Core Viewpoint - Industrial Logistics Properties Trust (ILPT) has experienced a significant downtrend, with an 18.8% decline over the past four weeks, but is now in oversold territory, suggesting a potential turnaround due to improved earnings expectations from analysts [1]. Group 1: Stock Performance - ILPT shares have faced heavy selling pressure, leading to an RSI reading of 25.83, indicating that the stock may soon reverse its downward trend [3]. - The stock's recent decline has placed it in oversold territory, which typically signals a potential for price recovery [1][3]. Group 2: Analyst Sentiment - There is strong consensus among sell-side analysts regarding an increase in earnings estimates for ILPT, with a 2% rise in the consensus EPS estimate over the last 30 days [3]. - ILPT holds a Zacks Rank 2 (Buy), positioning it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises, further supporting the potential for a turnaround [3].

Core Viewpoint - Industrial Logistics Properties Trust (ILPT) reported quarterly funds from operations (FFO) of $0.12 per share, matching the Zacks Consensus Estimate, and showing no year-over-year change [1] - The company posted revenues of $108.95 million for the quarter ended September 2024, missing the Zacks Consensus Estimate by 1.13% and down from $110.14 million a year ago [2] Financial Performance - FFO for the previous quarter was also $0.14 per share, with the company having surpassed consensus FFO estimates only once in the last four quarters [1] - The current consensus FFO estimate for the upcoming quarter is $0.11 on revenues of $109.92 million, and for the current fiscal year, it is $0.51 on revenues of $442.97 million [7] Market Performance - ILPT shares have declined approximately 16% since the beginning of the year, contrasting with the S&P 500's gain of 22.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Outlook - The REIT and Equity Trust - Other industry is currently ranked in the top 24% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% of ranked industries [8]

Core Viewpoint - Industrial Logistics Properties Trust has shown mixed performance in terms of estimate revisions and is currently rated as a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [2] Financial Performance - The company reported quarterly funds from operations (FFO) of $0.14 per share, which was in line with the Zacks Consensus Estimate and represents an increase from $0.12 per share a year ago [7] - Revenues for the quarter ended June 2024 were $110.62 million, slightly missing the Zacks Consensus Estimate by 0.52%, but showing an increase from $108.04 million in the same quarter last year [8] - The current consensus FFO estimate for the upcoming quarter is $0.12 on revenues of $110.7 million, and for the current fiscal year, it is $0.52 on revenues of $444.45 million [5] Market Context - Year-to-date, Industrial Logistics Properties Trust shares have increased by approximately 6.8%, underperforming compared to the S&P 500's gain of 14.5% [12] - The REIT and Equity Trust - Other industry, to which the company belongs, is currently ranked in the bottom 41% of over 250 Zacks industries, indicating potential challenges ahead [14]

[PART I. Financial Information](index=3&type=section&id=PART%20I) This section presents the company's unaudited financial statements and related disclosures for the reporting period [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements and detailed notes for Industrial Logistics Properties Trust [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Presents the company's assets, liabilities, and equity as of June 30, 2024, and December 31, 2023 Condensed Consolidated Balance Sheets (June 30, 2024 vs. December 31, 2023) | Metric (in thousands) | June 30, 2024 | December 31, 2023 | Change | % Change | | :-------------------- | :------------ | :---------------- | :----- | :------- | | Total assets | $5,489,822 | $5,563,675 | $(73,853) | -1.33% | | Total liabilities | $4,402,055 | $4,401,896 | $159 | 0.00% | | Total equity | $1,087,767 | $1,161,779 | $(74,012) | -6.37% | - Total assets decreased by **$73.85 million**, primarily driven by a decrease in total real estate properties, net, and restricted cash and cash equivalents[10](index=10&type=chunk) - Total equity decreased by **$74.01 million**, mainly due to a decrease in cumulative net income (deficit) and noncontrolling interest[10](index=10&type=chunk) [Condensed Consolidated Statements of Comprehensive Income (Loss)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income%20(Loss)) Details the company's revenues, expenses, and net loss for the three and six months ended June 30, 2024 and 2023 Condensed Consolidated Statements of Comprehensive Income (Loss) (Three Months Ended June 30) | Metric (in thousands, except per share) | 2024 | 2023 | Change | % Change | | :------------------------------------ | :---------- | :---------- | :---------- | :------- | | Rental income | $110,621 | $108,043 | $2,578 | 2.39% | | Total expenses | $75,716 | $76,913 | $(1,197) | -1.56% | | Interest expense | $(73,631) | $(71,846) | $(1,785) | 2.48% | | Net loss | $(33,479) | $(36,580) | $3,101 | -8.48% | | Net loss attributable to common shareholders | $(23,175) | $(25,828) | $2,653 | -10.27% | | Net loss per common share | $(0.35) | $(0.40) | $0.05 | -12.50% | Condensed Consolidated Statements of Comprehensive Income (Loss) (Six Months Ended June 30) | Metric (in thousands, except per share) | 2024 | 2023 | Change | % Change | | :------------------------------------ | :---------- | :---------- | :---------- | :------- | | Rental income | $222,856 | $218,301 | $4,555 | 2.09% | | Total expenses | $153,165 | $156,062 | $(2,897) | -1.86% | | Interest expense | $(146,861) | $(142,617) | $(4,244) | 2.98% | | Net loss | $(67,381) | $(72,126) | $4,745 | -6.58% | | Net loss attributable to common shareholders | $(46,578) | $(50,637) | $4,059 | -8.01% | | Net loss per common share | $(0.71) | $(0.77) | $0.06 | -7.79% | - Net loss attributable to common shareholders decreased by **10.3%** for the three months and **8.0%** for the six months ended June 30, 2024, compared to the prior year periods, resulting in an improved net loss per common share[12](index=12&type=chunk) [Condensed Consolidated Statements of Shareholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Shareholders'%20Equity) Outlines changes in shareholders' equity, including net loss, share transactions, and distributions, for the period Changes in Total Equity (December 31, 2023 to June 30, 2024) | Metric (in thousands) | Balance at Dec 31, 2023 | Net Loss (6 months) | Share Grants/Repurchases | Distributions | Other Comprehensive Loss | Balance at Jun 30, 2024 | | :-------------------- | :---------------------- | :------------------ | :----------------------- | :------------ | :----------------------- | :---------------------- | | Total Equity | $1,161,779 | $(67,381) | $1,205 | $(1,317) | $(6,356) | $1,087,767 | - Total equity decreased from **$1,161,779 thousand** at December 31, 2023, to **$1,087,767 thousand** at June 30, 2024, primarily due to net losses and other comprehensive losses[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Summarizes cash flows from operating, investing, and financing activities for the six months ended June 30, 2024 and 2023 Condensed Consolidated Statements of Cash Flows (Six Months Ended June 30) | Cash Flow Activity (in thousands) | 2024 | 2023 | Change | % Change | | :-------------------------------- | :---------- | :---------- | :---------- | :------- | | Net cash provided by operating activities | $18,839 | $10,631 | $8,208 | 77.21% | | Net cash provided by investing activities | $4,648 | $17,387 | $(12,739) | -73.27% | | Net cash (used in) provided by financing activities | $(10,641) | $41,570 | $(52,211) | -125.59% | | Increase in cash and cash equivalents and restricted cash | $12,846 | $69,588 | $(56,742) | -81.53% | | Cash and cash equivalents and restricted cash at end of period | $258,569 | $210,368 | $48,201 | 22.91% | - Net cash provided by operating activities significantly increased by **77.2%** for the six months ended June 30, 2024, compared to the prior year, driven by higher cash flows from properties and favorable working capital changes[17](index=17&type=chunk)[117](index=117&type=chunk) - Net cash provided by investing activities decreased by **73.3%**, primarily due to the purchase of an interest rate cap for **$26.175 million** in 2024, partially offset by increased proceeds from derivative settlements and reduced real estate improvements[17](index=17&type=chunk)[117](index=117&type=chunk) - Financing activities shifted from providing **$41.57 million** in cash in 2023 to using **$10.64 million** in 2024, mainly due to a **$91 million** mortgage loan obtained by the consolidated joint venture in 2023 that was not repeated in 2024[17](index=17&type=chunk)[117](index=117&type=chunk) [Note 1. Basis of Presentation](index=10&type=section&id=Note%201.%20Basis%20of%20Presentation) Explains the basis for preparing the unaudited condensed consolidated financial statements and the use of estimates - The condensed consolidated financial statements are unaudited and prepared in accordance with GAAP, with certain information condensed or omitted[21](index=21&type=chunk) - The preparation of financial statements involves estimates and assumptions, such as purchase price allocations, useful lives of fixed assets, and impairment assessments, which could differ from actual results[22](index=22&type=chunk) [Note 2. Recent Accounting Pronouncements](index=10&type=section&id=Note%202.%20Recent%20Accounting%20Pronouncements) Discusses the evaluation of recent accounting pronouncements, specifically ASU 2023-07, on segment reporting disclosures - The company is evaluating the impact of ASU 2023-07, 'Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,' effective for fiscal years beginning after December 15, 2023[23](index=23&type=chunk) [Note 3. Real Estate Investments](index=10&type=section&id=Note%203.%20Real%20Estate%20Investments) Details the company's portfolio of industrial and logistics properties, including joint venture interests and capitalized expenditures

Industrial Logistics Properties Trust Second Quarter 2024 Financial Results and Supplemental Information July 30, 2024 Quarterly Results RETURN TO TABLE OF CONTENTS P = = = 7 - 1 7 7 6 INDUSTRIAL LOGISTICS PROPERTIES TRUST ANNOUNCES SECOND QUARTER 2024 FINANCIAL RESULTS "Operating results for ILPT's second quarter remained strong as we executed 628,000 square feet of new and renewal leases at weighted average rental rates that were 15.8% higher than prior rental rates for the same space and saw same propert ...

031 # II 1 用 Shares of Industrial Logistics Properties Trust (NASDAQ:ILPT) have been nearly decimated since the company employed a lot of leverage following an ill-time acquisition, amidst higher interest rates and some governance issues as well. This means that shares trade discounted during an era of near 100% occupancy rates and decent rental growth. In fact, shares trade at a fraction of book value, with investors having to hope for a lower interest rate environment and/or asset sales, and governance im ...

Financial Data and Key Metrics Changes - Normalized FFO for Q1 2024 was $9.5 million or $0.14 per share, representing a 19.4% increase year-over-year and a 16.9% increase sequentially [20] - Adjusted EBITDAre increased by 4.6% year-over-year and 1.6% sequentially, reaching $84.4 million [20] - Same-property cash basis NOI grew by 2.3% compared to the same period last year [16] - The net debt to total assets ratio improved by 110 basis points year-over-year to 68.6% [21] Business Line Data and Key Metrics Changes - The company entered 10 new and renewal leases and 1 rent reset for approximately 2 million square feet, resulting in GAAP and cash leasing spreads of 38.3% and 25%, respectively [8] - Renewals accounted for 90% of leasing activity, with a strong tenant retention rate of 94% [18] - A significant renewal with Exel, a subsidiary of DHL, resulted in a 73% roll-up in GAAP rents, increasing annualized rent by $2.2 million effective July 2024 [18] Market Data and Key Metrics Changes - The portfolio maintained a high occupancy rate of 99% [12] - The company has a pipeline of 41 deals totaling over 7.5 million square feet, with expected average roll-ups in rent of 20% on the mainland and 30% in Hawaii [35] Company Strategy and Development Direction - The company is focused on maintaining portfolio stability while generating organic cash flow growth through strong leasing activities [8] - The management highlighted the importance of sustainability practices and ESG transparency, as noted in their recent sustainability report [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for high-quality industrial real estate, supported by rising rental income [16] - There is an expectation of continued roll-ups in rents due to market shifts since original leases were signed [39] - Management noted some potential short-term softening in demand in specific markets, such as Indianapolis, but emphasized strong tenant interest in renewing leases [26][27] Other Important Information - The company has approximately $128 million in cash and $108 million in restricted cash as of March 31, 2024 [22] - All debt is currently fixed or hedged, with no maturities until 2027 [22] Q&A Session Summary Question: Any pushback from tenants regarding rent roll-ups? - Management indicated that negotiations are taking longer, but tenants are generally interested in renewing rather than relocating due to associated costs and disruptions [23][27] Question: Observations on market weaknesses, particularly in California? - Management noted no significant weaknesses in their operating markets, although there is new competition in Indianapolis [26][27] Question: Clarification on interest expense forecasting for Q2? - Management expects a slight increase in interest expense, estimating $58 million in cash interest and $15.5 million in noncash amortization [37] Question: Status of the 600,000 square feet property in Indianapolis? - The property is currently being marketed, but management anticipates it may remain vacant for up to a year [55]

Industrial Logistics Properties Trust (ILPT) came out with quarterly funds from operations (FFO) of $0.14 per share, beating the Zacks Consensus Estimate of $0.13 per share. This compares to FFO of $0.12 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an FFO surprise of 7.69%. A quarter ago, it was expected that this company would post FFO of $0.12 per share when it actually produced FFO of $0.12, delivering no surprise.Over the last four quarters, t ...

PART I. Financial Information [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) This section presents the unaudited condensed consolidated financial statements, including balance sheets, income, equity, cash flows, and detailed notes Condensed Consolidated Balance Sheet Highlights (dollars in thousands) | Metric | March 31, 2024 | December 31, 2023 | Change | % Change | | :-------------------------------- | :------------- | :---------------- | :----- | :------- | | Total assets | $5,527,569 | $5,563,675 | $(36,106) | -0.65% | | Total liabilities | $4,405,069 | $4,401,896 | $3,173 | 0.07% | | Total equity | $1,122,500 | $1,161,779 | $(39,279) | -3.38% | | Cash and cash equivalents | $128,394 | $112,341 | $16,053 | 14.29% | | Restricted cash and cash equivalents | $108,083 | $133,382 | $(25,299) | -18.97% | Condensed Consolidated Statements of Comprehensive Income (Loss) Highlights (dollars in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change | % Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Rental income | $112,235 | $110,258 | $1,977 | 1.79% | | Total expenses | $77,449 | $79,149 | $(1,700) | -2.15% | | Interest expense | $(73,230) | $(70,771) | $(2,459) | 3.47% | | Net loss | $(33,902) | $(35,546) | $1,644 | -4.63% | | Net loss attributable to common shareholders | $(23,403) | $(24,809) | $1,406 | -5.67% | | Net loss per common share (basic and diluted) | $(0.36) | $(0.38) | $0.02 | -5.26% | Condensed Consolidated Statements of Shareholders' Equity Highlights (dollars in thousands) | Metric | Balance at Dec 31, 2023 | Net Loss | Share Grants, Repurchases & Forfeitures | Distributions to Common Shareholders | Other Comprehensive Loss | Distributions to Noncontrolling Interest | Balance at Mar 31, 2024 | | :-------------------------------- | :---------------------- | :------- | :-------------------------------------- | :----------------------------------- | :----------------------- | :------------------------------------- | :---------------------- | | Total Equity Attributable to Common Shareholders | $669,954 | $(23,403) | $290 | $(658) | $(2,958) | — | $643,225 | | Noncontrolling Interest | $491,825 | $(10,499) | — | — | $(1,888) | $(163) | $479,275 | | Total Equity | $1,161,779 | $(33,902) | $290 | $(658) | $(4,846) | $(163) | $1,122,500 | Condensed Consolidated Statements of Cash Flows Highlights (dollars in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change | % Change | | :----------------------------------- | :-------------------------------- | :-------------------------------- | :----- | :------- | | Net cash provided by operating activities | $7,989 | $1,167 | $6,822 | 584.58% | | Net cash (used in) provided by investing activities | $(11,770) | $9,435 | $(21,205) | -224.75% | | Net cash used in financing activities | $(5,465) | $(6,223) | $758 | -12.18% | | (Decrease) increase in cash and cash equivalents and restricted cash and cash equivalents | $(9,246) | $4,379 | $(13,625) | -311.14% | | Cash and cash equivalents and restricted cash and cash equivalents at end of period | $236,477 | $145,159 | $91,318 | 62.91% | [Notes to Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [Note 1. Basis of Presentation](index=9&type=section&id=Note%201.%20Basis%20of%20Presentation) The unaudited financial statements are prepared under GAAP, requiring management estimates, and should be read with the **2023 Annual Report** - The accompanying condensed consolidated financial statements are unaudited and prepared in conformity with U.S. generally accepted accounting principles (GAAP)[20](index=20&type=chunk) - The preparation of financial statements requires management to make estimates and assumptions, which could differ from actual results[21](index=21&type=chunk) [Note 2. Recent Accounting Pronouncements](index=9&type=section&id=Note%202.%20Recent%20Accounting%20Pronouncements) The company is evaluating ASU 2023-07, requiring enhanced segment expense and interim disclosures, effective for fiscal years after **December 15, 2024** - The Financial Accounting Standards Board issued ASU 2023-07, 'Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,' in November 2023[22](index=22&type=chunk) - ASU 2023-07 requires disclosures of significant segment expenses, all annual disclosures about a reportable segment's profit or loss and assets in interim periods, and disclosure of the CODM's title and explanation of usage[22](index=22&type=chunk) - The ASU is effective for fiscal years beginning after **December 15, 2023**, and interim periods within fiscal years beginning after **December 15, 2024**, with early adoption permitted. The company is currently evaluating its impact[22](index=22&type=chunk) [Note 3. Real Estate Investments](index=9&type=section&id=Note%203.%20Real%20Estate%20Investments) The company's portfolio includes **411** properties (**59.9 million** sq ft) across **39** states, operating in one segment, and holds interests in two joint ventures - As of March 31, 2024, the portfolio included **411 properties** (approximately **59,893,000 rentable square feet**) in **39 states**[23](index=23&type=chunk) - The company operates in one business segment: ownership and leasing of industrial and logistics properties and leased industrial lands[24](index=24&type=chunk) Capital Expenditures (dollars in thousands) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------- | :-------------------------------- | :-------------------------------- | | Capital expenditures | $3,373 | $4,931 | - The company owns a **61% equity interest** in Mountain Industrial REIT LLC (consolidated joint venture) and a **22% equity interest** in The Industrial Fund REIT LLC (unconsolidated joint venture)[27](index=27&type=chunk)[29](index=29&type=chunk) [Note 4. Leases](index=10&type=section&id=Note%204.%20Leases) The company, primarily a lessor, reported **$21.175 million** in variable lease payments for Q1 2024, with Hawaii Properties, FedEx, and Amazon as key contributors - Variable payments, including tenant reimbursements, totaled **$21,175 thousand** for the three months ended March 31, 2024, compared to **$21,099 thousand** for the same period in 2023[31](index=31&type=chunk) - Hawaii Properties represented **28.0% of rental income** for the three months ended March 31, 2024, an **increase** from **27.4%** in the prior year period[34](index=34&type=chunk) Tenant Concentration (Annualized Rental Revenues) | Tenant | As of March 31, 2024 | As of March 31, 2023 | | :------- | :------------------- | :------------------- | | FedEx | 28.9% | 30.1% | | Amazon | 6.7% | 6.9% | [Note 5. Indebtedness](index=11&type=section&id=Note%205.%20Indebtedness) Total indebtedness was **$4.308 billion** at **5.35%** weighted average interest, with key floating rate loans maturing in **October 2024** and **March 2025** Outstanding Indebtedness as of March 31, 2024 (dollars in thousands) | Entity | Principal Balance | Interest Rate | Type | Maturity | | :------- | :---------------- | :------------ | :--- | :--------- | | ILPT | $1,235,000 | 6.18% | Floating | 10/09/2024 | | ILPT | $650,000 | 4.31% | Fixed | 02/07/2029 | | ILPT | $700,000 | 4.42% | Fixed | 03/09/2032 | | Mountain JV | $1,400,000 | 5.81% | Floating | 03/09/2025 | | Total/weighted average | $4,321,478 | 5.35% | | | - The Mountain Floating Rate Loan was extended in March 2024 to **March 2025**, and a new one-year interest rate cap was purchased for **$26,175 thousand**[44](index=44&type=chunk) Required Principal Payments (dollars in thousands) | Year | Principal Payment | | :--- | :---------------- | | 2024 | $1,248,648 | | 2025 | $1,418,794 | | 2026 | $19,495 | | 2027 | $20,229 | | 2028 | $20,989 | | Thereafter | $1,593,323 | | Total | $4,321,478 | [Note 6. Fair Value of Assets and Liabilities](index=13&type=section&id=Note%206.%20Fair%20Value%20of%20Assets%20and%20Liabilities) Fair values of most financial instruments aligned with carrying values, except fixed rate mortgage notes payable, with unconsolidated joint venture and interest rate caps measured at fair value Fixed Rate Mortgage Notes Payable Fair Value (dollars in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------- | :------------- | :---------------- | | Aggregate carrying value | $1,678,351 | $1,682,501 | | Fair value | $1,531,780 | $1,553,863 | Fair Value of Assets Measured on a Recurring Basis (dollars in thousands) | Asset | March 31, 2024 (Total) | December 31, 2023 (Total) | | :-------------------------------- | :--------------------- | :------------------------ | | Investment in unconsolidated joint venture | $116,093 | $115,360 | | Interest rate caps | $44,700 | $30,576 | - The fair value of the investment in the unconsolidated joint venture is determined using discounted cash flow analyses with Level 3 unobservable inputs (discount rates of **5.75%**-**8.00%** and exit capitalization rates of **5.25%**-**6.50%**)[53](index=53&type=chunk) [Note 7. Shareholders' Equity](index=14&type=section&id=Note%207.%20Shareholders%27%20Equity) In Q1 2024, the company repurchased **11,857** common shares for tax obligations and declared a **$0.01** per share quarterly distribution - During the three months ended March 31, 2024, the company purchased **11,857 common shares** at a weighted average price of **$4.12 per share** to satisfy tax withholding obligations[54](index=54&type=chunk) Common Share Distributions (dollars in thousands) | Declaration Date | Record Date | Payment Date | Distribution Per Share | Total Distribution | | :--------------- | :---------- | :----------- | :--------------------- | :----------------- | | January 11, 2024 | January 22, 2024 | February 15, 2024 | $0.01 | $658 | - On April 11, 2024, a **regular quarterly distribution** of **$0.01 per share** (approximately **$658 thousand**) was declared, payable on or about **May 16, 2024**[55](index=55&type=chunk) [Note 8. Business and Property Management Agreements with RMR](index=14&type=section&id=Note%208.%20Business%20and%20Property%20Management%20Agreements%20with%20RMR) The company relies on RMR for management services, incurring **$5.830 million** in business management fees and **$3.403 million** in property management fees for Q1 2024 Management Fees and Reimbursed Expenses (dollars in thousands) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Business management fees | $5,830 | $5,726 | | Property management and construction supervision fees | $3,403 | $3,452 | | Reimbursed operating expenses | $1,687 | $1,841 | - No incentive fees were included in business management fees for Q1 2024 or Q1 2023, as they are based on common share total return for the three-year period ending December 31, 2024[58](index=58&type=chunk) [Note 9. Related Person Transactions](index=15&type=section&id=Note%209.%20Related%20Person%20Transactions) The company maintains ongoing relationships and transactions with RMR and other related entities, including a **$652 thousand** payable to an unconsolidated joint venture - The company has relationships and transactions with RMR, The RMR Group Inc., and other related entities, including shared trustees, directors, and officers[63](index=63&type=chunk) - As of March 31, 2024, the company owed **$652 thousand** to the unconsolidated joint venture for rents collected on its behalf[66](index=66&type=chunk) [Note 10. Derivatives and Hedging Activities](index=16&type=section&id=Note%2010.%20Derivatives%20and%20Hedging%20Activities) The company uses interest rate cap agreements as cash flow hedges for floating rate debt, with a **$(4.846) million** unrealized loss recognized in Q1 2024 - The company uses interest rate cap agreements to manage interest rate risk on its ILPT Floating Rate Loan and Mountain Floating Rate Loan[68](index=68&type=chunk) Interest Rate Cap Agreements Fair Value (dollars in thousands) | Underlying Instrument | Maturity | Strike Rate | Notional Amount | Fair Value at March 31, 2024 | Fair Value at December 31, 2023 | | :-------------------- | :------- | :---------- | :-------------- | :--------------------------- | :---------------------------- | | Mountain Floating Rate Loan | 03/15/2025 | 3.04% | $1,400,000 | $25,345 | — | | ILPT Floating Rate Loan | 10/15/2024 | 2.25% | $1,235,000 | $19,355 | $25,060 | | Total | | | | $44,700 | $30,576 | Cash Flow Hedges Activity in Other Comprehensive Income (dollars in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------------------------------------------------------------ | :-------------------------------- | :-------------------------------- | | Unrealized gain (loss) on derivatives recognized in cumulative other comprehensive income | $4,674 | $(3,776) | | Realized gain on derivatives reclassified from cumulative other comprehensive income into interest expense | $(9,520) | $(5,002) | | Unrealized loss on derivatives recognized in cumulative other comprehensive income | $(4,846) | $(8,778) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=17&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's analysis of the company's financial condition and operational results, covering portfolio, property operations, non-GAAP measures, and liquidity [OVERVIEW](index=17&type=section&id=OVERVIEW) The company's portfolio comprises **411** properties with **99.0%** occupancy, experiencing **increased** rental income despite economic uncertainties - As of March 31, 2024, the company's portfolio consisted of **411 properties** (approximately **59,893,000 rentable square feet**) in **39 states**, with **99.0% occupancy** leased to **301** different tenants[72](index=72&type=chunk) Portfolio Summary as of March 31, 2024 | Ownership | Properties | States | Rentable Square Feet (in thousands) | Occupancy | Weighted Average Remaining Lease Term (years) | | :-------------------------- | :--------- | :----- | :---------------------------------- | :-------- | :-------------------------------------------- | | Hawaii Properties (100%) | 226 | Hawaii | 16,729 | 99.0% | 13.1 | | Consolidated joint venture (61%) | 94 | 27 States | 20,981 | 99.2% | 6.9 | | Wholly owned Mainland Properties (100%) | 90 | 34 States | 22,119 | 98.9% | 5.0 | | Other (67%) | 1 | New Jersey | 64 | 100.0% | 4.2 | | Total/weighted average | 411 | | 59,893 | 99.0% | 8.0 | - Rental income and net operating income (NOI) **increased** in Q1 2024 compared to Q1 2023, driven by leasing activity and rent resets[74](index=74&type=chunk) - Economic uncertainty due to inflationary pressures, high interest rates, and geopolitical tensions has **increased** the cost of capital and negatively impacted leverage reduction efforts[74](index=74&type=chunk) [Property Operations](index=17&type=section&id=Property%20Operations) Property operations show **99.0%** occupancy, with average effective rental rates **increasing** and significant rental rate changes on new and renewal leases Occupancy Data | Metric | As of March 31, 2024 | As of March 31, 2023 | | :--------------- | :------------------- | :------------------- | | Total properties | 411 | 413 | | Percent leased | 99.0% | 98.7% | Average Effective Rental Rates Per Square Foot | Period | 2024 | 2023 | | :----- | :--- | :--- | | All properties | $7.58 | $7.46 | | Comparable properties | $7.58 | $7.46 | New and Renewal Leases (Three Months Ended March 31, 2024) | Metric | New Leases | Renewals | Totals | | :------------------------------------------ | :--------- | :------- | :----- | | Square feet leased (in thousands) | 90 | 1,785 | 1,875 | | Weighted average rental rate change | 48.1% | 38.5% | 39.4% | | Weighted average lease term (years) | 19.4 | 5.6 | 6.2 | | Total leasing costs and concession commitments (in thousands) | $717 | $2,754 | $3,471 | - Rent resets for approximately **106,000** square feet of land at Hawaii Properties resulted in rental rates approximately **27.5% higher** than prior rates[79](index=79&type=chunk) - As of March 31, 2024, subsidiaries of FedEx and Amazon leased **21.7%** and **7.7%** of total leased square feet, respectively, and represented **28.9%** and **6.7%** of total annualized rental revenues, respectively[81](index=81&type=chunk) [RESULTS OF OPERATIONS](index=20&type=section&id=RESULTS%20OF%20OPERATIONS) Consolidated results show **increased** rental income and interest expense, leading to a **reduced net loss** attributable to common shareholders Consolidated Results of Operations (Three Months Ended March 31, 2024 vs 2023) (dollars in thousands, except per share data) | Metric | 2024 | 2023 | Change | % Change | | :----------------------------------- | :----- | :----- | :----- | :------- | | Rental income | $112,235 | $110,258 | $1,977 | 1.8% | | Real estate taxes | $15,861 | $16,467 | $(606) | -3.7% | | Other operating expenses | $10,322 | $9,318 | $1,004 | 10.8% | | Depreciation and amortization | $43,577 | $45,457 | $(1,880) | -4.1% | | General and administrative | $7,689 | $7,907 | $(218) | -2.8% | | Interest and other income | $2,852 | $1,146 | $1,706 | 148.9% | | Interest expense | $(73,230) | $(70,771) | $(2,459) | 3.5% | | Net loss attributable to common shareholders | $(23,403) | $(24,809) | $1,406 | -5.7% | | Net loss per common share | $(0.36) | $(0.38) | $0.02 | -5.3% | - **Rental income increased** primarily due to leasing activity and rent resets[89](index=89&type=chunk) - **Real estate taxes decreased** due to lower assessed values from successful tax appeals[90](index=90&type=chunk) - **Interest expense increased** due to refinancing activities in May 2023 and costs related to purchasing an interest rate cap[93](index=93&type=chunk) [Non-GAAP Financial Measures](index=21&type=section&id=Non-GAAP%20Financial%20Measures) The company presents non-GAAP measures like **NOI**, **FFO**, and **Normalized FFO** to evaluate operating performance and facilitate comparisons - The company presents non-GAAP financial measures including **Net Operating Income (NOI)**, **Funds From Operations (FFO)** attributable to common shareholders, and **Normalized FFO** attributable to common shareholders, which are used to evaluate operating performance and facilitate comparisons[95](index=95&type=chunk) Reconciliation of Net Loss to NOI (dollars in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(33,902) | $(35,546) | | Equity in earnings of unconsolidated joint venture | $(1,723) | $(3,961) | | Income tax expense | $33 | $17 | | Loss on sale of real estate | — | $974 | | Interest expense | $73,230 | $70,771 | | Interest and other income | $(2,852) | $(1,146) | | General and administrative | $7,689 | $7,907 | | Depreciation and amortization | $43,577 | $45,457 | | **NOI** | **$86,052** | **$84,473** | | NOI: Hawaii Properties | $23,433 | $22,122 | | NOI: Mainland Properties | $62,619 | $62,351 | FFO and Normalized FFO Attributable to Common Shareholders (dollars in thousands, except per share data) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Net loss attributable to common shareholders | $(23,403) | $(24,809) | | Equity in earnings of unconsolidated joint venture | $(1,723) | $(3,961) | | Loss on sale of real estate | — | $974 | | Depreciation and amortization | $43,577 | $45,457 | | Share of FFO from unconsolidated joint venture | $1,459 | $1,468 | | FFO adjustments attributable to noncontrolling interest | $(10,460) | $(11,213) | | **FFO and Normalized FFO attributable to common shareholders** | **$9,450** | **$7,916** | | Per common share data (basic and diluted) | $0.14 | $0.12 | [LIQUIDITY AND CAPITAL RESOURCES](index=23&type=section&id=LIQUIDITY%20AND%20CAPITAL%20RESOURCES) This section details the company's operating, investing, and financing liquidity, including cash flows, funding sources, and indebtedness [Our Operating Liquidity and Resources](index=23&type=section&id=Our%20Operating%20Liquidity%20and%20Resources) Operating funds primarily derive from tenant rents, with **76.6%** from investment-grade tenants, and net cash from operations significantly **increased** in Q1 2024 - As of March 31, 2024, **76.6%** of annualized rental revenues were from investment grade rated tenants or Hawaii land leases[102](index=102&type=chunk) - Only **5.5%** of annualized rental revenues were from leases expiring over the next **12 months**[102](index=102&type=chunk) Cash Flow Summary (dollars in thousands) | Cash Flow Activity | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash provided by operating activities | $7,989 | $1,167 | | Net cash (used in) provided by investing activities | $(11,770) | $9,435 | | Net cash used in financing activities | $(5,465) | $(6,223) | | Cash and cash equivalents and restricted cash and cash equivalents at end of period | $236,477 | $145,159 | - The **increase** in net cash provided by operating activities was primarily due to **higher cash flows from properties** and favorable changes in working capital[104](index=104&type=chunk) [Our Investing and Financing Liquidity and Resources](index=24&type=section&id=Our%20Investing%20and%20Financing%20Liquidity%20and%20Resources) The company held **$128.394 million** in cash, with REIT distribution rules limiting retained earnings, and plans to fund future growth via asset sales and equity/debt offerings - As of March 31, 2024, the company had cash and cash equivalents of **$128,394 thousand**[105](index=105&type=chunk) - REIT tax qualification requires distributing at least **90% of taxable income** annually, which limits the ability to retain earnings for capital[105](index=105&type=chunk) - Future property acquisitions, developments, and redevelopments are expected to be funded by proceeds from asset sales, equity contributions from joint ventures, and offerings of equity or debt securities[106](index=106&type=chunk) [Real Estate Activities](index=24&type=section&id=Real%20Estate%20Activities) Capitalized real estate expenditures totaled **$3.373 million** in Q1 2024, with **$5.981 million** in unspent leasing obligations expected within **12 months** Capitalized Real Estate Expenditures (dollars in thousands) | Category | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Tenant improvements and leasing costs | $2,571 | $2,040 | | Building improvements | $802 | $370 | | Development, redevelopment and other activities | — | $2,521 | | Total | $3,373 | $4,931 | - As of March 31, 2024, estimated unspent leasing related obligations were **$5,981 thousand**, all expected to be spent within the next **12 months**[108](index=108&type=chunk) [Consolidated Joint Venture](index=24&type=section&id=Consolidated%20Joint%20Venture) The company holds a **61%** equity interest in its consolidated joint venture, owning **94** properties with **$2.991 billion** in assets and **$1.771 billion** in liabilities - The company owns a **61% equity interest** in its consolidated joint venture, Mountain Industrial REIT LLC, which owns **94 properties** totaling approximately **20,981,000 rentable square feet**[109](index=109&type=chunk) - As of March 31, 2024, the consolidated joint venture had total assets of **$2,991,343 thousand** and total liabilities of **$1,771,327 thousand**[109](index=109&type=chunk) [Unconsolidated Joint Venture](index=25&type=section&id=Unconsolidated%20Joint%20Venture) The company holds a **22%** equity interest in an unconsolidated joint venture, accounted for at fair value, which distributed **$990 thousand** in cash for Q1 2024 - The company owns a **22% equity interest** in the unconsolidated joint venture, which owns **18 industrial properties** totaling approximately **11,726,000 rentable square feet**[110](index=110&type=chunk) - The investment in the unconsolidated joint venture is accounted for under the equity method using the fair value option[110](index=110&type=chunk) - Cash distributions from the unconsolidated joint venture to the company were **$990 thousand** for both the three months ended March 31, 2024, and 2023[110](index=110&type=chunk) [Indebtedness](index=25&type=section&id=Indebtedness) Total indebtedness was **$4.321 billion** with maturities from **2024** to **2038**, and the company was in **compliance with all loan covenants** as of **March 31, 2024** - The ILPT Floating Rate Loan (**$1.235 billion**) matures in **October 2024**, with a weighted average interest rate of **6.18%** (including interest rate cap)[112](index=112&type=chunk) - The Mountain Floating Rate Loan (**$1.4 billion**) was extended in March 2024 to mature in **March 2025**, with an interest rate of **5.81%** as of March 31, 2024[113](index=113&type=chunk) - As of March 31, 2024, the aggregate principal amount of indebtedness was **$4,321,478 thousand**, with maturities between **2024** and **2038**[114](index=114&type=chunk) - The company believes it was in **compliance with all covenants** and other terms under its loan agreements as of March 31, 2024[115](index=115&type=chunk) [Distributions](index=25&type=section&id=Distributions) The company paid **$658 thousand** in quarterly cash distributions to shareholders in Q1 2024, with a similar distribution declared for **May 2024** - During the three months ended March 31, 2024, the company paid quarterly cash distributions totaling **$658 thousand** to shareholders[117](index=117&type=chunk) - On April 11, 2024, a **regular quarterly distribution** of **$0.01 per share** (approximately **$658 thousand**) was declared, payable on or about **May 16, 2024**[117](index=117&type=chunk) [Related Person Transactions](index=26&type=section&id=Related%20Person%20Transactions) The company maintains ongoing relationships and transactions with RMR and its affiliates, with further details available in SEC filings - The company has relationships and historical and continuing transactions with RMR, RMR Inc., and others related to them[118](index=118&type=chunk) - Further information on these relationships and transactions can be found in the **2023 Annual Report** and other SEC filings[118](index=118&type=chunk) [Critical Accounting Estimates](index=26&type=section&id=Critical%20Accounting%20Estimates) Critical accounting estimates, including purchase price allocations and impairment assessments, remain unchanged since **December 31, 2023** - Significant estimates in the condensed consolidated financial statements include purchase price allocations, useful lives of fixed assets, and assessment of impairment of real estate and related intangibles[119](index=119&type=chunk) - There have been **no significant changes** in critical accounting estimates since the year ended **December 31, 2023**[120](index=120&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=26&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section details the company's market interest rate risk exposure, particularly for floating rate debt, and its management through derivative instruments [Floating Rate Debt](index=26&type=section&id=Floating%20Rate%20Debt) The company manages floating rate debt interest rate risk using interest rate caps, with current rates exceeding strike rates, mitigating impact from rate increases Outstanding Floating Rate Debt as of March 31, 2024 (dollars in thousands) | Debt | Principal Balance | Annual Interest Rate | Annual Interest Expense | Current Maturity | | :-------------------- | :---------------- | :------------------- | :---------------------- | :--------------- | | ILPT Floating Rate Loan | $1,235,000 | 6.18% | $77,383 | 10/09/2024 | | Mountain Floating Rate Loan | $1,400,000 | 5.81% | $82,470 | 03/09/2025 | | Total/weighted average | $2,635,000 | 5.98% | $159,853 | | - The company uses interest rate caps with SOFR strike rates of **2.25%** for the ILPT Floating Rate Loan and **3.04%** for the Mountain Floating Rate Loan to hedge exposure to changes in SOFR[123](index=123&type=chunk) - A **one percentage point increase** in interest rates would not impact annual total interest expense for floating rate debt due to current rates exceeding the strike rates of the interest rate caps[126](index=126&type=chunk) [Fixed Rate Debt](index=27&type=section&id=Fixed%20Rate%20Debt) No **material changes** occurred in market interest rate risks for fixed rate debt during Q1 2024, with further details in the **2023 Annual Report** - There have been **no material changes** to market interest rate risks associated with fixed rate debt during the three months ended March 31, 2024[128](index=128&type=chunk) - For a discussion of market interest rate risks associated with fixed rate debt, refer to the **2023 Annual Report**[128](index=128&type=chunk) [Item 4. Controls and Procedures](index=27&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were **effective** as of **March 31, 2024**, with **no material changes** to internal control over financial reporting - Management concluded that the company's disclosure controls and procedures were **effective** as of March 31, 2024[129](index=129&type=chunk) - There have been **no changes** in internal control over financial reporting during the quarter ended March 31, 2024, that have materially affected, or are reasonably likely to materially affect, internal control over financial reporting[130](index=130&type=chunk) [Warning Concerning Forward-Looking Statements](index=28&type=section&id=Warning%20Concerning%20Forward-Looking%20Statements) This warning highlights that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations - The report contains forward-looking statements that are subject to risks and uncertainties, which could cause actual results to differ materially from expected outcomes[133](index=133&type=chunk)[134](index=134&type=chunk) - **Key risks include** the ability to reduce leverage, tenant renewals, competition, cost of capital, demand for industrial properties, economic conditions, and related party conflicts[135](index=135&type=chunk)[141](index=141&type=chunk) - Readers should not place undue reliance on forward-looking statements, and the company does not intend to update them unless required by law[138](index=138&type=chunk) [Statement Concerning Limited Liability](index=29&type=section&id=Statement%20Concerning%20Limited%20Liability) The Declaration of Trust limits **personal liability** for trustees, officers, and shareholders, directing all claims **solely to the Trust's assets** - The Amended and Restated Declaration of Trust states that no trustee, officer, shareholder, employee, or agent of Industrial Logistics Properties Trust shall be held to any **personal liability** for obligations or claims against the Trust[140](index=140&type=chunk) - All persons dealing with the Trust must look only to its assets for the payment of any sum or performance of any obligation[140](index=140&type=chunk) PART II. Other Information [Item 1A. Risk Factors](index=30&type=section&id=Item%201A.%20Risk%20Factors) No **material changes** occurred to the risk factors previously disclosed in the company's **2023 Annual Report** - There have been **no material changes** to the risk factors from those previously provided in the **2023 Annual Report**[142](index=142&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=30&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2024, the company purchased **11,857** common shares at **$4.12** per share to satisfy tax withholding obligations for former RMR employees Issuer Purchases of Equity Securities (Quarter Ended March 31, 2024) | Calendar Month | Number of Shares Purchased | Average Price Paid per Share | | :--------------------------------- | :------------------------- | :--------------------------- | | January 1, 2024 - January 31, 2024 | 1,048 | $4.74 | | March 1, 2024 - March 31, 2024 | 10,809 | $4.06 | | Total | 11,857 | $4.12 | - These common share purchases were made to satisfy tax withholding and payment obligations of certain former employees of RMR in connection with the vesting of prior awards of common shares[143](index=143&type=chunk) [Item 6. Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Quarterly Report on Form 10-Q, including organizational documents, certifications, and XBRL files - The exhibits include the Composite Copy of Amended and Restated Declaration of Trust, Second Amended and Restated Bylaws, Form of Common Share Certificate, Rule 13a-14(a) Certifications, Section 1350 Certification, and various XBRL Taxonomy Extension Documents[145](index=145&type=chunk) [Signatures](index=32&type=section&id=Signatures) The report is signed by Yael Duffy, President and COO, and Tiffany R. Sy, CFO and Treasurer, on **April 30, 2024** - The report was signed by Yael Duffy, President and Chief Operating Officer, and Tiffany R. Sy, Chief Financial Officer and Treasurer, on **April 30, 2024**[148](index=148&type=chunk)

[Quarterly Results](index=3&type=section&id=QUARTERLY%20RESULTS) This section presents Industrial Logistics Properties Trust's (ILPT) first quarter 2024 financial and operational performance, highlighting strong fundamentals and key achievements [Industrial Logistics Properties Trust Announces First Quarter 2024 Financial Results](index=4&type=section&id=Industrial%20Logistics%20Properties%20Trust%20Announces%20First%20Quarter%202024%20Financial%20Results) ILPT reported strong Q1 2024 financial results, driven by robust operating fundamentals, increased key metrics, and active leasing - Operating fundamentals were strong, with key financial metrics increasing year-over-year and sequentially[8](index=8&type=chunk) - Completed nearly two million square feet of leasing, including rent resets, at weighted average rental rates **38.3% higher** than prior rates for the same space[8](index=8&type=chunk) - Robust renewal activity accounted for **1.8 million square feet** of leasing[8](index=8&type=chunk) - ILPT declared a quarterly distribution on its common shares on April 11, 2024, payable on or about May 16, 2024[10](index=10&type=chunk) - ILPT is a REIT focused on owning and operating industrial and logistics properties, with a portfolio of approximately **59.9 million rentable square feet** as of March 31, 2024[12](index=12&type=chunk) - Approximately **77% of ILPT's annualized rental revenues** are from investment-grade tenants or subsidiaries of investment-grade rated entities[12](index=12&type=chunk) [First Quarter 2024 Highlights](index=5&type=section&id=First%20Quarter%202024%20Highlights) Q1 2024 highlights include **99.0% occupancy**, **38.3% rent increases** from leasing, stable cash flows, and the Mountain JV's **$1.4 billion loan extension** - Portfolio occupancy grew to **99.0%**, an increase of **20 basis points** quarter-over-quarter[14](index=14&type=chunk) - Executed **1,981,000 square feet** of total leasing, including rent resets, at weighted average rental rates **38.3% higher** than prior rates for the same space[14](index=14&type=chunk) - Lease renewals accounted for **90% of leasing activity**, demonstrating strong tenant retention[14](index=14&type=chunk) - Stable cash flows with **76.6% of annualized rental revenues** generated from leases with investment grade tenants (or their subsidiaries) and Hawaii land leases, with a weighted average lease term of **8.0 years**[14](index=14&type=chunk) Q1 2024 Financial Results Highlights | Metric | Value | Change vs. Q1 2023 | | :----------------------------------------- | :-------------- | :----------------- | | Net loss attributable to common shareholders | $(23.4) million | - | | Per diluted share | $(0.36) | - | | Normalized FFO attributable to common shareholders | $9.5 million | - | | Per diluted share | $0.14 | - | | Adjusted EBITDAre | $84.4 million | +4.6% | | Same property NOI | - | +2.0% | | Same property Cash Basis NOI | - | +2.3% | - Mountain JV exercised the first of its three, one-year options to extend the maturity date of its **$1.4 billion floating rate loan**, purchasing a one-year interest rate cap for **$26.2 million** with a SOFR strike rate of **3.04%**[14](index=14&type=chunk) [Financials](index=6&type=section&id=FINANCIALS) This section provides a comprehensive overview of ILPT's financial performance, including key income statement, balance sheet, debt, and capital expenditure data [Key Financial Data](index=7&type=section&id=Key%20Financial%20Data) This section presents ILPT's key financial metrics across multiple quarters, including income statement, per share data, and balance sheet trends Selected Income Statement Data (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :----------------------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Rental income | $112,235 | $108,895 | $110,142 | $108,043 | $110,258 | | Net loss | $(33,902) | $(41,402) | $(36,191) | $(36,580) | $(35,546) | | Net loss attributable to common shareholders | $(23,403) | $(31,240) | $(26,112) | $(25,828) | $(24,809) | | NOI | $86,052 | $84,887 | $85,309 | $84,424 | $84,473 | | Cash Basis NOI | $82,196 | $81,453 | $81,643 | $80,827 | $80,441 | | Adjusted EBITDAre | $84,400 | $83,072 | $83,194 | $81,331 | $80,712 | | FFO attributable to common shareholders | $9,450 | $7,799 | $7,945 | $7,375 | $7,916 | | Normalized FFO attributable to common shareholders | $9,450 | $8,086 | $7,945 | $7,594 | $7,916 | | CAD attributable to common shareholders | $11,928 | $8,948 | $10,505 | $9,803 | $10,182 | Per Common Share Data (basic and diluted) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :----------------------------------------- | :-------- | :--------- | :-------- | :-------- | :-------- | | Net loss attributable to common shareholders | $(0.36) | $(0.48) | $(0.40) | $(0.40) | $(0.38) | | FFO attributable to common shareholders | $0.14 | $0.12 | $0.12 | $0.11 | $0.12 | | Normalized FFO attributable to common shareholders | $0.14 | $0.12 | $0.12 | $0.12 | $0.12 | | CAD attributable to common shareholders | $0.18 | $0.14 | $0.16 | $0.15 | $0.16 | Selected Balance Sheet Data (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :---------------- | :----------- | :----------- | :----------- | :----------- | :----------- | | Total gross assets | $5,956,536 | $5,961,129 | $6,000,494 | $5,997,715 | $5,939,557 | | Total assets | $5,527,569 | $5,563,675 | $5,634,315 | $5,662,080 | $5,634,976 | | Total liabilities | $4,405,069 | $4,401,896 | $4,416,177 | $4,400,791 | $4,348,801 | | Total equity | $1,122,500 | $1,161,779 | $1,218,138 | $1,261,289 | $1,286,175 | [Condensed Consolidated Statements of Income (Loss)](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income%20(Loss)) This section details the consolidated income statement for Q1 2024 versus Q1 2023, showing increased rental income and reduced net loss attributable to common shareholders Condensed Consolidated Statements of Income (Loss) (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | YoY Change | | :----------------------------------------- | :-------------------------------- | :-------------------------------- | :--------- | | Rental income | $112,235 | $110,258 | +1.8% | | Total expenses | $77,449 | $79,149 | -2.1% | | Interest expense | $(73,230) | $(70,771) | +3.5% | | Net loss | $(33,902) | $(35,546) | -4.6% | | Net loss attributable to common shareholders | $(23,403) | $(24,809) | -5.7% | [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section presents consolidated balance sheets as of March 31, 2024, and December 31, 2023, indicating slight decreases in total assets and equity, with stable liabilities Condensed Consolidated Balance Sheets (in thousands) | Metric | March 31, 2024 | December 31, 2023 | QoQ Change | | :---------------- | :------------- | :---------------- | :--------- | | Total assets | $5,527,569 | $5,563,675 | -0.65% | | Total liabilities | $4,405,069 | $4,401,896 | +0.07% | | Total equity | $1,122,500 | $1,161,779 | -3.4% | [Debt Summary](index=10&type=section&id=Debt%20Summary) This section summarizes ILPT's debt as of March 31, 2024, detailing principal balances, interest rates, and collateral, with a **5.35% weighted average interest rate** Debt Summary (as of March 31, 2024, in thousands) | Entity | Type | Secured By | Interest Rate (1) | Principal Balance | | :---------- | :------------------------ | :--------------------------------------- | :---------------- | :---------------- | | ILPT | Floating rate - interest only | 69 mainland and 35 Hawaii properties | 6.18% | $1,235,000 | | ILPT | Fixed rate - interest only | 186 Hawaii properties | 4.31% | $650,000 | | ILPT | Fixed rate - interest only | 17 mainland properties | 4.42% | $700,000 | | Mountain JV | Floating rate - interest only | 82 mainland properties | 5.81% | $1,400,000 | | Mountain JV | Fixed rate - interest only | Four mainland properties | 6.25% | $91,000 | | Mountain JV | Fixed rate - amortizing | One mainland property | 3.67% | $11,045 | | Mountain JV | Fixed rate - amortizing | One mainland property | 4.14% | $12,601 | | Mountain JV | Fixed rate - amortizing | One mainland property | 4.02% | $28,026 | | Mountain JV | Fixed rate - amortizing | One mainland property | 4.13% | $39,198 | | Mountain JV | Fixed rate - amortizing | One mainland property | 3.10% | $23,989 | | Mountain JV | Fixed rate - amortizing | One mainland property | 2.95% | $38,730 | | Mountain JV | Fixed rate - amortizing | One mainland property | 4.27% | $43,269 | | Mountain JV | Fixed rate - amortizing | One mainland property | 3.25% | $48,620 | | | **Weighted average / total** | | **5.35%** | **$4,321,478** | - Mountain JV exercised the first of its three, one-year options to extend the maturity date of its **$1.4 billion floating rate loan**, purchasing a one-year interest rate cap for **$26.2 million** with a SOFR strike rate of **3.04%**[24](index=24&type=chunk) [Debt Maturity Schedule](index=11&type=section&id=Debt%20Maturity%20Schedule) This section illustrates ILPT's debt maturity profile as of March 31, 2024, detailing significant maturities in 2024 and beyond, by secured floating and fixed rate debt Principal Debt Maturities (in millions) | Year | Secured floating rate debt | Secured fixed rate debt | Secured floating rate debt of consolidated joint venture | | :-------- | :------------------------- | :---------------------- | :------------------------------------------------------- | | 2024 | $1,235.0 | $1,593.3 | - | | 2025 | - | $18.8 | - | | 2026 | - | $13.7 | - | | 2027 | - | - | $1,400.0 | | 2028 | - | $19.5 | - | | Thereafter | - | $20.2 | - | - Mountain JV exercised the first of its three, one-year options to extend the maturity date of its secured floating rate loan[27](index=27&type=chunk) [Leverage and Coverage Ratios](index=12&type=section&id=Leverage%20and%20Coverage%20Ratios) This section provides ILPT's key leverage and coverage ratios across quarters, showing a slight increase in net debt to total gross assets and stable Adjusted EBITDAre to interest expense Leverage Ratios | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | | :------------------------------------ | :-------- | :--------- | :-------- | :-------- | | Net debt / total gross assets | 68.6% | 68.4% | 68.5% | 68.8% | | Net debt / gross book value of real estate assets | 71.7% | 71.3% | 71.7% | 72.2% | | Net debt / total market capitalization | 88.7% | 88.0% | 90.9% | 90.6% | | Secured debt / total assets | 78.2% | 77.8% | 76.9% | 76.6% | | Variable rate debt / net debt | 64.5% | 64.6% | 64.1% | 63.9% | Coverage Ratios | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | | :-------------------------------- | :-------- | :--------- | :-------- | :-------- | | Net debt / annualized Adjusted EBITDAre | 12.1× | 12.3x | 12.3x | 12.7x | | Adjusted EBITDAre / interest expense | 1.2x | 1.1× | 1.1x | 1.1× | [Capital Expenditures Summary](index=13&type=section&id=Capital%20Expenditures%20Summary) This section summarizes ILPT's Q1 2024 capital expenditures, showing a decrease compared to prior quarters, driven by lower building improvements and no development activities Capital Expenditures Summary (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :-------------------------------------- | :-------- | :--------- | :-------- | :-------- | :-------- | | Tenant improvements and leasing costs | $2,571 | $2,619 | $1,241 | $2,498 | $2,040 | | Building improvements | $802 | $2,406 | $2,720 | $1,283 | $370 | | Recurring capital expenditures | $3,373 | $5,025 | $3,961 | $3,781 | $2,410 | | Development, redevelopment and other activities | - | $381 | $1,314 | $3,870 | $2,521 | | Total capital expenditures | $3,373 | $5,406 | $5,275 | $7,651 | $4,931 | [Portfolio Information](index=14&type=section&id=PORTFOLIO%20INFORMATION) This section details ILPT's property portfolio, covering same property results, occupancy, leasing, tenant characteristics, and lease expiration schedules [Same Property Results](index=15&type=section&id=Same%20Property%20Results) This section details ILPT's same property performance for Q1 2024 versus Q1 2023, showing increases in rental income, NOI, and Cash Basis NOI, with stable occupancy Same Property Results (Three Months Ended March 31) | Metric | 3/31/2024 | 3/31/2023 | % Change | | :--------------- | :-------- | :-------- | :------- | | Properties | 411 | 411 | 0% | | Square feet (thousands) | 59,893 | 59,951 | -0.1% | | Percent leased | 99.0% | 98.7% | +0.3% | | Rental income (thousands) | $112,235 | $110,195 | +1.85% | | NOI (thousands) | $86,085 | $84,427 | +2.0% | | Cash Basis NOI (thousands) | $82,229 | $80,395 | +2.3% | [Occupancy and Leasing Summary](index=16&type=section&id=Occupancy%20and%20Leasing%20Summary) This section details ILPT's Q1 2024 occupancy and leasing activities, highlighting strong renewals, significant rent increases, and a **6.2-year weighted average lease term** Occupancy and Leasing Activity (as of and for the Three Months Ended March 31) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :----------------------------------------- | :-------- | :--------- | :-------- | :-------- | :-------- | | Percentage leased | 99.0% | 98.8% | 98.9% | 99.1% | 98.7% | | Leasing Activity (Sq. Ft. in thousands): | | | | | | | New leases | 90 | 276 | 94 | 494 | 36 | | Renewals | 1,785 | 1,220 | 694 | 1,091 | 1,107 | | Rent resets | 106 | 38 | - | 382 | - | | % Change in GAAP Rent (Weighted average by sq. ft.) | 38.3% | 19.7% | 13.5% | 29.6% | 15.1% | | Weighted Average Lease Term by Sq. Ft. (Years) | 6.2 | 6.7 | 4.1 | 8.9 | 8.9 | - New leases saw a **48.1% change in GAAP rent**, renewals **38.5%**, and rent resets **27.5%** for Q1 2024[39](index=39&type=chunk) [Tenant Credit Characteristics and Concentration](index=17&type=section&id=Tenant%20Credit%20Characteristics%20and%20Concentration) This section outlines ILPT's tenant credit quality and concentration as of March 31, 2024, showing significant annualized rental revenues from investment-grade tenants, with **FedEx Corporation** as the largest tenant Tenant Credit Characteristics (% of Total Annualized Rental Revenues) | Tenant Credit Characteristics | % of Total Annualized Rental Revenues | | :---------------------------------------------------------------- | :------------------------------------ | | Investment grade rated | 18.4% | | Subsidiaries of investment grade rated parent entities | 36.9% | | Other leased Hawaii lands | 21.3% | | Subtotal investment grade rated, subsidiaries of investment grade rated parent entities and other leased Hawaii lands | 76.6% | | Other unrated or non-investment grade | 23.4% | Top Tenants with 1% or More of Total Annualized Rental Revenues (as of March 31, 2024) | Tenant | % of Total Annualized Rental Revenues | | :--------------------------------------- | :------------------------------------ | | FedEx Corporation / FedEx Ground Package System, Inc. | 28.9% | | Amazon.com Services, Inc. / Amazon.com Services LLC | 6.7% | | Home Depot U.S.A., Inc. | 2.2% | | American Tire Distributors, Inc. | 1.6% | | UPS Supply Chain Solutions, Inc. | 1.5% | | Restoration Hardware, Inc. | 1.5% | | Servco Pacific, Inc. | 1.4% | | Par Pacific Holdings Inc. | 1.2% | | DHL Group | 1.2% | | TD SYNNEX Corporation | 1.1% | | Berkshire Hathaway Inc. | 1.0% | [Portfolio Lease Expiration and Reset Schedules](index=18&type=section&id=Portfolio%20Lease%20Expiration%20and%20Reset%20Schedules) This section details ILPT's lease expiration and rent reset schedules as of March 31, 2024, showing **6.8% of leased square feet** and **4.6% of annualized rental revenues** expire in 2024, with a **7.0-year weighted average remaining lease term** Lease Expiration Schedule (as of March 31, 2024, in thousands) | Period/Year | No. of Leases | Leased Square Feet Expiring | % of Total Leased Square Feet Expiring | Annualized Rental Revenues Expiring | % of Total Annualized Rental Revenues Expiring | | :---------- | :------------ | :-------------------------- | :------------------------------------- | :---------------------------------- | :--------------------------------------------- | | 2024 | 32 | 4,017 | 6.8% | $20,420 | 4.6% | | 2025 | 34 | 4,355 | 7.3% | $26,598 | 6.0% | | 2026 | 32 | 4,174 | 7.0% | $29,664 | 6.7% | | 2027 | 38 | 8,738 | 14.7% | $53,275 | 12.1% | | 2028 | 41 | 6,066 | 10.2% | $45,274 | 10.3% | | Thereafter | 213 | 31,963 | 54.0% | $265,595 | 60.3% | | Total | 390 | 59,313 | 100.0% | $440,826 | 100.0% | - Weighted average remaining lease term is **7.0 years by square feet** and **8.0 years by annualized rental revenues**[43](index=43&type=chunk) Scheduled Rent Resets at Hawaii Properties (in thousands) | Period/Year | Reset sq. ft. | Annualized rental revenues | | :---------- | :------------ | :------------------------- | | 2024 | - | - | | 2025 | 204 | $1,002 | | 2026 | 154 | $1,315 | | 2027 | 89 | $795 | | 2028 | - | - | | Thereafter | 2,940 | $19,338 | [Key Financial Data by Investment Portfolio](index=19&type=section&id=Key%20Financial%20Data%20by%20Investment%20Portfolio) This section breaks down key financial data for ILPT's wholly-owned properties (Mainland and Hawaii) and its consolidated joint venture, detailing individual performance metrics Portfolio Overview (as of and for the Three Months Ended March 31, 2024, in thousands) | Portfolio | Ownership % | Properties | Sq. ft. | Occupancy % | Total gross assets | Total debt (principal) | | :--------------------------- | :---------- | :--------- | :------ | :---------- | :----------------- | :--------------------- | | ILPT Wholly Owned Properties - Mainland | 100% | 90 | 22,119 | 98.9% | $1,814,875 | $1,722,070 | | ILPT Wholly Owned Properties - Hawaii | 100% | 226 | 16,729 | 99.0% | $727,437 | $862,930 | | Mountain Industrial REIT LLC | 61% | 94 | 20,981 | 99.2% | $3,154,781 | $1,736,478 | Selected Income Statement Data (Three Months Ended March 31, 2024, in thousands) | Portfolio | Rental income | NOI | Cash Basis NOI | Adjusted EBITDAre | Normalized FFO attributable to common shareholders | CAD attributable to common shareholders | | :--------------------------- | :------------ | :------ | :------------- | :---------------- | :------------------------------------------------- | :-------------------------------------- | | ILPT Wholly Owned Properties - Mainland | $37,987 | $29,622 | $28,661 | $27,285 | $(3,565) | $952 | | ILPT Wholly Owned Properties - Hawaii | $31,447 | $23,433 | $21,844 | $22,493 | $10,506 | $9,292 | | Mountain Industrial REIT LLC | $42,363 | $32,792 | $31,486 | $30,147 | $(166) | $(855) | Key Ratios (Annualized Cash Basis NOI / total gross assets) | Portfolio | Ratio | | :--------------------------- | :------ | | ILPT Wholly Owned Properties - Mainland | 6.3% | | ILPT Wholly Owned Properties - Hawaii | 12.0% | | Mountain Industrial REIT LLC | 4.0% | [Joint Ventures](index=20&type=section&id=JOINT%20VENTURES) This section provides detailed financial and operational information for ILPT's consolidated and unconsolidated joint ventures, highlighting their property portfolios, financial performance, and debt structures [Consolidated Joint Venture - Mountain Industrial REIT LLC](index=21&type=section&id=Consolidated%20Joint%20Venture%20-%20Mountain%20Industrial%20REIT%20LLC) This section details financial and operational information for Mountain Industrial REIT LLC, a **61% owned consolidated joint venture**, including major tenants, lease expirations, balance sheet, and operating results - ILPT owns a **61% interest** in Mountain Industrial REIT LLC, which is consolidated in ILPT's financial statements[52](index=52&type=chunk) - The joint venture owns **94 properties** across **27 states**, totaling approximately **20,981 thousand square feet**[52](index=52&type=chunk) Major Tenants by % of Total Annualized Rental Revenues Expiring (as of March 31, 2024) | Tenant | % of Total Annualized Rental Revenues Expiring | | :--------------------------------------- | :--------------------------------------------- | | FedEx Corporation / FedEx Ground Package System, Inc. | 1.5% (2024) | | Amazon.com Services, Inc. / Amazon.com Service | 7.1% (2025) | | Home Depot U.S.A., Inc. | 6.5% (2026) | | Berkshire Hathaway Inc. | 13.4% (2027) | | Techtronic Industries Company Limited | 10.4% (2028) | Consolidated Joint Venture Balance Sheets (in thousands) | Metric | March 31, 2024 | December 31, 2023 | | :-------------------------------- | :------------- | :---------------- | | Total real estate properties, net | $2,677,182 | $2,696,385 | | Total assets | $2,991,343 | $3,026,194 | | Mortgage and notes payable, net | $1,735,458 | $1,736,426 | | Total liabilities | $1,771,327 | $1,774,380 | Operating Information of the Consolidated Joint Venture (100%, Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | | :---------------- | :-------- | :-------- | | Rental income | $42,363 | $43,066 | | Total expenses | $40,329 | $41,811 | | Interest expense | $(30,393) | $(28,472) | | Net loss | $(26,953) | $(27,518) | | Normalized FFO | $(270) | $1,033 | | CAD | $(1,400) | $(2,752) | | Adjusted EBITDAre | $30,147 | $29,519 | [Unconsolidated Joint Venture - The Industrial Fund REIT LLC](index=25&type=section&id=Unconsolidated%20Joint%20Venture%20-%20The%20Industrial%20Fund%20REIT%20LLC) This section overviews The Industrial Fund REIT LLC, an unconsolidated joint venture with **22% ILPT ownership**, detailing its properties, investment, operating results, and secured debt - ILPT holds a **22% ownership interest** in The Industrial Fund REIT LLC, an unconsolidated joint venture[59](index=59&type=chunk) - The joint venture owns **18 properties** across **12 states**, totaling approximately **11,726 thousand square feet**[59](index=59&type=chunk) - ILPT's investment in the unconsolidated joint venture is **$116,093 thousand** as of March 31, 2024[59](index=59&type=chunk) Operating Information (Three Months Ended March 31, in thousands) | Metric | 2024 | 2023 | | :--------------- | :-------- | :-------- | | Rental income | $19,025 | $17,411 | | Total expenses | $14,027 | $13,846 | | Interest expense | $(6,302) | $(5,197) | | Net loss | $(1,172) | $(1,573) | | Distributions received | $990 | $990 | Secured Debt (as of March 31, 2024, in thousands) | Type | Interest Rate | Maturity Date | Principal Balance | | :------------------------ | :------------ | :------------ | :---------------- | | Mortgage notes payable (secured by one property in Florida) | 6.96% | 11/01/2028 | $65,000 | | Mortgage notes payable (secured by six properties in four states) | 5.30% | 10/01/2027 | $123,700 | | Mortgage notes payable (secured by 11 properties in eight states) | 3.33% | 11/07/2029 | $350,000 | | **Weighted average / total** | **4.22%** | | **$538,700** | [Appendix](index=26&type=section&id=APPENDIX) This section provides detailed calculations and reconciliations of non-GAAP financial measures, including NOI, Cash Basis NOI, EBITDA, FFO, Normalized FFO, and CAD [Calculation and Reconciliation of NOI and Cash Basis NOI](index=27&type=section&id=Calculation%20and%20Reconciliation%20of%20NOI%20and%20Cash%20Basis%20NOI) This section details the calculation and reconciliation of NOI and Cash Basis NOI from net loss for Q1 2024 and prior quarters, illustrating non-cash item adjustments Calculation of NOI and Cash Basis NOI (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | 6/30/2023 | 3/31/2023 | | :-------------------------------------- | :--------- | :--------- | :--------- | :--------- | :--------- | | Rental income | $112,235 | $108,895 | $110,142 | $108,043 | $110,258 | | Real estate taxes | $(15,861) | $(13,560) | $(14,926) | $(15,100) | $(16,467) | | Other operating expenses | $(10,322) | $(10,448) | $(9,907) | $(8,519) | $(9,318) | | **NOI** | **$86,052** | **$84,887** | **$85,309** | **$84,424** | **$84,473** | | Non-cash straight line rent adjustments | $(3,489) | $(3,068) | $(3,414) | $(3,355) | $(3,762) | | Lease value amortization | $(367) | $(366) | $(252) | $(242) | $(270) | | **Cash Basis NOI** | **$82,196** | **$81,453** | **$81,643** | **$80,827** | **$80,441** | - The reconciliation from net loss to NOI and Cash Basis NOI involves adding back items like interest expense, depreciation and amortization, and general and administrative expenses, while subtracting interest and other income[63](index=63&type=chunk) [Reconciliation of NOI to Same Property NOI and Calculation of Same Property Cash Basis NOI](index=28&type=section&id=Reconciliation%20of%20NOI%20to%20Same%20Property%20NOI%20and%20Calculation%20of%20Same%20Property%20Cash%20Basis%20NOI) This section reconciles total NOI to Same Property NOI and calculates Same Property Cash Basis NOI for Q1 2024 and 2023, adjusting for non-same properties and non-cash rent items Reconciliation of NOI to Same Property NOI and Calculation of Same Property Cash Basis NOI (in thousands) | Metric | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | NOI | $86,052 | $84,473 | | Less: NOI of properties not included in same property results | $33 | $(46) | | **Same property NOI** | **$86,085** | **$84,427** | | Less: Non-cash straight line rent adjustments | $(3,489) | $(3,762) |\ | Less: Lease value amortization | $(367) | $(270) | | **Same property Cash Basis NOI** | **$82,229** | **$80,395** | [Calculation of EBITDA, EBITDAre and Adjusted EBITDAre](index=29&type=section&id=Calculation%20of%20EBITDA%2C%20EBITDAre%20and%20Adjusted%20EBITDAre) This section details the calculation of EBITDA, EBITDAre, and Adjusted EBITDAre for Q1 2024 and prior quarters, starting from net loss and applying Nareit-defined adjustments Calculation of EBITDA, EBITDAre and Adjusted EBITDAre (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :-------------------------------------- | :--------- | :--------- | :--------- | | Net loss | $(33,902) | $(41,402) | $(36,191) | | Plus: interest expense | $73,230 | $72,979 | $72,941 | | Plus: income tax expense (benefit) | $33 | $(9) | $51 | | Plus: depreciation and amortization | $43,577 | $44,450 | $43,912 | | **EBITDA** | **$82,938** | **$76,018** | **$80,713** | | Equity in (earnings) losses of unconsolidated joint venture | $(1,723) | $6,521 | $(719) | | Share of EBITDAre from unconsolidated joint venture | $2,846 | $2,717 | $2,724 | | **EBITDAre** | **$84,061** | **$82,474** | **$82,718** | | Plus: general and administrative expense paid in common shares | $339 | $311 | $476 | | **Adjusted EBITDAre** | **$84,400** | **$83,072** | **$83,194** | [Calculation of FFO, Normalized FFO and CAD](index=30&type=section&id=Calculation%20of%20FFO%2C%20Normalized%20FFO%20and%20CAD) This section provides the calculation of FFO, Normalized FFO, and CAD attributable to common shareholders for Q1 2024 and prior quarters, detailing adjustments from net loss Calculation of FFO and Normalized FFO (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :----------------------------------------- | :-------- | :--------- | :-------- | | Net loss attributable to common shareholders | $(23,403) | $(31,240) | $(26,112) | | Depreciation and amortization | $43,577 | $44,450 | $43,912 | | Share of FFO from unconsolidated joint venture | $1,459 | $1,367 | $1,446 | | FFO adjustments attributable to noncontrolling interest | $(10,460) | $(10,517) | $(10,582) |\ | **FFO attributable to common shareholders** | **$9,450** | **$7,799** | **$7,945** | | **Normalized FFO attributable to common shareholders** | **$9,450** | **$8,086** | **$7,945** | Calculation of CAD (in thousands) | Metric | 3/31/2024 | 12/31/2023 | 9/30/2023 | | :----------------------------------------- | :-------- | :--------- | :-------- | | Normalized FFO attributable to common shareholders | $9,450 | $8,086 | $7,945 | | Plus (minus): Non-cash interest expense | $13,859 | $12,883 | $12,884 | | Non-cash revenues | $(3,856) | $(3,434) | $(3,666) | | Recurring capital expenditures | $(3,373) | $(5,025) | $(3,961) | | Principal amortization | $(4,466) | $(4,425) | $(4,385) | | Distributions from unconsolidated joint venture | $990 | $990 | $990 | | **CAD attributable to common shareholders** | **$11,928** | **$8,948** | **$10,505** | [Company Profile, Research Coverage and Governance Information](index=32&type=section&id=Company%20Profile%2C%20Research%20Coverage%20and%20Governance%20Information) This section overviews ILPT's company profile, covering market index inclusions, management by The RMR Group, and details on its Board of Trustees and executive officers [Company Profile, Research Coverage and Governance Information](index=32&type=section&id=Company%20Profile%2C%20Research%20Coverage%20and%20Governance%20Information) This section overviews ILPT's company profile, covering market index inclusions, management by The RMR Group, and details on its Board of Trustees and executive officers - ILPT is included in **117 market indices** and comprises more than **1% of several key indices**, including Invesco S&P SmallCap High Dividend Low Volatility ETF INAV Index and Bloomberg US Micro Cap Real Estate Price Return Index[75](index=75&type=chunk) - ILPT is managed by The RMR Group (Nasdaq: RMR), an alternative asset management company with over **$41 billion in assets under management** as of March 31, 2024[76](index=76&type=chunk) - ILPT believes RMR provides management services at a lower cost than if it were self-managed, offering a competitive advantage due to RMR's depth of management and experience[76](index=76&type=chunk) - Executive Officers include Yael Duffy (President and Chief Operating Officer) and Tiffany R. Sy (Chief Financial Officer and Treasurer)[77](index=77&type=chunk) [Non-GAAP Financial Measures and Certain Definitions](index=33&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Certain%20Definitions) This section defines and explains ILPT's non-GAAP financial measures, including FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre, NOI, Cash Basis NOI, and CAD, plus other key report definitions [Non-GAAP Financial Measures and Certain Definitions](index=33&type=section&id=Non-GAAP%20Financial%20Measures%20and%20Certain%20Definitions) This section defines and explains ILPT's non-GAAP financial measures, including FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre, NOI, Cash Basis NOI, and CAD, plus other key report definitions - ILPT presents non-GAAP financial measures including FFO, Normalized FFO, EBITDA, EBITDAre, Adjusted EBITDAre, NOI, same property NOI, Cash Basis NOI, and same property Cash Basis NOI as supplemental measures of operating performance[81](index=81&type=chunk) - NOI is defined as rental income less property operating expenses, excluding depreciation and amortization. Cash Basis NOI further excludes non-cash straight line rent adjustments, lease value amortization, and lease termination fees[82](index=82&type=chunk) - FFO attributable to common shareholders is calculated based on Nareit's definition, adjusting net loss for real estate impairment/gains/losses, equity in unconsolidated joint venture earnings, and real estate depreciation/amortization[83](index=83&type=chunk) - CAD (Cash Available for Distribution) is defined as Normalized FFO minus ILPT's proportionate share of Normalized FFO from unconsolidated joint venture properties, plus operating cash flow distributions received from the unconsolidated joint venture, recurring capital expenditures, and other adjustments[84](index=84&type=chunk) - EBITDAre (EBITDA for real estate) is calculated based on Nareit's definition, including ILPT's proportionate share of EBITDAre from unconsolidated joint venture properties and excluding gains/losses on real estate sales, impairment, and equity in unconsolidated joint venture[85](index=85&type=chunk) - Key definitions include Annualized dividend yield, Annualized rental revenues, Building improvements, Development, redevelopment and other activities, GAAP, Gross book value of real estate assets, ILPT Wholly Owned Properties, Leased square feet, Leasing costs, Leasing costs and concession commitments, Mountain JV, Net debt, Non-cash interest expense, Percent change in GAAP rent, Rolling four quarter CAD, Same property, SOFR, Square feet, Tenant improvements, Total gross assets, and Total market capitalization[87](index=87&type=chunk)[88](index=88&type=chunk)[89](index=89&type=chunk)[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[95](index=95&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) [Warning Concerning Forward-Looking Statements](index=36&type=section&id=WARNING%20CONCERNING%20FORWARD-LOOKING%20STATEMENTS) This section warns that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations [Warning Concerning Forward-Looking Statements](index=36&type=section&id=Warning%20Concerning%20Forward-Looking%20Statements) This section warns that forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations - The presentation contains forward-looking statements that are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from expected future results[99](index=99&type=chunk)[100](index=100&type=chunk) - These risks include ILPT's ability to reduce leverage, renew leases, compete for tenancies, raise capital, pay debt, maintain REIT qualification, and operate under unfavorable market and commercial real estate industry conditions[100](index=100&type=chunk) - ILPT does not intend to update or change any forward-looking statements as a result of new information, future events, or otherwise, except as required by law[101](index=101&type=chunk)