preference $25.00 per share, 2,941,073    71,665         –
and 0 shares issued and outstanding, respectively
Common stock, $0.01 par value, 500,000,000 shares
authorized, 73,658,045 and 66,275,535 shares          737            663
issued and outstanding, respectively
Additional paid in capital                            325,824        321,303
Accumulated other comprehensive loss                 (666)        (11,051)
Total Stockholders' Equity                           477,336      384,795
Non-controlling interest in consolidated             1,036        1,106
subsidiaries
Total Equity                                         478,372      385,901
Total Liabilities and Equity                       $  1,750,443  $  1,641,623

CapLease, Inc. and Subsidiaries
Reconciliation of Net Income (Loss) to Funds from Operations and Cash
Available for Distribution (unaudited)
For the three and twelve months ended December 31, 2012 and December 31, 2011

                                  For the Three Months   For the Twelve Months
                                                       
                                  Ended December 31,     Ended December 31,
(Amounts in thousands, except per  2012     2011       2012      2011
share amounts)
Net income (loss) allocable to    $ (2,015) $ 14,443     $ (11,703) $ (8,345)
common stockholders
Add (deduct):
Non-controlling interest in         (4)       35           (27)       (20)
consolidated subsidiaries
Depreciation and amortization       12,311    11,775       48,189     46,313
expense on real property
Depreciation and amortization
expense on discontinued             –         500          653        3,315
operations
(Gain) loss on property sales on    –         –            15,229     (1,426)
discontinued operations
Provision for loss on property
investment on discontinued         –        2,304      –         16,423
operations
Funds from operations              10,292   29,057     52,341    56,260
Add (deduct):
Straight-lining of rents            (5,020)   (5,157)      6,241      (1,886)
General and administrative          759       522          3,200      2,785
expenses-stock based compensation
Amortization of above and below     (227)     16           (839)      1,274
market leases
Non-cash interest income and        87        233          939        1,282
expenses
Routine capital expenditures on     (403)     (267)        (1,410)    (1,740)
real estate investments
Gain on investments other than      –         –            (1,009)    (648)
real property, net
Loss (gain) on extinguishment of    221       –            (10,790)   3,698
debt, net
Gain on extinguishment of debt on  –        (18,861)   –         (18,861)
discontinued operations
Cash available for distribution   $ 5,709   $ 5,543     $ 48,673   $ 42,164
                                                                    
Weighted average number of common
shares outstanding, basic and       68,625    66,303       67,121     64,758
diluted
Weighted average number of OP      156      156        156       156
units outstanding
Weighted average number of common
shares and OP units outstanding,   68,781   66,459     67,277    64,914
diluted
Net income (loss) per common      $ (0.03)  $ 0.22       $ (0.17)   $ (0.13)
share, basic and diluted
Funds from operations per share   $ 0.15    $ 0.44       $ 0.78     $ 0.87
Cash available for distribution   $ 0.08    $ 0.08       $ 0.72     $ 0.65
per share

CapLease, Inc. and Subsidiaries
Overall Company Leverage (unaudited)
As of December 31, 2012 and December 31, 2011

                                                  Dec 31, 2012  Dec 31, 2011
Debt                                                            
   Mortgages on real estate investments            $  1,012,075   $  972,924
   Credit agreements                                  67,655         70,668
   Secured term loan                                  72,417         88,142
   Convertible senior notes                           19,210         34,522
  Other long-term debt                              30,930       30,930
Total Debt                                         $  1,202,287  $  1,197,186
                                                                  
Assets
   Total assets                                    $  1,750,443   $  1,641,623
   Accumulated depreciation and amortization on       297,675        268,209
   owned properties
   Intangible liabilities on real estate              (33,032)       (35,219)
   investments
   Prepaid expenses and deposits                      (1,798)        (1,381)
   Accrued rental income                              (35,144)       (41,387)
   Deferred rental income                             –              2
   Debt issuance costs, net                           (5,775)        (3,889)
  Other                                             (398)        (712)
Total Assets, as adjusted                          $  1,971,971  $  1,827,247
                                                                  
Leverage (Total Debt/Total Assets, as adjusted)       61%            66%

CapLease, Inc. and Subsidiaries
Leverage by Segment (unaudited)
As of December 31, 2012

(in           Mortgage       Secured     Credit                    Investment
thousands)   Debt          Term Loan  Agreement  Total Debt   (1)           Leverage
                             Debt        Debt
Owned         $ 1,012,075    $ 17,076    $ 64,466    $ 1,093,617   $ 1,853,967    59%
Properties
Debt            –              55,342      3,190       58,532        89,850       65%
Investments

(1) Represents our carry value for financial reporting purposes before
depreciation and amortization on owned properties. The carry value of our debt
investments has been adjusted to exclude a $500 general loss reserve.

Contact:

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