Industrial Logistics Properties Trust(ILPT) - 2024 Q1 - Quarterly Report

PART I. Financial Information Item 1. Financial Statements (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 Note 1. Basis of Presentation 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] - The preparation of financial statements requires management to make estimates and assumptions, which could differ from actual results[21] Note 2. Recent Accounting Pronouncements 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] - 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] - 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] Note 3. Real Estate Investments 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] - The company operates in one business segment: ownership and leasing of industrial and logistics properties and leased industrial lands[24] 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][29] Note 4. Leases 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] - 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] 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 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] 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 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] Note 7. Shareholders' Equity 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] 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] Note 8. Business and Property Management Agreements with RMR 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] Note 9. Related Person Transactions 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] - As of March 31, 2024, the company owed $652 thousand to the unconsolidated joint venture for rents collected on its behalf[66] Note 10. Derivatives and Hedging Activities 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] 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 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 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] 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] - 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] Property Operations 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] - 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] RESULTS OF OPERATIONS 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] - Real estate taxes decreased due to lower assessed values from successful tax appeals[90] - Interest expense increased due to refinancing activities in May 2023 and costs related to purchasing an interest rate cap[93] Non-GAAP Financial Measures 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] 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 This section details the company's operating, investing, and financing liquidity, including cash flows, funding sources, and indebtedness Our Operating Liquidity and Resources 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] - Only 5.5% of annualized rental revenues were from leases expiring over the next 12 months[102] 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] Our Investing and Financing Liquidity and Resources 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] - REIT tax qualification requires distributing at least 90% of taxable income annually, which limits the ability to retain earnings for capital[105] - 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] Real Estate Activities 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] Consolidated Joint Venture 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] - 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] Unconsolidated Joint Venture 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] - The investment in the unconsolidated joint venture is accounted for under the equity method using the fair value option[110] - 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] 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] - 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] - As of March 31, 2024, the aggregate principal amount of indebtedness was $4,321,478 thousand, with maturities between 2024 and 2038[114] - The company believes it was in compliance with all covenants and other terms under its loan agreements as of March 31, 2024[115] 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] - 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] Related Person Transactions 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] - Further information on these relationships and transactions can be found in the 2023 Annual Report and other SEC filings[118] Critical Accounting Estimates 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] - There have been no significant changes in critical accounting estimates since the year ended December 31, 2023[120] Item 3. Quantitative and Qualitative Disclosures About Market Risk 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 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] - 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] Fixed Rate Debt 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] - For a discussion of market interest rate risks associated with fixed rate debt, refer to the 2023 Annual Report[128] Item 4. Controls and Procedures 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] - 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] Warning Concerning Forward-Looking Statements 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][134] - 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][141] - Readers should not place undue reliance on forward-looking statements, and the company does not intend to update them unless required by law[138] Statement Concerning Limited Liability 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] - All persons dealing with the Trust must look only to its assets for the payment of any sum or performance of any obligation[140] PART II. Other Information Item 1A. Risk Factors 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] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] Item 6. Exhibits 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] 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]