Industrial Logistics Properties Trust(US:ILPT)2024-10-29 21:11Property and Occupancy - As of September 30, 2024, the company owned 411 properties with approximately 59,890,000 rentable square feet and a 94.4% occupancy rate[67]. - Occupancy at Mainland Properties was 97.7%, contributing to 72.1% of total annualized rental revenues as of September 30, 2024[78]. - Occupancy at Hawaii Properties was 85.7%, representing 27.9% of total annualized rental revenues, with potential for future rent growth due to periodic rent resets[79]. - 5.6% of rentable square feet were currently vacant as of September 30, 2024[81]. Rental Income and Financial Performance - Rental income and net operating income (NOI) increased during the nine months ended September 30, 2024, primarily due to leasing activity and rent resets, with long-term e-commerce trends contributing to high occupancy[69]. - Rental income for the nine months ended September 30, 2024, increased to $331,801, a 1.1% increase from $328,339 in the same period of 2023[93]. - Rental income for Q3 2024 was $108,945, a decrease of $1,197 or 1.1% compared to $110,142 in Q3 2023[84]. - NOI for Q3 2024 was $84,713, a decrease of $609 or 0.7% compared to $85,322 in Q3 2023[84]. - Net Operating Income (NOI) for the period was $257,062, up 1.1% from $254,150 in the previous year[93]. - The Funds From Operations (FFO) attributable to common shareholders for the nine months ended September 30, 2024, was $26,478, an increase of 13.0% from $23,236 in the same period of 2023[109]. Leasing Activity - The company entered into new and renewal leases totaling 2,757 thousand square feet during the three months ended September 30, 2024, with a weighted average rental rate change of 7.0%[72]. - During the nine months ended September 30, 2024, the company completed rent resets for approximately 106,000 square feet in Hawaii at rates 27.5% higher than prior rates[73]. - The company’s total leasing costs and concession commitments for new leases were $113,000, averaging $6.77 per square foot[72]. Expenses and Losses - Operating expenses totaled $24,232, down $588 or 2.4% from $24,820 in the same period last year[84]. - General and administrative expenses decreased by $475 or 6.2%, totaling $7,237 in Q3 2024[84]. - Total operating expenses rose to $74,739, reflecting a 0.7% increase compared to $74,189 in the prior year[93]. - The net loss attributable to common shareholders improved to $(71,568) from $(76,749), reflecting a 6.8% reduction in losses[93]. - The net loss attributable to common shareholders was $24,990, a decrease of $1,122 or 4.3% from $26,112 in Q3 2023[84]. Interest and Debt - Interest income increased significantly by 67.1% to $8,921, driven by higher interest rates and average cash balances[100]. - Interest expense rose to $220,797, a 2.4% increase from $215,558, primarily due to increased amortization related to interest rate caps[101]. - The company’s interest expense for the three months ended September 30, 2024, was $73,936, slightly up from $72,941 in the same period of 2023[107]. - The company had an aggregate principal amount of $4,312,421 of indebtedness, including the ILPT Floating Rate Loan and the Mountain Floating Rate Loan[125]. - A one percentage point increase in interest rates would result in a weighted average interest rate of 6.98% and total interest expense per year of $186,568[137]. Cash and Investments - Cash and cash equivalents at the end of the period increased to $264,931 from $222,503 in the previous year, reflecting a growth of 19.1%[112]. - The company reported a net cash provided by operating activities of $15,426 for the nine months ended September 30, 2024, compared to $14,063 in 2023, marking an increase of 9.7%[112]. - The company capitalized $5,637 for tenant improvements and leasing costs in the three months ended September 30, 2024, compared to $5,275 in the same period of 2023, indicating an increase of 6.9%[115]. Tenant and Lease Information - As of September 30, 2024, subsidiaries of FedEx and Amazon accounted for 22.7% and 8.0% of total leased square feet, representing 29.3% and 6.8% of total annualized rental revenues, respectively[77]. - As of September 30, 2024, 77.2% of annualized rental revenues came from investment-grade rated tenants, with only 4.0% of revenues from leases expiring in the next 12 months[110]. - Future rental rates will depend on prevailing market conditions, with historical increases not guaranteed[81]. Compliance and Governance - The company believes it was in compliance with all covenants and terms under the agreements governing its loans as of September 30, 2024[126].