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Item 1. Financial Statements

2025-04-29 compared with 2024-10-29 · 165 added, 207 removed, 305 unchanged (55% of the section changed)

3 unchanged sentences

(dollars in thousands, except per share data)

September 30, December 31,

March 31, December 31,

Real estate properties:

25 unchanged sentences

Additional paid in capital 1,017,627 1,017,382

Cumulative net (deficit) income ( 62,372 ) 9,196

Cumulative other comprehensive (loss) income ( 1,749 ) 10,171

Cumulative net deficit

( 108,005 ) ( 86,473 )

Cumulative other comprehensive loss

( 1,611 ) ( 1,065 )

Cumulative common distributions ( 369,147 ) ( 368,486 )

7 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Rental income $ 111,905 $ 112,235

3 unchanged sentences

General and administrative 8,238 7,689

Loss on impairment of real estate — — — 254

Total expenses 74,159 77,449

Interest income

3,134 2,397 8,921 5,340

Interest expense

( 69,813 ) ( 73,230 )

Loss on sale of real estate — — — ( 974 )

Loss on early extinguishment of debt — — — ( 359 )

Loss before income taxes and equity in earnings of unconsolidated joint venture

Loss before income taxes and equity in (losses) earnings of unconsolidated joint venture

( 30,099 ) ( 35,592 )

Income tax expense ( 28 ) ( 33 )

Equity in earnings of unconsolidated joint venture 1,161 719 5,232 7,423

Equity in (losses) earnings of unconsolidated joint venture

( 1,042 ) 1,723

Net loss ( 31,169 ) ( 33,902 )

1 unchanged sentence

Net loss attributable to common shareholders ( 21,532 ) ( 23,403 )

Other comprehensive income (loss):

Other comprehensive loss:

Unrealized loss on derivatives ( 802 ) ( 4,846 )

unrealized loss on derivatives attributable to noncontrolling interest 256 1,888

Other comprehensive (loss) income attributable to common shareholders

( 6,984 ) ( 4,345 ) ( 11,920 ) 239

Other comprehensive loss attributable to common shareholders ( 546 ) ( 2,958 )

Comprehensive loss attributable to common shareholders $ ( 22,078 ) $ ( 26,361 )

Weighted average common shares outstanding (basic and diluted) 65,834 65,556

Per common share data (basic and diluted):

Net loss attributable to common shareholders $ ( 0.38 ) $ ( 0.40 ) $ ( 1.09 ) $ ( 1.17 )

Net loss per share attributable to common shareholders (basic and diluted)

$ ( 0.33 ) $ ( 0.36 )

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

6 unchanged sentences

Noncontrolling Total

Shares Shares Capital Income Income (Loss) Distributions Shareholders

Shares Shares Capital Income (Loss) Income Distributions Shareholders

Interest Equity

7 unchanged sentences

Balance at March 31, 2025 66,143,704 $ 661 $ 1,017,627 $ ( 108,005 ) $ ( 1,611 ) $ ( 369,147 ) $ 539,525 $ 437,388 $ 976,913

Net loss — — — ( 23,175 ) — — ( 23,175 ) ( 10,304 ) ( 33,479 )

Share grants, repurchases and forfeitures 160,979 2 913 — — — 915 — 915

Distributions to common shareholders — — — — — ( 659 ) ( 659 ) — ( 659 )

Other comprehensive (loss) income — — — — ( 1,978 ) — ( 1,978 ) 468 ( 1,510 )

Balance at June 30, 2024 65,992,509 660 1,016,980 ( 37,382 ) 5,235 ( 367,165 ) 618,328 469,439 1,087,767

Net loss — — — ( 24,990 ) — — ( 24,990 ) ( 10,417 ) ( 35,407 )

Share grants, repurchases and forfeitures 151,913 1 192 — — — 193 — 193

Distributions to common shareholders — — — — — ( 659 ) ( 659 ) — ( 659 )

Other comprehensive loss — — — — ( 6,984 ) — ( 6,984 ) ( 1,988 ) ( 8,972 )

Distributions to noncontrolling interest — — — — — — — ( 163 ) ( 163 )

Balance at September 30, 2024 66,144,422 $ 661 $ 1,017,172 $ ( 62,372 ) $ ( 1,749 ) $ ( 367,824 ) $ 585,888 $ 456,871 $ 1,042,759

Balance at December 31, 2023 65,843,387 $ 658 $ 1,015,777 $ 9,196 $ 10,171 $ ( 365,848 ) $ 669,954 $ 491,825 $ 1,161,779

3 unchanged sentences

Other comprehensive loss

Balance at March 31, 2023 65,565,969 656 1,014,585 92,376 14,885 ( 363,877 ) 758,625 527,550 1,286,175

Net loss — — — ( 25,828 ) — — ( 25,828 ) ( 10,752 ) ( 36,580 )

Share grants, repurchases and forfeitures 131,990 1 553 — — — 554 — 554

Distributions to common shareholders — — — — — ( 656 ) ( 656 ) — ( 656 )

Other comprehensive income — — — — 11,602 — 11,602 419 12,021

— — — — ( 2,958 ) — ( 2,958 ) ( 1,888 ) ( 4,846 )

Distributions to noncontrolling interest — — — — — — — ( 163 ) ( 163 )

Balance at June 30, 2023 65,697,959 657 1,015,138 66,548 26,487 ( 364,533 ) 744,297 516,992 1,261,289

Net loss — — — ( 26,112 ) — — ( 26,112 ) ( 10,079 ) ( 36,191 )

Share grants, repurchases and forfeitures 147,114 1 330 — — — 331 — 331

Distributions to common shareholders — — — — — ( 656 ) ( 656 ) — ( 656 )

Other comprehensive loss — — — — ( 4,345 ) — ( 4,345 ) ( 2,290 ) ( 6,635 )

Balance at September 30, 2023 65,845,073 $ 658 $ 1,015,468 $ 40,436 $ 22,142 $ ( 365,189 ) $ 713,515 $ 504,623 $ 1,218,138

Balance at March 31, 2024 65,831,530 $ 658 $ 1,016,067 $ ( 14,207 ) $ 7,213 $ ( 366,506 ) $ 643,225 $ 479,275 $ 1,122,500

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

2 unchanged sentences

(dollars in thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

CASH FLOWS FROM OPERATING ACTIVITIES:

3 unchanged sentences

Amortization of interest rate caps

31,726 18,435

Net amortization of debt issuance costs, premiums and discounts 376 6,654

2 unchanged sentences

Straight line rental income ( 3,287 ) ( 3,489 )

Loss on sale of real estate — 974

Loss on impairment of real estate — 254

Loss on early extinguishment of debt — 359

Proceeds from settlement of derivatives ( 52,365 ) ( 40,426 )

Proceeds from settlement of interest rate caps

( 9,674 ) ( 16,537 )

General and administrative expenses paid in common shares

Distributions of earnings from unconsolidated joint venture 990 990

Equity in earnings of unconsolidated joint venture ( 5,232 ) ( 7,423 )

Equity in losses (earnings) of unconsolidated joint venture

1,042 ( 1,723 )

Change in assets and liabilities:

4 unchanged sentences

Net cash provided by operating activities

15,426 14,063

CASH FLOWS FROM INVESTING ACTIVITIES:

Real estate improvements ( 6,353 ) ( 2,132 )

Proceeds from sale of real estate — 243

Purchase of interest rate cap

Proceeds from settlement of derivatives 52,365 40,426

Distributions in excess of earnings from unconsolidated joint venture — 4,400

Net cash provided by investing activities 20,048 31,420

( 15,010 ) ( 26,175 )

Proceeds from settlement of interest rate caps

Net cash used in investing activities

( 11,689 ) ( 11,770 )

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of mortgage notes payable — 91,000

Repayment of mortgage notes payable ( 4,633 ) ( 4,466 )

3 unchanged sentences

Distributions to noncontrolling interest ( 30 ) ( 163 )

Net cash (used in) provided by financing activities ( 16,266 ) 36,240

Increase in cash and cash equivalents and restricted cash and cash equivalents 19,208 81,723

Net cash used in financing activities

( 5,460 ) ( 5,465 )

Decrease in cash and cash equivalents and restricted cash and cash equivalents

( 5,778 ) ( 9,246 )

Cash and cash equivalents and restricted cash and cash equivalents at beginning of period 242,480 245,723

2 unchanged sentences

Interest paid $ 59,523 $ 59,621

Income taxes (received) paid

$ ( 80 ) $ 85

Income taxes received $ — $ 80

NON-CASH INVESTING ACTIVITIES:

2 unchanged sentences

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

As of September 30,

As of March 31,

Cash and cash equivalents $ 107,951 $ 128,394

3 unchanged sentences

$ 236,702 $ 236,477

(1) Restricted cash and cash equivalents consist of amounts escrowed at certain of our mortgaged properties and cash held for the operations of our consolidated joint venture.

(1) Restricted cash and cash equivalents consist of amounts escrowed as required by the agreements governing certain of our mortgage debt and cash held for the operations of our consolidated joint venture.

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

3 unchanged sentences

Basis of Presentation

The accompanying condensed consolidated financial statements of Industrial Logistics Properties Trust and its consolidated subsidiaries, or the Company, ILPT, we, us or our, are unaudited.

The accompanying condensed consolidated financial statements of Industrial Logistics Properties Trust and its consolidated subsidiaries, or the Company or ILPT, are unaudited.

Certain information and disclosures required by U.S.

7 unchanged sentences

Actual results could differ from those estimates.

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.

Significant estimates in the condensed consolidated financial statements include purchase price allocations, useful lives of fixed assets and impairment of real estate and related intangibles.

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board issued Accounting Standards Update, or ASU, 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, which requires public entities, including those with a single reportable segment, to:

(i) provide disclosures of significant segment expenses and other segment items if they are regularly provided to the chief operating decision maker, or the CODM, and included in each reported measure of segment profit or loss;

(ii) provide all annual disclosures about a reportable segment’s profit or loss and assets currently required by Accounting Standards Codification, or ASC, 280, Segment Reporting , in interim periods;

and (iii) disclose the CODM’s title and position, as well as an explanation of how the CODM uses the reported measures and other disclosures.

ASU 2023-07 does not change how a public entity identifies its operating segments, aggregates those operating segments or applies the quantitative thresholds to determine its reportable segments.

ASU 2023-07 is required to be applied retrospectively and 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.

We expect to include additional disclosures in the notes to our condensed consolidated financial statements as a result of the implementation of ASU 2023-07;

however, these changes are not expected to have a material effect on our condensed consolidated financial statements.

In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update, or ASU, 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statements Expenses , which requires public entities to disclose specific expense categories such as employee compensation, depreciation and intangible asset amortization.

These details must be presented in a tabular format in the notes to condensed consolidated financial statements for both interim and annual reporting periods.

ASU 2024-03 is required to be applied prospectively but can be applied retrospectively, and is effective for the first annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

We are currently evaluating the impact that ASU 2024-03 will have on our condensed consolidated financial statements.

Real Estate Investments

As of September 30, 2024, our portfolio was comprised of 411 properties containing approximately 59,890,000 rentable square feet located in 39 states, including 226 buildings, leasable land parcels and easements containing approximately 16,729,000 rentable square feet that were primarily industrial lands located on the island of Oahu, Hawaii, or our Hawaii Properties, and 185 properties containing approximately 43,161,000 rentable square feet that were industrial and logistics properties located in 38 other states, or our Mainland Properties, which included 94 properties in 27 states totaling approximately 20,978,000 rentable square feet, owned by Mountain Industrial REIT LLC, or Mountain JV, or our consolidated joint venture, in which we own a 61 % equity interest.

As of September 30, 2024, we also owned a 22 % equity interest in The Industrial Fund REIT LLC, or the unconsolidated joint venture.

We operate in one business segment:

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

As of March 31, 2025, our portfolio was comprised of 411 properties containing approximately 59,890,000 rentable square feet located in 39 states, including 226 buildings, leasable land parcels and easements containing approximately 16,729,000 rentable square feet that were primarily industrial lands located on the island of Oahu, Hawaii, or our Hawaii Properties, and 185 properties containing approximately 43,161,000 rentable square feet that were industrial and logistics properties located in 38 other states, or our Mainland Properties, which included 94 properties in 27 states totaling approximately 20,978,000 rentable square feet, owned by Mountain Industrial REIT LLC, or Mountain JV, or our consolidated joint venture, in which we own a 61 % equity interest.

As of March 31, 2025, we also owned a 22 % equity interest in The Industrial Fund REIT LLC, or the unconsolidated joint venture.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

During the three and nine months ended September 30, 2024 and 2023, amounts capitalized at our properties for tenant improvements, leasing costs, building improvements and development, redevelopment and other activities were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

During the three months ended March 31, 2025 and 2024, amounts capitalized at certain of our properties for tenant improvements, leasing costs and building improvements were as follows:

Three Months Ended March 31,

Tenant improvements (1)

$ 433 $ 194 $ 1,019 $ 1,893

Leasing costs (1)

2,695 1,047 5,006 3,886

Building improvements (2)

2,509 2,720 5,817 4,373

Development, redevelopment and other activities (3)

— 1,314 — 7,705

$ 5,637 $ 5,275 $ 11,842 $ 17,857

(1) Tenant improvements and leasing costs include capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space and leasing related costs, such as brokerage commissions and tenant inducements.

(2) Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.

(3) Development, redevelopment and other activities generally include capital expenditure projects that reposition a property or result in new sources of revenues.

During the three and nine months ended September 30, 2024 and 2023, recognized net income (loss) attributable to noncontrolling interest in our condensed consolidated financial statements was as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

Total capital expenditures

$ 3,959 $ 3,373

(1) Includes capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space and leasing related costs, such as brokerage commissions and tenant inducements.

(2) Includes expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.

During the three months ended March 31, 2025 and 2024, recognized net loss attributable to noncontrolling interest in our condensed consolidated financial statements was as follows:

Three Months Ended March 31,

Consolidated joint venture $ 9,672 $ 10,514

Tenancy in common ( 35 ) ( 15 )

$ ( 10,417 ) $ ( 10,079 ) $ ( 31,220 ) $ ( 31,568 )

Total net loss attributable to noncontrolling interest $ 9,637 $ 10,499

Consolidated Joint Venture

1 unchanged sentence

We control this consolidated joint venture and therefore account for the properties owned by this joint venture on a consolidated basis in our condensed consolidated financial statements.

As of September 30, 2024, our consolidated joint venture had total assets of $ 2,932,320 and total liabilities of $ 1,769,384 .

Consolidated Tenancy in Common

An unrelated third party owns an approximate 33 % tenancy in common interest in one property located in Somerset, New Jersey with approximately 64,000 rentable square feet, and we own the remaining approximate 67 % tenancy in common interest in this property.

The tenancy in common made cash distributions to the unrelated third party investor of $ 163 and $ 0 during the three months ended September 30, 2024 and 2023, respectively, and cash distributions of $ 326 and $ 225 during the nine months ended September 30, 2024 and 2023, respectively.

As of September 30, 2024, the tenancy in common had total assets of $ 10,388 and total liabilities of $ 250 .

The tenancy in common made cash distributions to the unrelated third party investor of $ 30 and $ 163 during the three months ended March 31, 2025 and 2024, respectively.

Unconsolidated Joint Venture

1 unchanged sentence

We account for the unconsolidated joint venture using the equity method of accounting under the fair value option.

We recognize changes in the fair value of our investment in the unconsolidated joint venture as equity in earnings of the unconsolidated joint venture in our condensed consolidated statements of comprehensive income (loss).

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

We recognize changes in the fair value of our investment in the unconsolidated joint venture as equity in (losses) earnings of the unconsolidated joint venture in our condensed consolidated statements of comprehensive income (loss).

We are a lessor of industrial and logistics properties.

Our leases provide our tenants with the contractual right to use and economically benefit from all the physical space specified in their respective leases and are generally classified as operating leases.

Our leases provide our tenants with the contractual right to use and economically benefit from the physical space specified in their respective leases and are generally classified as operating leases.

Our leases provide for base rent payments and may also include variable payments.

1 unchanged sentence

Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term.

Allowances for bad debts are recognized as a direct reduction of rental income.

In certain circumstances, some leases provide the tenant with the right to terminate if the legislature or other funding authority does not appropriate the funding necessary for the tenant to meet its lease obligations;

we have determined the fixed non-cancelable lease term of these leases to be the full term of the lease because we believe the occurrence of early terminations to be a remote contingency based on both our historical experience and our assessments of the likelihood of lease cancellation on a separate lease basis.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

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 $ 18,997 and $ 19,310 for the three months ended September 30, 2024 and 2023, respectively, and $ 60,228 and $ 58,700 for the nine months ended September 30, 2024 and 2023, respectively.

Such payments totaled $ 19,857 and $ 21,175 for the three months ended March 31, 2025 and 2024, respectively.

Generally, payments of ground lease obligations are made by our tenants.

However, if a tenant does not perform obligations under a ground lease or does not renew any ground lease, we may have to perform obligations under the ground lease in order to protect our investment in the affected property.

However, if a tenant does not pay obligations under a ground lease or does not renew any ground lease, we may have to pay obligations under the ground lease in order to protect our investment in the affected property.

Right of Use Assets and Lease Liabilities

1 unchanged sentence

For leases with a term greater than 12 months under which we are the lessee, we recognize right of use assets and lease liabilities.

The values of our right of use assets and related lease liabilities were $ 4,308 and $ 4,401 , respectively, as of September 30, 2024, and $ 4,646 and $ 4,730 , respectively, as of December 31, 2023.

The values of our right of use assets and related lease liabilities were $ 4,078 and $ 4,173 , respectively, as of March 31, 2025, and $ 4,193 and $ 4,288 , respectively, as of December 31, 2024.

Our right of use assets and related lease liabilities are included in other assets, net and accounts payable and other liabilities, respectively, in our condensed consolidated balance sheets.

Geographic Concentration

For the three months ended September 30, 2024 and 2023, our Hawaii Properties represented 26.9 % and 28.1 %, respectively, of our rental income.

For the nine months ended September 30, 2024 and 2023, our Hawaii Properties represented 27.4 % and 27.9 %, respectively, of our rental income.

Tenant Concentration

We define annualized rental revenues as the annualized contractual base rents from our tenants pursuant to our lease agreements as of the measurement date, including straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding amortization of deferred leasing costs.

Subsidiaries of FedEx Corporation, or FedEx, and subsidiaries of Amazon.com Services, Inc., or Amazon, represented 29.3 % and 6.8 % of our annualized rental revenues as of September 30, 2024, respectively, and 29.8 % and 6.7 % as of September 30, 2023, respectively.

For the three months ended March 31, 2025 and 2024, our Hawaii Properties represented 27.7 % and 28.0 %, respectively, of our annualized rental revenues.

Tenant Concentration

Subsidiaries of FedEx Corporation, or FedEx, and subsidiaries of Amazon.com Services, Inc., or Amazon, represented 28.7 % and 6.7 % of our annualized rental revenues as of March 31, 2025, respectively, and 28.9 % and 6.7 % as of March 31, 2024, respectively.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

Our outstanding indebtedness as of September 30, 2024 and December 31, 2023 is summarized below:

Our outstanding indebtedness as of March 31, 2025 and December 31, 2024 is summarized below:

Properties Principal Interest Carrying Value

1 unchanged sentence

Type Maturity of Collateral

As of September 30, 2024

As of March 31, 2025

ILPT 104 $ 1,235,000 6.71 % Floating 10/09/2025 $ 1,009,721

ILPT 186 650,000 4.31 % Fixed 02/07/2029 490,369

ILPT 17 700,000 4.42 % Fixed 03/09/2032 494,538

17 700,000 4.42 % Fixed 03/09/2032 489,606

82 1,400,000 5.87 % Floating 03/09/2026 1,788,145

32 unchanged sentences

(dollars in thousands, except per share data)

Our $ 1,235,000 loan, or the ILPT Floating Rate Loan, which is secured by 104 of our properties, was scheduled to mature in October 2024, subject to three , one year extension options, and required that interest be paid at an annual rate of secured overnight financing rate, or SOFR, plus a weighted average premium of 3.93 %.

Our $ 1,235,000 loan, or the ILPT Floating Rate Loan, which is secured by 104 of our properties, matures in October 2025, subject to two remaining one-year extension options, and requires that interest be paid at an annual rate of secured overnight financing rate, or SOFR, plus a weighted average premium of 3.93 %.

In October 2024, we exercised the first of our three , one-year extension options for the maturity date of this loan.

1 unchanged sentence

Subject to the satisfaction of certain conditions, we have the option to prepay the ILPT Floating Rate Loan in full or in part at any time at par with no premium.

Our consolidated joint venture’s $ 1,400,000 loan, or the Mountain Floating Rate Loan, matures in March 2025, subject to two remaining one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.77 %.

In March 2024, in connection with the exercise of the first of its three , one year extension options for the maturity date of this loan, our consolidated joint venture purchased a one year interest rate cap for $ 26,175 with a SOFR strike rate equal to 3.04 %, which replaced the previous interest rate cap with a SOFR strike rate equal to 3.40 %.

Subject to the satisfaction of certain conditions, we have the option to prepay the Mountain Floating Rate Loan in full or in part at any time at par with no premium.

The weighted average interest rates under our floating rate loans for the three and nine months ended September 30, 2024 were as follows:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Our consolidated joint venture’s $ 1,400,000 loan, or the Mountain Floating Rate Loan, which is secured by 82 properties, matures in March 2026, subject to one remaining one-year extension option, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.77 %.

In March 2025, our consolidated joint venture exercised the second of its three , one-year extension options for the maturity date of this loan.

In connection with the exercise of the extension, our consolidated joint venture purchased a one-year interest rate cap for $ 15,010 with a SOFR strike rate equal to 3.10 %, which replaced the previous interest rate cap with a SOFR strike rate equal to 3.04 %.

Subject to the satisfaction of certain conditions, our consolidated joint venture has the option to prepay the Mountain Floating Rate Loan in full or in part at any time at par with no premium.

The weighted average interest rates under our floating rate loans for the three months ended March 31, 2025 and 2024 were as follows:

Three Months Ended March 31,

ILPT Floating Rate Loan (1)

6.71 % 6.18 %

Mountain Floating Rale Loan (2)

Mountain Floating Rate Loan (2)

5.82 % 6.09 %

(1) Reflects the impact of an interest rate cap with a SOFR strike rate equal to 2.25 %.

(1) Reflects the impact of interest rate caps, with a current SOFR strike rate equal to 2.78 % which replaced the previous strike rate equal to 2.25 % in October 2024.

(2) Reflects the impact of interest rate caps, with a current SOFR strike rate equal to 3.10 % which replaced the previous strike rate equal to 3.04 % in March 2025.

In May 2023, our consolidated joint venture obtained a $ 91,000 fixed rate, interest only mortgage loan secured by four properties owned by our consolidated joint venture.

This mortgage loan matures in June 2030 and requires that interest be paid at an annual rate of 6.25 %.

A portion of the net proceeds from this mortgage loan was used to repay four then outstanding mortgage loans of our consolidated joint venture with an aggregate outstanding principal balance of $ 35,910 and a weighted average interest rate of 3.70 %.

We recognized a loss on early extinguishment of debt of $ 359 in conjunction with the repayment of these mortgage loans.

The agreements governing certain of our indebtedness contain customary covenants and provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default.

See Note 10 for further information regarding our interest rate caps.

The required principal payments due during the next five years and thereafter under all our outstanding debt as of September 30, 2024 are as follows:

The required principal payments due during the next five years and thereafter, excluding extension options, under all our outstanding debt as of March 31, 2025 are as follows:

2025 $ 1,249,159

2026 1,419,499

Thereafter 921,547

(1) In October 2024, we exercised the first of our three , one year extension options for the maturity date of the ILPT Floating Rate Loan.

(2) Our consolidated joint venture has two remaining one year extension options for the maturity date of the Mountain Floating Rate Loan.

Total $ 4,303,196

Fair Value of Assets and Liabilities

Our financial instruments include cash and cash equivalents, restricted cash and cash equivalents, mortgages and notes payable, accounts payable and interest rate caps.

We remeasure our interest rate caps at fair value on a quarterly basis.

As of March 31, 2025 and December 31, 2024, the fair value of our other financial instruments approximated their carrying values in our condensed consolidated financial statements due to their short term nature or floating interest rates, except for our fixed rate mortgage notes payable.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

Fair Value of Assets and Liabilities

Our financial instruments include cash and cash equivalents, restricted cash and cash equivalents, mortgages and notes payable, accounts payable and interest rate caps.

As of September 30, 2024 and December 31, 2023, 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 for our fixed rate mortgage notes payable.

Our fixed rate mortgage notes payable had an aggregate carrying value of $ 1,669,925 and $ 1,682,501 as of September 30, 2024 and December 31, 2023, respectively, and a fair value of $ 1,599,252 and $ 1,553,863 as of September 30, 2024 and December 31, 2023, respectively.

We estimate the fair value of our fixed rate mortgage notes payable using significant unobservable inputs (Level 3), including discounted cash flow analyses and prevailing market interest rates.

The table below presents certain of our assets measured on a recurring basis at fair value as of September 30, 2024 and December 31, 2023, categorized by the level of inputs as defined in the fair value hierarchy under ASC 820, Fair Value Measurement , used in the valuation of each asset:

Our fixed rate mortgage notes payable had an aggregate carrying value of $ 1,661,331 and $ 1,665,649 as of March 31, 2025 and December 31, 2024, respectively, and a fair value of $ 1,565,801 and $ 1,535,640 as of March 31, 2025 and December 31, 2024, respectively.

We estimate the fair value of our fixed rate mortgage notes payable using significant unobservable inputs, including discounted cash flow analyses and prevailing market interest rates.

The table below presents certain of our assets measured on a recurring basis at fair value as of March 31, 2025 and December 31, 2024, 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

2 unchanged sentences

Total (Level 1) (Level 2) (Level 3)

As of September 30, 2024

As of March 31, 2025

Investment in unconsolidated joint venture $ 114,700 $ — $ — $ 114,700

4 unchanged sentences

The fair value of our investment in the unconsolidated joint venture is determined by applying our ownership percentage to the net asset value of the entity.

The net asset value of the unconsolidated joint venture is determined by using similar estimation techniques as those used for consolidated real estate properties, including discounting expected future cash flows of the underlying real estate investments based on prevailing market rents over a holding period and including an exit capitalization rate to determine the final year of cash flows.

The net asset value of the unconsolidated joint venture uses similar estimation techniques as those used for consolidated real estate properties, including discounting expected future cash flows of the underlying real estate investments based on prevailing market rents over a holding period and including an exit capitalization rate to determine the final year of cash flows.

The fair values of our interest rate cap derivatives are based on prevailing market prices in secondary markets for similar derivative contracts as of the measurement date.

The discount rates, exit capitalization rates and holding periods used to determine the fair value of our investment in the unconsolidated joint venture are Level 3 significant unobservable inputs and are shown in the table below:

The discount rates, exit capitalization rates and holding periods used to determine the fair value of our investment in the unconsolidated joint venture are significant unobservable inputs and are shown in the table below:

Valuation Discount Capitalization Holding

Technique Rates Rates Periods

As of September 30, 2024

As of March 31, 2025

Investment in unconsolidated joint venture Discounted cash flow 6.25 % - 8.00 %

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5.25 % - 6.50 %

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

10 - 12 years

The table below presents a summary of the changes in fair value for our investment in the unconsolidated joint venture:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Three Months Ended March 31,

Beginning balance $ 116,732 $ 115,360

Equity in earnings of unconsolidated joint venture 1,161 719 5,232 7,423

Equity in (losses) earnings of unconsolidated joint venture

( 1,042 ) 1,723

Distributions from unconsolidated joint venture ( 990 ) ( 990 )

Ending balance $ 114,700 $ 116,093

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Shareholders’ Equity

Common Share Awards

On May 30, 2024, in accordance with our Trustee compensation arrangements, we awarded to each of our seven Trustees 23,316 of our common shares, valued at $ 3.86 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day.

On September 11, 2024, we awarded under our equity compensation plan an aggregate of 204,915 of our common shares, valued at $ 4.84 per share, the closing price of our common shares on Nasdaq on that day, to our officers and certain other employees of The RMR Group LLC, or RMR.

Common Share Purchases

During the three and nine months ended September 30, 2024, we purchased an aggregate of 53,002 and 67,092 , respectively, of our common shares, valued at a weighted average price of $ 4.78 and $ 4.65 per common share, respectively, from our officers and certain other current and former officers and employees of RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

We withheld and purchased these common shares at their fair market values based upon the trading prices of our common shares at the close of trading on Nasdaq on the applicable purchase dates.

During the three months ended March 31, 2025, we purchased an aggregate of 604 of our common shares, valued at a weighted average price of $ 3.59 per common share, from a former employee of The RMR Group LLC, or RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

We withheld and purchased these common shares at their fair market value based upon the trading price of our common shares at the close of trading on The Nasdaq Stock Market LLC, or Nasdaq, on the purchase date.

Distributions

During the nine months ended September 30, 2024, we declared and paid regular quarterly distributions to common shareholders as follows:

During the three months ended March 31, 2025, we declared and paid a regular quarterly distribution to common shareholders as follows:

Distribution Total

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January 16, 2025 January 27, 2025 February 20, 2025 $ 0.01 $ 661

April 11, 2024 April 22, 2024 May 16, 2024 0.01 659

July 11, 2024 July 22, 2024 August 15, 2024 0.01 659

$ 0.03 $ 1,976

On October 16, 2024, we declared a regular quarterly distribution to common shareholders of record on October 28, 2024 of $ 0.01 per share, or approximately $ 661 .

We expect to pay this distribution to our shareholders on or about November 14, 2024 using cash on hand.

On April 10, 2025, we declared a regular quarterly distribution to common shareholders of record on April 22, 2025 of $ 0.01 per share, or approximately $ 661 .

We expect to pay this distribution on or about May 15, 2025 using cash on hand.

Business and Property Management Agreements with RMR

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

Business Management Agreement.

Pursuant to our business management agreement and in accordance with GAAP, we accrued estimated incentive management fees during the three months ended March 31, 2025.

The actual amount of incentive management fees incurred for 2025, 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, 2025, and will be payable to RMR in January 2026.

We did no t incur any incentive management fees for the year ended December 31, 2024.

Property Management Agreement.

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

We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function and as otherwise agreed.

Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR which are included in other operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss).

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

Pursuant to our business management agreement with RMR, we recognized business management fees of $ 5,938 and $ 17,577 for the three and nine months ended September 30, 2024, respectively, and $ 5,919 and $ 17,301 for the three and nine months ended September 30, 2023, respectively.

Based on our common share total return, as defined in our business management agreement, as of September 30, 2024 and 2023, no incentive fees are included in the business management fees we recognized for the three or nine months ended September 30, 2024 or 2023.

The actual amount of annual incentive fees for 2024, 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, 2024, and will be payable in January 2025.

We did no t incur any incentive fee payable to RMR for the year ended December 31, 2023.

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

Pursuant to our property management agreement with RMR, we recognized aggregate property management and construction supervision fees of $ 3,317 and $ 9,951 for the three and nine months ended September 30, 2024, respectively, and $ 3,464 and $ 10,286 for the three and nine months ended September 30, 2023, respectively.

Of these amounts, for the three and nine months ended September 30, 2024, $ 3,202 and $ 9,648 , respectively, were included in other operating expenses in our condensed consolidated financial statements and $ 115 and $ 303 , respectively, were capitalized as building improvements in our condensed consolidated balance sheets.

For the three and nine months ended September 30, 2023, $ 3,293 and $ 9,745 , respectively, were included in other operating expenses in our condensed consolidated statements of comprehensive income (loss) and $ 171 and $ 541 , 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 of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf.

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

We reimbursed RMR $ 1,856 and $ 5,190 for these expenses and costs for the three and nine months ended September 30, 2024, respectively, and $ 2,375 and $ 6,216 for the three and nine months ended September 30, 2023, respectively.

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

For the three months ended March 31, 2025 and 2024, the business management fees, incentive management fees, property management fees, construction supervision fees and expense reimbursements recognized in our condensed consolidated financial statements were as follows:

Financial Statement

Three Months Ended March 31,

Pursuant to business management agreement:

Business management fees

General and administrative expenses

$ 5,735 $ 5,830

Incentive management fees

General and administrative expenses 967 —

Total $ 6,702 $ 5,830

Pursuant to property management agreement:

Property management fees

Other operating expenses

$ 3,267 $ 3,330

Construction supervision fees

Buildings and improvements (1)

Total $ 3,297 $ 3,403

Expense reimbursement:

Property level expenses

General and administrative expenses $ 50 $ 82

Property level expenses

Other operating expenses

Total $ 1,620 $ 1,687

(1) Amounts capitalized as buildings and improvements are depreciated over the estimated useful lives of the related assets.

In January 2025, in connection with a $ 100,000 credit agreement and related security agreement entered into by RMR and certain of its subsidiaries with Citibank, N.A., or Citibank, and the other lenders party thereto, we consented to the pledge and assignment of RMR’s interest in our management agreements under the security agreement.

Pursuant to the consent, we agreed, among other things, that upon notice that an event of default under the RMR credit agreement has occurred and is continuing, we will continue to make all payments under our management agreements in accordance with the instructions of Citibank, and that if there is an event of default by RMR under our management agreements that would allow us to terminate or suspend our obligations, we will not terminate or suspend without notice to Citibank and provide Citibank 30 days to cure the default on RMR’s behalf.

The consent was approved by our Independent Trustees.

Management Agreements Between Our Joint Ventures and RMR.

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See Note 9 for further information regarding our relationships, agreements and transactions with RMR.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Related Person Transactions

1 unchanged sentence

RMR is a majority owned subsidiary of RMR Inc.

The Chair of our Board of Trustees and one of our Managing Trustees, Adam D.

Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the chair of the board of directors, a managing director and the president and chief executive officer of RMR Inc.

The Chair of our Board of Trustees and one of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the chair of the board of directors, a managing director and the president and chief executive officer of RMR Inc.

and an officer and employee of RMR.

6 unchanged sentences

Jordan, serve as managing trustees or officers of certain of these public companies.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Our Manager, RMR .

5 unchanged sentences

See Note 3 for further information regarding our joint ventures.

As of September 30, 2024 and December 31, 2023, we owed $ 443 and $ 680 , respectively, to the unconsolidated joint venture for rents that we collected on behalf of that joint venture.

These amounts are presented as due to related persons in our condensed consolidated balance sheets.

For further information about these and other such relationships and certain other related person transactions, see our 2024 Annual Report.

2 unchanged sentences

The only risk currently managed by us using derivative instruments is our interest rate risk.

We have interest rate cap agreements to manage our interest rate risk exposure on each of the ILPT Floating Rate Loan and the Mountain Floating Rate Loan, both with interest payable at a rate equal to SOFR plus a premium.

As required under the applicable loan agreements, we have interest rate cap agreements to manage our interest rate risk exposure on each of the ILPT Floating Rate Loan and the Mountain Floating Rate Loan, both with interest payable at a rate equal to SOFR plus a premium.

The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements.

3 unchanged sentences

See Notes 5 and 6 for further information regarding the debt our interest rate caps are related to and the fair value of our interest rate caps.

The following table summarizes the terms of our outstanding interest rate cap agreements as of September 30, 2024 and December 31, 2023:

The following table summarizes the terms of our outstanding interest rate cap agreements as of March 31, 2025 and December 31, 2024:

Sheet Underlying Maturity Strike Notional Fair Value at

Line Item Instrument Date Rate Amount September 30, 2024 December 31, 2023

Other assets ILPT Floating Rate Loan 10/15/2024

2.25 % $ 1,235,000 $ 1,366 $ 25,060

Other assets Mountain Floating Rate Loan

3.40 % $ 1,400,000 — 5,516

Other assets Mountain Floating Rate Loan

3.04 % $ 1,400,000 8,331 —

Line Item Instrument Date Rate Amount March 31, 2025 December 31, 2024

Other assets, net

ILPT Floating Rate Loan 10/15/2025 2.78 % $ 1,235,000 $ 8,976 $ 13,302

Other assets, net

Mountain Floating Rate Loan

3.04 % $ 1,400,000 — 3,614

Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.

For derivatives designated and qualifying as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in cumulative other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.

Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election.

The earnings recognition of excluded components is presented in interest expense.

Amounts reported in cumulative other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our applicable debt.

In October 2024, we exercised the first of our three , one year extension options for the maturity date of the ILPT Floating Rate Loan.

In connection with the exercise of the extension, we purchased a one year interest rate cap for $ 16,975 with a SOFR strike rate equal to 2.78 %, which replaced the previous interest rate cap with a SOFR strike rate equal to 2.25 %.

Other assets, net

Mountain Floating Rate Loan 03/15/2026 3.10 % $ 1,400,000 11,937 —

Total $ 20,913 $ 16,916

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

The following table summarizes the activity related to our cash flow hedges within cumulative other comprehensive income (loss) for the periods shown:

Three Months Ended

September 30, Nine Months Ended

September 30,

2024 2023 2024 2023

Amount of (loss) gain recognized on derivative in other comprehensive income (loss)

For derivatives designated and qualifying as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in cumulative other comprehensive loss and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings.

The earnings recognition of excluded components is presented in interest expense.

Amounts reported in cumulative other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on our applicable debt.

The following table summarizes the activity related to our cash flow hedges within cumulative other comprehensive loss for the periods shown:

Three Months Ended March 31,

Amount of (loss) gain recognized on derivative in other comprehensive loss

$ ( 1,759 ) $ 4,674

Amount of gain reclassified from cumulative other comprehensive (loss) income into interest expense

Amount of (loss) gain reclassified from cumulative other comprehensive loss into interest expense

$ ( 957 ) $ 9,520

1 unchanged sentence

$ ( 69,813 ) $ ( 73,230 )

Tabl e of Contents

Segment Reporting

We manage our business on a consolidated basis and therefore have one reportable segment:

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

The chief operating decision maker, or CODM, is our President and Chief Operating Officer.

The CODM assesses performance, allocates resources and makes strategic decisions based on net income (loss) as shown in our condensed consolidated statements of comprehensive income (loss).

The CODM is also regularly provided with information on expenses related to our management agreements with RMR, which are detailed in Note 8.

The measure of segment assets is reported as total assets in our condensed consolidated balance sheets.

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