10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2018

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from  to

Commission file number: 000-55376

Industrial Property Trust Inc.

(Exact name of registrant as specified in its charter)

Maryland	61-1577639
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
518 Seventeenth Street, 17th Floor Denver, CO	80202
(Address of principal executive offices)	(Zip code)

(303) 228-2200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	¨	Accelerated filer	¨	Smaller reporting company	¨
Non-accelerated filer	x			Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of November 5, 2018, there were 105,667,443 shares of the registrant’s Class A common stock and 71,280,451 shares of the registrant’s Class T common stock outstanding.

INDUSTRIAL PROPERTY TRUST INC.

TABLE OF CONTENTS

		Page
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements:
	Condensed Consolidated Balance Sheets as of September 30, 2018 (unaudited) and December 31, 2017	1
	Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2017 (unaudited)	2
	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months Ended September 30, 2018 and 2017 (unaudited)	3
	Condensed Consolidated Statement of Equity for the Nine Months Ended September 30, 2018 (unaudited)	4
	Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017 (unaudited)	5
	Notes to Condensed Consolidated Financial Statements (unaudited)	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
Item 4.	Controls and Procedures	27
PART II. OTHER INFORMATION
Item 1A.	Risk Factors	28
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
Item 6.	Exhibits	33

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

INDUSTRIAL PROPERTY TRUST INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

	As of
(in thousands, except per share data)	September 30, 2018			December 31, 2017
	(unaudited)
ASSETS
Net investment in real estate properties	$	2,694,922		$	2,706,344
Investment in unconsolidated joint ventures	121,297			106,631
Cash and cash equivalents	4,772			5,397
Restricted cash	65			65
Straight-line and tenant receivables, net	28,509			23,643
Due from affiliates	282			907
Other assets	31,029			22,560
Total assets	$	2,880,876		$	2,865,547
LIABILITIES AND EQUITY
Liabilities
Accounts payable and accrued liabilities	$	29,420		$	21,668
Debt, net	1,560,684			1,489,145
Due to affiliates	119			570
Distributions payable	23,860			23,757
Distribution fees payable to affiliates	20,432			26,071
Other liabilities	43,637			44,866
Total liabilities	1,678,152			1,606,077
Commitments and contingencies (Note 9)
Equity
Stockholders’ equity:
Preferred stock, $0.01 par value - 200,000 shares authorized, none issued and outstanding	—			—
Class A common stock, $0.01 par value per share - 900,000 shares authorized, 105,514 shares and 104,589 shares issued and outstanding, respectively	1,055			1,046
Class T common stock, $0.01 par value per share - 600,000 shares authorized, 70,992 shares and 69,925 shares issued and outstanding, respectively	710			699
Additional paid-in capital	1,578,724			1,561,749
Accumulated deficit	(401,014		)	(320,897		)
Accumulated other comprehensive income	23,248			16,872
Total stockholders’ equity	1,202,723			1,259,469
Noncontrolling interests	1			1
Total equity	1,202,724			1,259,470
Total liabilities and equity	$	2,880,876		$	2,865,547

See accompanying Notes to Condensed Consolidated Financial Statements.

1

INDUSTRIAL PROPERTY TRUST INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands, except per share data)	2018			2017			2018			2017
Revenues:
Rental revenues	$	60,664		$	56,686		$	179,514		$	166,368
Total revenues	60,664			56,686			179,514			166,368
Operating expenses:
Rental expenses	15,950			14,899			47,451			43,910
Real estate-related depreciation and amortization	27,934			29,044			83,987			83,756
General and administrative expenses	2,130			2,106			7,410			6,301
Asset management fees, related party	6,214			5,689			18,326			16,575
Total operating expenses	52,228			51,738			157,174			150,542
Operating income	8,436			4,948			22,340			15,826
Other expenses (income):
Equity in income of unconsolidated joint ventures	(2,729		)	(39		)	(4,023		)	(124		)
Interest expense and other	12,875			10,516			36,939			30,600
Net gain on disposition of real estate properties	(141		)	—			(126		)	(131		)
Total other expenses	10,005			10,477			32,790			30,345
Net loss	(1,569		)	(5,529		)	(10,450		)	(14,519		)
Net income attributable to noncontrolling interests	—			(16		)	—			(47		)
Net loss attributable to common stockholders	$	(1,569	)	$	(5,545	)	$	(10,450	)	$	(14,566	)
Weighted-average shares outstanding	176,456			174,300			176,071			167,363
Net loss per common share - basic and diluted	$	(0.01	)	$	(0.03	)	$	(0.06	)	$	(0.09	)

See accompanying Notes to Condensed Consolidated Financial Statements.

2

INDUSTRIAL PROPERTY TRUST INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2018			2017			2018			2017
Net loss attributable to common stockholders	$	(1,569	)	$	(5,545	)	$	(10,450	)	$	(14,566	)
Unrealized gain (loss) on derivative instruments, net	81			(209		)	6,376			(963		)
Comprehensive loss attributable to common stockholders	$	(1,488	)	$	(5,754	)	$	(4,074	)	$	(15,529	)

See accompanying Notes to Condensed Consolidated Financial Statements.

3

INDUSTRIAL PROPERTY TRUST INC.

CONDENSED CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)

	Stockholders’ Equity
	Common Stock					Additional Paid-In Capital			Accumulated Deficit			Accumulated Other Comprehensive Income		Noncontrolling Interests		Total
(in thousands)	Shares		Amount
Balance as of December 31, 2017	174,514		$	1,745		$	1,561,749		$	(320,897	)	$	16,872	$	1	$	1,259,470
Net loss	—		—			—			(10,450		)	—		—		(10,450		)
Unrealized gain on derivative instruments	—		—			—			—			6,376		—		6,376
Issuance of common stock	3,433		34			36,252			—			—		—		36,286
Share-based compensation	—		—			1,201			—			—		—		1,201
Upfront offering costs	—		—			(397		)	—			—		—		(397		)
Trailing distribution fees	—		—			51			5,589			—		—		5,640
Redemptions of common stock	(1,441	)	(14		)	(20,132		)	—			—		—		(20,146		)
Distributions on common stock	—		—			—			(75,256		)	—		—		(75,256		)
Balance as of September 30, 2018	176,506		$	1,765		$	1,578,724		$	(401,014	)	$	23,248	$	1	$	1,202,724

See accompanying Notes to Condensed Consolidated Financial Statements.

4

INDUSTRIAL PROPERTY TRUST INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	For the Nine Months Ended September 30,
(in thousands)	2018			2017
Operating activities:
Net loss	$	(10,450	)	$	(14,519	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Real estate-related depreciation and amortization	83,987			83,756
Equity in income of unconsolidated joint ventures	(4,023		)	(124		)
Straight-line rent and amortization of above- and below-market leases	(7,519		)	(9,278		)
Net gain on disposition of real estate properties	(126		)	(131		)
Other	2,137			2,913
Changes in operating assets and liabilities:
Tenant receivables and other assets	(1,679		)	(867		)
Accounts payable, accrued expenses and other liabilities	5,955			6,633
Due from / to affiliates, net	413			(2,845		)
Net cash provided by operating activities	68,695			65,538
Investing activities:
Real estate acquisitions	(39,918		)	(248,501		)
Acquisition deposits	(130		)	(623		)
Proceeds from the disposition of real estate properties	580			15,427
Capital expenditures and development activities	(30,806		)	(31,157		)
Investment in unconsolidated joint ventures	(14,931		)	(32,192		)
Distributions from joint ventures	—			2,730
Net proceeds from sale of joint venture ownership interest	4,235			—
Net cash used in investing activities	(80,970		)	(294,316		)
Financing activities:
Proceeds from line of credit	117,000			296,000
Repayments of line of credit	(46,000		)	(241,000		)
Proceeds from mortgage note	—			105,000
Repayments of mortgage notes	(893		)	—
Financing costs paid	(335		)	(777		)
Proceeds from issuance of common stock	—			146,217
Offering costs paid related to issuance of common stock	(435		)	(10,578		)
Distributions paid to common stockholders	(33,277		)	(29,091		)
Dividends paid on noncontrolling interests	—			(63		)
Distribution fees paid to affiliates	(5,588		)	(4,781		)
Redemptions of common stock	(18,822		)	(9,891		)
Net cash provided by financing activities	11,650			251,036
Net (decrease) increase in cash, cash equivalents and restricted cash	(625		)	22,258
Cash, cash equivalents and restricted cash, at beginning of period	5,462			8,438
Cash, cash equivalents and restricted cash, at end of period	$	4,837		$	30,696

See accompanying Notes to Condensed Consolidated Financial Statements.

5

INDUSTRIAL PROPERTY TRUST INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. BASIS OF PRESENTATION

Unless the context otherwise requires, the “Company” refers to Industrial Property Trust Inc. and its consolidated subsidiaries.

The accompanying unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain disclosures normally included in the annual audited financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been omitted. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 9, 2018 (“2017 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with GAAP.

Reclassifications

Certain items in the Company’s condensed consolidated balance sheet for 2017 have been reclassified to conform to the 2018 presentation. Future estimated distribution fees payable have been reclassified from due to affiliates and are presented separately in the condensed consolidated balance sheets.

Recently Adopted Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which provides guidance for revenue recognition and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition.” The standard is based on the principle that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance specifically excludes revenue derived from lease contracts from its scope. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The effective date for the standard is for annual reporting periods beginning after December 15, 2017 and interim periods therein. The Company adopted the standard when it became effective for the Company, as of the reporting period beginning January 1, 2018. The Company elected the package of practical expedients, and accordingly did not reallocate contract consideration to lease components within the scope of the existing lease guidance when it adopted ASU 2014-09. The adoption of ASU 2014-09 did not have a significant impact on the Company’s condensed consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which requires: (i) all equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; and (iii) eliminates the requirement for public entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU 2016-01 is effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption is permitted for the accounting guidance on financial liabilities under the fair value option. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a significant impact on the Company’s condensed consolidated financial statements.

6

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements by removing, modifying, or adding certain disclosures. ASU 2018-13 is effective for all companies beginning after December 15, 2019 and for interim periods within those fiscal years, with early adoption permitted. Certain disclosures in ASU 2018-13 are required to be applied on a retrospective basis and others on a prospective basis. The Company adopted this guidance effective September 30, 2018. The adoption of ASU 2018-13 did not have a significant impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Subtopic 842)” (“ASU 2016-02”), which provides guidance for greater transparency in financial reporting by organizations that lease assets such as real estate, airplanes and manufacturing equipment by requiring such organizations to recognize lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The accounting for lessors will remain largely unchanged from current GAAP; however, the standard requires that lessors expense, on an as-incurred basis, certain initial direct costs that are not incremental in negotiating a lease. Under existing standards, certain of these costs are capitalizable and therefore this new standard will result in certain of these costs being expensed as incurred after adoption. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt the standard when it becomes effective for the Company, as of the reporting period beginning January 1, 2019, and it expects to elect the practical expedients available for implementation under the standard. Under the practical expedients election, the Company would not be required to reassess: (i) whether an expired or existing contract meets the definition of a lease; (ii) the lease classification at the adoption date for expired or existing leases; and (iii) whether costs previously capitalized as initial direct costs would continue to be amortized. The standard also will require new disclosures within the notes accompanying the consolidated financial statements. Additionally, in January 2018, the FASB issued ASU No. 2018-01, “Leases (Subtopic 842): Land Easement Practical Expedient for Transition to Topic 842” (“ASU 2018-01”), which updates ASU 2016-02 to include land easements under the updated guidance, including the option to elect the practical expedient discussed above. The Company also plans to adopt ASU 2018-01 when it becomes effective for the Company, as of the reporting period beginning January 1, 2019, and it expects to elect the practical expedients available for implementation under the standard. The Company’s initial analysis of its lease contracts indicates that the adoption of these standards will not have a material effect on its consolidated financial statements. The Company is still in the process of evaluating the impact of ASU 2016-02 and ASU 2018-02.

2. INVESTMENT IN REAL ESTATE PROPERTIES

As of September 30, 2018 and December 31, 2017, the Company’s consolidated investment in real estate properties consisted of 238 and 235 industrial buildings, respectively.

	As of
(in thousands)	September 30, 2018			December 31, 2017
Land	$	792,306		$	771,613
Building and improvements	1,961,752			1,919,580
Intangible lease assets	208,453			239,190
Construction in progress	17,005			14,002
Investment in real estate properties	2,979,516			2,944,385
Less accumulated depreciation and amortization	(284,594		)	(238,041		)
Net investment in real estate properties	$	2,694,922		$	2,706,344

7

Intangible Lease Assets and Liabilities

Intangible lease assets and liabilities, as of September 30, 2018 and December 31, 2017, include the following:

	As of September 30, 2018									As of December 31, 2017
(in thousands)	Gross			Accumulated Amortization			Net			Gross			Accumulated Amortization			Net
Intangible lease assets (1)	$	198,195		$	(96,264	)	$	101,931		$	227,922		$	(103,979	)	$	123,943
Above-market lease assets (1)	10,258			(5,591		)	4,667			11,268			(5,212		)	6,056
Below-market lease liabilities (2)	(30,310		)	13,737			(16,573		)	(33,278		)	13,755			(19,523		)

(1) Included in net investment in real estate properties on the condensed consolidated balance sheets.

(2) Included in other liabilities on the condensed consolidated balance sheets.

Rental Revenue Adjustments and Depreciation and Amortization Expense

The following table summarizes straight-line rent adjustments, amortization recognized as an increase (decrease) to rental revenues from above- and below-market lease assets and liabilities, and real estate-related depreciation and amortization expense:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2018			2017			2018			2017
Increase (Decrease) to Rental Revenue:
Straight-line rent adjustments	$	1,614		$	1,623		$	4,724		$	5,950
Above-market lease amortization	(441		)	(508		)	(1,390		)	(1,577		)
Below-market lease amortization	1,296			1,738			4,185			4,905
Real Estate-Related Depreciation and Amortization:
Depreciation expense	$	18,552		$	16,430		$	53,889		$	47,742
Intangible lease asset amortization	9,382			12,614			30,098			36,014

3. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The Company has entered into joint ventures with third-party investors for purposes of investing primarily in the development of industrial properties located in certain major U.S. distribution markets. The Company reports its investment for the Build-To-Core I Partnership LP (the “BTC I Partnership”) and the Build-To-Core II Partnership LP (the “BTC II Partnership”) under the equity method on its condensed consolidated balance sheets due to the fact that the Company maintains significant influence in each partnership. The following table summarizes the Company’s investment in the unconsolidated joint ventures:

	As of				Investment in Unconsolidated Joint Ventures as of
	September 30, 2018		December 31, 2017
($ in thousands)	Ownership Percentage	Number of Buildings	Ownership Percentage	Number of Buildings	September 30, 2018		December 31, 2017
BTC I Partnership	20.0%	37	20.0%	33	$	110,343	$	97,359
BTC II Partnership (1)	8.0%	11	13.0%	10	10,954		9,272
Total joint ventures		48		43	$	121,297	$	106,631

(1) On January 31, 2018, the Company sold and assigned a 5.0% portion of its ownership interest in the BTC II Partnership for a purchase price equal to approximately $4.2 million.

8

The following is a summary of certain operating data of the BTC I Partnership:

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
(in thousands)	2018		2017			2018		2017
Operating data:
Total revenues	$	12,310	$	7,525		$	35,172	$	20,637
Total operating expenses	9,352		6,297			26,886		18,421
Total other income (expenses)	10,998		(645		)	13,030		(1,151		)
Net income	13,956		583			21,316		1,065

4. DEBT

The Company’s consolidated indebtedness is currently comprised of borrowings under its line of credit, term loans and mortgage notes. Borrowings under the non-recourse mortgage notes are secured by mortgages or deeds of trust and related assignments and security interests in collateralized and certain cross-collateralized properties, which are generally owned by single purpose entities. A summary of the Company’s debt is as follows:

	Weighted-Average Effective Interest Rate as of			Balance as of
($ in thousands)	September 30, 2018	December 31, 2017	Maturity Date	September 30, 2018			December 31, 2017
Line of credit (1)	3.30%	2.81%	January 2020	$	346,000		$	275,000
Term loan (2)	2.65%	2.65%	January 2021	350,000			350,000
Term loan (3)	3.81%	3.46%	May 2022	150,000			150,000
Fixed-rate mortgage notes (4)	3.36%	3.36%	July 2020 - December 2025	721,988			722,880
Total principal amount / weighted-average (5)	3.23%	3.10%		$	1,567,988		$	1,497,880
Less unamortized debt issuance costs				$	(7,304	)	$	(8,735	)
Total debt, net				$	1,560,684		$	1,489,145
Gross book value of properties encumbered by debt				$	1,146,378		$	1,153,150

(1) The effective interest rate is calculated based on either: (i) the London Interbank Offered Rate (“LIBOR”) multiplied by a statutory reserve rate plus a margin ranging from 1.40% to 2.30%; or (ii) an alternative base rate plus a margin ranging from 0.40% to 1.30%, each depending on the Company’s consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to $150.0 million in borrowings under this line of credit. As of September 30, 2018, the unused and available portions under the line of credit were both $153.5 million. The line of credit is available for general corporate purposes, including but not limited to the acquisition and operation of permitted investments.

(2) The effective interest rate is calculated based on either: (i) LIBOR multiplied by a statutory reserve rate, plus a margin ranging from 1.35% to 2.20%; or (ii) an alternative base rate plus a margin ranging from 0.35% to 1.20%, each depending on the Company’s consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements. This term loan is available for general corporate purposes, including but not limited to the acquisition and operation of permitted investments.

(3) As of December 31, 2017, the effective interest rate was calculated based on either: (i) LIBOR multiplied by a statutory reserve rate, plus a margin ranging from 1.60% to 2.50%; or (ii) an alternative base rate plus a margin ranging from 0.60% to 1.50%, each depending on the Company’s consolidated leverage ratio. On June 20, 2018, the Company amended the terms of this term loan. As of September 30, 2018, the effective interest rate is calculated based on either: (i) LIBOR multiplied by a statutory reserve rate, plus a margin ranging from 1.30% to 2.15%; or (ii) an alternative base rate plus a margin ranging from 0.30% to 1.15%, each depending on the Company’s consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate. This term loan is available for general corporate purposes, including but not limited to the acquisition and operation of permitted investments.

(4) Interest rates range from 2.94% to 3.65%, which includes the effects of an interest rate swap agreement relating to a variable-rate mortgage note with an outstanding amount of $96.1 million and $97.0 million as of September 30, 2018 and December 31, 2017, respectively. The assets and credit of each of the Company’s consolidated properties pledged as collateral for the Company’s mortgage notes are not available to satisfy the Company’s other debt and obligations, unless the Company first satisfies the mortgage notes payable on the respective underlying properties.

9

(5) The weighted-average remaining term of the Company’s consolidated debt was approximately 3.8 years as of September 30, 2018, excluding any extension options on the line of credit.

As of September 30, 2018, the principal payments due on the Company’s consolidated debt during each of the next five years and thereafter were as follows:

(in thousands)	Line of Credit (1)		Term Loans		Mortgage Notes		Total
Remainder of 2018	$	—	$	—	$	462	$	462
2019	—		—		2,191		2,191
2020	346,000		—		15,259		361,259
2021	—		350,000		6,047		356,047
2022	—		150,000		83,579		233,579
Thereafter	—		—		614,450		614,450
Total principal payments	$	346,000	$	500,000	$	721,988	$	1,567,988

(1) The term of the line of credit may be extended pursuant to a one-year extension option, subject to certain conditions.

Debt Covenants

The Company’s line of credit, term loans and mortgage note agreements contain various property-level covenants, including customary affirmative and negative covenants. In addition, the line of credit and term loan agreements contain certain corporate level financial covenants, including leverage ratio, fixed charge coverage ratio, and tangible net worth thresholds. The Company was in compliance with its debt covenants as of September 30, 2018.

Derivative Instruments

To manage interest rate risk for certain of its variable-rate debt, the Company uses interest rate swaps as part of its risk management strategy. These derivatives are designed to mitigate the risk of future interest rate increases by providing a fixed interest rate for a limited, pre-determined period of time. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the interest rate swap agreements without exchange of the underlying notional amount. As of September 30, 2018, the Company had 11 outstanding interest rate swap agreements, which were associated with $596.1 million of debt, that were designated as cash flow hedges of interest rate risk. Certain of the Company’s variable-rate borrowings are not hedged, and therefore, to an extent, the Company has on-going exposure to interest rate movements.

The effective portion of the change in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss (“AOCI”) on the condensed consolidated balance sheets and is subsequently reclassified into earnings as interest expense for the period that the hedged forecasted transaction affects earnings, which is when the interest expense is recognized on the related debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. For the three and nine months ended September 30, 2018 and 2017, there was no hedge ineffectiveness. The Company expects no hedge ineffectiveness in the next 12 months.

The following table summarizes the location and fair value of the cash flow hedges on the Company’s condensed consolidated balance sheets:

				Fair Value as of
(in thousands)	Notional Amount		Balance Sheet Location	September 30, 2018		December 31, 2017
Interest rate swaps	$	596,087	Other assets	$	23,248	$	16,872

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The following table presents the effect of the Company’s cash flow hedges on the Company’s condensed consolidated financial statements:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2018			2017			2018			2017
Interest rate swaps:
Income (loss) recognized in AOCI (effective portion)	$	1,664		$	144		$	10,081		$	(719	)
Income reclassified from AOCI into income (effective portion)	(1,583		)	(353		)	(3,705		)	(244		)
Net other comprehensive income (loss)	$	81		$	(209	)	$	6,376		$	(963	)

5. FAIR VALUE

The Company estimates the fair value of its financial instruments using available market information and valuation methodologies it believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that the Company would realize upon disposition.

Fair Value Measurements on a Recurring Basis

The following table presents the Company’s financial instruments measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017:

(in thousands)	Level 1		Level 2		Level 3		Total Fair Value
September 30, 2018
Assets
Derivative instruments	$	—	$	23,248	$	—	$	23,248
Total assets measured at fair value	$	—	$	23,248	$	—	$	23,248
December 31, 2017
Assets
Derivative instruments	$	—	$	16,872	$	—	$	16,872
Total assets measured at fair value	$	—	$	16,872	$	—	$	16,872

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Derivative Instruments. The derivative instruments are interest rate swaps. The interest rate swaps are standard cash flow hedges whose fair value is estimated using market-standard valuation models. Such models involve using market-based observable inputs, including interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements, which we have concluded are not material to the valuation. Due to the interest rate swaps being unique and not actively traded, the fair value is classified as Level 2. See “Note 4” above for further discussion of the Company’s derivative instruments.

Nonrecurring Fair Value of Financial Measurements

As of September 30, 2018 and December 31, 2017, the fair values of cash and cash equivalents, restricted cash, tenant receivables, due from/to affiliates, accounts payable and accrued liabilities, and distributions payable approximate their carrying values due to the short-term nature of these instruments. The table below includes fair values for certain of the Company’s financial instruments for which it is practicable to estimate fair value. The carrying values and fair values of these financial instruments were as follows:

	As of September 30, 2018				As of December 31, 2017
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities
Line of credit	$	346,000	$	346,000	$	275,000	$	275,000
Term loans	500,000		500,000		500,000		500,000
Mortgage notes	721,988		687,330		722,880		708,615

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6. STOCKHOLDERS’ EQUITY

Distribution Reinvestment Plan Offering

The Company is continuing to offer and sell shares pursuant to its distribution reinvestment plan, which it may amend or terminate at any time, in its sole discretion. The Company has registered $311.9 million in shares of its common stock to be sold pursuant to its distribution reinvestment plan and is offering the shares at a price equal to the net asset value (“NAV”) per share most recently disclosed by the Company, which is presently $11.11 per share. As of September 30, 2018, $263.4 million in shares remained available for sale pursuant to the Company’s distribution reinvestment plan.

Common Stock

The following table summarizes the changes in the shares outstanding for each class of common stock for the period presented below:

(in thousands)	Class A Shares		Class T Shares		Total Shares
Balance as of December 31, 2017	104,589		69,925		174,514
Issuance of common stock:
Primary shares	—		—		—
DRIP	1,958		1,308		3,266
Stock grants	180		—		180
Redemptions	(1,200	)	(241	)	(1,441	)
Forfeitures	(13	)	—		(13	)
Balance as of September 30, 2018	105,514		70,992		176,506

Distributions

The following table summarizes the Company’s distribution activity (including distributions reinvested in shares of the Company’s common stock) for the quarters ended below:

	Amount
(in thousands, except per share data)	Declared per Common Share (1)		Paid in Cash		Reinvested in Shares		Distribution Fees (2)		Gross Distributions (3)
2018
September 30	$	0.1425	$	11,362	$	11,885	$	1,880	$	25,127
June 30	0.1425		11,262		11,980		1,864		25,106
March 31	0.1425		11,092		12,086		1,845		25,023
Total	$	0.4275	$	33,716	$	35,951	$	5,589	$	75,256
2017
December 31	$	0.1425	$	10,923	$	12,222	$	1,781	$	24,926
September 30	0.1425		10,820		12,242		1,764		24,826
June 30	0.1425		10,349		11,868		1,630		23,847
March 31	0.1425		9,902		11,447		1,495		22,844
Total	$	0.5700	$	41,994	$	47,779	$	6,670	$	96,443

(1) Amounts reflect the quarterly distribution rate authorized by the Company’s board of directors per Class A share and per Class T share of common stock. The quarterly distribution on Class T shares of common stock is reduced by the distribution fees that are payable monthly with respect to such Class T shares (as calculated on a daily basis).

(2) Distribution fees are paid monthly to the Dealer Manager with respect to Class T shares issued in the primary portion of the initial public offering only.

(3) Gross distributions are total distributions before the deduction of distribution fees relating to Class T shares.

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Redemptions

The following table summarizes the Company’s redemption activity for the periods presented below:

	For the Nine Months Ended September 30,
(in thousands, except per share data)	2018		2017
Number of eligible shares redeemed	2,057		1,419
Aggregate dollar amount of shares redeemed	$	20,146	$	13,616
Average redemption price per share	$	9.79	$	9.60

7. RELATED PARTY TRANSACTIONS

The table below summarizes the fees and expenses incurred by the Company for services provided by Industrial Property Advisors LLC (the “Advisor”) and its affiliates, and by the Black Creek Capital Markets, LLC (the “Dealer Manager”) related to the services the Dealer Manager provided in connection with the Company’s initial public offering, and any related amounts payable:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				Payable as of
									September 30, 2018		December 31, 2017
(in thousands)	2018		2017		2018		2017
Expensed:
Asset management fees	$	6,010	$	5,689	$	17,916	$	16,575	$	74	$	54
Asset management fees related to dispositions (1)	221		—		427		409		—		—
Other expense reimbursements (2)	1,145		1,056		3,881		3,317		315		605
Total	$	7,376	$	6,745	$	22,224	$	20,301	$	389	$	659
Capitalized:
Acquisition fees	$	525	$	2,102	$	784	$	5,144	$	—	$	132
Development acquisition fees	123		384		1,070		558		61		98
Total	$	648	$	2,486	$	1,854	$	5,702	$	61	$	230
Additional Paid-In Capital:
Sales commissions	$	—	$	222	$	—	$	4,491	$	—	$	—
Dealer manager fees	—		143		—		3,026		—		—
Offering costs	137		509		397		4,240		80		116
Distribution fees - current (3)	1,880		1,764		5,589		4,889		613		613
Distribution fees - trailing (3)	—		—		—		926		20,432		26,071
Total	$	2,017	$	2,638	$	5,986	$	17,572	$	21,125	$	26,800

(1) Asset management fees that relate to the Company’s proportionate share of the disposition fee associated with the dispositions of joint venture properties are included in asset management fees on the Company’s condensed consolidated statement of operations. Asset management fees that relate to the disposition fee associated with dispositions of wholly-owned properties are netted against the respective gain from dispositions and are included in the related net gain amount on the Company’s condensed consolidated statements of operations.

(2) Other expense reimbursements include certain expenses incurred in connection with the services provided to the Company under the amended and restated advisory agreement, dated August 12, 2018, by and among the Company, Industrial Property Operating Partnership LP (the “Operating Partnership”), and the Advisor. These reimbursements include a portion of compensation expenses of individual employees of the Advisor, including certain of the Company’s named executive officers, related to services for which the Advisor does not otherwise receive a separate fee. The Company reimbursed the Advisor approximately $0.9 million and $0.9 million for the three months ended September 30, 2018 and 2017, respectively, and $3.1 million and $3.1 million for the nine months ended September 30, 2018 and 2017, respectively, for such compensation expenses. The remaining amount of other expense reimbursements relate to other general overhead and administrative expenses including, but not limited to, allocated rent paid to both third parties and affiliates of the Advisor, equipment, utilities, insurance, travel and entertainment.

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(3) The distribution fees accrue daily and are payable monthly in arrears. The monthly amount of distribution fees payable is included in distributions payable on the condensed consolidated balance sheets. Additionally, the Company accrues for estimated trailing amounts payable based on the shares outstanding as of the balance sheet date, which are included in distribution fees payable to affiliates on the condensed consolidated balance sheets. All or a portion of the distribution fees are reallowed or advanced by the Dealer Manager to unaffiliated participating broker dealers or broker dealers servicing accounts of investors who own Class T shares.

Joint Ventures

As described in “Note 3,” the Company owns a 20.0% interest in the BTC I Partnership and an 8.0% interest in the BTC II Partnership, each of which is a joint venture that has and continues to invest in industrial properties located in certain major U.S. distribution markets. Two of the Company’s wholly-owned subsidiaries, IPT BTC I GP LLC and IPT BTC I LP LLC, are partners in the BTC I Partnership. Third-party limited partners own the remaining 80.0% interest in the BTC I Partnership. The Company’s 8.0% interest in the BTC II Partnership is owned through two of its wholly-owned subsidiaries, IPT BTC II GP LLC (the “General Partner”) and IPT BTC II LP LLC (the “IPT Limited Partner,” and together with the General Partner, the “IPT Partners”). BCG BTC II Investors LLC (the “BCG Limited Partner”), owns a 2.0% interest in the BTC II Partnership. The BCG Limited Partner is an affiliate of Black Creek Group LLC (“BCG”), which is an affiliate of the Sponsor. bcIMC (College) US Realty Inc., bcIMC (Municipal) US Realty Inc., bcIMC (Public Service) US Realty Inc., bcIMC (Teachers) US Realty Inc., bcIMC (WCB) US Realty Inc., bcIMC (WCBAF) Realpool Global Investment Corporation, bcIMC (Hydro) US Realty Inc. and QuadReal US Holdings, Inc. (collectively, the “QuadReal Limited Partner”) own the remaining 90.0% interest in the BTC II Partnership.

The Advisor has two wholly-owned subsidiaries, which are referred to herein as “Advisor Sub I” and “Advisor Sub II,” and collectively, the “Advisor Subs.” Advisor Sub I holds a special limited partner interest in the BTC I Partnership and an affiliate of Advisor Sub II holds a special limited partner interest in the BTC II Partnership. The BTC I Partnership pays fees to Advisor Sub I for providing advisory services to the BTC I Partnership and the BTC II Partnership pays fees to Advisor Sub II for providing advisory services to the BTC II Partnership. These advisory services include acquisition and asset management services and, to the extent applicable, development management and development oversight services. In addition, the partnership agreements for the joint ventures contain procedures for making distributions to the parties, including incentive distributions to the respective Advisor Sub that is a special limited partner of the respective joint venture, which are subject to certain return thresholds being achieved. The obligations of the Advisor Subs to provide advisory services to the respective joint ventures will terminate upon termination of the Advisory Agreement with the exception that if the Advisory Agreement is terminated other than for “cause,” the respective Advisor Subs will have the option, in their sole discretion, to seek to become the administrative general partner of the respective joint venture; subject, in the case of the BTC I Partnership, to certain conditions, including obtaining the consent of the third-party limited partners. If the respective Advisor Sub is made the administrative general partner, then the Advisor Sub will continue to provide the advisory services and receive the same fees as those to which it was entitled prior to becoming the administrative general partner, but the Advisor Sub will not control or manage the respective joint venture.

As a result of the payment of the fees to the respective Advisor Subs by the respective joint ventures, the fees payable to the Advisor pursuant to the Advisory Agreement will be reduced by the product of (i) the fees actually paid to the Advisor Subs, and (ii) the percentage interest of the respective joint venture owned by the Company or any entity in which the Company owns an interest. Accordingly, with respect to each joint venture, the aggregate of all fees paid to the respective Advisor Sub will not, with respect to the interests in such joint venture held by the Company or any entity in which the Company owns an interest, exceed the aggregate amounts otherwise payable to the Advisor pursuant to the Advisory Agreement for such services.

For the three and nine months ended September 30, 2018, the joint ventures incurred in aggregate approximately $2.1 million and $5.6 million, respectively, in acquisition and asset management fees, which were paid to the Advisor and its wholly-owned subsidiary pursuant to the respective service agreements, as compared to $1.3 million and $3.8 million for the three and nine months ended September 30, 2017, respectively. Additionally, as of September 30, 2018, the joint ventures had amounts payable to the Company of approximately $0.2 million, which were recorded in due from affiliates on the condensed consolidated balance sheets.

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8. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information and disclosure of non-cash investing and financing activities is as follows:

	For the Nine Months Ended September 30,
(in thousands)	2018		2017
Distributions payable	$	23,860	$	23,653
Redemptions payable	6,053		6,220
Distribution fees payable to affiliates	20,432		27,877
Distributions reinvested in common stock	36,288		33,586
Non-cash capital expenditures	2,090		609

Restricted Cash

Restricted cash consists of cash held in escrow in connection with certain financing requirements and tenant improvements. The following table presents the components of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows:

	For the Nine Months Ended September 30,
(in thousands)	2018		2017
Beginning of period:
Cash and cash equivalents	$	5,397	$	8,358
Restricted cash	65		80
Cash, cash equivalents and restricted cash	$	5,462	$	8,438
End of period:
Cash and cash equivalents	$	4,772	$	30,631
Restricted cash	65		65
Cash, cash equivalents and restricted cash	$	4,837	$	30,696

9. COMMITMENTS AND CONTINGENCIES

The Company and the Operating Partnership are not presently involved in any material litigation nor, to the Company’s knowledge, is any material litigation threatened against the Company or its investments.

Environmental Matters

A majority of the properties the Company acquires are subject to environmental reviews either by the Company or the previous owners. In addition, the Company may incur environmental remediation costs associated with certain land parcels it may acquire in connection with the development of land. The Company has acquired certain properties in urban and industrial areas that may have been leased to or previously owned by commercial and industrial companies that discharged hazardous material. The Company may purchase various environmental insurance policies to mitigate its exposure to environmental liabilities. The Company is not aware of any environmental liabilities that it believes would have a material adverse effect on its business, financial condition, or results of operations as of September 30, 2018.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References to the terms “we,” “our,” or “us” refer to Industrial Property Trust Inc. and its consolidated subsidiaries. The following discussion and analysis should be read together with our unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes certain statements that may be deemed forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements relate to, without limitation, rent and occupancy growth, general conditions in the geographic area where we operate, our future debt and financial position, our future capital expenditures, future distributions and acquisitions (including the amount and nature thereof), other developments and trends of the real estate industry, business strategies and the expansion and growth of our operations. Forward-looking statements are generally identifiable by the use of the words “may,” “will,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “project,” or the negative of these words or other comparable terminology. These statements are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that are difficult to predict.

The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions, and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions, and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to:

• Our ability to locate and make investments in accordance with our business strategy;

• The failure of properties to perform as we expect;

• Risks associated with acquisitions, dispositions and development of properties;

• Our failure to successfully integrate acquired properties and operations;

• Unexpected delays or increased costs associated with any development projects;

• The availability of cash flows from operating activities for distributions and capital expenditures;

• Defaults on or non-renewal of leases by customers, lease renewals at lower than expected rent, or failure to lease properties at all or on favorable rents and terms;

• Difficulties in economic conditions generally and the real estate, debt, and securities markets specifically;

• Legislative or regulatory changes, including changes to the laws governing the taxation of real estate investment trusts (“REITs”);

• Our failure to obtain, renew, or extend necessary financing or access the debt or equity markets;

• Conflicts of interest arising out of our relationships with Industrial Property Advisors Group LLC (the “Sponsor”), the Advisor, and their affiliates;

• Risks associated with using debt to fund our business activities, including re-financing and interest rate risks;

• Increases in interest rates, operating costs, or greater than expected capital expenditures;

• Changes to GAAP; and

• Our ability to continue to qualify as a REIT.

Any of the assumptions underlying forward-looking statements could prove to be inaccurate. Our stockholders are cautioned not to place undue reliance on any forward-looking statements included in this Quarterly Report on Form 10-Q. All forward-looking statements are made as of the date of this Quarterly Report on Form 10-Q and the risk that actual results will differ materially from the expectations expressed in this Quarterly Report on Form 10-Q will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements after the date of this Quarterly Report on Form 10-Q, whether as a result of new information, future events, changed circumstances, or any other reason. In light of the significant uncertainties inherent in the forward-looking statements included in this Quarterly Report on Form 10-Q, including, without limitation, the risks described under “Risk Factors,” the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this Quarterly Report on Form 10-Q will be achieved.

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OVERVIEW

General

Industrial Property Trust Inc. is a Maryland corporation formed on August 28, 2012 to make investments in income-producing real estate assets consisting primarily of high-quality distribution warehouses and other industrial properties that are leased to creditworthy corporate customers. We have operated and elected to be treated as a REIT for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2013, and we intend to continue to operate in accordance with the requirements for qualification as a REIT. We utilize an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) organizational structure to hold all or substantially all of our assets through the Operating Partnership.

On July 24, 2013, we commenced an initial public offering of up to $2.0 billion in shares of our common stock, including up to $1.5 billion in shares of common stock in our primary offering and $500.0 million in shares offered under our distribution reinvestment plan. On June 30, 2017, we terminated the primary portion of our initial public offering. We are continuing to offer and sell shares pursuant to our distribution reinvestment plan at a price equal to the NAV per share we most recently disclosed, which is presently $11.11 per share. We may terminate our distribution reinvestment plan offering at any time. As of September 30, 2018, we had raised gross proceeds of approximately $1.8 billion from the sale of 180.1 million shares of our common stock in our public offering, including shares issued under our distribution reinvestment plan. See “Note 6 to the Condensed Consolidated Financial Statements” for information concerning our distribution reinvestment plan offering.

As of September 30, 2018, we owned and managed, either directly or through our minority ownership interests in our joint ventures, a total real estate portfolio that included 286 industrial buildings totaling approximately 49.2 million square feet located in 26 markets throughout the U.S., with 513 customers, and was 89.2% occupied (90.7% leased) with a weighted-average remaining lease term (based on square feet) of approximately 4.1 years. The occupied rate reflects the square footage with a paying customer in place. The leased rate includes the occupied square footage and additional square footage with leases in place that have not yet commenced. As of September 30, 2018:

• 276 industrial buildings totaling approximately 45.7 million square feet comprised our operating portfolio, which includes stabilized properties, and was 94.8% occupied (95.2% leased).

• 10 industrial buildings totaling approximately 3.5 million square feet comprised our development and value-add portfolio, which includes buildings acquired with the intention to reposition or redevelop, or buildings recently completed which have not yet reached stabilization. We generally consider a building to be stabilized on the earlier to occur of the first anniversary of a building’s shell completion or a building achieving 90% occupancy.

Of our total portfolio, we owned and managed 48 buildings totaling approximately 11.5 million square feet through our joint ventures (as described in “Note 3 to the Condensed Consolidated Financial Statements”). From January 2014 through September 30, 2018, we had acquired, either directly or through our minority ownership interest in our joint ventures, 301 buildings comprised of approximately 51.3 million square feet for an aggregate total purchase price of approximately $3.9 billion. We funded these acquisitions primarily with proceeds from our public offering and debt financings.

We have used the net proceeds from our public offering primarily to make investments in real estate assets. We may use the cash flows generated from operating activities, net proceeds from the sale of common stock pursuant to our distribution reinvestment plan, funds provided by debt financings and refinancings, and net proceeds from asset sales to continue to acquire real estate assets. The number and type of properties we may acquire and debt and other investments we may make will depend upon real estate market conditions and other circumstances existing at the time we make our investments.

Our primary investment objectives include the following:

• preserving and protecting our stockholders’ capital contributions;

• providing current income to our stockholders in the form of regular distributions; and

• realizing capital appreciation upon the potential sale of our assets or other liquidity events.

There is no assurance that we will attain our investment objectives. Our charter places numerous limitations on us with respect to the manner in which we may invest our funds. In most cases these limitations cannot be changed unless our charter is amended, which may require the approval of our stockholders.

We may acquire assets free and clear of mortgage or other indebtedness by paying the entire purchase price in cash or equity securities, or a combination thereof, and we may selectively encumber all or only certain assets with debt. The proceeds from our borrowings may be used to fund investments, make capital expenditures, pay distributions, and for general corporate purposes.

We expect to manage our financing strategy under the current mortgage lending and corporate financing environment by considering various lending sources, which may include long-term fixed-rate mortgage loans, unsecured or secured lines of credit or term loans,

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private placements or public bond issuances, and the assumption of existing loans in connection with certain property acquisitions, or any combination of the foregoing.

Summary of 2018 Activities

During the nine months ended September 30, 2018, we completed the following activities:

• In January 2018, IPT BTC II LP LLC (the “IPT Limited Partner”) sold and assigned a 5.0% ownership interest in the BTC II Partnership to the QuadReal Limited Partner for a purchase price equal to approximately $4.2 million. Prior to the sale, the IPT Limited Partner owned a 13.0% interest in the BTC II Partnership and, after the sale, the IPT Limited Partner, together with IPT BTC II GP LLC, owns a 8.0% interest in the BTC II Partnership.

• In June 2018, we amended the terms of our $150.0 million term loan to lower the margins used in calculating the effective interest rate, depending on our consolidated leverage ratio, from (i) a range of 1.60% to 2.50% to a range of 1.30% to 2.15% for the margin added to LIBOR multiplied by a statutory reserve rate; and (ii) a range of 0.60% to 1.50% to a range of 0.30% to 1.15% for the margin added to an alternative base rate.

• We directly acquired three industrial buildings comprised of approximately 0.3 million square feet for a purchase price of approximately $34.4 million.

• We, through our 20.0% ownership interest in the BTC I Partnership, acquired one industrial building comprising approximately 0.3 million square feet for a total purchase price of approximately $20.5 million, and completed the development of six industrial buildings comprising approximately 2.4 million square feet for an aggregate total purchase price of approximately $215.1 million. Additionally, the BTC I Partnership sold three industrial buildings totaling 0.5 million square feet for net proceeds of $38.7 million. As of September 30, 2018, the BTC I Partnership owned 37 industrial buildings totaling approximately 9.2 million square feet.

• We, through our 8.0% ownership interest in the BTC II Partnership, acquired one industrial building totaling approximately 0.3 million square feet for a purchase price of approximately $17.0 million. As of September 30, 2018, the BTC II Partnership owned 11 industrial buildings totaling approximately 2.3 million square feet.

• As of September 30, 2018, our joint ventures had an additional 18 buildings under construction totaling approximately 4.3 million square feet, and five buildings in the pre-construction phase for an additional 1.2 million square feet.

• We leased approximately 6.7 million square feet, which included 4.1 million square feet of new and future leases and 2.6 million square feet of renewals through 105 separate transactions with an average annual base rent of $5.38 per square foot. Future leases represent new leases for units that are entered into while the units are occupied by the current customer.

Portfolio Information

Our total owned and managed portfolio was as follows:

	As of
(square feet in thousands)	September 30, 2018		December 31, 2017		September 30, 2017
Portfolio data:
Consolidated buildings	238		235		232
Unconsolidated buildings	48		43		40
Total buildings	286		278		272
Rentable square feet of consolidated buildings	37,750		37,460		37,078
Rentable square feet of unconsolidated buildings	11,495		9,032		7,862
Total rentable square feet	49,245		46,492		44,940
Total number of customers (1)	513		493		495
Percent occupied of operating portfolio (1)(2)	94.8	%	96.2	%	95.0	%
Percent occupied of total portfolio (1)(2)	89.2	%	88.4	%	88.2	%
Percent leased of operating portfolio (1)(2)	95.2	%	96.5	%	97.3	%
Percent leased of total portfolio (1)(2)	90.7	%	90.3	%	91.4	%

(1) Represents our total portfolio, which includes our consolidated and unconsolidated properties.

(2) See “Overview—General” above for a description of our operating portfolio and our total portfolio (which includes our operating and development and value-add portfolios) and for a description of the occupied and leased rates.

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Results for the Three and Nine Months Ended September 30, 2018 Compared to the Same Periods in 2017

The following table summarizes our results of operations for the three and nine months ended September 30, 2018 as compared to the same periods in 2017. We evaluate the performance of consolidated operating properties we own and manage using a same store analysis because the population of properties in this analysis is consistent from period to period, thereby eliminating the effects of any material changes in the composition of the aggregate portfolio on performance measures. We have defined the same store portfolio to include consolidated operating properties owned for the entirety of both the current and prior reporting periods for which the operations had been stabilized. “Other properties” includes buildings not meeting the same store criteria. The same store operating portfolio for the three month periods presented below included 217 buildings totaling approximately 34.8 million square feet owned as of July 1, 2017, which portfolio represented 92.2% of total rentable square feet, 93.9% of total revenues, and 94.1% of net operating income as of September 30, 2018. The same store operating portfolio for the nine month periods presented below included 205 buildings totaling approximately 33.1 million square feet owned as of January 1, 2017, which portfolio represented 87.8% of total rentable square feet, 89.7% of total revenues, and 90.1% of net operating income as of September 30, 2018.

	For the Three Months Ended September 30,											For the Nine Months Ended September 30,
(in thousands, except per share data)	2018			2017			$ Change			% Change		2018			2017			$ Change			% Change
Rental revenues:
Same store operating properties	$	56,934		$	56,263		$	671		1.2	%	$	160,936		$	158,887		$	2,049		1.3	%
Other properties	3,730			423			3,307			NM		18,578			7,481			11,097			NM
Total rental revenues	60,664			56,686			3,978			7.0		179,514			166,368			13,146			7.9
Rental expenses:
Same store operating properties	(14,848		)	(14,734		)	(114		)	(0.8	)	(41,889		)	(41,585		)	(304		)	(0.7	)
Other properties	(1,102		)	(165		)	(937		)	NM		(5,562		)	(2,325		)	(3,237		)	NM
Total rental expenses	(15,950		)	(14,899		)	(1,051		)	(7.1	)	(47,451		)	(43,910		)	(3,541		)	(8.1	)
Net operating income:
Same store operating properties	42,086			41,529			557			1.3		119,047			117,302			1,745			1.5
Other properties	2,628			258			2,370			NM		13,016			5,156			7,860			NM
Total net operating income	44,714			41,787			2,927			7.0		132,063			122,458			9,605			7.8
Other income and (expenses):
Real estate-related depreciation and amortization	(27,934		)	(29,044		)	1,110			3.8		(83,987		)	(83,756		)	(231		)	(0.3	)
General and administrative expenses	(2,130		)	(2,106		)	(24		)	(1.1	)	(7,410		)	(6,301		)	(1,109		)	(17.6	)
Asset management fees, related party	(6,214		)	(5,689		)	(525		)	(9.2	)	(18,326		)	(16,575		)	(1,751		)	(10.6	)
Equity in income of unconsolidated joint ventures	2,729			39			2,690			NM		4,023			124			3,899			NM
Interest expense and other	(12,875		)	(10,516		)	(2,359		)	(22.4	)	(36,939		)	(30,600		)	(6,339		)	(20.7	)
Net gain on disposition of real estate properties	141			—			141			100.0		126			131			(5		)	(3.8	)
Total other income and (expenses)	(46,283		)	(47,316		)	1,033			2.2		(142,513		)	(136,977		)	(5,536		)	(4.0	)
Net loss	(1,569		)	(5,529		)	3,960			71.6		(10,450		)	(14,519		)	4,069			28.0
Net loss attributable to noncontrolling interests	—			(16		)	16			100.0		—			(47		)	47			100.0
Net loss attributable to common stockholders	$	(1,569	)	$	(5,545	)	$	3,976		71.7	%	$	(10,450	)	$	(14,566	)	$	4,116		28.3	%
Weighted-average shares outstanding	176,456			174,300			2,156					176,071			167,363			8,708
Net loss per common share - basic and diluted	$	(0.01	)	$	(0.03	)	$	0.02				$	(0.06	)	$	(0.09	)	$	0.03

NM = Not meaningful

Rental Revenues. Rental revenues are comprised of base rent, straight-line rent, amortization of above- and below-market lease assets and liabilities, and tenant reimbursement revenue. Total rental revenues increased by approximately $4.0 million, or 7.0%, and $13.1 million, or 7.9%, for the three and nine months ended September 30, 2018, respectively, as compared to the same periods in 2017, primarily due to an increase in non-same store revenues, which was attributable to the significant growth in our portfolio over these periods. For the three months ended September 30, 2018, non-same store rental revenues reflect the addition of 13 buildings we had acquired since July 1, 2017, and for the nine months ended September 30, 2018, non-same store rental revenues reflect the addition of 27 buildings we have acquired since January 1, 2017. Same store rental revenues for the three and nine months ended September 30, 2018 increased by 1.2% and 1.3%, respectively, as compared to the same periods in 2017, primarily due to higher rental rates for new leases and renewals, as well as a slight increase in the average occupancy rate for the same store operating portfolio from 97.1% to

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97.4% and from 96.9% to 97.2% for the three and nine months ended September 30, 2018, respectively, as compared to the same periods in 2017, which were partially offset by an easement payment received in 2017.

Rental Expenses. Rental expenses include certain property operating expenses typically reimbursed by our customers, such as real estate taxes, property insurance, property management fees, repair and maintenance, and certain non-recoverable expenses, such as consulting services and roof repairs. Total rental expenses increased by approximately $1.1 million, or 7.1%, for the three months ended September 30, 2018, as compared to the same period in 2017, and $3.5 million, or 8.1%, for the nine months ended September 30, 2018, as compared to the same period in 2017, primarily due to an increase in non-same store rental expenses attributable to the growth in our portfolio over these periods. Same store rental expenses for the three and nine months ended September 30, 2018 increased less than 1.0% as compared to the same periods in 2017.

Other Income and Expenses. Other income and expenses, in aggregate, decreased by approximately $1.0 million, or 2.2%, for the three months ended September 30, 2018, as compared to the same period in 2017, primarily due to:

• an increase in our proportionate share of the income of our unconsolidated joint ventures of $2.7 million primarily related to our share of net gains on disposition of real estate properties of unconsolidated joint ventures; and

• a decrease in real estate-related depreciation and amortization expense of $1.1 million that was driven by the retirement of certain intangible assets that became fully amortized during 2018;

Partially offset by:

• an increase in interest expense of $2.4 million primarily due to: (i) higher average net borrowings under our line of credit for the three months ended September 30, 2018 of $199.7 million; and (ii) a higher aggregate weighted-average interest rate of 3.23% as of September 30, 2018, as compared to 2.97% as of September 30, 2017.

Other income and expenses, in aggregate, increased by approximately $5.5 million, or 4.0%, for the nine months ended September 30, 2018, as compared to the same period in 2017, primarily due to:

• an increase in interest expense of $6.3 million for the nine months ended September 30, 2018 primarily due to: (i) higher average net borrowings under our line of credit for the nine months ended September 30, 2018 of $123.7 million; (ii) higher average net property level borrowings for the nine months ended September 30, 2018 of $58.0 million; and (iii) a higher aggregate weighted-average interest rate as mentioned above; and

• an increase in asset management fees, general and administrative expenses, and real estate-related depreciation and amortization totaling an aggregate amount of $3.1 million for the nine months ended September 30, 2018 as the result of the growth of our portfolio since January 1, 2017;

Partially offset by:

• an increase in our proportionate share of the income of our unconsolidated joint ventures of $3.9 million primarily related to our share of net gains on disposition of real estate properties of unconsolidated joint ventures.

ADDITIONAL MEASURES OF PERFORMANCE

Net Loss and Net Operating Income (“NOI”)

We define NOI as GAAP rental revenues less GAAP rental expenses. For the three and nine months ended September 30, 2018, GAAP net loss attributable to common stockholders was $1.6 million and $10.5 million, respectively, as compared to $5.5 million and $14.6 million, respectively, for the three and nine months ended September 30, 2017. For the three and nine months ended September 30, 2018, NOI increased 7.0% to $44.7 million and 7.8% to $132.1 million, respectively, as compared to $41.8 million and $122.5 million, respectively, for the three and nine months ended September 30, 2017. For the three and nine months ended September 30, 2018, same store NOI was $42.1 million and $119.0 million, up 1.3% and 1.5%, respectively, as compared to $41.5 million and $117.3 million, respectively, for the three and nine months ended September 30, 2017. We consider NOI to be an appropriate supplemental performance measure and believe NOI provides useful information to our investors regarding our financial condition and results of operations because NOI reflects the operating performance of our properties and excludes certain items that are not considered to be controllable in connection with the management of the properties, such as real estate-related depreciation and amortization, acquisition-related expenses, impairment charges, general and administrative expenses and interest expense. However, NOI should not be viewed as an alternative measure of our financial performance since it excludes such expenses, which could materially impact our results of operations. Further, our NOI may not be comparable to that of other real estate companies as they may use different methodologies for calculating NOI. Therefore, we believe our net loss, as defined by GAAP, to be the most appropriate measure to evaluate our overall performance. Refer to “Results of Operations—Results for the Three and Nine Months Ended September 30, 2018 Compared

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to the Same Periods in 2017” above for a reconciliation of our GAAP net loss to NOI for the three and nine months ended September 30, 2018 and 2017.

Funds from Operations (“FFO”) and Modified Funds from Operations (“MFFO”)

We believe that FFO and MFFO, in addition to net loss and cash flows from operating activities as defined by GAAP, are useful supplemental performance measures that our management uses to evaluate our consolidated operating performance. However, these supplemental, non-GAAP measures should not be considered as an alternative to net loss or to cash flows from operating activities as an indication of our performance and are not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs, including our ability to make distributions to our stockholders. No single measure can provide users of financial information with sufficient information and only our disclosures read as a whole can be relied upon to adequately portray our financial position, liquidity, and results of operations. Fees deferred or waived by the Advisor and payments received from the Advisor pursuant to the expense support agreement, as described in Item 8, “Financial Statements and Supplementary Data” in our 2017 Form 10-K. are included in determining our net loss, which is used to determine FFO and MFFO. If we had not received expense support from the Advisor in prior periods, our FFO and MFFO for such periods would have been lower. In addition, other REITs may define FFO and similar measures differently and choose to treat acquisition-related costs and potentially other accounting line items in a manner different from us due to specific differences in investment and operating strategy or for other reasons.

FFO. As defined by the National Association of Real Estate Investment Trusts (“NAREIT”), FFO is a non-GAAP measure that excludes certain items such as real estate-related depreciation and amortization, impairment of depreciable real estate, and gains or losses on sales of assets. We believe FFO is a meaningful supplemental measure of our operating performance that is useful to investors because depreciation and amortization in accordance with GAAP implicitly assumes that the value of real estate assets diminishes predictably over time. By excluding gains or losses on the sale of assets, we believe FFO provides a helpful additional measure of our consolidated operating performance on a comparative basis. We use FFO as an indication of our consolidated operating performance and as a guide to making decisions about future investments.

MFFO. As defined by the Institute for Portfolio Alternatives (“IPA”), MFFO is a non-GAAP supplemental financial performance measure used to evaluate our operating performance. Similar to FFO, MFFO excludes items such as real estate-related depreciation and amortization, impairment of depreciable real estate, and gains or losses on sales of assets. MFFO also excludes straight-line rent and amortization of above- and below-market leases. In addition, there are certain other MFFO adjustments as defined by the IPA that are not applicable to us and are not included in our presentation of MFFO.

We use FFO and MFFO to, among other things: (i) evaluate and compare the potential performance of the portfolio, and (ii) evaluate potential performance to determine liquidity event strategies. We believe FFO and MFFO facilitate a comparison to other REITs that have similar operating characteristics as us. We believe investors are best served if the information that is made available to them allows them to align their analyses and evaluation with the same performance metrics used by management in planning and executing our business strategy. We believe that these performance metrics will assist investors in evaluating the potential performance of the portfolio. However, these supplemental, non-GAAP measures are not necessarily indicative of future performance and should not be considered as an alternative to net loss or to cash flows from operating activities and is not intended to be used as a liquidity measure indicative of cash flow available to fund our cash needs. Neither the SEC, NAREIT, nor any regulatory body has passed judgment on the acceptability of the adjustments used to calculate FFO and MFFO. In the future, the SEC, NAREIT, or a regulatory body may decide to standardize the allowable adjustments across the non-traded REIT industry at which point we may adjust our calculation and characterization of FFO and MFFO.

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The following unaudited table presents a reconciliation of GAAP net loss to NAREIT FFO, Company-defined FFO and MFFO:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands, except per share data)	2018			2017			2018			2017
GAAP net loss attributable to common stockholders	$	(1,569	)	$	(5,545	)	$	(10,450	)	$	(14,566	)
GAAP net loss per common share	$	(0.01	)	$	(0.03	)	$	(0.06	)	$	(0.09	)
Reconciliation of GAAP net loss to NAREIT FFO:
GAAP net loss attributable to common stockholders	$	(1,569	)	$	(5,545	)	$	(10,450	)	$	(14,566	)
Add NAREIT-defined adjustments:
Real estate-related depreciation and amortization	27,934			29,044			83,987			83,756
Our share of real estate-related depreciation and amortization of unconsolidated joint ventures	1,070			736			3,044			1,975
Net gain on disposition of real estate properties	(141		)	—			(126		)	(131		)
Our share of net loss (gain) on disposition of real estate properties of unconsolidated joint ventures and sell down of joint venture ownership interest	(2,193		)	—			(2,794		)	—
NAREIT FFO attributable to common stockholders	$	25,101		$	24,235		$	73,661		$	71,034
NAREIT FFO per common share	$	0.14		$	0.14		$	0.42		$	0.42
Reconciliation of NAREIT FFO to MFFO:
NAREIT FFO attributable to common stockholders	$	25,101		$	24,235		$	73,661		$	71,034
Deduct MFFO adjustments:
Straight-line rent and amortization of above/below market leases	(2,469		)	(2,853		)	(7,519		)	(9,278		)
Our share of straight-line rent and amortization of above/below market leases of unconsolidated joint ventures	(169		)	(154		)	(1,026		)	(285		)
MFFO attributable to common stockholders	$	22,463		$	21,228		$	65,116		$	61,471
MFFO per common share	$	0.13		$	0.12		$	0.37		$	0.37
Weighted-average shares outstanding	176,456			174,300			176,071			167,363

We believe that: (i) our FFO of $25.1 million, or $0.14 per share, as compared to the total gross distributions declared (which are paid in cash or reinvested in shares offered through our distribution reinvestment plan) in the amount of $25.1 million, or $0.14 per share, for the three months ended September 30, 2018; and (ii) our FFO of $73.7 million, or $0.42 per share, as compared to the total gross distributions declared (which are paid in cash or reinvested in shares offered through our distribution reinvestment plan) in the amount of $75.3 million, or $0.43 per share, for the nine months ended September 30, 2018 are indicative of future performance as we are no longer raising capital from the primary portion of our public offering and are no longer in the acquisition phase of our life cycle. See “Liquidity and Capital Resources—Distributions” below for details concerning our distributions, which are paid in cash or reinvested in shares of our common stock by participants in our distribution reinvestment plan.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity

Our primary sources of capital for meeting our cash requirements include, and will continue to include, cash flows generated from operating activities, net proceeds from the sale of common stock pursuant to our distribution reinvestment plan, funds provided by debt financings and refinancings, and net proceeds from asset sales. Our principal uses of funds are, and will continue to be, for the acquisition of properties and other investments, capital expenditures, operating expenses, payments under our debt obligations, and distributions to our stockholders. We terminated the primary portion of our offering on June 30, 2017, and accordingly, net proceeds from our offering will no longer be a primary source of capital for meeting our cash needs, as we have fully deployed the net proceeds from the sale of primary shares in our offering. We expect to utilize the same sources of capital to meet our short-term and long-term liquidity and capital requirements.

Now that the net proceeds from the primary portion of our offering have been fully deployed, we will no longer have priority over another non-traded, public REIT, Black Creek Industrial REIT IV Inc. (“BCI IV”), which is sponsored by an affiliate of our Sponsor, with regard to the acquisition of industrial properties. Rather, we and other investment vehicles sponsored by affiliates of the Advisor and the Sponsor with capital available to invest will have access to industrial property investment opportunities on a rotational basis that the Sponsor determines to be fair and reasonable to the applicable vehicles. The Advisor, subject to the oversight of our board of directors and, under certain circumstances, the investment committee or other committees established by our board of directors, will continue to evaluate potential acquisitions and will engage in negotiations with sellers and lenders on our behalf.

Cash Flows. The following table summarizes our cash flows, as determined on a GAAP basis, for the following periods:

	For the Nine Months Ended September 30,
(in thousands)	2018			2017
Total cash provided by (used in):
Operating activities	$	68,695		$	65,538
Investing activities	(80,970		)	(294,316		)
Financing activities	11,650			251,036
Net (decrease) increase in cash	$	(625	)	$	22,258

Cash provided by operating activities during the nine months ended September 30, 2018increased by approximately $3.2 million as compared to the same period in 2017, related to increases in both property operations and cash from working capital. Cash used in investing activities during the nine months ended September 30, 2018decreased by approximately $213.3 million as compared to the same period in 2017, primarily due to a net decrease in our acquisition activity in the amount of $209.4 million and a net decrease in our activity related to our investments in unconsolidated joint ventures in the amount of $17.3 million, which were partially offset by a decrease in net proceeds from the disposition of real estate properties of $14.8 million. Cash provided by financing activities during the nine months ended September 30, 2018decreased by approximately $239.4 million as compared to the same period in 2017, primarily due to a decrease in our net offering proceeds raised of $136.1 million as a result of the termination of the primary portion of our offering in June 2017, as well as a decrease in our net borrowing activity of $89.5 million.

Capital Resources and Uses of Liquidity

In addition to our cash and cash equivalents balances available, our capital resources and uses of liquidity are as follows:

Line of Credit and Term Loans. As of September 30, 2018, we had an aggregate of $1.0 billion of commitments under our credit agreements, including $500.0 million under our line of credit and $500.0 million under our two term loans. As of that date, we had: (i) approximately $346.0 million outstanding under our line of credit with a weighted-average effective interest rate of 3.30%, which includes the effect of the interest rate swap agreements related to $150.0 million in borrowings under our line of credit; and (ii) $500.0 million outstanding under our term loans with a weighted-average effective interest rate of 3.00%, which includes the effect of the interest rate swap agreements related to $350.0 million in borrowings under our term loans. The unused and available portions under our line of credit were both $153.5 million. Our $500.0 million line of credit matures in January 2020, and may be extended pursuant to a one-year extension option, subject to certain conditions, including the payment of an extension fee. Our $350.0 million term loan matures in January 2021 and our $150.0 million term loan matures in May 2022. Our line of credit and term loan borrowings are available for general corporate purposes, including but not

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limited to the acquisition and operation of permitted investments. Refer to “Note 4 to the Condensed Consolidated Financial Statements” for additional information regarding our line of credit and term loans.

Mortgage Notes. As of September 30, 2018, we had property-level borrowings of approximately $722.0 million outstanding with a weighted-average remaining term of 5.6 years. These borrowings are secured by mortgages or deeds of trust and related assignments and security interests in the collateralized properties, and had a weighted-average interest rate of 3.36%, which includes the effects of the interest rate swap agreement relating to our $96.1 million variable-rate mortgage note. The proceeds from our mortgage notes were used to partially finance certain of our acquisitions. Refer to “Note 4 to the Condensed Consolidated Financial Statements” for additional information regarding the mortgage notes.

Debt Covenants. Our line of credit, term loan and mortgage note agreements contain various property-level covenants, including customary affirmative and negative covenants. In addition, our line of credit and term loan agreements contain certain corporate level financial covenants, including leverage ratio, fixed charge coverage ratio, and tangible net worth thresholds. These covenants may limit our ability to incur additional debt, to make borrowings under our line of credit, or to pay distributions. We were in compliance with our debt covenants as of September 30, 2018.

Offering Proceeds. As of September 30, 2018, aggregate gross proceeds raised from our offering, including proceeds raised through our distribution reinvestment plan, were $1.8 billion ($1.7 billion net of direct selling costs).

Distributions. We intend to continue to make distributions on a quarterly basis. For the nine months ended September 30, 2018, 52.2% of our total gross distributions were paid from cash flows from operating activities, as determined on a GAAP basis, and 47.8% of our total gross distributions were funded from sources other than cash flows from operating activities, specifically with proceeds from shares issued pursuant to our distribution reinvestment plan. Some or all of our future distributions may continue to be paid from sources other than cash flows from operating activities, such as cash flows from financing activities, which include borrowings, proceeds from the issuance of shares pursuant to our distribution reinvestment plan, cash resulting from a waiver or deferral of fees or expense reimbursements otherwise payable to the Advisor or its affiliates, cash resulting from the Advisor or its affiliates paying certain of our expenses, net proceeds from the sales of assets, and our cash balances. We have not established a cap on the amount of our distributions that may be paid from any of these sources. The amount of any distributions will be determined by our board of directors, and will depend on, among other things, current and projected cash requirements, tax considerations and other factors deemed relevant by our board. For the fourth quarter of 2018, our board of directors authorized daily distributions to all common stockholders of record as of the close of business on each day of the fourth quarter of 2018 at a quarterly rate of $0.1425 per Class A share of common stock and $0.1425 per Class T share of common stock less the annual distribution fees that are payable monthly with respect to such Class T shares (calculated on a daily basis). Distributions for the fourth quarter of 2018 will be aggregated and paid in cash or reinvested in shares of our common stock for those electing to participate in our distribution reinvestment plan, on a date determined by us that is no later than January 15, 2019.

There can be no assurances that the current distribution rate or amount per share will be maintained. In the near-term, we expect that we may need to utilize cash flows from financing activities, as determined on a GAAP basis, to pay distributions, which if insufficient could negatively impact our ability to pay such distributions.

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The following table outlines sources used, as determined on a GAAP basis, to pay total gross distributions (which are paid in cash or reinvested in shares of our common stock through our distribution reinvestment plan) for the periods indicated below:

	Source of Distributions
($ in thousands)	Provided by Operating Activities				Proceeds from DRIP Shares (1)				Gross Distributions (2)
2018
September 30	$	13,242	52.7	%	$	11,885	47.3	%	$	25,127
June 30	13,126		52.3		11,980		47.7		25,106
March 31	12,937		51.7		12,086		48.3		25,023
Total	$	39,305	52.2	%	$	35,951	47.8	%	$	75,256
2017
December 31	$	12,704	51.0	%	$	12,222	49.0	%	$	24,926
September 30	12,584		50.7		12,242		49.3		24,826
June 30	11,979		50.2		11,868		49.8		23,847
March 31	11,397		49.9		11,447		50.1		22,844
Total	$	48,664	50.5	%	$	47,779	49.5	%	$	96,443

(1) Stockholders may elect to have their distributions reinvested in shares of our common stock through our distribution reinvestment plan.

(2) Gross distributions are total distributions before the deduction of distribution fees relating to Class T shares issued in the primary portion of our offering.

Refer to “Note 6 to the Condensed Consolidated Financial Statements” for further detail on distributions.

Redemptions. For the nine months ended September 30, 2018 and 2017, we received eligible redemption requests related to approximately 2.1 million and 1.4 million shares of our common stock, respectively, all of which we redeemed using cash flows from financing activities, for an aggregate amount of approximately $20.1 million, or an average price of $9.79 per share, and approximately $13.6 million, or an average price of $9.60 per share, respectively. We have redeemed shares of our common stock above the NAV per share most recently determined as of the date of such redemptions and, accordingly, these redemptions have been dilutive to our remaining stockholders. We are not obligated to redeem shares of our common stock under the share redemption program. We presently intend to limit the number of shares to be redeemed during any calendar quarter to the “Quarterly Redemption Cap” which will equal the lesser of: (i) one-quarter of five percent of the number of shares of common stock outstanding as of the date that is 12 months prior to the end of the current quarter; and (ii) the aggregate number of shares sold pursuant to our distribution reinvestment plan in the immediately preceding quarter, less the number of shares redeemed in the most recently completed quarter in excess of such quarter’s applicable redemption cap due to qualifying death or disability requests of a stockholder or stockholders during such quarter, which amount may be less than the Aggregate Redemption Cap described below. However, to the extent that the aggregate proceeds received from the sale of shares pursuant to our distribution reinvestment plan are not at a level sufficient to fund redemption requests, subject to the limitations as discussed in Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds—Share Redemption Program,” our board of directors retains the right, but is not obligated to, redeem additional shares if, in its sole discretion, it determines that it is in our best interest to do so, provided that we will not redeem during any consecutive 12-month period more than five percent of the number of shares of common stock outstanding at the beginning of such 12-month period (referred to herein as the “Aggregate Redemption Cap” and together with the Quarterly Redemption Cap, the “Redemption Caps”) unless permitted to do so by applicable regulatory authorities. In addition, our board of directors has reserved the right to apply the Quarterly Redemption Cap on a per class basis as described in Part II, Item 2. “Unregistered Sales of Equity Securities and Use of Proceeds—Share Redemption Program.”

Although we presently intend to redeem shares pursuant to the above-referenced methodology, to the extent that the aggregate proceeds received from the sale of shares pursuant to our distribution reinvestment plan in any quarter are not sufficient to fund redemption requests, our board of directors may, in its sole discretion, choose to use other sources of funds to redeem shares of our common stock, up to the Aggregate Redemption Cap. Such sources of funds could include cash on hand, cash available from borrowings, cash from the sale of our shares pursuant to our distribution reinvestment plan in other quarters, and cash from liquidations of securities investments, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, distributions to stockholders, debt repayment, purchases of real property, debt related or other investments. Our board of directors may, in its sole discretion, amend, suspend, or terminate the share redemption program at any time if it

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determines that the funds available to fund the share redemption program are needed for other business or operational purposes or that amendment, suspension or termination of the share redemption program is in the best interest of our stockholders. If our board of directors decides to materially amend, suspend or terminate the share redemption program, we will provide stockholders with no less than 30 days’ prior notice, which we will provide by filing a Current Report on Form 8-K with the SEC.

CONTRACTUAL OBLIGATIONS

A summary of future obligations as of December 31, 2017 was disclosed in our 2017 Form 10-K. Except as otherwise disclosed in “Note 4 to the Condensed Consolidated Financial Statements” relating to our debt obligations, there were no material changes outside the ordinary course of business.

OFF-BALANCE SHEET ARRANGEMENTS

As of September 30, 2018, we had no off-balance sheet arrangements that have or are reasonably likely to have a material effect, on our financial condition, changes in our financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources.

RECENTLY ISSUED ACCOUNTING STANDARDS

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Subtopic 842)” (“ASU 2016-02”), which provides guidance for greater transparency in financial reporting by organizations that lease assets such as real estate, airplanes and manufacturing equipment by requiring such organizations to recognize lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The accounting for lessors will remain largely unchanged from current GAAP; however, the standard requires that lessors expense, on an as-incurred basis, certain initial direct costs that are not incremental in negotiating a lease. Under existing standards, certain of these costs are capitalizable and therefore this new standard will result in certain of these costs being expensed as incurred after adoption. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018, with early adoption permitted. We plan to adopt the standard when it becomes effective for us, as of the reporting period beginning January 1, 2019, and we expect to elect the practical expedients available for implementation under the standard. Under the practical expedients election, we would not be required to reassess: (i) whether an expired or existing contract meets the definition of a lease; (ii) the lease classification at the adoption date for expired or existing leases; and (iii) whether costs previously capitalized as initial direct costs would continue to be amortized. The standard also will require new disclosures within the notes accompanying the consolidated financial statements. Additionally, in January 2018, the FASB issued ASU No. 2018-01, “Leases (Subtopic 842): Land Easement Practical Expedient for Transition to Topic 842” (“ASU 2018-01”), which updates ASU 2016-02 to include land easements under the updated guidance, including the option to elect the practical expedient discussed above. We also plan to adopt ASU 2018-01 when it becomes effective for us, as of the reporting period beginning January 1, 2019, and we expect to elect the practical expedients available for implementation under the standard. Our initial analysis of our lease contracts indicates that the adoption of these standards will not have a material effect on our consolidated financial statements. We are still in the process of evaluating the impact of ASU 2016-02 and ASU 2018-02.

CRITICAL ACCOUNTING ESTIMATES

Our unaudited condensed consolidated financial statements have been prepared in accordance with GAAP and in conjunction with the rules and regulations of the SEC. The preparation of our unaudited condensed consolidated financial statements requires significant management judgments, assumptions, and estimates about matters that are inherently uncertain. These judgments affect the reported amounts of assets and liabilities and our disclosure of contingent assets and liabilities at the dates of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. With different estimates or assumptions, materially different amounts could be reported in our condensed consolidated financial statements. Additionally, other companies may utilize different estimates that may impact the comparability of our results of operations to those of companies in similar businesses. For a detailed description of our critical accounting estimates, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 2017 Form 10-K. As of September 30, 2018, our critical accounting estimates have not changed from those described in our 2017 Form 10-K.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Risk

We are exposed to the impact of interest rate changes. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows, and optimize overall borrowing costs. To achieve these objectives, we plan to borrow on a fixed interest rate basis for longer-term debt and utilize interest rate swap agreements on certain variable interest rate debt in order to limit the effects of changes in interest rates on our results of operations. As of September 30, 2018, our debt instruments consisted of borrowings under our line of credit, term loans, and mortgage notes.

Fixed Interest Rate Debt. As of September 30, 2018, our consolidated fixed interest rate debt consisted of $150.0 million of borrowings under our line of credit, $350.0 million of borrowings under one of our term loans, and $722.0 million under our mortgage notes, which, in the aggregate, represented approximately 77.9% of our total consolidated debt. The interest rates on certain of these borrowings are fixed through the use of interest rate swap agreements. Interest rate fluctuations will generally not affect our future earnings or cash flows on our fixed interest rate debt unless such instruments mature or are otherwise terminated. However, interest rate changes could affect the fair value of our fixed interest rate debt. As of September 30, 2018, the fair value and the carrying value of our consolidated fixed interest rate debt were both approximately $1.2 billion. The fair value estimate of our fixed interest rate debt was estimated using a discounted cash flow analysis utilizing rates we would expect to pay for debt of a similar type and remaining maturity if the loans were originated on September 30, 2018. As we expect to hold our fixed interest rate debt instruments to maturity, based on the underlying structure of the debt instrument, and the amounts due under such instruments are limited to the outstanding principal balance and any accrued and unpaid interest, we do not expect that market fluctuations in interest rates, and the resulting change in fair value of our fixed interest rate debt instruments, would have a significant impact on our operating cash flows.

Variable Interest Rate Debt. As of September 30, 2018, our consolidated variable interest rate debt consisted of $196.0 million of borrowings under our line of credit and our $150.0 million term loan, which represented approximately 22.1% of our total consolidated debt. Interest rate changes on our variable-rate debt could impact our future earnings and cash flows, but would not significantly affect the fair value of such debt. As of September 30, 2018, we were exposed to market risks related to fluctuations in interest rates on $346.0 million of consolidated borrowings. A hypothetical 10% change in the average interest rate on the outstanding balance of our variable interest rate debt as of September 30, 2018, would change our annual interest expense by approximately $0.7 million.

Derivative Instruments. As of September 30, 2018, we had 11 outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk, with a total notional amount of $596.1 million. See “Note 4 to the Condensed Consolidated Financial Statements” for further detail on our interest rate swaps. We are exposed to credit risk of the counterparty to our interest rate swap agreements in the event of non-performance under the terms of the agreements. If we were not able to replace these swaps in the event of non-performance by the counterparty, we would be subject to variability of the interest rate on the amount outstanding under our debt that is fixed through the use of the swaps.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the direction of our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of September 30, 2018. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of September 30, 2018, our disclosure controls and procedures were effective.

Internal Control Over Financial Reporting

There have not been any changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the three months ended September 30, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1A. RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the risk factors discussed in Part I, Item 1A, “Risk Factors” of our 2017 Form 10-K, as updated in Part II, Item 1A, “Risk Factors” of our Quarterly Report on Form 10-Q for the period ended June 30, 2018, filed with the SEC on August 13, 2018 (the “Second Quarter 2018 10-Q”), which could materially affect our business, financial condition, and/or future results. The risks described in our 2017 Form 10-K and our Second Quarter 2018 10-Q are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and/or operating results.

With the exception of the risk factor set forth below, which updates the risk factors disclosed in our 2017 Form 10-K and our Second Quarter 2018 10-Q, there have been no material changes to the risk factors disclosed in our 2017 Form 10-K and our Second Quarter 2018 10-Q.

RISKS RELATED TO THE ADVISOR AND ITS AFFILIATES

We will compete with entities sponsored or advised by affiliates of the Sponsor, for whom affiliates of the Sponsor provide certain advisory or management services, for opportunities to acquire or sell investments, and for customers, which may have an adverse impact on our operations.

We will compete with entities sponsored or advised by affiliates of the Sponsor, whether existing or created in the future, as well as entities for whom affiliates of the Sponsor provide certain advisory or management services, for opportunities to acquire, lease, finance or sell certain types of properties. We may also buy, finance or sell properties at the same time as these entities are buying, financing or selling properties. In this regard, there is a risk that we will purchase a property that provides lower returns to us than a property purchased by entities sponsored or advised by affiliates of the Sponsor and entities for whom affiliates of the Sponsor provide certain advisory or management services. Certain entities sponsored or advised by affiliates of the Sponsor own and/or manage properties in geographical areas in which we expect to own properties. Therefore, our properties may compete for customers with other properties owned and/or managed by these entities. The Advisor may face conflicts of interest when evaluating customer leasing opportunities for our properties and other properties owned and/or managed by these entities and these conflicts of interest may have a negative impact on our ability to attract and retain customers.

The Sponsor and the Advisor have implemented lease allocation guidelines to assist with the process of the allocation of leases when we and certain other entities to which affiliates of the Advisor are providing certain advisory services have potentially competing properties with respect to a particular customer. Pursuant to the lease allocation guidelines, if we have an opportunity to bid on a lease with a prospective customer and one or more of these other entities has a potentially competing property, then, under certain circumstances, we may not be permitted to bid on the opportunity and in other circumstances, we and the other entities will be permitted to participate in the bidding process. The lease allocation guidelines are overseen by a joint management committee consisting of our management committee and certain other management representatives associated with other entities to which affiliates of the Advisor are providing similar services.

Because affiliates of the Sponsor and the Advisor currently sponsor and in the future may advise other investment vehicles (each, an “Investment Vehicle”) with overlapping investment objectives, strategies and criteria, potential conflicts of interest may arise with respect to industrial real estate investment opportunities (“Industrial Investments”). In order to manage this potential conflict of interest, in allocating Industrial Investments among the Investment Vehicles, the Sponsor follows an allocation policy (the “Allocation Policy”) which currently provides that if the Sponsor or one of its affiliates is awarded and controls an Industrial Investment that is suitable for more than one Investment Vehicle, based upon various Allocation Factors (defined below), including without limitation availability of capital, portfolio objectives, diversification goals, target investment markets, return requirements, investment timing and the Investment Vehicle’s applicable approval discretion and timing, then the Industrial Investment will be allocated to Investment Vehicles on a rotational basis and will be offered to the Investment Vehicle at the top of the rotation list (that is, the Investment Vehicle that has gone the longest without being allocated an Industrial Investment). If an Investment Vehicle on the list declines the Industrial Investment, it will be rotated to the bottom of the rotation list. Exceptions may be made to the Allocation Policy for (x) transactions necessary to accommodate an exchange pursuant to Section 1031 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), or (y) characteristics of a particular Industrial Investment or Investment Vehicle, such as adjacency to an existing asset, legal, regulatory or tax concerns or benefits, portfolio balancing or other Allocation Factors listed below, which make the Industrial Investment more advantageous to one of the Investment Vehicles. In addition, the Sponsor may from time to time specify that it will not seek new allocations for more than one Investment Vehicle until certain minimum allocation levels are reached.

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The Sponsor may from time to time grant to certain Investment Vehicles certain exclusivity, rotation or other priority with respect to Industrial Investments or other investment opportunities. The Sponsor or its affiliates may grant additional special priorities in the future and from time to time. In addition, to the extent that a potential conflict of interest arises with respect to an investment opportunity other than an Industrial Investment, the Sponsor currently expects to manage the potential conflict of interest by allocating the investment in accordance with the principles of the Allocation Policy the Sponsor follows with respect to Industrial Investments.

“Allocation Factors” are those factors that the Sponsor maintains and updates from time to time based on review by the Sponsor’s Head of Real Estate. Current examples of Allocation Factors include:

• Overall investment objectives, strategy and criteria, including product type and style of investing (for example, core, core plus, value-add and opportunistic);

• The general real property sector or debt investment allocation targets of each program and any targeted geographic concentration;

• The cash requirements of each program;

• The strategic proximity of the investment opportunity to other assets;

• The effect of the acquisition on diversification of investments, including by type of property, geographic area, customers, size and risk;

• The policy of each program relating to leverage of investments;

• The effect of the acquisition on loan maturity profile;

• The effect on lease expiration profile;

• Customer concentration;

• The effect of the acquisition on ability to comply with any restrictions on investments and indebtedness contained in applicable governing documents, SEC filings, contracts or applicable law or regulation;

• The effect of the acquisition on the applicable entity’s intention not to be subject to regulation under the Investment Company Act;

• Legal considerations, such as Employee Retirement Income Security Act of 1974, as amended (“ERISA”) and Foreign Investment in Real Property Tax Act (“FIRPTA”), that may be applicable to specific investment platforms;

• The financial attributes of the investment opportunity;

• Availability of financing;

• Cost of capital;

• Ability to service any debt associated with the investment opportunity;

• Risk return profiles;

• Targeted distribution rates;

• Anticipated future pipeline of suitable investments;

• Expected holding period of the investment opportunity and the applicable entity’s remaining term;

• Whether the applicable entity still is in its fundraising and acquisition stage, or has substantially invested the proceeds from its fundraising stage;

• Whether the applicable entity was formed for the purpose of making a particular type of investment;

• Affiliate and/or related party considerations;

• The anticipated cash flow of the applicable entity and the asset;

• Tax effects of the acquisition, including on REIT or partnership qualifications;

• The size of the investment opportunity; and

• The amount of funds available to each program and the length of time such funds have been available for investment.

The Sponsor may modify its overall allocation policies from time to time. Any changes to the Sponsor’s allocation policies will be timely reported to our Conflicts Resolution Committee. The Advisor will be required to provide information to our board of directors on a quarterly basis to enable our board of directors, including the independent directors, to determine whether such policies are being fairly applied.

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ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Share Redemption Program

Subject to certain restrictions and limitations, a stockholder may redeem shares of our common stock for cash at a price that may reflect a discount from the purchase price paid for the shares of common stock being redeemed. Shares of common stock must be held for a minimum of one year, subject to certain exceptions. We are not obligated to redeem shares of our common stock under the share redemption program. We presently intend to limit the number of shares to be redeemed during any consecutive 12-month period to no more than five percent of the number of shares of common stock outstanding at the beginning of such 12-month period. We also intend to limit redemptions in accordance with a quarterly cap.

After a stockholder has held shares of our common stock for a minimum of one year, our share redemption program may provide a limited opportunity for a stockholder to have its shares of common stock redeemed, subject to certain restrictions and limitations, at a price equal to or at a discount from the purchase price of the shares of our common stock being redeemed and the amount of the discount (the “Holding Period Discount”) will vary based upon the length of time that our stockholders have held their shares of our common stock subject to redemption, as described in the following table:

Share Purchase Anniversary	Redemption Price as a Percentage of the Purchase Price
Less than one year	No redemption allowed
One year	92.5%
Two years	95.0%
Three years	97.5%
Four years and longer	100.0%

Since we are no longer engaged in a public offering of primary shares, the redemption price will continue to be calculated in accordance with the above table (subject to the limitations and exceptions described herein); provided, that, if the redemption price calculated in accordance with the above table would result in a price that is higher than the NAV per share of our common stock most recently disclosed by us in a public filing with the SEC, then the redemption price will be equal to the NAV per share most recently disclosed by us in a public filing with the SEC, which presently is $11.11 per share.

Our board of directors may, in its sole discretion, amend, suspend, or terminate the share redemption program at any time if it determines that the funds available to fund the share redemption program are needed for other business or operational purposes or that amendment, suspension or termination of the share redemption program is in the best interest of our stockholders. Any amendment, suspension or termination of the share redemption program will not affect the rights of holders of Operating Partnership Units (or “OP Units”) to cause us to redeem their OP Units for, at our sole discretion, shares of our common stock, cash, or a combination of both pursuant to the Operating Partnership Agreement. In addition, our board of directors, in its sole discretion, may determine at any time to modify the share redemption program to redeem shares at a price that is higher or lower than the price paid for the shares by the redeeming stockholder. Any such price modification may be arbitrarily determined by our board of directors, or may be determined on a different basis, including but not limited to a price equal to the then-current estimated NAV per share. If our board of directors decides to materially amend, suspend or terminate the share redemption program, we will provide stockholders with no less than 30 days’ prior written notice, which we will provide by filing a Current Report on Form 8-K with the SEC. During a public offering, we will also include this information in a prospectus supplement or post-effective amendment to the registration statement, as then required under the federal securities laws. Therefore, our stockholders may not have the opportunity to make a redemption request prior to any potential suspension, amendment or termination of the share redemption program.

As described below, our board of directors, in its sole discretion, may determine at any time to modify the share redemption program to redeem shares at a price that is higher or lower than the price paid for the shares by the redeeming stockholder. In the event that a stockholder seeks to redeem all of its shares of our common stock, shares of our common stock purchased pursuant to our distribution reinvestment plan may be excluded from the foregoing one-year holding period requirement, in the discretion of our board of directors. If a stockholder has made more than one purchase of our common stock (other than through our distribution reinvestment plan), the one-year holding period will be calculated separately with respect to each such purchase. In addition, for purposes of the one-year holding period, holders of OP Units who exchange their OP Units for shares of our common stock shall be deemed to have owned their shares as of the date they were issued their OP Units. Neither the one-year holding period nor the Redemption Caps (as defined below) will apply in the event of the death of a stockholder and such shares will be redeemed at a price equal to 100% of the price paid by the deceased stockholder for the shares without regard to the date of purchase of the shares to be redeemed; provided, however, that any such redemption request with respect to the death of a stockholder must be submitted to us within 18 months after the date of death, as further described in the share redemption plan. Our board of directors reserves the right in its sole discretion at any time and from time to time to (a) waive the one-year holding period and either of the Redemption Caps (defined below) in the event of the disability (as such term is

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defined in Section 72(m)(7) of the Internal Revenue Code) of a stockholder, (b) reject any request for redemption for any reason, or (c) reduce the number of shares of our common stock allowed to be redeemed under the share redemption program. A stockholder’s request for redemption in reliance on any of the waivers that may be granted in the event of the disability of the stockholder must be submitted within 18 months of the initial determination of the stockholder’s disability, as further described in the share redemption plan. If our board of directors waives the one-year holding period in the event of the disability of a stockholder, such stockholder will have its shares redeemed at the discounted amount listed in the above table for a stockholder who has held its shares for one year. In all other cases in the event of the disability of a stockholder, such stockholder will have its shares redeemed as described in the above table. Furthermore, any shares redeemed in excess of the Quarterly Redemption Cap (as defined below) as a result of the death or disability of a stockholder will be included in calculating the following quarter’s redemption limitations. At any time we are engaged in an offering of shares of our common stock, the per share price for shares of our common stock redeemed under our redemption program will never be greater than the then-current offering price of our shares of our common stock sold in the primary offering. If we are engaged in a public offering and the redemption price calculated in accordance with the share redemption program would result in a price that is higher than the then-current public offering price of such class of common stock, then the redemption price will be reduced and will be equal to the then-current public offering price of such class of common stock.

We are not obligated to redeem shares of our common stock under the share redemption program. We presently intend to limit the number of shares to be redeemed during any calendar quarter to the “Quarterly Redemption Cap” which will equal the lesser of: (i) one-quarter of five percent of the number of shares of common stock outstanding as of the date that is 12 months prior to the end of the current quarter, and (ii) the aggregate number of shares sold pursuant to our distribution reinvestment plan in the immediately preceding quarter, less the number of shares redeemed in the most recently completed quarter in excess of such quarter’s applicable redemption cap due to qualifying death or disability requests of a stockholder or stockholders during such quarter, which amount may be less than the Aggregate Redemption Cap described below. In addition, our board of directors retains the right, but is not obligated to, redeem additional shares if, in its sole discretion, it determines that it is in our best interest to do so, provided that we will not redeem during any consecutive 12-month period more than five percent of the number of shares of common stock outstanding at the beginning of such 12-month period (referred to herein as the “Aggregate Redemption Cap” and together with the Quarterly Redemption Cap, the “Redemption Caps”) unless permitted to do so by applicable regulatory authorities. Although we presently intend to redeem shares pursuant to the above-referenced methodology, to the extent that the aggregate proceeds received from the sale of shares pursuant to our distribution reinvestment plan in any quarter are not sufficient to fund redemption requests, our board of directors may, in its sole discretion, choose to use other sources of funds to redeem shares of our common stock, up to the Aggregate Redemption Cap. Such sources of funds could include cash on hand, cash available from borrowings, cash from the sale of our shares pursuant to our distribution reinvestment plan in other quarters, and cash from liquidations of securities investments, to the extent that such funds are not otherwise dedicated to a particular use, such as working capital, distributions to stockholders, debt repayment, purchases of real property, debt related or other investments, or redemptions of OP Units. Our board of directors has no obligation to use other sources to redeem shares of our common stock under any circumstances. Our board of directors may, but is not obligated to, increase the Aggregate Redemption Cap but may only do so in reliance on an applicable no-action letter issued or other guidance provided by the SEC staff that would not object to such an increase. There can be no assurance that our board of directors will increase either of the Redemption Caps at any time, nor can there be assurance that our board of directors will be able to obtain, if necessary, a no-action letter from the SEC staff. In any event, the number of shares of our common stock that we may redeem will be limited by the funds available from purchases pursuant to our distribution reinvestment plan, cash on hand, cash available from borrowings and cash from liquidations of securities or debt related investments as of the end of the applicable quarter.

Our board of directors reserves the right, in its sole discretion, to limit the number of shares to be redeemed for each class of shares by applying the Quarterly Redemption Cap on a per class basis; provided that any such change in the application of the Quarterly Redemption Cap from a general basis to a per class basis would not jeopardize our ability to qualify as a REIT for federal income tax purposes. In order for our board of directors to change the application of the Quarterly Redemption Cap from a general basis to a per class basis, we will notify stockholders through a prospectus supplement and/or a current or periodic report filed with the SEC, as well as in a press release or on our website, at least 10 days before the first business day of the quarter for which the new application will apply.

The above description of the share redemption program is a summary of certain of the terms of the share redemption program. Please see the full text of the share redemption program, incorporated by reference as Exhibit 4.2 to this Quarterly Report on Form 10-Q, for all terms and conditions of the share redemption program in effect during the period covered by this report.

For the nine months ended September 30, 2018 and 2017, we received eligible redemption requests related to approximately 2.1 million and 1.4 million shares of our common stock, respectively, all of which we redeemed using cash flows from financing activities, for an aggregate amount of approximately $20.1 million, or an average price of $9.79 per share, and approximately $13.6 million or an average price of $9.60 per share, respectively.

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The table below summarizes the redemption activity for the three months ended September 30, 2018:

For the Month Ended	Total Number of Shares Redeemed	Average Price Paid per Share		Total Number of Shares Redeemed as Part of Publicly Announced Plans or Programs	Maximum Number of Shares That May Yet Be Redeemed Under the Plans or Programs (1)
July 31, 2018	—	$	—	—	—
August 31, 2018	—	—		—	—
September 30, 2018	620,530	9.81		620,530	—
Total	620,530	$	9.81	620,530	—

(1) We limit the number of shares that may be redeemed per calendar quarter under the program as described above.

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ITEM 6. EXHIBITS

The exhibits required by this item are set forth on the Exhibit Index attached hereto.

EXHIBIT INDEX

EXHIBIT NUMBER	DESCRIPTION
3.1	Articles of Amendment and Restatement of Industrial Property Trust Inc., dated July 16, 2013. Incorporated by reference to Exhibit 3.1 to Pre-Effective Amendment No. 3 to the Registration Statement on Form S-11 (File No. 333-184126) filed with the SEC on July 17, 2013.
3.2	Articles Supplementary of Industrial Property Trust Inc., dated August 8, 2013. Incorporated by reference to Exhibit  3.3 to Post-Effective Amendment No. 1 to the Registration Statement on Form S-11 (File No. 333-184126) filed with the SEC on August 14, 2013.
3.3	Articles of Amendment of Industrial Property Trust Inc., dated August 27, 2013. Incorporated by reference to Exhibit  3.4 to the Annual Report on Form 10-K filed with the SEC on March 7, 2014.
3.4	Certificate of Correction to Articles of Amendment and Restatement of Industrial Property Trust Inc., dated March  20, 2014. Incorporated by reference to Exhibit 3.4 to Post-Effective Amendment No. 3 to the Registration Statement on Form S-11 (File No. 333-184126) filed with the SEC on April 16, 2014.
3.5	Articles Supplementary of Industrial Property Trust Inc., dated August 13, 2015. Incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K filed with the SEC on August 14, 2015.
3.6	Articles of Amendment of Industrial Property Trust Inc., dated August 13, 2015. Incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the SEC on August 14, 2015.
3.7	Third Amended and Restated Bylaws of Industrial Property Trust Inc. Incorporated by reference to Exhibit 3.5 to Post-Effective Amendment No. 3 to the Registration Statement on Form S-11 (File No. 333-184126) filed with the SEC on April 16, 2014.
4.1	Third Amended and Restated Distribution Reinvestment Plan, effective as of October 31, 2016. Incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the SEC on September 20, 2016.
4.2	Second Amended and Restated Share Redemption Program, effective as of October 31, 2016. Incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K filed with the SEC on September 20, 2016.
31.1*	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1**	Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101	The following materials from Industrial Property Trust Inc.’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2018, filed on November 9, 2018, formatted in XBRL (eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive Loss, (iv) Condensed Consolidated Statements of Equity, (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Condensed Consolidated Financial Statements.

*	Filed herewith.
**	Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	INDUSTRIAL PROPERTY TRUST INC.
November 9, 2018	By:	/s/ DWIGHT L. MERRIMAN III
		Dwight L. Merriman III Managing Director, Chief Executive Officer (Principal Executive Officer)
November 9, 2018	By:	/s/ THOMAS G. MCGONAGLE
		Thomas G. McGonagle Managing Director, Chief Financial Officer (Principal Financial Officer and  Principal Accounting Officer)

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EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Dwight L. Merriman III, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Industrial Property Trust Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 9, 2018	/s/ DWIGHT L. MERRIMAN III
	Dwight L. Merriman III Managing Director, Chief Executive Officer (Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF

THE SARBANES-OXLEY ACT OF 2002

I, Thomas G. McGonagle, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Industrial Property Trust Inc. (the “registrant”);

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)  Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)  Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)  Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)  Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)  All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)  Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

November 9, 2018	/s/ THOMAS G. MCGONAGLE
	Thomas G. McGonagle Managing Director, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Certification of Principal Executive Officer

In connection with the Quarterly Report on Form 10-Q of Industrial Property Trust Inc. (the “Company”) for the period ended September 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Dwight L. Merriman III, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 9, 2018	/s/ DWIGHT L. MERRIMAN III
	Dwight L. Merriman III Managing Director, Chief Executive Officer (Principal Executive Officer)

Certification of Principal Financial Officer

In connection with the Quarterly Report on Form 10-Q of Industrial Property Trust Inc. (the “Company”) for the period ended September 30, 2018, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas G. McGonagle, certify pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

November 9, 2018	/s/ THOMAS G. MCGONAGLE
	Thomas G. McGonagle Managing Director, Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2018	Nov. 05, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	Industrial Property Trust Inc.
Entity Central Index Key	0001558441
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q3
Amendment Flag	false
Class A
Class of Stock [Line Items]
Entity Common Stock, Shares Outstanding		105,667,443
Class T
Class of Stock [Line Items]
Entity Common Stock, Shares Outstanding		71,280,451

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CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
ASSETS
Net investment in real estate properties	$ 2,694,922	$ 2,706,344
Investment in unconsolidated joint ventures	121,297	106,631
Cash and cash equivalents	4,772	5,397
Restricted cash	65	65
Straight-line and tenant receivables, net	28,509	23,643
Due from affiliates	282	907
Other assets	31,029	22,560
Total assets	2,880,876	2,865,547
Liabilities
Accounts payable and accrued liabilities	29,420	21,668
Debt, net	1,560,684	1,489,145
Due to affiliates	119	570
Distributions payable	23,860	23,757
Distribution fees payable to affiliates	20,432	26,071
Other liabilities	43,637	44,866
Total liabilities	1,678,152	1,606,077
Commitments and contingencies (Note 9)
Stockholders’ equity:
Preferred stock, $0.01 par value - 200,000 shares authorized, none issued and outstanding	0	0
Additional paid-in capital	1,578,724	1,561,749
Accumulated deficit	(401,014)	(320,897)
Accumulated other comprehensive income	23,248	16,872
Total stockholders’ equity	1,202,723	1,259,469
Noncontrolling interests	1	1
Total equity	1,202,724	1,259,470
Total liabilities and equity	2,880,876	2,865,547
Class A
Stockholders’ equity:
Common stock, value	1,055	1,046
Class T
Stockholders’ equity:
Common stock, value	$ 710	$ 699

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value (usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized	200,000,000	200,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Class A
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	105,514,000	104,589,000
Common stock, shares outstanding	105,514,000	104,589,000
Class T
Common stock, par value (usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	70,992,000	69,925,000
Common stock, shares outstanding	70,992,000	69,925,000

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Rental revenues	$ 60,664	$ 56,686	$ 179,514	$ 166,368
Total revenues	60,664	56,686	179,514	166,368
Operating expenses:
Rental expenses	15,950	14,899	47,451	43,910
Real estate-related depreciation and amortization	27,934	29,044	83,987	83,756
General and administrative expenses	2,130	2,106	7,410	6,301
Asset management fees, related party	6,214	5,689	18,326	16,575
Total operating expenses	52,228	51,738	157,174	150,542
Operating income	8,436	4,948	22,340	15,826
Other expenses (income):
Equity in income of unconsolidated joint ventures	(2,729)	(39)	(4,023)	(124)
Interest expense and other	12,875	10,516	36,939	30,600
Net gain on disposition of real estate properties	(141)	0	(126)	(131)
Total other expenses	10,005	10,477	32,790	30,345
Net loss	(1,569)	(5,529)	(10,450)	(14,519)
Net income attributable to noncontrolling interests	0	(16)	0	(47)
Net loss attributable to common stockholders	$ (1,569)	$ (5,545)	$ (10,450)	$ (14,566)
Weighted-average shares outstanding (in shares)	176,456	174,300	176,071	167,363
Net loss per common share-basic and diluted (usd per share)	$ (0.01)	$ (0.03)	$ (0.06)	$ (0.09)

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net loss attributable to common stockholders	$ (1,569)	$ (5,545)	$ (10,450)	$ (14,566)
Unrealized gain (loss) on derivative instruments, net	81	(209)	6,376	(963)
Comprehensive loss attributable to common stockholders	$ (1,488)	$ (5,754)	$ (4,074)	$ (15,529)

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CONDENSED CONSOLIDATED STATEMENT OF EQUITY (Unaudited) - 9 months ended Sep. 30, 2018 - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Accumulated Other Comprehensive Income	Noncontrolling Interests
Beginning balance at Dec. 31, 2017	$ 1,259,470	$ 1,745	$ 1,561,749	$ (320,897)	$ 16,872	$ 1
Beginning balance, shares at Dec. 31, 2017		174,514
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net loss	(10,450)			(10,450)
Unrealized gain on derivative instruments	6,376				6,376
Issuance of common stock	36,286	$ 34	36,252
Issuance of common stock, shares		3,433
Share-based compensation	1,201		1,201
Upfront offering costs	(397)		(397)
Trailing distribution fees	$ 5,640		51	5,589
Redemptions of common stock, shares	(2,057)	(1,441)
Redemptions of common stock	$ (20,146)	$ (14)	(20,132)
Distributions on common stock	(75,256)			(75,256)
Ending balance at Sep. 30, 2018	$ 1,202,724	$ 1,765	$ 1,578,724	$ (401,014)	$ 23,248	$ 1
Ending balance, shares at Sep. 30, 2018		176,506

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Operating activities:
Net loss	$ (10,450)	$ (14,519)
Adjustments to reconcile net loss to net cash provided by operating activities:
Real estate-related depreciation and amortization	83,987	83,756
Equity in income of unconsolidated joint ventures	(4,023)	(124)
Straight-line rent and amortization of above- and below-market leases	(7,519)	(9,278)
Net gain on disposition of real estate properties	(126)	(131)
Other	2,137	2,913
Changes in operating assets and liabilities:
Tenant receivables and other assets	(1,679)	(867)
Accounts payable, accrued expenses and other liabilities	5,955	6,633
Due from / to affiliates, net	413	(2,845)
Net cash provided by operating activities	68,695	65,538
Investing activities:
Real estate acquisitions	(39,918)	(248,501)
Acquisition deposits	(130)	(623)
Proceeds from the disposition of real estate properties	580	15,427
Capital expenditures and development activities	(30,806)	(31,157)
Investment in unconsolidated joint ventures	(14,931)	(32,192)
Distributions from joint ventures	0	2,730
Net proceeds from sale of joint venture ownership interest	4,235	0
Net cash used in investing activities	(80,970)	(294,316)
Financing activities:
Proceeds from line of credit	117,000	296,000
Repayments of line of credit	(46,000)	(241,000)
Proceeds from mortgage note	0	105,000
Repayments of mortgage notes	(893)	0
Financing costs paid	(335)	(777)
Proceeds from issuance of common stock	0	146,217
Offering costs paid related to issuance of common stock	(435)	(10,578)
Distributions paid to common stockholders	(33,277)	(29,091)
Dividends paid on noncontrolling interests	0	(63)
Distribution fees paid to affiliates	(5,588)	(4,781)
Redemptions of common stock	(18,822)	(9,891)
Net cash provided by financing activities	11,650	251,036
Net (decrease) increase in cash, cash equivalents and restricted cash	(625)	22,258
Cash, cash equivalents and restricted cash, at beginning of period	5,462	8,438
Cash, cash equivalents and restricted cash, at end of period	$ 4,837	$ 30,696

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BASIS OF PRESENTATION

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

BASIS OF PRESENTATION

1. BASIS OF PRESENTATION

Unless the context otherwise requires, the “Company” refers to Industrial Property Trust Inc. and its consolidated subsidiaries.

The accompanying unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain disclosures normally included in the annual audited financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been omitted. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 9, 2018 (“2017 Form 10-K”).

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with GAAP.

Reclassifications

Certain items in the Company’s condensed consolidated balance sheet for 2017 have been reclassified to conform to the 2018 presentation. Future estimated distribution fees payable have been reclassified from due to affiliates and are presented separately in the condensed consolidated balance sheets.

Recently Adopted Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which provides guidance for revenue recognition and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition.” The standard is based on the principle that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance specifically excludes revenue derived from lease contracts from its scope. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The effective date for the standard is for annual reporting periods beginning after December 15, 2017 and interim periods therein. The Company adopted the standard when it became effective for the Company, as of the reporting period beginning January 1, 2018. The Company elected the package of practical expedients, and accordingly did not reallocate contract consideration to lease components within the scope of the existing lease guidance when it adopted ASU 2014-09. The adoption of ASU 2014-09 did not have a significant impact on the Company’s condensed consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which requires: (i) all equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; and (iii) eliminates the requirement for public entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU 2016-01 is effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption is permitted for the accounting guidance on financial liabilities under the fair value option. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a significant impact on the Company’s condensed consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements by removing, modifying, or adding certain disclosures. ASU 2018-13 is effective for all companies beginning after December 15, 2019 and for interim periods within those fiscal years, with early adoption permitted. Certain disclosures in ASU 2018-13 are required to be applied on a retrospective basis and others on a prospective basis. The Company adopted this guidance effective September 30, 2018. The adoption of ASU 2018-13 did not have a significant impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Subtopic 842)” (“ASU 2016-02”), which provides guidance for greater transparency in financial reporting by organizations that lease assets such as real estate, airplanes and manufacturing equipment by requiring such organizations to recognize lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The accounting for lessors will remain largely unchanged from current GAAP; however, the standard requires that lessors expense, on an as-incurred basis, certain initial direct costs that are not incremental in negotiating a lease. Under existing standards, certain of these costs are capitalizable and therefore this new standard will result in certain of these costs being expensed as incurred after adoption. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt the standard when it becomes effective for the Company, as of the reporting period beginning January 1, 2019, and it expects to elect the practical expedients available for implementation under the standard. Under the practical expedients election, the Company would not be required to reassess: (i) whether an expired or existing contract meets the definition of a lease; (ii) the lease classification at the adoption date for expired or existing leases; and (iii) whether costs previously capitalized as initial direct costs would continue to be amortized. The standard also will require new disclosures within the notes accompanying the consolidated financial statements. Additionally, in January 2018, the FASB issued ASU No. 2018-01, “Leases (Subtopic 842): Land Easement Practical Expedient for Transition to Topic 842” (“ASU 2018-01”), which updates ASU 2016-02 to include land easements under the updated guidance, including the option to elect the practical expedient discussed above. The Company also plans to adopt ASU 2018-01 when it becomes effective for the Company, as of the reporting period beginning January 1, 2019, and it expects to elect the practical expedients available for implementation under the standard. The Company’s initial analysis of its lease contracts indicates that the adoption of these standards will not have a material effect on its consolidated financial statements. The Company is still in the process of evaluating the impact of ASU 2016-02 and ASU 2018-02.

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INVESTMENT IN REAL ESTATE PROPERTIES

9 Months Ended

Sep. 30, 2018

Real Estate [Abstract]

INVESTMENT IN REAL ESTATE PROPERTIES

2. INVESTMENT IN REAL ESTATE PROPERTIES

As of September 30, 2018 and December 31, 2017, the Company’s consolidated investment in real estate properties consisted of 238 and 235 industrial buildings, respectively.

	As of
(in thousands)	September 30, 2018			December 31, 2017
Land	$	792,306		$	771,613
Building and improvements	1,961,752			1,919,580
Intangible lease assets	208,453			239,190
Construction in progress	17,005			14,002
Investment in real estate properties	2,979,516			2,944,385
Less accumulated depreciation and amortization	(284,594		)	(238,041		)
Net investment in real estate properties	$	2,694,922		$	2,706,344

Intangible Lease Assets and Liabilities

Intangible lease assets and liabilities, as of September 30, 2018 and December 31, 2017, include the following:

	As of September 30, 2018									As of December 31, 2017
(in thousands)	Gross			Accumulated Amortization			Net			Gross			Accumulated Amortization			Net
Intangible lease assets (1)	$	198,195		$	(96,264	)	$	101,931		$	227,922		$	(103,979	)	$	123,943
Above-market lease assets (1)	10,258			(5,591		)	4,667			11,268			(5,212		)	6,056
Below-market lease liabilities (2)	(30,310		)	13,737			(16,573		)	(33,278		)	13,755			(19,523		)

(1) Included in net investment in real estate properties on the condensed consolidated balance sheets.

(2) Included in other liabilities on the condensed consolidated balance sheets.

Rental Revenue Adjustments and Depreciation and Amortization Expense

The following table summarizes straight-line rent adjustments, amortization recognized as an increase (decrease) to rental revenues from above- and below-market lease assets and liabilities, and real estate-related depreciation and amortization expense:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2018			2017			2018			2017
Increase (Decrease) to Rental Revenue:
Straight-line rent adjustments	$	1,614		$	1,623		$	4,724		$	5,950
Above-market lease amortization	(441		)	(508		)	(1,390		)	(1,577		)
Below-market lease amortization	1,296			1,738			4,185			4,905
Real Estate-Related Depreciation and Amortization:
Depreciation expense	$	18,552		$	16,430		$	53,889		$	47,742
Intangible lease asset amortization	9,382			12,614			30,098			36,014

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

9 Months Ended

Sep. 30, 2018

Equity Method Investments and Joint Ventures [Abstract]

INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

3. INVESTMENT IN UNCONSOLIDATED JOINT VENTURES

The Company has entered into joint ventures with third-party investors for purposes of investing primarily in the development of industrial properties located in certain major U.S. distribution markets. The Company reports its investment for the Build-To-Core I Partnership LP (the “BTC I Partnership”) and the Build-To-Core II Partnership LP (the “BTC II Partnership”) under the equity method on its condensed consolidated balance sheets due to the fact that the Company maintains significant influence in each partnership. The following table summarizes the Company’s investment in the unconsolidated joint ventures:

	As of				Investment in Unconsolidated Joint Ventures as of
	September 30, 2018		December 31, 2017
($ in thousands)	Ownership Percentage	Number of Buildings	Ownership Percentage	Number of Buildings	September 30, 2018		December 31, 2017
BTC I Partnership	20.0%	37	20.0%	33	$	110,343	$	97,359
BTC II Partnership (1)	8.0%	11	13.0%	10	10,954		9,272
Total joint ventures		48		43	$	121,297	$	106,631

(1) On January 31, 2018, the Company sold and assigned a 5.0% portion of its ownership interest in the BTC II Partnership for a purchase price equal to approximately $4.2 million.

The following is a summary of certain operating data of the BTC I Partnership:

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
(in thousands)	2018		2017			2018		2017
Operating data:
Total revenues	$	12,310	$	7,525		$	35,172	$	20,637
Total operating expenses	9,352		6,297			26,886		18,421
Total other income (expenses)	10,998		(645		)	13,030		(1,151		)
Net income	13,956		583			21,316		1,065

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DEBT

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

DEBT

4. DEBT

The Company’s consolidated indebtedness is currently comprised of borrowings under its line of credit, term loans and mortgage notes. Borrowings under the non-recourse mortgage notes are secured by mortgages or deeds of trust and related assignments and security interests in collateralized and certain cross-collateralized properties, which are generally owned by single purpose entities. A summary of the Company’s debt is as follows:

	Weighted-Average Effective Interest Rate as of			Balance as of
($ in thousands)	September 30, 2018	December 31, 2017	Maturity Date	September 30, 2018			December 31, 2017
Line of credit (1)	3.30%	2.81%	January 2020	$	346,000		$	275,000
Term loan (2)	2.65%	2.65%	January 2021	350,000			350,000
Term loan (3)	3.81%	3.46%	May 2022	150,000			150,000
Fixed-rate mortgage notes (4)	3.36%	3.36%	July 2020 - December 2025	721,988			722,880
Total principal amount / weighted-average (5)	3.23%	3.10%		$	1,567,988		$	1,497,880
Less unamortized debt issuance costs				$	(7,304	)	$	(8,735	)
Total debt, net				$	1,560,684		$	1,489,145
Gross book value of properties encumbered by debt				$	1,146,378		$	1,153,150

(1) The effective interest rate is calculated based on either: (i) the London Interbank Offered Rate (“LIBOR”) multiplied by a statutory reserve rate plus a margin ranging from 1.40% to 2.30%; or (ii) an alternative base rate plus a margin ranging from 0.40% to 1.30%, each depending on the Company’s consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to $150.0 million in borrowings under this line of credit. As of September 30, 2018, the unused and available portions under the line of credit were both $153.5 million. The line of credit is available for general corporate purposes, including but not limited to the acquisition and operation of permitted investments.

(2) The effective interest rate is calculated based on either: (i) LIBOR multiplied by a statutory reserve rate, plus a margin ranging from 1.35% to 2.20%; or (ii) an alternative base rate plus a margin ranging from 0.35% to 1.20%, each depending on the Company’s consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements. This term loan is available for general corporate purposes, including but not limited to the acquisition and operation of permitted investments.

(3) As of December 31, 2017, the effective interest rate was calculated based on either: (i) LIBOR multiplied by a statutory reserve rate, plus a margin ranging from 1.60% to 2.50%; or (ii) an alternative base rate plus a margin ranging from 0.60% to 1.50%, each depending on the Company’s consolidated leverage ratio. On June 20, 2018, the Company amended the terms of this term loan. As of September 30, 2018, the effective interest rate is calculated based on either: (i) LIBOR multiplied by a statutory reserve rate, plus a margin ranging from 1.30% to 2.15%; or (ii) an alternative base rate plus a margin ranging from 0.30% to 1.15%, each depending on the Company’s consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate. This term loan is available for general corporate purposes, including but not limited to the acquisition and operation of permitted investments.

(4) Interest rates range from 2.94% to 3.65%, which includes the effects of an interest rate swap agreement relating to a variable-rate mortgage note with an outstanding amount of $96.1 million and $97.0 million as of September 30, 2018 and December 31, 2017, respectively. The assets and credit of each of the Company’s consolidated properties pledged as collateral for the Company’s mortgage notes are not available to satisfy the Company’s other debt and obligations, unless the Company first satisfies the mortgage notes payable on the respective underlying properties.

(5) The weighted-average remaining term of the Company’s consolidated debt was approximately 3.8 years as of September 30, 2018, excluding any extension options on the line of credit.

As of September 30, 2018, the principal payments due on the Company’s consolidated debt during each of the next five years and thereafter were as follows:

(in thousands)	Line of Credit (1)		Term Loans		Mortgage Notes		Total
Remainder of 2018	$	—	$	—	$	462	$	462
2019	—		—		2,191		2,191
2020	346,000		—		15,259		361,259
2021	—		350,000		6,047		356,047
2022	—		150,000		83,579		233,579
Thereafter	—		—		614,450		614,450
Total principal payments	$	346,000	$	500,000	$	721,988	$	1,567,988

(1) The term of the line of credit may be extended pursuant to a one-year extension option, subject to certain conditions.

Debt Covenants

The Company’s line of credit, term loans and mortgage note agreements contain various property-level covenants, including customary affirmative and negative covenants. In addition, the line of credit and term loan agreements contain certain corporate level financial covenants, including leverage ratio, fixed charge coverage ratio, and tangible net worth thresholds. The Company was in compliance with its debt covenants as of September 30, 2018.

Derivative Instruments

To manage interest rate risk for certain of its variable-rate debt, the Company uses interest rate swaps as part of its risk management strategy. These derivatives are designed to mitigate the risk of future interest rate increases by providing a fixed interest rate for a limited, pre-determined period of time. Interest rate swaps designated as cash flow hedges involve the receipt of variable-rate amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the interest rate swap agreements without exchange of the underlying notional amount. As of September 30, 2018, the Company had 11 outstanding interest rate swap agreements, which were associated with $596.1 million of debt, that were designated as cash flow hedges of interest rate risk. Certain of the Company’s variable-rate borrowings are not hedged, and therefore, to an extent, the Company has on-going exposure to interest rate movements.

The effective portion of the change in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss (“AOCI”) on the condensed consolidated balance sheets and is subsequently reclassified into earnings as interest expense for the period that the hedged forecasted transaction affects earnings, which is when the interest expense is recognized on the related debt. The ineffective portion of the change in fair value of the derivatives is recognized directly in earnings. For the three and nine months ended September 30, 2018 and 2017, there was no hedge ineffectiveness. The Company expects no hedge ineffectiveness in the next 12 months.

The following table summarizes the location and fair value of the cash flow hedges on the Company’s condensed consolidated balance sheets:

				Fair Value as of
(in thousands)	Notional Amount		Balance Sheet Location	September 30, 2018		December 31, 2017
Interest rate swaps	$	596,087	Other assets	$	23,248	$	16,872

The following table presents the effect of the Company’s cash flow hedges on the Company’s condensed consolidated financial statements:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2018			2017			2018			2017
Interest rate swaps:
Income (loss) recognized in AOCI (effective portion)	$	1,664		$	144		$	10,081		$	(719	)
Income reclassified from AOCI into income (effective portion)	(1,583		)	(353		)	(3,705		)	(244		)
Net other comprehensive income (loss)	$	81		$	(209	)	$	6,376		$	(963	)

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FAIR VALUE

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE

5. FAIR VALUE

The Company estimates the fair value of its financial instruments using available market information and valuation methodologies it believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that the Company would realize upon disposition.

Fair Value Measurements on a Recurring Basis

The following table presents the Company’s financial instruments measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017:

(in thousands)	Level 1		Level 2		Level 3		Total Fair Value
September 30, 2018
Assets
Derivative instruments	$	—	$	23,248	$	—	$	23,248
Total assets measured at fair value	$	—	$	23,248	$	—	$	23,248
December 31, 2017
Assets
Derivative instruments	$	—	$	16,872	$	—	$	16,872
Total assets measured at fair value	$	—	$	16,872	$	—	$	16,872

The following methods and assumptions were used to estimate the fair value of each class of financial instrument:

Derivative Instruments. The derivative instruments are interest rate swaps. The interest rate swaps are standard cash flow hedges whose fair value is estimated using market-standard valuation models. Such models involve using market-based observable inputs, including interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements, which we have concluded are not material to the valuation. Due to the interest rate swaps being unique and not actively traded, the fair value is classified as Level 2. See “Note 4” above for further discussion of the Company’s derivative instruments.

Nonrecurring Fair Value of Financial Measurements

As of September 30, 2018 and December 31, 2017, the fair values of cash and cash equivalents, restricted cash, tenant receivables, due from/to affiliates, accounts payable and accrued liabilities, and distributions payable approximate their carrying values due to the short-term nature of these instruments. The table below includes fair values for certain of the Company’s financial instruments for which it is practicable to estimate fair value. The carrying values and fair values of these financial instruments were as follows:

	As of September 30, 2018				As of December 31, 2017
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities
Line of credit	$	346,000	$	346,000	$	275,000	$	275,000
Term loans	500,000		500,000		500,000		500,000
Mortgage notes	721,988		687,330		722,880		708,615

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STOCKHOLDERS' EQUITY

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

STOCKHOLDERS' EQUITY

6. STOCKHOLDERS’ EQUITY

Distribution Reinvestment Plan Offering

The Company is continuing to offer and sell shares pursuant to its distribution reinvestment plan, which it may amend or terminate at any time, in its sole discretion. The Company has registered $311.9 million in shares of its common stock to be sold pursuant to its distribution reinvestment plan and is offering the shares at a price equal to the net asset value (“NAV”) per share most recently disclosed by the Company, which is presently $11.11 per share. As of September 30, 2018, $263.4 million in shares remained available for sale pursuant to the Company’s distribution reinvestment plan.

Common Stock

The following table summarizes the changes in the shares outstanding for each class of common stock for the period presented below:

(in thousands)	Class A Shares		Class T Shares		Total Shares
Balance as of December 31, 2017	104,589		69,925		174,514
Issuance of common stock:
Primary shares	—		—		—
DRIP	1,958		1,308		3,266
Stock grants	180		—		180
Redemptions	(1,200	)	(241	)	(1,441	)
Forfeitures	(13	)	—		(13	)
Balance as of September 30, 2018	105,514		70,992		176,506

Distributions

The following table summarizes the Company’s distribution activity (including distributions reinvested in shares of the Company’s common stock) for the quarters ended below:

	Amount
(in thousands, except per share data)	Declared per Common Share (1)		Paid in Cash		Reinvested in Shares		Distribution Fees (2)		Gross Distributions (3)
2018
September 30	$	0.1425	$	11,362	$	11,885	$	1,880	$	25,127
June 30	0.1425		11,262		11,980		1,864		25,106
March 31	0.1425		11,092		12,086		1,845		25,023
Total	$	0.4275	$	33,716	$	35,951	$	5,589	$	75,256
2017
December 31	$	0.1425	$	10,923	$	12,222	$	1,781	$	24,926
September 30	0.1425		10,820		12,242		1,764		24,826
June 30	0.1425		10,349		11,868		1,630		23,847
March 31	0.1425		9,902		11,447		1,495		22,844
Total	$	0.5700	$	41,994	$	47,779	$	6,670	$	96,443

(1) Amounts reflect the quarterly distribution rate authorized by the Company’s board of directors per Class A share and per Class T share of common stock. The quarterly distribution on Class T shares of common stock is reduced by the distribution fees that are payable monthly with respect to such Class T shares (as calculated on a daily basis).

(2) Distribution fees are paid monthly to the Dealer Manager with respect to Class T shares issued in the primary portion of the initial public offering only.

(3) Gross distributions are total distributions before the deduction of distribution fees relating to Class T shares.

Redemptions

The following table summarizes the Company’s redemption activity for the periods presented below:

	For the Nine Months Ended September 30,
(in thousands, except per share data)	2018		2017
Number of eligible shares redeemed	2,057		1,419
Aggregate dollar amount of shares redeemed	$	20,146	$	13,616
Average redemption price per share	$	9.79	$	9.60

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

7. RELATED PARTY TRANSACTIONS

The table below summarizes the fees and expenses incurred by the Company for services provided by Industrial Property Advisors LLC (the “Advisor”) and its affiliates, and by the Black Creek Capital Markets, LLC (the “Dealer Manager”) related to the services the Dealer Manager provided in connection with the Company’s initial public offering, and any related amounts payable:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				Payable as of
									September 30, 2018		December 31, 2017
(in thousands)	2018		2017		2018		2017
Expensed:
Asset management fees	$	6,010	$	5,689	$	17,916	$	16,575	$	74	$	54
Asset management fees related to dispositions (1)	221		—		427		409		—		—
Other expense reimbursements (2)	1,145		1,056		3,881		3,317		315		605
Total	$	7,376	$	6,745	$	22,224	$	20,301	$	389	$	659
Capitalized:
Acquisition fees	$	525	$	2,102	$	784	$	5,144	$	—	$	132
Development acquisition fees	123		384		1,070		558		61		98
Total	$	648	$	2,486	$	1,854	$	5,702	$	61	$	230
Additional Paid-In Capital:
Sales commissions	$	—	$	222	$	—	$	4,491	$	—	$	—
Dealer manager fees	—		143		—		3,026		—		—
Offering costs	137		509		397		4,240		80		116
Distribution fees - current (3)	1,880		1,764		5,589		4,889		613		613
Distribution fees - trailing (3)	—		—		—		926		20,432		26,071
Total	$	2,017	$	2,638	$	5,986	$	17,572	$	21,125	$	26,800

(1) Asset management fees that relate to the Company’s proportionate share of the disposition fee associated with the dispositions of joint venture properties are included in asset management fees on the Company’s condensed consolidated statement of operations. Asset management fees that relate to the disposition fee associated with dispositions of wholly-owned properties are netted against the respective gain from dispositions and are included in the related net gain amount on the Company’s condensed consolidated statements of operations.

(2) Other expense reimbursements include certain expenses incurred in connection with the services provided to the Company under the amended and restated advisory agreement, dated August 12, 2018, by and among the Company, Industrial Property Operating Partnership LP (the “Operating Partnership”), and the Advisor. These reimbursements include a portion of compensation expenses of individual employees of the Advisor, including certain of the Company’s named executive officers, related to services for which the Advisor does not otherwise receive a separate fee. The Company reimbursed the Advisor approximately $0.9 million and $0.9 million for the three months ended September 30, 2018 and 2017, respectively, and $3.1 million and $3.1 million for the nine months ended September 30, 2018 and 2017, respectively, for such compensation expenses. The remaining amount of other expense reimbursements relate to other general overhead and administrative expenses including, but not limited to, allocated rent paid to both third parties and affiliates of the Advisor, equipment, utilities, insurance, travel and entertainment.

(3) The distribution fees accrue daily and are payable monthly in arrears. The monthly amount of distribution fees payable is included in distributions payable on the condensed consolidated balance sheets. Additionally, the Company accrues for estimated trailing amounts payable based on the shares outstanding as of the balance sheet date, which are included in distribution fees payable to affiliates on the condensed consolidated balance sheets. All or a portion of the distribution fees are reallowed or advanced by the Dealer Manager to unaffiliated participating broker dealers or broker dealers servicing accounts of investors who own Class T shares.

Joint Ventures

As described in “Note 3,” the Company owns a 20.0% interest in the BTC I Partnership and an 8.0% interest in the BTC II Partnership, each of which is a joint venture that has and continues to invest in industrial properties located in certain major U.S. distribution markets. Two of the Company’s wholly-owned subsidiaries, IPT BTC I GP LLC and IPT BTC I LP LLC, are partners in the BTC I Partnership. Third-party limited partners own the remaining 80.0% interest in the BTC I Partnership. The Company’s 8.0% interest in the BTC II Partnership is owned through two of its wholly-owned subsidiaries, IPT BTC II GP LLC (the “General Partner”) and IPT BTC II LP LLC (the “IPT Limited Partner,” and together with the General Partner, the “IPT Partners”). BCG BTC II Investors LLC (the “BCG Limited Partner”), owns a 2.0% interest in the BTC II Partnership. The BCG Limited Partner is an affiliate of Black Creek Group LLC (“BCG”), which is an affiliate of the Sponsor. bcIMC (College) US Realty Inc., bcIMC (Municipal) US Realty Inc., bcIMC (Public Service) US Realty Inc., bcIMC (Teachers) US Realty Inc., bcIMC (WCB) US Realty Inc., bcIMC (WCBAF) Realpool Global Investment Corporation, bcIMC (Hydro) US Realty Inc. and QuadReal US Holdings, Inc. (collectively, the “QuadReal Limited Partner”) own the remaining 90.0% interest in the BTC II Partnership.

The Advisor has two wholly-owned subsidiaries, which are referred to herein as “Advisor Sub I” and “Advisor Sub II,” and collectively, the “Advisor Subs.” Advisor Sub I holds a special limited partner interest in the BTC I Partnership and an affiliate of Advisor Sub II holds a special limited partner interest in the BTC II Partnership. The BTC I Partnership pays fees to Advisor Sub I for providing advisory services to the BTC I Partnership and the BTC II Partnership pays fees to Advisor Sub II for providing advisory services to the BTC II Partnership. These advisory services include acquisition and asset management services and, to the extent applicable, development management and development oversight services. In addition, the partnership agreements for the joint ventures contain procedures for making distributions to the parties, including incentive distributions to the respective Advisor Sub that is a special limited partner of the respective joint venture, which are subject to certain return thresholds being achieved. The obligations of the Advisor Subs to provide advisory services to the respective joint ventures will terminate upon termination of the Advisory Agreement with the exception that if the Advisory Agreement is terminated other than for “cause,” the respective Advisor Subs will have the option, in their sole discretion, to seek to become the administrative general partner of the respective joint venture; subject, in the case of the BTC I Partnership, to certain conditions, including obtaining the consent of the third-party limited partners. If the respective Advisor Sub is made the administrative general partner, then the Advisor Sub will continue to provide the advisory services and receive the same fees as those to which it was entitled prior to becoming the administrative general partner, but the Advisor Sub will not control or manage the respective joint venture.

As a result of the payment of the fees to the respective Advisor Subs by the respective joint ventures, the fees payable to the Advisor pursuant to the Advisory Agreement will be reduced by the product of (i) the fees actually paid to the Advisor Subs, and (ii) the percentage interest of the respective joint venture owned by the Company or any entity in which the Company owns an interest. Accordingly, with respect to each joint venture, the aggregate of all fees paid to the respective Advisor Sub will not, with respect to the interests in such joint venture held by the Company or any entity in which the Company owns an interest, exceed the aggregate amounts otherwise payable to the Advisor pursuant to the Advisory Agreement for such services.

For the three and nine months ended September 30, 2018, the joint ventures incurred in aggregate approximately $2.1 million and $5.6 million, respectively, in acquisition and asset management fees, which were paid to the Advisor and its wholly-owned subsidiary pursuant to the respective service agreements, as compared to $1.3 million and $3.8 million for the three and nine months ended September 30, 2017, respectively. Additionally, as of September 30, 2018, the joint ventures had amounts payable to the Company of approximately $0.2 million, which were recorded in due from affiliates on the condensed consolidated balance sheets.

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SUPPLEMENTAL CASH FLOW INFORMATION

9 Months Ended

Sep. 30, 2018

Supplemental Cash Flow Elements [Abstract]

SUPPLEMENTAL CASH FLOW INFORMATION

8. SUPPLEMENTAL CASH FLOW INFORMATION

Supplemental cash flow information and disclosure of non-cash investing and financing activities is as follows:

	For the Nine Months Ended September 30,
(in thousands)	2018		2017
Distributions payable	$	23,860	$	23,653
Redemptions payable	6,053		6,220
Distribution fees payable to affiliates	20,432		27,877
Distributions reinvested in common stock	36,288		33,586
Non-cash capital expenditures	2,090		609

Restricted Cash

Restricted cash consists of cash held in escrow in connection with certain financing requirements and tenant improvements. The following table presents the components of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows:

	For the Nine Months Ended September 30,
(in thousands)	2018		2017
Beginning of period:
Cash and cash equivalents	$	5,397	$	8,358
Restricted cash	65		80
Cash, cash equivalents and restricted cash	$	5,462	$	8,438
End of period:
Cash and cash equivalents	$	4,772	$	30,631
Restricted cash	65		65
Cash, cash equivalents and restricted cash	$	4,837	$	30,696

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

9. COMMITMENTS AND CONTINGENCIES

The Company and the Operating Partnership are not presently involved in any material litigation nor, to the Company’s knowledge, is any material litigation threatened against the Company or its investments.

Environmental Matters

A majority of the properties the Company acquires are subject to environmental reviews either by the Company or the previous owners. In addition, the Company may incur environmental remediation costs associated with certain land parcels it may acquire in connection with the development of land. The Company has acquired certain properties in urban and industrial areas that may have been leased to or previously owned by commercial and industrial companies that discharged hazardous material. The Company may purchase various environmental insurance policies to mitigate its exposure to environmental liabilities. The Company is not aware of any environmental liabilities that it believes would have a material adverse effect on its business, financial condition, or results of operations as of September 30, 2018.

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BASIS OF PRESENTATION (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Policies [Abstract]

Basis of Presentation

Unless the context otherwise requires, the “Company” refers to Industrial Property Trust Inc. and its consolidated subsidiaries.

The accompanying unaudited condensed consolidated financial statements included herein have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, certain disclosures normally included in the annual audited financial statements prepared in accordance with accounting principles generally accepted in the U.S. (“GAAP”) have been omitted. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2017, filed with the SEC on March 9, 2018 (“2017 Form 10-K”).

Consolidation

In the opinion of management, the accompanying unaudited condensed consolidated financial statements contain all adjustments and eliminations, consisting only of normal recurring adjustments necessary for a fair presentation in conformity with GAAP.

Reclassifications

Reclassifications

Certain items in the Company’s condensed consolidated balance sheet for 2017 have been reclassified to conform to the 2018 presentation. Future estimated distribution fees payable have been reclassified from due to affiliates and are presented separately in the condensed consolidated balance sheets.

Recently Adopted Accounting Standards and Recently Issued Accounting Standards

Recently Adopted Accounting Standards

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”), which provides guidance for revenue recognition and supersedes the revenue recognition requirements in Topic 605, “Revenue Recognition.” The standard is based on the principle that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The guidance specifically excludes revenue derived from lease contracts from its scope. ASU 2014-09 also requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and assets recognized from costs incurred to obtain or fulfill a contract. The effective date for the standard is for annual reporting periods beginning after December 15, 2017 and interim periods therein. The Company adopted the standard when it became effective for the Company, as of the reporting period beginning January 1, 2018. The Company elected the package of practical expedients, and accordingly did not reallocate contract consideration to lease components within the scope of the existing lease guidance when it adopted ASU 2014-09. The adoption of ASU 2014-09 did not have a significant impact on the Company’s condensed consolidated financial statements.

In January 2016, the FASB issued ASU No. 2016-01, “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” (“ASU 2016-01”), which requires: (i) all equity investments to be measured at fair value with changes in fair value recognized in net income; (ii) requires an entity to present separately in other comprehensive income the portion of the total change in the fair value of a liability resulting from a change in the instrument-specific credit risk when the entity has elected to measure the liability at fair value in accordance with the fair value option for financial instruments; and (iii) eliminates the requirement for public entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. ASU 2016-01 is effective for annual and interim reporting periods beginning after December 15, 2017. Early adoption is permitted for the accounting guidance on financial liabilities under the fair value option. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a significant impact on the Company’s condensed consolidated financial statements.

In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”), which modifies the disclosure requirements on fair value measurements by removing, modifying, or adding certain disclosures. ASU 2018-13 is effective for all companies beginning after December 15, 2019 and for interim periods within those fiscal years, with early adoption permitted. Certain disclosures in ASU 2018-13 are required to be applied on a retrospective basis and others on a prospective basis. The Company adopted this guidance effective September 30, 2018. The adoption of ASU 2018-13 did not have a significant impact on the Company’s condensed consolidated financial statements.

Recently Issued Accounting Standards

In February 2016, the FASB issued ASU No. 2016-02, “Leases (Subtopic 842)” (“ASU 2016-02”), which provides guidance for greater transparency in financial reporting by organizations that lease assets such as real estate, airplanes and manufacturing equipment by requiring such organizations to recognize lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The accounting for lessors will remain largely unchanged from current GAAP; however, the standard requires that lessors expense, on an as-incurred basis, certain initial direct costs that are not incremental in negotiating a lease. Under existing standards, certain of these costs are capitalizable and therefore this new standard will result in certain of these costs being expensed as incurred after adoption. ASU 2016-02 is effective for annual and interim reporting periods beginning after December 15, 2018, with early adoption permitted. The Company plans to adopt the standard when it becomes effective for the Company, as of the reporting period beginning January 1, 2019, and it expects to elect the practical expedients available for implementation under the standard. Under the practical expedients election, the Company would not be required to reassess: (i) whether an expired or existing contract meets the definition of a lease; (ii) the lease classification at the adoption date for expired or existing leases; and (iii) whether costs previously capitalized as initial direct costs would continue to be amortized. The standard also will require new disclosures within the notes accompanying the consolidated financial statements. Additionally, in January 2018, the FASB issued ASU No. 2018-01, “Leases (Subtopic 842): Land Easement Practical Expedient for Transition to Topic 842” (“ASU 2018-01”), which updates ASU 2016-02 to include land easements under the updated guidance, including the option to elect the practical expedient discussed above. The Company also plans to adopt ASU 2018-01 when it becomes effective for the Company, as of the reporting period beginning January 1, 2019, and it expects to elect the practical expedients available for implementation under the standard. The Company’s initial analysis of its lease contracts indicates that the adoption of these standards will not have a material effect on its consolidated financial statements. The Company is still in the process of evaluating the impact of ASU 2016-02 and ASU 2018-02.

Fair Value Measurement

Derivative Instruments. The derivative instruments are interest rate swaps. The interest rate swaps are standard cash flow hedges whose fair value is estimated using market-standard valuation models. Such models involve using market-based observable inputs, including interest rate curves. The Company incorporates credit valuation adjustments to appropriately reflect both its nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements, which we have concluded are not material to the valuation. Due to the interest rate swaps being unique and not actively traded, the fair value is classified as Level 2.

The Company estimates the fair value of its financial instruments using available market information and valuation methodologies it believes to be appropriate for these purposes. Considerable judgment and a high degree of subjectivity are involved in developing these estimates and, accordingly, they are not necessarily indicative of amounts that the Company would realize upon disposition.

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INVESTMENT IN REAL ESTATE PROPERTIES (Tables)

9 Months Ended

Sep. 30, 2018

Real Estate [Abstract]

Investment in Properties

As of September 30, 2018 and December 31, 2017, the Company’s consolidated investment in real estate properties consisted of 238 and 235 industrial buildings, respectively.

	As of
(in thousands)	September 30, 2018			December 31, 2017
Land	$	792,306		$	771,613
Building and improvements	1,961,752			1,919,580
Intangible lease assets	208,453			239,190
Construction in progress	17,005			14,002
Investment in real estate properties	2,979,516			2,944,385
Less accumulated depreciation and amortization	(284,594		)	(238,041		)
Net investment in real estate properties	$	2,694,922		$	2,706,344

Summary of Intangible Lease Assets and Liabilities

Intangible lease assets and liabilities, as of September 30, 2018 and December 31, 2017, include the following:

	As of September 30, 2018									As of December 31, 2017
(in thousands)	Gross			Accumulated Amortization			Net			Gross			Accumulated Amortization			Net
Intangible lease assets (1)	$	198,195		$	(96,264	)	$	101,931		$	227,922		$	(103,979	)	$	123,943
Above-market lease assets (1)	10,258			(5,591		)	4,667			11,268			(5,212		)	6,056
Below-market lease liabilities (2)	(30,310		)	13,737			(16,573		)	(33,278		)	13,755			(19,523		)

(1) Included in net investment in real estate properties on the condensed consolidated balance sheets.

(2) Included in other liabilities on the condensed consolidated balance sheets.

Summary of Rental Revenue Adjustments and Depreciation and Amortization Expense

The following table summarizes straight-line rent adjustments, amortization recognized as an increase (decrease) to rental revenues from above- and below-market lease assets and liabilities, and real estate-related depreciation and amortization expense:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2018			2017			2018			2017
Increase (Decrease) to Rental Revenue:
Straight-line rent adjustments	$	1,614		$	1,623		$	4,724		$	5,950
Above-market lease amortization	(441		)	(508		)	(1,390		)	(1,577		)
Below-market lease amortization	1,296			1,738			4,185			4,905
Real Estate-Related Depreciation and Amortization:
Depreciation expense	$	18,552		$	16,430		$	53,889		$	47,742
Intangible lease asset amortization	9,382			12,614			30,098			36,014

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES (Tables)

9 Months Ended

Sep. 30, 2018

Equity Method Investments and Joint Ventures [Abstract]

Summary of Investment in Unconsolidated Joint Ventures

The following table summarizes the Company’s investment in the unconsolidated joint ventures:

	As of				Investment in Unconsolidated Joint Ventures as of
	September 30, 2018		December 31, 2017
($ in thousands)	Ownership Percentage	Number of Buildings	Ownership Percentage	Number of Buildings	September 30, 2018		December 31, 2017
BTC I Partnership	20.0%	37	20.0%	33	$	110,343	$	97,359
BTC II Partnership (1)	8.0%	11	13.0%	10	10,954		9,272
Total joint ventures		48		43	$	121,297	$	106,631

(1) On January 31, 2018, the Company sold and assigned a 5.0% portion of its ownership interest in the BTC II Partnership for a purchase price equal to approximately $4.2 million.

Schedule of Certain Operating Data

The following is a summary of certain operating data of the BTC I Partnership:

	For the Three Months Ended September 30,					For the Nine Months Ended September 30,
(in thousands)	2018		2017			2018		2017
Operating data:
Total revenues	$	12,310	$	7,525		$	35,172	$	20,637
Total operating expenses	9,352		6,297			26,886		18,421
Total other income (expenses)	10,998		(645		)	13,030		(1,151		)
Net income	13,956		583			21,316		1,065

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DEBT (Tables)

9 Months Ended

Sep. 30, 2018

Debt Disclosure [Abstract]

Summary of Debt

A summary of the Company’s debt is as follows:

	Weighted-Average Effective Interest Rate as of			Balance as of
($ in thousands)	September 30, 2018	December 31, 2017	Maturity Date	September 30, 2018			December 31, 2017
Line of credit (1)	3.30%	2.81%	January 2020	$	346,000		$	275,000
Term loan (2)	2.65%	2.65%	January 2021	350,000			350,000
Term loan (3)	3.81%	3.46%	May 2022	150,000			150,000
Fixed-rate mortgage notes (4)	3.36%	3.36%	July 2020 - December 2025	721,988			722,880
Total principal amount / weighted-average (5)	3.23%	3.10%		$	1,567,988		$	1,497,880
Less unamortized debt issuance costs				$	(7,304	)	$	(8,735	)
Total debt, net				$	1,560,684		$	1,489,145
Gross book value of properties encumbered by debt				$	1,146,378		$	1,153,150

(1) The effective interest rate is calculated based on either: (i) the London Interbank Offered Rate (“LIBOR”) multiplied by a statutory reserve rate plus a margin ranging from 1.40% to 2.30%; or (ii) an alternative base rate plus a margin ranging from 0.40% to 1.30%, each depending on the Company’s consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements relating to $150.0 million in borrowings under this line of credit. As of September 30, 2018, the unused and available portions under the line of credit were both $153.5 million. The line of credit is available for general corporate purposes, including but not limited to the acquisition and operation of permitted investments.

(2) The effective interest rate is calculated based on either: (i) LIBOR multiplied by a statutory reserve rate, plus a margin ranging from 1.35% to 2.20%; or (ii) an alternative base rate plus a margin ranging from 0.35% to 1.20%, each depending on the Company’s consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate, including the effects of interest rate swap agreements. This term loan is available for general corporate purposes, including but not limited to the acquisition and operation of permitted investments.

(3) As of December 31, 2017, the effective interest rate was calculated based on either: (i) LIBOR multiplied by a statutory reserve rate, plus a margin ranging from 1.60% to 2.50%; or (ii) an alternative base rate plus a margin ranging from 0.60% to 1.50%, each depending on the Company’s consolidated leverage ratio. On June 20, 2018, the Company amended the terms of this term loan. As of September 30, 2018, the effective interest rate is calculated based on either: (i) LIBOR multiplied by a statutory reserve rate, plus a margin ranging from 1.30% to 2.15%; or (ii) an alternative base rate plus a margin ranging from 0.30% to 1.15%, each depending on the Company’s consolidated leverage ratio. The weighted-average effective interest rate is the all-in interest rate. This term loan is available for general corporate purposes, including but not limited to the acquisition and operation of permitted investments.

(4) Interest rates range from 2.94% to 3.65%, which includes the effects of an interest rate swap agreement relating to a variable-rate mortgage note with an outstanding amount of $96.1 million and $97.0 million as of September 30, 2018 and December 31, 2017, respectively. The assets and credit of each of the Company’s consolidated properties pledged as collateral for the Company’s mortgage notes are not available to satisfy the Company’s other debt and obligations, unless the Company first satisfies the mortgage notes payable on the respective underlying properties.

(5) The weighted-average remaining term of the Company’s consolidated debt was approximately 3.8 years as of September 30, 2018, excluding any extension options on the line of credit.

Principal Payments Due on Consolidated Debt During Each of Next Five Years and Thereafter

As of September 30, 2018, the principal payments due on the Company’s consolidated debt during each of the next five years and thereafter were as follows:

(in thousands)	Line of Credit (1)		Term Loans		Mortgage Notes		Total
Remainder of 2018	$	—	$	—	$	462	$	462
2019	—		—		2,191		2,191
2020	346,000		—		15,259		361,259
2021	—		350,000		6,047		356,047
2022	—		150,000		83,579		233,579
Thereafter	—		—		614,450		614,450
Total principal payments	$	346,000	$	500,000	$	721,988	$	1,567,988

(1) The term of the line of credit may be extended pursuant to a one-year extension option, subject to certain conditions.

Summary of Location and Fair Value of Cash Flow Hedges

The following table summarizes the location and fair value of the cash flow hedges on the Company’s condensed consolidated balance sheets:

				Fair Value as of
(in thousands)	Notional Amount		Balance Sheet Location	September 30, 2018		December 31, 2017
Interest rate swaps	$	596,087	Other assets	$	23,248	$	16,872

Effect of Derivative Instruments

The following table presents the effect of the Company’s cash flow hedges on the Company’s condensed consolidated financial statements:

	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
(in thousands)	2018			2017			2018			2017
Interest rate swaps:
Income (loss) recognized in AOCI (effective portion)	$	1,664		$	144		$	10,081		$	(719	)
Income reclassified from AOCI into income (effective portion)	(1,583		)	(353		)	(3,705		)	(244		)
Net other comprehensive income (loss)	$	81		$	(209	)	$	6,376		$	(963	)

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FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Financial Instruments Measured at Fair Value on Recurring Basis

The following table presents the Company’s financial instruments measured at fair value on a recurring basis as of September 30, 2018 and December 31, 2017:

(in thousands)	Level 1		Level 2		Level 3		Total Fair Value
September 30, 2018
Assets
Derivative instruments	$	—	$	23,248	$	—	$	23,248
Total assets measured at fair value	$	—	$	23,248	$	—	$	23,248
December 31, 2017
Assets
Derivative instruments	$	—	$	16,872	$	—	$	16,872
Total assets measured at fair value	$	—	$	16,872	$	—	$	16,872

Carrying Value and Fair Value of Certain Financial Instruments

The table below includes fair values for certain of the Company’s financial instruments for which it is practicable to estimate fair value. The carrying values and fair values of these financial instruments were as follows:

	As of September 30, 2018				As of December 31, 2017
(in thousands)	Carrying Value		Fair Value		Carrying Value		Fair Value
Liabilities
Line of credit	$	346,000	$	346,000	$	275,000	$	275,000
Term loans	500,000		500,000		500,000		500,000
Mortgage notes	721,988		687,330		722,880		708,615

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STOCKHOLDERS' EQUITY (Tables)

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

Summary of Changes in Shares Outstanding and Aggregate Par Value of Outstanding Shares for Each Class of Common Stock

The following table summarizes the changes in the shares outstanding for each class of common stock for the period presented below:

(in thousands)	Class A Shares		Class T Shares		Total Shares
Balance as of December 31, 2017	104,589		69,925		174,514
Issuance of common stock:
Primary shares	—		—		—
DRIP	1,958		1,308		3,266
Stock grants	180		—		180
Redemptions	(1,200	)	(241	)	(1,441	)
Forfeitures	(13	)	—		(13	)
Balance as of September 30, 2018	105,514		70,992		176,506

Dividends Table

The following table summarizes the Company’s distribution activity (including distributions reinvested in shares of the Company’s common stock) for the quarters ended below:

	Amount
(in thousands, except per share data)	Declared per Common Share (1)		Paid in Cash		Reinvested in Shares		Distribution Fees (2)		Gross Distributions (3)
2018
September 30	$	0.1425	$	11,362	$	11,885	$	1,880	$	25,127
June 30	0.1425		11,262		11,980		1,864		25,106
March 31	0.1425		11,092		12,086		1,845		25,023
Total	$	0.4275	$	33,716	$	35,951	$	5,589	$	75,256
2017
December 31	$	0.1425	$	10,923	$	12,222	$	1,781	$	24,926
September 30	0.1425		10,820		12,242		1,764		24,826
June 30	0.1425		10,349		11,868		1,630		23,847
March 31	0.1425		9,902		11,447		1,495		22,844
Total	$	0.5700	$	41,994	$	47,779	$	6,670	$	96,443

(1) Amounts reflect the quarterly distribution rate authorized by the Company’s board of directors per Class A share and per Class T share of common stock. The quarterly distribution on Class T shares of common stock is reduced by the distribution fees that are payable monthly with respect to such Class T shares (as calculated on a daily basis).

(2) Distribution fees are paid monthly to the Dealer Manager with respect to Class T shares issued in the primary portion of the initial public offering only.

(3) Gross distributions are total distributions before the deduction of distribution fees relating to Class T shares.

Redemption Table

The following table summarizes the Company’s redemption activity for the periods presented below:

	For the Nine Months Ended September 30,
(in thousands, except per share data)	2018		2017
Number of eligible shares redeemed	2,057		1,419
Aggregate dollar amount of shares redeemed	$	20,146	$	13,616
Average redemption price per share	$	9.79	$	9.60

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RELATED PARTY TRANSACTIONS (Tables)

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

Summary of Fees and Expenses Incurred by Company

The table below summarizes the fees and expenses incurred by the Company for services provided by Industrial Property Advisors LLC (the “Advisor”) and its affiliates, and by the Black Creek Capital Markets, LLC (the “Dealer Manager”) related to the services the Dealer Manager provided in connection with the Company’s initial public offering, and any related amounts payable:

	For the Three Months Ended September 30,				For the Nine Months Ended September 30,				Payable as of
									September 30, 2018		December 31, 2017
(in thousands)	2018		2017		2018		2017
Expensed:
Asset management fees	$	6,010	$	5,689	$	17,916	$	16,575	$	74	$	54
Asset management fees related to dispositions (1)	221		—		427		409		—		—
Other expense reimbursements (2)	1,145		1,056		3,881		3,317		315		605
Total	$	7,376	$	6,745	$	22,224	$	20,301	$	389	$	659
Capitalized:
Acquisition fees	$	525	$	2,102	$	784	$	5,144	$	—	$	132
Development acquisition fees	123		384		1,070		558		61		98
Total	$	648	$	2,486	$	1,854	$	5,702	$	61	$	230
Additional Paid-In Capital:
Sales commissions	$	—	$	222	$	—	$	4,491	$	—	$	—
Dealer manager fees	—		143		—		3,026		—		—
Offering costs	137		509		397		4,240		80		116
Distribution fees - current (3)	1,880		1,764		5,589		4,889		613		613
Distribution fees - trailing (3)	—		—		—		926		20,432		26,071
Total	$	2,017	$	2,638	$	5,986	$	17,572	$	21,125	$	26,800

(1) Asset management fees that relate to the Company’s proportionate share of the disposition fee associated with the dispositions of joint venture properties are included in asset management fees on the Company’s condensed consolidated statement of operations. Asset management fees that relate to the disposition fee associated with dispositions of wholly-owned properties are netted against the respective gain from dispositions and are included in the related net gain amount on the Company’s condensed consolidated statements of operations.

(2) Other expense reimbursements include certain expenses incurred in connection with the services provided to the Company under the amended and restated advisory agreement, dated August 12, 2018, by and among the Company, Industrial Property Operating Partnership LP (the “Operating Partnership”), and the Advisor. These reimbursements include a portion of compensation expenses of individual employees of the Advisor, including certain of the Company’s named executive officers, related to services for which the Advisor does not otherwise receive a separate fee. The Company reimbursed the Advisor approximately $0.9 million and $0.9 million for the three months ended September 30, 2018 and 2017, respectively, and $3.1 million and $3.1 million for the nine months ended September 30, 2018 and 2017, respectively, for such compensation expenses. The remaining amount of other expense reimbursements relate to other general overhead and administrative expenses including, but not limited to, allocated rent paid to both third parties and affiliates of the Advisor, equipment, utilities, insurance, travel and entertainment.

(3) The distribution fees accrue daily and are payable monthly in arrears. The monthly amount of distribution fees payable is included in distributions payable on the condensed consolidated balance sheets. Additionally, the Company accrues for estimated trailing amounts payable based on the shares outstanding as of the balance sheet date, which are included in distribution fees payable to affiliates on the condensed consolidated balance sheets. All or a portion of the distribution fees are reallowed or advanced by the Dealer Manager to unaffiliated participating broker dealers or broker dealers servicing accounts of investors who own Class T shares.

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SUPPLEMENTAL CASH FLOW INFORMATION (Tables)

9 Months Ended

Sep. 30, 2018

Supplemental Cash Flow Elements [Abstract]

Schedule of Cash Flow Supplemental Disclosures

The following table presents the components of the beginning of period and end of period cash, cash equivalents and restricted cash reported within the condensed consolidated statements of cash flows:

	For the Nine Months Ended September 30,
(in thousands)	2018		2017
Beginning of period:
Cash and cash equivalents	$	5,397	$	8,358
Restricted cash	65		80
Cash, cash equivalents and restricted cash	$	5,462	$	8,438
End of period:
Cash and cash equivalents	$	4,772	$	30,631
Restricted cash	65		65
Cash, cash equivalents and restricted cash	$	4,837	$	30,696

Supplemental cash flow information and disclosure of non-cash investing and financing activities is as follows:

	For the Nine Months Ended September 30,
(in thousands)	2018		2017
Distributions payable	$	23,860	$	23,653
Redemptions payable	6,053		6,220
Distribution fees payable to affiliates	20,432		27,877
Distributions reinvested in common stock	36,288		33,586
Non-cash capital expenditures	2,090		609

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INVESTMENT IN REAL ESTATE PROPERTIES - Narrative (Details) - Building	Sep. 30, 2018	Dec. 31, 2017
Consolidated Properties
Real Estate Properties [Line Items]
Real estate properties owned, buildings	238	235

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INVESTMENT IN REAL ESTATE PROPERTIES - Investment in Properties (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Real Estate [Abstract]
Land	$ 792,306	$ 771,613
Building and improvements	1,961,752	1,919,580
Intangible lease assets	208,453	239,190
Construction in progress	17,005	14,002
Investment in real estate properties	2,979,516	2,944,385
Less accumulated depreciation and amortization	(284,594)	(238,041)
Net investment in real estate properties	$ 2,694,922	$ 2,706,344

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INVESTMENT IN REAL ESTATE PROPERTIES - Summary of Intangible Lease Assets and Liabilities (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Finite-lived Intangible Assets [Roll Forward]
Intangible lease assets	$ 208,453	$ 239,190
Below Market Lease [Roll Forward]
Gross	(30,310)	(33,278)
Accumulated Amortization	13,737	13,755
Net	(16,573)	(19,523)
Intangible lease assets
Finite-lived Intangible Assets [Roll Forward]
Intangible lease assets	198,195	227,922
Accumulated Amortization	(96,264)	(103,979)
Net	101,931	123,943
Above-market lease assets
Finite-lived Intangible Assets [Roll Forward]
Intangible lease assets	10,258	11,268
Accumulated Amortization	(5,591)	(5,212)
Net	$ 4,667	$ 6,056

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INVESTMENT IN REAL ESTATE PROPERTIES - Summary of Rental Revenue Adjustments and Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Increase (Decrease) to Rental Revenue:
Straight-line rent adjustments	$ 1,614	$ 1,623	$ 4,724	$ 5,950
Above-market lease amortization	(441)	(508)	(1,390)	(1,577)
Below-market lease amortization	1,296	1,738	4,185	4,905
Real Estate-Related Depreciation and Amortization:
Depreciation expense	18,552	16,430	53,889	47,742
Intangible lease asset amortization	$ 9,382	$ 12,614	$ 30,098	$ 36,014

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES - Investments in Unconsolidated Joint Ventures (Details) $ in Thousands		9 Months Ended		12 Months Ended
	Jan. 31, 2018 USD ($)	Sep. 30, 2018 USD ($) Building	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) Building
Investments in and Advances to Affiliates [Line Items]
Number of buildings | Building		48		43
Investment in unconsolidated joint ventures		$ 121,297		$ 106,631
Net proceeds from sale of joint venture ownership interest		$ 4,235	$ 0
BTC I Partnership
Investments in and Advances to Affiliates [Line Items]
Ownership Percentage		20.00%		20.00%
Number of buildings | Building		37		33
Investment in unconsolidated joint ventures		$ 110,343		$ 97,359
BTC II Partnership
Investments in and Advances to Affiliates [Line Items]
Ownership Percentage		8.00%		13.00%
Number of buildings | Building		11		10
Investment in unconsolidated joint ventures		$ 10,954		$ 9,272
Ownership percentage	5.00%
Net proceeds from sale of joint venture ownership interest	$ 4,200

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INVESTMENT IN UNCONSOLIDATED JOINT VENTURES - Certain Financial Data (Details) - BTC I Partnership - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Operating data:
Total revenues	$ 12,310	$ 7,525	$ 35,172	$ 20,637
Total operating expenses	9,352	6,297	26,886	18,421
Total other income (expenses)	10,998	(645)	13,030	(1,151)
Net income	$ 13,956	$ 583	$ 21,316	$ 1,065

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DEBT - Narrative (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($) agreement	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) agreement	Sep. 30, 2017 USD ($)
Debt Instrument [Line Items]
Number of interest rate swap agreements outstanding | agreement	11		11
Hedge ineffectiveness	$ 0	$ 0	$ 0	$ 0
Interest rate swaps
Debt Instrument [Line Items]
Notional amount of interest rate swap	$ 596,087,000		$ 596,087,000

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DEBT - Summary of Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Debt instrument, principal amount outstanding	$ 1,567,988	$ 1,497,880
Less unamortized debt issuance costs	(7,304)	(8,735)
Total debt, net	1,560,684	1,489,145
Gross book value of properties encumbered by debt	$ 1,146,378	$ 1,153,150
Weighted-average effective interest rate	3.23%	3.10%
Line of Credit
Debt Instrument [Line Items]
Debt instrument, principal amount outstanding	$ 346,000	$ 275,000
Weighted-average effective interest rate	3.30%	2.81%
Term Loan Due January 2021
Debt Instrument [Line Items]
Debt instrument, principal amount outstanding	$ 350,000	$ 350,000
Weighted-average effective interest rate	2.65%	2.65%
Term Loan Due May 2022
Debt Instrument [Line Items]
Debt instrument, principal amount outstanding	$ 150,000	$ 150,000
Weighted-average effective interest rate	3.81%	3.46%
Mortgage Notes
Debt Instrument [Line Items]
Debt instrument, principal amount outstanding	$ 721,988	$ 722,880
Weighted-average effective interest rate	3.36%	3.36%

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DEBT - Summary of Debt (Footnote Information) (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Weighted-average remaining term of debt	3 years 9 months 18 days
Interest rate swaps
Debt Instrument [Line Items]
Notional amount of interest rate swap	$ 596,087
Line of Credit
Debt Instrument [Line Items]
Unused portions of line of credit	153,500
Amount available under line of credit	$ 153,500
Line of Credit | Based On LIBOR | Minimum
Debt Instrument [Line Items]
Interest rate margin	1.40%
Line of Credit | Based On LIBOR | Maximum
Debt Instrument [Line Items]
Interest rate margin	2.30%
Line of Credit | Alternative base rate | Minimum
Debt Instrument [Line Items]
Interest rate margin	0.40%
Line of Credit | Alternative base rate | Maximum
Debt Instrument [Line Items]
Interest rate margin	1.30%
Line of Credit | Interest rate swaps
Debt Instrument [Line Items]
Notional amount of interest rate swap	$ 150,000
Term Loan Due January 2021 | Based On LIBOR | Minimum
Debt Instrument [Line Items]
Interest rate margin	1.35%
Term Loan Due January 2021 | Based On LIBOR | Maximum
Debt Instrument [Line Items]
Interest rate margin	2.20%
Term Loan Due January 2021 | Alternative base rate | Minimum
Debt Instrument [Line Items]
Interest rate margin	0.35%
Term Loan Due January 2021 | Alternative base rate | Maximum
Debt Instrument [Line Items]
Interest rate margin	1.20%
Term Loan Due May 2022 | Based On LIBOR | Minimum
Debt Instrument [Line Items]
Interest rate margin		1.60%
Term Loan Due May 2022 | Based On LIBOR | Maximum
Debt Instrument [Line Items]
Interest rate margin		2.50%
Term Loan Due May 2022 | Alternative base rate | Minimum
Debt Instrument [Line Items]
Interest rate margin		0.60%
Term Loan Due May 2022 | Alternative base rate | Maximum
Debt Instrument [Line Items]
Interest rate margin		1.50%
Amended Term Loan Due May 2022 | Based On LIBOR | Minimum
Debt Instrument [Line Items]
Interest rate margin	1.30%
Amended Term Loan Due May 2022 | Based On LIBOR | Maximum
Debt Instrument [Line Items]
Interest rate margin	2.15%
Amended Term Loan Due May 2022 | Alternative base rate | Minimum
Debt Instrument [Line Items]
Interest rate margin	0.30%
Amended Term Loan Due May 2022 | Alternative base rate | Maximum
Debt Instrument [Line Items]
Interest rate margin	1.15%
Mortgage Notes | Minimum
Debt Instrument [Line Items]
Interest rate margin	2.94%
Mortgage Notes | Maximum
Debt Instrument [Line Items]
Interest rate margin	3.65%
Variable-Rate Mortgage Note | Interest rate swaps
Debt Instrument [Line Items]
Notional amount of interest rate swap	$ 96,100	$ 97,000

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DEBT - Principal Payments Due on Consolidated Debt During Each of Next Five Years and Thereafter (Details) $ in Thousands	Sep. 30, 2018 USD ($) Extension	Dec. 31, 2017 USD ($)
Debt Instrument [Line Items]
Remainder of 2018	$ 462
2019	2,191
2020	361,259
2021	356,047
2022	233,579
Thereafter	614,450
Total principal payments	$ 1,567,988	$ 1,497,880
Number of one-year line of credit extension options | Extension	1
Line of Credit
Debt Instrument [Line Items]
Remainder of 2018	$ 0
2019	0
2020	346,000
2021	0
2022	0
Thereafter	0
Total principal payments	346,000	275,000
Term Loans
Debt Instrument [Line Items]
Remainder of 2018	0
2019	0
2020	0
2021	350,000
2022	150,000
Thereafter	0
Total principal payments	500,000
Mortgage Notes
Debt Instrument [Line Items]
Remainder of 2018	462
2019	2,191
2020	15,259
2021	6,047
2022	83,579
Thereafter	614,450
Total principal payments	$ 721,988	$ 722,880

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DEBT - Summary of Location and Fair Value of Cash Flow Hedges (Details) - Interest rate swaps - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Derivatives, Fair Value [Line Items]
Notional amount of interest rate swap	$ 596,087
Other assets
Derivatives, Fair Value [Line Items]
Derivative, Fair Value	$ 23,248	$ 16,872

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DEBT - Effect of Derivative Instruments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative Instruments, Gain (Loss) [Line Items]
Net other comprehensive income (loss)	$ 81	$ (209)	$ 6,376	$ (963)
Interest rate swaps
Derivative Instruments, Gain (Loss) [Line Items]
Income (loss) recognized in AOCI (effective portion)	1,664	144	10,081	(719)
Income reclassified from AOCI into income (effective portion)	(1,583)	(353)	(3,705)	(244)
Net other comprehensive income (loss)	$ 81	$ (209)	$ 6,376	$ (963)

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FAIR VALUE - Financial Instruments Measured at Fair Value on Recurring Basis (Details) - Recurring - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Assets
Derivative instruments	$ 23,248	$ 16,872
Total assets measured at fair value	23,248	16,872
Level 1
Assets
Derivative instruments	0	0
Total assets measured at fair value	0	0
Level 2
Assets
Derivative instruments	23,248	16,872
Total assets measured at fair value	23,248	16,872
Level 3
Assets
Derivative instruments	0	0
Total assets measured at fair value	$ 0	$ 0

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FAIR VALUE - Carrying Value and Fair Value of Certain Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Carrying Value
Liabilities
Line of credit	$ 346,000	$ 275,000
Term loans	500,000	500,000
Mortgage notes	721,988	722,880
Fair Value
Liabilities
Line of credit	346,000	275,000
Term loans	500,000	500,000
Mortgage notes	$ 687,330	$ 708,615

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STOCKHOLDERS' EQUITY - Narrative (Details) - Common Stock $ / shares in Units, $ in Millions	Sep. 30, 2018 USD ($) $ / shares
Stockholders' Equity Detail [Line Items]
Maximum dollar value of common stock in public offering	$ 311.9
Offering price of common stock per share, DRIP shares (usd per share) | $ / shares	$ 11.11
Amount of stock remaining available for sale through DRIP	$ 263.4

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STOCKHOLDERS' EQUITY - Summary of Changes in Shares Outstanding and Aggregate Par Value of Outstanding Shares for Each Class of Common Stock (Details) - shares shares in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Redemptions of common stock	(2,057)	(1,419)
Class A
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance, shares	104,589
Ending balance, shares	105,514
Class T
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance, shares	69,925
Ending balance, shares	70,992
Common Stock
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance, shares	174,514
Issuance of common stock, Primary shares	0
Issuance of common stock, DRIP	3,266
Issuance of common stock, Stock grants	180
Redemptions of common stock	(1,441)
Forfeitures of common stock	(13)
Ending balance, shares	176,506
Common Stock | Class A
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance, shares	104,589
Issuance of common stock, Primary shares	0
Issuance of common stock, DRIP	1,958
Issuance of common stock, Stock grants	180
Redemptions of common stock	(1,200)
Forfeitures of common stock	(13)
Ending balance, shares	105,514
Common Stock | Class T
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Beginning balance, shares	69,925
Issuance of common stock, Primary shares	0
Issuance of common stock, DRIP	1,308
Issuance of common stock, Stock grants	0
Redemptions of common stock	(241)
Forfeitures of common stock	0
Ending balance, shares	70,992

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STOCKHOLDERS' EQUITY - Distributions Table (Details) - Cash Distributions - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended							9 Months Ended	12 Months Ended
	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2018	Dec. 31, 2017
Schedule Of Stockholders' Equity [Line Items]
Declared per Common Share (usd per share)	$ 0.1425	$ 0.1425	$ 0.1425	$ 0.1425	$ 0.1425	$ 0.1425	$ 0.1425	$ 0.4275	$ 0.57
Paid in Cash	$ 11,362	$ 11,262	$ 11,092	$ 10,923	$ 10,820	$ 10,349	$ 9,902	$ 33,716	$ 41,994
Reinvested in Shares	11,885	11,980	12,086	12,222	12,242	11,868	11,447	35,951	47,779
Distributions Fees	1,880	1,864	1,845	1,781	1,764	1,630	1,495	5,589	6,670
Gross Distributions	$ 25,127	$ 25,106	$ 25,023	$ 24,926	$ 24,826	$ 23,847	$ 22,844	$ 75,256	$ 96,443

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STOCKHOLDERS' EQUITY - Redemption Table (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Equity [Abstract]
Number of eligible shares redeemed	2,057	1,419
Aggregate dollar amount of shares redeemed	$ 20,146	$ 13,616
Average redemption price per share (usd per share)	$ 9.79	$ 9.60

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RELATED PARTY TRANSACTIONS - Summary of Fees and Expenses Incurred by Company (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Expensed:
Asset management fees, incurred	$ 6,010	$ 5,689	$ 17,916	$ 16,575
Asset management fees related to dispositions, incurred	221	0	427	409
Other expense reimbursements, incurred	1,145	1,056	3,881	3,317
Total incurred	7,376	6,745	22,224	20,301
Asset management fees, payable	74		74		$ 54
Asset management fees related to dispositions, payable	0		0		0
Other expense reimbursements, payable	315		315		605
Total payable	389		389		659
Capitalized:
Acquisition fees, incurred	525	2,102	784	5,144
Development acquisition fees, incurred	123	384	1,070	558
Total incurred	648	2,486	1,854	5,702
Acquisition fees, payable	0		0		132
Development acquisition fees, payable	61		61		98
Total payable	61		61		230
Additional Paid-In Capital:
Sales commissions, incurred	0	222	0	4,491
Dealer manager fees, incurred	0	143	0	3,026
Offering costs, incurred	137	509	397	4,240
Distribution fees - current, incurred	1,880	1,764	5,589	4,889
Distribution fees - trailing, incurred	0	0	0	926
Total incurred	2,017	2,638	5,986	17,572
Sales commissions, payable	0		0		0
Dealer manager fees, payable	0		0		0
Offering costs, payable	80		80		116
Distribution fees - current	613		613		613
Distribution fees - trailing	20,432	27,877	20,432	27,877	26,071
Total payable	21,125		21,125		$ 26,800
Advisor or Its Affiliates
Additional Paid-In Capital:
Other expense reimbursements for compensation costs	$ 900	$ 900	$ 3,100	$ 3,100

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RELATED PARTY TRANSACTIONS - Joint Ventures (Details) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) Subsidiary	Sep. 30, 2017 USD ($)	Dec. 31, 2017
BTC I Partnership
Related Party Transaction [Line Items]
Ownership percentage	20.00%		20.00%		20.00%
Number of wholly-owned entered into joint venture agreement			2
Ownership percentage by noncontrolling owners	80.00%		80.00%
BTC II Partnership
Related Party Transaction [Line Items]
Ownership percentage	8.00%		8.00%		13.00%
Number of wholly-owned entered into joint venture agreement			2
Ownership percentage by noncontrolling owners	90.00%		90.00%
BTC II Partnership | BCG BTC II Investors LLC
Related Party Transaction [Line Items]
Ownership percentage by noncontrolling owners	2.00%		2.00%
Advisor
Related Party Transaction [Line Items]
Number of wholly-owned entered into joint venture agreement			2
Advisor | Joint Venture Agreement | BTC Partnership
Related Party Transaction [Line Items]
Acquisition and asset management fee incurred | $	$ 2.1	$ 1.3	$ 5.6	$ 3.8
Due from related parties | $	$ 0.2		$ 0.2

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SUPPLEMENTAL CASH FLOW INFORMATION - Supplemental Cash Flow Information (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Supplemental Cash Flow Elements [Abstract]
Distributions payable	$ 23,860	$ 23,653	$ 23,757
Redemptions payable	6,053	6,220
Distribution fees payable to affiliates	20,432	27,877	$ 26,071
Distributions reinvested in common stock	36,288	33,586
Non-cash capital expenditures	$ 2,090	$ 609

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SUPPLEMENTAL CASH FLOW INFORMATION - Restricted Cash (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Supplemental Cash Flow Elements [Abstract]
Cash and cash equivalents	$ 4,772	$ 5,397	$ 30,631	$ 8,358
Restricted cash	65	65	65	80
Cash, cash equivalents and restricted cash	$ 4,837	$ 5,462	$ 30,696	$ 8,438