NEWTON, Mass.--(BUSINESS WIRE)--Industrial Logistics Properties Trust (Nasdaq: ILPT) today announced financial results for the quarter and six months ended June 30, 2019.
John Murray, President and Chief Executive Officer of ILPT, made the following statement:
"During the second quarter, ILPT continued to execute on our business plan, which included strong leasing activity, and the completion of two previously announced portfolio acquisitions. These properties have been integrated into our existing portfolio operations with the expertise and support of The RMR Group’s real estate professionals across the country. We also completed approximately 359,000 square feet of new and renewal leasing, which resulted in weighted average rental rates that are approximately 27.5% higher than prior rental rates for the same space, with a weighted average lease term of 11.0 years."
Results for the Quarter Ended June 30, 2019:
Net income for the quarter ended June 30, 2019 was $13.1 million, or $0.20 per share, compared to $18.7 million, for the same quarter last year. Normalized funds from operations, or Normalized FFO, for the quarter ended June 30, 2019 were $29.8 million, or $0.46 per share, compared to $25.6 million for the same quarter last year.
Reconciliations of net income determined in accordance with U.S. generally accepted accounting principles, or GAAP, to funds from operations, or FFO, and to Normalized FFO for the quarters ended June 30, 2019 and 2018 appear later in this press release.
Results for the Six Months Ended June 30, 2019:
Net income for the six months ended June 30, 2019 was $29.9 million, or $0.46 per share, compared to $38.0 million, for the same period last year. Normalized FFO for the six months ended June 30, 2019 were $56.2 million, or $0.86 per share, compared to $51.7 million for the same period last year.
For the period from January 1, 2018 to January 17, 2018, the date of ILPT’s initial public offering, or the IPO, ILPT’s historical results of operations have been derived from ILPT’s former parent, Select Income REIT, or SIR, a former publicly traded real estate investment trust, or REIT, that merged with and into a wholly owned subsidiary of Office Properties Income Trust (Nasdaq: OPI) on December 31, 2018.
Reconciliations of net income determined in accordance with GAAP to FFO and to Normalized FFO for the six months ended June 30, 2019 and 2018 appear later in this press release.
Leasing, Occupancy and Same Property Results:
During the quarter ended June 30, 2019, ILPT entered new leases and lease renewals for approximately 359,000 square feet, which resulted in weighted average (by square feet) rental rates that were approximately 27.5% higher than prior rental rates for the same space, with a weighted average (by square feet) lease term of 11.0 years. There were no rent resets during the quarter ended June 30, 2019. Commitments for leasing capital and concessions for new and renewal leases entered during the quarter ended June 30, 2019 totaled approximately $472,000, or approximately $0.12 per square foot per lease year.
As of June 30, 2019, 99.3% of ILPT’s total rentable square feet was leased, compared to 99.4% as of March 31, 2019 and 99.1% as of June 30, 2018. Occupancy for properties owned continuously since April 1, 2018, or on a same property basis, decreased to 99.0% at June 30, 2019 from 99.1% at June 30, 2018. Same property cash basis net operating income, or Cash Basis NOI, increased 2.6% for the quarter ended June 30, 2019 compared to the quarter ended June 30, 2018, primarily as a result of contractual rent increases and leasing activity at certain properties since April 1, 2018.
Reconciliations of net income determined in accordance with GAAP to net operating income, or NOI, and Cash Basis NOI, and a reconciliation of NOI to same property NOI and calculation of same property Cash Basis NOI, for the quarters ended June 30, 2019 and 2018, appear later in this press release.
Recent Investment Activities:
As previously disclosed, in February 2019, ILPT entered an agreement to acquire a portfolio of industrial properties located in the Indianapolis, IN and Cincinnati, OH market areas. At the time ILPT entered this agreement, ILPT completed the acquisition of seven of the eight properties. In April 2019, ILPT completed the acquisition of the remaining property with approximately 494,000 rentable square feet for a purchase price of $30.5 million, excluding acquisition related costs. This property was 100% leased to two tenants and had a remaining weighted average (by rental revenues) lease term of 9.2 years as of the date of acquisition.
In April 2019, ILPT acquired a previously disclosed portfolio of industrial properties located in 12 states with an aggregate of 8,694,321 rentable square feet for a purchase price of $624.7 million, including the assumption of $57.0 million of mortgage debt and excluding acquisition related costs. These properties were 100% leased to 13 tenants and had a remaining weighted average (by rental revenues) lease term of 9.2 years as of the date of acquisition.
Supplemental Data:
A copy of ILPT’s Second Quarter 2019 Supplemental Operating and Financial Data is available for download at ILPT’s website, which is located at www.ilptreit.com. ILPT’s website is not incorporated as part of this press release.
ILPT is a REIT that owns and leases industrial and logistics properties throughout the United States. ILPT is managed by the operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company that is headquartered in Newton, MA.
