Executive Summary

Q4 2024 delivered stable operations with portfolio 94.4% leased, Rental income of $110.5M, Normalized FFO of $8.9M ($0.13/sh), and Adjusted EBITDAre of $82.2M; sequential trends were modestly softer on NOI/EBITDA but FFO rose ~10% QoQ as interest expense declined with a new cap .
Management guided Q1 2025 Normalized FFO to $0.16–$0.18/sh, driven by lower interest expense (~$70M; $59M cash, $11M non-cash) and leasing contributions; Q4 included < $1M of nonrecurring bad debt that should not repeat .
Leasing remained constructive: 731k sq ft executed in Q4 at +39.3% GAAP rent roll-up and 10.5-year WALT; full-year 2024 leasing totaled ~6.1M sq ft at +18.2% with $8.2M ARR uplift (41% to be realized in 2025+) .
Balance sheet actions continue: ILPT extended its $1.235B floating loan and bought a 1-year SOFR cap at 2.78% for $17M; Mountain JV intends to exercise its next extension and purchased a 3.10% cap for $15M; management reiterated focus on leverage reduction and liquidity (cash $131.7M) .
Stock reaction catalysts: visible normalization in interest expense, resolution of the Hawaii (2.2M sq ft) and Indianapolis (535k sq ft) vacancies, and continued positive leasing spreads; offset risks include tenant restructuring (ATD) and elevated leverage (Net debt/EBITDA ~12.4x) .

What Went Well and What Went Wrong

What Went Well
- Robust leasing economics: Q4 executed 731k sq ft at +39.3% GAAP rent spread and 10.5-year WALT; Hawaii new leasing was 148k sq ft at +43% with 21.3-year WALT .
- Interest expense tailwind: Q4 interest expense declined to $71.7M with the new interest rate cap; Q1’25 interest expense expected to ~ $70M, supporting guided FFO step-up to $0.16–$0.18/sh .
- Positive tenant feedback: Kingsley survey exceeded benchmarks across categories; 34 properties received Kingsley Excellence Awards, reinforcing operating execution and tenant retention potential .
What Went Wrong
- Occupancy headwinds persisted at 94.4% (vs. 98.8% prior year) due to two large vacancies (Hawaii land parcel and Indianapolis), reducing occupancy by 4.6% and quarterly rent by ~$1.8M in H2 .
- Slightly softer operating metrics QoQ: NOI and Adjusted EBITDAre dipped sequentially (NOI $84.2M vs. $84.7M; Adj. EBITDAre $82.2M vs. $83.9M) amid vacancies and timing .
- Tenant credit watch: American Tire (ATD) remains in bankruptcy; ILPT reports no lease rejections to date and is resisting rent restructures, but uncertainty remains until court milestones in May .

Financial Results

Metric	Q4 2023	Q3 2024	Q4 2024
Rental income ($USD Thousands)	$108,895	$108,945	$110,521
Net loss attributable to common ($USD Thousands)	$(31,240)	$(24,990)	$(24,101)
Net loss per share ($)	$(0.48)	$(0.38)	$(0.37)
NOI ($USD Thousands)	$84,887	$84,709	$84,186
Cash Basis NOI ($USD Thousands)	$81,453	$82,503	$81,610
Adjusted EBITDAre ($USD Thousands)	$83,072	$83,947	$82,156
FFO to common ($USD Thousands)	$7,799	$8,063	$8,877
Normalized FFO to common ($USD Thousands)	$8,086	$8,063	$8,877
Normalized FFO per share ($)	$0.12	$0.12	$0.13
CAD to common ($USD Thousands)	$8,948	$11,247	$7,696
Interest expense ($USD Thousands)	$72,979	$73,936	$71,739

Notes: Consensus estimates via S&P Global were unavailable at time of analysis due to request limits; no estimate comparisons are shown (we attempted retrieval but were rate-limited) [GetEstimates error].

Segment breakdown (Q4 2024)

Segment (Q4 2024)	Rental income ($USD Thousands)	NOI ($USD Thousands)	Cash Basis NOI ($USD Thousands)	Adjusted EBITDAre ($USD Thousands)	Normalized FFO to common ($USD Thousands)
ILPT Mainland (wholly owned)	38,062	29,269	28,887	26,903	(2,201)
Hawaii (wholly owned)	29,722	21,396	20,071	20,449	8,767
Mountain JV (consolidated)	42,399	33,316	32,453	30,521	(312)
Other/Adjustments	338	205	199	4,283	2,623
Total	110,521	84,186	81,610	82,156	8,877

Key KPIs and leverage/coverage

KPI	Q4 2023	Q3 2024	Q4 2024
Percentage leased	98.8%	94.4%	94.4%
Leasing activity (sq ft, 000s)	1,534	2,757	731
Weighted avg GAAP rent change	19.7%	7.0%	39.3%
Weighted avg lease term (years)	6.7	6.2	10.5
Net debt / annualized Adj. EBITDAre	12.3x	12.1x	12.4x
Adj. EBITDAre / interest expense	1.1x	1.1–1.2x	1.1x
Cash & cash equivalents ($USD Thousands)	112,341	153,863	131,706

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Normalized FFO per share	Q1 2025	NA	$0.16–$0.18	New quantitative guidance introduced
Interest expense (total; cash/non-cash)	Q1 2025	NA	~$70M total; $59M cash, $11M non-cash	New quantitative guidance introduced
Interest expense (actual vs prior guide)	Q4 2024	~ $72M (guided on Q3 call)	$71.7M actual	Met/slight beat vs guide
Common dividend	Ongoing	$0.01/qtr	$0.01/qtr (declared Jan 16, 2025)	Maintained

Additional financing updates: ILPT extended its $1.235B floating-rate loan and purchased a 1-year SOFR cap (2.78% strike) for $17M; Mountain JV provided notice to exercise its second extension and purchased a 1-year SOFR cap (3.10%) for $15M .

Earnings Call Themes & Trends

Topic	Q-2 (Q2 2024)	Q-1 (Q3 2024)	Current (Q4 2024)	Trend
Interest rate caps & interest expense	Expected ILPT cap cost $25–30M; Q3 interest expense to be ~flat; all debt fixed/hedged; weighted avg ~5.35%	Purchased ILPT cap for $17M (2.78% strike); Q4 interest expense guided to ~ $72M	Q4 interest expense fell to $71.7M; Q1’25 interest expense guided to ~$70M ($59M cash, $11M non-cash)	Improving cost trajectory
Vacancies: Hawaii 2.2M sf & Indianapolis 535k sf	Introduced and flagged modeling to 2H’25 for lease-up	Occupancy 94.4%; aim to lease HI in 2H’25, Indy in 1H’25	Vacancies cut occupancy by 4.6% and ~$1.8M quarterly rent; still targeting 2025 lease-up	Timing risk but progressing
Leasing pipeline	Tracking >7.0M sf; 35% advanced	39 deals/8.3M sf; strong FedEx renewals	28 deals/>6.5M sf; 1.8M sf already executed post YE	Stable; longer timelines
Tenant credit (ATD)	ATD filed Ch. 11; no unpaid obligations; properties fully utilized	No material updates beyond monitoring	No lease rejections to date; ILPT not open to rent cuts; May milestone ahead	Watch but contained
Dividend policy	Preserving cash; dividend under review each meeting	Same stance reiterated	Declared $0.01 in Jan; focus remains liquidity	Maintained
Deleveraging/asset sales	Pace similar next 12 months vs prior	Evaluating inbound bids; covenant constraints on releases -	Reiterated leverage focus; Net debt/EBITDA ~12.4x	Ongoing, constrained

Management Commentary

Strategic focus: “We remain focused on our ability to realize organic cash flow growth… and continue to strategically evaluate opportunities to reduce leverage, in an effort to strengthen our balance sheet and enhance financial flexibility.” — Yael Duffy, President & COO .
Leasing outcomes: “During the fourth quarter, we completed 731,000 square feet of leasing at weighted average rental rates that were 39.3% higher… Hawaii accounted for all of our new leasing… at 43% higher… WALT of 21.3 years.” — Yael Duffy .
Interest/FFO outlook: “Including the impact of the new interest rate cap, we expect our interest expense for the first quarter of 2025 to decline to approximately $70 million… We expect normalized FFO for the first quarter of 2025 to be between $0.16 and $0.18 per share.” — Tiffany Sy, CFO & Treasurer .
Tenant satisfaction: “Our portfolio exceeded the Kingsley benchmark in every category… 34 properties received the Kingsley Excellence Award…” — Marc Krohn, VP .

Q&A Highlights

Q1 uplift drivers vs Q4: Lower interest expense, leasing contribution, and nonrecurring Q4 bad debt (<$1M) that should not repeat .
Pipeline dynamics: Pipeline appears smaller due to 1.8M sq ft already executed post YE; execution remains high once LOIs are signed, though timelines have lengthened .
ATD bankruptcy: No ILPT lease rejections to date; ILPT is not open to rent restructures; a May court milestone is expected .

Estimates Context

We attempted to retrieve S&P Global (Capital IQ) Wall Street consensus estimates to show beats/misses, but estimates were unavailable at the time of analysis due to request limits. Accordingly, no consensus comparisons are presented here [GetEstimates error].

Key Takeaways for Investors

FFO inflecting near-term: Q1’25 Normalized FFO guided to $0.16–$0.18/sh on interest expense normalization and executed leasing; monitor delivery against guide and cadence thereafter .
Leasing spreads remain a strength: +39% GAAP spread in Q4 and +18% for 2024 underpin embedded rent growth; Hawaii remains a unique long-duration lever .
Two vacancy resolutions are the swing factors: Leasing the Hawaii parcel (2.2M sf) and Indianapolis (535k sf) are key 2025 catalysts for occupancy, NOI, and sentiment .
Balance sheet management ongoing: Extensions and lower cap costs reduce near-term refinancing risk; focus on deleveraging persists with Net debt/EBITDA ~12.4x and coverage ~1.1x .
Tenant risk manageable so far: ATD case bears watching but remains contained with no lease rejections; FedEx renewals underscore tenant relationship strength .
Dividend stable at $0.01/qtr; any increase likely gated by liquidity, capex/leasing needs, and covenant constraints rather than earnings capacity alone -.
Trading implication: Near-term upside if interest expense comes in at/under ~$70M and one of the vacancies secures a lease; risks if vacancy timing slips or tenant restructuring impacts cash flows .

Industrial Logistics Properties Trust (ILPT)·Q4 2024 Earnings Summary