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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 


For the quarterly period ended March 31, 2022

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

Commission File Number 001-38342 

INDUSTRIAL LOGISTICS PROPERTIES TRUST
(Exact Name of Registrant as Specified in Its Charter)
Maryland 82-2809631
(State or Other Jurisdiction of Incorporation or Organization) (IRS Employer Identification No.)
Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634
(Address of Principal Executive Offices)(Zip Code)

617-219-1460
(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each ClassTrading Symbol(s)Name Of Each Exchange On Which Registered
Common Shares of Beneficial InterestILPTThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filerAccelerated filer
Non-accelerated filerSmaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes No
Number of registrant’s common shares of beneficial interest, $.01 par value per share, outstanding as of April 22, 2022: 65,403,859



INDUSTRIAL LOGISTICS PROPERTIES TRUST
 
FORM 10-Q
 
March 31, 2022
 
INDEX
 
  Page
   
   
 
   
 
   
 
   
 
   
   
   
   
 
   
 
   
   
   
 
 
References in this Quarterly Report on Form 10-Q to the Company, we, us or our include Industrial Logistics Properties Trust and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.
2

PART I Financial Information
 
Item 1.  Financial Statements
 
INDUSTRIAL LOGISTICS PROPERTIES TRUST 
CONDENSED CONSOLIDATED BALANCE SHEETS
(dollars in thousands, except per share data)
(unaudited) 
 March 31, December 31,
 20222021
ASSETS  
Real estate properties:  
Land $1,026,237 $699,037 
Buildings and improvements 3,524,573 1,049,796 
Total real estate properties, gross4,550,810 1,748,833 
Accumulated depreciation (182,482)(167,490)
Total real estate properties, net4,368,328 1,581,343 
Assets of properties held for sale731,964  
Investment in unconsolidated joint venture143,428 143,021 
Acquired real estate leases, net 282,314 63,441 
Cash and cash equivalents275,075 29,397 
Restricted cash146,354  
Rents receivable, including straight line rents of $70,253 and $69,173, respectively
77,443 75,877 
Other assets, net78,887 15,479 
Total assets $6,103,793 $1,908,558 
  
LIABILITIES AND EQUITY  
Revolving credit facility$ $182,000 
Bridge loan facility1,356,606  
Mortgage notes payable, net3,031,819 646,124 
Liabilities of properties held for sale10,516  
Assumed real estate lease obligations, net 25,943 12,435 
Accounts payable and other liabilities68,863 27,772 
Due to related persons6,077 2,185 
Total liabilities4,499,824 870,516 
Commitments and contingencies
Equity:
Equity attributable to common shareholders:
Common shares of beneficial interest, $0.01 par value: 100,000,000 shares authorized; 65,403,859 and 65,404,592 shares issued and outstanding, respectively
654 654 
Additional paid in capital 1,012,622 1,012,224 
Cumulative net income337,394 343,908 
Cumulative other comprehensive income3,908  
Cumulative common distributions(340,328)(318,744)
Total equity attributable to common shareholders1,014,250 1,038,042 
Noncontrolling interest:
Total equity attributable to noncontrolling interest589,719  
Total equity1,603,969 1,038,042 
Total liabilities and equity $6,103,793 $1,908,558 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3

INDUSTRIAL LOGISTICS PROPERTIES TRUST 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(amounts in thousands, except per share data)
(unaudited)
 
 Three Months Ended March 31,
 20222021
Rental income$71,375 $54,217 
Expenses:  
Real estate taxes 9,436 7,247 
Other operating expenses 6,772 4,976 
Depreciation and amortization 22,878 12,678 
General and administrative6,077 3,756 
Total expenses 45,163 28,657 
 
Realized gain on sale of equity securities1,232  
Unrealized gain on equity securities2,460  
Dividend income478  
Interest expense (including net amortization of debt issuance costs, premiums and discounts of $20,321 and $505, respectively)
(40,999)(8,741)
Loss on early extinguishment of debt(828) 
Income (loss) before income tax expense and equity in earnings of investees(11,445)16,819 
Income tax expense(69)(63)
Equity in earnings of investees1,727 2,581 
Net (loss) income(9,787)19,337 
Net loss attributable to noncontrolling interest3,273  
Net (loss) income attributable to common shareholders(6,514)19,337 
Other comprehensive income:
Unrealized gain on derivatives5,632  
Less: unrealized gain on derivatives attributable to noncontrolling interest(1,724) 
Other comprehensive income attributable to common shareholders3,908  
Comprehensive (loss) income attributable to common shareholders$(2,606)$19,337 
Weighted average common shares outstanding - basic65,212 65,139 
Weighted average common shares outstanding - diluted65,212 65,177 
 
Per common share data (basic and diluted):
Net (loss) income attributable to common shareholders$(0.10)$0.30 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



4

INDUSTRIAL LOGISTICS PROPERTIES TRUST
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY
(dollars in thousands)
(unaudited)
Cumulative    Total EquityTotal Equity
Number ofAdditionalOtherCumulativeAttributable toAttributable to
CommonCommonPaid InCumulativeComprehensiveCommonCommonNoncontrollingTotal
SharesSharesCapitalNet IncomeIncomeDistributionsShareholdersInterestEquity
Balance at December 31, 202165,404,592 $654 $1,012,224 $343,908 $ $(318,744)$1,038,042 $ $1,038,042 
Net (loss) income— — — (6,514)— — (6,514)(3,273)(9,787)
Share grants— — 407 — — — 407 — 407 
Share repurchases(333)— (7)— — — (7)— (7)
Share forfeitures(400)— (1)— — — (1)— (1)
Net current period other comprehensive income— — — — 3,908— 3,908 1,724 5,632 
Contributions from noncontrolling interest— — — — — — — 591,268 591,268 
Distributions to common shareholders— — — — — (21,584)(21,584)— (21,584)
Balance at March 31, 202265,403,859 $654 $1,012,622 $337,394 $3,908 $(340,328)$1,014,250 $589,719 $1,603,969 
Balance at December 31, 202065,301,088 $653 $1,010,819 $224,226 — $(232,508)$1,003,190  $1,003,190 
Net income — — — 19,337 — — 19,337 — 19,337 
Share grants— — 239 — — — 239 — 239 
Distributions to common shareholders— — — — — (21,550)(21,550)— (21,550)
Balance at March 31, 202165,301,088 $653 $1,011,058 $243,563 $— $(254,058)$1,001,216 $ $1,001,216 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
5

INDUSTRIAL LOGISTICS PROPERTIES TRUST 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(dollars in thousands)
(unaudited)
 Three Months Ended March 31,
20222021
CASH FLOWS FROM OPERATING ACTIVITIES:  
Net (loss) income $(9,787)$19,337 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation 14,992 7,617 
Net amortization of debt issuance costs, premiums and discounts20,320 505 
Amortization of acquired real estate leases and assumed real estate lease obligations7,223 4,673 
Amortization of deferred leasing costs 361 211 
Unrealized gain on equity securities(2,460) 
Realized gain on sale of equity securities(1,232)— 
Straight line rental income (1,156)(2,044)
Loss on early extinguishment of debt828  
Other non-cash expenses696 239 
Unconsolidated joint venture distributions1,320 660 
Equity in earnings of investees(1,727)(2,581)
Change in assets and liabilities:
Rents receivable (1,309)1,144 
Deferred leasing costs (3,226)(771)
Due from related persons 1,256 
Other assets (15,018)(787)
Accounts payable and other liabilities22,502 508 
Rents collected in advance19,646 (289)
Security deposits729 29 
Due to related persons3,937 (55)
Net cash provided by operating activities 56,639 29,652 
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions and deposits(3,557,602) 
Real estate improvements(618)(789)
Proceeds from sale of marketable securities115,735  
Net cash used in investing activities (3,442,485)(789)
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of mortgage notes payable2,100,000  
Proceeds from secured bridge loan facility1,385,158  
Borrowings under revolving credit facility3,000 9,000 
Repayments of revolving credit facility(185,000)(13,000)
Repayment of mortgage notes payable(1,782) 
Payment of debt issuance costs(89,354) 
Distributions to common shareholders(21,584)(21,550)
Proceeds from noncontrolling interest, net587,440  
Net cash (used in) provided by financing activities3,777,878 (25,550)
 
Increase in cash, cash equivalents and restricted cash 392,032 3,313 
Cash, cash equivalents and restricted cash at beginning of period 29,397 22,834 
Cash, cash equivalents and restricted cash at end of period $421,429 $26,147 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


6


INDUSTRIAL LOGISTICS PROPERTIES TRUST 
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(dollars in thousands)
(unaudited)


 Three Months Ended March 31,
20222021
SUPPLEMENTAL DISCLOSURES:
Interest paid $13,021 $8,240 
Income taxes paid $57 $ 
NON-CASH INVESTING ACTIVITIES:
Real estate acquired by assumption of mortgage notes payable$323,432 $ 
Real estate improvements accrued, not paid$821 $72 
NON-CASH FINANCING ACTIVITIES:
Assumption of mortgage notes payable$(323,432)$ 
Increase in deferred financing fees$14,537 $ 

SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows:
As of March 31,
20222021
Cash and cash equivalents$275,075 $26,147 
Restricted cash (1)
146,354  
Total cash, cash equivalents and restricted cash shown in the statements of cash flows$421,429 $26,147 
(1) Restricted cash consists of amounts escrowed for capital expenditures at certain of our mortgaged properties and cash held for the operations of our consolidated joint venture arrangement in which we own a 61% equity interest.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
7

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, ILPT, we, us or our, 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, 2021, or our 2021 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.
On February 25, 2022, we acquired Monmouth Real Estate Investment Corporation, or MNR, pursuant to the merger of MNR with and into one of our wholly owned subsidiaries, or the Merger, as further described below. In connection with the Merger, we entered into a new joint venture arrangement for 95 of the acquired MNR properties, including two committed, but not yet completed, property acquisitions, located in the mainland United States, in which we retained a 61% equity interest. We have determined that this joint venture is not a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, and we evaluated such entity under the voting model and concluded we should consolidate the entity. Under the voting model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting rights and that other equity holders do not have substantive participating rights. The other joint venture investor’s interest in this consolidated entity is reflected as noncontrolling interest in our condensed consolidated financial statements. See Notes 2, 9 and 11 for further information regarding this joint venture.
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, impairments of real estate and related intangibles.
Note 2. Real Estate Investments

As of March 31, 2022, our portfolio was comprised of 412 consolidated properties containing approximately 59,736,000 rentable square feet, including 226 buildings, leasable land parcels and easements containing approximately 16,729,000 rentable square feet of primarily industrial lands located on the island of Oahu, Hawaii, or our Hawaii Properties, and 186 properties containing approximately 43,007,000 rentable square feet of industrial properties located in 38 other states, or our Mainland Properties, which includes 93 properties owned by a consolidated joint venture arrangement in which we own a 61% equity interest. As of March 31, 2022, we also owned a 22% equity interest in an unconsolidated joint venture which owns 18 properties located in 12 states totaling approximately 11,726,000 rentable square feet.
We operate in one business segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands. For the three months ended March 31, 2022 and 2021, approximately 37.4% and 50.2%, respectively, of our rental income was from our Hawaii Properties. In addition, we have a concentration of Mainland Properties leased to FedEx Corporation and certain of its subsidiaries, or FDX, which, as of March 31, 2022, consisted of approximately 21.6% of our rentable square feet located in 34 states with a weighted average remaining lease term of 7.5 years and accounted for $13,468, or 18.9%, and $2,751, or 5.1%, of our rental income for the three months ended March 31, 2022 and 2021, respectively. As of March 31, 2022, the only other tenants that leased over 5% of our total rentable square footage were subsidiaries of Amazon.com, Inc., which accounted for $5,615, or 7.9%, and $5,538, or 10.2%, of our rental income for the three months ended March 31, 2022 and 2021, respectively.
8

INDUSTRIAL LOGISTICS PROPERTIES TRUST 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)

Acquisition activities
On February 25, 2022, we completed the acquisition of MNR pursuant to the Agreement and Plan of Merger, dated as of November 5, 2021 and as amended on February 7, 2022, or the Merger Agreement, by and among us, Maple Delaware Merger Sub LLC, a Delaware limited liability company and our wholly owned subsidiary, or Merger Sub, and MNR. At the effective time on February 25, 2022, or the Effective Time, MNR merged with and into Merger Sub, with Merger Sub continuing as the surviving entity, and the separate existence of MNR ceased. MNR’s portfolio included 124 Class A, single tenant, net leased, e-commerce focused industrial properties containing approximately 25,745,000 rentable square feet and two committed, but not yet completed, property acquisitions. The aggregate value of the consideration paid in the Merger was $3,734,485, including the assumption of $323,432 aggregate principal amount of existing MNR mortgage debt, the repayment of $885,269 of MNR debt and the payment of certain transaction fees and expenses, net of MNR’s cash on hand, and excluding two pending property acquisitions for an aggregate purchase price of $78,843, excluding acquisition related costs.
Pursuant to the terms set forth in the Merger Agreement, at the Effective Time, each share of common stock, par value $0.01 per share, of MNR that was issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive $21.00 per share in cash, or the Common Stock Consideration, and each share of 6.125% Series C Cumulative Redeemable Preferred Stock, par value $0.01 per share, of MNR, that was issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive an amount in cash equal to $25.00 plus accumulated and unpaid dividends, or the Preferred Stock Consideration.
At the Effective Time, each MNR stock option and restricted stock award outstanding immediately prior to the Effective Time, whether vested or unvested, became fully vested and converted into the right to receive, in the case of stock options, the difference between the Common Stock Consideration and the exercise price and, in the case of restricted stock awards, the Common Stock Consideration. Any out-of-money stock options were canceled for no consideration.
Immediately following the closing of the Merger, we entered into a joint venture arrangement with an institutional investor for 95 MNR properties, including two committed, but not yet completed, property acquisitions. The investor acquired a 39% equity interest in the joint venture from us for $587,440, and we retained the remaining 61% equity interest in the joint venture. In connection with the transaction, the joint venture assumed $323,432 aggregate principal amount of existing MNR mortgage debt secured by 11 properties and entered into a $1,400,000 floating rate CMBS loan secured by 82 properties, or the Floating Rate Loan. The Floating Rate Loan matures in March 2024, subject to three one year extension options, and requires that interest be paid at an annual rate based on the secured overnight financing rate, or SOFR, plus a premium of 2.765%. See Notes 4, 9 and 11 for more information regarding this joint venture.
In connection with the closing of the Merger, we entered into a $1,385,158 bridge loan facility, secured by 109 properties not owned by the joint venture in which we retained a 61% equity interest, or the Bridge Loan. We also entered into a $700,000 fixed rate CMBS loan secured by 17 of our properties, or the Fixed Rate Loan.
The Bridge Loan matures in February 2023 and requires that interest be paid at an annual rate of SOFR plus a weighted average premium of 2.919%. The Fixed Rate Loan matures in March 2032 and requires that interest be paid at a weighted average annual interest rate of 4.417%. The Floating Rate Loan, the Bridge Loan and the Fixed Rate Loan are collectively referred to as the Loans.
We used the proceeds from our sale of the equity interest in our joint venture in which we retained a 61% equity interest to partially fund our acquisition of MNR. We funded our equity interest in that joint venture and the balance of the acquisition of MNR with proceeds from our Bridge Loan and our Fixed Rate Loan.
In connection with the Merger and the Loans, we repaid the outstanding principal balance under our $750,000 unsecured revolving credit facility and then terminated the agreement governing the facility, which was scheduled to expire in June 2022, in accordance with its terms and without penalty.
9

INDUSTRIAL LOGISTICS PROPERTIES TRUST 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)

The following table summarizes the purchase price allocation for the Merger:
Land$327,200 
Buildings2,478,047 
Acquired real estate leases (1)
226,820 
Assets of properties held for sale724,073 
Cash8,814 
Other assets, net14,194 
Securities available for sale (2)
146,550 
Total assets3,925,698 
Mortgage notes payable, at fair value(323,432)
Accounts payable and other liabilities(20,750)
Assumed real estate lease obligations(14,233)
Liabilities of properties held for sale(3,596)
Equity attributable to noncontrolling interest on the joint venture(3,827)
Net assets acquired3,559,860 
Assumed working capital(148,807)
Assumed mortgage notes payable, principal323,432 
Purchase price$3,734,485 
(1)As of the date of acquisition, the weighted average amortization periods for the above market lease values, lease origination value and capitalized below market lease values were 11.05 years, 8.50 years and 7.83 years, respectively.
(2)As part of the Merger, we acquired a portfolio of marketable securities and classified them as held for sale. During the three months ended March 31, 2022, we sold securities with a cost of $114,503 for net proceeds of $115,735, resulting in a $1,232 realized gain on sale of equity securities for the three months ended March 31, 2022. As of March 31, 2022, we owned securities with a cost of $32,047 and a fair value of $34,508 resulting in a $2,460 unrealized gain on equity securities for the three months ended March 31, 2022. The securities are included in other assets, net on our condensed consolidated balance sheet as of March 31, 2022. We expect to complete the sales of these marketable securities during the second quarter of 2022. See Note 5 for more information regarding these marketable securities.

10

INDUSTRIAL LOGISTICS PROPERTIES TRUST 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)


During the three months ended March 31, 2022, we committed $4,772 for expenditures related to leasing related costs for leases executed during the period for approximately 885,000 square feet. Committed, but unspent, tenant related obligations based on existing leases as of March 31, 2022 were $28,700.
Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands is changed; however, we do not have plans to change the use of those lands. As of both March 31, 2022 and December 31, 2021, accrued environmental remediation costs of $6,940 were included in accounts payable and other liabilities in our condensed consolidated balance sheets. These accrued environmental remediation costs relate to maintenance of our properties for current uses, and, because of the indeterminable timing of the remediation, these amounts have not been discounted to present value. In general, we do not have insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event, such as fire or flood, although some of our tenants may maintain such insurance that may benefit us. While we do not believe that there are environmental conditions at any of our properties that will have a material adverse effect on us, we cannot be sure that such conditions are not present at our properties or that costs we incur to remediate contamination will not have a material adverse effect on our business or financial condition. Charges for environmental remediation costs, if any, are included in other operating expenses in our condensed consolidated statements of comprehensive income (loss).
Disposition activities
As of March 31, 2022, we classified 30 properties we acquired as part of the MNR acquisition as held for sale in our condensed consolidated balance sheet. We are currently marketing these properties for sale, which contain approximately 4,921,000 rentable square feet. We cannot be sure we will sell any properties we are marketing for prices in excess of our carrying values or that we will not recognize impairment losses or losses on sale with respect to these properties.
Joint Venture Activities
As of March 31, 2022, we have equity investments in our joint ventures that consist of the following:
ILPT Carrying Value
ILPTof InvestmentNumber ofSquare
Joint VenturePresentationOwnershipat March 31, 2022PropertiesLocationFeet
Mountain Industrial REIT LLCConsolidated61%N/A
93
Various20,754,664 
The Industrial Fund REIT LLCUnconsolidated22%$143,428 18 Various11,726,000 
The following table provides a summary of the mortgages of our joint ventures:
Principal Balance
at March 31,
Joint Venture (Consolidated)Coupon Rate Maturity Date
2022 (1)
Mortgage notes payable (secured by 11 properties in 10 states)
3.690%
Various$321,650 
Mortgage notes payable (secured by 82 properties in 25 states)
3.060%
3/9/20241,400,000 
Weighted average/total3.178%$1,721,650 
Principal Balance
at March 31,
Joint Venture (Unconsolidated)
Coupon Rate (2)
Maturity Date
2022 (1)
Mortgage notes payable (secured by one property in Florida)
3.60%
10/1/2023$56,980 
Mortgage notes payable (secured by 11 other properties in eight states)
3.33%
11/7/2029350,000 
Weighted average/total3.37%$406,980 
(1)Amounts are not adjusted for our minority interest; none of the debt is recourse to us.
(2)Includes the effect of mark to market purchase accounting.
11

INDUSTRIAL LOGISTICS PROPERTIES TRUST 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)

Consolidated Joint Venture - Mountain Industrial REIT LLC
Immediately following the closing of the Merger, we entered into a joint venture arrangement with an institutional investor for 95 of the acquired MNR properties in 27 states, including two committed, but not yet completed, property acquisitions. The investor acquired a 39% noncontrolling equity interest in the joint venture from us for $587,440, and we retained the remaining 61% equity interest in the joint venture. The joint venture assumed $323,432 aggregate principal amount of existing MNR mortgage debt on certain of the properties. We control this joint venture and therefore account for the properties on a consolidated basis in our condensed consolidated financial statements.
We recognized a 39% noncontrolling interest in our condensed consolidated financial statements for the three months ended March 31, 2022. The portion of this joint venture's net loss not attributable to us, or $3,261 for the three months ended March 31, 2022, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income (loss). There were no distributions made by this joint venture during the three months ended March 31, 2022. See Notes 1, 9 and 11 for more information regarding this joint venture.
Unconsolidated Joint Venture - The Industrial Fund REIT LLC
As of March 31, 2022 and December 31, 2021, we also owned an interest in an unconsolidated joint venture with 18 properties in 12 states. We account for the unconsolidated joint venture under the equity method of accounting under the fair value option.
During the three months ended March 31, 2022 and 2021, we recorded a change in the fair value of our investment in the unconsolidated joint venture of $1,727 and $2,581, respectively, as equity in earnings of investees in our condensed consolidated statements of comprehensive income (loss). In addition, during the three months ended March 31, 2022 and 2021, the unconsolidated joint venture made aggregate cash distributions of $1,320 and $660, respectively, to us.
See Notes 5, 9 and 11 for more information regarding our joint ventures.
Note 3. 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 all the physical space specified in their respective leases; therefore, we have determined to evaluate our leases as lease arrangements.
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 $12,380 and $9,872 for the three months ended March 31, 2022 and 2021, respectively, of which tenant reimbursements totaled $12,135 and $9,627, respectively.
We increased rental income to record revenue on a straight line basis by $1,156 and $2,044 for the three months ended March 31, 2022 and 2021, respectively.
Right of use asset and lease liability. In connection with our acquisition of MNR, we assumed the lease for MNR’s former corporate headquarters, which expires on December 31, 2029, and three of the properties we acquired as part of the MNR acquisition were subject to ground leases under which we are the lessee. For leases under which we are the lessee, we are required to record a right of use asset and lease liability for all leases with a term greater than 12 months. As of March 31, 2022, the value of the right of use asset and related liability representing our future obligations under the lease arrangements under which we are the lessee were $5,147 and $5,192, respectively. The right of use asset and related lease liability are included in other assets, net and accounts payable and other liabilities, respectively, in our condensed consolidated balance sheets.
12

INDUSTRIAL LOGISTICS PROPERTIES TRUST 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)

Generally, payments of ground lease obligations are made by our tenants. However, if a tenant does not perform obligations under a ground lease or does not renew any ground lease, we may have to perform obligations under, or renew, the ground lease in order to protect our investment in the affected property.
Note 4. Indebtedness

As of March 31, 2022, our outstanding indebtedness consisted of the following:
Net Book
 Value
Principal Balance as of of Collateral
March 31,December 31,InterestAt March 31,
EntityTypeSecured By:
2022 (1)
2021 (1)
RateMaturity2022
ILPT
Revolving credit facility (2)
Unsecured$ $182,000 1.410 %N/A$ 
ILPTBridge Loan Facility109 Properties1,385,158  3.214 %Feb 20231,206,972 
ILPTFixed Rate - Interest only186 Properties650,000 650,000 4.310 %Feb 2029490,882 
ILPTFixed Rate - Interest only17 Properties700,000  4.417 %Mar 2032528,498 
Mountain (3)
Floating Rate - Interest only82 Properties1,400,000  3.060 %Mar 2024
(4)
1,946,182 
Mountain (3)
Fixed Rate - AmortizingOne Property13,644  3.670 %May 203131,352 
Mountain (3)
Fixed Rate - AmortizingOne Property27,446  3.100 %Jun 203548,843 
Mountain (3)
Fixed Rate - AmortizingOne Property15,585  3.560 %Sep 203051,807 
Mountain (3)
Fixed Rate - AmortizingOne Property45,534  4.130 %Nov 2033132,174 
Mountain (3)
Fixed Rate - AmortizingOne Property15,032  4.140 %Jul 203245,854 
Mountain (3)
Fixed Rate - AmortizingOne Property32,634  4.020 %Oct 203388,253 
Mountain (3)
Fixed Rate - AmortizingOne Property5,290  3.770 %Apr 203040,668 
Mountain (3)
Fixed Rate - AmortizingOne Property5,594  3.850 %Apr 203040,668 
Mountain (3)
Fixed Rate - AmortizingOne Property44,042  2.950 %Jan 2036103,379 
Mountain (3)
Fixed Rate - AmortizingOne Property47,742  4.270 %Nov 2037114,816 
Mountain (3)
Fixed Rate - AmortizingOne Property54,012  3.250 %Jan 2038118,337 
Mountain (3)
Fixed Rate - AmortizingOne Property15,095  3.760 %Oct 202865,064 
4,456,808 832,000 $5,053,749 
Unamortized debt issuance costs(68,383)(3,876)
$4,388,425 $828,124 

(1)The principal balances are the amounts stated in contracts. In accordance with GAAP, our carrying values and recorded interest expense may be different because of market conditions at the time we assumed certain of these debts.

(2)In February 2022, we repaid the outstanding principal balance under our $750,000 unsecured revolving credit facility and then terminated the agreement governing the facility in accordance with its terms and without penalty.

(3)Mountain is Mountain Industrial REIT LLC.

(4)The Floating Rate Loan matures in March 2024, subject to three, one year extension options.

Our principal debt obligations at March 31, 2022 were: (1) $1,385,158 outstanding principal amount of the Bridge Loan; (2) $1,400,000 outstanding principal amount of the Floating Rate Loan; (3) $700,000 outstanding principal amount of the Fixed Rate Loan; (4) $650,000 outstanding principal amount of a mortgage loan secured by 186 of our properties; and (5) $321,650 aggregate principal amount of mortgages secured by 11 properties owned by our consolidated joint venture in which we own a 61% equity interest.
13

INDUSTRIAL LOGISTICS PROPERTIES TRUST 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)

As of December 31, 2021, we had a $750,000 unsecured revolving credit facility that was available for our general business purposes, including acquisitions. The maturity date of this revolving credit facility was June 29, 2022 and had an option to extend the maturity date for one, six month period, subject to payment of extension fees and satisfaction of other conditions. As of December 31, 2021, the annual interest rate payable on borrowings under this revolving credit facility was 1.41%. The weighted average annual interest rate for borrowings under this revolving credit facility was 1.41% and 1.57% for the period from January 1, 2022 to February 25, 2022 and the three months ended 2021, respectively. In connection with the closing of the Merger, we entered into the Loans, and repaid the outstanding principal balance under this revolving credit facility and then terminated the agreement governing the facility in accordance with its terms and without penalty. During the three months ended March 31, 2022, we recorded a $828 loss on extinguishment of debt to write off any unamortized costs related to this facility.
On February 25, 2022, subsidiaries of our consolidated joint venture entered into a loan agreement with Citi Real Estate Funding Inc., UBS AG, Bank of America, N.A., Bank of Montreal and Morgan Stanley Bank, N.A., or collectively, the Floating Rate Lenders, pursuant to which this joint venture obtained the Floating Rate Loan. Also on February 25, 2022, our consolidated joint venture entered into a guaranty in favor of the Floating Rate Lenders, pursuant to which this joint venture guaranteed certain limited recourse obligations of its subsidiaries with respect to the Floating Rate Loan. The Floating Rate Loan matures in March 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.25%. Effective in March 2022, the Floating Rate Lenders exercised their option to increase the premium in connection with the securitization of the Floating Rate Loan, resulting in an increase of 51.5 basis points in the premium. As of March 31, 2022, the weighted average annual interest rate payable under our Floating Rate Loan was 3.060% and the weighted average interest rate for borrowings under the Floating Rate Loan was 3.011% for the period from February 25, 2022 to March 31, 2022.
Also on February 25, 2022, certain of our subsidiaries entered into a loan agreement with Citibank, N.A., UBS AG, Bank of America, N.A., Bank of Montreal and Morgan Stanley Bank, N.A., or collectively, the Bridge Lenders, and a mezzanine loan agreement with an institutional lender, or the Bridge Mezz Lender, together pursuant to which we obtained the Bridge Loan. Also on February 25, 2022, we entered into a guaranty in favor of the Bridge Lenders and the Bridge Mezz Lender, pursuant to which we guaranteed certain limited recourse obligations of its subsidiaries with respect to the Bridge Loan. The Bridge Loan matures in February 2023 and requires that interest be paid at an annual rate of SOFR plus a premium of 1.75% under the loan agreement and a premium of 8.0% under the mezzanine loan agreement. As of March 31, 2022, the weighted average annual interest rate payable under our Bridge Loan was 3.214% and the weighted average annual interest rate for borrowings under the Bridge Loan was 3.143% for the period from February 25, 2022 to March 31, 2022.
Also on February 25, 2022, certain of our subsidiaries entered into a loan agreement with Citi Real Estate Funding Inc., UBS AG, Bank of America, N.A., Bank of Montreal and Morgan Stanley Bank, N.A., or collectively, the Fixed Rate Lenders, and mezzanine loan agreements with Citigroup Global Markets Realty Corp., UBS AG, Bank of America, N.A., Bank of Montreal and Morgan Stanley Mortgage Capital Holdings LLC, or collectively the Fixed Mezz Lenders, pursuant to which we obtained the Fixed Rate Loan. Also on February 25, 2022, we entered into a guaranty in favor of the Fixed Rate Lenders and the Fixed Mezz Lenders, pursuant to which we guaranteed certain limited recourse obligations of our subsidiaries with respect to the Fixed Rate Loan. The Fixed Rate Loan matures in March 2032 and requires that interest be paid at a weighted average annual fixed rate of 4.417%.
We used the aggregate net proceeds from the Loans to fund the acquisition of MNR. Principal payments on the Loans are not required prior to the end of the respective initial term, subject to certain conditions set forth in the applicable loan agreement. Subject to the satisfaction of certain stated conditions, we have the option under the applicable loan agreement: (1) to prepay up to $280,000 of the Floating Rate Loan after March 2023, at par with no premium, and to prepay the balance of the Floating Rate Loan at any time, subject to a premium; (2) to prepay the Bridge Loan, in full or in part at any time, subject to breakage costs; and (3) to prepay the Fixed Rate Loan in full or part at any time, subject to a premium, and beginning in September 2031, without a premium.
The agreements governing the Loans contain customary covenants and provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default.
14

INDUSTRIAL LOGISTICS PROPERTIES TRUST 
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(dollars in thousands, except per share data)

In connection with the Merger, our consolidated joint venture in which we own a 61% equity interest assumed an aggregate $323,432 of existing MNR mortgages secured by 11 properties which are owned by this joint venture. These amortizing mortgages require monthly payments of principal and interest until maturity. The value of these mortgages approximated their estimated fair value on the date of acquisition.
See Notes 2 and 5 for further information regarding our acquisition of MNR.
Note 5. Fair Value of Assets and Liabilities

Our financial instruments include cash and cash equivalents, restricted cash, rents receivable, the Floating Rate Loan, the Bridge Loan, the Fixed Rate Loan, mortgage notes payable, accounts payable, rents collected in advance, marketable securities available for sale, interest rate caps, security deposits and amounts due from or to related persons. At March 31, 2022 and December 31, 2021, the fair value of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows:
 At March 31, 2022At December 31, 2021
 CarryingEstimatedCarryingEstimated
 
Value (1)
Fair Value
Value (1)
Fair Value
Mortgage notes payable, 4.310% interest rate, due in 2029
$646,260 $653,231 $646,124 $709,198 
Bridge Loan, 3.214% weighted average interest rate, due in 2023
1,356,606 1,356,606   
Mortgage notes payable, 3.060% interest rate, due in 2024 (2)
1,369,635 1,369,635   
Mortgage notes payable, 4.417% interest rate, due in 2032
694,274 694,274   
Mortgage note payable, 3.670% interest rate, due in 2031
13,644 13,644   
Mortgage note payable, 3.100% interest rate, due in 2035
27,446 27,446   
Mortgage note payable, 3.560% interest rate, due in 2030
15,585 15,585   
Mortgage note payable, 4.130% interest rate, due in 2033
45,534 45,534   
Mortgage note payable, 4.140% interest rate, due in 2032
15,032 15,032   
Mortgage note payable, 4.020% interest rate, due in 2033
32,634 32,634   
Mortgage note payable, 3.770% interest rate, due in 2030
5,290 5,290   
Mortgage note payable, 3.850% interest rate, due in 2030
5,594 5,594   
Mortgage note payable, 2.950% interest rate, due in 2036
44,042 44,042   
Mortgage note payable, 4.270% interest rate, due in 2037
47,742 47,742   
Mortgage note payable, 3.250% interest rate, due in 2038
54,012 54,012