What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-07-29 compared with 2025-04-29 · 187 added, 75 removed, 220 unchanged (54% of the section changed)

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We are a real estate investment trust, or REIT, organized under Maryland law.

As of March 31, 2025, our portfolio was comprised of 411 properties containing approximately 59,890,000 rentable square feet located in 39 states with 94.6% occupancy leased to approximately 300 different tenants.

As of March 31, 2025, we also owned a 22% equity interest in 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 with 94.3% occupancy, leased to approximately 300 different tenants, including one property classified as held for sale.

As of June 30, 2025, we also owned a 22% equity interest in the unconsolidated joint venture.

We believe consumer expectations, growth in the number of households and demand for supply chain resiliency will keep demand for industrial properties strong for the foreseeable future.

However, uncertainties surrounding interest rates and inflation in the United States and globally, global geopolitical hostilities and tensions and the impacts of or changes to tariffs and trade policies, have given rise to economic uncertainty and have caused, and may continue to cause, disruptions in the financial markets.

However, uncertainties surrounding interest rates and inflation globally and in the United States, wars or other global geopolitical hostilities and tensions and the impacts of or changes to tariffs and trade policies, have given rise to economic uncertainty and have caused, and may continue to cause, disruptions in the financial markets.

For example, there have been significant changes to U.S.

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These conditions, if continued, could adversely affect our financial condition and that of our tenants, could adversely impact the ability or willingness of our tenants to renew our leases or pay rent to us, may restrict our access to, and would likely increase our cost of, capital, may impact our ability to sell properties and may cause the values of our properties and of our common shares or other securities to decline.

Our portfolio as of March 31, 2025 is summarized below (square feet in thousands):

Our portfolio as of June 30, 2025 is summarized below (square feet in thousands):

% of Weighted

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Total / weighted average 411 59,890 94.3% 100.0% 7.6

(1) Based on annualized rental revenues as of March 31, 2025.

(1) Based on annualized rental revenues as of June 30, 2025.

Property Operations

Occupancy and average effective rental rate data for our portfolio as of March 31, 2025 and 2024 were as follows (square feet in thousands):

As of March 31,

Occupancy data for our portfolio as of June 30, 2025 and 2024 were as follows (square feet in thousands):

All Properties Comparable Properties (1)

As of June 30,

as of June 30,

2025 2024 2025 2024

Total properties 411 411 410 410

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94.3 % 95.4 % 94.3 % 95.3 %

Average effective rental rates per square feet (3)

$ 7.92 $ 7.58

(1) Consists of properties that we have owned continuously since April 1, 2024 and excludes one property classified as held for sale as of June 30, 2025.

(2) Subject to modest adjustments when space is remeasured or reconfigured for new tenants and when land leases are converted to building leases.

(2) Leased square feet is pursuant to existing leases as of March 31, 2025, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

(3) Represents total rental income divided by the average rentable square feet leased during the periods specified for our properties.

(3) Leased square feet is pursuant to existing leases as of June 30, 2025, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

The average effective rental rates per square foot represents total rental income divided by the average rentable square feet leased during the periods specified for our properties.

For the three and six months ended June 30, 2025 and 2024, the average effective rental rates per square foot of our properties were as follows:

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

All properties $ 7.94 $ 7.76 $ 7.93 $ 7.67

Comparable properties (1) (2)

$ 7.97 $ 7.79 $ 7.96 $ 7.69

(1) For the three months ended June 30, 2025 and 2024, consists of properties that we have owned continuously since April 1, 2024 and excludes one property classified as held for sale as of June 30, 2025.

(2) For the six months ended June 30, 2025 and 2024, consists of properties that we have owned continuously since January 1, 2024 and excludes one property classified as held for sale as of June 30, 2025.

Mainland Properties.

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Hawaii Properties.

Certain of our Hawaii Properties are lands leased for rents that periodically reset based on fair market values, generally every 10 years.

Revenues from our Hawaii Properties have generally increased as rents under the leases for those properties have been reset or renewed.

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Due to the limited availability of land suitable for industrial uses that might compete with our Hawaii Properties, we believe that our Hawaii Properties offer the potential for future rent growth as a result of periodic rent resets, lease extensions and new leasing.

During the three months ended March 31, 2025, we entered into new and renewal leases as summarized in the following table, excluding the impact of rent resets (square feet in thousands):

Certain of our Hawaii Properties are lands leased for rents that periodically reset based on fair market values, generally every 10 years.

During the three and six months ended June 30, 2025, we entered into new and renewal leases as summarized in the following table, excluding the impact of rent resets (square feet in thousands):

Three Months Ended June 30, 2025

New Leases Renewals Totals

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$ 0.04 $ 0.08 $ 0.07

Six Months Ended June 30, 2025

New Leases Renewals Totals

Square feet leased during the period 481 1,865 2,346

Weighted average rental rate change (by rentable square feet) 24.3 % 17.5 % 18.7 %

Weighted average lease term by square feet (years) 5.7 6.2 6.1

Total leasing costs and concession commitments (1)

$ 2,859 $ 3,676 $ 6,535

Total leasing costs and concession commitments per square foot (1)

$ 5.95 $ 1.97 $ 2.79

Total leasing costs and concession commitments per square foot per year (1)

$ 1.04 $ 0.32 $ 0.46

(1) Includes commitments made for leasing expenditures and concessions, such as leasing commissions, tenant improvements or other tenant inducements.

During the three months ended March 31, 2025, we completed rent resets for approximately 144,000 square feet of land at our Hawaii Properties at rental rates that were 34.6% higher than prior rental rates.

The following table provides the annualized rental revenues scheduled to reset at our Hawaii Properties as of March 31, 2025:

During the six months ended June 30, 2025, we completed rent resets for approximately 144,000 square feet of land at our Hawaii Properties at rental rates that were 34.6% higher than prior rental rates.

The following table provides the annualized rental revenues scheduled to reset at our Hawaii Properties as of June 30, 2025:

Rental Revenues

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Total $ 22,848

As of March 31, 2025, our remaining lease expirations by year were as follows (square feet in thousands):

As of June 30, 2025, our remaining lease expirations by year were as follows (square feet in thousands):

% of Total Cumulative

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Weighted average remaining lease term (in years) 6.8 7.6

(1) Leased square feet is pursuant to existing leases as of March 31, 2025, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

As of March 31, 2025, subsidiaries of FedEx and Amazon leased 22.5% and 8.0% of our total leased square feet, respectively, and represented 28.7% and 6.7% of our total annualized rental revenues, respectively.

As of March 31, 2025, $5,478, or 1.2%, of our annualized rental revenues was included in leases scheduled to expire by March 31, 2026 and 5.4% of our rentable square feet was vacant.

(1) Leased square feet is pursuant to existing leases as of June 30, 2025, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

As of June 30, 2025, FedEx and Amazon leased 22.6% and 8.1% of our total leased square feet, respectively, and represented 28.8% and 6.7% of our total annualized rental revenues, respectively.

As of June 30, 2025, $10,079, or 2.3%, of our annualized rental revenues was included in leases scheduled to expire by June 30, 2026 and 5.7% of our rentable square feet was vacant.

Rental rates for which available space may be leased in the future will depend on prevailing market conditions when lease extensions, lease renewals or new leases are negotiated.

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RMR also may use a third party service to monitor the credit ratings of debt securities of our existing tenants whose debt securities are rated by a nationally recognized credit rating agency.

In October 2024, American Tire Distributors, Inc., or ATD, which represented 1.6% of our total annualized rental revenues as of March 31, 2025, filed for Chapter 11 bankruptcy.

As of April 29, 2025, this tenant has no outstanding lease obligations due to us and has indicated that it does not intend to vacate any of its leases with us but is seeking to modify the terms of its existing leases with us.

As of April 29, 2025, we have not engaged with ATD to modify any of its current leases.

ATD has until May 20, 2025 to accept or reject the continuation of these leases.

In October 2024, OldCo Tire Distributors, Inc., formerly known as American Tire Distributors, Inc., or ATD, filed for Chapter 11 bankruptcy.

Under ATD’s bankruptcy plan, which became effective on May 20, 2025, ATD will not vacate or modify the terms of any of its existing leases with us.

As of June 30, 2025, ATD represented 1.7% of our total annualized rental revenues and had no outstanding lease obligations due to us.

RESULTS OF OPERATIONS

Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024 (dollars and share amounts in thousands, except per share data)

Three Months Ended March 31,

2025 2024 Change Change

Three Months Ended June 30, 2025 Compared to Three Months Ended June 30, 2024 (dollars and share amounts in thousands, except per share data)

Comparable (1)

Non-Comparable

Properties Results Properties Results Consolidated Properties Results

Three Months Ended Three Months Ended

Three Months Ended

2025 2024 Change Change 2025 2024 Change 2025 2024 Change Change

Rental income $ 111,343 $ 109,864 $ 1,479 1.3% $ 754 $ 757 $ (3) $ 112,097 $ 110,621 $ 1,476 1.3%

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Total other expenses 51,105 51,360 (255) (0.5)%

Interest income 1,968 2,852 (884) (31.0)%

Interest and other income

2,024 2,935 (911) (31.0)%

Interest expense (67,914) (73,631) 5,717 (7.8)%

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

Loss on extinguishment of debt

(5,070) — (5,070) n/m

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

(34,508) (35,791) 1,283 3.6%

Income tax expense (30) (36) 6 (16.7)%

Equity in (losses) earnings of unconsolidated joint venture

Equity in earnings of unconsolidated joint venture

4,144 2,348 1,796 76.5%

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Net loss per share attributable to common shareholders (basic and diluted) $ (0.32) $ (0.35) $ 0.03 8.6%

$ (0.33) $ (0.36) $ 0.03 8.3%

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(1) Consists of properties that we have owned continuously since April 1, 2024 and excludes one property classified as held for sale as of June 30, 2025.

(2) See our definition of net operating income, or NOI, and our reconciliation of net loss to NOI below under the heading “Non-GAAP Financial Measures”.

References to changes in the income and expense categories below relate to the comparison of results for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.

References to changes in the income and expense categories below relate to the comparison of results for the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Rental income.

Rental income decreased primarily due to vacancies at certain of our properties, partially offset by our leasing activity.

Rental income increased primarily due to increases from our net leasing activity and rent resets, partially offset by vacancies at certain of our properties.

Real estate taxes .

Real estate taxes increased primarily due to higher assessed values at certain of our properties.

Other operating expenses .

The decrease in other operating expenses is primarily due to decreases in professional fees and insurance expenses, partially offset by increases in payroll costs reimbursable to RMR.

Depreciation and amortization.

The decrease in depreciation and amortization primarily reflects the impact of certain acquired real estate leases fully amortizing since July 1, 2024, partially offset by increased depreciation related to improvements made to certain of our properties since July 1, 2024.

General and administrative.

The increase in general and administrative expenses is primarily due to an increase in accrued incentive management fees of $1,311 and increases in legal fees during the three months ended June 30, 2025.

Interest and other income.

The decrease in interest and other income is primarily due to lower interest rates and average cash balances during the 2025 period as compared to the 2024 period.

Interest expense.

The decrease in interest expense is primarily due to decreased amortization of debt issuance and interest rate cap costs related to our floating rate loans, partially offset by higher average strike rates on our interest rate caps designated as cash flow hedges compared to the 2024 period.

Loss on extinguishment of debt .

During the three months ended June 30, 2025, we recognized a loss on extinguishment of debt in connection with the repayment of the ILPT Floating Rate Loan.

Income tax expense.

Income tax expense reflects state income taxes payable in certain jurisdictions.

Equity in earnings of unconsolidated joint venture.

Equity in earnings of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024 (dollars and share amounts in thousands, except per share data)

Comparable (1)

Non-Comparable

Properties Results Properties Results Consolidated Properties Results

Six Months Ended Six Months Ended Six Months Ended

2025 2024 Change Change 2025 2024 Change 2025 2024 Change Change

Rental income $ 222,485 $ 221,314 $ 1,171 0.5% $ 1,517 $ 1,542 $ (25) $ 224,002 $ 222,856 $ 1,146 0.5%

Operating expenses:

Real estate taxes 29,774 30,962 (1,188) (3.8)% 42 48 (6) 29,816 31,010 (1,194) (3.9)%

Other operating expenses 18,958 19,326 (368) (1.9)% 169 203 (34) 19,127 19,529 (402) (2.1)%

Total operating expenses 48,732 50,288 (1,556) (3.1)% 211 251 (40) 48,943 50,539 (1,596) (3.2)%

Net operating income (2)

$ 173,753 $ 171,026 $ 2,727 1.6% $ 1,306 $ 1,291 $ 15 175,059 172,317 2,742 1.6%

Other expenses:

Depreciation and amortization 82,961 86,998 (4,037) (4.6)%

General and administrative 17,900 15,628 2,272 14.5%

Total other expenses 100,861 102,626 (1,765) (1.7)%

Interest and other income

3,992 5,787 (1,795) (31.0)%

Interest expense (137,727) (146,861) 9,134 (6.2)%

Loss on extinguishment of debt

(5,070) — (5,070) n/m

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

(64,607) (71,383) 6,776 (9.5)%

Income tax expense (58) (69) 11 (15.9)%

Equity in earnings of unconsolidated joint venture

3,102 4,071 (969) (23.8)%

Net loss (61,563) (67,381) 5,818 (8.6)%

Net loss attributable to noncontrolling interest 18,721 20,803 (2,082) (10.0)%

Net loss attributable to common shareholders $ (42,842) $ (46,578) $ 3,736 (8.0)%

Weighted average common shares outstanding (basic and diluted) 65,881 65,591 290 0.4%

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

$ (0.65) $ (0.71) $ 0.06 (8.5)%

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(1) Consists of properties that we have owned continuously since January 1, 2024 and excludes one property classified as held for sale as of June 30, 2025.

(2) See our definition of NOI and our reconciliation of net loss to NOI below under the heading “Non-GAAP Financial Measures”.

References to changes in the income and expense categories below relate to the comparison of results for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

Rental income.

Rental income increased primarily due to increases from our net leasing activity and rent resets, partially offset by vacancies at certain of our properties.

Real estate taxes .

Real estate taxes decreased primarily due to a lowered assessed value as a result of a successful real estate tax appeal at one of our Mainland Properties.

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Depreciation and amortization.

The decrease in depreciation and amortization primarily reflects the impact of certain acquired real estate leases fully amortizing since April 1, 2024, partially offset by increased depreciation related to improvements made to certain of our properties since April 1, 2024.

General and administrative.

The increase in general and administrative expenses is primarily due to accrued incentive management fees of $967 recognized during the three months ended March 31, 2025 as a result of our total shareholder return exceeding the returns for the MSCI U.S.

REIT/Industrial REIT Index over the applicable measurement period, partially offset by decreases in professional and legal fees.

Interest income.

The decrease in interest income is primarily due to lower interest rates and average cash balances during the 2025 period as compared to the 2024 period.

The increase in general and administrative expenses is primarily due to an increase in accrued incentive management fees of $2,278 during the six months ended June 30, 2025.

Interest and other income.

The decrease in interest and other income is primarily due to lower interest rates and average cash balances during the 2025 period as compared to the 2024 period.

Interest expense.

The decrease in interest expense is primarily due to decreased amortization of debt issuance and interest rate cap costs related to our floating rate loans.

Loss on extinguishment of debt .

During the six months ended June 30, 2025, we recognized a loss on extinguishment of debt in connection with the repayment of the ILPT Floating Rate Loan.

Income tax expense.

Income tax expense primarily reflects state income taxes payable in certain jurisdictions.

Equity in (losses) earnings of unconsolidated joint venture.

Equity in (losses) earnings of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.

Income tax expense reflects state income taxes payable in certain jurisdictions.

Equity in earnings of unconsolidated joint venture.

Equity in earnings of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.

Non-GAAP Financial Measures (dollars in thousands, except per share data)

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Other real estate companies and REITs may calculate NOI differently than we do.

The following table presents the reconciliation of net loss to NOI for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

The following table presents the reconciliation of net loss to NOI for the three and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

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

Equity in losses (earnings) of unconsolidated joint venture

Equity in earnings of unconsolidated joint venture

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

Income tax expense 30 36 58 69

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

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

(34,508) (35,791) (64,607) (71,383)

Loss on extinguishment of debt

5,070 — 5,070 —

Interest expense 67,914 73,631 137,727 146,861

Interest income

Interest and other income

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

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and (4) certain other adjustments currently not applicable to us.

In calculating Normalized FFO attributable to common shareholders, we adjust for certain nonrecurring items shown below, including adjustments for such items related to the unconsolidated joint venture, if any, and incentive management fees, if any.

FFO attributable to common shareholders and Normalized FFO attributable to common shareholders are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders.

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Other real estate companies and REITs may calculate FFO attributable to common shareholders and Normalized FFO attributable to common shareholders differently than we do.

The following table presents our calculation of FFO attributable to common shareholders and Normalized FFO attributable to common shareholders and reconciliations of net loss attributable to common shareholders to FFO attributable to common shareholders and Normalized FFO attributable to common shareholders for the three months ended March 31, 2025 and 2024:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

2025 2024 2025 2024

Net loss attributable to common shareholders $ (21,310) $ (23,175) $ (42,842) $ (46,578)

Equity in losses (earnings) of unconsolidated joint venture

Equity in earnings of unconsolidated joint venture

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

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Incentive management fees (1)

1,311 — 2,278 —

Loss on extinguishment of debt

5,070 — 5,070 —

Normalized FFO attributable to common shareholders $ 13,808 $ 8,965 $ 27,298 $ 18,415

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Our principal sources of funds to meet our operating and capital obligations, pay our debt service obligations and make distributions to our shareholders are rents from tenants at our properties.

As of March 31, 2025, investment grade rated tenants, subsidiaries of investment grade rated parent entities or our Hawaii land leases represented 76.1% of our annualized rental revenues and only 1.2% of our annualized rental revenues were from leases expiring over the next 12 months.

As of June 30, 2025, investment grade rated tenants, subsidiaries of investment grade rated parent entities or our Hawaii land leases represented 76.2% of our annualized rental revenues and only 2.3% of our annualized rental revenues were from leases expiring over the next 12 months.

We believe that these sources of funds will be sufficient to meet our operating and capital obligations, pay our debt service obligations and make distributions to our shareholders for the next 12 months and for the foreseeable future thereafter.

The following is a summary of our sources and uses of cash flows for the periods presented, as reflected in our condensed consolidated statements of cash flows:

Three Months Ended March 31,

Six Months Ended June 30,

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

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Cash and cash equivalents and restricted cash and cash equivalents at end of period $ 159,065 $ 258,569

The increase in net cash provided by operating activities for the three months ended March 31, 2025 compared to the 2024 period is primarily due to lower cash interest expense, excluding the impact of settlement of our interest rate caps.

The change in net cash used in investing activities for the three months ended March 31, 2025 compared to the 2024 period is primarily due to a decrease in proceeds from settlement of interest rate caps and an increase in real estate improvements, partially offset by reduced interest rate cap purchase costs.

The increase in net cash provided by operating activities for the six months ended June 30, 2025 compared to the 2024 period is primarily due to lower cash interest expense, excluding the impact of settlement of our interest rate caps.

The change in net cash (used in) provided by investing activities for the six months ended June 30, 2025 compared to the 2024 period is primarily due to a decrease in proceeds from settlement of interest rate caps and an increase in real estate improvements, partially offset by reduced interest rate cap purchase costs.

The change in net cash used in financing activities for the six months ended June 30, 2025 compared to the 2024 period is primarily due to the repayment of the ILPT Floating Rate Loan, partially offset by the net proceeds received from our $1,160,000 mortgage loan.

Our Operating Liquidity and Resources

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Our Investing and Financing Liquidity and Resources

As of March 31, 2025, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $107,951.

As of June 30, 2025, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $58,559.

To maintain our qualification for taxation as a REIT under the Internal Revenue Code of 1986, as amended, we generally are required to distribute at least 90% of our REIT taxable income annually, subject to specified adjustments and excluding any net capital gain.

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Such alternatives may include incurring term debt, obtaining financing secured by mortgages on properties we own, issuing new equity or debt securities, obtaining a revolving credit facility, participating or selling equity interests in joint ventures or selling properties.

Further, any issuances of our equity securities may be dilutive to our existing shareholders.

We may also assume mortgage loans or incur debt in connection with future acquisitions, developments and redevelopments.

Although we cannot be sure that we will be successful in completing any particular type of financing, we believe that we will have access to financing, such as debt or equity offerings, to fund capital expenditures, future acquisitions, development, redevelopment and other activities and to pay our obligations.

Real Estate Activities

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

Three Months Ended March 31,

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.

Capital Expenditures

During the three and six months ended June 30, 2025 and 2024, amounts capitalized at 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

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

As of March 31, 2025, committed, but unspent, tenant related obligations based on existing leases were $6,786, all of which are expected to be spent during the next 12 months.

As of June 30, 2025, committed, but unspent, tenant related obligations based on existing leases were $4,819, all of which are expected to be spent during the next 12 months.

Joint Ventures

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

The unconsolidated joint venture made aggregate cash distributions to us of $990 for each of the three months ended March 31, 2025 and 2024.

The unconsolidated joint venture made aggregate cash distributions to us of $990 for each of the three months ended June 30, 2025 and 2024, and $1,980 for each of the six months ended June 30, 2025 and 2024, respectively.

For further information regarding our consolidated joint venture and the unconsolidated joint venture, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

As of March 31, 2025, we had an aggregate principal amount of $4,303,196 of indebtedness, including (1) the ILPT Floating Rate Loan, (2) the Mountain Floating Rate Loan, (3) our $700,000 mortgage loan and (4) our $650,000 mortgage loan, with maturity dates after giving effect to potential exercises of all extension options between 2027 and 2038.

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 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.

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%.

As of June 30, 2025, we had an aggregate principal amount of $4,223,519 of indebtedness, primarily including (1) our $1,160,000 mortgage loan, (2) the Mountain Floating Rate Loan, (3) our $700,000 mortgage loan and (4) our $650,000 mortgage loan, with maturity dates after giving effect to potential exercises of all extension options between 2027 and 2038.

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 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 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.

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.

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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)

6.71% 6.18% 6.71% 6.18%

Mountain Floating Rate Loan (2)

5.87% 5.81% 5.84% 5.95%

(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 and related documents governing the ILPT Floating Rate Loan, the Mountain Floating Rate Loan, our $700,000 mortgage loan and our $650,000 mortgage loan contain customary covenants, provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default and, in the case of the $650,000 mortgage loan, also require us to maintain a minimum consolidated net worth of at least $250,000 and liquidity of at least $15,000.

As of March 31, 2025, we believe that we were in compliance with all of the covenants and other terms under the agreements governing these loans.

The agreements and related documents governing our $1,160,000 mortgage loan, the Mountain Floating Rate Loan, our $700,000 mortgage loan and our $650,000 mortgage loan contain customary covenants, provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default and, in the case of the $650,000 mortgage loan, also require us to maintain a minimum consolidated net worth of at least $250,000 and liquidity of at least $15,000.

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

For further information regarding our indebtedness, see Notes 5 and 6 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Distributions

During the three months ended March 31, 2025, we declared and paid a regular quarterly distribution to common shareholders totaling $661 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.

During the six months ended June 30, 2025, we declared and paid a regular quarterly distribution to common shareholders totaling $1,323 using cash on hand.

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.

Related Person Transactions

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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.

A discussion of our critical accounting estimates is included in our 2024 Annual Report.

1 unchanged sentence

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 2. Management’s Discussion and Analysis