Executive Summary

Q1 2025 showed steady operating improvement: NOI rose to $87.5m (+1.7% YoY), Cash Basis NOI to $83.8m (+1.9% YoY), and Adjusted EBITDAre to $85.3m (+1.1% YoY), while normalized FFO jumped to $13.5m ($0.20/share), up 43% YoY and 52% sequentially .
Leasing velocity remained robust: 2.319m sq ft executed (75% renewals) at weighted-average GAAP rent spreads of +18.9%; occupancy edged up to 94.6% .
Financing/interest: interest expense fell to $69.8m (vs $73.2m prior-year quarter), aided by lower rate cap costs; management guided Q2 2025 interest expense to ~$68.5m and normalized FFO to $0.19–$0.21/share (includes ~$0.01 one-time benefit) .
Dividend maintained at $0.01 per quarter; Q1 distribution declared April 10, 2025, payable around May 15, 2025 .
Near-term stock reaction catalysts: continued positive leasing spreads, interest expense trajectory (rate caps), and clarity on leasing the 2.2m sq ft Hawaii parcel and 535k sq ft Indianapolis vacancy .

What Went Well and What Went Wrong

What Went Well

Strong leasing and retention: “over 2.3 million square feet of leasing…weighted average rental rates…18.9% higher…Renewal activity accounted for 75%” (Yael Duffy) .
Financial momentum: normalized FFO $13.5m ($0.20/share), beating the high-end of internal guidance by $0.02, driven by percentage rent and bad debt recovery (≈$0.75m) (Tiffany Sy) .
Interest expense tailwind: reduced cap costs and JV extension lowered run-rate; Q2 interest expense guided ~$68.5m, with ~$60m cash and ~$8.5m non-cash amortization (Tiffany Sy) .

What Went Wrong

Continuing net losses: net loss attributable to common shareholders remained negative at $(21.5)m, or $(0.33) per share .
Vacancy overhang: sizable unleased assets (2.2m sq ft Hawaii parcel, 535k sq ft Indianapolis property); while activity exists, conversion timelines remain elongated .
High leverage persists: net debt/total gross assets 68.7%; coverage metrics only modestly improved (Adjusted EBITDAre/interest 1.2x), highlighting ongoing balance sheet constraints .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Rental income ($USD Thousands)	$108,945	$110,521	$111,905
Net loss attributable to common shareholders ($USD Thousands)	$(24,990)	$(24,101)	$(21,532)
Diluted EPS ($USD)	$(0.38)	$(0.37)	$(0.33)
NOI ($USD Thousands)	$84,709	$84,186	$87,502
Cash Basis NOI ($USD Thousands)	$82,503	$81,610	$83,780
Adjusted EBITDAre ($USD Thousands)	$83,947	$82,156	$85,324
Normalized FFO ($USD Thousands)	$8,063	$8,877	$13,490
Normalized FFO per share ($USD)	$0.12	$0.13	$0.20
Occupancy (%)	94.4%	94.4%	94.6%
Total leasing activity (sq ft, thousands)	2,757	731	2,319
Weighted avg GAAP rent spread (by sq ft)	7.0%	39.3%	18.9%

Vs. Wall Street Consensus (S&P Global)

Metric	Q1 2025 Actual	Q1 2025 Consensus	Surprise
Revenue ($USD Millions)	$111.905	$112.100*	Miss: -$0.195m (≈-0.2%)*
Primary EPS ($USD)	$(0.33)	N/A*	N/A*
EBITDA ($USD Millions)	$80.190	N/A*	N/A*

Values retrieved from S&P Global.*

Segment Breakdown (Q1 2025)

Segment	Rental Income ($USD Thousands)	NOI ($USD Thousands)	Cash Basis NOI ($USD Thousands)	Adjusted EBITDAre ($USD Thousands)	Occupancy (%)
Mainland (ILPT wholly owned)	$38,041	$29,796	$29,002	$27,047	96.4%
Hawaii (ILPT wholly owned)	$31,768	$23,681	$21,771	$22,559	85.8%
Mountain Industrial REIT LLC (consolidated JV)	$41,685	$33,783	$32,763	$30,742	99.8%
Other	$411	$242	$244	$4,976	100.0%
Total	$111,905	$87,502	$83,780	$85,324	94.6%

KPIs and Leasing

KPI	Q3 2024	Q4 2024	Q1 2025
Percentage leased	94.4%	94.4%	94.6%
Total leasing activity (sq ft, thousands)	2,757	731	2,319
New leases (sq ft, thousands)	17	148	437
Renewals (sq ft, thousands)	2,740	583	1,738
Rent resets (sq ft, thousands)	—	—	144
Weighted avg GAAP rent spread (by sq ft)	7.0%	39.3%	18.9%
Weighted avg lease term by sq ft (years)	6.2	10.5	6.1

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Normalized FFO per share	Q2 2025	Not provided	$0.19–$0.21/share; includes ~$0.01 one-time benefit	New
Interest expense	Q2 2025	Not provided	~$68.5m total; ~$60m cash, ~$8.5m non-cash amortization	New
Dividend (common)	Ongoing	$0.01/quarter (maintained) [14? see below]	$0.01/quarter; Q1 dividend declared April 10, 2025, payable ~May 15, 2025	Maintained

Note: Q4 2024 management discussed lower cap costs and Q4 interest expense of ≈$72m as a near-term expectation, but formal prior guidance for Q2 2025 was not provided .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2024)	Previous Mentions (Q4 2024)	Current Period (Q1 2025)	Trend
Leverage reduction / asset sales	Evaluating unsolicited offers; debt covenants complicate releases	Focus on reducing leverage and strengthening balance sheet	Greater conviction to explore dispositions (owner-user bids at higher valuations), refinancing options; JV loan extended	Improving optionality
Interest rate caps / financing costs	$17m cap (2.78% strike) on $1.235b loan; expected lower cap costs with Fed cuts	ILPT cap $17m; Mountain JV intent to extend and cap $15m	Mountain JV purchased $15m cap (3.10% strike); lower cap costs reduced interest expense; Q2 guide ~$68.5m	Positive tailwind
Tariffs / macro	Noted demand resilience; inflation/interest risks in forward-looking statements	Similar macro risk disclosures	Tariffs likely positive for retention; build-to-suit hesitation boosts stay-in-place decisions (Yael)	Supportive for retention
Vacancy (Hawaii parcel; Indianapolis)	Expect leasing in 2025; H2 for Hawaii, H1 for Indy	Minimal near expirations; pipeline active	Active proposals; credit/funding hurdles; revenue impact from parcel is immaterial vs Q1 leasing increases (Yael)	Gradual progress
Dividend policy	Maintained at $0.01; liquidity prioritized over increases	$0.01 declared Jan 2025	$0.01 declared April 10, 2025	Stable
Tenant health (ATD bankruptcy)	ATD filed Ch.11; no outstanding rent obligations; leases fully utilized	ATD update; no outstanding rental obligations; potential modifications	No changes yet; top tenants remain investment-grade or Hawaii land leases	Watchful but contained

Management Commentary

“Our first quarter results continued to highlight the strong operating fundamentals of our portfolio…over 2.3 million square feet of leasing…weighted average rental rates…18.9% higher…Renewal activity accounted for 75%” — Yael Duffy, President & COO .
“Normalized FFO of $13.5 million or $0.20 per share increased nearly 43% year-over-year and 52% on a sequential quarter basis. This exceeded the high end of our guidance by $0.02, driven by percentage rent revenues and recovery of bad debt in Hawaii.” — Tiffany Sy, CFO & Treasurer .
“We expect our interest expense for the second quarter of 2025 to decline to approximately $68.5 million, with $60 million of cash interest expense… and $8.5 million of noncash amortization…” — Tiffany Sy .
“We may pursue options to refinance our existing debt and evaluate strategic property dispositions…” — Yael Duffy .

Q&A Highlights

Bad debt recovery: ~$0.75m recognized in revenue (Hawaii), contributing to Q1 beat vs internal guidance .
Leasing timelines: elongated decision cycles, hence earlier renewal engagement and dual-path marketing to mitigate vacancy risk .
Vacancies: Hawaii parcel has proposals; some prospects failed due to credit/funding; Indy building actively marketed with proposals, none far enough yet .
Leverage reduction: increased optimism linked to owner-user bids at higher valuations; Hawaii land unlikely for sale “today”; no active JV changes .
Q2 guidance construction: Q1 benefited by ~$0.02 one-time; Q2 includes ~$0.01 one-time, with low-end allowing for unforeseen OpEx or leasing variability .
Tariff impact: supportive for retention; hesitancy around construction costs pushes tenants to stay rather than relocate/build-to-suit .
Hawaii exposure to tourism: minimal, tenants serve local economy; COVID travel restrictions did not materially impact tenants .

Estimates Context

Revenue came in slightly below S&P Global consensus ($111.905m actual vs $112.100m estimate; ~0.2% miss)* .
EPS consensus for Q1 2025 was not available; actual diluted EPS was $(0.33) .
EBITDA consensus estimate for Q1 2025 was not available; company-reported EBITDA was $80.190m .
Values retrieved from S&P Global.*

Where estimates may need to adjust:

Normalized FFO trajectory and interest expense guide suggest modest upward bias to cash metrics if leasing conversions materialize and cap costs remain favorable .
Revenue estimates likely refine on timing/size of leasing conversions for Hawaii/Indy and rent resets in Hawaii .

Key Takeaways for Investors

Leasing spreads remain a core driver: +18.9% weighted-average GAAP spreads and 75% renewal mix underpin organic cash flow growth momentum .
Interest expense outlook improving: lower cap costs and Q2 guide (~$68.5m) enhance coverage metrics and FFO visibility; watch subsequent cap purchases/extensions .
Balance sheet actions: management exploring refinancing and potential asset sales (owner-user bids) to reduce leverage; progress here could be a catalyst .
Vacancy watch: conversion of the 2.2m sq ft Hawaii parcel and 535k sq ft Indy property could add revenue; near-term pipeline conversion (~500k sq ft) expected with 20% Mainland/30% Hawaii rent roll-ups .
Dividend stable but constrained: $0.01/quarter maintained; any increase likely contingent on leverage reduction and liquidity priorities .
Tenant quality and concentration: 76%+ of rental revenues from investment-grade tenants/subs or Hawaii land leases; FedEx concentration within JV remains a stability anchor .
Trading implications: favor catalysts tied to leasing announcements and financing progress; monitor tariff-related retention tailwinds and ATD restructuring outcomes .

Additional Q1 2025 Materials

8-K and earnings presentation for Q1 2025, including detailed financials and portfolio metrics .
Press release announcing Q1 2025 results .
Quarterly dividend press release ($0.01/share) .

Industrial Logistics Properties Trust (ILPT)·Q1 2025 Earnings Summary