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Item 7. Management’s Discussion and Analysis

2026-02-18 compared with 2025-02-19 · 92 added, 105 removed, 261 unchanged (43% of the section changed)

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We are a REIT organized under Maryland law.

As of December 31, 2024, our portfolio was comprised of 411 properties containing approximately 59,890,000 rentable square feet located in 39 states with 94.4% occupancy leased to over 300 different tenants.

As of December 31, 2025, our portfolio was comprised of 409 properties containing approximately 59,604,000 rentable square feet located in 39 states with 94.5% occupancy leased to approximately 300 different tenants.

As of December 31, 2025, we also owned a 22% equity interest in the unconsolidated joint venture.

We believe customer service 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, and global geopolitical hostilities and tensions, have given rise to economic uncertainty and have caused disruptions in the financial markets.

These conditions have increased our cost of capital and negatively impacted our ability to reduce leverage, and 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.

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.

This continued demand has contributed to favorable market conditions, resulting in positive mark-to-market rents on our lease renewals and new leases.

During 2025, there were uncertainties in global and U.S.

economic conditions driven by fluctuations in interest rates and inflation, wars and other geopolitical hostilities and tensions, changes in trade policies and tariffs and a U.S.

government shutdown, all of which have impacted financial markets and supply chains.

While these factors did not have a significant adverse impact on our operations, if continued, they could adversely affect our financial condition primarily through our tenants’ financial stability, including their ability or willingness to renew leases or satisfy lease obligations.

Most of our leases require our tenants to be responsible for certain operating expenses, including real estate taxes, insurance and common area maintenance, thereby reducing our exposure to increases in operating expenses resulting from inflation or other factors.

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

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ILPT 100% 88 33 states 21,833 95.7% 34.5% 5.7

22,119 96.3% 34.0% 5.1

Hawaii Properties ILPT 100% 226 Hawaii

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

All Properties Comparable Properties

As of December 31,

as of December 31, (1)

2025 2024 2025 2024

Total properties 409 411 409 409

Total rentable square feet 59,604 59,890 59,604 59,604

59,890 59,951

Percent leased (2)

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$ 7.96 $ 7.71 $ 7.95 $ 7.73

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

(1) Consists of properties that we have owned continuously since January 1, 2024.

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

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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.

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

During the year ended December 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):

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Total $ 22,194

As of December 31, 2024, our lease expirations by year were as follows (square feet in thousands):

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

Annualized % of Total

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Total 385 56,298 100.0 % $ 446,918 100.0 %

Weighted average remaining lease term (in years) 7.0 7.8

Weighted average remaining lease term (years)

(1) Leased square feet is pursuant to existing leases as of December 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 December 31, 2024, subsidiaries of FedEx and Amazon leased 22.6% and 8.0% of our total leased square feet, respectively, and represented 29.1% and 6.8% of our total annualized rental revenues, respectively.

As of December 31, 2024, $15,005, or 3.4%, of our annualized rental revenues are included in leases scheduled to expire by December 31, 2025 and 5.6% of our rentable square feet are currently vacant.

As of December 31, 2025, FedEx and Amazon leased 22.7% and 8.1% of our total leased square feet, respectively, and represented 27.9% and 7.3% of our total annualized rental revenues, respectively.

As of December 31, 2025, $16,800, or 3.8%, of our annualized rental revenues are included in leases scheduled to expire by December 31, 2026 and 5.5% of our rentable square feet were 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.

Disposition Activities

In 2023, we received gross proceeds of $25,460, excluding closing costs, and recognized a net gain on sale of real estate of $1,710 as a result of the sale of two properties and a portion of a land parcel.

For further information regarding our disposition activities, see elsewhere in this Annual Report on Form 10-K, including “Business—Our Company”, “Business—Our Investment Policies” and “Business—Our Disposition Policies” included in Part I, Item 1 of this Annual Report on Form 10-K, “Liquidity and Capital Resources—Our Investing and Financing Liquidity and Resources” below and Note 3 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

RESULTS OF OPERATIONS

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024 (dollars and share amounts in thousands, except per share data)

Comparable (1)

Non-Comparable

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Properties Results

Consolidated Results

Year Ended December 31, (1)

Year Ended December 31, (2)

Year Ended December 31,

Consolidated Properties Results

Year Ended December 31, Year Ended December 31, Year Ended December 31,

2025 2024 Change Change 2025 2024 Change 2025 2024 Change Change

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Total operating expenses 98,242 100,598 (2,356) (2.3) % 493 512 (19) 98,735 101,110 (2,375) (2.3) %

Net operating income (2)

$ 349,681 $ 340,886 $ 8,795 2.6 % $ 432 $ 326 $ 106 350,113 341,212 8,901 2.6 %

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General and administrative 36,961 30,454 6,507 21.4 %

Acquisition and other transaction related costs — 287 (287) (100.0) %

Loss on impairment of real estate — 156 (156) (100.0) %

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

Total other expenses 208,269 202,441 5,828 2.9 %

Interest income

Interest and other income

6,716 11,427 (4,711) (41.2) %

Interest expense (264,559) (292,536) 27,977 (9.6) %

Gain on sale of real estate — 1,710 (1,710) (100.0) %

Loss on early extinguishment of debt — (359) 359 (100.0) %

Loss on sale of real estate (1,376) — (1,376) n/m

Loss on extinguishment of debt

(5,070) — (5,070) n/m

Loss before income taxes and equity in earnings of unconsolidated joint venture (122,445) (142,338) 19,893 (14.0) %

Income tax expense (104) (162) 58 (35.8) %

Equity in earnings of unconsolidated joint venture 5,332 902 4,430 n/m

Equity in earnings of unconsolidated joint venture 19,981 5,332 14,649 274.7 %

Net loss (102,568) (137,168) 34,600 (25.2) %

Net loss attributable to noncontrolling interest 41,499 41,730 (231) (0.6) %

Net loss attributable to noncontrolling interests

36,381 41,499 (5,118) (12.3) %

Net loss attributable to common shareholders $ (66,187) $ (95,669) $ 29,482 (30.8) %

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n/m - not meaningful

(1) Consists of properties that we owned continuously since January 1, 2023.

(2) Consists of two properties we disposed since January 1, 2023.

(1) Consists of properties that we have owned continuously since January 1, 2024.

(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".

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Rental income.

Rental income increased primarily due to our leasing activity and an increase in tenant reimbursement income driven by higher real estate taxes at certain of our properties in 2024.

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 increased primarily due to higher assessed values at certain of our properties and the expiration of a payment in lieu of taxes program at one of our Mainland Properties, partially offset by an abatement at one of our Mainland Properties in 2023.

Real estate taxes decreased primarily due to reimbursements received from the prior year during 2025 and lowered assessed values as a result of successful tax appeals at certain of our properties, partially offset by higher tax rates at certain of our properties.

Other operating expenses .

Other operating expenses increased primarily due to increases in insurance and utility costs at certain of our properties, partially offset by decreased expense reimbursements to RMR as compared to 2023.

The decrease in other operating expenses is primarily due to decreases in insurance expenses and professional fees, partially offset by increases in snow removal and electricity expenses at certain of our properties.

Depreciation and amortization.

The decrease in depreciation and amortization reflects the impact of certain acquired real estate leases fully amortizing in 2024, partially offset by increased depreciation and amortization related to improvements and lease renewals at certain of our properties as compared to 2023.

The decrease in depreciation and amortization primarily reflects the impact of certain acquired real estate leases fully amortizing in 2024, partially offset by increased depreciation related to improvements made to certain of our properties during 2025.

General and administrative.

The decrease in general and administrative expenses is primarily due to refunds of franchise and transfer taxes and professional fees, partially offset by increases in our trustee share awards and in our business management fees during 2024.

Acquisition and other transaction related costs.

During 2023, our consolidated joint venture incurred costs related to a committed MNR property acquisition which was later terminated.

We also incurred costs related to a property that was classified as held for sale and subsequently reclassified to held and used during 2023.

The increase in general and administrative expenses is primarily due to an incentive management fee of $5,679 incurred for 2025, refunds of franchise and transfer taxes during 2024 and an increase in legal fees during 2025.

Loss on impairment of real estate.

During 2023, we recognized a loss on impairment of real estate on one property that was classified as held for sale.

Interest income.

The increase in interest income is primarily due to higher average cash balances during 2024, as compared to 2023.

During 2025, we recognized a loss on impairment of real estate 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 average cash balances and interest rates during 2025 as compared to 2024.

Interest expense.

The increase in interest expense is primarily due to increased amortization related to the cost of the interest rate cap purchased by our consolidated joint venture in 2024 and refinancing activities by our consolidated joint venture in 2023, partially offset by decreased interest costs and amortization of debt issuance costs related to our and our consolidated joint venture’s floating rate loans.

Gain on sale of real estate.

During 2023, we recognized a gain on sale of real estate of $2,684 as a result of the sale of two properties in Asheville, NC and Mesquite, TX, partially offset by a loss on sale of real estate of $974 as a result of the sale of a portion of a land parcel in Everett, WA.

Loss on early extinguishment of debt.

Loss on early extinguishment of debt relates to prepayment penalties incurred by our consolidated joint venture related to refinancing activities in 2023.

The decrease in interest expense is primarily due to the repayment of our then $1,235,000 loan, or 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 2025.

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

Loss on sale of real estate.

During 2025, we recognized a net loss on sale of real estate as a result of the sale of two properties in Monaca, PA and Augusta, GA.

Loss on extinguishment of debt.

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

The increase in 2025 was primarily due to an increase in the fair value of the underlying real estate owned by the unconsolidated joint venture.

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

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Loss before income taxes and equity in earnings of unconsolidated joint venture (122,445) (142,338)

Loss on early extinguishment of debt — 359

Gain on sale of real estate — (1,710)

Loss on extinguishment of debt

Loss on sale of real estate 1,376 —

Interest expense 264,559 292,536

Interest income

Interest and other income

(6,716) (11,427)

Loss on impairment of real estate 6,081 —

Acquisition and other transaction related costs

General and administrative 36,961 30,454

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FFO attributable to common shareholders is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is:

(1) net loss attributable to common shareholders calculated in accordance with GAAP, excluding (i) any recovery or loss on impairment of real estate, (ii) any gain or loss on sale of real estate and (iii) equity in earnings of unconsolidated joint venture;

(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.

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.

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.

Other factors include, but are not limited to, requirements to maintain our qualification for taxation as a REIT, the then current and expected needs for and availability of cash to pay our obligations and fund our investments, limitations in the agreements governing our debt, the availability to us of debt and equity capital, our dividend yield and our dividend yield compared to the dividend yields of other REITs and our expectation of future capital requirements and operating performance.

Other factors include, but are not limited to, requirements to maintain our qualification for taxation as a REIT, the then current and expected needs for and availability of cash to pay our obligations and fund our investments, limitations in our debt agreements, the availability to us of debt and equity capital, our dividend yield and our dividend yield compared to the dividend yields of other REITs and our expectation of future capital requirements and operating performance.

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

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Equity in earnings of unconsolidated joint venture (19,981) (5,332)

Gain on sale of real estate — (1,710)

Loss on impairment of real estate 6,081 —

Loss on sale of real estate 1,376 —

Depreciation and amortization 165,227 171,987

Share of FFO from unconsolidated joint venture 6,314 5,879

FFO adjustments attributable to noncontrolling interest (41,510) (43,031)

FFO adjustments attributable to noncontrolling interests

(40,018) (41,510)

FFO attributable to common shareholders 52,812 35,355

Loss on early extinguishment of debt — 359

Acquisition and other transaction related costs

Normalized FFO adjustments attributable to noncontrolling interest — (140)

Incentive management fees 5,679 —

Loss on extinguishment of debt

Normalized FFO attributable to common shareholders $ 63,561 $ 35,355

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Financing activities (124,080) (21,626)

(3,243) 104,943

Total (59,449) (3,243)

Cash and cash equivalents and restricted cash and cash equivalents at end of period

$ 183,031 $ 242,480

The decrease in net cash provided by operating activities for the year ended December 31, 2024 compared to 2023 is primarily due to the timing of payables in 2024, partially offset by higher cash flows from our properties.

The decrease in net cash provided by investing activities for the year ended December 31, 2024 compared to 2023 is primarily due to costs associated with the purchase of interest rate caps for an aggregate of $43,150 in 2024 and proceeds from sales of real estate and distributions from the unconsolidated joint venture in 2023, partially offset by a reduction in real estate improvements and increased proceeds from the settlement of our interest rate caps in 2024.

The change in net cash used in financing activities for the year ended December 31, 2024 compared to net cash provided by financing activities for 2023 was primarily due to our consolidated joint venture’s refinancing activities related to certain of its mortgage notes payable in 2023.

The increase in net cash from operating activities for the year ended December 31, 2025 compared to 2024 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 year ended December 31, 2025 compared to 2024 is primarily due to a decrease in proceeds from the settlement of interest rate caps and an increase in real estate improvements, partially offset by reduced interest rate cap purchase costs and the sale of two unencumbered vacant properties during 2025.

The increase in net cash used in financing activities for the year ended December 31, 2025 compared to 2024 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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• maintain the occupancy of, and maintain or increase the rental rates at, our properties;

• control our operating cost increases, including interest and other financing costs.

• control operating cost increases, including interest and other financing costs.

Our Investing and Financing Liquidity and Resources

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This distribution requirement limits our ability to retain earnings and thereby provide capital for our operations or acquisitions.

We may use our cash and cash equivalents on hand, the cash flow from our operations, net proceeds from any sales of assets and net proceeds of offerings of equity or debt securities to fund our distributions to our shareholders.

When our debt approaches maturity or we desire to reduce our leverage or refinance debt, we intend to explore refinancing alternatives, property sales or sales of equity interests in joint ventures.

We may use our cash and cash equivalents on hand, the cash flow from our operations, net proceeds from any sales of assets and net proceeds of any offerings of equity or debt securities to fund our distributions to our shareholders.

As our debt approaches maturity or we desire to reduce our leverage or refinance debt, we may explore refinancing alternatives, property sales or sales of equity interests in joint ventures.

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.

We expect to fund any future property acquisitions, developments and redevelopments with proceeds we may receive in connection with any additional properties we may sell to our joint ventures, equity contributions from any third party investors in our joint ventures or any future joint ventures, net proceeds from offerings of equity or debt securities and cash on hand.

Real Estate Activities

In 2023, we received gross proceeds of $25,460, excluding closing costs of $1,160, and recognized a net gain on sale of real estate of $1,710 as a result of the sale of two properties and a portion of a land parcel.

During the years ended December 31, 2024 and 2023, amounts capitalized at our properties for tenant improvements, leasing costs, building improvements and development, redevelopment and other activities were as follows:

Year Ended December 31,

Tenant improvements (1)

$ 1,935 $ 3,316

Leasing costs (1)

Building improvements (2)

Development, redevelopment and other activities (3)

$ 17,199 $ 23,263

(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.

(3) Includes capital expenditure projects that reposition a property or result in new sources of revenues.

As of December 31, 2024, committed, but unspent, tenant related obligations based on existing leases were $3,910, all of which are expected to be spent during the next 12 months.

For further information regarding real estate activities, see Note 3 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Disposition Activities

In 2025, we received gross proceeds of $3,900, excluding closing costs, and recognized a net loss on sale of real estate of $1,376 as a result of the sale of two unencumbered vacant properties.

For further information regarding our disposition activities, see Note 3 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Capital Expenditures

As of December 31, 2025, committed, but unspent, tenant related obligations based on existing leases were $7,578, of which $5,933 is expected to be spent during the next 12 months.

For further information regarding our capital expenditures, see Note 3 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

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 $3,960 and $9,900 for the years ended December 31, 2024 and 2023, respectively.

The unconsolidated joint venture made aggregate cash distributions to us of $3,960 for each of the years ended December 31, 2025 and 2024.

For further information regarding these joint ventures, see Note 3 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

As of December 31, 2024, we had an aggregate principal amount of $4,307,829 of indebtedness, including (1) our $1,235,000 loan, or the ILPT Floating Rate Loan, (2) our consolidated joint venture’s $1,400,000 loan, or 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 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.

The Mountain Floating Rate Loan is secured by 82 properties, matures in March 2025, subject to two remaining one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.77%.

In March 2024, our consolidated joint venture exercised the first of its three, one year extension options for the maturity date of this loan.

As of December 31, 2025, we had an aggregate principal amount of $4,214,036 of indebtedness, primarily including:

(1) our $1,160,000 mortgage loan;

(2) our consolidated joint venture’s $1,400,000 loan, or 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 secured overnight financing rate, or SOFR, plus a weighted average premium of 3.93%.

During year ended December 31, 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.

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

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

In February 2025, our consolidated joint venture provided notice to exercise the second extension option for the maturity of the Mountain Floating Rate Loan and in connection therewith purchased a one year interest rate cap for $15,010 with a SOFR strike rate equal to 3.10%.

The weighted average interest rates under our floating rate loans for the years ended December 31, 2024 and 2023 were as follow:

Year Ended December 31,

ILPT Floating Rate Loan (1)

Mountain Floating Rate Loan (2)

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

(2) Reflects the impact of interest rate caps with a current SOFR strike rate equal to 3.04%, which replaced the previous strike rate equal to 3.40% in March 2024.

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

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

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

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

The agreements 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.

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 the Mountain Floating Rate Loan were 5.85% and 5.88% for the years ended December 31, 2025 and 2024, respectively.

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 December 31, 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 interest rate caps, see Notes 5 and 11 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

For further information regarding our indebtedness and historical weighted average interest rates under our floating rate loans, see Notes 5 and 11 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Distributions

During the year ended December 31, 2024, we paid quarterly cash distributions to our shareholders totaling $2,638 using cash on hand.

On January 16, 2025, we declared a regular quarterly distribution to common shareholders of record on January 27, 2025 of $0.01 per share, or approximately $661, and we expect to pay this distribution on or about February 20, 2025 using cash on hand.

During the year ended December 31, 2025, we paid regular quarterly distributions to common shareholders totaling $7,973 using cash on hand.

On January 15, 2026, we declared a regular quarterly distribution to common shareholders of record on January 26, 2026 of $0.05 per share, or approximately $3,333.

We expect to pay this distribution on or about February 19, 2026 using cash on hand.

Related Person Transactions

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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-K

Item 7. Management’s Discussion and Analysis