Industrial Logistics Properties Trust
For the period ended Jun 30, 2026. Filed Jul 29, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Jul 29, 2026
ILPT$5.93-1.7%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-04-29.
0001717307-26-000027
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-07-29.
0001717307-26-000041
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 78 previous paragraphs and 94 current paragraphs.
53 unchanged; 24 reworded; 8 added; 1 removed; 0 previous and 9 current paragraphs rearranged.
Tables are not compared: 10 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (8)
Current report
(3)During the three months ended June 30, 2026, we executed new leases for two previously vacant properties in Indiana and Hawaii totaling 2,770 square feet with commencement dates in May and July 2026, respectively.
Current report
(1)Consists of properties that we have owned continuously since April 1, 2025.
Current report
Interest and other income. The increase in interest and other income is primarily due to the discontinuation of hedge accounting upon repayment of the Mountain Floating Rate Loan during the three months ended June 30, 2026, partially offset by decreases primarily due to lower average cash balances and lower interest rates during the 2026 period as compared to the 2025 period.
Current report
Loss on extinguishment of debt. During the three months ended June 30, 2026, we recognized a loss on extinguishment of debt in connection with the repayment of the Mountain Floating Rate Loan and$204,999 of amortizing fixed rate 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.
Current report
General and administrative. The increase in general and administrative expenses is primarily due to increases in accrued incentive management fees, business management fees and trustee and RMR employee share award expenses during the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Current report
Interest expense. The decrease in interest expense is primarily due to the discontinuation of hedge accounting for interest rate caps related to the ILPT Floating Rate Loan and the Mountain Floating Rate Loan, resulting in no further amortization of interest rate cap costs and a lower outstanding principal balance compared to the 2025 period.
Current report
Loss on extinguishment of debt. During the six months ended June 30, 2026, we recognized a loss on extinguishment of debt in connection with the repayment of the Mountain Floating Rate Loan and $204,999 of amortizing loans. 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.
Current report
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. Our consolidated joint venture made cash distributions of $38,000 during the three and six months ended June 30, 2026, of which $14,820 was distributed to the unrelated third party investor. The remaining $23,180 distributed to us was reclassified from restricted cash and cash equivalents to cash and cash equivalents in our condensed consolidated balance sheets.
Removed paragraphs (1)
Previous report
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 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%. The weighted average interest rates under the Mountain Floating Rate Loan were 5.90% and 5.82% for three months ended March 31, 2026 and 2025, respectively, including the impact of our interest rate caps.
Reworded paragraphs (24)
Previous wording
We are a real estate investment trust, or REIT, organized under Maryland law. As of March 31, 2026, our portfolio was comprised of 409 properties containing approximately 59,604,000 rentable square feet located in 39 states with 94.6% occupancy, leased to approximately 300 different tenants. As of March 31, 2026, we also owned a 22% equity interest in the unconsolidated joint venture.
Current wording
We are a real estate investment trust, or REIT, organized under Maryland law. As of June 30, 2026, our portfolio was comprised of 409 properties containing approximately 59,609,000 rentable square feet located in 39 states with 99.1% occupancy, leased to approximately 300 different tenants. As of June 30, 2026, we also owned a 22% equity interest in the unconsolidated joint venture.
Previous wording
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 months ended March 31, 2026 and 2025, the average effective rental rates per square foot of our properties were as follows:
Current wording
The average effective rental rates per square foot represent 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, 2026 and 2025, the average effective rental rates per square foot of our properties were as follows:
Previous wording
During the three months ended March 31, 2026, we entered into new and renewal leases as summarized in the following table, excluding the impact of rent resets (square feet in thousands):
Current wording
During the three and six months ended June 30, 2026, we entered into new and renewal leases as summarized in the following table, excluding the impact of rent resets (square feet in thousands):
Previous wording
During the three months ended March 31, 2026, we completed rent resets for approximately 122,000 square feet of land at our Hawaii Properties at rental rates that were 30.6% higher than prior rental rates.
Current wording
During the six months ended June 30, 2026, we completed rent resets for approximately 153,000 square feet of land at our Hawaii Properties at rental rates that were 33.7% higher than prior rental rates.
Previous wording
As of March 31, 2026, FedEx and Amazon leased 22.7% and 8.1% of our total leased square feet, respectively, and represented 27.7% and 7.6% of our total annualized rental revenues, respectively.
Current wording
As of June 30, 2026, FedEx and Amazon leased 22.5% and 7.7% of our total leased square feet, respectively, and represented 27.8% and 7.4% of our total annualized rental revenues, respectively.
Previous wording
As of March 31, 2026, $16,556, or 3.7%, of our annualized rental revenues were included in leases scheduled to expire by March 31, 2027 and 5.4% 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. Whenever we extend, renew or enter new leases for our properties, we intend to seek rents that are equal to or higher than our historical rents for the same properties. Despite our prior experience with rent resets, lease extensions and new leases in Hawaii, our ability to increase rents when rents reset, leases are extended or leases expire depends upon market conditions, which are beyond our control. Accordingly, we cannot be sure that the historical increases achieved at our Hawaii Properties will continue in the future.
Current wording
As of June 30, 2026, $14,211, or 3.1%, of our annualized rental revenues were included in leases scheduled to expire by June 30, 2027 and 0.9% 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. Whenever we extend, renew or enter new leases for our properties, we intend to seek rents that are equal to or higher than our historical rents for the same properties. Despite our prior experience with rent resets, lease extensions and new leases in Hawaii, our ability to increase rents when rents reset, leases are extended or leases expire depends upon market conditions, which are beyond our control. Accordingly, we cannot be sure that the historical increases achieved at our Hawaii Properties will continue in the future.
Previous wording
Rental income. Rental income increased primarily due to increases from our net leasing activity and increases in real estate tax reimbursements at certain of our properties.
Current wording
Rental income. Rental income increased primarily due to increases from our net leasing activity and increases in real estate tax reimbursements at certain of our properties, partially offset by a $2,575 bad debt reserve for six of our Hawaii properties.
Previous wording
Other operating expenses. The decrease in other operating expenses is primarily due to decreases in repairs and maintenance expenses, other professional fees and insurance expenses, partially offset by increases in snow removal expenses at certain of our properties.
Current wording
Other operating expenses. The decrease in other operating expenses is primarily due to decreases in payroll costs reimbursable to RMR during the three months ended June 30, 2026.
Previous wording
General and administrative. The increase in general and administrative expenses is primarily due to increases in accrued incentive management fees, legal costs and trustee share award expense during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Current wording
General and administrative. The increase in general and administrative expenses is primarily due to increases in accrued incentive management fees and trustee and RMR employee share award expenses during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.
Previous wording
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 2026 period. Additionally, amortization of interest rate cap costs of our consolidated joint venture decreased during the 2026 period.
Current wording
Interest expense. The decrease in interest expense is primarily due to the discontinuation of hedge accounting for interest rate caps related to the ILPT Floating Rate Loan and the Mountain Floating Rate Loan, resulting in no further amortization of interest rate cap costs and a lower outstanding principal balance compared to the 2025 period.
Previous wording
Equity in earnings (losses) of unconsolidated joint venture. Equity in earnings (losses) of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.
Current wording
Equity in earnings of unconsolidated joint venture. Equity in earnings of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.
Previous wording
Interest income. The decrease in interest income is primarily due to lower cash balances and lower interest rates during the 2026 period as compared to the 2025 period.
Current wording
Interest and other income. The increase in interest and other income is primarily due to the discontinuation of hedge accounting upon repayment of the Mountain Floating Rate Loan during the six months ended June 30, 2026, partially offset by decreases due to lower average cash balances and lower interest rates during the 2026 period as compared to the 2025 period.
Previous wording
The following table presents the reconciliation of net loss to NOI for the three months ended March 31, 2026 and 2025:
Current wording
The following table presents the reconciliation of net loss to NOI for the three and six months ended June 30, 2026 and 2025:
Previous wording
The following table presents our calculation of FFO attributable to common shareholders and Normalized FFO attributable to common shareholders and reconciliations of net loss attributable to common shareholders to FFO attributable to common shareholders and Normalized FFO attributable to common shareholders for the three months ended March 31, 2026 and 2025:
Current wording
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, 2026 and 2025:
Previous wording
Our principal sources of funds to meet our operating and capital obligations, pay our debt service obligations and make distributions to our shareholders are rents from tenants at our properties. As of March 31, 2026, investment grade rated tenants, subsidiaries of investment grade rated entities or our Hawaii land leases represented 76.9% of our annualized rental revenues and only 3.7% 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.
Current wording
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, 2026, investment grade rated tenants, subsidiaries of investment grade rated entities or our Hawaii land leases represented 78.7% of our annualized rental revenues and only 3.1% 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.
Previous wording
The increase in net cash from operating activities for the three months ended March 31, 2026 compared to the 2025 period is primarily due to higher cash flows and reimbursements from our properties and lower interest expense, excluding the impact of settlement of our interest rate caps. The decrease in net cash used in investing activities for the three months ended March 31, 2026 compared to the 2025 period is primarily due to reduced interest rate cap purchase costs and real estate improvements in 2026. The increase in net cash used in financing activities for the three months ended March 31, 2026 compared to the 2025 period is due to increases in distributions to common shareholders in 2026.
Current wording
The increase in net cash from operating activities for the six months ended June 30, 2026 compared to the 2025 period is primarily due to higher cash flows and reimbursements from our properties and lower interest expense, excluding the impact of settlement of our interest rate caps. The decrease in net cash used in investing activities for the six months ended June 30, 2026 compared to the 2025 period is primarily due to reduced interest rate cap purchase costs, decreased real estate improvements and proceeds from the sale of our consolidated joint venture’s interest rate cap in 2026. These decreases were partially offset by reduced proceeds from the settlement of our interest rate caps. The change in net cash used in financing activities for the six months ended June 30, 2026, is due to proceeds received from our consolidated joint venture’s $1,620,000 fixed rate mortgage loan during the 2026 period compared to the repayment of the ILPT Floating Rate Loan during the 2025 period. Proceeds from the $1,620,000 fixed rate mortgage loan were used to repay the Mountain Floating Rate Loan and $204,999 of our consolidated joint venture’s amortizing debt during the 2026 period. During the 2025 period, our consolidated joint venture used proceeds of $1,160,000 from its fixed rate mortgage loan to repay the ILPT Floating Rate Loan. In addition to these debt transactions during the 2026 and 2025 periods, our distributions to noncontrolling interests and common shareholders increased in 2026.
Previous wording
As of March 31, 2026, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $99,500. 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. 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 any offerings of equity or debt securities to fund our distributions to our shareholders.
Current wording
As of June 30, 2026, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $135,326. 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. 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 any offerings of equity or debt securities to fund our distributions to our shareholders.
Previous wording
As of March 31, 2026, committed, but unspent, tenant related obligations based on existing leases were $4,868, of which $3,900 is expected to be spent during the next 12 months.
Current wording
As of June 30, 2026, committed, but unspent, tenant related obligations based on existing leases were $12,599, of which $12,115 is expected to be spent during the next 12 months.
Previous wording
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. We also own a 22% equity interest in the unconsolidated joint venture. 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 $1,188 and $990 for the three months ended March 31, 2026 and 2025, respectively.
Current wording
We also own a 22% equity interest in the unconsolidated joint venture. 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 $1,188 and $990 for the three months ended June 30, 2026 and 2025, and $2,376 and $1,980 for the six months ended June 30, 2026 and 2025, respectively.
Previous wording
As of March 31, 2026, we had an aggregate principal amount of $4,209,229 of indebtedness, primarily including: (1) our $1,160,000 mortgage loan; (2) the Mountain Floating Rate Loan; (3) our $700,000 mortgage loan; (4) our $650,000 mortgage loan; (5) our consolidated joint venture’s $91,000 mortgage loan; and (6) $208,229 of our consolidated joint venture’s amortizing mortgage loans, with maturity dates between 2027 and 2038.
Current wording
As of June 30, 2026, we had an aggregate principal amount of $4,221,000 of indebtedness, primarily including: (1) our $1,160,000 mortgage loan; (2) our $700,000 mortgage loan; (3) our $650,000 mortgage loan; and (4) our consolidated joint venture’s $1,711,000 in aggregate mortgage loans, with maturity dates between 2029 and 2032.
Previous wording
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.
Current wording
In May 2026, our consolidated joint venture obtained a $1,620,000 fixed rate, interest only mortgage loan secured by 90 of its properties. This mortgage loan matures in May 2031 and requires that interest be paid at an annual rate of 5.71%. Subject to a 24 month prepayment lockout period and the satisfaction of certain other conditions, our consolidated joint venture has the option to prepay its $1,620,000 mortgage loan in full or in part with a premium prior to November 2030 and at par with no premium beginning from November 2030. Our consolidated joint venture used the proceeds from this mortgage loan to repay in full the Mountain Floating Rate Loan, and $204,999 of its amortizing fixed rate debt. The Mountain Floating Rate Loan was secured by 82 properties, was scheduled to mature in March 2027 and required that interest be paid at an annual rate of SOFR plus a weighted average premium of 2.77%. The amortizing fixed rate debt repaid was secured by eight properties with a weighted average interest rate of 3.66%. In connection with the repayment of the Mountain Floating Rate Loan and $204,999 of amortizing fixed rate debt, we recognized a $3,830 loss on extinguishment of debt.
Previous wording
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 March 31, 2026, we believe that we were in compliance with all of the covenants and other terms under the agreements governing these loans.
Current wording
The agreements and related documents governing our $1,160,000 mortgage loan, our $700,000 mortgage loan, our $650,000 mortgage loan and our consolidated joint venture’s $1,620,000 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, 2026, we believe that we were in compliance with all of the covenants and other terms under the agreements governing these loans.
Previous wording
During the three months ended March 31, 2026, we declared and paid a regular quarterly distribution to common shareholders totaling $3,333 using cash on hand.
Current wording
During the six months ended June 30, 2026, we declared and paid regular quarterly distributions to common shareholders totaling $6,666 using cash on hand.
Previous wording
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.
Current wording
On July 9, 2026, we declared a regular quarterly distribution to common shareholders of record on July 20, 2026 of $0.10 per share, or approximately $6,675. We expect to pay this distribution on or about August 13, 2026 using cash on hand.
Rearranged current paragraphs (9)
Current report — wording carried from elsewhere
Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 (dollars and share amounts in thousands, except per share data)
Current report — wording carried from elsewhere
(2)See our definition of NOI and our reconciliation of net loss to NOI below under the heading “Non-GAAP Financial Measures”.
Current report — wording carried from elsewhere
References to changes in the income and expense categories below relate to the comparison of results for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.
Current report — wording carried from elsewhere
Rental income. Rental income increased primarily due to increases from our net leasing activity and increases in real estate tax reimbursements at certain of our properties, partially offset by a $2,575 bad debt reserve for six of our Hawaii properties.
Current report — wording carried from elsewhere
Real estate taxes. Real estate taxes increased primarily due to a refund received during the six months ended June 30, 2025 as a result of a successful real estate tax appeal at one of our Mainland Properties and higher tax rates at certain of our properties during the six months ended June 30, 2026.
Current report — wording carried from elsewhere
Other operating expenses. The decrease in other operating expenses is primarily due to decreases in payroll costs reimbursable to RMR and repairs and maintenance expenses during the six months ended June 30, 2026.
Current report — wording carried from elsewhere
Depreciation and amortization. The decrease in depreciation and amortization primarily reflects the impact of certain acquired real estate leases fully amortizing and the disposition of two properties since January 1, 2025, partially offset by increased depreciation related to improvements made to certain of our properties since January 1, 2025.
Current report — wording carried from elsewhere
Income tax expense. Income tax expense reflects state income taxes payable in certain jurisdictions.
Current report — wording carried from elsewhere
Equity in earnings of unconsolidated joint venture. Equity in earnings of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.