Fourth Quarter Net Income Attributable to Common Shareholders of $0.97 Per Share
Fourth Quarter Normalized FFO Attributable to Common Shareholders of $0.49 Per Share
Fourth Quarter Same Property Cash Basis NOI Increased by 4.5% Compared to the Same Period Last Year
Entered into a Definitive Agreement to Acquire Monmouth Real Estate Investment Corporation (NYSE: MNR)
NEWTON, Mass.--(BUSINESS WIRE)-- Industrial Logistics Properties Trust (Nasdaq: ILPT) today announced financial results for the quarter ended December 31, 2021.
John Murray, President and Chief Executive Officer of ILPT, made the following statement:
“ILPT finished 2021 with strong leasing momentum, solid financial growth and the announcement of a high quality, strategic acquisition. We entered new and renewal leases and completed rent resets for approximately 1.6 million square feet at weighted average rental rates that were over 15% higher than prior rental rates for the same space with portfolio occupancy reaching 99.2% at year end. We achieved per share Normalized FFO growth of 6.5% and same property cash basis NOI growth accelerated to 4.5% during the fourth quarter. We have a solid balance sheet, strengthened by the sale of six recently acquired properties to our joint venture, at a gain of $11.1 million.
In 2022, ILPT is poised for significant growth from our planned acquisition of Monmouth Real Estate Investment Corporation, which we expect to close in the first quarter. We believe this accretive acquisition creates a stronger ILPT with enhanced scale, additional high quality e-commerce focused mainland properties, and increased geographic and tenant diversity.”
Quarterly Results:
Financial | Three Months Ended | ||||
(dollars in thousands, except per share data) | December 31, 2021 |
| December 31, 2020 |
| Change |
Net income attributable to common shareholders per share | $0.97 |
| $0.62 |
| 56.5% |
Normalized FFO attributable to common shareholders per share | $0.49 |
| $0.46 |
| 6.5% |
Net operating income (NOI) | $43,771 |
| $46,659 |
| (6.2)% |
Same property cash basis NOI | $38,756 |
| $37,092 |
| 4.5% |
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 Normalized FFO attributable to common shareholders for the quarters ended December 31, 2021 and 2020 appear later in this press release. 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 December 31, 2021 and 2020, also appear later in this press release.
| Three Months Ended |
Leasing Activity | December 31, 2021 |
Leasing activity for new and renewal leases and rent resets (square feet) | 1,564,000 |
Weighted average lease term for new and renewal leases (by square feet) | 10.2 years |
Weighted average rental rate change versus prior rental rate for same space (by square feet) | 15.1% |
Commitments for leasing capital and concessions for new and renewal leases (per square foot per year) | $0.28 |
| As of | ||||
Occupancy | December 31, 2021 |
| September 30, 2021 |
| December 31, 2020 |
Occupancy | 99.2% |
| 99.0% |
| 98.4% |
Same property occupancy | 99.2% |
| 98.9% |
| 98.4% |
Acquisition and Financing Activities:
Liquidity:
Conference Call:
On Wednesday, February 16, 2022 at 10:00 a.m. Eastern Time, John Murray, Chief Executive Officer, Richard Siedel, Chief Financial Officer, and Yael Duffy, Chief Operating Officer, will host a conference call to discuss ILPT’s fourth quarter 2021 financial results.
The conference call telephone number is (877) 418-4826. Participants calling from outside the United States and Canada should dial (412) 902-6758. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 11:59 p.m. on Wednesday, February 23, 2022. To access the replay, dial (412) 317-0088. The replay pass code is 9127484.
A live audio webcast of the conference call will also be available in a listen-only mode on ILPT’s website, at www.ilptreit.com. Participants wanting to access the webcast should visit ILPT’s website about five minutes before the call. The archived webcast will be available for replay on ILPT’s website following the call for about one week. The transcription, recording and retransmission in any way of ILPT’s fourth quarter conference call are strictly prohibited without the prior written consent of ILPT.
Supplemental Data:
A copy of ILPT’s Fourth Quarter 2021 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.
Industrial Logistics Properties Trust (Nasdaq: ILPT) is a real estate investment trust, or REIT, focused on owning and leasing high quality distribution and logistics properties that serve the growing needs of e-commerce. As of December 31, 2021, ILPT’s portfolio consisted of 288 properties containing 34 million rentable square feet in 31 states. More than 70% of ILPT’s annual rental revenues are derived from investment grade tenants, tenants that are subsidiaries of investment grade rated entities or Hawaii land leases. ILPT is managed by The RMR Group (Nasdaq: RMR), a leading U.S. alternative asset management company with more than $33 billion in assets under management as of December 31, 2021 and more than 35 years of institutional experience in buying, selling, financing and operating commercial real estate. ILPT is headquartered in Newton, MA. For more information, visit www.ilptreit.com.
Non-GAAP Financial Measures:
ILPT presents certain “non-GAAP financial measures” within the meaning of the applicable rules of the Securities and Exchange Commission, or SEC, including FFO attributable to common shareholders, Normalized FFO attributable to common shareholders, NOI and Cash Basis NOI. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income or net income attributable to common shareholders as indicators of ILPT’s operating performance or as measures of ILPT’s liquidity. These measures should be considered in conjunction with net income and net income attributable to common shareholders as presented in ILPT’s consolidated statements of income. ILPT considers these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income and net income attributable to common shareholders. ILPT believes these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of ILPT’s operating performance between periods and with other REITs and, in the case of NOI and Cash Basis NOI, reflecting only those income and expense items that are generated and incurred at the property level may help both investors and management to understand the operations of ILPT’s properties.
Please see the pages attached hereto for a more detailed statement of ILPT’s operating results and financial condition and for an explanation of ILPT’s calculation of NOI, Cash Basis NOI, same property NOI, same property Cash Basis NOI, FFO attributable to common shareholders and Normalized FFO attributable to common shareholders and a reconciliation of those amounts to amounts determined in accordance with GAAP.
Industrial Logistics Properties TrustConsolidated Statements of Income (amounts in thousands, except per share data) (unaudited)
|
|
|
| Three Months Ended December 31, |
| Year Ended December 31, | ||||||||||||
|
|
|
|
| 2021 |
|
|
| 2020 |
|
|
| 2021 |
|
|
| 2020 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Rental income |
| $ | 56,496 |
|
| $ | 60,081 |
|
| $ | 219,874 |
|
| $ | 254,575 |
| ||
|
|
|
|
|
|
|
|
|
|
| ||||||||
Expenses: |
|
|
|
|
|
|
|
| ||||||||||
| Real estate taxes |
|
| 7,781 |
|
|
| 8,406 |
|
|
| 30,134 |
|
|
| 35,185 |
| |
| Other operating expenses |
|
| 4,944 |
|
|
| 5,016 |
|
|
| 18,678 |
|
|
| 20,749 |
| |
| Depreciation and amortization |
|
| 13,396 |
|
|
| 15,215 |
|
|
| 50,598 |
|
|
| 70,518 |
| |
| Acquisition and certain other transaction related costs |
|
| 486 |
|
|
| 22 |
|
|
| 1,132 |
|
|
| 200 |
| |
| General and administrative |
|
| 4,006 |
|
|
| 4,723 |
|
|
| 16,724 |
|
|
| 19,580 |
| |
|
| Total expenses |
|
| 30,613 |
|
|
| 33,382 |
|
|
| 117,266 |
|
|
| 146,232 |
|
|
|
|
|
|
|
|
|
|
|
| ||||||||
Gain on sale of real estate |
|
| 11,114 |
|
|
| 23,996 |
|
|
| 12,054 |
|
|
| 23,996 |
| ||
Interest income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 113 |
| ||
Interest expense (including net amortization of debt issuance costs, premiums and discounts of $506, $588, $2,022 and $2,481, respectively) |
|
| (9,157 | ) |
|
| (11,009 | ) |
|
| (35,625 | ) |
|
| (51,619 | ) | ||
Gain on early extinguishment of debt |
|
| — |
|
|
| — |
|
|
| — |
|
|
| 120 |
| ||
Income before income tax expense and equity in earnings of investees |
|
| 27,840 |
|
|
| 39,686 |
|
|
| 79,037 |
|
|
| 80,953 |
| ||
Income tax expense |
|
| (96 | ) |
|
| (75 | ) |
|
| (273 | ) |
|
| (277 | ) | ||
Equity in earnings of investees |
|
| 35,463 |
|
|
| 529 |
|
|
| 40,918 |
|
|
| 529 |
| ||
Net income |
|
| 63,207 |
|
|
| 40,140 |
|
|
| 119,682 |
|
|
| 81,205 |
| ||
Net loss attributable to noncontrolling interest |
|
| — |
|
|
| 175 |
|
|
| — |
|
|
| 866 |
| ||
Net income attributable to common shareholders |
| $ | 63,207 |
|
| $ | 40,315 |
|
| $ | 119,682 |
|
| $ | 82,071 |
| ||
|
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average common shares outstanding - basic |
|
| 65,212 |
|
|
| 65,139 |
|
|
| 65,169 |
|
|
| 65,104 |
| ||
Weighted average common shares outstanding - diluted |
|
| 65,231 |
|
|
| 65,152 |
|
|
| 65,211 |
|
|
| 65,114 |
| ||
|
|
|
|
|
|
|
|
|
|
| ||||||||
Per common share data (basic and diluted): |
|
|
|
|
|
|
|
| ||||||||||
Net income attributable to common shareholders |
| $ | 0.97 |
|
| $ | 0.62 |
|
| $ | 1.83 |
|
| $ | 1.26 |
|
Industrial Logistics Properties TrustFunds from Operations Attributable to Common Shareholders and Normalized Funds from Operations Attributable to Common Shareholders (1) (amounts in thousands, except per share data) (unaudited)
|
| Three Months Ended December 31, |
| Year Ended December 31, | ||||||||||||
|
|
| 2021 |
|
|
| 2020 |
|
|
| 2021 |
|
|
| 2020 |
|
|
|
|
|
|
|
|
|
| ||||||||
Net income attributable to common shareholders |
| $ | 63,207 |
|
| $ | 40,315 |
|
| $ | 119,682 |
|
| $ | 82,071 |
|
Depreciation and amortization |
|
| 13,396 |
|
|
| 15,215 |
|
|
| 50,598 |
|
|
| 70,518 |
|
Equity in earnings of unconsolidated joint venture |
|
| (35,463 | ) |
|
| (529 | ) |
|
| (40,918 | ) |
|
| (529 | ) |
Share of FFO from unconsolidated joint venture |
|
| 1,202 |
|
|
| 556 |
|
|
| 4,823 |
|
|
| 556 |
|
Gain on sale of real estate |
|
| (11,114 | ) |
|
| (23,996 | ) |
|
| (12,054 | ) |
|
| (23,996 | ) |
FFO adjustments attributable to noncontrolling interest |
|
| — |
|
|
| (1,384 | ) |
|
| — |
|
|
| (7,656 | ) |
FFO attributable to common shareholders |
|
| 31,228 |
|
|
| 30,177 |
|
|
| 122,131 |
|
|
| 120,964 |
|
Acquisition and certain other transaction related costs |
|
| 486 |
|
|
| 22 |
|
|
| 1,132 |
|
|
| 200 |
|
Gain on early extinguishment of debt |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (120 | ) |
Normalized FFO attributable to common shareholders |
| $ | 31,714 |
|
| $ | 30,199 |
|
| $ | 123,263 |
|
| $ | 121,044 |
|
|
|
|
|
|
|
|
|
| ||||||||
Weighted average common shares outstanding - basic |
|
| 65,212 |
|
|
| 65,139 |
|
|
| 65,169 |
|
|
| 65,104 |
|
Weighted average common shares outstanding - diluted |
|
| 65,231 |
|
|
| 65,152 |
|
|
| 65,211 |
|
|
| 65,114 |
|
|
|
|
|
|
|
|
|
| ||||||||
Per common share data (basic and diluted): |
|
|
|
|
|
|
|
| ||||||||
FFO attributable to common shareholders |
| $ | 0.48 |
|
| $ | 0.46 |
|
| $ | 1.87 |
|
| $ | 1.86 |
|
Normalized FFO attributable to common shareholders |
| $ | 0.49 |
|
| $ | 0.46 |
|
| $ | 1.89 |
|
| $ | 1.86 |
|
Distributions declared |
| $ | 0.33 |
|
| $ | 0.33 |
|
| $ | 1.32 |
|
| $ | 1.32 |
|
Industrial Logistics Properties TrustCalculation and Reconciliation of Property Net Operating Income and Cash Basis Net Operating Income (1) (dollars in thousands) (unaudited)
|
|
| Three Months Ended December 31, |
| Year Ended December 31, | ||||||||||||
|
|
|
| 2021 |
|
|
| 2020 |
|
|
| 2021 |
|
|
| 2020 |
|
Calculation of NOI and Cash Basis NOI: |
|
|
|
|
|
|
|
| |||||||||
Rental income |
| $ | 56,496 |
|
| $ | 60,081 |
|
| $ | 219,874 |
|
| $ | 254,575 |
| |
Real estate taxes |
|
| (7,781 | ) |
|
| (8,406 | ) |
|
| (30,134 | ) |
|
| (35,185 | ) | |
Other operating expenses |
|
| (4,944 | ) |
|
| (5,016 | ) |
|
| (18,678 | ) |
|
| (20,749 | ) | |
| NOI |
|
| 43,771 |
|
|
| 46,659 |
|
|
| 171,062 |
|
|
| 198,641 |
|
Non-cash straight line rent adjustments included in rental income |
|
| (1,590 | ) |
|
| (2,858 | ) |
|
| (7,263 | ) |
|
| (9,041 | ) | |
Lease value amortization included in rental income |
|
| (256 | ) |
|
| (185 | ) |
|
| (781 | ) |
|
| (791 | ) | |
Lease termination fees included in rental income |
|
| — |
|
|
| — |
|
|
| (512 | ) |
|
| — |
| |
| Cash Basis NOI |
| $ | 41,925 |
|
| $ | 43,616 |
|
| $ | 162,506 |
|
| $ | 188,809 |
|
|
|
|
|
|
|
|
|
|
| ||||||||
Reconciliation of Net Income to NOI and Cash Basis NOI: |
|
|
|
|
|
|
|
| |||||||||
Net income |
| $ | 63,207 |
|
| $ | 40,140 |
|
| $ | 119,682 |
|
| $ | 81,205 |
| |
Equity in earnings of investees |
|
| (35,463 | ) |
|
| (529 | ) |
|
| (40,918 | ) |
|
| (529 | ) | |
Income tax expense |
|
| 96 |
|
|
| 75 |
|
|
| 273 |
|
|
| 277 |
| |
Income before income tax expense and equity in earnings of investees |
|
| 27,840 |
|
|
| 39,686 |
|
|
| 79,037 |
|
|
| 80,953 |
| |
Gain on early extinguishment of debt |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (120 | ) | |
Interest expense |
|
| 9,157 |
|
|
| 11,009 |
|
|
| 35,625 |
|
|
| 51,619 |
| |
Gain on sale of real estate |
|
| (11,114 | ) |
|
| (23,996 | ) |
|
| (12,054 | ) |
|
| (23,996 | ) | |
Interest income |
|
| — |
|
|
| — |
|
|
| — |
|
|
| (113 | ) | |
General and administrative |
|
| 4,006 |
|
|
| 4,723 |
|
|
| 16,724 |
|
|
| 19,580 |
| |
Acquisition and certain other transaction related costs |
| 486 |
|
|
| 22 |
|
|
| 1,132 |
|
|
| 200 |
| ||
Depreciation and amortization |
|
| 13,396 |
|
|
| 15,215 |
|
|
| 50,598 |
|
|
| 70,518 |
| |
| NOI |
| 43,771 |
|
|
| 46,659 |
|
|
| 171,062 |
|
|
| 198,641 |
| |
Non-cash straight line rent adjustments included in rental income |
|
| (1,590 | ) |
|
| (2,858 | ) |
|
| (7,263 | ) |
|
| (9,041 | ) | |
Lease value amortization included in rental income |
|
| (256 | ) |
|
| (185 | ) |
|
| (781 | ) |
|
| (791 | ) | |
Lease termination fees included in rental income |
|
| — |
|
|
| — |
|
|
| (512 | ) |
|
| — |
| |
| Cash Basis NOI |
| $ | 41,925 |
|
| $ | 43,616 |
|
| $ | 162,506 |
|
| $ | 188,809 |
|
Industrial Logistics Properties TrustReconciliation of Net Operating Income to Same Property Net Operating Income and Calculation of Same Property Cash Basis Net Operating Income (1) (dollars in thousands) (unaudited)
|
|
| Three Months Ended December 31, |
| Year Ended December 31, | ||||||||||||
|
|
|
| 2021 |
|
|
| 2020 |
|
|
| 2021 |
|
|
| 2020 |
|
Reconciliation of NOI to Same Property NOI (2)(3): |
|
|
|
|
|
|
|
| |||||||||
Rental income |
| $ | 56,496 |
|
| $ | 60,081 |
|
| $ | 219,874 |
|
| $ | 254,575 |
| |
Real estate taxes |
|
| (7,781 | ) |
|
| (8,406 | ) |
|
| (30,134 | ) |
|
| (35,185 | ) | |
Other operating expenses |
|
| (4,944 | ) |
|
| (5,016 | ) |
|
| (18,678 | ) |
|
| (20,749 | ) | |
| NOI |
|
| 43,771 |
|
|
| 46,659 |
|
|
| 171,062 |
|
|
| 198,641 |
|
Less: |
|
|
|
|
|
|
|
| |||||||||
| NOI of properties not included in same property results |
|
| (3,273 | ) |
|
| (6,771 | ) |
|
| (10,458 | ) |
|
| (41,504 | ) |
Same Property NOI |
| $ | 40,498 |
|
| $ | 39,888 |
|
| $ | 160,604 |
|
| $ | 157,137 |
| |
|
|
|
|
|
|
|
|
|
| ||||||||
Calculation of Same Property Cash Basis NOI (2)(3): |
|
|
|
|
|
|
|
| |||||||||
Same Property NOI |
| $ | 40,498 |
|
| $ | 39,888 |
|
| $ | 160,604 |
|
| $ | 157,137 |
| |
Less: |
|
|
|
|
|
|
|
| |||||||||
| Non-cash straight line rent adjustments included in rental income |
|
| (1,491 | ) |
|
| (2,627 | ) |
|
| (6,846 | ) |
|
| (6,705 | ) |
| Lease value amortization included in rental income |
|
| (251 | ) |
|
| (169 | ) |
|
| (773 | ) |
|
| (682 | ) |
| Lease termination fees included in rental income |
|
| — |
|
|
| — |
|
|
| (512 | ) |
|
| — |
|
Same Property Cash Basis NOI | $ | 38,756 |
|
| $ | 37,092 |
|
| $ | 152,473 |
|
| $ | 149,750 |
|
Industrial Logistics Properties TrustConsolidated Balance Sheets (dollars in thousands, except per share data) (unaudited)
|
| December 31, |
| December 31, | ||||
|
|
| 2021 |
|
|
| 2020 |
|
ASSETS |
|
|
|
| ||||
Real estate properties: |
|
|
|
| ||||
Land |
| $ | 699,037 |
|
| $ | 709,099 |
|
Buildings and improvements |
|
| 1,049,796 |
|
|
| 1,099,971 |
|
Total real estate properties, gross |
|
| 1,748,833 |
|
|
| 1,809,070 |
|
Accumulated depreciation |
|
| (167,490 | ) |
|
| (141,406 | ) |
Total real estate properties, net |
|
| 1,581,343 |
|
|
| 1,667,664 |
|
Investment in unconsolidated joint venture |
|
| 143,021 |
|
|
| 60,590 |
|
Acquired real estate leases, net |
|
| 63,441 |
|
|
| 83,644 |
|
Cash and cash equivalents |
|
| 29,397 |
|
|
| 22,834 |
|
Rents receivable, including straight line rents of $69,173 and $62,753, respectively |
|
| 75,877 |
|
|
| 69,511 |
|
Deferred leasing costs, net |
|
| 8,883 |
|
|
| 4,595 |
|
Debt issuance costs, net |
|
| 804 |
|
|
| 1,477 |
|
Due from related persons |
|
| — |
|
|
| 2,665 |
|
Other assets, net |
|
| 5,792 |
|
|
| 2,765 |
|
Total assets |
| $ | 1,908,558 |
|
| $ | 1,915,745 |
|
|
|
|
|
| ||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
| ||||
Revolving credit facility |
| $ | 182,000 |
|
| $ | 221,000 |
|
Mortgage notes payable, net |
|
| 646,124 |
|
|
| 645,579 |
|
Assumed real estate lease obligations, net |
|
| 12,435 |
|
|
| 14,630 |
|
Accounts payable and other liabilities |
|
| 16,281 |
|
|
| 14,716 |
|
Rents collected in advance |
|
| 8,394 |
|
|
| 7,811 |
|
Security deposits |
|
| 3,097 |
|
|
| 6,540 |
|
Due to related persons |
|
| 2,185 |
|
|
| 2,279 |
|
Total liabilities |
|
| 870,516 |
|
|
| 912,555 |
|
|
|
|
|
| ||||
Commitments and contingencies |
|
|
|
| ||||
|
|
|
|
| ||||
Shareholders' Equity: |
|
|
|
| ||||
Common shares of beneficial interest, $.01 par value: 100,000,000 shares authorized; 65,404,592 and 65,301,088 shares issued and outstanding, respectively |
|
| 654 |
|
|
| 653 |
|
Additional paid in capital |
|
| 1,012,224 |
|
|
| 1,010,819 |
|
Cumulative net income |
|
| 343,908 |
|
|
| 224,226 |
|
Cumulative common distributions |
|
| (318,744 | ) |
|
| (232,508 | ) |
Total shareholders' equity |
|
| 1,038,042 |
|
|
| 1,003,190 |
|
Total liabilities and shareholders' equity |
| $ | 1,908,558 |
|
| $ | 1,915,745 |
|
Warning Concerning Forward-Looking Statements
This press release contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Whenever ILPT uses words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, ILPT is making forward-looking statements. These forward-looking statements are based upon ILPT’s present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Actual results may differ materially from those contained in or implied by ILPT’s forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond ILPT’s control. For example:
The information contained in ILPT’s filings with the SEC, including under “Risk Factors” in ILPT’s periodic reports, or incorporated therein, identifies important factors that could cause ILPT’s actual results to differ materially from those stated in or implied by ILPT’s forward-looking statements. ILPT’s filings with the SEC are available on the SEC’s website at www.sec.gov.
You should not place undue reliance upon forward-looking statements.
Except as required by law, ILPT does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.
A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq. No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.
View source version on businesswire.com: https://www.businesswire.com/news/home/20220215006135/en/
Kevin Barry, Director, Investor Relations (617) 658-0776
Source: Industrial Logistics Properties Trust