What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-10-28 compared with 2025-07-29 · 104 added, 110 removed, 297 unchanged (42% of the section changed)

3 unchanged sentences

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

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 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.

As of September 30, 2025, our portfolio was comprised of 411 properties containing approximately 59,890,000 rentable square feet located in 39 states with 94.1% occupancy, leased to approximately 300 different tenants, including three properties classified as held for sale.

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

We believe consumer expectations, long-term growth of e-commerce and modernization of and demand for supply chain resiliency will keep demand for industrial properties strong for the foreseeable future.

However, uncertainties surrounding interest rates and inflation globally and in the United States, wars or other global geopolitical hostilities and tensions, the impacts of or changes to tariffs and trade policies and any U.S.

government shutdown, 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.

1 unchanged sentence

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 June 30, 2025 is summarized below (square feet in thousands):

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

% of Weighted

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Total / weighted average 411 59,890 94.1% 100.0% 7.4

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

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

Property Operations

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

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

All Properties Comparable Properties (1)

As of June 30,

as of June 30,

As of September 30,

as of September 30,

2025 2024 2025 2024

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Total rentable square feet 59,890 59,890 59,023 59,023

59,890 59,893 59,308 59,312

Percent leased (2)

94.1 % 94.4 % 94.5 % 94.4 %

(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.

(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.

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

(2) Leased square feet is pursuant to existing leases as of September 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,

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

Three Months Ended September 30,

Nine Months Ended September 30,

2025 2024 2025 2024

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$ 7.91 $ 7.73 $ 7.93 $ 7.71

(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.

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

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

Mainland Properties.

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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

During the three and nine months ended September 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 September 30, 2025

New Leases Renewals Totals

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$ 1.26 $ 0.22 $ 0.54

Six Months Ended June 30, 2025

Nine Months Ended September 30, 2025

New Leases Renewals Totals

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

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:

During the nine months ended September 30, 2025, we completed rent resets for approximately 204,000 square feet of land at our Hawaii Properties at rental rates that were 29.1% higher than prior rental rates.

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

Rental Revenues

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Total $ 22,194

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

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

% of Total Cumulative

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Total 386 56,354 100.0% $ 440,978 100.0%

Weighted average remaining lease term (in years) 6.8 7.6

(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.

Weighted average remaining lease term (years)

(1) Leased square feet is pursuant to existing leases as of September 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 September 30, 2025, FedEx and Amazon leased 22.7% and 8.1% of our total leased square feet, respectively, and represented 28.3% and 6.8% of our total annualized rental revenues, respectively.

As of September 30, 2025, $17,435, or 4.0%, of our annualized rental revenues was included in leases scheduled to expire by September 30, 2026 and 5.9% 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, 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 June 30, 2025 Compared to Three Months Ended June 30, 2024 (dollars and share amounts in thousands, except per share data)

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

Comparable (1)

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Three Months Ended

September 30,

2025 2024 Change Change 2025 2024 Change 2025 2024 Change Change

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General and administrative 10,586 7,237 3,349 46.3%

Loss on impairment of real estate 6,081 — 6,081 n/m

Total other expenses 57,701 50,442 7,259 14.4%

2 unchanged sentences

Interest expense (63,470) (73,936) 10,466 (14.2)%

Loss on extinguishment of debt

(5,070) — (5,070) n/m

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

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Net loss (30,431) (35,407) 4,976 14.1%

Net loss attributable to noncontrolling interest 9,084 10,304 (1,220) (11.8)%

Net loss attributable to noncontrolling interests

8,866 10,417 (1,551) (14.9)%

Net loss attributable to common shareholders $ (21,565) $ (24,990) $ 3,425 13.7%

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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.

(1) Consists of properties that we have owned continuously since July 1, 2024 and excludes three properties classified as held for sale as of September 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 June 30, 2025 compared to the three months ended June 30, 2024.

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

Rental income increased primarily due to increases from our net leasing activity and rent resets.

Real estate taxes .

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

Real estate taxes decreased primarily due to lowered assessed values as a result of successful tax appeals 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.

The decrease in other operating expenses is primarily due to decreases in payroll costs reimbursable to RMR and professional fees, partially offset by increases in electricity expenses at certain of our properties.

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.

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

The increase in general and administrative expenses is primarily due to accrued incentive management fees of $2,438 at September 30, 2025.

Additionally, franchise taxes and legal costs, as well as general and administrative expenses paid in common shares increased during the three months ended September 30, 2025.

Loss on impairment of real estate.

During the 2025 period, we recognized a loss on impairment of real estate of $6,081 to reduce the carrying value of one held for sale property to its fair value less estimated costs to sell.

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.

The decrease in interest and other income is primarily due to lower average cash balances and interest rates 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.

The decrease in interest expense is primarily due to the repayment of the ILPT Floating Rate Loan in June 2025 and the discontinuation of hedge accounting for the related interest rate cap.

As a result, no further amortization of the related interest rate cap was recognized during the 2025 period.

Additionally, amortization of interest rate cap costs of our consolidated joint venture and debt issuance costs decreased during the 2025 period.

Income tax expense.

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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)

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

Comparable (1)

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Properties Results Properties Results Consolidated Properties Results

Six Months Ended Six Months Ended Six Months Ended

Nine Months Ended Nine Months Ended Nine Months Ended

September 30,

2025 2024 Change Change 2025 2024 Change 2025 2024 Change Change

9 unchanged sentences

General and administrative 28,486 22,865 5,621 24.6%

Loss on impairment of real estate 6,081 — 6,081 n/m

Total other expenses 158,562 153,068 5,494 3.6%

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Net loss (91,994) (102,788) 10,794 (10.5)%

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

Net loss attributable to noncontrolling interests

27,587 31,220 (3,633) (11.6)%

Net loss attributable to common shareholders $ (64,407) $ (71,568) $ 7,161 (10.0)%

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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.

(1) Consists of properties that we have owned continuously since January 1, 2024 and excludes three properties classified as held for sale as of September 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.

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

Rental income increased primarily due to increases from our net leasing activity and rent resets, partially offset by a decrease in real estate tax reimbursements and 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.

Real estate taxes decreased primarily due to lowered assessed values as a result of successful tax appeals at certain of our properties.

Other operating expenses .

1 unchanged sentence

Depreciation and amortization.

General and administrative.

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.

The increase in general and administrative expenses is primarily due to accrued incentive management fees of $4,716 for the 2025 period and an increase in legal fees.

Loss on impairment of real estate.

During the 2025 period, we recognized a loss on impairment of real estate of $6,081 to reduce the carrying value of one held for sale property to its fair value less estimated costs to sell.

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.

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

Interest expense.

The decrease in interest expense is primarily due to the repayment of the ILPT Floating Rate Loan in June 2025 and the discontinuation of hedge accounting for the related interest rate cap.

As a result, no further amortization of the related interest rate cap was recognized during the 2025 period.

Additionally, amortization of interest rate cap costs of our consolidated joint venture and debt issuance costs decreased during the 2025 period.

These decreases were partially offset by higher average strike rates on our interest rate cap designated as a cash flow hedge compared to the 2024 period.

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.

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

Income tax expense.

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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 and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Six Months Ended June 30,

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

Three Months Ended Nine Months Ended

September 30,

2025 2024 2025 2024

6 unchanged sentences

Loss on extinguishment of debt

5,070 — 5,070 —

Interest expense 63,470 73,936 201,197 220,797

1 unchanged sentence

(1,585) (3,134) (5,577) (8,921)

Loss on impairment of real estate 6,081 — 6,081 —

General and administrative 10,586 7,237 28,486 22,865

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(2) plus (i) real estate depreciation and amortization and (ii) our proportionate share of FFO from unconsolidated joint venture properties;

(3) minus FFO adjustments attributable to noncontrolling interest;

(3) minus FFO adjustments attributable to noncontrolling interests;

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

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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 and six months ended June 30, 2025 and 2024:

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended Nine Months Ended

September 30,

2025 2024 2025 2024

2 unchanged sentences

(2,236) (1,161) (5,338) (5,232)

Loss on impairment of real estate 6,081 — 6,081 —

Depreciation and amortization 41,034 43,205 123,995 130,203

Share of FFO from unconsolidated joint venture 1,623 1,496 4,603 4,439

FFO adjustments attributable to noncontrolling interest (10,037) (10,417) (20,047) (20,877)

FFO adjustments attributable to noncontrolling interests

(9,990) (10,487) (30,037) (31,364)

FFO attributable to common shareholders 14,947 8,063 34,897 26,478

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Loss on extinguishment of debt

5,070 — 5,070 —

Normalized FFO attributable to common shareholders $ 17,385 $ 8,063 $ 44,683 $ 26,478

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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 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.

As of September 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 4.0% 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:

Six Months Ended June 30,

Nine Months Ended September 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 $ 177,704 $ 264,931

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.

The increase in net cash from operating activities for the nine months ended September 30, 2025 compared to the 2024 period is primarily due to lower interest expense, excluding the impact of settlement of our interest rate caps, and higher cash flows and reimbursements from our properties.

The decrease in net cash from investing activities for the nine months ended September 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 decrease in net cash from financing activities for the nine months ended September 30, 2025 compared to the 2024 period is primarily due to the repayment of the ILPT Floating Rate Loan and increases in debt issuance costs and distributions to common shareholders, 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 June 30, 2025, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $58,559.

As of September 30, 2025, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $83,173.

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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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.

As of October 28, 2025, we had two properties under agreements or letters of intent to sell for an aggregate sales price of $51,650, excluding closing costs.

We may not complete the sales of any or all of the properties we currently plan to sell.

Also, we may sell some or all of these properties at amounts that are less than currently expected and/or less than the carrying values of such properties and we may incur losses on any such sales as a result.

For further information regarding our held for sale properties and disposition activities, see Note 3 to our condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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

$ 5,151 $ 2,832 $ 9,110 $ 6,205

(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.

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.

As of September 30, 2025, committed, but unspent, tenant related obligations based on existing leases were $4,988, all of which are expected to be spent during the next 12 months.

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

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 June 30, 2025 and 2024, and $1,980 for each of the six months ended June 30, 2025 and 2024, respectively.

The unconsolidated joint venture made aggregate cash distributions to us of $990 for each of the three months ended September 30, 2025 and 2024, and $2,970 for each of the nine months ended September 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 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.

As of September 30, 2025, we had an aggregate principal amount of $4,218,799 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.

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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.

During the nine months ended September 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%.

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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 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 weighted average interest rates under the Mountain Floating Rate Loan were 5.87% and 5.85% for three and nine months ended September 30, 2025, respectively, including the impact of our interest rate caps.

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.

As of September 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 and historical weighted average interest rates under our floating rate loans, 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 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.

During the nine months ended September 30, 2025, we declared and paid regular quarterly distributions to common shareholders totaling $4,640 using cash on hand.

On October 9, 2025, we declared a regular quarterly distribution to common shareholders of record on October 27, 2025 of $0.05 per share, or approximately $3,333.

We expect to pay this distribution on or about November 13, 2025 using cash on hand.

Related Person Transactions

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What changed 10-Q

Item 2. Management’s Discussion and Analysis