Industrial Logistics Properties Trust 10-Q

Item 1. Financial Statements INDUSTRIAL LOGISTICS PROPERTIES TRUST CONDENSED CONSOLIDATED BALANCE SHEETS (dollars in thousands, except per share data) (unaudited) March 31, December 31, 2026 2025 ASSETS Real estate properties: Land $ 1,112,238 $ 1,112,238 Buildings and improvements 4,069,337 4,067,721 Total real estate properties, gross 5,181,575 5,179,959 Accumulated depreciation ( 680,299 ) ( 648,310 ) Total real estate properties, net 4,501,276 4,531,649 Investment in unconsolidated joint venture 134,436 132,753 Acquired real estate leases, net 156,134 164,186 Cash and cash equivalents 99,500 94,812 Restricted cash and cash equivalents 86,290 88,219 Rents receivable, including straight line rents of $ 116,864 and $ 114,199 , respectively 137,585 136,669 Other assets, net 51,543 41,656 Total assets $ 5,166,764 $ 5,189,944 LIABILITIES AND EQUITY Mortgage notes payable, net $ 4,189,431 $ 4,193,194 Accounts payable and other liabilities 76,255 74,571 Assumed real estate lease obligations, net 10,992 11,679 Due to related persons 6,395 9,802 Total liabilities 4,283,073 4,289,246 Commitments and contingencies Equity: Equity attributable to common shareholders: Common shares of beneficial interest, $ .01 par value: 100,000,000 shares authorized; 66,666,050 and 66,653,129 shares issued and outstanding, respectively 667 667 Additional paid in capital 1,019,334 1,018,985 Cumulative net deficit ( 162,087 ) ( 152,660 ) Cumulative other comprehensive gain (loss) 1,596 ( 836 ) Cumulative common distributions ( 379,792 ) ( 376,459 ) Total equity attributable to common shareholders 479,718 489,697 Noncontrolling interests 403,973 411,001 Total equity 883,691 900,698 Total liabilities and equity $ 5,166,764 $ 5,189,944 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (amounts in thousands, except per share data) (unaudited) Three Months Ended March 31, 2026 2025 Rental income $ 116,419 $ 111,905 Expenses: Real estate taxes 16,014 14,154 Other operating expenses 10,098 10,249 Depreciation and amortization 40,801 41,518 General and administrative 9,464 8,238 Total expenses 76,377 74,159 Interest income 1,044 1,968 Interest expense ( 61,702 ) ( 69,813 ) Loss before income taxes and equity in earnings (losses) of unconsolidated joint venture ( 20,616 ) ( 30,099 ) Income tax expense ( 114 ) ( 28 ) Equity in earnings (losses) of unconsolidated joint venture 2,871 ( 1,042 ) Net loss ( 17,859 ) ( 31,169 ) Net loss attributable to noncontrolling interests 8,432 9,637 Net loss attributable to common shareholders ( 9,427 ) ( 21,532 ) Other comprehensive income (loss): Unrealized gain (loss) on derivatives 3,986 ( 802 ) Less: unrealized (gain) loss on derivatives attributable to noncontrolling interests ( 1,554 ) 256 Other comprehensive income (loss) attributable to common shareholders 2,432 ( 546 ) Comprehensive loss attributable to common shareholders $ ( 6,995 ) $ ( 22,078 ) Weighted average common shares outstanding (basic and diluted) 66,178 65,834 Net loss per share attributable to common shareholders (basic and diluted) $ ( 0.14 ) $ ( 0.33 ) The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY (dollars in thousands) (unaudited) Cumulative Total Equity Number of Additional Other Cumulative Attributable to Common Common Paid In Cumulative Comprehensive Common Common Noncontrolling Total Shares Shares Capital Net Deficit Gain (Loss) Distributions Shareholders Interests Equity Balance at December 31, 2025 66,653,129 $ 667 $ 1,018,985 $ ( 152,660 ) $ ( 836 ) $ ( 376,459 ) $ 489,697 $ 411,001 $ 900,698 Net loss — — — ( 9,427 ) — — ( 9,427 ) ( 8,432 ) ( 17,859 ) Share grants, repurchases and forfeitures 12,921 — 349 — — — 349 — 349 Distributions to common shareholders — — — — — ( 3,333 ) ( 3,333 ) — ( 3,333 ) Other comprehensive gain — — — — 2,432 — 2,432 1,554 3,986 Distributions to noncontrolling interests — — — — — — — ( 150 ) ( 150 ) Balance at March 31, 2026 66,666,050 $ 667 $ 1,019,334 $ ( 162,087 ) $ 1,596 $ ( 379,792 ) $ 479,718 $ 403,973 $ 883,691 Balance at December 31, 2024 66,144,308 $ 661 $ 1,017,382 $ ( 86,473 ) $ ( 1,065 ) $ ( 368,486 ) $ 562,019 $ 447,311 $ 1,009,330 Net loss — — — ( 21,532 ) — — ( 21,532 ) ( 9,637 ) ( 31,169 ) Share grants, repurchases and forfeitures ( 604 ) — 245 — — — 245 — 245 Distributions to common shareholders — — — — — ( 661 ) ( 661 ) — ( 661 ) Other comprehensive loss — — — — ( 546 ) — ( 546 ) ( 256 ) ( 802 ) Distributions to noncontrolling interests — — — — — — — ( 30 ) ( 30 ) Balance at March 31, 2025 66,143,704 $ 661 $ 1,017,627 $ ( 108,005 ) $ ( 1,611 ) $ ( 369,147 ) $ 539,525 $ 437,388 $ 976,913 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (dollars in thousands) (unaudited) Three Months Ended March 31, 2026 2025 CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ ( 17,859 ) $ ( 31,169 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 31,989 31,858 Amortization of interest rate caps 3,241 10,211 Net amortization of debt issuance costs, premiums and discounts 1,176 376 Amortization of acquired real estate leases and assumed real estate lease obligations 7,365 8,222 Amortization of deferred leasing costs 1,115 1,003 Straight line rental income ( 2,665 ) ( 3,287 ) Proceeds from settlement of interest rate caps ( 2,117 ) ( 9,674 ) General and administrative expenses paid in common shares 365 247 Distributions of earnings from unconsolidated joint venture 1,188 990 Equity in (earnings) losses of unconsolidated joint venture ( 2,871 ) 1,042 Change in assets and liabilities: Rents receivable 1,749 985 Other assets ( 6,537 ) — Accounts payable and other liabilities 3,160 159 Due to related persons ( 3,407 ) 408 Net cash provided by operating activities 15,892 11,371 CASH FLOWS FROM INVESTING ACTIVITIES: Real estate improvements ( 3,092 ) ( 6,353 ) Purchase of interest rate cap ( 3,720 ) ( 15,010 ) Proceeds from settlement of interest rate caps 2,117 9,674 Net cash used in investing activities ( 4,695 ) ( 11,689 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of mortgage notes payable ( 4,807 ) ( 4,633 ) Payment of debt issuance costs ( 132 ) ( 134 ) Distributions to common shareholders ( 3,333 ) ( 661 ) Repurchase of common shares ( 16 ) ( 2 ) Distributions to noncontrolling interests ( 150 ) ( 30 ) Net cash used in financing activities ( 8,438 ) ( 5,460 ) Increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents 2,759 ( 5,778 ) Cash and cash equivalents and restricted cash and cash equivalents at beginning of period 183,031 242,480 Cash and cash equivalents and restricted cash and cash equivalents at end of period $ 185,790 $ 236,702 SUPPLEMENTAL DISCLOSURES: Interest paid $ 57,174 $ 59,523 Income taxes paid $ — $ — NON-CASH INVESTING ACTIVITIES: Real estate improvements accrued not paid $ 268 $ 849 6 Table of Contents SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH AND CASH EQUIVALENTS: The following table provides a reconciliation of cash and cash equivalents and restricted cash and cash equivalents reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows: As of March 31, 2026 2025 Cash and cash equivalents $ 99,500 $ 107,951 Restricted cash and cash equivalents (1) 86,290 128,751 Total cash and cash equivalents and restricted cash $ 185,790 $ 236,702 (1) Restricted cash and cash equivalents consist of cash held for the operations of our consolidated joint venture and amounts escrowed as required by the agreements governing certain of our mortgage debt. The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 7 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) Note 1. Basis of Presentation The accompanying condensed consolidated financial statements of Industrial Logistics Properties Trust and its consolidated subsidiaries, or the Company, or ILPT, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2025, or our 2025 Annual Report. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year. The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. 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 assumptions used in the evaluation of impairment of real estate and related intangibles. Note 2. Recent Accounting Pronouncements In November 2024, the Financial Accounting Standards Board issued Accounting Standards Update, or ASU, 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statements Expenses , which requires public entities to disclose specific expense categories such as employee compensation, depreciation and intangible asset amortization. These details must be presented in a tabular format in the notes to condensed consolidated financial statements for both interim and annual reporting periods. ASU 2024-03 is required to be applied prospectively but can be applied retrospectively, and is effective for the first annual reporting periods beginning after December 15, 2026, and interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted. We are currently evaluating the impact that ASU 2024-03 will have on our condensed consolidated financial statements. Note 3. Real Estate Investments As of March 31, 2026, our portfolio was comprised of 409 properties containing approximately 59,604,000 rentable square feet located in 39 states, including 226 buildings, leasable land parcels and easements containing approximately 16,729,000 rentable square feet that were primarily industrial lands located on the island of Oahu, Hawaii, or our Hawaii Properties, and 183 properties containing approximately 42,875,000 rentable square feet that were industrial and logistics properties located in 38 other states, or our Mainland Properties, as well as 94 properties in 27 states totaling approximately 20,978,000 rentable square feet, owned by Mountain Industrial REIT LLC, or our consolidated joint venture, or Mountain JV, in which we own a 61 % equity interest. As of March 31, 2026, we also owned a 22 % equity interest in The Industrial Fund REIT LLC, or the unconsolidated joint venture. 8 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) Capital Expenditures During the three months ended March 31, 2026 and 2025, amounts capitalized at certain of our properties for tenant improvements, leasing costs and building improvements were as follows: Three Months Ended March 31, 2026 2025 Tenant improvements (1) $ 162 $ 3 Leasing costs (1) 902 3,222 Building improvements (2) 1,454 734 Total capital expenditures $ 2,518 $ 3,959 (1) Includes capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space and leasing related costs, such as brokerage commissions and tenant inducements. (2) Includes expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets. During the three months ended March 31, 2026 and 2025, net loss attributable to noncontrolling interests in our condensed consolidated financial statements was as follows: Three Months Ended March 31, 2026 2025 Consolidated joint venture $ 8,475 $ 9,672 Tenancy in common ( 43 ) ( 35 ) Total net loss attributable to noncontrolling interests $ 8,432 $ 9,637 Consolidated Joint Venture We own a 61 % equity interest in our consolidated joint venture. We control this consolidated joint venture and therefore account for the properties owned by this joint venture on a consolidated basis in our condensed consolidated financial statements. Consolidated Tenancy in Common An unrelated third party owns an approximate 33 % tenancy in common interest in one property located in Somerset, New Jersey with approximately 64,000 rentable square feet, and we own the remaining approximate 67 % tenancy in common interest in this property. The tenancy in common made cash distributions to the unrelated third party investor of $ 150 and $ 30 during three months ended March 31, 2026 and 2025, respectively. Unconsolidated Joint Venture We own a 22 % equity interest in the unconsolidated joint venture, which owns 18 industrial properties located in 12 states totaling approximately 11,726,000 rentable square feet. We account for the unconsolidated joint venture using the equity method of accounting under the fair value option. We recognize changes in the fair value of our investment in the unconsolidated joint venture as equity in earnings (losses) of unconsolidated joint venture in our condensed consolidated financial statements. 9 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) Note 4. Leases We are a lessor of industrial and logistics properties. Our leases provide our tenants with the contractual right to use and economically benefit from the physical space specified in their respective leases and are generally classified as operating leases. Our leases provide for base rent payments and may also include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $ 22,284 and $ 19,857 for the three months ended March 31, 2026 and 2025, respectively. Generally, payments of ground lease obligations are made by our tenants. However, if a tenant does not pay obligations under a ground lease or does not renew a ground lease, we may have to pay obligations under the ground lease in order to protect our investment in the affected property. Right of Use Assets and Lease Liabilities We are the lessee for three of our properties subject to ground leases and one office lease. For leases with a term greater than 12 months under which we are the lessee, we recognize right of use assets and lease liabilities. The values of our right of use assets and related lease liabilities were $ 3,606 and $ 3,700 , respectively, as of March 31, 2026, and $ 3,726 and $ 3,821 , respectively, as of December 31, 2025. Our right of use assets and related lease liabilities are included in other assets, net and accounts payable and other liabilities, respectively, in our condensed consolidated balance sheets. Geographic Concentration We define annualized rental revenues as the annualized contractual base rents from our tenants pursuant to our lease agreements as of the measurement date, including straight line rent adjustments and estimated recurring expense reimbursements to be paid to us, and excluding amortization of deferred leasing costs. Our Hawaii Properties represented 28.0 % and 27.7 % of our annualized rental revenues as of March 31, 2026 and 2025, respectively. Tenant Concentration FedEx Corporation and its subsidiaries, or FedEx, and Amazon.com Services, Inc. and its subsidiaries, or Amazon, represented 27.7 % and 7.6 % of our annualized rental revenues as of March 31, 2026, respectively, and 28.7 % and 6.7 % as of March 31, 2025, respectively. 10 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) Note 5. Indebtedness Our outstanding indebtedness as of March 31, 2026 and December 31, 2025 is summarized below: Number of Properties Principal Interest Carrying Value Entity Secured By Balance Rate (1) Type Maturity of Collateral As of March 31, 2026 ILPT 186 $ 650,000 4.31 % Fixed 02/07/2029 $ 490,710 ILPT 101 1,160,000 6.40 % Fixed 07/09/2030 968,750 ILPT 17 700,000 4.42 % Fixed 03/09/2032 477,624 Mountain JV (2) 82 1,400,000 6.06 % Floating 03/09/2027 1,735,253 Mountain JV 4 91,000 6.25 % Fixed 06/10/2030 172,627 Mountain JV (2) 1 8,248 3.67 % Fixed 05/01/2031 28,320 Mountain JV (2) 1 9,960 4.14 % Fixed 07/01/2032 40,658 Mountain JV (2) 1 23,032 4.02 % Fixed 10/01/2033 79,506 Mountain JV (2) 1 32,318 4.13 % Fixed 11/01/2033 125,723 Mountain JV (2) 1 20,311 3.10 % Fixed 06/01/2035 43,538 Mountain JV (2) 1 33,094 2.95 % Fixed 01/01/2036 92,836 Mountain JV (2) 1 38,399 4.27 % Fixed 11/01/2037 103,672 Mountain JV (2) 1 42,867 3.25 % Fixed 01/01/2038 106,433 Total / weighted average 4,209,229 5.50 % $ 4,465,650 Unamortized debt issuance costs ( 19,798 ) Total indebtedness, net $ 4,189,431 As of December 31, 2025 ILPT 186 $ 650,000 4.31 % Fixed 02/07/2029 $ 489,987 ILPT 101 1,160,000 6.40 % Fixed 07/09/2030 976,178 ILPT 17 700,000 4.42 % Fixed 03/09/2032 481,374 Mountain JV 82 1,400,000 5.87 % Floating 03/09/2026 1,749,546 Mountain JV 4 91,000 6.25 % Fixed 06/10/2030 173,992 Mountain JV 1 8,609 3.67 % Fixed 05/01/2031 28,492 Mountain JV 1 10,302 4.14 % Fixed 07/01/2032 40,975 Mountain JV 1 23,678 4.02 % Fixed 10/01/2033 80,094 Mountain JV 1 33,209 4.13 % Fixed 11/01/2033 126,170 Mountain JV 1 20,784 3.10 % Fixed 06/01/2035 43,871 Mountain JV 1 33,817 2.95 % Fixed 01/01/2036 93,533 Mountain JV 1 39,031 4.27 % Fixed 11/01/2037 104,474 Mountain JV 1 43,606 3.25 % Fixed 01/01/2038 107,217 Total / weighted average 4,214,036 5.43 % $ 4,495,903 Unamortized debt issuance costs ( 20,842 ) Total indebtedness, net $ 4,193,194 (1) Interest rate reflects the impact of interest rate caps, if any. (2) In April 2026, our consolidated joint venture priced a $ 1,620,000 five year, fixed rate, interest only mortgage loan at 5.71 %. This mortgage loan is expected to close on or about May 8, 2026 and our consolidated joint venture expects to use the net proceeds to repay these loans in full. 11 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) In June 2025, we obtained a $ 1,160,000 fixed rate, interest only mortgage loan secured by 101 of our properties. This mortgage loan matures in July 2030 and requires that interest be paid at an annual rate of 6.40 %. Subject to the satisfaction of certain conditions, we have the option to prepay our $ 1,160,000 mortgage loan in full or in part with a premium prior to January 9, 2030 and at par with no premium on or after January 9, 2030. We used the net proceeds from our $ 1,160,000 mortgage loan and cash on hand to repay in full our $ 1,235,000 loan, or the ILPT Floating Rate Loan. Our consolidated joint venture’s $ 1,400,000 loan, or the Mountain Floating Rate Loan, is secured by 82 properties, matures in March 2027 and requires that interest be paid at an annual rate of secured overnight financing rate, or SOFR, plus a weighted average premium of 2.77 %. In March 2026, our consolidated joint venture exercised the third 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 $ 3,720 with a SOFR strike rate equal to 3.29 %, which replaced the previous interest rate cap with a SOFR strike rate equal to 3.10 %. 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. In April 2026, our consolidated joint venture priced a $ 1,620,000 five year, fixed rate, interest only mortgage loan to be secured by 90 of its properties. This mortgage loan is expected to close on or about May 8, 2026 and our consolidated joint venture expects to use the net proceeds from this mortgage loan to repay in full the Mountain Floating Rate Loan and $ 204,999 of its amortizing fixed rate debt secured by eight properties. The weighted average interest rates under our floating rate loans for the three months ended March 31, 2026 and 2025 were as follows: Three Months Ended March 31, 2026 2025 ILPT Floating Rate Loan (1) — % 6.71 % Mountain Floating Rate Loan (2) 5.90 % 5.82 % (1) 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. Reflects the impact of interest rate caps, which prior to the repayment, had a 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 3.29 % which replaced the previous strike rate equal to 3.10 % in March 2026. The agreements governing certain of our indebtedness contain customary covenants and provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default. As of March 31, 2026, we believe that we were in compliance with all of the covenants and other terms under the agreements governing our debt obligations. See Note 10 for further information regarding our current and former interest rate caps. The required principal payments due during the next five years and thereafter, excluding extension options, under all our outstanding debt as of March 31, 2026 are as follows: Principal Payment 2026 $ 14,692 2027 1,420,224 2028 20,989 2029 671,778 2030 1,273,597 Thereafter 807,949 Total $ 4,209,229 12 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) Note 6. Fair Value of Assets and Liabilities Our financial instruments include cash and cash equivalents, restricted cash and cash equivalents, mortgage notes payable, accounts payable and interest rate caps. We remeasure our interest rate caps at fair value on a quarterly basis. As of March 31, 2026 and December 31, 2025, the fair value of our other financial instruments approximated their carrying values in our condensed consolidated financial statements due to their short term nature or floating interest rates, except for our fixed rate mortgage notes payable. Our fixed rate mortgage notes payable had an aggregate carrying value of $ 2,789,555 and $ 2,793,219 as of March 31, 2026 and December 31, 2025, respectively, and a fair value of $ 2,762,661 and $ 2,784,286 as of March 31, 2026 and December 31, 2025, respectively. We estimate the fair value of our fixed rate mortgage notes payable using significant unobservable inputs, including discounted cash flow analyses and prevailing market interest rates. The table below presents certain of our assets measured on a recurring basis at fair value as of March 31, 2026 and December 31, 2025, categorized by the level of inputs, as defined in the fair value hierarchy under GAAP, used in the valuation of each asset: Quoted Prices in Significant Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Total (Level 1) (Level 2) (Level 3) As of March 31, 2026 Interest rate cap $ 6,093 $ — $ 6,093 $ — Investment in unconsolidated joint venture $ 134,436 $ — $ — $ 134,436 As of December 31, 2025 Interest rate cap $ 1,629 $ — $ 1,629 $ — Investment in unconsolidated joint venture $ 132,753 $ — $ — $ 132,753 The fair values of our interest rate caps are based on prevailing market prices in secondary markets for similar derivative contracts as of the measurement date. The fair value of our investment in the unconsolidated joint venture is determined by applying our ownership percentage to the net asset value of the entity. The net asset value of the unconsolidated joint venture uses similar estimation techniques as those used for consolidated real estate properties, including discounting expected future cash flows of the underlying real estate investments based on prevailing market rents over a holding period and including an exit capitalization rate to determine the final year of cash flows. The discount rates, exit capitalization rates and holding periods used to determine the fair value of our investment in the unconsolidated joint venture are significant unobservable inputs and are shown in the table below: Exit Valuation Discount Capitalization Holding Technique Rates Rates Periods As of March 31, 2026 Investment in unconsolidated joint venture Discounted cash flow 6.25 % - 8.00 % 5.50 % - 6.25 % 10 - 11 years As of December 31, 2025 Investment in unconsolidated joint venture Discounted cash flow 6.50 % - 8.00 % 5.75 % - 6.25 % 10 - 11 years 13 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) The table below presents a summary of the changes in fair value for our investment in the unconsolidated joint venture: Three Months Ended March 31, 2026 2025 Beginning balance $ 132,753 $ 116,732 Equity in earnings (losses) of unconsolidated joint venture 2,871 ( 1,042 ) Distributions from unconsolidated joint venture ( 1,188 ) ( 990 ) Ending balance $ 134,436 $ 114,700 Note 7. Shareholders’ Equity Common Share Awards On March 18, 2026, in accordance with our Trustee compensation arrangements, we awarded 15,625 of our common shares in connection with the election of one of our Trustees, valued at $ 6.08 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day . Common Share Purchases During the three months ended March 31, 2026, we purchased an aggregate of 2,704 of our common shares, valued at $ 6.08 per share, from certain former employees of The RMR Group LLC, or RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. We withheld and purchased these common shares at their fair market value based upon the trading price of our common shares at the close of trading on Nasdaq on the purchase date. Distributions During the three months ended March 31, 2026, we declared and paid a regular quarterly distribution to common shareholders as follows: Distribution Total Declaration Date Record Date Payment Date Per Share Distribution January 15, 2026 January 26, 2026 February 19, 2026 $ 0.05 $ 3,333 On April 9, 2026, we declared a regular quarterly distribution to common shareholders of record on April 21, 2026 of $ 0.05 per share, or approximately $ 3,333 . We expect to pay this distribution on or about May 14, 2026 using cash on hand. Note 8. Business and Property Management Agreements with RMR We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to our property level operations. Business Management Agreement. Pursuant to our business management agreement and in accordance with GAAP, we accrued estimated incentive management fees during the three months ended March 31, 2026. The actual amount of incentive management fees incurred for 2026, if any, will be based on our common share total return, as defined in our business management agreement, for the three year period ending December 31, 2026, and will be payable to RMR in January 2027. We incurred an incentive management fee of $ 5,679 for the year ended December 31, 2025. 14 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) Property Management Agreement. We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function and as otherwise agreed. Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR which are included in other operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss). For the three months ended March 31, 2026 and 2025, the business management fees, incentive management fees, property management fees, construction supervision fees and expense reimbursements recognized in our condensed consolidated financial statements were as follows: Three Months Ended March 31, Financial Statement Line Item 2026 2025 Pursuant to business management agreement: Business management fees General and administrative expenses $ 5,792 ` $ 5,735 Incentive management fees General and administrative expenses 1,567 967 Total $ 7,359 $ 6,702 Pursuant to property management agreement: Property management fees Other operating expenses $ 3,349 $ 3,267 Construction supervision fees Buildings and improvements (1) 81 30 Total $ 3,430 $ 3,297 Expense reimbursement: Other expenses General and administrative expenses $ 44 $ 50 Property level expenses Other operating expenses 1,534 1,570 Total $ 1,578 $ 1,620 (1) Amounts capitalized as buildings and improvements are depreciated over the estimated useful lives of the related assets. Management Agreements Between Our Joint Ventures and RMR. We have two separate joint venture arrangements, our consolidated joint venture and the unconsolidated joint venture. RMR provides management services to both of these joint ventures. We are not obligated to pay management fees to RMR under our management agreements with RMR for the services it provides to the unconsolidated joint venture. We are obligated to pay management fees to RMR under our management agreements with RMR for the services it provides to our consolidated joint venture; however, our consolidated joint venture pays management fees directly to RMR, and any such fees paid by our consolidated joint venture are credited against the fees payable by us to RMR. See Note 9 for further information regarding our relationships, agreements and transactions with RMR. 15 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) Note 9. Related Person Transactions We have relationships and historical and continuing transactions with RMR, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR is a majority owned subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam D. Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., the chair of the board of directors, a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR. Yael Duffy, our other Managing Trustee and our President and Chief Executive Officer, is also an executive vice president of RMR Inc. and a managing trustee and president and chief executive officer of Office Properties Income Trust, one of the other public companies managed by RMR. Each of our officers is also an officer and employee of RMR. Some of our Independent Trustees also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services. Mr. Portnoy serves as chair of the boards and as a managing trustee of these public companies. Other officers of RMR, including Ms. Duffy, serve as managing trustees or officers of certain of these public companies. Our Manager, RMR . We have two agreements with RMR to provide management services to us. See Note 8 for further information regarding our management agreements with RMR. Joint Ventures. We have two separate joint venture arrangements. RMR provides management services to each of these joint ventures. See Note 3 for further information regarding our joint ventures. For further information about these and other such relationships and certain other related person transactions, see our 2025 Annual Report. Note 10. Derivatives and Hedging Activities We are exposed to certain risks relating to our ongoing business operations, including the impact of changes in interest rates. The only risk currently managed by us using derivative instruments is our interest rate risk. As required under the loan agreement, we have an interest rate cap agreement to manage our interest rate risk exposure on the Mountain Floating Rate Loan, with interest payable at a rate equal to SOFR plus a premium. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, we only enter into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which we or our related parties may also have other financial relationships. We do not anticipate that any of the counterparties will fail to meet their obligations. Our interest rate cap agreement for the Mountain Floating Rate Loan is designated as a cash flow hedge of interest rate risk and is measured on a recurring basis at fair value. Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. For derivatives designated and qualifying as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in cumulative other comprehensive loss and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. The earnings recognition of excluded components is presented in interest expense. Amounts reported in cumulative other comprehensive loss related to derivatives will be reclassified to interest expense as interest payments are made on our applicable debt. 16 Table of Contents INDUSTRIAL LOGISTICS PROPERTIES TRUST NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (dollars in thousands, except per share data) The following table summarizes the terms of our outstanding interest rate cap agreements as of March 31, 2026 and December 31, 2025: Balance Sheet Underlying Maturity Strike Notional Fair Value at Line Item Instrument Date Rate Amount March 31, 2026 December 31, 2025 Other assets, net Mountain Floating Rate Loan 03/15/2026 3.10 % $ 1,400,000 $ — $ 1,629 Other assets, net Mountain Floating Rate Loan 03/15/2027 3.29 % $ 1,400,000 6,093 — Total $ 6,093 $ 1,629 The following table summarizes the activity related to our cash flow hedges within cumulative other comprehensive income (loss) for the periods shown: Three Months Ended March 31, 2026 2025 Amount of gain (loss) recognized on derivatives in other comprehensive income (loss) $ 2,682 $ ( 1,759 ) Amount of loss reclassified from cumulative other comprehensive income (loss) into interest expense $ ( 1,304 ) $ ( 957 ) Total amount of interest expense presented in the condensed consolidated statements of comprehensive income (loss) $ ( 61,702 ) $ ( 69,813 ) See Notes 5 and 6 for further information regarding the debt our interest rate caps are related to and the fair value of our interest rate caps. Note 11. Segment Reporting We manage our business on a consolidated basis and therefore have one reportable segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands. The chief operating decision maker, or CODM, is our President and Chief Executive Officer. The CODM assesses performance, allocates resources and makes strategic decisions based on net income (loss) as shown in our condensed consolidated statements of comprehensive income (loss). The CODM is also regularly provided with information on expenses related to our management agreements with RMR, which are detailed in Note 8. The measure of segment assets is reported as total assets in our condensed consolidated balance sheets. 17 Table of Contents