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Item 1. Financial Statements

2025-07-29 compared with 2025-04-29 · 151 added, 89 removed, 381 unchanged (39% of the section changed)

3 unchanged sentences

(dollars in thousands, except per share data)

March 31, December 31,

June 30, December 31,

Real estate properties:

5 unchanged sentences

Investment in unconsolidated joint venture 117,854 116,732

Assets of properties held for sale 25,726 —

Acquired real estate leases, net 180,977 199,193

7 unchanged sentences

LIABILITIES AND EQUITY

Mortgages and notes payable, net $ 4,296,146 $ 4,300,537

Mortgages notes payable, net

$ 4,200,314 $ 4,300,537

Liabilities of properties held for sale 337 —

Accounts payable and other liabilities 70,283 76,753

21 unchanged sentences

(amounts in thousands, except per share data)

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

Rental income $ 112,097 $ 110,621 $ 224,002 $ 222,856

4 unchanged sentences

Total expenses 75,645 75,716 149,804 153,165

Interest income

Interest and other income

2,024 2,935 3,992 5,787

Interest expense

( 67,914 ) ( 73,631 ) ( 137,727 ) ( 146,861 )

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

Loss on extinguishment of debt

( 5,070 ) — ( 5,070 ) —

Loss before income taxes and equity in earnings of unconsolidated joint venture ( 34,508 ) ( 35,791 ) ( 64,607 ) ( 71,383 )

Income tax expense ( 30 ) ( 36 ) ( 58 ) ( 69 )

Equity in (losses) earnings of unconsolidated joint venture

( 1,042 ) 1,723

Equity in earnings of unconsolidated joint venture 4,144 2,348 3,102 4,071

Net loss ( 30,394 ) ( 33,479 ) ( 61,563 ) ( 67,381 )

2 unchanged sentences

Other comprehensive loss:

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

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

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

Unrealized gain (loss) on derivatives 1,058 ( 1,510 ) 256 ( 6,356 )

unrealized (gain) loss on derivatives attributable to noncontrolling interest ( 346 ) ( 468 ) ( 90 ) 1,420

Other comprehensive gain (loss) attributable to common shareholders

712 ( 1,978 ) 166 ( 4,936 )

Comprehensive loss attributable to common shareholders $ ( 20,598 ) $ ( 25,153 ) $ ( 42,676 ) $ ( 51,514 )

Weighted average common shares outstanding (basic and diluted) 65,927 65,626 65,881 65,591

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

$ ( 0.33 ) $ ( 0.36 )

Net loss per share attributable to common shareholders

(basic and diluted) $ ( 0.32 ) $ ( 0.35 ) $ ( 0.65 ) $ ( 0.71 )

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

16 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 — — — ( 21,310 ) — — ( 21,310 ) ( 9,084 ) ( 30,394 )

Share grants, repurchases and forfeitures 192,295 2 847 — — — 849 — 849

Distributions to common shareholders — — — — — ( 662 ) ( 662 ) — ( 662 )

Other comprehensive loss — — — — 712 — 712 346 1,058

Balance at June 30, 2025 66,335,999 $ 663 $ 1,018,474 $ ( 129,315 ) $ ( 899 ) $ ( 369,809 ) $ 519,114 $ 428,650 $ 947,764

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

6 unchanged sentences

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

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

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

2 unchanged sentences

(dollars in thousands)

Three Months Ended March 31,

Six Months Ended June 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

3 unchanged sentences

Amortization of interest rate caps

17,468 19,473

Net amortization of debt issuance costs, premiums and discounts 750 9,748

2 unchanged sentences

Straight line rental income ( 5,670 ) ( 6,441 )

Loss on extinguishment of debt

Proceeds from settlement of interest rate caps

2 unchanged sentences

Distributions of earnings from unconsolidated joint venture 1,980 1,980

Equity in losses (earnings) of unconsolidated joint venture

Equity in earnings of unconsolidated joint venture

( 3,102 ) ( 4,071 )

5 unchanged sentences

Net cash provided by operating activities

29,780 18,839

CASH FLOWS FROM INVESTING ACTIVITIES:

3 unchanged sentences

Proceeds from settlement of interest rate caps

Net cash used in investing activities

18,841 34,429

Net cash (used in) provided by investing activities

( 5,767 ) 4,648

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from issuance of mortgage notes payable 1,160,000 —

Repayment of ILPT Floating Rate Loan and related costs

( 1,240,070 ) —

Repayment of mortgage notes payable

( 9,310 ) ( 8,974 )

Payment of debt issuance costs ( 16,663 ) ( 129 )

4 unchanged sentences

( 107,428 ) ( 10,641 )

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

(Decrease) increase in cash and cash equivalents and restricted cash and cash equivalents

( 83,415 ) 12,846

8 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 March 31,

As of June 30,

Cash and cash equivalents $ 58,559 $ 146,150

3 unchanged sentences

$ 159,065 $ 258,569

(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.

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

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

13 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 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 assumptions used in the evaluation of impairment of real estate and related intangibles.

Recent Accounting Pronouncements

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):

In November 2024, the Financial Accounting Standards Board, or the FASB, 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.

2 unchanged sentences

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

In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810):

Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which clarifies the guidance in determining the accounting acquirer in a business combination effected primarily by exchanging equity interests when the acquiree is a variable interest entity that meets the definition of a business.

ASU 2025-03 is required to be applied prospectively, and is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods, with early adoption permitted.

We have early adopted ASU 2025-03 as of June 30, 2025 a nd do not expect ASU 2025-03 to have a material impact on our condensed consolidated financial statements.

Real Estate Investments

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.

As of June 30, 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 one property classified as held for sale, as well as 94 properties in 27 states totaling approximately 20,978,000 rentable square feet owned by Mountain Industrial REIT LLC, or our consolidated joint venture, or Mountain JV, in which we own a 61 % equity interest.

As of June 30, 2025, we also owned a 22 % equity interest in The Industrial Fund REIT LLC, or the unconsolidated joint venture.

Disposition Activities

As of June 30, 2025, one mainland property, located in Groveport, OH and containing approximately 581,000 rentable square feet, met the held for sale criteria and was classified as held for sale in our condensed consolidated balance sheets.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

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,

Capital Expenditures

During the three and six months ended June 30, 2025 and 2024, amounts capitalized at certain of our properties for tenant improvements, leasing costs and building improvements were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

Tenant improvements (1)

$ 2,393 $ 142 $ 2,396 $ 586

Leasing costs (1)

300 184 3,522 2,311

Building improvements (2)

2,458 2,506 3,192 3,308

Total capital expenditures

2 unchanged sentences

(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,

During the three and six months ended June 30, 2025 and 2024, recognized net loss attributable to noncontrolling interest in our condensed consolidated financial statements was as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

Consolidated joint venture $ 9,067 $ 10,314 $ 18,739 $ 20,828

6 unchanged sentences

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 $ 30 and $ 163 during the three months ended March 31, 2025 and 2024, respectively.

The tenancy in common did no t make any cash distributions to the unrelated third party investor during the three months ended June 30, 2025 or 2024 and made cash distributions of $ 30 and $ 163 during the six months ended June 30, 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 (losses) earnings of the unconsolidated joint venture in our condensed consolidated statements of comprehensive income (loss).

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 financial statements.

We are a lessor of industrial and logistics properties.

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.

Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable.

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.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

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

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.

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

Such payments totaled $ 20,072 and $ 19,067 for the three months ended June 30, 2025 and 2024, respectively, and $ 39,929 and $ 40,242 for the six months ended June 30, 2025 and 2024, respectively.

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

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.

However, if a tenant does not pay obligations under a ground lease or does not renew a 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 $ 4,078 and $ 4,173 , respectively, as of March 31, 2025, and $ 4,193 and $ 4,288 , respectively, as of December 31, 2024.

The values of our right of use assets and related lease liabilities were $ 3,961 and $ 4,058 , respectively, as of June 30, 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.

1 unchanged sentence

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.

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.

Our Hawaii Properties represented 27.7 % and 27.6 % of our annualized rental revenues as of June 30, 2025 and 2024, respectively.

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.

FedEx Corporation and its subsidiaries, or FedEx, and Amazon.com Services, Inc.

and its subsidiaries, or Amazon, represented 28.8 % and 6.7 % of our annualized rental revenues as of June 30, 2025, respectively, and 29.0 % and 6.8 % as of June 30, 2024, respectively.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

1 unchanged sentence

(dollars in thousands, except per share data)

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

Our outstanding indebtedness as of June 30, 2025 and December 31, 2024 is summarized below:

Properties Principal Interest Carrying Value

1 unchanged sentence

Type Maturity of Collateral

As of March 31, 2025

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

As of June 30, 2025

ILPT 186 $ 650,000 4.31 % Fixed 02/07/2029 $ 490,115

ILPT 101 1,160,000 6.40 % Fixed 07/09/2030 1,002,066

17 700,000 4.42 % Fixed 03/09/2032 488,492

33 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, 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.

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 %.

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, 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 June 2025, we obtained a $ 1,160,000 fixed rate, interest only mortgage loan secured by 101 of our properties.

This mortgage loan matures in July 2030 and requires that interest be paid at an annual rate of 6.40 %.

Subject to the satisfaction of certain conditions, we have the option to prepay our $ 1,160,000 mortgage loan in full or in part with a premium prior to January 9, 2030 and at par with no premium on or after January 9, 2030.

We used the net proceeds from our $ 1,160,000 mortgage loan and cash on hand to repay in full our $ 1,235,000 loan, or the ILPT Floating Rate Loan.

The ILPT Floating Rate Loan was secured by 104 of our properties, was scheduled to mature in October 2025 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 %.

At the time of repayment of the ILPT Floating Rate Loan, we believe that we were in compliance with all of the covenants and other terms under the agreement governing such loan.

During the three and six months ended June 30, 2025, we recognized a $ 5,070 loss on extinguishment of debt related to the repayment of the ILPT Floating Rate Loan.

Our consolidated joint venture’s $ 1,400,000 loan, or the Mountain Floating Rate Loan, 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.

1 unchanged sentence

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,

The weighted average interest rates under our floating rate loans for the three and six months ended June 30, 2025 and 2024 were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

ILPT Floating Rate Loan (1)

3 unchanged sentences

(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.

In June 2025, we repaid in full the ILPT Floating Rate Loan using proceeds from our $ 1,160,000 mortgage loan and cash on hand.

(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.

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.

As of June 30, 2025, we believe that we were in compliance with all of the covenants and other terms under the agreements governing our debt obligations.

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

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

The required principal payments due during the next five years and thereafter, excluding extension options, under all our outstanding debt as of June 30, 2025 are as follows:

2026 1,419,499

1 unchanged sentence

Total $ 4,223,519

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)

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.

Fair Value of Assets and Liabilities

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

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

As of June 30, 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.

Our fixed rate mortgage notes payable had an aggregate carrying value of $ 2,800,439 and $ 1,665,649 as of June 30, 2025 and December 31, 2024, respectively, and a fair value of $ 2,711,609 and $ 1,535,640 as of June 30, 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:

The table below presents certain of our assets measured on a recurring basis at fair value as of June 30, 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 March 31, 2025

As of June 30, 2025

Investment in unconsolidated joint venture $ 117,854 $ — $ — $ 117,854

9 unchanged sentences

Technique Rates Rates Periods

As of March 31, 2025

As of June 30, 2025

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

5 unchanged sentences

10 - 12 years

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

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

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

Beginning balance $ 114,700 $ 116,093 $ 116,732 $ 115,360

Equity in (losses) earnings of unconsolidated joint venture

Equity in earnings of unconsolidated joint venture

4,144 2,348 3,102 4,071

1 unchanged sentence

Ending balance $ 117,854 $ 117,451 $ 117,854 $ 117,451

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Shareholders’ Equity

Common Share Awards

On May 28, 2025, in accordance with our Trustee compensation arrangements, we awarded to each of our seven Trustees 28,875 of our common shares, valued at $ 3.29 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day.

Common Share Purchases

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.

During the three and six months ended June 30, 2025, we purchased an aggregate of 9,095 and 9,699 of our common shares, respectively, valued at a weighted average price of $ 3.17 and $ 3.20 per common share, respectively, from a former officer of ours and certain other former officers and employees of The RMR Group LLC, or RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of prior 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.

Distributions

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

During the six months ended June 30, 2025, we declared and paid a regular quarterly distribution to common shareholders as follows:

Distribution Total

1 unchanged sentence

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

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.

April 10, 2025 April 22, 2025 May 15, 2025 0.01 662

$ 0.02 $ 1,323

On July 10, 2025, we declared a regular quarterly distribution to common shareholders of record on July 21, 2025 of $ 0.05 per share, or approximately $ 3,317 .

We expect to pay this distribution on or about August 14, 2025 using cash on hand.

Business and Property Management Agreements with RMR

5 unchanged sentences

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.

Pursuant to our business management agreement and in accordance with GAAP, we accrued estimated incentive management fees during the three and six months ended June 30, 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.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Property Management Agreement.

2 unchanged sentences

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

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:

For the three and six months ended June 30, 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,

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

Pursuant to business management agreement:

11 unchanged sentences

Buildings and improvements (1)

87 115 117 188

Total $ 3,325 $ 3,231 $ 6,622 $ 6,634

Expense reimbursement:

Property level expenses

Other expenses

General and administrative expenses $ 51 $ 82 $ 101 $ 164

1 unchanged sentence

Other operating expenses

1,736 1,565 3,306 3,170

Total $ 1,787 $ 1,647 $ 3,407 $ 3,334

36 unchanged sentences

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

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.

As required under the loan agreement, we have an interest rate cap agreement to manage our interest rate risk exposure on the Mountain Floating Rate Loan, with interest payable at a rate equal to SOFR plus a premium.

Additionally, we maintain another interest rate cap that has been designated as a standalone derivative instrument.

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.

1 unchanged sentence

We do not anticipate that any of the counterparties will fail to meet their obligations.

Our interest rate cap agreements are designated as cash flow hedges of interest rate risk and are measured on a recurring basis at fair value.

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 March 31, 2025 and December 31, 2024:

Our interest rate cap agreement for the Mountain Floating Rate Loan is designated as a cash flow hedge of interest rate risk and is measured on a recurring basis at fair value.

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 loss 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 loss related to derivatives will be reclassified to interest expense as interest payments are made on our applicable debt.

On June 26, 2025, we obtained a $ 1,160,000 mortgage loan and used the net proceeds from such loan and cash on hand to repay in full the ILPT Floating Rate Loan.

As of June 26, 2025, we discontinued hedge accounting for the derivative associated with this underlying instrument, which was previously designated as a cash flow hedge of variable interest payments on our ILPT Floating Rate Loan.

As a result of the discontinuation of hedge accounting, the derivative is now accounted for as a standalone instrument, and all subsequent changes in the fair value and proceeds from settlements of the interest rate cap will be recognized in interest and other income 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)

The following table summarizes the terms of our outstanding interest rate cap agreements as of June 30, 2025 and December 31, 2024:

Sheet Underlying Maturity Strike Notional Fair Value at

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

Line Item Instrument Date Rate Amount June 30, 2025 December 31, 2024

Other assets, net

ILPT Floating Rate Loan

10/15/2025 2.78 % $ 1,235,000 $ 5,365 $ 13,302

Other assets, net

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Total $ 14,450 $ 16,916

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

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

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

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

Amount of gain recognized on derivatives in other comprehensive loss

$ 2,673 $ 3,926 $ 914 $ 8,600

Amount of gain (loss) reclassified from cumulative other comprehensive loss into interest expense $ 1,615 $ ( 5,436 ) $ 658 $ ( 14,956 )

Total amount of interest expense presented in the condensed consolidated statements of comprehensive income (loss)

$ ( 67,914 ) $ ( 73,631 ) $ ( 137,727 ) $ ( 146,861 )

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.

Segment Reporting

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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