NEWTON, Mass.--(BUSINESS WIRE)--Industrial Logistics Properties Trust (Nasdaq: ILPT) today announced financial results for the quarter and nine months ended September 30, 2020.
John Murray, President and Chief Executive Officer of ILPT, made the following statement:
“Our third quarter results reflect the strength and resilience of industrial and logistics properties despite a challenging economic environment. ILPT continues to benefit from robust industry fundamentals, a portfolio of high-quality warehouse and distribution assets, and strong credit tenants. We reported solid third quarter results, including same-property cash NOI growth and increased FFO year over year, as well as more than $460 million of liquidity at quarter end. We executed nearly 800,000 square feet of leasing activity with a 9.6% rollup in rent during the quarter, and demand for our properties was strong with occupancy rates holding steady at nearly 99% at quarter end. After giving effect to modest rent deferrals granted to certain tenants, we collected 98% of our contractual rents for the quarter. ILPT's portfolio of industrial properties positions us well to continue to successfully manage through current economic disruptions and drive growth and value creation over the long term."
Results for the Quarter Ended September 30, 2020:
Net income attributable to common shareholders for the quarter ended September 30, 2020 was $14.1 million, or $0.22 per diluted share, compared to $10.9 million, or $0.17 per diluted share, for the same quarter last year. Normalized funds from operations attributable to common shareholders, or Normalized FFO attributable to common shareholders, for the quarter ended September 30, 2020 were $30.1 million, or $0.46 per diluted share, compared to $28.5 million, or $0.44 per diluted share, for the same quarter last year.
Reconciliations of net income attributable to common shareholders determined in accordance with U.S. generally accepted accounting principles, or GAAP, to funds from operations, or FFO, attributable to common shareholders and to Normalized FFO attributable to common shareholders for the quarters ended September 30, 2020 and 2019 appear later in this press release.
Results for the Nine Months Ended September 30, 2020:
Net income attributable to common shareholders for the nine months ended September 30, 2020 was $41.8 million, or $0.64 per diluted share, compared to $40.8 million, or $0.63 per diluted share, for the same period last year. Normalized FFO attributable to common shareholders for the nine months ended September 30, 2020 were $90.8 million, or $1.40 per diluted share, compared to $84.7 million, or $1.30 per diluted share, for the same period last year.
Reconciliations of net income attributable to common shareholders determined in accordance with GAAP to FFO attributable to common shareholders and to Normalized FFO attributable to common shareholders for the nine months ended September 30, 2020 and 2019 appear later in this press release.
Leasing, Occupancy and Same Property Results:
During the quarter ended September 30, 2020, ILPT entered new and renewal leases and completed rent resets for approximately 776,000 square feet of space, which resulted in weighted average (by square feet) rental rates that were approximately 9.6% higher than prior rental rates for the same space, with a weighted average (by square feet) lease term of 4.4 years for new and renewal leases. Commitments for leasing capital and concessions for new and renewal leases entered during the quarter ended September 30, 2020 totaled approximately $927,000, or approximately $0.44 per square foot per lease year.
As of September 30, 2020, 98.8% of ILPT’s total rentable square feet was leased, compared to 98.8% as of June 30, 2020 and 99.5% as of September 30, 2019. Occupancy for properties owned continuously since July 1, 2019 on a same property basis was 98.7% as of September 30, 2020 compared to 98.7% as of June 30, 2020 and 99.5% at September 30, 2019. Same property cash basis net operating income, or Cash Basis NOI, increased 1.9% for the quarter ended September 30, 2020 compared to the quarter ended September 30, 2019, primarily as a result of contractual rent increases and leasing activity at certain properties since July 1, 2019.
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 September 30, 2020 and 2019, appear later in this press release.
In response to the COVID-19 pandemic, ILPT granted requests to 43 tenants to defer aggregate rent payments of $3.6 million as of October 23, 2020, and in most cases, these tenants were obligated to pay the deferred rents in 12 equal monthly installments beginning in September 2020. For the quarter ended September 30, 2020, ILPT collected approximately 98% of its contractual rents due after giving effect to such rent deferrals.
Acquisition and Disposition Activities:
In September 2020, ILPT entered into an agreement to sell one property located in Virginia containing approximately 308,000 rentable square feet for a sales price of $11.0 million, excluding closing costs. This sale is expected to occur during the fourth quarter of 2020. ILPT has classified this property as held for sale as of September 30, 2020.
