What changed in this filing

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Item 1. Financial Statements

2021-10-27 compared with 2021-07-28 · 125 added, 82 removed, 317 unchanged (40% of the section changed)

3 unchanged sentences

(dollars in thousands, except per share data)

June 30, December 31,

September 30, December 31,

Real estate properties:

37 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

6 unchanged sentences

Total expenses 29,456 38,393 86,653 112,850

Gain on sale of real estate 940 — 940 —

Interest income — — — 113

20 unchanged sentences

Balance at December 31, 2020 65,301,088 $ 653 $ 1,010,819 $ 224,226 $ ( 232,508 ) $ 1,003,190

Net income (loss) — — — 19,337 — 19,337

Net income — — — 19,337 — 19,337

Share grants — — 239 — — 239

1 unchanged sentence

Balance at March 31, 2021 65,301,088 653 1,011,058 243,563 ( 254,058 ) 1,001,216

Net income (loss) — — — 18,831 — 18,831

Net income — — — 18,831 — 18,831

Share grants 21,000 — 780 — — 780

2 unchanged sentences

Balance at June 30, 2021 65,314,355 653 1,011,636 262,394 ( 275,607 ) 999,076

Net income — — — 18,307 — 18,307

Share grants 118,800 1 916 — — 917

Share repurchases ( 27,576 ) — ( 713 ) — — ( 713 )

Share forfeitures ( 700 ) — ( 4 ) — — ( 4 )

Distributions to common shareholders — — — — ( 21,554 ) ( 21,554 )

Balance at September 30, 2021 65,404,879 $ 654 $ 1,011,835 $ 280,701 $ ( 297,161 ) $ 996,029

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

19 unchanged sentences

Balance at June 30, 2020 65,209,564 652 1,007,223 169,822 ( 189,440 ) 988,257 98,354 1,086,611

Net income (loss) — — — 14,089 — 14,089 ( 275 ) 13,814

Share grants 108,600 1 675 — — 676 — 676

Share repurchases ( 16,496 ) — ( 351 ) — — ( 351 ) — ( 351 )

Share forfeitures ( 580 ) — ( 3 ) — — ( 3 ) — ( 3 )

Distributions to common shareholders — — — — ( 21,519 ) ( 21,519 ) — ( 21,519 )

Contributions from noncontrolling interest — — 2,595 — — 2,595 ( 2,293 ) 302

Distributions to noncontrolling interest — — — — — — ( 2,107 ) ( 2,107 )

Balance at September 30, 2020 65,301,088 $ 653 $ 1,010,139 $ 183,911 $ ( 210,959 ) $ 983,744 $ 93,679 $ 1,077,423

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

2 unchanged sentences

(dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

6 unchanged sentences

Straight line rental income ( 5,673 ) ( 6,183 )

Gain on sale of real estate ( 940 ) —

Gain on early extinguishment of debt — ( 120 )

15 unchanged sentences

Real estate improvements ( 2,373 ) ( 4,495 )

Proceeds from sale of real estate 1,206 —

Proceeds from sale of joint venture 804 —

9 unchanged sentences

Repurchase of common shares ( 915 ) ( 382 )

Net cash (used in) provided by financing activities ( 20,301 ) 23,940

Increase (decrease) in cash, cash equivalents and restricted cash 7,678 12,409

Net cash provided by financing activities 67,432 265

Increase in cash, cash equivalents and restricted cash 21,259 17,361

Cash, cash equivalents and restricted cash at beginning of period 22,834 34,550

4 unchanged sentences

(dollars in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

SUPPLEMENTAL DISCLOSURES:

5 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows:

As of June 30,

As of September 30,

Cash and cash equivalents $ 44,093 $ 39,105

18 unchanged sentences

Real Estate Investments

As of June 30, 2021, our portfolio was comprised of 291 wholly owned properties containing approximately 35,201,000 rentable square feet, including 226 buildings, leasable land parcels and easements containing approximately 16,729,000 rentable square feet of primarily industrial lands located on the island of Oahu, Hawaii, or our Hawaii Properties, and 65 properties containing approximately 18,472,000 rentable square feet of industrial properties located in 31 other states, or our Mainland Properties.

As of June 30, 2021, we also owned a 22 % equity interest in an unconsolidated joint venture which owns 12 properties located in nine states totaling approximately 9,227,000 rentable square feet.

As of September 30, 2021, our portfolio was comprised of 294 wholly owned properties containing approximately 36,488,000 rentable square feet, including 226 buildings, leasable land parcels and easements containing approximately 16,729,000 rentable square feet of primarily industrial lands located on the island of Oahu, Hawaii, or our Hawaii Properties, and 68 properties containing approximately 19,759,000 rentable square feet of industrial properties located in 32 other states, or our Mainland Properties.

As of September 30, 2021, we also owned a 22 % equity interest in an unconsolidated joint venture which owns 12 properties located in nine states totaling approximately 9,227,000 rentable square feet.

We operate in one business segment:

ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands.

For the three months ended June 30, 2021 and 2020, approximately 51.3 % and 41.3 %, respectively, of our rental income was from our Hawaii Properties.

For the six months ended June 30, 2021 and 2020, approximately 50.8 % and 41.2 %, respectively, of our rental income was from our Hawaii Properties.

In addition, subsidiaries of Amazon.com, Inc., which are tenants at certain of our Mainland Properties, accounted for $ 5,348 , or 9.9 %, and $ 10,399 , or 16.0 %, of our rental income for the three months ended June 30, 2021 and 2020, respectively, and $ 10,886 , or 10.0 %, and $ 20,061 , or 15.5 %, of our rental income for the six months ended June 30, 2021 and 2020, respectively.

During the six months ended June 30, 2021, we acquired one parcel of developable land and one property containing 357,504 rentable square feet for an aggregate purchase price of $ 34,081 , including acquisition related costs of $ 381 .

For the three months ended September 30, 2021 and 2020, approximately 50.5 % and 40.7 %, respectively, of our rental income was from our Hawaii Properties.

For the nine months ended September 30, 2021 and 2020, approximately 50.7 % and 41.0 %, respectively, of our rental income was from our Hawaii Properties.

In addition, subsidiaries of Amazon.com, Inc., which are tenants at certain of our Mainland Properties, accounted for $ 5,231 , or 9.5 %, and $ 10,288 , or 15.8 %, of our rental income for the three months ended September 30, 2021 and 2020, respectively, and $ 16,117 , or 9.9 %, and $ 30,349 , or 15.6 %, of our rental income for the nine months ended September 30, 2021 and 2020, respectively.

During the nine months ended September 30, 2021, we acquired four industrial properties and one parcel of developable land containing 1,644,508 rentable square feet for an aggregate purchase price of $ 134,730 , including acquisition related costs of $ 1,030 .

These acquisitions were accounted for as asset acquisitions.

We allocated the purchase prices for these acquisitions based on the estimated fair value of the acquired assets as follows:

Number Rentable Buildings Acquired

of Square Purchase and Real Estate

Date Market Area Properties Feet Price Land Improvements Leases

Number Rentable Buildings Acquired Acquired

of Square Purchase and Real Estate Real Estate

Date Market Area Properties Feet Price Land Improvements Leases Lease Obligations

May 2021 Dallas, TX 1 — $ 2,319 $ 2,319 $ — $ — $ —

June 2021 Columbus, OH 1 357,504 31,762 1,491 27,407 2,864 —

August 2021 Memphis, TN 3 1,287,004 100,649 5,922 87,600 7,192 ( 65 )

5 1,644,508 $ 134,730 $ 9,732 $ 115,007 $ 10,056 $ ( 65 )

During the six months ended June 30, 2021, we committed $ 4,547 for expenditures related to leasing related costs for leases executed during the period for approximately 1,184,000 square feet.

Committed but unspent tenant related obligations based on existing leases as of June 30, 2021 were $ 1,730 .

Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands is changed;

however, we do not have plans to change the use of those lands.

As of both June 30, 2021 and December 31, 2020, accrued environmental remediation costs of $ 6,940 were included in accounts payable and other liabilities in our condensed consolidated balance sheets.

These accrued environmental remediation costs relate to maintenance of our properties for current

As a result of eminent domain taking in September 2021, we sold a portion of a land parcel located in Rock Hill, South Carolina for $ 1,400 , excluding closing costs, resulting in a net gain on sale of real estate of $ 940 .

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

uses, and, because of the indeterminable timing of the remediation, these amounts have not been discounted to present value.

In October 2021, we entered into an agreement to acquire a recently built property located in the Detroit, Michigan market area containing approximately 1,009,000 rentable square feet and net leased to a single e-commerce tenant for a purchase price of $ 120,000 , excluding acquisition related costs.

This acquisition is expected to close during the fourth quarter of 2021.

However, this acquisition is subject to conditions;

accordingly, we cannot be sure that we will complete this acquisition, that this will not be delayed or that the terms will not change.

During the nine months ended September 30, 2021, we committed $ 7,074 for expenditures related to leasing related costs for leases executed during the period for approximately 2,002,000 square feet.

Committed but unspent tenant related obligations based on existing leases as of September 30, 2021 were $ 2,315 .

Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands is changed;

however, we do not have plans to change the use of those lands.

As of both September 30, 2021 and December 31, 2020, accrued environmental remediation costs of $ 6,940 were included in accounts payable and other liabilities in our condensed consolidated balance sheets.

These accrued environmental remediation costs relate to maintenance of our properties for current uses, and, because of the indeterminable timing of the remediation, these amounts have not been discounted to present value.

In general, we do not have any insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event, such as fire or flood, although some of our tenants may maintain such insurance that may benefit us.

2 unchanged sentences

Joint Venture Activities

As of June 30, 2021, we have an equity investment in a joint venture that consists of the following:

ILPT Carrying Value of

ILPT Investment at June 30, Number of Square

Joint Venture Ownership 2021 Properties Location Feet

As of September 30, 2021, we have an equity investment in a joint venture that consists of the following:

ILPT Carrying Value

ILPT of Investment at Number of Square

Joint Venture Ownership September 30, 2021 Properties Location Feet

12 properties

2 unchanged sentences

Principal Balance

at September 30,

Joint Venture Coupon Rate (1)

8 unchanged sentences

none of the debt is recourse to us.

During the six months ended June 30, 2020, we entered into agreements related to a joint venture for 12 of our properties in the mainland United States, or our joint venture, with an Asian institutional investor and contributed those 12 properties to our joint venture.

During the nine months ended September 30, 2020, we entered into agreements related to this joint venture for 12 of our properties in the mainland United States, or our joint venture, with an Asian institutional investor and contributed those 12 properties to our joint venture.

We received an aggregate of $ 108,676 from that investor for a 39 % equity interest in our joint venture and we retained the remaining 61 % equity interest in our joint venture.

During the six months ended June 30, 2020, we incurred transaction costs of $ 626 in connection with the formation of our joint venture.

We recognized a 39 % noncontrolling interest in our condensed consolidated financial statements for the three and six months ended June 30, 2020.

The portion of our joint venture's net loss not attributable to us, or $ 264 and $ 416 for the three and six months ended June 30, 2020, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income.

During the three and six months ended June 30, 2020, our joint venture made aggregate cash distributions of $ 1,898 to the first joint venture investor, which were reflected as a decrease in total equity attributable to noncontrolling interest in our condensed consolidated balance sheets.

In November 2020, we sold an additional 39 % equity interest from our then remaining 61 % equity interest to a second unrelated third party institutional investor and retained a 22 % equity interest in our joint venture.

Effective as of the date of the sale, we deconsolidated our joint venture and, since that time, we account for our joint venture using the equity method of accounting under the fair value option.

During the three and six months ended June 30, 2021, we recorded an increase in the fair value of our investment in our joint venture of $ 1,876 and $ 4,457 , respectively, as equity in earnings of investees in our condensed consolidated statements of comprehensive income.

In addition, during the three and six months ended June 30, 2021, our joint venture made aggregate cash distributions of $ 660 and $ 1,320 , respectively, to us.

See Note 5 for more information regarding our joint venture.

We recognized a 39 % noncontrolling interest in our condensed consolidated financial statements for the three and nine months ended September 30, 2020.

The portion of our joint venture's net loss not attributable to us, or $ 275 and $ 691 for the three and nine months ended September 30, 2020, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income.

During the three and nine months ended September 30, 2020, our joint venture made aggregate cash distributions of $ 2,107 and $ 4,005 , respectively, to the first joint venture investor, which were reflected as a decrease in total equity attributable to noncontrolling interest in our condensed consolidated balance sheets.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

Effective as of the date of the sale, we deconsolidated our joint venture and, since that time, we account for our joint venture using the equity method of accounting under the fair value option.

During the three and nine months ended September 30, 2021, we recorded an increase in the fair value of our investment in our joint venture of $ 998 and $ 5,455 , respectively, as equity in earnings of investees in our condensed consolidated statements of comprehensive income.

In addition, during the three and nine months ended September 30, 2021, our joint venture made aggregate cash distributions of $ 660 and $ 1,980 , respectively, to us.

See Note 5 for more information regarding our joint venture.

We are a lessor of industrial and logistics properties.

5 unchanged sentences

We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred.

Such payments totaled $ 9,383 and $ 11,640 for the three months ended June 30, 2021 and 2020, respectively, of which tenant reimbursements totaled $ 9,138 and $ 11,395 , respectively, and $ 19,255 and $ 23,160 for the six months ended June 30, 2021 and 2020, respectively, of which tenant reimbursements totaled $ 18,765 and $ 22,670 , respectively.

We increased rental income to record revenue on a straight line basis by $ 1,951 and $ 2,096 for the three months ended June 30, 2021 and 2020, respectively, and $ 3,995 and $ 4,063 for the six months ended June 30, 2021 and 2020, respectively.

Rents receivable included $ 66,748 and $ 62,753 of straight line rents at June 30, 2021 and December 31, 2020, respectively.

Such payments totaled $ 9,478 and $ 11,943 for the three months ended September 30, 2021 and 2020, respectively, of which tenant reimbursements totaled $ 9,233 and $ 11,698 , respectively, and $ 28,733 and $ 35,103 for the nine months ended September 30, 2021 and 2020, respectively, of which tenant reimbursements totaled $ 27,998 and $ 34,368 , respectively.

We increased rental income to record revenue on a straight line basis by $ 1,678 and $ 2,120 for the three months ended September 30, 2021 and 2020, respectively, and $ 5,673 and $ 6,183 for the nine months ended September 30, 2021 and 2020, respectively.

Rents receivable included $ 68,426 and $ 62,753 of straight line rents at September 30, 2021 and December 31, 2020, respectively.

During the year ended December 31, 2020, certain of our tenants requested, and we granted, relief from their obligations to pay rent due to us in response to the economic conditions resulting from the COVID-19 pandemic.

In most cases, the tenants granted deferrals were obligated to pay the deferred rents in 12 equal monthly installments beginning in September 2020.

As of June 30, 2021 and December 31, 2020, deferred payments totaling $ 1,383 and $ 2,630 , respectively, are included in rents receivable in our condensed consolidated balance sheets.

These deferred amounts did not impact our operating results for the three or six months ended June 30, 2021 or 2020.

As of June 30, 2021, our outstanding indebtedness consisted of the following:

As of September 30, 2021 and December 31, 2020, deferred payments totaling $ 1,168 and $ 2,630 , respectively, are included in rents receivable in our condensed consolidated balance sheets.

These deferred amounts did not impact our operating results for the three or nine months ended September 30, 2021 or 2020.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

As of September 30, 2021, our outstanding indebtedness consisted of the following:

Principal Balance as of of Collateral

June 30, December 31, Interest At June 30,

September 30, December 31, Interest At September 30,

Rate Maturity 2021

9 unchanged sentences

(2) The maturity date of our revolving credit facility is December 29, 2021 and we have the option to extend the maturity date for two , six month periods through December 29, 2022.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

We have a $ 750,000 unsecured revolving credit facility that is available for our general business purposes, including acquisitions.

We have a $ 750,000 unsecured revolving credit facility, or our revolving credit facility, that is available for our general business purposes, including acquisitions.

The maturity date of our revolving credit facility is December 29, 2021.

We have the option to extend the maturity date of our revolving credit facility for two , six month periods, subject to payment of extension fees and satisfaction of other conditions.

We may borrow, repay and reborrow funds under our revolving credit facility until maturity, and no principal repayment is due until maturity.

Interest on borrowings under our revolving credit facility is calculated at floating rates based on LIBOR plus a premium that varies based on our leverage ratio.

We have the option to extend the maturity date of our revolving credit facility for two , six month periods, subject to payment of extension fees and satisfaction of other conditions.

We are also required to pay a commitment fee on the unused portion of our revolving credit facility.

The agreement governing our revolving credit facility, or our credit agreement, also includes a feature under which the maximum borrowing availability under our revolving credit facility may be increased to up to $ 1,500,000 in certain circumstances.

As of June 30, 2021, interest payable on the amount outstanding under our revolving credit facility was LIBOR plus 130 basis points and our commitment fee was 25 basis points.

As of June 30, 2021 and December 31, 2020, the interest rate payable on borrowings under our revolving credit facility was 1.40 % and 1.70 %, respectively.

The weighted average interest rate for borrowings under our revolving credit facility was 1.41 % and 2.04 % for the three months ended June 30, 2021 and 2020, respectively, and 1.49 % and 2.80 % for the six months ended June 30, 2021 and June 30, 2020, respectively.

As of June 30, 2021 and July 26, 2021, we had $ 244,000 outstanding under our revolving credit facility, and $ 506,000 available to borrow under our revolving credit facility.

As of September 30, 2021, interest payable on the amount outstanding under our revolving credit facility was LIBOR plus 130 basis points and our commitment fee was 25 basis points.

As of September 30, 2021 and December 31, 2020, the interest rate payable on borrowings under our revolving credit facility was 1.39 % and 1.70 %, respectively.

The weighted average interest rate for borrowings under our revolving credit facility was 1.42 % and 1.57 % for the three months ended September 30, 2021 and 2020, respectively, and 1.46 % and 2.51 % for the nine months ended September 30, 2021 and September 30, 2020, respectively.

As of September 30, 2021 and October 25, 2021, we had $ 354,000 and $ 327,000 , respectively, outstanding under our revolving credit facility, and $ 396,000 and $ 423,000 , respectively, available to borrow under our revolving credit facility.

Our credit agreement provides for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as a change of control of us, which includes The RMR Group LLC, or RMR LLC, ceasing to act as our business manager and property manager.

Our credit agreement also contains a number of covenants, including covenants that restrict our ability to incur debts or to make distributions in certain circumstances, and generally requires us to maintain certain financial ratios.

We believe we were in compliance with the terms and conditions of the covenants under our credit agreement at June 30, 2021.

We believe we were in compliance with the terms and conditions of the covenants under our credit agreement at September 30, 2021.

In May 2020, we prepaid at par plus accrued interest a mortgage note secured by one of our properties with an outstanding principal balance of approximately $ 48,750 , an annual interest rate of 3.48 % and a maturity date in November 2020.

As a result of the prepayment of this mortgage note, we recorded a gain on early extinguishment of debt of $ 120 for the three and six months ended June 30, 2020 to write off unamortized debt premiums.

As a result of the prepayment of this mortgage note, we recorded a gain on early extinguishment of debt of $ 120 for the nine months ended September 30, 2020 to write off unamortized debt premiums.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Fair Value of Assets and Liabilities

Our financial instruments include cash and cash equivalents, restricted cash, rents receivable, our revolving credit facility, mortgage notes payable, accounts payable, rents collected in advance, security deposits and amounts due from or to related persons.

At June 30, 2021 and December 31, 2020, the fair value of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows:

At June 30, 2021 At December 31, 2020

At September 30, 2021 and December 31, 2020, the fair value of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows:

At September 30, 2021 At December 31, 2020

Carrying Estimated Carrying Estimated

1 unchanged sentence

Mortgage notes payable $ 645,987 $ 713,330 $ 645,579 $ 730,119

(1) Includes unamortized debt issuance costs of $ 4,149 and $ 4,421 as of June 30, 2021 and December 31, 2020, respectively.

(1) Includes unamortized debt issuance costs of $ 4,013 and $ 4,421 as of September 30, 2021 and December 31, 2020, respectively.

We estimate the fair value of our mortgage notes payable using discounted cash flow analyses and currently prevailing market rates as of the measurement date (Level 3 inputs).

Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

The table below presents certain of our assets measured on a recurring basis at fair value at June 30, 2021 , categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset:

The table below presents certain of our assets measured on a recurring basis at fair value at September 30, 2021 , categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset:

Quoted Prices in Significant Other Significant

9 unchanged sentences

See Note 2 for further information regarding our investment in this joint venture.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Shareholders’ Equity

1 unchanged sentence

On June 2, 2021, in accordance with our Trustee compensation arrangements, we awarded to each of our six Trustees 3,500 of our common shares, valued at $ 25.62 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day.

Share Repurchases

During the six months ended June 30, 2021, we purchased an aggregate of 7,733 of our common shares valued at a weighted average share price of $ 26.14 per share, from certain former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

On September 15, 2021, we awarded under our equity compensation plan an aggregate of 118,800 of our common shares, valued at $ 25.98 per share, the closing price of our common shares on Nasdaq on that day, to our officers and certain other employees of RMR LLC.

Common Share Repurchases

During the three and nine months ended September 30, 2021, we purchased an aggregate of 27,576 and 35,309 of our common shares valued at a weighted average share price of $ 25.84 and $ 25.98 per share, respectively, from our officers and certain current and former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

Distributions

During the six months ended June 30, 2021, we declared and paid regular quarterly distributions to common shareholders as follows:

During the nine months ended September 30, 2021, we declared and paid regular quarterly distributions to common shareholders as follows:

Declaration Date Record Date Payment Date Distribution Per Share Total Distribution

1 unchanged sentence

April 15, 2021 April 26, 2021 May 20, 2021 0.33 21,549

July 15, 2021 July 26, 2021 August 19, 2021 0.33 21,554

$ 0.99 $ 64,653

On July 15, 2021, we declared a regular quarterly distribution to common shareholders of record on July 26, 2021 of $ 0.33 per share, or approximately $ 21,550 in aggregate.

We expect to pay this distribution to our shareholders on or about August 19, 2021.

On October 14, 2021, we declared a regular quarterly distribution to common shareholders of record on October 25, 2021 of $ 0.33 per share, or approximately $ 21,600 in aggregate.

We expect to pay this distribution to our shareholders on or about November 18, 2021.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

6 unchanged sentences

The calculation of basic and diluted earnings per share is as follows:

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2021 2020 2021 2020

1 unchanged sentence

Income attributable to unvested participating securities ( 43 ) ( 24 ) ( 140 ) ( 70 )

Net income attributable to common shareholder used in calculating earnings per share $ 18,784 $ 14,797 $ 38,073 $ 27,622

Net income attributable to common shareholders used in calculating earnings per share $ 18,264 $ 14,065 $ 56,335 $ 41,686

Denominators:

11 unchanged sentences

and (2) a property management agreement, which relates to our property level operations.

Pursuant to our business management agreement with RMR LLC, we recognized net business management fees of $ 2,580 and $ 5,124 for the three and six months ended June 30, 2021, respectively, and $ 3,277 and $ 6,584 for the three and six months ended June 30, 2020, respectively.

T he net business management fees we recognized for the three and six months ended June 30, 2020 include $ 347 and $ 476 , respectively, of management fees paid to RMR LLC for those periods by our joint venture we then owned a majority interest in and whose operating results we reported on a consolidated basis.

Pursuant to our business management agreement with RMR LLC, we recognized net business management fees of $ 2,708 and $ 7,832 for the three and nine months ended September 30, 2021, respectively, and $ 3,410 and $ 9,994 for the three and nine months ended September 30, 2020, respectively.

T he net business management fees we recognized for the three and nine months ended September 30, 2020 include $ 347 and $ 823 , respectively, of management fees paid to RMR LLC for those periods by our joint venture we then owned a majority interest in and whose operating results we reported on a consolidated basis.

Beginning in November 2020, our ownership in our joint venture was reduced to a minority interest;

1 unchanged sentence

Our joint venture is further described in Notes 2 and 9.

Based on our common share total return, as defined in our business management agreement, as of June 30, 2021 and 2020, no incentive fees are included in the net business management fees we recognized for the three or six months ended June 30, 2021 or 2020.

Based on our common share total return, as defined in our business management agreement, as of September 30, 2021 and 2020, no incentive fees are included in the net business management fees we recognized for the three or nine months ended September 30, 2021 or 2020.

The actual amount of annual incentive fees for 2021, if any, will be based on our common share total return, as defined in our business management agreement, for the three year period ending December 31, 2021, and will be payable in January 2022.

1 unchanged sentence

We include business management fees in general and administrative expenses in our condensed consolidated statements of comprehensive income.

Pursuant to our property management agreement with RMR LLC, we recognized aggregate property management and construction supervision fees of $ 1,591 and $ 3,185 for the three and six months ended June 30, 2021, respectively, and $ 1,860 and $ 3,783 for the three and six months ended June 30, 2020, respectively.

Of these amounts, for the three and six months ended June 30, 2021, $ 1,571 and $ 3,153 , respectively, were expensed to other operating expenses in our condensed consolidated financial statements and $ 20 and $ 32 were capitalized as building improvements in our condensed consolidated balance sheets and are being depreciated over the estimated useful lives of the related capital assets.

For the three and six months ended June 30, 2020, $ 1,813 and $ 3,673 , respectively, were expensed to other operating expenses in our condensed

We and RMR LLC amended our business management agreement effective August 1, 2021 to replace the benchmark index used in the calculation of incentive management fees.

Pursuant to the amendment, for periods beginning on and after August 1, 2021, the MSCI U.S.

REIT/Industrial REIT Index will replace the discontinued SNL U.S.

REIT Industrial Index and be used to calculate benchmark returns per share for purposes of determining any incentive management fee payable by us to RMR LLC.

For periods prior to August 1, 2021, the SNL U.S.

REIT Industrial Index will continue to be used.

Accordingly, the calculation

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

consolidated financial statements and $ 47 and $ 110 , respectively, were capitalized as building improvements in our condensed consolidated balance sheets and are being depreciated over the estimated useful lives of the related capital assets.

of incentive management fees for the next three measurement periods will continue to use the SNL U.S.

REIT Industrial Index in calculating the benchmark returns for periods through July 31, 2021.

This change of index was due to S&P Global ceasing to publish the SNL U.S.

REIT Industrial Index.

Pursuant to our property management agreement with RMR LLC, we recognized aggregate property management and construction supervision fees of $ 1,675 and $ 4,860 for the three and nine months ended September 30, 2021, respectively, and $ 1,914 and $ 5,697 for the three and nine months ended September 30, 2020, respectively.

Of these amounts, for the three and nine months ended September 30, 2021, $ 1,598 and $ 4,751 , respectively, were expensed to other operating expenses in our condensed consolidated financial statements and $ 77 and $ 109 , respectively, were capitalized as building improvements in our condensed consolidated balance sheets.

For the three and nine months ended September 30, 2020, $ 1,866 and $ 5,539 , respectively, were expensed to other operating expenses in our condensed consolidated financial statements and $ 48 and $ 158 , respectively, were capitalized as building improvements in our condensed consolidated balance sheets.

The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets.

We are generally responsible for all our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf.

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Our property level operating expenses are generally incorporated into the rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC.

We reimbursed RMR LLC $ 1,125 and $ 2,267 for these expenses and costs for the three and six months ended June 30, 2021, respectively, and $ 1,217 and $ 2,416 for the three and six months ended June 30, 2020, respectively.

We reimbursed RMR LLC $ 1,184 and $ 3,451 for these expenses and costs for the three and nine months ended September 30, 2021, respectively, and $ 1,328 and $ 3,744 for the three and nine months ended September 30, 2020, respectively.

These amounts are included in other operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income.

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Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services.

Adam Portnoy serves as chair of the boards of trustees or boards of directors of several of these public companies and as a managing director or managing trustee of these public companies.

Adam Portnoy serves as chair of the boards of trustees or boards of directors and as a managing trustee or managing director of those companies.

Other officers of RMR LLC, including Mr.

Murray and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies.

See Note 6 for information relating to the awards of our common shares we made in September 2021 to our officers and certain other employees of RMR LLC and common shares we purchased from our officers and certain current and former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

We include amounts recognized as expense for awards of our common shares to our officers and RMR LLC employees in general and administrative expenses in our condensed consolidated statements of comprehensive income.

Our Manager, RMR LLC .

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See Note 8 for further information regarding our management agreements with RMR LLC.

For further information about these and other such relationships and certain other related person transactions, see our 2020 Annual Report.

Our Joint Venture .

As of December 31, 2020, our joint venture owed to us $ 2,665 for post-closing adjustments relating to our sale of some of our equity interests in the joint venture to a second third party institutional investor in November 2020.

Our joint venture paid these amounts due to us during the six months ended June 30, 2021.

Our joint venture paid these amounts due to us during the nine months ended September 30, 2021.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

In May 2021, we acquired a property located in the Dallas, Texas market from TravelCenters of America Inc., or TA, for a purchase price of $ 2,319 , including acquisition related costs of $ 119 .

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See Note 2 for further information regarding this acquisition.

For further information about these and other such relationships and certain other related person transactions, see our 2020 Annual Report.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements