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IL

Industrial Logistics Properties Trust (ILPT)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 delivered steady operations: rental income of $110.94M, Normalized FFO of $17.39M ($0.26/share), Adjusted EBITDAre of $84.09M, same property Cash Basis NOI up 3.0% year-over-year, and consolidated occupancy of 94.1% .
  • Versus Wall Street: revenue came in slightly below consensus, EPS modestly beat, and EBITDA missed; revenue $110.94M vs $111.93M consensus, EPS -$0.234 vs -$0.26 consensus, EBITDA $74.10M vs $83.40M consensus. Values retrieved from S&P Global.*
  • Management guided Q4 2025 Normalized FFO of $0.27–$0.29 per share and Adjusted EBITDAre of $84–$85M; interest expense expected to be flat with ~$58.5M cash and ~$5M non-cash amortization .
  • Portfolio actions: three properties (867k sq ft) in various stages of disposition for ~$55M; recognized a $6.1M impairment to align carrying value with estimated sales price; proceeds to partially repay ILPT’s $700M loan due 2032 .
  • Dividend maintained at $0.05 per quarter (annualized $0.20), following the July increase from $0.01; declared on October 9, 2025 .

What Went Well and What Went Wrong

  • What Went Well

    • Normalized FFO grew 26% sequentially and 116% year over year, supported by refinancing and rent roll-ups .
    • Strong leasing economics: 836k sq ft executed with weighted average GAAP rent increases of 22.4%; renewals comprised ~70% with an average 8-year term, sustaining cash flow and stability .
    • Interest expense declined $10.5M (14.2%) year over year, reflecting lower debt costs and improved rates .

  • What Went Wrong

    • GAAP losses persist: net loss attributable to common shareholders was -$21.6M and -$0.33 per share for Q3 2025 .
    • A $6.1M impairment was recorded related to a held-for-sale property, reducing GAAP earnings in the quarter .
    • Mainland wholly owned portfolio GAAP rent spread was just 1.8% this quarter, largely due to a lower-spread USPS re-leasing outcome .

Financial Results

MetricQ3 2024Q2 2025Q3 2025
Rental income ($USD Millions)$108.95$112.10 $110.94
Net loss attributable to common shareholders ($USD Millions)-$24.99 -$21.31 -$21.57
Net loss per share ($USD)-$0.38 -$0.32 -$0.33
Normalized FFO ($USD Millions)$8.06 $13.81 $17.39
Normalized FFO per share ($USD)$0.12$0.21$0.26
Adjusted EBITDAre ($USD Millions)$83.95 $84.97 $84.09
Same property Cash Basis NOI ($USD Millions)$81.68$83.95$84.16

Estimates vs Actuals (Q3 2025) — Values retrieved from S&P Global.*

MetricConsensus Estimate*Actual*
Primary EPS (USD)-$0.26-$0.234
Revenue (USD)$111.93M$110.94M
EBITDA (USD)$83.40M$74.10M
  • Bold highlights: EPS beat; revenue slight miss; EBITDA miss.*

Segment breakdown (Q3 2025)

SegmentOccupancy (%)Rental income ($USD M)NOI ($USD M)Cash Basis NOI ($USD M)Adjusted EBITDAre ($USD M)
ILPT Mainland (wholly owned)94.8% $37.38 $29.90 $29.62 $27.20
ILPT Hawaii (wholly owned)85.8% $31.15 $22.78 $21.67 $21.66
Mountain Industrial REIT LLC (consolidated JV)100.0% $42.13 $34.10 $33.29 $31.02
Other98.1% $0.28 $0.17 $0.17 $4.21
Total94.1% $110.94 $86.95 $84.75$84.09

KPIs (Q3 2025)

KPIValue
Occupancy (%)94.1%
Leasing volume (sq ft)836,000
Weighted avg GAAP rent change22.4%
Weighted avg lease term (years)7.8
Same property NOI YoY change+2.9%
Same property Cash Basis NOI YoY change+3.0%
Cash on hand ($USD M)$83.17
Adjusted EBITDAre / Interest expense (x)1.3x
Net debt / annualized Adjusted EBITDAre (x)12.0x
Quarterly dividend per share$0.05

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Normalized FFO per shareQ3 2025$0.25–$0.27 Actual $0.26 In line
Normalized FFO per shareQ4 2025N/A$0.27–$0.29 Raised vs Q3 run-rate
Adjusted EBITDAre ($USD M)Q4 2025N/A$84–$85 New
Interest expense ($USD M)Q3 2025~$63.5 (incl. ~$58.5 cash, ~$5 non-cash) Actual $63.47 (GAAP) In line
Interest expense ($USD M)Q4 2025N/AFlat; ~$58.5 cash, ~$5 non-cash New
Dividend per share2H 2025$0.05 (raised July 10) $0.05 maintained (Oct 9) Maintained
DispositionsQ4 2025–early 2026N/A~$55M expected proceeds; 867k sq ft; proceeds to partially repay $700M 2032 loan New

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025)Previous Mentions (Q2 2025)Current Period (Q3 2025)Trend
Leasing pipeline & spreads2.3M sq ft; GAAP +18.9%; pipeline 7.4M sq ft; Mainland/Hawaii roll-ups 20%/30% targets 171k sq ft; GAAP +21.1%; pipeline 7.8M sq ft; roll-ups 20%/30% 836k sq ft; GAAP +22.4%; renewals ~70%; pipeline >8M sq ft Improving execution; stable demand
Balance sheet & refinancingConsidering debt refi and dispositions in 2025 $1.235B floating refi to $1.16B fixed; savings ~$8.5M; JV debt options under evaluation Interest expense down; Q4 guidance stable; dispositions in process; partial debt repayment Progressing; deleveraging focus
Tariffs/macroExpect retention benefits; elongated decision timelines Monitoring macro; no demand weakening observed Sector resilient despite tariff uncertainty; tenants confident in long-term needs Neutral-to-positive
Hawaii land parcel2.2M sq ft parcel; activity but slow underwriting; immaterial revenue impact Early-stage prospects; status quo Prospect in diligence; 90-day access agreement underway Gradual progress
Indianapolis vacancyActively marketing; proposals out More activity; early-stage prospects Three proposals out; potential lease-up 1H 2026 Improving
Dividend policy$0.01 declared Q1 Raised to $0.05 in July Maintained at $0.05 in Oct Stable
Incentive management feeNot quantified; accrual framework discussedN/AFull-year ~$6.3M if based on 9/30; < $2M in Q4; paid Jan 2026; excluded from Q4 Normalized FFO One-time; cash impact in Jan

Management Commentary

  • “Our third quarter results continue to highlight the solid operating fundamentals of our portfolio… Leasing velocity also remained strong… weighted average rental rates that were 22.4% higher… Renewal activity accounted for 70%… ability to achieve organic cash flow growth while maintaining portfolio stability.” — Yael Duffy, President & COO .
  • “Normalized FFO… $17.4 million or $0.26 per share… Same property cash basis NOI was $84.2 million… Interest expense decreased… reflecting the impact of our $1.16 billion fixed-rate debt refinancing completed in June… we expect normalized FFO to be between $0.27 and $0.29 per share, excluding incentive fees, and adjusted EBITDA-RE between $84 million and $85 million.” — Tiffany Sy, CFO .
  • “Our leasing pipeline continues to grow and now exceeds 8 million square feet… anticipate near-term conversion of approximately 75%… average roll-ups in rent of 20% on the mainland and 30% in Hawaii.” — Marc Krohn, VP .

Q&A Highlights

  • Incentive management fees: full-year ~$6.3M under 9/30 conditions; < $2M to be recorded in Q4; paid in January 2026; excluded from Q4 Normalized FFO .
  • Mainland spread nuance: USPS re-leasing at ~2% GAAP roll-up drove the mainland weighted average down to 1.8%; management satisfied with outcome given building specifics .
  • Dispositions: owner-user sale ~ $50M (sub-6% cap rate premium); two additional vacant assets in process; aggregate ~$55M; impairment tied to the vacant asset sale .
  • Indianapolis lease-up: three proposals active; optimistic but realistic; potential lease-up in 1H 2026 .
  • Hawaii vacancy: full-site user in diligence under a 90-day access agreement; underwriting complexity keeps pace measured .

Estimates Context

  • Q3 2025: EPS modest beat, revenue slight miss, EBITDA miss versus S&P Global consensus; target price consensus mean is $6.85. Values retrieved from S&P Global.*
  • Implications: EBITDA miss versus consensus and GAAP loss suggest Street models may adjust for the impairment charge and higher G&A, while steady leasing spreads and Q4 FFO guidance could support upward revisions to FFO outlook.*

Key Takeaways for Investors

  • Leasing economics remain robust: 22.4% GAAP rent lifts on 836k sq ft and ~70% renewals underpin organic cash NOI growth (+3.0% YoY) .
  • Balance sheet improvement: interest expense down 14.2% YoY; coverage at 1.3x remains thin but stable post-refinancing; deleveraging via ~$55M asset sales targeted to partially repay the $700M 2032 loan .
  • Q4 guide constructive: Normalized FFO $0.27–$0.29 and Adjusted EBITDAre $84–$85M point to sequential momentum despite macro uncertainty .
  • Dividend now sustainable at $0.05/qtr (3.4% annualized yield at Q3 close), supported by improved cash savings from June refinancing and CAD stability .
  • Watch the JV debt: $1.4B floating-rate JV loan fixed via cap; extension flexibility to 2027; management evaluating refinancing options amid high occupancy .
  • Vacancy catalysts: Indianapolis and Hawaii prospects advancing (proposals and diligence); lease-up timing into 2026 could add NOI and derisk trajectory .
  • Non-GAAP clarity: impairment ($6.1M) and incentive fee timing (Jan 2026) explain GAAP/EBITDA variances vs Street; focus on Normalized FFO and Adjusted EBITDAre for run-rate .

* Values retrieved from S&P Global.