1 Industrial Logistics Properties Trust First Quarter 2023 Financial Results and Supplemental Information April 25, 2023 Exhibit 99.2510 John Dodd Road Spartanburg, SC 1,015,740 Square Feet ILPT Ownership 100%
2Supplemental Q1 2023RETURN TO TABLE OF CONTENTS QUARTERLY RESULTS Industrial Logistics Properties Trust Announces First Quarter 2023 Financial Results .......................................................................... 4 First Quarter 2023 Highlights and Results ...................................................................................................................................................... 5 - 6 FINANCIALS Key Financial Data ............................................................................................................................................................................................... 8 Condensed Consolidated Statements of Income (Loss) .............................................................................................................................. 9 Condensed Consolidated Balance Sheets ..................................................................................................................................................... 10 Debt Summary .................................................................................................................................................................................................... 11 Debt Maturity Schedule ...................................................................................................................................................................................... 12 Leverage Ratios and Coverage Ratios ............................................................................................................................................................. 13 Capital Expenditures Summary ......................................................................................................................................................................... 14 Property Acquisitions and Dispositions Since 1/1/2023 .............................................................................................................................. 15 PORTFOLIO INFORMATION Same Property Results ........................................................................................................................................................................................ 17 Occupancy and Leasing Summary ................................................................................................................................................................... 18 Tenant Concentration and Credit Characteristics ......................................................................................................................................... 19 Portfolio Lease Expiration and Reset Schedules ........................................................................................................................................... 20 Key Financial Data - By Investment Portfolio .................................................................................................................................................. 21 JOINT VENTURES Consolidated Joint Venture - Mountain Industrial REIT LLC ....................................................................................................................... 23 Consolidated Joint Venture - Financial Information at 100% ..................................................................................................................... 24 Consolidated Joint Venture - Pro-Rata Financial Information ..................................................................................................................... 25 Consolidated Joint Venture - Portfolio Information ...................................................................................................................................... 26 Unconsolidated Joint Venture - The Industrial Fund REIT LLC ................................................................................................................... 27 APPENDIX Company Profile and Research Coverage ...................................................................................................................................................... 29 Governance Information .................................................................................................................................................................................... 30 Non-GAAP Financial Measures and Certain Definitions .............................................................................................................................. 31 - 32 Calculation and Reconciliation of NOI and Cash Basis NOI ........................................................................................................................ 33 Reconciliation of NOI to Same Property NOI and Calculation of Same Property Cash Basis NOI ...................................................... 34 Calculation of EBITDA, EBITDAre and Adjusted EBITDAre ......................................................................................................................... 35 Calculation of FFO Attributable to Common Shareholders and Normalized FFO Attributable to Common Shareholders .......... 36 WARNING CONCERNING FORWARD-LOOKING STATEMENTS ................................................................................................................................. 37 Table of Contents All amounts in this presentation are unaudited. Please refer to the Non-GAAP Financial Measures and Certain Definitions for terms used throughout this document. Trading Symbols: Common Shares: ILPT Investor Relations Contact Stephen Colbert, Director (617) 231-3223 scolbert@ilptreit.com Corporate Headquarters Two Newton Place 255 Washington Street, Suite 300 Newton, Massachusetts 02458-1634
3Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Quarterly Results
4Supplemental Q1 2023RETURN TO TABLE OF CONTENTS “During the first quarter, we executed 1.1 million square feet of new and renewal leases at weighted average rental rates that were 15.1% higher than prior rental rates for the same space. Same property cash basis NOI grew by over 3% compared to the same period last year and we finished the quarter with portfolio occupancy of 98.7%. With no near-term debt maturities, a cash flowing portfolio and continued stability in the industrial sector, we are focused on generating organic cash flow through mark-to-market rent increase opportunities.” Yael Duffy, President and Chief Operating Officer INDUSTRIAL LOGISTICS PROPERTIES TRUST ANNOUNCES FIRST QUARTER 2023 FINANCIAL RESULTS Newton, MA (April 25, 2023): Industrial Logistics Properties Trust (Nasdaq: ILPT) today announced its financial results for the quarter ended March 31, 2023. Dividend ILPT has declared a quarterly distribution on its common shares of $0.01 per share to shareholders of record as of the close of business on April 24, 2023. This distribution will be paid on or about May 18, 2023. Conference Call A conference call to discuss ILPT's first quarter results will be held on Wednesday, April 26, 2023 at 10:00 a.m. Eastern Time. The conference call may be accessed by dialing (877) 418-4826 or (412) 902-6758 (if calling from outside the United States and Canada); a pass code is not required. A replay will be available for one week by dialing (412) 317-0088; the replay pass code is 3354195. 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. The archived webcast will be available for replay on ILPT’s website after the call. The transcription, recording and retransmission in any way are strictly prohibited without the prior written consent of ILPT. About Industrial Logistics Properties Trust 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 March 31, 2023, ILPT’s portfolio consisted of 413 properties containing approximately 60.0 million rentable square feet located in 39 states. Approximately 78% of ILPT’s annualized rental revenues as of March 31, 2023 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 over $37 billion in assets under management as of March 31, 2023 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.
5Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Financial Results • Net loss attributable to common shareholders was $24.8 million, or $0.38 per diluted share. • Normalized FFO attributable to common shareholders were $7.9 million, or $0.12 per diluted share. • Adjusted EBITDAre was $80.7 million. • Same property NOI, and same property Cash Basis NOI increased 7.8% and 3.2%, respectively, compared to the prior year quarter. The increase in same property NOI this quarter was driven by ILPT's leasing activity, an increase in percentage rent earned this quarter and a favorable change in reserves for uncollectible rents. Portfolio Update • Completed 1,143,000 square feet of leasing activity with a weighted average lease term of 8.9 years (by square feet). • Occupancy totaled 98.7% as of March 31, 2023. • Leasing activity yielded a 15.1% roll up in rents. First Quarter 2023 Highlights 2020 Joe B. Jackson Parkway Murfreesboro, TN 1,016,281 Square Feet ILPT Ownership: 100%
6Supplemental Q1 2023RETURN TO TABLE OF CONTENTS First Quarter 2023 Results (dollars in thousands, except per share data) 2552 South 98th Street Edwardsville, KS 280,019 Square Feet ILPT Ownership: 61% Three Months Ended March 31, Financial 2023 2022 Change Net loss attributable to common shareholders ($24,809) $(6,514) N/M Net loss attributable to common shareholders per diluted share $(0.38) $(0.10) N/M Normalized FFO attributable to common shareholders $7,916 $27,603 (71.3)% Normalized FFO attributable to common shareholders per diluted share $0.12 $0.42 (71.4)% Adjusted EBITDAre $80,712 $52,532 53.6% NOI $84,473 $55,167 53.1% Cash Basis NOI $80,441 $53,691 49.8% Same property NOI $43,500 $40,339 7.8% Same property Cash Basis NOI $40,662 $39,415 3.2% Three Months Ended Leasing Activity March 31, 2023 Leasing activity for new and renewal leases and rent resets (square feet) 1,143,000 Weighted average lease term for new and renewal leases (by square feet) 8.9 years Weighted average rental rate change versus prior rental rate for same space (by square feet) 15.1% Commitments for leasing costs and concessions for new and renewal leases (per square foot per year) $0.19 Three Months Ended Occupancy March 31, 2023 December 31, 2022 March 31, 2022 Occupancy 98.7% 99.1% 98.9% Same property occupancy 99.0% 99.1% 99.3%
7Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Financials
8Supplemental Q1 2023RETURN TO TABLE OF CONTENTS (dollars in thousands, except per share data) As of and For the Three Months Ended As of 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 3/31/2023 Selected Income Statement Data: Capitalization: Rental income $ 110,258 $ 106,339 $ 103,215 $ 107,222 $ 71,375 Total common shares (at end of period) 65,565,969 Net loss $ (35,546) $ (41,759) $ (83,974) $ (151,321) $ (9,787) Closing price (at end of period) $ 3.07 Net loss attributable to common shareholders $ (24,809) $ (31,043) $ (45,627) $ (143,539) $ (6,514) Equity market capitalization (at end of period) $ 201,288 NOI $ 84,473 $ 83,598 $ 81,013 $ 86,894 $ 55,167 Debt (principal balance) 4,284,833 Cash Basis NOI $ 80,441 $ 79,931 $ 76,969 $ 79,949 $ 53,691 Total market capitalization $ 4,486,121 Adjusted EBITDAre $ 80,712 $ 79,213 $ 76,072 $ 80,811 $ 52,532 FFO attributable to common shareholders $ 7,916 $ 5,440 $ (10,134) $ (2,001) $ 8,102 Liquidity: Normalized FFO attributable to common shareholders $ 7,916 $ 5,440 $ 14,873 $ 28,302 $ 27,603 Cash and cash equivalents 61,250 Total liquidity $ 61,250 Per Common Share Data (basic and diluted): Net loss attributable to common shareholders $ (0.38) $ (0.48) $ (0.70) $ (2.20) $ (0.10) Normalized FFO attributable to common shareholders $ 0.12 $ 0.08 $ (0.16) $ (0.03) $ 0.12 FFO attributable to common shareholders - diluted $ 0.12 $ 0.08 $ 0.23 $ 0.43 $ 0.42 Dividends: Annualized dividends paid per share $ 0.04 $ 0.04 $ 0.04 $ 1.32 $ 1.32 Annualized dividend yield (at end of period) 1.3% 1.2% 0.7% 9.4% 5.8% Normalized FFO attributable to common shareholders payout ratio (annualized) 8.3% 12.5% 4.3% 76.7% 78.6% Selected Balance Sheet Data: Total gross assets $ 5,939,557 $ 5,949,633 $ 5,962,116 $ 6,166,704 $ 6,286,275 Total assets $ 5,634,976 $ 5,676,166 $ 5,719,635 $ 5,955,838 $ 6,103,793 Total liabilities $ 4,348,801 $ 4,345,395 $ 4,358,125 $ 4,520,904 $ 4,499,824 Total equity $ 1,286,175 $ 1,330,771 $ 1,361,510 $ 1,434,934 $ 1,603,969 Key Financial Data
9Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Condensed Consolidated Statements of Income (Loss) Three Months Ended March 31, 2023 2022 Rental income $ 110,258 $ 71,375 Expenses: Real estate taxes 16,467 9,436 Other operating expenses 9,318 6,772 Depreciation and amortization 45,457 22,878 General and administrative 7,907 6,077 Total expenses 79,149 45,163 Interest and other income 1,146 478 Interest expense (including net amortization of debt issuance costs, premiums and discounts of $6,713 and $20,321, respectively) (70,771) (40,999) Loss on sale of real estate (974) — Realized gain on equity securities — 1,232 Unrealized gain on equity securities — 2,460 Loss on early extinguishment of debt — (828) Loss before income tax expense and equity in earnings of unconsolidated joint venture (39,490) (11,445) Income tax expense (17) (69) Equity in earnings of unconsolidated joint venture 3,961 1,727 Net loss (35,546) (9,787) Net loss attributable to noncontrolling interest 10,737 3,273 Net loss attributable to common shareholders $ (24,809) $ (6,514) Weighted average common shares outstanding - basic and diluted 65,309 65,212 Per common share data (basic and diluted): Net loss attributable to common shareholders $ (0.38) $ (0.10) Additional data: General and administrative expenses / total assets (at end of period) 0.1% 0.1% Non-cash straight line rent adjustments included in rental income $ 3,762 $ 1,156 Lease value amortization included in rental income $ 270 $ 320 (amounts in thousands, except percentage data and per share data) 8411 Florida Mining Boulevard Tampa, FL 174,975 Square Feet ILPT Ownership: 61%
10Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Condensed Consolidated Balance Sheets March 31, December 31, 2023 2022 ASSETS Real estate properties: Land $ 1,116,561 $ 1,117,779 Buildings and improvements 4,061,589 4,058,329 Total real estate properties, gross 5,178,150 5,176,108 Accumulated depreciation (304,581) (273,467) Total real estate properties, net 4,873,569 4,902,641 Investment in unconsolidated joint venture 127,329 124,358 Acquired real estate leases, net 282,947 297,445 Cash and cash equivalents 61,250 48,261 Restricted cash 83,909 92,519 Rents receivable, including straight line rents of $84,472 and $80,710, respectively 111,014 107,011 Other assets, net 94,958 103,931 Total assets $ 5,634,976 $ 5,676,166 LIABILITIES AND EQUITY Mortgages and notes payable, net $ 4,245,651 $ 4,244,501 Accounts payable and other liabilities 75,937 73,547 Assumed real estate lease obligations, net 21,439 22,523 Due to related persons 5,774 4,824 Total liabilities 4,348,801 4,345,395 Commitments and contingencies Equity: Equity attributable to common shareholders: Common shares of beneficial interest, $.01 par value: 100,000,000 shares authorized; 65,565,969 and 65,568,145 shares issued and outstanding, respectively 656 656 Additional paid in capital 1,014,585 1,014,201 Cumulative net income 92,376 117,185 Cumulative other comprehensive income 14,885 21,903 Cumulative common distributions (363,877) (363,221) Total equity attributable to common shareholders 758,625 790,724 Total equity attributable to noncontrolling interest 527,550 540,047 Total equity 1,286,175 1,330,771 Total liabilities and equity $ 5,634,976 $ 5,676,166 (dollars in thousands, except per share data) 10551 N Congress Avenue Kansas City, MO 158,417 Square Feet ILPT Ownership: 61%
11Supplemental Q1 2023RETURN TO TABLE OF CONTENTS (1) Interest rates are as of March 31, 2023 and reflect the impact of interest rate caps, as applicable. (2) Principal balance excludes unamortized debt issuance costs related to these debts. Total debt outstanding as of March 31, 2023, including unamortized debt issuance costs totaling $39,182, was $4,245,651. (3) The $1,235,000 floating rate loan has an initial maturity date of October 9, 2024, with three, one year extension options, subject to the satisfaction of certain conditions, and requires that interest be paid at an annual rate of secured overnight financing rate, or SOFR, plus a weighted average premium of 3.93%. ILPT also purchased an interest rate cap through October 2024 with a SOFR strike rate equal to 2.25%. The current interest rate reflects the impact of this interest rate cap. (4) Mountain JV is Mountain Industrial REIT LLC, ILPT's consolidated joint venture in which ILPT owns a 61% equity interest. See pages 23-26 for more information. (5) The $1,400,000 floating rate loan has an original maturity date of March 9, 2024 with three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.77%. Mountain JV has also purchased an interest rate cap through March 2024 with a SOFR strike rate equal to 3.40%. The current interest rate reflects the impact of this interest rate cap. Current Interest Principal Maturity Due at Years to Entity Type Secured By Rate (1) Balance (2) Date Maturity Maturity ILPT Floating Rate - Interest only (3) 104 Properties 6.18 % $ 1,235,000 10/9/2024 $ 1,235,000 1.5 ILPT Fixed Rate - Interest only 186 Hawaii Properties 4.31 % 650,000 2/7/2029 650,000 5.9 ILPT Fixed Rate - Interest only 17 Mainland Properties 4.42 % 700,000 3/9/2032 700,000 8.9 Mountain JV (4) Floating Rate - Interest only (5) 82 Mainland Properties 6.17 % 1,400,000 3/9/2024 1,400,000 0.9 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 3.76 % 13,034 10/1/2028 — 5.5 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 3.77 % 4,720 4/1/2030 — 7.0 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 3.85 % 4,992 4/1/2030 — 7.0 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 3.56 % 13,987 9/1/2030 — 7.4 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 3.67 % 12,368 5/1/2031 — 8.1 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 4.14 % 13,842 7/1/2032 — 9.3 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 4.02 % 30,376 10/1/2033 — 10.5 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 4.13 % 42,432 11/1/2033 — 10.6 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 3.10 % 25,744 6/1/2035 — 12.2 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 2.95 % 41,425 1/1/2036 — 12.8 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 4.27 % 45,553 11/1/2037 — 14.6 Mountain JV (4) Fixed Rate - Amortizing One Mainland Property 3.25 % 51,360 1/1/2038 — 14.8 Total / weighted average debt 5.43 % $ 4,284,833 $ 3,985,000 3.9 Debt Summary (dollars in thousands) As of March 31, 2023
12Supplemental Q1 2023RETURN TO TABLE OF CONTENTS (1) Principal balance excludes unamortized debt issuance costs related to these debts. Total debt outstanding as of March 31, 2023, including unamortized debt issuance costs totaling $39,182, was $4,245,651. (2) The $1,235,000 floating rate loan matures in October 2024, subject to three, one year extension options. (3) The $1,400,000 floating rate loan of ILPT's consolidated joint venture matures in March 2024, subject to three, one year extension options. See pages 23-26 for further information on this joint venture. Debt Maturity Schedule (1) (dollars in thousands) As of March 31, 2023 $( Th ou sa nd s) $1,235,000 $1,400,000 $16,898 $23,268 $24,141 $25,048 $25,988 $26,531 $675,325 $24,685 $22,413 $721,753 $63,783 Secured Floating Rate Debt Secured Floating Rate Debt of consolidated joint venture Secured Fixed Rate Debt 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 and thereafter $0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $3,000,000 (3) (3) 900 Commerce Parkway West Drive Greenwood, IN 294,388 Square Feet ILPT Ownership: 100% (2) (2)
13Supplemental Q1 2023RETURN TO TABLE OF CONTENTS As of and For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Leverage Ratios: Net debt / total gross assets 69.7% 69.7% 69.9% 65.1% 64.2% Net debt / gross book value of real estate assets 72.4% 72.6% 73.1% 73.7% 76.4% Net debt / total market capitalization 92.3% 92.1% 89.5% 74.7% 67.9% Secured debt / total assets 76.0% 75.6% 75.1% 74.7% 73.0% Variable rate debt / net debt 63.7% 63.5% 63.2% 69.4% 69.0% Coverage Ratios: Net debt / annualized Adjusted EBITDAre 12.8x 13.1x 13.7x 12.4x 13.2x Adjusted EBITDAre / interest expense 1.1x 1.1x 0.8x 1.0x 1.4x Leverage Ratios and Coverage Ratios 309 Dulty’s Lane Burlington, NJ 633,836 Square Feet ILPT Ownership: 100%
14Supplemental Q1 2023RETURN TO TABLE OF CONTENTS (dollars in thousands) For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Tenant improvements and leasing costs $ 2,040 $ 4,369 $ 2,302 $ 2,627 $ 3,361 Building improvements 370 2,221 1,292 376 110 Recurring capital expenditures 2,410 6,590 3,594 3,003 3,471 Development, redevelopment and other activities 2,521 1,322 4,980 7,077 294 Total capital expenditures $ 4,931 $ 7,912 $ 8,574 $ 10,080 $ 3,765 Capital Expenditures Summary 5440 Haggerty Lane Lafayette, IN 350,418 Square Feet ILPT Ownership: 61%
15Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Property Acquisitions and Dispositions Since 1/1/2023 Dispositions: ILPT has not disposed of any properties since January 1, 2023. Acquisitions: ILPT has not acquired any properties since January 1, 2023.
16Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Portfolio Information
17Supplemental Q1 2023RETURN TO TABLE OF CONTENTS (dollars and sq. ft. in thousands) As of and For the Three Months Ended 03/31/2023 03/31/2022 Properties (end of period) 287 287 Square Feet 34,012 33,991 Percent Leased 99.0% 99.3% Rental income $ 56,563 $ 52,570 NOI $ 43,500 $ 40,339 NOI % Change 7.8% Cash Basis NOI $ 40,662 $ 39,415 Cash Basis NOI % Change 3.2% Same Property Results 55 Commerce Avenue Albany, NY 125,000 Square Feet ILPT Ownership: 100%
18Supplemental Q1 2023RETURN TO TABLE OF CONTENTS (dollars and sq. ft. in thousands, except per sq. ft. data) As of and For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Properties 413 413 413 412 412 Total sq. ft. 59,983 59,983 59,962 59,736 59,736 Square feet leased 59,193 59,420 59,469 59,060 59,059 Percentage leased 98.7% 99.1% 99.2% 98.9% 98.9% Leasing Activity (Sq. Ft.): New leases 36 188 543 2,652 281 Renewals 1,107 1,145 1,142 1,082 548 Rent resets — 36 — 138 56 Expirations (1,370) (1,382) (1,502) (3,733) (776) % Change in GAAP Rent: New leases 51.4% 20.3% 280.7% 104.7% 60.9% Renewals 13.9% 17.8% 26.1% 29.1% 15.7% Rent resets —% 33.2% —% 37.2% 35.8% Weighted average (by square feet) 15.1% 18.7% 77.5% 61.3% 27.9% Leasing Costs and Concession Commitments (3): New leases $ 160 $ 782 $ 3,570 $ 3,025 $ 2,355 Renewals 1,777 4,248 992 2,945 2,417 Total $ 1,937 $ 5,030 $ 4,562 $ 5,970 $ 4,772 Leasing Costs and Concession Commitments per Sq. Ft. (4): New leases $ 4.44 $ 4.16 $ 6.58 $ 1.14 $ 8.38 Renewals $ 1.60 $ 3.71 $ 0.87 $ 2.72 $ 4.41 Total $ 1.69 $ 3.77 $ 2.71 $ 1.60 $ 5.76 Weighted Average Lease Term by Sq. Ft. (Years): New leases 18.0 6.5 7.4 28.3 12.6 Renewals 8.6 8.2 3.7 9.1 6.9 Total 8.9 8.0 4.9 22.7 8.9 Leasing Costs and Concession Commitments per Sq. Ft. per Year (3) (4): New leases $ 0.25 $ 0.64 $ 0.89 $ 0.04 $ 0.66 Renewals $ 0.19 $ 0.45 $ 0.24 $ 0.30 $ 0.64 Total $ 0.19 $ 0.47 $ 0.55 $ 0.07 $ 0.65 (1) This leasing summary is based on leases entered into during the periods indicated. (2) Excludes properties owned by ILPT's unconsolidated joint venture. (3) Includes commitments made for leasing expenditures and concessions, such as tenant improvements, leasing commissions, tenant reimbursements and free rent. (4) Amounts are per square foot per year for the weighted average lease term by leased square feet. Occupancy and Leasing Summary (1) (2)
19Supplemental Q1 2023RETURN TO TABLE OF CONTENTS As of March 31, 2023 Tenant Credit Characteristics % of Annualized Rental Revenues Investment grade rated 18.5% Subsidiaries of investment grade rated parent entities 39.0% Other leased Hawaii lands 20.1% Subtotal investment grade rated, subsidiaries of investment grade rated parent entities and other leased Hawaii lands 77.6% Other unrated or non-investment grade 22.4% 100.0% Tenant Concentration and Credit Characteristics 17001 Mercury Street Gardner, KS 645,462 Square Feet ILPT Ownership: 100% Tenants Representing 1% or More of Total Annualized Rental Revenues % of Total Annualized No. of Leased % of Total Rental Tenant States Properties Sq. Ft. Leased Sq. Ft. Revenues 1 FedEx Corporation/ FedEx Ground Package System, Inc. Various (34 States) 83 13,093 22.1% 30.1% 2 Amazon.com Services, Inc./ Amazon.com Services LLC AL, IN, OK, SC, TN, VA 8 4,539 7.7% 6.9% 3 Home Depot U.S.A., Inc. (1) GA, HI 2 956 1.6% 2.2% 4 UPS Supply Chain Solutions, Inc. NH, NY 3 794 1.3% 1.6% 5 Restoration Hardware, Inc. MD 1 1,195 2.0% 1.5% 6 Servco Pacific, Inc HI 7 629 1.1% 1.4% 7 American Tire Distributors, Inc. CO, LA, NE, NY, OH 5 722 1.2% 1.3% 8 Par Pacific Holdings Inc HI 3 3,148 5.3% 1.2% 9 TD SYNNEX Corporation OH 2 939 1.6% 1.1% 10 Berkshire Hathaway Inc. GA 1 832 1.4% 1.0% 115 26,847 45.3% 48.3% (dollars and sq. ft. in thousands) (1) In 2022, ILPT entered into an agreement with Home Depot U.S.A., Inc. to lease a property in Hawaii with 2,238 square feet for annualized rental revenues of $8,096. In March 2023, the tenant exercised its option to terminate the agreement prior to lease commencement.
20Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Cumulative % of Total Cumulative % % of Total % of Total Leased Leased of Total Leased Annualized Annualized Annualized Number of Square Feet Square Feet Square Feet Rental Revenues Rental Revenues Rental Revenues Period / Year Tenants Expiring Expiring Expiring Expiring Expiring Expiring 4/1/2023-12/31/2023 27 1,678 2.8% 2.8% $ 12,231 2.9% 2.9% 2024 47 6,758 11.4% 14.2% 34,041 8.1% 11.0% 2025 35 4,802 8.1% 22.3% 27,999 6.6% 17.6% 2026 25 3,851 6.5% 28.8% 25,608 6.1% 23.7% 2027 38 8,841 14.9% 43.7% 53,593 12.7% 36.4% 2028 32 5,489 9.3% 53.0% 39,325 9.3% 45.7% 2029 16 3,428 5.8% 58.8% 17,018 4.0% 49.7% 2030 15 2,334 3.9% 62.7% 19,582 4.6% 54.3% 2031 17 3,265 5.5% 68.2% 25,366 6.0% 60.3% 2032 37 3,615 6.1% 74.3% 35,200 8.3% 68.6% Thereafter 105 15,132 25.7% 100.0% 132,443 31.4% 100.0% Total 394 59,193 100.0% $ 422,406 100.0% Weighted average remaining lease term (in years) 7.3 8.4 Portfolio Lease Expiration and Reset Schedules (dollars and sq. ft. in thousands) As of March 31, 2023 158 West Yard Road Feura Bush, NY 354,000 Square Feet ILPT Ownership: 100% 4/1/2023 - 2028 and Total 12/31/2023 2024 2025 2026 2027 Thereafter Next Scheduled Rent Resets at Hawaii Properties: Reset sq. ft. 3,676 334 192 156 154 86 2,754 Percent 2.0% 1.2% 1.0% 0.9% 0.5% 16.8% Annualized rental revenues $ 23,218 $ 1,824 $ 1,273 $ 831 $ 1,307 $ 781 $ 17,202 Percent 1.6% 1.1% 0.7% 1.1% 0.7% 14.6%
21Supplemental Q1 2023RETURN TO TABLE OF CONTENTS (dollars and sq. ft. in thousands, except per sq. ft. data) Key Financial Data - By Investment Portfolio As of and For the Three Months Ended March 31, 2023 ILPT Wholly Owned Properties Mountain Industrial ILPT Hawaii Mainland Total REIT LLC (1) Other (2) Consolidated Ownership % 100 % 100 % 100 % 61 % Properties 226 92 318 94 1 413 Sq. Ft. 16,729 22,209 38,938 20,981 64 59,983 Occupancy % 98.0 % 99.6 % 98.9 % 98.3 % 98.1 % 98.7 % Selected Balance Sheet Data: Total gross assets $ 724,325 $ 1,860,667 $ 2,584,992 $ 3,149,255 $ 205,310 $ 5,939,557 Total debt (principal) $ 862,930 $ 1,722,070 $ 2,585,000 $ 1,699,833 $ — $ 4,284,833 Selected Income Statement Data: Rental income $ 30,220 $ 36,664 $ 66,884 $ 43,066 $ 308 $ 110,258 Net income (loss) $ 8,550 $ (20,681) $ (12,131) $ (27,518) $ 4,103 $ (35,546) Net income (loss) attributable to common shareholders $ 8,550 $ (20,681) $ (12,131) $ (16,790) $ 4,112 $ (24,809) NOI $ 22,122 $ 29,220 $ 51,342 $ 32,923 $ 208 $ 84,473 Cash Basis NOI $ 19,512 $ 28,983 $ 48,495 $ 31,740 $ 206 $ 80,441 Adjusted EBITDAre $ 21,233 $ 26,940 $ 48,173 $ 29,519 $ 3,020 $ 80,712 Normalized FFO attributable to common shareholders $ 9,264 $ (3,749) $ 5,515 $ 1,033 $ 1,368 $ 7,916 Key Ratios: Annualized Cash Basis NOI / total gross assets 10.8 % 6.2 % 7.5 % 4.0 % 5.4 % Net debt / annualized Adjusted EBITDAre 10.2 x 16.0 x 13.4 x 13.6 x 12.8 x Select Quarterly Leasing Activity: Leasing activity (sq. ft.): 107 428 535 587 21 1,143 % Change in GAAP rent (weighted average by sq. ft.): 23.5 % 13.7 % 19.6 % 14.1 % 9.9 % 15.1 % Weighted average lease term by sq. ft. (Years): 12.4 5.3 8.8 11.0 5.0 8.9 (1) Amounts represent this joint venture at 100%, not ILPT's proportionate share thereof. Amounts presented are derived from GAAP information and may not be comparable to amounts reflected in this joint venture's standalone financial information. (2) Other includes one consolidated mainland property containing approximately 64,000 rentable square feet located in New Jersey in which ILPT has a 67% ownership interest; any corporate assets and liabilities including ILPT's equity investment in its unconsolidated joint venture; and adjustments to remove the non-controlling interest of Mountain Industrial REIT LLC from the balance sheet and income statement data.
22Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Joint Ventures
23Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Consolidated Joint Venture - Mountain Industrial REIT LLC (dollars and sq. ft. in thousands) Investment in Joint Venture: ILPT Number of Number of Square Joint Venture Ownership Presentation Properties States Feet Mountain Industrial REIT LLC 61% Consolidated 94 27 20,981 (1) Amounts represent this joint venture at 100%, not ILPT's proportionate share thereof. Amounts presented are derived from GAAP information and may not be comparable to amounts reflected in this joint venture's standalone financial information. (2) ILPT's proportionate share of the principal amount of debt balances based on its ownership percentage of its consolidated joint venture as of March 31, 2023 is $1,036,898. None of the debt is recourse to ILPT, subject to certain limitations. As of March 31, 2023 Mountain Industrial REIT LLC Balance Sheet Information of ILPT's Consolidated Joint Venture (1) March 31, 2023 December 31, 2022 ASSETS Real estate properties: Total real estate properties, gross $ 2,835,807 $ 2,836,538 Accumulated depreciation (85,212) (65,732) Total real estate properties, net 2,750,595 2,770,806 Acquired real estate leases, net 185,991 194,266 Other assets, net 127,457 135,376 Total assets $ 3,064,043 $ 3,100,448 LIABILITIES Mortgage and notes payable, net (2) $ 1,685,202 $ 1,687,050 Other liabilities 35,819 38,347 Total liabilities $ 1,721,021 $ 1,725,397 Total equity attributable to non-controlling interest (39%) $ 527,550 $ 540,047
24Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Consolidated Joint Venture - Financial Information at 100% (1) Three Months Ended March 31, 2023 2022 (2) Mountain Industrial REIT LLC Rental income $ 43,066 $ 14,786 Real estate taxes 7,065 1,594 Other operating expenses 3,078 1,374 Depreciation and amortization 27,577 11,804 General and administrative 4,091 1,447 Total expenses 41,811 16,219 Interest and other income 687 — Interest expense (28,472) (6,928) Loss on sale of real estate (974) — Loss before income tax expense and equity in earnings of unconsolidated joint venture (27,504) (8,361) Income tax expense (14) — Net loss $ (27,518) $ (8,361) Net Loss $ (27,518) $ (8,361) Plus: depreciation and amortization 27,577 11,804 Plus: loss on sale of real estate 974 — Funds from Operations 1,033 3,443 Normalized Funds from Operations $ 1,033 $ 3,443 Net Loss $ (27,518) $ (8,361) Plus: interest expense 28,472 6,928 Plus: income tax expense 14 — Plus: depreciation and amortization 27,577 11,804 Plus: loss on sale of real estate 974 — EBITDA, EBITDAre and Adjusted EBITDAre $ 29,519 $ 10,371 (dollars in thousands, except percentage data and per share data) (1) Amounts represent this joint venture at 100%, not ILPT's proportionate share thereof. Amounts presented are derived from GAAP information and may not be comparable to amounts reflected in this joint venture's standalone financial information. (2) For the period from February 25, 2022 to March 31, 2022. 6 Konzen Court Granite City, IL 184,800 Square Feet ILPT Ownership: 61%
25Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Consolidated Joint Venture - Pro-Rata Financial Information (1) Three Months Ended March 31, 2023 2022 (2) ILPT Share of Consolidated Joint Venture (61%) Rental income $ 26,270 $ 9,018 Real estate taxes 4,310 972 Other operating expenses 1,878 838 Depreciation and amortization 16,824 7,200 General and administrative 2,496 883 Total expenses 25,508 9,893 Interest and other income 419 — Interest expense (17,368) (4,226) Loss on sale of real estate (594) — Loss before income tax expense and equity in earnings of unconsolidated joint venture (16,781) (5,101) Income tax expense (9) — Net loss $ (16,790) $ (5,101) Net Loss $ (16,790) $ (5,101) Plus: depreciation and amortization 16,824 7,200 Plus: loss on sale of real estate 594 — Funds from Operations 628 2,099 Normalized Funds from Operations $ 628 $ 2,099 Net Loss $ (16,790) $ (5,101) Plus: interest expense 17,368 4,226 Plus: income tax expense 9 — Plus: depreciation and amortization 16,824 7,200 Plus: loss on sale of real estate 594 — EBITDA, EBITDAre and Adjusted EBITDAre $ 18,005 $ 6,325 (amounts in thousands, except percentage data and per share data) 101 North Campus Drive Imperial, PA 125,860 Square Feet ILPT Ownership: 61% (1) See page 31 for more information regarding Pro-Rata Financial Information of Consolidated Joint Venture. (2) For the period from February 25, 2022 to March 31, 2022.
26Supplemental Q1 2023RETURN TO TABLE OF CONTENTS GA: 12.3% OH: 10.7% TX: 10.2% IN: 8.3% NC: 6.1%FL: 5.1% MI: 4.7% NJ: 4.0% MS: 3.6% KS: 3.6% TN: 3.3% 16 Other States: 28.1% Consolidated Joint Venture - Portfolio Information (dollars in thousands) Number of Leases Expiring 2 6 8 10 13 7 35 % of Total Annualized Rental Revenues Expiring 1.3% 3.9% 8.2% 5.3% 13.6% 10.3% 57.4% A nn ua liz ed R ev en ue E xp ir in g 4/1/2023- 12/31/2023 2024 2025 2026 2027 2028 2029 and Thereafter $0 $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000 $90,000 $100,000 Joint Venture Lease Expiration Schedule As of March 31, 2023 Major Tenants of Consolidated Joint Venture % of Annualized Rental Tenant Revenues of Joint Venture FedEx Corporation/ FedEx Ground Package System, Inc. 57.3% Amazon.com Services, Inc./ Amazon.com Services LLC 7.2% Home Depot U.S.A., Inc. 3.8% Berkshire Hathaway Inc. 2.7% Techtronic Industries Company Limited 2.5% Autoneum Holding AG 2.4% Geographic Diversification (1) (1) Based on the aggregate annualized rental revenues of ILPT's consolidated joint venture as of March 31, 2023.
27Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Unconsolidated Joint Venture - The Industrial Fund REIT LLC (dollars in thousands) As of March 31, 2023 Investment in Unconsolidated ILPT Number of Square Joint Venture at Joint Venture Ownership Properties States Feet March 31, 2023 The Industrial Fund REIT LLC 22% 18 12 11,726 $ 127,329 Three Months Ended March 31, 2023 2022 Rental income $ 17,411 $ 17,288 Real estate taxes 2,454 2,355 Other operating expenses 2,161 2,441 Depreciation and amortization 8,246 8,350 General and administrative 985 862 Total expenses 13,846 14,008 Interest and other income 64 (4) Interest expense (5,197) (3,617) Loss before income tax expense (1,568) (341) Income tax expense (5) (3) Net loss $ (1,573) $ (344) Distributions received (1) $ 990 $ 1,320 Current Maturity Principal Balance Secured Debt Interest Rate (2) Date March 31, 2023 (3) Mortgage notes payable (secured by one property in Florida) (4) 3.60% 10/1/2023 $ 56,980 Mortgage notes payable (secured by five properties in eight states) (5) 5.30% 10/1/2027 97,000 Mortgage notes payable (secured by 11 properties in four states) (4) 3.33% 11/7/2029 350,000 Total / Weighted Average 3.74% $ 503,980 (1) Includes distribution of proceeds from the joint venture's financing activities. (2) Current interest rate is as of March 31, 2023 and reflects the interest rate stated in, or determined pursuant to, the contract terms. (3) Reflects the entire balance of the debt secured by the respective properties. (4) The mortgage debts require interest-only payments until their respective maturity dates. (5) The $97,000 interest only floating rate loan requires that interest be paid at an annual rate of SOFR plus a premium of 1.80% through October 1, 2027. The Industrial Fund REIT LLC has also purchased an interest rate cap through October 2025 with a SOFR strike rate equal to 3.50%.
28Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Appendix
29Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Company Profile and Research Coverage The Company: Industrial Logistics Properties Trust (Nasdaq: ILPT) is a REIT that owns and leases industrial and logistics properties throughout the United States. ILPT is included in 147 market indices and comprises more than 1% of the following indices as of March 31, 2023: Invesco S&P SmallCap High Dividend Low Volatility ETF INAV Index (XSHDIV), Bloomberg US Micro Cap Real Estate Price Return Index (BMICR), Bloomberg Real Estate Investment Trust Small Cap Index (BBRESMLC) and Invesco KBW Premium Yield Equity REIT ETF INAV Index (KBWYIV). Management: ILPT is managed by The RMR Group (Nasdaq: RMR). RMR is an alternative asset management company that is focused on commercial real estate and related businesses. As of March 31, 2023, RMR had over $37 billion of real estate assets under management and the combined RMR managed companies had more than $16 billion of annual revenues, nearly 2,100 properties and approximately 38,000 employees. ILPT believes that being managed by RMR is a competitive advantage for ILPT because of RMR’s depth of management and experience in the real estate industry. ILPT also believes RMR provides management services to it at a lower cost than it would have to pay for similar quality services if it were self managed. Equity Research Coverage B. Riley Securities, Inc. BofA Securities Bryan Maher Camille Bonnel bmaher@brileyfin.com camille.bonnel@baml.com (646) 885-5423 (416) 369-2140 BTIG JMP Securities Thomas Catherwood Mitchell Germain tcatherwood@btig.com mgermain@jmpsecurities.com (212) 738-6140 (212) 906-3537 RBC Capital Markets Michael Carroll michael.carroll@rbccm.com (440) 715-2649 ILPT is followed by the analysts listed on this page. Please note that any opinions, estimates or forecasts regarding ILPT’s performance made by these analysts do not represent opinions, forecasts or predictions of ILPT or its management. ILPT does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts.
30Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Governance Information Board of Trustees Bruce M. Gans Lisa Harris Jones Matthew P. Jordan Lead Independent Trustee Independent Trustee Managing Trustee Joseph L. Morea Kevin C. Phelan Adam D. Portnoy Independent Trustee Independent Trustee Chair of the Board & Managing Trustee June S. Youngs Independent Trustee Executive Officers Yael Duffy Brian E. Donley President and Chief Operating Officer Chief Financial Officer and Treasurer 91-238 Kauhi Kapolei, HI 85,317 Square Feet ILPT Ownership: 100%
31Supplemental Q1 2023RETURN TO TABLE OF CONTENTS FFO and Normalized FFO Attributable to Common Shareholders: ILPT calculates funds from operations, or FFO, attributable to common shareholders and Normalized FFO attributable to common shareholders as shown on page 36. FFO attributable to common shareholders is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or Nareit, which is net income (loss) attributable to common shareholders, calculated in accordance with GAAP, excluding loss on impairment of real estate, any gain or loss on sale of real estate, equity in earnings of unconsolidated joint venture and any realized and unrealized gains or losses on equity securities, plus real estate depreciation and amortization of consolidated properties and ILPT's proportionate share of FFO of unconsolidated joint venture properties and minus FFO adjustments attributable to noncontrolling interest, as well as certain other adjustments currently not applicable to us. In calculating Normalized FFO attributable to common shareholders, ILPT adjusts for the items shown on page 36 including similar adjustments for the unconsolidated joint venture, if any. FFO attributable to common shareholders and Normalized FFO attributable to common shareholders are among the factors considered by ILPT's Board of Trustees when determining the amount of distributions to its shareholders. Other factors include, but are not limited to, requirements to maintain ILPT's qualification for taxation as a REIT, limitations in the agreements governing its debt, the availability to ILPT of debt and equity capital, its distribution rate as a percentage of the trading price of ILPT's common shares, or dividend yield, and ILPT's dividend yield compared to the dividend yields of other industrial REITs, ILPT's expectation of its future capital requirements and operating performance and its expected needs for and availability of cash to pay its obligations. Other real estate companies and REITs may calculate FFO attributable to common shareholders and Normalized FFO attributable to common shareholders differently than ILPT does. Unless otherwise noted, all data presented in this presentation excludes 18 properties, which are encumbered by $504.0 million of mortgage notes, owned by an unconsolidated joint venture in which ILPT owns a 22% equity interest. See page 27 for information regarding this joint venture and related mortgage notes. 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, EBITDA, EBITDAre, Adjusted EBITDAre, NOI, same property NOI, Cash Basis NOI and same property 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 (loss) or net income (loss) attributable to common shareholders as indicators of ILPT's operating performance or as measures of its liquidity. These measures should be considered in conjunction with net income (loss) and net income (loss) attributable to common shareholders as presented in ILPT's condensed consolidated statements of income (loss). ILPT considers these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss) and net income (loss) 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 its 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. NOI and Cash Basis NOI: The calculations of net operating income, or NOI, and Cash Basis NOI exclude certain components of net income (loss) in order to provide results that are more closely related to ILPT's property level results of operations. ILPT calculates NOI and Cash Basis NOI as shown on page 33 and same property NOI and same property Cash Basis NOI as shown on page 34. ILPT defines NOI as income from its rental of real estate less its property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that it records as depreciation and amortization expense. ILPT defines Cash Basis NOI as NOI excluding non-cash straight line rent adjustments, lease value amortization and lease termination fees, if any. ILPT uses NOI and Cash Basis NOI to evaluate individual and company-wide property level performance. We calculate same property NOI and same property Cash Basis NOI in the same manner that we calculate the corresponding NOI and Cash Basis NOI amounts, except that we only include same properties in calculating same property NOI and same property Cash Basis NOI. Other real estate companies and REITs may calculate NOI and Cash Basis NOI differently than ILPT does. Non-GAAP Financial Measures and Certain Definitions EBITDA, EBITDAre and Adjusted EBITDAre: ILPT calculates earnings before interest, taxes, depreciation and amortization, or EBITDA, EBITDA for real estate, or EBITDAre, and Adjusted EBITDAre as shown on page 35. EBITDAre is calculated on the basis defined by Nareit, which is EBITDA, including ILPT's proportionate share of EBITDAre from unconsolidated joint venture properties, and excluding gains and losses on the sale of real estate, equity in earnings of unconsolidated joint venture, loss on impairment of real estate, any realized and unrealized gains or losses on equity securities, as well as certain other adjustments currently not applicable to us. In calculating Adjusted EBITDAre, ILPT adjusts for the items shown on page 35. Other real estate companies and REITs may calculate EBITDA, EBITDAre and Adjusted EBITDAre differently than ILPT does. Pro-Rata Financial Information of Consolidated Joint Venture: ILPT believes this financial presentation of its joint venture information provides useful information to investors by providing additional insight into the financial performance of its consolidated joint venture, in which ILPT owns a 61% equity interest. This information may not accurately depict the impact of these investments in accordance with GAAP. Pro-rata information should not be considered in isolation or as a substitute for ILPT's condensed consolidated financial statements in accordance with GAAP.
32Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Non-GAAP Financial Measures and Certain Definitions (Cont.) Annualized dividend yield - Annualized dividend yield is the annualized dividend paid during the applicable period divided by the closing price of ILPT's common shares at the end of the relevant period. Annualized rental revenues - Annualized rental revenues is the annualized contractual rents, as of March 31, 2023, including straight line rent adjustments and excluding lease value amortization, adjusted for tenant concessions including free rent and amounts reimbursed to tenants, plus estimated recurring expense reimbursements from tenants. Building improvements - Building improvements generally include (i) expenditures to replace obsolete building components and (ii) expenditures that extend the useful life of existing assets. Development, redevelopment and other activities - Development, redevelopment and other activities generally include capital expenditures projects that (i) reposition a property or (ii) result in new sources of revenue. Equity Research Coverage - ILPT is followed by the analysts listed on page 29. Please note that any opinions, estimates or forecasts regarding ILPT’s performance made by these analysts do not represent opinions, forecasts or predictions of ILPT or its management. ILPT does not by its reference above imply its endorsement of or concurrence with any information, conclusions or recommendations provided by any of these analysts. Gross book value of real estate assets - Gross book value of real estate assets is real estate assets at cost, plus certain acquisition related costs, if any, before depreciation and purchase price allocations, less impairment writedowns, if any. ILPT Wholly Owned Properties - ILPT Wholly Owned Properties is comprised of 318 properties that are wholly owned by ILPT, including 226 buildings, leasable land parcels and easements containing approximately 16.7 million rentable square feet that are primarily industrial lands located on the island of Oahu, HI or the Hawaii Portfolio, and 92 properties containing approximately 22.2 million rentable square feet located in 34 other states, or the Mainland Portfolio. Information included in this presentation with respect to the Mainland Portfolio and the Hawaii Portfolio include certain allocations of interest expense on debts secured by properties in each portfolio and of general and administrative expense based upon gross asset value of properties in each portfolio. ILPT believes the information presented for these portfolios is useful to investors to provide insight into the financial performance of these portfolios. Investment Grade Tenants - Investment grade tenants Include investment grade rated tenants, subsidiaries of investment grade rated parent entities and other leased Hawaii lands. Leased square feet - Leased square feet is pursuant to existing leases as of March 31, 2023, and includes (i) space being fitted out for occupancy, if any, and (ii) space which is leased but is not occupied, or is being offered for sublease by tenants, if any. Leasing costs - Leasing costs include leasing related costs, such as brokerage commissions and tenant inducements. Mountain Industrial REIT LLC - Mountain Industrial REIT LLC, owns 94 mainland properties containing approximately 21.0 million rentable square feet located in 27 states. ILPT owns a 61% equity interest in this joint venture. ILPT consolidates 100% of this joint venture in its financial statements in accordance with GAAP. Net debt - Net debt is total debt less cash. Percent change in GAAP rent - Percent change in GAAP rent is the percent change from prior rents charged for same space. Rents include estimated recurring expense reimbursements and exclude lease value amortization. Same space represents the same land area and building area (with leasing rates for vacant space based upon the most recent rental rate for the same space). Same property - For the three months ended March 31, 2023 and 2022, same property NOI and Cash Basis NOI are based on properties that ILPT owned as of March 31, 2023 and that it owned continuously since January 1, 2022, excluding properties owned by an unconsolidated joint venture. Square feet - Subject to modest adjustments when space is remeasured or reconfigured for new tenants or when land leases are converted to building leases. Tenant improvements - Tenant improvements include capital expenditures used to improve tenants' space or amounts paid directly to tenants to improve their space. Total gross assets - Total gross assets is total assets plus accumulated depreciation. Total market capitalization - Total market capitalization is total debt plus the market value of ILPT's common shares at the end of the applicable period.
33Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Calculation and Reconciliation of NOI and Cash Basis NOI (dollars in thousands) For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Calculation of NOI and Cash Basis NOI: Rental income $ 110,258 $ 106,339 $ 103,215 $ 107,222 $ 71,375 Real estate taxes (16,467) (14,164) (13,749) (13,275) (9,436) Other operating expenses (9,318) (8,577) (8,453) (7,053) (6,772) NOI 84,473 83,598 81,013 86,894 55,167 Non-cash straight line rent adjustments included in rental income (3,762) (3,368) (3,794) (3,220) (1,156) Lease value amortization included in rental income (270) (279) (250) (3,695) (320) Lease termination fees included in rental income — (20) — (30) — Cash Basis NOI $ 80,441 $ 79,931 $ 76,969 $ 79,949 $ 53,691 Reconciliation of Net Loss to NOI and Cash Basis NOI: Net loss $ (35,546) $ (41,759) $ (83,974) $ (151,321) $ (9,787) Equity in earnings of unconsolidated joint venture (3,961) (444) (3,297) (1,610) (1,727) Income tax (benefit) expense 17 (68) 28 16 69 Loss before income tax expense and equity in earnings of unconsolidated joint venture (39,490) (42,271) (87,243) (152,915) (11,445) Loss on early extinguishment of debt — — 21,370 — 828 Interest and other income (1,146) (763) (1,068) (354) (478) Interest expense 70,771 71,765 89,739 77,548 40,999 Loss on sale of real estate 974 — — 10 — Realized loss (gain) on sale of equity securities — — — 9,450 (1,232) Unrealized gain on equity securities — — — — (2,460) General and administrative 7,907 7,981 9,110 9,709 6,077 Acquisition and other transaction related costs — — 586 — — Loss on impairment of real estate — — — 100,747 — Depreciation and amortization 45,457 46,886 48,519 42,699 22,878 NOI 84,473 83,598 81,013 86,894 55,167 Non-cash straight line rent adjustments included in rental income (3,762) (3,368) (3,794) (3,220) (1,156) Lease value amortization included in rental income (270) (279) (250) (3,695) (320) Lease termination fees included in rental income — (20) — (30) — Cash Basis NOI $ 80,441 $ 79,931 $ 76,969 $ 79,949 $ 53,691 5300 Centerpoint Parkway Groveport, OH 581,342 Square Feet ILPT Ownership: 100%
34Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Reconciliation of NOI to Same Property NOI and Calculation of Same Property Cash Basis NOI (dollars in thousands) Three Months Ended March 31, 2023 2022 Reconciliation of NOI to Same Property NOI: Rental income $ 110,258 $ 71,375 Real estate taxes (16,467) (9,436) Other operating expenses (9,318) (6,772) NOI 84,473 55,167 Less: NOI of properties not included in same property results (40,973) (14,828) Same property NOI $ 43,500 $ 40,339 Calculation of Same Property Cash Basis NOI: Same property NOI $ 43,500 $ 40,339 Less: Non-cash straight line rent adjustments included in rental income (2,687) (685) Lease value amortization included in rental income (151) (239) Same property Cash Basis NOI $ 40,662 $ 39,415 955 Aeroplaza Drive Colorado Springs, CO 125,060 Square Feet ILPT Ownership: 100%
35Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Calculation of EBITDA, EBITDAre, and Adjusted EBITDAre (dollars in thousands) For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Net loss $ (35,546) $ (41,759) $ (83,974) $ (151,321) $ (9,787) Plus: interest expense 70,771 71,765 89,739 77,548 40,999 Plus: income tax expense (benefit) 17 (68) 28 16 69 Plus: depreciation and amortization 45,457 46,886 48,519 42,699 22,878 EBITDA 80,699 76,824 54,312 (31,058) 54,159 Loss on impairment of real estate — — — 100,747 — Loss on sale of real estate 974 — — 10 — Equity in earnings of unconsolidated joint venture (3,961) (444) (3,297) (1,610) (1,727) Share of EBITDAre from unconsolidated joint venture 2,613 2,432 2,483 2,476 2,558 Realized loss (gain) on sale of equity securities — — — 9,450 (1,232) Unrealized gain on equity securities — — — — (2,460) EBITDAre 80,325 78,812 53,498 80,015 51,298 Plus: acquisition and other transaction related costs — — 586 — — Plus: general and administrative expense paid in common shares (1) 387 401 618 796 406 Plus: loss on early extinguishment of debt — — 21,370 — 828 Adjusted EBITDAre $ 80,712 $ 79,213 $ 76,072 $ 80,811 $ 52,532 (1) Amounts represent equity based compensation to ILPT's trustees and officers and certain other employees of RMR.
36Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Calculation of FFO Attributable to Common Shareholders and Normalized FFO Attributable to Common Shareholders (dollars and shares in thousands, except per share data) For the Three Months Ended 3/31/2023 12/31/2022 9/30/2022 6/30/2022 3/31/2022 Net loss attributable to common shareholders $ (24,809) $ (31,043) $ (45,627) $ (143,539) $ (6,514) Depreciation and amortization 45,457 46,886 48,519 42,699 22,878 Equity in earnings of unconsolidated joint venture (3,961) (444) (3,297) (1,610) (1,727) Realized loss (gain) on sale of equity securities — — — 9,450 (1,232) Unrealized loss on equity securities — — — — (2,460) Share of FFO from unconsolidated joint venture 1,468 1,291 1,678 1,676 1,761 Loss on impairment of real estate — — — 100,747 — Loss on sale of real estate 974 — — 10 — FFO adjustments attributable to noncontrolling interest (11,213) (11,250) (11,407) (11,434) (4,604) FFO attributable to common shareholders 7,916 5,440 (10,134) (2,001) 8,102 Loss on early extinguishment of debt — — 21,370 — 828 Acquisition, transaction related and certain other financing costs (1) — — 32,016 30,303 18,673 Normalized FFO adjustments attributable to noncontrolling interest — — (28,379) — — Normalized FFO attributable to common shareholders $ 7,916 $ 5,440 $ 14,873 $ 28,302 $ 27,603 Weighted average common shares outstanding - basic and diluted 65,309 65,307 65,250 65,221 65,212 Per Common Share Data (basic and diluted): Net loss attributable to common shareholders (0.38) (0.48) (0.70) (2.20) (0.10) FFO attributable to common shareholders 0.12 0.08 (0.16) (0.03) 0.12 Normalized FFO attributable to common shareholders 0.12 0.08 0.23 0.43 0.42 (1) Amounts for the three months ended March 31, 2022, June 30, 2022, and September 30, 2022, primarily represent debt issuance costs recorded as interest expense related to certain financing and other transaction related costs expensed under GAAP.
37Supplemental Q1 2023RETURN TO TABLE OF CONTENTS Warning Concerning Forward-Looking Statements This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions. Forward-looking statements reflect ILPT’s current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause ILPT’s actual results, performance or achievements to differ materially from expected future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these forward-looking statements and the related risks, uncertainties and other factors include, but are not limited to, the following: ILPT’s ability and the ability of its tenants to operate under unfavorable market and economic conditions, such as rising or sustained high interest rates, high inflation, labor market challenges, dislocation and volatility in the public equity and debt markets, challenges in the commercial real estate industry generally and in the industrial and logistics sector, geopolitical instability and economic recessions or downturns; demand for industrial and logistics properties; ILPT’s ability to reduce its leverage, generate cash flow and take advantage of mark-to-market opportunities; ILPT’s ability to cost-effectively raise and balance its use of debt or equity capital; ILPT’s ability to pay interest on and principal of its debt; ILPT’s ability to maintain sufficient liquidity; ILPT’s tenants’ ability and willingness to pay their rent obligations to ILPT; ILPT’s ability to successfully compete for tenancies, the likelihood that the rents it realizes will increase when ILPT renews or extends its leases, enters new leases, or its rents reset at ILPT’s properties in Hawaii; whether ILPT's tenants will renew or extend their leases or that ILPT will be able to obtain replacement tenants on terms as favorable to it as the terms of its existing leases; the credit qualities of ILPT’s tenants; changes in the security of cash flows from ILPT’s properties; ILPT’s ability to maintain high occupancy at its properties; potential defaults of its leases by its tenants; changes in global supply chain conditions and emerging technologies; whether the industrial and logistics sector and the extent to which ILPT’s tenants' businesses are critical to sustaining a resilient supply chain and that ILPT's business will benefit as a result; ILPT’s ability to pay distributions to its shareholders and to increase or sustain the amount of such distributions; ILPT’s ability to acquire properties that realize ILPT's targeted returns; ILPT’s ability to sell properties at prices it targets; ILPT’s ability to prudently pursue, and successfully and profitably complete, expansion and renovation projects at its properties and to realize its expected returns on those projects; ILPT’s ability to sell additional equity interests in, or contribute additional properties to, its existing joint ventures, or enter into additional, real estate joint ventures or to attract co-venturers and benefit from its existing joint ventures or any real estate joint ventures ILPT may enter into; the ability of ILPT’s manager, RMR, to successfully manage it; ILPT’s qualification for taxation as a REIT under the Internal Revenue Code of 1986, as amended; changes in federal or state tax laws; changes in environmental laws or in their interpretations or enforcement as a result of climate change or otherwise, or ILPT incurring environmental remediation costs or other liabilities; ILPT's expected capital expenditures and leasing costs, as well as risks and uncertainties regarding the development, redevelopment or repositioning of ILPT's properties, including as a result of inflation, cost overruns, supply chain challenges, labor shortages, construction delays or inability to obtain necessary permits, and ILPT’s ability to lease space at these properties at targeted returns; competition within the commercial real estate industry, particularly for industrial and logistics properties in those markets in which ILPT’s properties are located; compliance with, and changes to, federal, state and local laws and regulations, accounting rules, tax laws and similar matters; limitations imposed on ILPT’s business and its ability to satisfy complex rules in order for ILPT to maintain its qualification for taxation as a REIT for U.S. federal income tax purposes; non-performance by the counterparties to our interest rate caps and the costs for renewing or replacing the interest rate caps; actual and potential conflicts of interest with ILPT’s related parties, including its managing trustees, RMR and others affiliated with them; acts of terrorism, outbreaks or continuation of pandemics or other significant adverse public health safety events or conditions, war or other hostilities, supply chain disruptions, climate change or other manmade or natural disasters beyond ILPT’s control; and other matters. These risks, uncertainties and other factors are not exhaustive and should be read in conjunction with other cautionary statements that are included in ILPT’s periodic filings. The information contained elsewhere in ILPT’s filings with the Securities and Exchange Commission, or SEC, including under the caption “Risk Factors” in ILPT’s periodic reports, or incorporated therein, identifies important factors that could cause differences from ILPT’s forward-looking statements in this presentation. ILPT’s filings with the SEC are available on the SEC’s website at www.sec.gov. You should not place undue reliance upon ILPT’s 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.
