UPDATE 1- Lexington posts lower Q2 FFO, cuts FY09 FFO view

* Q2 FFO of $0.35 vs year-ago $0.40/shr

* Cuts FY09 FFO outlook range

* Lease executions and occupancy down year-over-year

Aug 6 (Reuters) - Real estate investment trust Lexington Realty Trust (LXP.N) posted a 4 percent fall in quarterly funds from operations (FFO), hurt by a lower number of lease executions, and also cut its 2009 FFO outlook.

For the full year, the diversified REIT now expects FFO of between $1.29 to $1.34 a share, down from its prior outlook of $1.30 to $1.37 a share.

In a statement, Lexington said the cut was to reflect the issuance of about 7.3 million common shares relating to the quarterly dividend and the repurchase and retirement of Series C preferred shares.

Analysts expect the company to post FFO of $1.03 a share, according to Reuters Estimates.

For the latest quarter ended June 30, Lexington reported FFO of $40.7 million, or 35 cents a share, compared with $42.3 million, or 40 cents a share in the year-ago period.

Analysts on average, were expecting the company to report FFO of 34 cents a share.

For the quarter, the REIT's portfolio was about 92 percent leased, down from 94.1 per cent a year earlier. New and renewal lease executions were at 26, down from 37 over the same period.

Shares of the New York-based REIT closed at $5.05, Wednesday, on the New York Stock Exchange. (Reporting by Biswarup Gooptu in Bangalore; Editing by Jarshad Kakkrakandy)