UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

For the quarterly period ended June 30, 2022

OR

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

Commission File Number 001-38342 

INDUSTRIAL LOGISTICS PROPERTIES TRUST

(Exact Name of Registrant as Specified in Its Charter)

Maryland	82-2809631
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634
(Address of Principal Executive Offices)	(Zip Code)

617-219-1460

(Registrant’s Telephone Number, Including Area Code)

Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class	Trading Symbol(s)	Name Of Each Exchange On Which Registered
Common Shares of Beneficial Interest	ILPT	The Nasdaq Stock Market LLC

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 ☒ 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 ☒ 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.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

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.  ☐

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

Number of registrant’s common shares of beneficial interest, $.01 par value per share, outstanding as of July 25, 2022: 65,427,459

INDUSTRIAL LOGISTICS PROPERTIES TRUST

FORM 10-Q

June 30, 2022

INDEX

		Page
PART I	Financial Information	3
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets — June 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) — Three and Six Months Ended June 30, 2022 and 2021	4
	Condensed Consolidated Statements of Shareholders’ Equity — Three and Six Months Ended June 30, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows — Six Months Ended June 30, 2022 and 2021	7
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	38
Item 4.	Controls and Procedures	40
	Warning Concerning Forward-Looking Statements	41
	Statement Concerning Limited Liability	44
PART II	Other Information	45
Item 1A.	Risk Factors	45
Item 6.	Exhibits	46
	Signatures	47

References in this Quarterly Report on Form 10-Q to the Company, we, us or our include Industrial Logistics Properties Trust and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.

2

PART I Financial Information

Item 1.  Financial Statements

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share data)

(unaudited) 

	June 30,		December 31,
	2022		2021
ASSETS
Real estate properties:
Land	$	1,113,997	$	699,037
Buildings and improvements	4,012,041		1,049,796
Total real estate properties, gross	5,126,038		1,748,833
Accumulated depreciation	(210,866)		(167,490)
Total real estate properties, net	4,915,172		1,581,343
Investment in unconsolidated joint venture	143,716		143,021
Acquired real estate leases, net	327,319		63,441
Cash and cash equivalents	291,866		29,397
Restricted cash	145,078		—
Rents receivable, including straight line rents of $73,549 and $69,173, respectively	90,187		75,877
Other assets, net	42,500		15,479
Total assets	$	5,955,838	$	1,908,558
LIABILITIES AND EQUITY
Revolving credit facility	$	—	$	182,000
Bridge loan facility	1,379,983		—
Mortgage notes payable, net	3,030,585		646,124
Assumed real estate lease obligations, net	24,759		12,435
Accounts payable and other liabilities	78,175		27,772
Due to related persons	7,402		2,185
Total liabilities	4,520,904		870,516
Commitments and contingencies
Equity:
Equity attributable to common shareholders:
Common shares of beneficial interest, $0.01 par value: 100,000,000 shares authorized; 65,427,459 and 65,404,592 shares issued and outstanding, respectively	654		654
Additional paid in capital	1,013,418		1,012,224
Cumulative net income	193,855		343,908
Cumulative other comprehensive income	7,572		—
Cumulative common distributions	(361,911)		(318,744)
Total equity attributable to common shareholders	853,588		1,038,042
Noncontrolling interest	581,346		—
Total equity	1,434,934		1,038,042
Total liabilities and equity	$	5,955,838	$	1,908,558

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

3

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(amounts in thousands, except per share data)

(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Rental income	$	107,222	$	54,180	$	178,597	$	108,397
Expenses:
Real estate taxes	13,275		7,489		22,711		14,736
Other operating expenses	7,053		4,341		13,825		9,317
Depreciation and amortization	42,699		11,830		65,577		24,508
Acquisition and certain other transaction costs	—		646		—		646
General and administrative	9,709		4,234		15,786		7,990
Loss on impairment of real estate	100,747		—		100,747		—
Total expenses	173,483		28,540		218,646		57,197
Interest and other income	354		—		832		—
Interest expense (including net amortization of debt issuance costs, premiums and discounts of $34,448, $506, $54,769 and $1,011, respectively)	(77,548)		(8,643)		(118,547)		(17,384)
Loss on sale of real estate	(10)		—		(10)		—
Loss on equity securities	(9,450)		—		(5,758)		—
Loss on early extinguishment of debt	—		—		(828)		—
(Loss) income before income tax expense and equity in earnings of investees	(152,915)		16,997		(164,360)		33,816
Income tax expense	(16)		(42)		(85)		(105)
Equity in earnings of investees	1,610		1,876		3,337		4,457
Net (loss) income	(151,321)		18,831		(161,108)		38,168
Net loss attributable to noncontrolling interest	7,782		—		11,055		—
Net (loss) income attributable to common shareholders	$	(143,539)	$	18,831	$	(150,053)	$	38,168
Other comprehensive income:
Unrealized gain on derivatives	4,438		—		10,070		—
Less: unrealized gain on derivatives attributable to noncontrolling interest	(774)		—		(2,498)		—
Other comprehensive income attributable to common shareholders	3,664		—		7,572		—
Comprehensive (loss) income attributable to common shareholders	$	(139,875)	$	18,831	$	(142,481)	$	38,168
Weighted average common shares outstanding - basic	65,221		65,146		65,217		65,142
Weighted average common shares outstanding - diluted	65,221		65,207		65,217		65,192
Per common share data (basic and diluted):
Net (loss) income attributable to common shareholders	$	(2.20)	$	0.29	$	(2.30)	$	0.58

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

4

INDUSTRIAL LOGISTICS PROPERTIES TRUST

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars in thousands)

(unaudited)

								Cumulative				Total Equity		Total Equity
	Number of			Additional				Other		Cumulative		Attributable to		Attributable to
	Common	Common		Paid In		Cumulative		Comprehensive		Common		Common		Noncontrolling		Total
	Shares	Shares		Capital		Net Income		Income		Distributions		Shareholders		Interest		Equity
Balance at December 31, 2021	65,404,592	$	654	$	1,012,224	$	343,908	$	—	$	(318,744)	$	1,038,042	$	—	$	1,038,042
Net (loss) income	—	—		—		(6,514)		—		—		(6,514)		(3,273)		(9,787)
Share grants	—	—		407		—		—		—		407		—		407
Share repurchases	(333)	—		(7)		—		—		—		(7)		—		(7)
Share forfeitures	(400)	—		(2)		—		—		—		(2)		—		(2)
Net current period other comprehensive income	—	—		—		—		3,908		—		3,908		1,724		5,632
Contributions from noncontrolling interest	—	—		—		—		—		—		—		591,268		591,268
Distributions to common shareholders	—	—		—		—		—		(21,584)		(21,584)		—		(21,584)
Balance at March 31, 2022	65,403,859	$	654	$	1,012,622	$	337,394	$	3,908	$	(340,328)	$	1,014,250	$	589,719	$	1,603,969
Net (loss) income	—	—		—		(143,539)		—		—		(143,539)		(7,782)		(151,321)
Share grants	24,500	—		800		—		—		—		800		—		800
Share forfeitures	(900)	—		(4)		—		—		—		(4)		—		(4)
Net current period other comprehensive income	—	—		—		—		3,664		—		3,664		774		4,438
Distributions to noncontrolling interest	—	—		—		—		—		—		—		(1,365)		(1,365)
Distributions to common shareholders	—	—		—		—		—		(21,583)		(21,583)		—		(21,583)
Balance at June 30, 2022	65,427,459	$	654	$	1,013,418	$	193,855	$	7,572	$	(361,911)	$	853,588	$	581,346	$	1,434,934

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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INDUSTRIAL LOGISTICS PROPERTIES TRUST

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

(dollars in thousands)

(unaudited)

	Number of			Additional				Cumulative
	Common	Common		Paid In		Cumulative		Common		Total
	Shares	Shares		Capital		Net Income		Distributions		Equity
Balance at December 31, 2020	65,301,088	$	653	$	1,010,819	$	224,226	$	(232,508)	$	1,003,190
Net income (loss)	—	—		—		19,337		—		19,337
Share grants	—	—		239		—		—		239
Distributions to common shareholders	—	—		—		—		(21,550)		(21,550)
Balance at March 31, 2021	65,301,088	653		1,011,058		243,563		(254,058)		1,001,216
Net income (loss)	—	—		—		18,831		—		18,831
Share grants	21,000	—		780		—		—		780
Share repurchases	(7,733)	—		(202)		—		—		(202)
Distributions to common shareholders	—	—		—		—		(21,549)		(21,549)
Balance at June 30, 2021	65,314,355	$	653	$	1,011,636	$	262,394	$	(275,607)	$	999,076

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

6

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

(unaudited)

	Six Months Ended June 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(161,108)	$	38,168
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	43,375		15,257
Loss on impairment of real estate	100,747		—
Net amortization of debt issuance costs, premiums and discounts	54,769		1,011
Amortization of acquired real estate leases and assumed real estate lease obligations	17,477		8,503
Amortization of deferred leasing costs	735		402
Loss on equity securities	5,758		—
Straight line rental income	(4,376)		(3,995)
Loss on early extinguishment of debt	828		—
Other non-cash expenses	2,156		1,019
Unconsolidated joint venture distributions	2,642		1,320
Equity in earnings of investees	(3,337)		(4,457)
Change in assets and liabilities:
Rents receivable	(9,933)		999
Deferred leasing costs	(4,565)		(1,205)
Due from related persons	—		2,665
Other assets	(4,695)		1,624
Accounts payable and other liabilities	25,539		153
Rents collected in advance	9,030		1,137
Security deposits	672		221
Due to related persons	5,217		(215)
Net cash provided by operating activities	80,931		62,607
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions and deposits	(3,551,509)		(34,081)
Real estate improvements	(5,305)		(1,351)
Proceeds from sale of marketable securities	140,792		—
Proceeds from sale of joint venture	—		804
Net cash used in investing activities	(3,416,022)		(34,628)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of mortgage notes payable	2,100,000		—
Proceeds from secured bridge loan facility	1,385,158		—
Borrowings under revolving credit facility	3,000		36,000
Repayments of revolving credit facility	(185,000)		(13,000)
Repayment of mortgage notes payable	(7,161)		—
Payment of debt issuance costs	(96,260)		—
Distributions to common shareholders	(43,167)		(43,099)
Proceeds from noncontrolling interest, net	587,440		—
Repurchase of common shares	(7)		(202)
Distributions to noncontrolling interest	(1,365)		—
Net cash provided by (used in) financing activities	3,742,638		(20,301)
Increase in cash, cash equivalents and restricted cash	407,547		7,678
Cash, cash equivalents and restricted cash at beginning of period	29,397		22,834
Cash, cash equivalents and restricted cash at end of period	$	436,944	$	30,512

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

7

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(dollars in thousands)

(unaudited)

	Six Months Ended June 30,
	2022		2021
SUPPLEMENTAL DISCLOSURES:
Interest paid	$	55,065	$	16,184
Income taxes paid	$	195	$	167
Interest capitalized	$	15	$	—
NON-CASH INVESTING ACTIVITIES:
Real estate acquired by assumption of mortgage notes payable	$	323,432	$	—
Real estate improvements accrued, not paid	$	4,055	$	174
NON-CASH FINANCING ACTIVITIES:
Assumption of mortgage notes payable	$	(323,432)	$	—

SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
The following table provides a reconciliation of cash, cash equivalents and restricted cash reported within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows:
	As of June 30,
	2022		2021
Cash and cash equivalents	$	291,866	$	30,512
Restricted cash (1)	145,078		—
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	436,944	$	30,512

(1) Restricted cash consists of amounts escrowed for capital expenditures at certain of our mortgaged properties and cash held for the operations of our consolidated joint venture arrangement in which we own a 61% equity interest.

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Note 1. Basis of Presentation

The accompanying condensed consolidated financial statements of Industrial Logistics Properties Trust and its consolidated subsidiaries, or the Company, ILPT, we, us or our, are unaudited. Certain information and disclosures required by U.S. generally accepted accounting principles, or GAAP, for complete financial statements have been condensed or omitted. We believe the disclosures made are adequate to make the information presented not misleading. However, the accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes contained in our Annual Report on Form 10-K for the year ended December 31, 2021, or our 2021 Annual Report. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair statement of results for the interim period have been included. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated. Our operating results for interim periods are not necessarily indicative of the results that may be expected for the full year.

On February 25, 2022, we acquired Monmouth Real Estate Investment Corporation, or MNR, pursuant to the merger of MNR with and into one of our wholly owned subsidiaries, or the Merger, as further described below. In connection with the Merger, we entered into a new joint venture arrangement for 95 of the acquired MNR properties, including two then committed, but not yet then completed, property acquisitions, located in the mainland United States, in which we retained a 61% equity interest. We have determined that this joint venture is not a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification, or ASC, and we evaluated such entity under the voting model and concluded we should consolidate the entity. Under the voting model, we consolidate the entity if we determine that we, directly or indirectly, have greater than 50% of the voting rights and that other equity holders do not have substantive participating rights. The other joint venture investor’s interest in this consolidated entity is reflected as noncontrolling interest in our condensed consolidated financial statements. See Notes 2, 9 and 11 for further information regarding this joint venture.

The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions that affect reported amounts. Actual results could differ from those estimates. Significant estimates in the condensed consolidated financial statements include purchase price allocations, useful lives of fixed assets, impairments of real estate and related intangibles.

Note 2. Real Estate Investments

As of June 30, 2022, our portfolio was comprised of 412 consolidated properties containing approximately 59,736,000 rentable square feet, including 226 buildings, leasable land parcels and easements containing approximately 16,729,000 rentable square feet of primarily industrial lands located on the island of Oahu, Hawaii, or our Hawaii Properties, and 186 properties containing approximately 43,007,000 rentable square feet of industrial properties located in 38 other states, or our Mainland Properties, which includes 93 properties owned by a consolidated joint venture arrangement in which we own a 61% equity interest. As of June 30, 2022, we also owned a 22% equity interest in an unconsolidated joint venture which owns 18 properties located in 12 states totaling approximately 11,726,000 rentable square feet.

We operate in one business segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands. For the three months ended June 30, 2022 and 2021, approximately 29.8% and 51.3%, respectively, of our rental income was from our Hawaii Properties. For the six months ended June 30, 2022 and 2021, approximately 32.8% and 50.8%, respectively, of our rental income was from our Hawaii properties.

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INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

As of June 30, 2022, we had a concentration of properties leased to tenants, including their applicable subsidiaries, that leased over 5% of our total rentable square footage. The impact of these tenants on our revenue are as follows:

				Weighted
	% of			Average
	Rentable		Number	Remaining	Rental Income								Rental Income
	Square		of	Lease Term	Three Months Ended								Six Months Ended
Tenant	Feet		States	(in years)	6/30/2022				6/30/2021				6/30/2022				6/30/2021
Federal Express Corporation/ FedEx Ground Package System, Inc.	21.8	%	34	7.4	$	31,063	29.0	%	$	2,695	5.0	%	$	44,531	24.9	%	$	5,446	5.0	%
Amazon.com Services, Inc./ Amazon.com Services LLC	7.7	%	6	6.4	7,236		6.7	%	5,348		9.9	%	12,852		7.2	%	10,886		10.0	%
Home Depot U.S.A., Inc.	5.7	%	3	26.5	6,540		6.1	%	1,312		2.4	%	6,822		3.8	%	2,625		2.4	%
Total	35.2	%	34	10.3	$	44,839	41.8	%	$	9,355	17.3	%	$	64,205	35.9	%	$	18,957	17.4	%

Acquisition Activities

On February 25, 2022, we completed the acquisition of MNR pursuant to the Agreement and Plan of Merger, dated as of November 5, 2021 and as amended on February 7, 2022, or the Merger Agreement, by and among us, Maple Delaware Merger Sub LLC, a Delaware limited liability company and our wholly owned subsidiary, or Merger Sub, and MNR. At the effective time on February 25, 2022, or the Effective Time, MNR merged with and into Merger Sub, with Merger Sub continuing as the surviving entity, and the separate existence of MNR ceased. MNR’s portfolio included 124 Class A, single tenant, net leased, e-commerce focused industrial properties containing approximately 25,745,000 rentable square feet and two then committed, but not yet then completed, property acquisitions. The aggregate value of the consideration paid in the Merger was $3,734,485, including the assumption of $323,432 aggregate principal amount of former MNR mortgage debt, the repayment of $885,269 of MNR debt and the payment of certain transaction fees and expenses, net of MNR’s cash on hand, and excluding two then pending property acquisitions for an aggregate purchase price of $78,843, excluding acquisition related costs.

Pursuant to the terms set forth in the Merger Agreement, at the Effective Time, each share of common stock, par value $0.01 per share, of MNR that was issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive $21.00 per share in cash, or the Common Stock Consideration, and each share of 6.125% Series C Cumulative Redeemable Preferred Stock, par value $0.01 per share, of MNR, that was issued and outstanding immediately prior to the Effective Time was automatically converted into the right to receive an amount in cash equal to $25.00 plus accumulated and unpaid dividends, or the Preferred Stock Consideration.

At the Effective Time, each MNR stock option and restricted stock award outstanding immediately prior to the Effective Time, whether vested or unvested, became fully vested and converted into the right to receive, in the case of stock options, the difference between the Common Stock Consideration and the exercise price and, in the case of restricted stock awards, the Common Stock Consideration. Any out-of-money stock options were canceled for no consideration.

Immediately following the closing of the Merger, we entered into a joint venture arrangement with an institutional investor for 95 MNR properties, including two then committed, but not yet completed, property acquisitions. The investor acquired a 39% equity interest in the joint venture from us for $587,440, and we retained the remaining 61% equity interest in the joint venture. In connection with the transaction, the joint venture assumed $323,432 aggregate principal amount of former MNR mortgage debt secured by 11 properties and entered into a $1,400,000 floating rate CMBS loan secured by 82 properties, or the Floating Rate Loan. The Floating Rate Loan matures in March 2024, subject to three one year extension options, and requires that interest be paid at an annual rate based on the secured overnight financing rate, or SOFR, plus a premium of 2.77%. See Notes 4, 9 and 11 for more information regarding this joint venture.

In connection with the closing of the Merger, we entered into a $1,385,158 bridge loan facility secured by 109 of our properties, or the Bridge Loan. We also entered into a $700,000 fixed rate CMBS loan secured by 17 of our properties, or the Fixed Rate Loan.

The Bridge Loan matures in February 2023 and requires that interest be paid at an annual rate of SOFR plus a weighted average premium of 2.92%. The Fixed Rate Loan matures in March 2032 and requires that interest be paid at a weighted

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INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

average annual interest rate of 4.42%. The Floating Rate Loan, the Bridge Loan and the Fixed Rate Loan are collectively referred to as the Loans.

We used the proceeds from our sale of the equity interest in our joint venture in which we retained a 61% equity interest to partially fund our acquisition of MNR. We funded our equity interest in that joint venture and the balance of the acquisition of MNR with proceeds from our Bridge Loan and our Fixed Rate Loan.

In connection with the Merger and the Loans, we repaid the outstanding principal balance under our $750,000 unsecured revolving credit facility and then terminated the agreement governing the facility, which was scheduled to expire in June 2022, in accordance with its terms and without penalty.

The following table summarizes the purchase price allocation for the Merger:

Land	$	327,200
Buildings	2,478,047
Acquired real estate leases (1)	226,820
Assets of properties held for sale	724,073
Cash	8,814
Other assets, net	14,194
Securities available for sale (2)	146,550
Total assets	3,925,698
Mortgage notes payable, at fair value	(323,432)
Accounts payable and other liabilities	(20,750)
Assumed real estate lease obligations	(14,233)
Liabilities of properties held for sale	(3,596)
Equity attributable to noncontrolling interest on the joint venture	(3,827)
Net assets acquired	3,559,860
Assumed working capital	(148,807)
Assumed mortgage notes payable, principal	323,432
Purchase price	$	3,734,485

(1)As of the date of acquisition, the weighted average amortization periods for the above market lease values, lease origination value and capitalized below market lease values were 11.05 years, 8.50 years and 7.83 years, respectively.

(2)As part of the Merger, we acquired a portfolio of marketable securities and classified them as available for sale. During the six months ended June 30, 2022, we sold all of these securities with a cost of $146,550 for net proceeds of $140,792, resulting in a $5,758 realized loss on sale of equity securities for the six months ended June 30, 2022.

In July 2022, our consolidated joint venture acquired a property located in Augusta, GA containing 226,000 rentable square feet for a purchase price of approximately $38,000, excluding acquisition related costs. This property is 100% leased to a single tenant with a remaining lease term of approximately 14.9 years. This property was a committed MNR acquisition at the time we acquired MNR and was purchased directly by our consolidated joint venture.

During the six months ended June 30, 2022, we committed $10,742 for expenditures related to leasing related costs for leases executed during the period for approximately 4,757 square feet. Committed, but unspent, tenant related obligations based on existing leases as of June 30, 2022 were $27,998.

Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands is changed; however, we do not have plans to change the use of those lands. As of both June 30, 2022 and December 31, 2021, accrued environmental remediation costs of $6,940 were included in accounts payable and other liabilities in our condensed consolidated balance sheets. These accrued environmental remediation costs relate to maintenance of our properties for current uses, and, because of the indeterminable timing of the remediation, these amounts have not been discounted to present value. In general, we do not have insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event, such as fire or flood, although some of our tenants may maintain such insurance that may benefit us. While we do not believe that there are environmental conditions at any of our properties that will have a material adverse effect on us, we cannot be sure that such conditions are not present at our properties or that costs we incur to remediate contamination will not have a material adverse effect on our business or financial condition.

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INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Charges for environmental remediation costs, if any, are included in other operating expenses in our condensed consolidated statements of comprehensive income (loss).

Disposition Activities

As of March 31, 2022, we classified 30 properties we acquired as part of the MNR acquisition as held for sale in our condensed consolidated balance sheet. During the three months ended June 30, 2022, we reclassified those properties to held and used due to a change in plans to sell as a result of market conditions and recorded a $100,747 loss on impairment of real estate to adjust the carrying value of 25 of those 30 properties to their estimated fair value.

Joint Venture Activities

As of June 30, 2022, we have equity investments in our joint ventures that consist of the following:

			ILPT Carrying Value
		ILPT	of Investment		Number of		Square
Joint Venture	Presentation	Ownership	at June 30, 2022		Properties	Location	Feet
Mountain Industrial REIT LLC	Consolidated	61%	N/A		93	Various	20,755,000
The Industrial Fund REIT LLC	Unconsolidated	22%	$	143,716	18	Various	11,726,000

The following table provides a summary of the mortgages of our joint ventures:

				Principal Balance
	Coupon			at June 30,
Joint Venture (Consolidated)	Rate		Maturity Date	2022 (1)
Mortgage notes payable (secured by 11 properties in 10 states)	3.67%	(2)	Various	$	316,721
Mortgage notes payable (secured by 82 properties in 25 states)	4.04%		3/9/2024	1,400,000
Weighted average/total	3.97%			$	1,716,721

(1)Amounts are not adjusted for our minority interest; none of the debt is recourse to us, subject to certain limitations.

(2)Represents weighted average interest rate as of June 30, 2022.

				Principal Balance
	Coupon			at June 30,
Joint Venture (Unconsolidated)	Rate		Maturity Date	2022 (1)
Mortgage notes payable (secured by one property in Florida)	3.60%	(2)	10/1/2023	$	56,980
Mortgage notes payable (secured by 11 other properties in eight states)	3.33%	(2)	11/7/2029	350,000
Weighted average/total	3.37%	(2)		$	406,980

(1)Amounts are not adjusted for our minority interest; none of the debt is recourse to us.

(2)Includes the effect of mark to market purchase accounting.

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INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Consolidated Joint Venture - Mountain Industrial REIT LLC

Immediately following the closing o