10-Q

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 September 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)	(I.R.S. 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 October 24, 2022: 65,568,560

INDUSTRIAL LOGISTICS PROPERTIES TRUST

FORM 10-Q

September 30, 2022

INDEX

		Page
PART I	Financial Information	3
Item 1.	Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets — September 30, 2022 and December 31, 2021	3
	Condensed Consolidated Statements of Comprehensive Income (Loss) — Three and Nine Months Ended September 30, 2022 and 2021	4
	Condensed Consolidated Statements of Shareholders’ Equity — Three and Nine Months Ended September 30, 2022 and 2021	5
	Condensed Consolidated Statements of Cash Flows — Nine Months Ended September 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	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.	Controls and Procedures	42
	Warning Concerning Forward-Looking Statements	43
	Statement Concerning Limited Liability	46
PART II	Other Information	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 6.	Exhibits	48
	Signatures	49

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) 

	September 30,		December 31,
	2022		2021
ASSETS
Real estate properties:
Land	$	1,117,801	$	699,037
Buildings and improvements	4,053,913		1,049,796
Total real estate properties, gross	5,171,714		1,748,833
Accumulated depreciation	(242,481)		(167,490)
Total real estate properties, net	4,929,233		1,581,343
Investment in unconsolidated joint venture	145,693		143,021
Acquired real estate leases, net	313,444		63,441
Cash and cash equivalents	26,381		29,397
Restricted cash	100,288		—
Rents receivable, including straight line rents of $77,343 and $69,173, respectively	100,347		75,877
Other assets, net	104,249		15,479
Total assets	$	5,719,635	$	1,908,558
LIABILITIES AND EQUITY
Revolving credit facility	$	—	$	182,000
Mortgages and notes payable, net	4,243,271		646,124
Assumed real estate lease obligations, net	23,633		12,435
Accounts payable and other liabilities	86,727		27,772
Due to related persons	4,494		2,185
Total liabilities	4,358,125		870,516
Commitments and contingencies
Equity:
Equity attributable to common shareholders:
Common shares of beneficial interest, $.01 par value: 100,000,000 shares authorized; 65,568,704 and 65,404,592 shares issued and outstanding, respectively	656		654
Additional paid in capital	1,013,802		1,012,224
Cumulative net income	148,228		343,908
Cumulative other comprehensive income	12,300		—
Cumulative common distributions	(362,565)		(318,744)
Total equity attributable to common shareholders	812,421		1,038,042
Total equity attributable to noncontrolling interest	549,089		—
Total equity	1,361,510		1,038,042
Total liabilities and equity	$	5,719,635	$	1,908,558

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 COMPREHENSIVE INCOME (LOSS)

(amounts in thousands, except per share data)

(unaudited)

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Rental income	$	103,215	$	54,981	$	281,812	$	163,378
Expenses:
Real estate taxes	13,749		7,617		36,460		22,353
Other operating expenses	8,453		4,417		22,278		13,734
Depreciation and amortization	48,519		12,694		114,096		37,202
Acquisition and other transaction related costs	586		—		586		646
General and administrative	9,110		4,728		24,896		12,718
Loss on impairment of real estate	—		—		100,747		—
Total expenses	80,417		29,456		299,063		86,653
Interest and other income	1,068		—		1,900		—
Interest expense (including net amortization of debt issuance costs, premiums and discounts of $35,496, $505, $90,265 and $1,516, respectively)	(89,739)		(9,084)		(208,286)		(26,468)
Gain (loss) on sale of real estate	—		940		(10)		940
Loss on equity securities	—		—		(5,758)		—
Loss on early extinguishment of debt	(21,370)		—		(22,198)		—
(Loss) income before income tax expense and equity in earnings of unconsolidated joint venture	(87,243)		17,381		(251,603)		51,197
Income tax expense	(28)		(72)		(113)		(177)
Equity in earnings of unconsolidated joint venture	3,297		998		6,634		5,455
Net (loss) income	(83,974)		18,307		(245,082)		56,475
Net loss attributable to noncontrolling interest	38,347		—		49,402		—
Net (loss) income attributable to common shareholders	$	(45,627)	$	18,307	$	(195,680)	$	56,475
Other comprehensive income:
Unrealized gain on derivatives	8,847		—		18,917		—
Less: unrealized gain on derivatives attributable to noncontrolling interest	(4,119)		—		(6,617)		—
Other comprehensive income attributable to common shareholders	4,728		—		12,300		—
Comprehensive (loss) income attributable to common shareholders	$	(40,899)	$	18,307	$	(183,380)	$	56,475
Weighted average common shares outstanding - basic	65,250		65,178		65,228		65,154
Weighted average common shares outstanding - diluted	65,250		65,230		65,228		65,205
Per common share data (basic and diluted):
Net (loss) income attributable to common shareholders	$	(0.70)	$	0.28	$	(3.00)	$	0.86

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)

								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
Net (loss) income	—	—		—		(45,627)		—		—		(45,627)		(38,347)		(83,974)
Share grants	173,300	2		620		—		—		—		622		—		622
Share repurchases	(31,455)	—		(232)		—		—		—		(232)		—		(232)
Share forfeitures	(600)	—		(4)		—		—		—		(4)		—		(4)
Net current period other comprehensive income	—	—		—		—		4,728		—		4,728		4,119		8,847
Contributions from noncontrolling interest	—	—		—		—		—		—		—		1,971		1,971
Distributions to common shareholders	—	—		—		—		—		(654)		(654)		—		(654)
Balance at September 30, 2022	65,568,704	$	656	$	1,013,802	$	148,228	$	12,300	$	(362,565)	$	812,421	$	549,089	$	1,361,510

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	—	—		—		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	—	—		—		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
Net income	—	—		—		18,307		—		18,307
Share grants	118,800	1		916		—		—		917
Share repurchases	(27,576)	—		(713)		—		—		(713)
Share forfeitures	(700)	—		(4)		—		—		(4)
Distributions to common shareholders	—	—		—		—		(21,554)		(21,554)
Balance at September 30, 2021	65,404,879	$	654	$	1,011,835	$	280,701	$	(297,161)	$	996,029

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)

	Nine Months Ended September 30,
	2022		2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income	$	(245,082)	$	56,475
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	75,014		23,500
Loss on impairment of real estate	100,747		—
Net amortization of debt issuance costs, premiums and discounts	90,265		1,516
Amortization of acquired real estate leases and assumed real estate lease obligations	33,680		12,567
Amortization of deferred leasing costs	1,170		620
Loss (gain) on sale of real estate	10		(940)
Loss on equity securities	5,758		—
Straight line rental income	(8,170)		(5,673)
Loss on early extinguishment of debt	22,198		—
Other non-cash expenses	4,443		1,932
Distributions of earnings from unconsolidated joint venture	3,962		1,980
Equity in earnings of unconsolidated joint venture	(6,634)		(5,455)
Change in assets and liabilities:
Rents receivable	(16,299)		960
Deferred leasing costs	(7,139)		(2,758)
Due from related persons	—		2,665
Other assets	3,615		(5,596)
Accounts payable and other liabilities	5,398		1,657
Rents collected in advance	15,739		4,012
Security deposits	923		393
Due to related persons	2,309		1,065
Net cash provided by operating activities	81,907		88,920
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions and deposits	(3,589,085)		(134,730)
Real estate improvements	(8,741)		(2,373)
Proceeds from sale of marketable securities	140,792		—
Proceeds from sale of real estate	—		1,206
Proceeds from sale of joint venture	—		804
Net cash used in investing activities	(3,457,034)		(135,093)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of mortgages and notes payable	3,335,000		—
Repayment of mortgage notes payable	(12,591)		—
Proceeds from secured bridge loan facility	1,385,158		—
Repayment of secured bridge loan facility	(1,385,158)		—
Borrowings under revolving credit facility	3,000		246,000
Repayments of revolving credit facility	(185,000)		(113,000)
Payment of debt issuance costs	(211,996)		—
Distributions to common shareholders	(43,821)		(64,653)
Proceeds from sale of noncontrolling interest, net	589,411		—
Repurchase of common shares	(239)		(915)
Distributions to noncontrolling interest	(1,365)		—
Net cash provided by financing activities	3,472,399		67,432
Increase in cash, cash equivalents and restricted cash	97,272		21,259
Cash, cash equivalents and restricted cash at beginning of period	29,397		22,834
Cash, cash equivalents and restricted cash at end of period	$	126,669	$	44,093

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 CASH FLOWS (CONTINUED)

(dollars in thousands)

(unaudited)

	Nine Months Ended September 30,
	2022		2021
SUPPLEMENTAL DISCLOSURES:
Interest paid	$	113,748	$	24,708
Income taxes paid	$	223	$	386
Interest capitalized	$	68	$	—
NON-CASH INVESTING ACTIVITIES:
Real estate acquired by assumption of mortgage notes payable	$	323,432	$	—
Real estate improvements accrued, not paid	$	7,165	$	799
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 September 30,
	2022		2021
Cash and cash equivalents	$	26,381	$	44,093
Restricted cash (1)	100,288		—
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	126,669	$	44,093

(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 September 30, 2022, our portfolio was comprised of 413 consolidated properties containing approximately 59,962,000 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 187 properties containing approximately 43,233,000 rentable square feet of industrial properties located in 38 other states, or our Mainland Properties, which includes 94 properties owned by a consolidated joint venture arrangement in which we own a 61% equity interest. As of September 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 September 30, 2022 and 2021, approximately 26.8% and 50.5%, respectively, of our rental income was from our Hawaii Properties. For the nine months ended September 30, 2022 and 2021, approximately 30.6% and 50.7%, 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 September 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
	Square		of	Lease Term	Rental Income								Rental Income
	Feet		States	(in years)	Three Months Ended								Nine Months Ended
Tenant	As of September 30, 2022				9/30/2022				9/30/2021				9/30/2022				9/30/2021
Federal Express Corporation/ FedEx Ground Package System, Inc.	22.0	%	34	7.3	$	31,697	30.7	%	$	2,706	4.9	%	$	76,227	27.0	%	$	8,152	5.0	%
Amazon.com Services, Inc./ Amazon.com Services LLC	7.7	%	6	6.2	7,244		7.0	%	5,231		9.5	%	20,095		7.1	%	16,117		9.9	%
Home Depot U.S.A., Inc.	5.7	%	3	26.3	3,346		3.2	%	1,322		2.4	%	10,169		3.6	%	3,948		2.4	%
Total	35.4	%	34	13.3	$	42,287	40.9	%	$	54,982	16.8	%	$	106,491	37.7	%	$	163,378	17.3	%

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 $3,739,048, 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 then completed, property acquisitions. The investor acquired a 39% equity interest in the joint venture from us for $589,411, as of the completion of this transaction, 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, 10 and 11 for more information regarding this joint venture and related loans.

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.

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INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

The Bridge Loan was scheduled to mature in February 2023 and required that interest be paid at an annual rate of SOFR plus a weighted average premium of 2.92%. The Bridge Loan was repaid in full on September 22, 2022. The Fixed Rate Loan matures in March 2032 and requires that interest be paid at a weighted 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. See Note 4 for more information regarding 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 the Bridge Loan and the 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	$	430,818
Buildings	3,035,309
Acquired real estate leases (1)	294,576
Cash	8,814
Other assets, net	14,194
Securities available for sale (2)	146,550
Total assets	3,930,261
Mortgage notes payable, at fair value	(323,432)
Accounts payable and other liabilities	(25,327)
Assumed real estate lease obligations	(17,829)
Equity attributable to noncontrolling interest on the joint venture	(3,827)
Net assets acquired	3,559,846
Assumed working capital	(144,230)
Assumed mortgage notes payable, principal	323,432
Purchase price	$	3,739,048

(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 nine months ended September 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 nine months ended September 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 $38,053, including acquisition related costs of $53. This property is 100% leased to a single tenant with a remaining lease term of approximately 14.9 years at the time of acquisition.

We allocated the purchase price for this acquisition based on the estimated fair value of the acquired assets as follows:

Purchase				Buildings and		Acquired Real Estate
Price		Land		Improvements		Leases
$	38,053	$	3,818	$	30,780	$	3,455

This property was one of two committed MNR property acquisitions at the time of the Merger and was acquired directly by our consolidated joint venture. In September 2022, our consolidated joint venture terminated the agreement for the other committed MNR property acquisition.

During the nine months ended September 30, 2022, we committed $15,304 for expenditures related to leasing related costs for leases executed during the period for approximately 6,442,000 square feet. As of September 30, 2022, committed, but unspent, tenant related obligations based on existing leases were $25,939.

11

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands changes; however, we do not have plans to change the use of those lands. As of both September 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 the maintenance of our properties for their 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. Charges for environmental remediation costs, if any, are included in other operating expenses in our condensed consolidated statements of comprehensive income (loss).

Disposition Activities

During the nine months ended September 30, 2022, we recorded a $100,747 loss on impairment of real estate to adjust the carrying value of 25 properties to their estimated fair value, due to a change in plans to sell and the reclassification of those properties from held for sale to held and used. See Note 5 for further information on these properties.

Joint Venture Activities

As of September 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 September 30, 2022		Properties	Location	Feet
Mountain Industrial REIT LLC	Consolidated	61%	N/A		94	Various	20,981,000
The Industrial Fund REIT LLC	Unconsolidated	22%	$	145,693	18	Various	11,726,000

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

				Principal Balance
	Interest			at September 30,
Joint Venture (Consolidated)	Rate		Maturity Date	2022 (1)
Mortgage notes payable (secured by 11 properties in 10 states)	3.67%	(2)	Various	$	310,842
Mortgage notes payable (secured by 82 properties in 25 states)	5.62%		3/9/2024	1,400,000
Weighted average/total	5.27%			$	1,710,842

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

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

				Principal Balance
	Interest			at September 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
Mortgage notes payable (secured by 5 properties in four states)	4.22%		10/1/2027	97,000
Weighted average/total	3.53%	(2)		$	503,980

(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.

12

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 of the Merger, we entered into a joint venture arrangement with an institutional investor for 95 of the acquired MNR properties in 27 states, including two then committed, but not yet then completed, property acquisitions. The investor acquired a 39% noncontrolling equity interest in the joint venture from us for $589,411, as of the completion of this transaction, and we retained the remaining 61% equity interest in the joint venture. The joint venture assumed $323,432 aggregate principal amount of former MNR mortgage debt on certain of the properties. In July 2022, our consolidated joint venture completed one of the two committed MNR property acquisitions, and in September 2022, our consolidated joint venture terminated the agreement for the other committed MNR property acquisition. We control this joint venture and therefore account for the properties on a consolidated basis in our condensed consolidated financial statements.

We recognized a 39% noncontrolling interest in our condensed consolidated financial statements for the three and nine months ended September 30, 2022. The portion of this joint venture's net loss not attributable to us, or $38,318 and $49,360 for the three and nine months ended September 30, 2022, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income (loss). During the nine months ended September 30, 2022, this joint venture made aggregate cash distributions of $1,365 to the other joint venture investor, which is reflected as a decrease in total equity attributable to noncontrolling interest in our condensed consolidated balance sheets. No distributions were made during the three months ended September 30, 2022. See Notes 1, 4, 5, 9, 10 and 11 for more information regarding this joint venture.

Unconsolidated Joint Venture - The Industrial Fund REIT LLC

As of September 30, 2022 and December 31, 2021, we also owned a 22% interest in an unconsolidated joint venture with 18 properties in 12 states. We account for the unconsolidated joint venture under the equity method of accounting under the fair value option.

We recorded a change in the fair value of our investment in the unconsolidated joint venture of $3,297 and $998 for the three months ended September 30, 2022 and 2021, respectively, and $6,634 and $5,455 for the nine months ended September 30, 2022 and 2021, respectively, as equity in earnings of unconsolidated joint venture in our condensed consolidated statements of comprehensive income (loss). In addition, the unconsolidated joint venture made aggregate cash distributions to us of $1,320 and $660 during the three months ended September 30, 2022 and 2021, respectively, and $3,962 and $1,980, during the nine months ended September 30, 2022 and 2021, respectively. In October 2022, the unconsolidated joint venture made a cash distribution to us of $20,900, including amounts related to a debt financing.

See Notes 1, 4, 5, 9, 10 and 11 for more information regarding our joint ventures.

Note 3. Leases

We are a lessor of industrial and logistics properties. Our leases provide our tenants with the contractual right to use and economically benefit from all the physical space specified in their respective leases; therefore, we have determined to evaluate our leases as lease arrangements.

Our leases provide for base rent payments and may also include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $16,664 and $9,478 for the three months ended September 30, 2022 and 2021, respectively, of which tenant reimbursements totaled $16,419 and $9,233, respectively, and $46,071 and $28,341 for the nine months ended September 30, 2022 and 2021, respectively, of which tenant reimbursements totaled $45,336 and $27,606, respectively.

We increased rental income to record revenue on a straight line basis by $3,794 and $1,678 for the three months ended September 30, 2022 and 2021, respectively, and $8,170 and $5,673 for the nine months ended September 30, 2022 and 2021, respectively.

13

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Right of use asset and lease liability. In connection with our acquisition of MNR, we assumed the lease for MNR’s former corporate headquarters, which expires on December 31, 2029, and three of the properties we acquired as part of the MNR acquisition were subject to ground leases under which we are the lessee. For leases under which we are the lessee, we are required to record a right of use asset and lease liability for all leases with a term greater than 12 months. As of September 30, 2022, the value of the right of use asset and related liability representing our future obligations under the lease arrangements under which we are the lessee were $4,959 and $5,019, respectively. The right of use asset and related lease liability are included in other assets, net and accounts payable and other liabilities, respectively, in our condensed consolidated balance sheets.

Generally, payments of ground lease obligations are made by our tenants. However, if a tenant does not perform obligations under a ground lease or does not renew any ground lease, we may have to perform obligations under, or renew, the ground lease in order to protect our investment in the affected property.

14

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Note 4. Indebtedness

As of September 30, 2022, our outstanding indebtedness consisted of the following:

										Net Book
										Value
			Principal Balance as of							of Collateral
			September 30,		December 31,		Interest			At September 30,
Entity	Type	Secured By:	2022 (1)		2021 (1)		Rate		Maturity	2022
ILPT	Revolving credit facility (2)	Unsecured	$	—	$	182,000	N/A		N/A	$	—
ILPT	Floating Rate - Interest only (3)	104 Properties	1,235,000		—		6.18	%	Oct 2024	1,077,796
ILPT	Fixed Rate - Interest only	186 Properties	650,000		650,000		4.31	%	Feb 2029	490,602
ILPT	Fixed Rate - Interest only	17 Properties	700,000		—		4.42	%	Mar 2032	521,785
Mountain (4)	Floating Rate - Interest only (5)	82 Properties	1,400,000		—		5.62	%	Mar 2024	1,923,147
Mountain (4)	Fixed Rate - Amortizing	One Property	14,074		—		3.76	%	Oct 2028	63,829
Mountain (4)	Fixed Rate - Amortizing	One Property	5,008		—		3.77	%	Apr 2030	40,002
Mountain (4)	Fixed Rate - Amortizing	One Property	5,295		—		3.85	%	Apr 2030	40,002
Mountain (4)	Fixed Rate - Amortizing	One Property	14,793		—		3.56	%	Sep 2030	51,100
Mountain (4)	Fixed Rate - Amortizing	One Property	13,012		—		3.67	%	May 2031	30,962
Mountain (4)	Fixed Rate - Amortizing	One Property	14,443		—		4.14	%	Jul 2032	45,094
Mountain (4)	Fixed Rate - Amortizing	One Property	31,517		—		4.02	%	Oct 2033	87,730
Mountain (4)	Fixed Rate - Amortizing	One Property	43,999		—		4.13	%	Nov 2033	131,986
Mountain (4)	Fixed Rate - Amortizing	One Property	26,602		—		3.10	%	June 2035	48,049
Mountain (4)	Fixed Rate - Amortizing	One Property	42,743		—		2.95	%	Jan 2036	102,593
Mountain (4)	Fixed Rate - Amortizing	One Property	46,659		—		4.27	%	Nov 2037	113,839
Mountain (4)	Fixed Rate - Amortizing	One Property	52,697		—		3.25	%	Jan 2038	117,386
	Total indebtedness		4,295,842		832,000					$	4,885,902
	Unamortized debt issuance costs		(52,571)		(3,876)
	Total indebtedness, net		$	4,243,271	$	828,124

(1)The principal balances are the amounts stated in contracts. In accordance with GAAP, our carrying values and recorded interest expense may be different because of market conditions at the time we assumed certain of these debts.

(2)In February 2022, we repaid the outstanding principal balance under our $750,000 unsecured revolving credit facility and then terminated the agreement governing the facility in accordance with its terms and without penalty.

(3)This loan matures in October 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a weighted average premium of 3.93%. We also purchased an interest rate cap through October 2024 with a SOFR strike rate equal to 2.25%.

(4)Mountain is Mountain Industrial REIT LLC, our consolidated joint venture, in which we own a 61% equity interest.

(5)This loan matures in March 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.77%. We also purchased an interest rate cap through March 2024 with a SOFR strike rate equal to 3.40%.

As of December 31, 2021, we had a $750,000 unsecured revolving credit facility that was available for our general business purposes, including acquisitions. The maturity date of this revolving credit facility was June 29, 2022 and had an option to extend the maturity date for one, six month period, subject to payment of extension fees and satisfaction of other conditions. As of December 31, 2021, the annual interest rate payable on borrowings under this revolving credit facility was 1.41%. The weighted average annual interest rate for borrowings under this revolving credit facility was 1.42% for the three months ended September 30, 2021 and 1.41% and 1.46% for the period from January 1, 2022 to February 25, 2022 and the nine months ended September 30, 2021, respectively. In connection with the closing of the Merger, we entered into the Loans, and repaid the outstanding principal balance under this revolving credit facility and then terminated the agreement governing the facility in accordance with its terms and without penalty. During the nine months ended September 30, 2022, we recorded a $828 loss on early extinguishment of debt to write off unamortized costs related to this facility.

15

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

On February 25, 2022, subsidiaries of our consolidated joint venture entered into a loan agreement with a group of institutional lenders, or the Floating Rate Lenders, pursuant to which this joint venture obtained the Floating Rate Loan. Also on February 25, 2022, our consolidated joint venture entered into a guaranty in favor of the Floating Rate Lenders, pursuant to which this joint venture guaranteed certain limited recourse obligations of its subsidiaries with respect to 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 of SOFR plus a premium of 2.25%. Effective in March 2022, the Floating Rate Lenders exercised their option to increase the premium in connection with the securitization of the Floating Rate Loan, resulting in an increase of 51.5 basis points in the premium. We also purchased an interest rate cap through March 2024 with a SOFR strike rate equal to 3.40%. As of September 30, 2022, the weighted average annual interest rate payable under the Floating Rate Loan was 5.62% and the weighted average interest rate for borrowings under the Floating Rate Loan was 4.94% and 4.23% for the three months ended September 30, 2022 and the period from February 25, 2022 to September 30, 2022, respectively.

Also on February 25, 2022, certain of our subsidiaries entered into a loan agreement with a group of institutional lenders, or the Bridge Lenders, and a mezzanine loan agreement with an institutional lender, or the Bridge Mezz Lender, together pursuant to which we obtained the Bridge Loan. Also on February 25, 2022, we entered into a guaranty in favor of the Bridge Lenders and the Bridge Mezz Lender, pursuant to which we guaranteed certain limited recourse obligations of its subsidiaries with respect to the Bridge Loan. The Bridge Loan was scheduled to mature in February 2023 and required that interest only be paid at an annual rate of SOFR plus a premium of 1.75% under the loan agreement and a premium of 8.0% under the mezzanine loan agreement. We also purchased an interest rate cap with a SOFR strike rate equal to 2.70%. The Bridge Loan was repaid in full on September 22, 2022 with cash on hand and proceeds from our $1,235,000 floating rate loan, which is further described below. During the three and nine months ended September 30, 2022, we recorded a $22,231 loss on early extinguishment of debt to write off unamortized costs related to the Bridge Loan and related interest rate cap. The weighted average annual interest rate for borrowings under the Bridge Loan was 5.01% and 4.24% for the period from July 1, 2022 to September 22, 2022 and the period from February 25, 2022 to September 22, 2022, respectively.

Also on February 25, 2022, certain of our subsidiaries entered into a loan agreement with a group of institutional lenders, or the Fixed Rate Lenders, and mezzanine loan agreements with a separate group of institutional lenders, or the Fixed Mezz Lenders, pursuant to which we obtained the Fixed Rate Loan. Also on February 25, 2022, we entered into a guaranty in favor of the Fixed Rate Lenders and the Fixed Mezz Lenders, pursuant to which we guaranteed certain limited recourse obligations of our subsidiaries with respect to the Fixed Rate Loan. The interest only Fixed Rate Loan matures in March 2032 and requires that interest be paid at a weighted average annual fixed rate of 4.42%.

We used the aggregate net proceeds from the Loans to partially fund the acquisition of MNR. Principal payments on the Floating Rate Loan and Fixed Rate Loan are not required prior to the end of their respective initial terms, subject to certain conditions set forth in the applicable loan agreement. Subject to the satisfaction of certain stated conditions, we have the option under the applicable loan agreement: (1) to prepay up to $280,000 of the Floating Rate Loan after March 2023, at par with no premium, and to prepay the balance of the Floating Rate Loan at any time, subject to a premium; and (2) to prepay the Fixed Rate Loan in full or part at any time, subject to a premium, and beginning in September 2031, without a premium.

On September 22, 2022, certain of our subsidiaries entered into a loan agreement with a group of institutional lenders, or the ILPT Floating Rate Lenders, and a mezzanine loan agreement with a separate group of institutional lenders, or the ILPT Floating Rate Mezz Lenders, pursuant to which we obtained the ILPT Floating Rate Loan, secured by 104 of our properties. The ILPT Floating Rate Loan is comprised of a $1,100,000 mortgage loan and a $135,000 mezzanine loan. Also, on September 22, 2022, we entered into a guaranty in favor of the ILPT Floating Rate Lenders and the ILPT Floating Rate Mezz Lenders, pursuant to which we guaranteed certain limited recourse obligations of our subsidiaries with respect to the ILPT Floating Rate Loan. The interest only ILPT Floating Rate Loan matures on October 9, 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR, which is capped at an annual rate of 2.25% for the initial term of the ILPT Floating Rate Loan, plus a weighted average premium of 3.93%. The weighted average interest rate payable under the ILPT Floating Rate Loan as of September 30, 2022 and for the period from September 22, 2022 to September 30, 2022 was 6.18%. See Notes 5 and 10 for further information on our interest rate caps.

The agreements governing the Floating Rate Loan, Fixed Rate Loan and the ILPT Floating Rate Loan contain customary covenants and provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default.

16

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

In connection with the Merger, our consolidated joint venture, in which we own a 61% equity interest, assumed an aggregate of $323,432 of former MNR mortgages secured by 11 properties which are owned by this joint venture. These amortizing mortgages require monthly payments of principal and interest until maturity. The value of these mortgages approximated their estimated fair value on the date of acquisition.

See Notes 2 and 5 for further information regarding our acquisition of MNR.

Note 5. Fair Value of Assets and Liabilities

Our financial instruments include cash and cash equivalents, restricted cash, rents receivable, the Floating Rate Loan, the ILPT Floating Rate Loan, the Fixed Rate Loan, mortgage notes payable, accounts payable, rents collected in advance, interest rate caps, security deposits and amounts due from or to related persons. At September 30, 2022 and December 31, 2021, the fair value of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows:

	At September 30, 2022				At December 31, 2021
	Carrying		Estimated		Carrying		Estimated
	Value (1)		Fair Value		Value (1)		Fair Value
Fixed rate loan, 4.31% interest rate, due in 2029	$	646,532	$	587,730	$	646,124	$	709,198
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024 (2)	1,213,336		1,213,336		—		—
Floating Rate Loan, 5.62% interest rate, due in 2024 (3)	1,378,000		1,378,000		—		—
Fixed Rate Loan, 4.42% interest rate, due in 2032	694,561		626,128		—		—
Fixed rate loan, 3.76% interest rate, due in 2028	14,074		13,105		—		—
Fixed rate loan, 3.77% interest rate, due in 2030	5,008		4,637		—		—
Fixed rate loan, 3.85% interest rate, due in 2030	5,295		4,918		—		—
Fixed rate loan, 3.56% interest rate, due in 2030	14,793		13,551		—		—
Fixed rate loan, 3.67% interest rate, due in 2031	13,012		11,900		—		—
Fixed rate loan, 4.14% interest rate, due in 2032	14,443		13,355		—		—
Fixed rate loan, 4.02% interest rate, due in 2033	31,517		28,715		—		—
Fixed rate loan, 4.13% interest rate, due in 2033	43,999		40,292		—		—
Fixed rate loan, 3.10% interest rate, due in 2035	26,602		22,671		—		—
Fixed rate loan, 2.95% interest rate, due in 2036	42,743		35,855		—		—
Fixed rate loan, 4.27% interest rate, due in 2037	46,659		42,183		—		—
Fixed rate loan, 3.25% interest rate, due in 2038	52,697		44,184		—		—
	$	4,243,271	$	4,080,560	$	646,124	$	709,198

(1)Includes unamortized debt issuance costs of $52,571 and $3,876 as of September 30, 2022 and December 31, 2021, respectively.

(2)The ILPT Floating Rate Loan matures in October 2024, subject to three, one year extension options.

(3)The Floating Rate Loan, entered into by our consolidated joint venture, matures in March 2024, subject to three, one year extension options.

17

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

We estimate the fair value of our mortgage notes payable using discounted cash flow analyses and current prevailing market rates as of the measurement date (Level 3 inputs). As Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value.

The table below presents certain of our assets measured on a recurring basis at fair value at September 30, 2022, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset:

			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Recurring fair value measurements
Investment in unconsolidated joint venture (1)	$	145,693	$	—	$	—	$	145,693
Interest rate cap derivatives (2)	$	67,998	$	—	$	67,998	$	—
Non-recurring fair value measurements
Real estate properties (3)	$	555,123	$	—	$	—	$	555,123

(1)We own a 22% equity interest in a joint venture that owns 18 properties and is included in investment in unconsolidated joint venture in our condensed consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs). The significant unobservable inputs used in the fair value are discount rates of between 5.25% and 7.00%, exit capitalization rates of between 4.50% and 6.00%, direct capitalization rates of between 4.00% and 4.50%, holding periods of approximately 10 years and market rents. Our assumptions are based on the location, type and nature of each property, and current and anticipated market conditions, which are derived from appraisers, industry publications and our experience. See Note 2 for further information regarding our investment in this joint venture.

(2)Our derivative assets are carried at fair value as required by GAAP. The estimated fair values of the derivative assets are based on current market prices in secondary markets for similar derivative contracts, (Level 2 inputs). See Note 10 for more information regarding our derivatives and hedging activities.

(3)We recorded a loss on impairment of real estate of $100,747 to reduce the carrying value of 25 properties in our condensed consolidated balance sheet to their estimated fair value (Level 3 inputs as defined in the fair value hierarchy under GAAP). See Note 3 for more information.

Note 6. Shareholders’ Equity

Common Share Awards:

On June 1, 2022, in accordance with our Trustee compensation arrangements, we awarded to each of our seven Trustees 3,500 of our common shares, valued at $15.07 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day.

On September 14, 2022, we awarded under our equity compensation plan an aggregate of 173,300 of our common shares, valued at $6.83 per share, the closing price of our common shares on Nasdaq on that day, to our officers and certain other employees of The RMR Group LLC, or RMR.

Common Share Purchases:

During the three and nine months ended September 30, 2022, we purchased an aggregate of 31,455 and 31,788 of our common shares, respectively, valued at a weighted average price of $7.40 and $7.56 per common share, respectively, from our officers and certain other current and former officers and employees of RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

Distributions:

During the nine months ended September 30, 2022, we declared and paid regular quarterly distributions to common shareholders as follows:

18

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Declaration Date	Record Date	Payment Date	Distribution Per Share		Total Distribution
January 13, 2022	January 24, 2022	February 17, 2022	$	0.33	$	21,584
April 14, 2022	April 25, 2022	May 19, 2022	0.33		21,583
July 14, 2022	July 25, 2022	August 18, 2022	0.01		654
			$	0.67	$	43,821

On October 13, 2022, we declared a quarterly distribution to common shareholders of record on October 24, 2022 in the amount of $0.01 per share, or approximately $656. We expect to pay this distribution to our shareholders on or about November 17, 2022.

Note 7. Per Common Share Amounts

We calculate basic earnings per common share by dividing net income (loss) attributable to common shareholders by the weighted average number of our common shares outstanding during the period. We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method. Unvested common share awards, and the related impact on earnings, are considered when calculating dilutive earnings per share. The calculation of basic and diluted earnings per share is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerators:
Net (loss) income attributable to common shareholders	$	(45,627)	$	18,307	$	(195,680)	$	56,475
Loss attributable to unvested share awards	(2)		(43)		(128)		(140)
Net (loss) income attributable to common shareholder used in calculating earnings per share	$	(45,629)	$	18,264	$	(195,808)	$	56,335
Denominators:
Weighted average common shares for basic earnings per share	65,250		65,178		65,228		65,154
Effect of dilutive securities: unvested share awards (1)	—		52		—		51
Weighted average common shares for diluted earnings per share	65,250		65,230		65,228		65,205
Net (loss) income attributable to common shareholders per common share - basic	$	(0.70)	$	0.28	$	(3.00)	$	0.86
Net (loss) income attributable to common shareholders per common share - diluted	$	(0.70)	$	0.28	$	(3.00)	$	0.86

(1)    For purposes of calculating diluted earnings per share, we did not include 205 and 196 of unvested share awards for the three and nine months ended September 30, 2022, respectively, because to do so would have been antidilutive.

Note 8. Business and Property Management Agreements with RMR

We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to our property level operations.

Pursuant to our business management agreement with RMR, we recognized net business management fees of $6,465 and $17,821 for the three and nine months ended September 30, 2022, respectively, and $2,708 and $7,832 for the three and nine months ended September 30, 2021, respectively. Based on our common share total return, as defined in our business management agreement, as of September 30, 2022 and 2021, no incentive fees are included in the net business management fees we recognized for the three and nine months ended September 30, 2022 or 2021. The actual amount of annual incentive fees for 2022, if any, will be based on our common share total return, as defined in our business management agreement, for the three-year period ending December 31, 2022, and will be payable in January 2023. We did not incur any incentive fee payable to RMR for the year ended December 31, 2021. We include business management fees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss). RMR provides management services to our two

19

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

joint ventures. See Note 9 for further information regarding our joint ventures’ management arrangements with RMR and the related impact on our management fees payable to RMR.

We and RMR amended our business management agreement effective August 1, 2021 to provide that (i) for periods beginning on and after August 1, 2021, the MSCI U.S. REIT/Industrial REIT Index will be used to calculate benchmark returns per share for purposes of determining any incentive management fee payable by us to RMR and (ii) for periods prior to August 1, 2021, the SNL U.S. REIT Industrial Index will continue to be used. This change of index was due to S&P Global ceasing to publish the SNL U.S. REIT Industrial Index.

Pursuant to our property management agreement with RMR, we recognized aggregate property management and construction supervision fees of $3,270 and $8,797 for the three and nine months ended September 30, 2022, respectively, and $1,675 and $4,860 for the three and nine months ended September 30, 2021, respectively. Of these amounts, for the three and nine months ended September 30, 2022, $2,976 and $8,104, respectively, were expensed to other operating expenses in our condensed consolidated financial statements and $294 and $693, respectively, were capitalized as building improvements in our condensed consolidated balance sheets. For the three and nine months ended September 30, 2021, $1,598 and $4,751, respectively, were expensed to other operating expenses in our condensed consolidated financial statements and $77 and $109, respectively, were capitalized as building improvements in our condensed consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets.

We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function, or as otherwise agreed. Our property level operating expenses are generally incorporated into the rents charged to our tenants, including certain payroll and related costs incurred by RMR. We reimbursed RMR $1,847 and $5,155 for these expenses and costs for the three and nine months ended September 30, 2022, respectively, and $1,184 and $3,451 for the three and nine months ended September 30, 2021, respectively. These amounts are included in other operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss).

See Note 9 for further information regarding our relationships, agreements and transactions with RMR.

Note 9. Related Person Transactions

We have relationships and historical and continuing transactions with RMR, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR is a majority owned subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., chair of the board of directors, a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR. Matthew Jordan, our other Managing Trustee, is an executive vice president and the chief financial officer and treasurer of RMR Inc. and an officer and employee of RMR. John Murray, one of our Managing Trustees until June 1, 2022 and our President and Chief Executive Officer until March 31, 2022, also serves as an officer and employee of RMR, and each of our other officers is also an officer and employee of RMR. Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR or its subsidiaries provide management services. Adam Portnoy serves as chair of the boards and as a managing trustee or managing director of those companies. Other officers of RMR, including Messrs. Jordan and Murray and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies.

See Note 6 for information relating to the awards of our common shares we made in September 2022 to our officers and certain other employees of RMR and common shares we purchased from our officers and certain other current and former officers and employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. We include amounts recognized as expense for awards of our common shares to our officers and RMR employees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss).

20

INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Our Manager, RMR. We have two agreements with RMR to provide management services to us. See Note 8 for further information regarding our management agreements with RMR.

Joint Ventures. We have two separate joint venture arrangements. One of these joint ventures is with two, third party institutional investors. This joint venture owns 18 properties. We own a 22% equity interest in this joint venture. We entered into this joint venture prior to January 1, 2021.

The other joint venture we entered into in connection with the Merger is with one, third party institutional investor. This joint venture owns 94 properties. We own a 61% equity interest in the joint venture and the other joint venture investor acquired a 39% equity interest in the joint venture from us for $589,411, as of the completion of this transaction, in connection with the joint venture’s formation in February 2022.

RMR provides management services to both of these joint ventures. We do not include our 18 property joint venture as a consolidated subsidiary and, as a result, we are not obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding that joint venture. Our 94 property joint venture is our consolidated subsidiary and, as a result, we are obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding that joint venture; however, that joint venture pays management fees directly to RMR, and any such fees paid by that joint venture are credited against the fees payable by us to RMR.

In December 2021, we sold six properties to our then existing joint venture. We received proceeds of approximately $160,516 from the other equity investors in that joint venture in connection with this sale. We and the other equity investors maintained our respective percentage equity interests in that joint venture following this transaction. As of December 31, 2021 and September 30, 2022, we owed $225 and $554, respectively, to that joint venture for rents that we collected on behalf of that joint venture. These amounts are presented as due to related persons in our condensed consolidated balance sheet. We paid the amounts we owed as of December 31, 2021 in January 2022 and the amounts we owed as of September 30, 2022 in October 2022.

See Notes 2, 4, 5 and 11 for further information regarding our joint ventures.

TA. In May 2021, we acquired a property located in the Dallas, Texas market from TravelCenters of America Inc., or TA, for a purchase price of $2,319, including acquisition related costs of $119. RMR provides management services to TA and Mr. Portnoy serves as the chair of the board of directors and as a managing director of TA.

For further information about these and other such relationships and certain other related person transactions, see our 2021 Annual Report.

Note 10. Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

We are exposed to certain risks relating to our ongoing business operations, including the impact of changes in interest rates. The only risk currently managed by us using derivative instruments is a part of our interest rate risk. We have an interest rate cap agreement to manage our interest rate risk exposure on each of the ILPT Floating Rate Loan and the Floating Rate Loan, both with interest payable at a rate equal to SOFR plus a premium. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, we only enter into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which we or our related parties may also have other financial relationships. We do not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

As required by ASC 815, Derivatives and Hedging, we record all derivatives on the balance sheet at fair value. The following table summarizes the terms of our outstanding interest rate cap agreements designated as cash flow hedges of interest rate risk as of September 30, 2022:

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INDUSTRIAL LOGISTICS PROPERTIES TRUST 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(dollars in thousands, except per share data)

Interest Rate Derivative	Balance Sheet Line Item	Underlying Instrument	Number of Instruments	Strike Rate	Notional Amount		Fair Value at September 30, 2022
Interest Rate Cap	Other assets	Floating Rate Loan (1)	1	3.40%	$	1,400,000	$	19,485
Interest Rate Cap	Other assets	ILPT Floating Rate Loan	2	2.25%	$	1,235,000	$	48,513

(1)The Floating Rate Loan was entered into by our consolidated joint venture.

Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. For derivatives designated and qualifying as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. The earnings recognition of excluded components is presented in interest expense. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our applicable debt.

In September 2022, in conjunction with the repayment of the Bridge Loan, we sold two interest rate cap instruments with an aggregate notional amount of $1,385,158, a strike rate equal to 2.70% and an original expiration date of March 15, 2023 for $7,740. As the underlying debt instrument that these interest rate caps were intended to hedge was repaid in its entirety and the related interest expense was no longer probable to occur, these interest rate caps were no longer designated as cash flow hedges and the remaining deferred gain was reclassified from cumulative other comprehensive income as a reduction of loss on early extinguishment of debt.

	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Amount of gain recognized in cumulative other comprehensive income	$	15,047	$	24,200
Amount reclassified from cumulative other comprehensive income into interest expense	761		1,678
Amount reclassified from cumulative other comprehensive income into loss on early extinguishment of debt	(6,961)		(6,961)
Unrealized gain on derivative instrument recognized in cumulative other comprehensive income	$	8,847	$	18,917

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Note 11. Noncontrolling Interest

On February 25, 2022, we completed the acquisition of MNR. In connection with the Merger, we entered into a joint venture arrangement with an institutional investor for 95 of the acquired MNR properties, including two then committed, but not yet then completed, property acquisitions. The investor acquired a 39% noncontrolling equity interest in the joint venture for $589,411, as of the completion of this transaction, and we retained the remaining 61% equity interest in the joint venture. The joint venture assumed $323,432 aggregate principal amount of former MNR mortgage debt on certain of the properties. In July 2022, our consolidated joint venture completed one of the two committed MNR property acquisitions, and in September 2022, our consolidated joint venture terminated the agreement for the other committed MNR property acquisition. We control this joint venture and therefore account for the properties on a consolidated basis in our condensed consolidated financial statements.

We recognized a 39% noncontrolling interest in our condensed consolidated financial statements for the three and nine months ended September 30, 2022. The portion of this joint venture's net loss not attributable to us, or $38,318 and $49,360 for the three and nine months ended September 30, 2022, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income (loss). During the nine months ended September 30, 2022, this joint venture made aggregate cash distributions of $1,365 to the other joint venture investor, which is reflected as a decrease in total equity attributable to noncontrolling interest in our condensed consolidated balance sheets. No distributions were made during the three months ended September 30, 2022. See Notes 1, 2, 4, 5, 9 and 11 for further information regarding this joint venture.

An unrelated third party owns an approximate 33% tenancy in common interest in one of the properties we acquired as part of the MNR acquisition located in Somerset, New Jersey, and we own the remaining 67% tenancy in common interest in this property. The portion of this property’s net loss not attributable to us, or $29 and $42 for the three and nine months ended September 30, 2022, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income (loss).

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our condensed consolidated financial statements and accompanying notes included in this Quarterly Report on Form 10-Q and with our 2021 Annual Report.

OVERVIEW (dollars in thousands, except per share and per square foot data)

We are a real estate investment trust, or REIT, organized under Maryland law. As of September 30, 2022, our portfolio was comprised of 413 consolidated properties containing approximately 59,962,000 rentable square feet located in 39 states, including 226 buildings, leasable land parcels and easements containing approximately 16,729,000 rentable square feet located on the island of Oahu, Hawaii, and 187 properties containing approximately 43,233,000 rentable square feet located in 38 other states. As of September 30, 2022, our 413 consolidated properties include 94 properties that we own in a consolidated joint venture arrangement in which we own a 61% equity interest. As of September 30, 2022, we also owned a 22% equity interest in an unconsolidated joint venture, which owns 18 properties located in 12 states containing approximately 11,726,000 rentable square feet that were 100% leased with an average (by annualized rental revenues) remaining lease term of 5.9 years. As of September 30, 2022, our consolidated properties were approximately 99.2% leased (based on rentable square feet) to 305 different tenants with a weighted average remaining lease term (based on annualized rental revenues) of approximately 8.9 years. We define the term annualized rental revenues as used in this section as the annualized contractual rents, as of September 30, 2022, including straight line rent adjustments and excluding lease value amortization, adjusted for tenant concessions including free rent and amounts reimbursed to tenants, plus estimated recurring expense reimbursements from tenants.

Investing and Financing Activities

On February 25, 2022, we completed the acquisition of MNR. MNR’s portfolio included 124 Class A, single tenant, net leased, e-commerce focused industrial properties located in 32 states containing approximately 25,745,000 rentable square feet and two committed, but not yet then completed, property acquisitions. The aggregate value of the consideration paid in the Merger was $3,739,048, 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. The 124 MNR properties were 97.9% leased to various tenants and had a remaining weighted average (by rental revenues) lease term of eight years as of the date of the acquisition.

In connection with the closing of the Merger, we entered into the $1,385,158 Bridge Loan, secured by 109 of our properties. The Bridge Loan was scheduled to mature in February 2023 and required that interest only be paid at an annual rate of SOFR plus a premium of 1.75% under the loan agreement and a premium of 8.0% under the mezzanine loan agreement. We also entered into the $700,000 Fixed Rate Loan secured by 17 of our properties. The Fixed Rate loan matures in March 2032 and requires that interest be paid at a weighted average annual fixed rate of 4.42%.

Immediately following the closing of the Merger, we entered into a joint venture arrangement with an institutional investor for 95 of the acquired MNR properties, including two then committed, but not yet then completed, property acquisitions. The investor acquired a 39% noncontrolling equity interest in the joint venture from us for $589,411, as of the completion of this transaction, 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 on certain of the properties and entered into the $1,400,000 Floating Rate Loan secured by 82 properties. 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 of SOFR plus a premium of 2.77%. During the nine months ended September 30, 2022, this joint venture made aggregate cash distributions of $1,365 to the other joint venture investor.

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 $38,053, including acquisition related costs of $53. This property is 100% leased to a single tenant with a remaining lease term of approximately 14.9 years at the time of acquisition. This property was one of two committed MNR property acquisitions at the time of the Merger and was acquired directly by our consolidated joint venture. In September 2022, our consolidated joint venture terminated the agreement for the other committed MNR property acquisition.

In September 2022, we entered into the $1,235,000 ILPT Floating Rate Loan, secured by 104 of our properties. The interest only ILPT Floating Rate Loan matures in October 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR, which is capped at an annual rate of 2.25% for the initial term of the ILPT Floating Rate Loan, plus a weighted average premium of 3.93%. The Bridge Loan was repaid in full on September 22, 2022 with cash on hand and proceeds from the ILPT Floating Rate Loan.

24

As of September 30, 2022, we also own an interest in an unconsolidated joint venture that owns 18 properties. We account for the unconsolidated joint venture under the equity method of accounting under the fair value option. During the three and nine months ended September 30, 2022, we recorded the change in the fair value of our investment in the unconsolidated joint venture of $3,297 and $6,634, respectively, in our condensed consolidated statements of comprehensive income (loss). In addition, during the three and nine months ended September 30, 2022, the unconsolidated joint venture made aggregate cash distributions of $1,320 and $3,962, respectively, to us. In October 2022, the unconsolidated joint venture made a cash distribution to us of $20,900, including amounts related to a debt financing.

For further information regarding our investing and financing activities, see Notes 2, 4, 5, 9 10, and 11 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 and “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Our Investing and Financing Liquidity and Resources” of this Quarterly Report on Form 10-Q.

In response to inflationary pressures, the U.S. Federal Reserve increased the federal funds rate by 300 basis points over five consecutive meetings from March 2022 to September 2022 and has signaled that further large increases are likely to occur. These inflationary pressures and rising interest rates in the United States and globally have given rise to increasing concerns that the U.S. economy is now in, or may soon enter, an economic recession and they have caused disruptions in the financial markets. An economic recession, or continued or intensified disruptions in the financial markets could adversely affect our financial condition and that of our tenants, could adversely impact the ability of our tenants to renew our leases or pay rent to us, may restrict our access to, and would likely increase our cost of capital, and may cause the values of our properties and of our securities to decline.

Property Operations

Occupancy data for our properties as of September 30, 2022 and 2021 is as follows (square feet in thousands):

	All Properties				Comparable Properties (1)
	As of September 30,				As of September 30,
	2022		2021		2022		2021
Total properties	413		294		286		286
Total rentable square feet (2)	59,962		36,488		33,634		33,631
Percent leased (3)	99.2	%	99.0	%	99.3	%	98.9	%

(1)Consists of properties that we owned continuously since January 1, 2021 and excludes 18 properties owned by an unconsolidated joint venture in which we own a 22% equity interest.

(2)Subject to modest adjustments when space is remeasured or reconfigured for new tenants and when land leases are converted to building leases.

(3)Percent leased includes (i) space being fitted out for occupancy pursuant to existing leases as of September 30, 2022, if any, and (ii) space which is leased but is not occupied or is being offered for sublease by tenants, if any.

The average effective rental rates per square foot, as defined below, for our properties for the three and nine months ended September 30, 2022 and 2021 are as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Average effective rental rates per square foot leased: (1)
All properties	$	6.96	$	6.22	$	6.96	$	6.28
Comparable properties (2)	$	6.32	$	6.26	$	6.46	$	6.31

(1)Average effective rental rates per square foot leased represents annualized rental income during the period specified divided by the average rentable square feet leased during the period specified.

(2)Consists of properties that we owned continuously since July 1, 2021 and January 1, 2021, respectively, and excludes properties owned by an unconsolidated joint venture.

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During the three and nine months ended September 30, 2022, we entered into new and renewal leases as summarized in the following tables:

	Three Months Ended September 30, 2022
	New Leases			Renewals			Totals
Square feet leased during the period (in thousands)	543			1,142			1,685
Weighted average rental rate change (by rentable square feet)	280.7		%	26.1		%	77.5		%
Weighted average lease term by square feet (years) (2)	7.4			3.7			4.9
Total leasing costs and concession commitments (1)	$	3,570		$	992		$	4,562
Total leasing costs and concession commitments per square foot (1)	$	6.58		$	0.87		$	2.71
Total leasing costs and concession commitments per square foot per year (1)	$	0.89		$	0.24		$	0.55

	Nine months ended September 30, 2022
	New Leases			Renewals			Totals
Square feet leased during the period (in thousands)	3,476			2,772			6,248
Weighted average rental rate change (by rentable square feet)	122.0		%	24.6		%	56.5		%
Weighted average lease term by square feet (years) (2)	23.8			6.4			16.1
Total leasing costs and concession commitments (1)	$	8,951		$	6,354		$	15,305
Total leasing costs and concession commitments per square foot (1)	$	2.57		$	2.29		$	2.45
Total leasing costs and concession commitments per square foot per year (1)	$	0.11		$	0.36		$	0.15

(1)Includes commitments made for leasing expenditures and concessions, such as leasing commissions, tenant improvements or other tenant inducements.

(2)The weighted average (by square feet) lease term for leases that were in effect for the same land area or building area during the prior lease term was 4.9 years for the three months ended September 30, 2022 and 16.1 years for the nine months ended September 30, 2022.

During the nine months ended September 30, 2022, we completed rent resets for approximately 194,000 square feet of land, respectively, at our Hawaii Properties at rental rates that were approximately 36.8% higher than the prior rental rates.

As shown in the table below, approximately 1.0% of our total leased square feet and 1.0% of our total annualized rental revenues as of September 30, 2022 are included in leases scheduled to expire by December 31, 2022.

As of September 30, 2022, our lease expirations by year are as follows (dollars and square feet in thousands):

									% of Total		Cumulative
			% of Total		Cumulative %		Annualized		Annualized		% of Total
		Leased	Leased		of Total Leased		Rental		Rental		Annualized
	Number of	Square Feet	Square Feet		Square Feet		Revenues		Revenues		Rental Revenues
Period / Year	Tenants	Expiring (1)	Expiring (1)		Expiring (1)		Expiring		Expiring		Expiring
10/1/2022-12/31/2022	12	593	1.0	%	1.0	%	$	4,210	1.0	%	1.0	%
2023	36	3,146	5.3	%	6.3	%	22,287		5.3	%	6.3	%
2024	49	4,855	8.2	%	14.5	%	32,699		7.8	%	14.1	%
2025	32	4,794	8.1	%	22.6	%	27,683		6.6	%	20.7	%
2026	24	3,524	5.9	%	28.5	%	22,708		5.4	%	26.1	%
2027	37	8,795	14.8	%	43.3	%	52,046		12.4	%	38.5	%
2028	27	4,876	8.2	%	51.5	%	34,085		8.1	%	46.6	%
2029	17	3,428	5.8	%	57.3	%	16,644		4.0	%	50.6	%
2030	14	2,155	3.6	%	60.9	%	18,303		4.4	%	55.0	%
2031	16	3,265	5.5	%	66.4	%	25,606		6.1	%	61.1	%
Thereafter	134	20,038	33.6	%	100.0	%	163,710		38.9	%	100.0	%
Total	398	59,469	100.0	%			$	419,981	100.0	%
Weighted average remaining lease term (in years):		8.6					8.9

(1)Leased square feet is pursuant to existing leases as of September 30, 2022 and includes (i) space being fitted out for occupancy, if any, and (ii) space which is leased but is not occupied or is being offered for sublease by tenants, if any.

26

We generally receive rents from our tenants monthly and in advance. As of September 30, 2022, tenants representing 1% or more of our total annualized rental revenues were as follows (square feet in thousands):

							% of Total
			No. of	Leased	% of Total		Annualized Rental
Tenant		States	Properties	Sq. Ft. (1)	Leased Sq. Ft. (1)		Revenues
1	Federal Express Corporation/ FedEx Ground Package System, Inc.	Various (34 states)	84	13,109	22.0	%	29.6	%
2	Amazon.com Services, Inc./ Amazon.com Services LLC	AL, IN, OK, SC, TN, VA	8	4,539	7.6	%	6.8	%
3	Home Depot U.S.A., Inc.	GA, HI, IL	4	3,365	5.7	%	4.4	%
4	UPS Supply Chain Solutions, Inc.	NH, NY	3	794	1.3	%	1.6	%
5	Restoration Hardware, Inc.	MD	1	1,195	2.0	%	1.5	%
6	Servco Pacific, Inc.	HI	7	629	1.1	%	1.4	%
7	American Tire Distributors, Inc.	CO, LA, NE, NY, OH	5	722	1.2	%	1.3	%
8	TD SYNNEX Corporation	OH	2	939	1.6	%	1.1	%
	Total		114	25,292	42.5	%	47.7	%

(1)Leased square feet is pursuant to existing leases as of September 30, 2022 and includes (i) space being fitted out for occupancy, if any, and (ii) space which is leased but is not occupied or is being offered for sublease by tenants, if any.

Tenant Concentration. We have a concentration of properties leased to tenants, including their applicable subsidiaries that leased over 5% of our total rentable square footage as follows:

				Weighted
				Average
	% of		Number	Remaining	Rental Income								Rental Income
	Rentable		of	Lease Term	Three Months Ended								Nine Months Ended
Tenant	Square Feet		States	(in years)	9/30/2022				9/30/2021				9/30/2022				9/30/2021
Federal Express Corporation/ FedEx Ground Package System, Inc.	22.0	%	34	7.3	$	31,697	30.7	%	$	2,706	4.9	%	$	76,227	27.0	%	$	8,152	5.0	%
Amazon.com Services, Inc./ Amazon.com Services LLC	7.7	%	6	6.2	7,244		7.0	%	5,231		9.5	%	20,095		7.1	%	16,117		9.9	%
Home Depot U.S.A., Inc.	5.7	%	3	26.3	3,346		3.2	%	1,322		2.4	%	10,169		3.6	%	3,948		2.4	%
Total	35.4	%	34	13.3	$	42,287	40.9	%	$	54,982	16.8	%	$	106,491	37.7	%	$	163,378	17.3	%

Mainland Properties. As of September 30, 2022, our Mainland Properties represented approximately 71.5% of our annualized rental revenues. We generally will seek to renew or extend the terms of leases at our Mainland Properties as their expirations approach. Due to the capital that many of the tenants in our Mainland Properties have invested in these properties and because many of these properties appear to be of strategic importance to the tenants’ businesses, we believe that it is likely that these tenants will renew or extend their leases prior to their expirations. If we are unable to extend or renew our leases, it may be time consuming and expensive to relet some of these properties and the terms of any leases we may enter may be less favorable to us than the terms of our existing leases for those properties.

Hawaii Properties. As of September 30, 2022, our Hawaii Properties represented approximately 28.5% of our annualized rental revenues. As of September 30, 2022, certain of our Hawaii Properties are lands leased for rents that periodically reset based on fair market values, generally every ten years. Revenues from our Hawaii Properties have generally increased under our or our predecessors’ ownership as rents under the leases for those properties have been reset or renewed. Lease renewals, lease extensions, new leases and rental rates for our Hawaii Properties in the future will depend on prevailing market conditions when these lease renewals, lease extensions, new leases and rental rates are set. As rent reset dates or lease expirations approach at our Hawaii Properties, we generally negotiate with existing or new tenants for new lease terms. If we are unable to reach an agreement with a tenant on a rent reset, our Hawaii Properties’ leases typically provide that rent is reset based on an appraisal process. Despite our and our predecessors’ prior experience with rent resets, lease extensions and new leases in Hawaii, our ability to increase rents when rents reset, leases are extended, or leases expire depends upon market conditions which are beyond our control. Accordingly, we cannot be sure that the historical increases achieved at our Hawaii Properties will continue in the future.

27

The following chart shows the annualized rental revenues as of September 30, 2022 scheduled to reset at our Hawaii Properties:

Scheduled Rent Resets at Hawaii Properties

(dollars in thousands) 

	Annualized
	Rental Revenues as of
	September 30, 2022
	Scheduled to Reset
10/1/2022-12/31/2022	$	—
2023	2,114
2024	1,273
2025	831
2026	1,307
2027 and thereafter	17,596
Total	$	23,121

As of September 30, 2022, $20,740, or 4.9%, of our annualized rental revenues are included in leases scheduled to expire through September 30, 2023 and 0.8% of our rentable square feet are currently vacant. Rental rates for which available space may be leased in the future will depend on prevailing market conditions when lease extensions, lease renewals or new leases are negotiated. Whenever we extend, renew or enter new leases for our properties, we intend to seek rents that are equal to or higher than our historical rents for the same properties; however, our ability to maintain or increase the rents for our current properties will depend in large part upon market conditions, which are beyond our control.

Tenant Review Process. Our manager, RMR, employs a tenant review process for us. RMR assesses tenants on an individual basis based on various applicable credit criteria. In general, depending on facts and circumstances, RMR evaluates the creditworthiness of a tenant based on information that is provided by the tenant and, in some cases, information that is publicly available or obtained from third party sources. RMR also may use a third party service to monitor the credit ratings of debt securities of our existing tenants whose debt securities are rated by a nationally recognized credit rating agency.

28

RESULTS OF OPERATIONS

Three Months Ended September 30, 2022, Compared to Three Months Ended September 30, 2021 (dollars and share amounts in thousands, except per share data)

	Comparable Properties Results (1)							Non-Comparable Properties Results (2)						Consolidated Results
	Three Months Ended September 30,							Three Months Ended September 30,						Three Months Ended September 30,
					$		%					$						$		%
	2022		2021		Change		Change	2022		2021		Change		2022		2021		Change		Change
Rental income	$	53,357	$	52,590	$	767	1.5%	$	49,858	$	2,391	$	47,467	$	103,215	$	54,981	$	48,234	87.7%
Operating expenses:
Real estate taxes	7,713		7,307		406		5.6%	6,036		310		5,726		13,749		7,617		6,132		80.5%
Other operating     expenses	4,630		4,160		470		11.3%	3,823		257		3,566		8,453		4,417		4,036		91.4%
Total operating     expenses	12,343		11,467		876		7.6%	9,859		567		9,292		22,202		12,034		10,168		84.5%
Net operating income (3)	$	41,014	$	41,123	$	(109)	(0.3%)	$	39,999	$	1,824	$	38,175	81,013		42,947		38,066		88.6%
Other expenses:
Depreciation and amortization														48,519		12,694		35,825		N/M
Acquisition and other transaction related costs														586		—		586		—%
General and administrative														9,110		4,728		4,382		92.7%
Total other expenses														58,215		17,422		40,793		N/M
Interest and other income														1,068		—		1,068		—%
Interest expense														(89,739)		(9,084)		(80,655)		N/M
Gain on sale of real estate														—		940		(940)		(100.0%)
Loss on early extinguishment of debt														(21,370)		—		(21,370)		—
(Loss) income before income tax expense and equity in earnings of unconsolidated joint venture														(87,243)		17,381		(104,624)		N/M
Income tax expense														(28)		(72)		44		(61.1%)
Equity in earnings of unconsolidated joint venture														3,297		998		2,299		230.4%
Net (loss) income														(83,974)		18,307		(102,281)		N/M
Net loss attributable to noncontrolling interest														38,347		—		38,347		—%
Net (loss) income attributable to common shareholders														$	(45,627)	$	18,307	$	(63,934)	N/M
Weighted average common shares outstanding - basic														65,250		65,178		72		0.1%
Weighted average common shares outstanding - diluted														65,250		65,230		20		—%
Per common share data (basic and diluted):
Net (loss) income attributable to common shareholders														$	(0.70)	$	0.28	$	(0.98)	N/M

N/M - Not Meaningful

(1)Consists of properties that we owned continuously since July 1, 2021 and excludes properties owned by an unconsolidated joint venture.

(2)Consists of 131 properties including (i) properties we acquired during the period from July 1, 2021 to September 30, 2022, including 94 properties we contributed to a consolidated joint venture in which we own a 61% equity interest, and (ii) properties we sold in December 2021 to our 18 property unconsolidated joint venture in which we own a 22% equity interest.

(3)See our definition of NOI and our reconciliation of net income (loss) to NOI below under the heading “Non-GAAP Financial Measures.”

References to changes in the income and expense categories below relate to the comparison of results for the three months ended September 30, 2022 compared to the three months ended September 30, 2021.

Rental income. The increase in rental income is primarily a result of our acquisition and disposition activities, which includes our acquisition of MNR. Rental income increased at certain of our comparable properties primarily due to increases from leasing activity and rent resets. Rental income includes non-cash straight line rent adjustments of $3,794 and $1,678 for the 2022 and 2021 periods, respectively, and net amortization of acquired real estate leases and assumed real estate lease obligations of $250 and $174 for the 2022 and 2021 periods, respectively.

Real estate taxes. The increase in real estate taxes primarily reflects our acquisition and disposition activities. Real estate taxes at our comparable properties increased primarily due to higher assessed values at certain of our properties.

29

Other operating expenses. Other operating expenses primarily include repairs and maintenance, utilities, insurance, snow removal, legal and property management fees. The increase in other operating expenses is primarily due to our acquisition and disposition activities. Other operating expenses increased primarily due to increases in repairs and maintenance and insurance expenses at certain of our comparable properties.

Depreciation and amortization. The increase in depreciation and amortization primarily reflects our acquisition and disposition activities.

Acquisition and other transaction related costs. Acquisition and other transaction related costs primarily consists of costs related to potential acquisition and disposition activities that were not completed.

General and administrative. General and administrative expenses primarily include fees paid under our business management agreement with RMR, legal fees, audit fees, Trustee fees and expenses and equity compensation expense. The increase in general and administrative expenses is primarily due to an increase in business management fees as a result of our net acquisition activity.

Interest and other income. The increase in interest and other income is primarily due to higher cash balances during the 2022 period as compared to the 2021 period and distributions we received on certain equity securities we held during the 2022 period.

Interest expense. The increase in interest expense is due to higher average interest rates and higher average outstanding debt balances in the 2022 period as compared to the 2021 period, primarily related to our acquisition of MNR.

Gain on sale of real estate. Gain on sale of real estate represents the net gain from the sale of a portion of a land parcel as a result of an eminent domain taking in the 2021 period.

Loss on early extinguishment of debt. Loss on early extinguishment of debt primarily relates to the write off of unamortized costs related to the repayment of the Bridge Loan in September 2022.

Income tax expense. Income tax expense primarily reflects state income taxes payable in certain jurisdictions.

Equity in earnings of unconsolidated joint venture. Equity in earnings of unconsolidated joint venture is the change in the fair value of our investment in the unconsolidated joint venture.

Net (loss) income. The net loss for the 2022 period compared to the net income for the 2021 period reflects the changes noted above.

Net loss attributable to noncontrolling interest. Net loss attributable to noncontrolling interest represents the net loss attributable to the 39% equity interest in our consolidated joint venture that we did not own during the 2022 period.

Weighted average common shares outstanding - basic and diluted. The increase in weighted average common shares outstanding primarily reflects common shares awarded under our equity compensation plan since July 1, 2021.

Net (loss) income attributable to common shareholders per common share - basic and diluted. The net loss attributable to common shareholders per common share for the 2022 period compared to the net income attributable to common shareholders per share for the 2021 period reflects the changes to net income attributable to common shareholders and weighted average common shares noted above.

30

Nine Months Ended September 30, 2022, Compared to Nine Months Ended September 30, 2021 (dollars and share amounts in thousands, except per share data)

	Comparable Properties Results (1)							Non-Comparable Properties Results (2)						Consolidated Results
	Nine Months Ended September 30,							Nine Months Ended September 30,						Nine Months Ended September 30,
					$		%					$						$		%
	2022		2021		Change		Change	2022		2021		Change		2022		2021		Change		Change
Rental income	$	161,921	$	156,971	$	4,950	3.2%	$	119,891	$	6,407	$	113,484	$	281,812	$	163,378	$	118,434	72.5%
Operating expenses:
Real estate taxes	22,278		21,616		662		3.1%	14,182		737		13,445		36,460		22,353		14,107		63.1%
Other operating     expenses	13,652		13,055		597		4.6%	8,626		679		7,947		22,278		13,734		8,544		62.2%
Total operating     expenses	35,930		34,671		1,259		3.6%	22,808		1,416		21,392		58,738		36,087		22,651		62.8%
Net operating income (3)	$	125,991	$	122,300	$	3,691	3.0%	$	97,083	$	4,991	$	92,092	$	223,074	$	127,291	$	95,783	75.2%
Other expenses:
Depreciation and amortization														114,096		37,202		76,894		206.7%
Acquisition and other transaction related costs														586		646		(60)		(9.3%)
General and administrative														24,896		12,718		12,178		95.8%
Loss on impairment of real estate														100,747		—		100,747		—%
Total other expenses														240,325		50,566		189,759		N/M
Interest and other income														1,900		—		1,900		—%
Interest expense														(208,286)		(26,468)		(181,818)		N/M
(Loss) gain on sale of real estate														(10)		940		(950)		(101.1%)
Loss on equity securities														(5,758)		—		(5,758)		—%
Loss on early extinguishment of debt														(22,198)		—		(22,198)		—%
(Loss) income before income tax expense and equity in earnings of unconsolidated joint venture														(251,603)		51,197		(302,800)		N/M
Income tax expense														(113)		(177)		64		(36.2%)
Equity in earnings of unconsolidated joint venture														6,634		5,455		1,179		21.6%
Net (loss) income														(245,082)		56,475		(200,810)		N/M
Net loss attributable to noncontrolling interest														49,402		—		49,402		—%
Net (loss) income attributable to common shareholders														$	(195,680)	$	56,475	$	(252,155)	N/M
Weighted average common shares outstanding - basic														65,228		65,154		74		0.1%
Weighted average common shares outstanding - diluted														65,228		65,205		23		—%
Per common share data (basic and diluted):
Net (loss) income attributable to common shareholders														$	(3.00)	0.86		(3.86)		N/M

N/M - Not Meaningful

(1)Consists of properties that we owned continuously since January 1, 2021 and excludes properties owned by an unconsolidated joint venture.

(2)Consists of 133 properties including (i) properties we acquired during the period from January 1, 2021 to September 30, 2022, including 94 properties we contributed to a consolidated joint venture in which we own a 61% equity interest, and (ii) properties we sold in December 2021 to our 18 property unconsolidated joint venture in which we own a 22% equity interest.

(3)See our definition of NOI and our reconciliation of net income (loss) to NOI below under the heading “Non-GAAP Financial Measures.”

References to changes in the income and expense categories below relate to the comparison of results for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021.

Rental income. The increase in rental income is primarily a result of our acquisition and disposition activities, which includes our acquisition of MNR. Rental income increased at certain of our comparable properties primarily due to increases from leasing activity and rent resets and a $3,428 write off of capitalized below market lease value related to a terminated tenant. Rental income includes non-cash straight line rent adjustments of $8,170 and $5,673 for the 2022 and 2021 periods, respectively, and net amortization of acquired real estate leases and assumed real estate lease obligations of $4,265 and $525 for the 2022 and 2021 periods, respectively.

Real estate taxes. The increase in real estate taxes primarily reflects our acquisition and disposition activities.

31

Other operating expenses. The increase in other operating expenses is primarily due to our acquisition and disposition activities. Other operating expenses increased primarily due to increases in repairs and maintenance, snow removal and insurance expenses at certain of our comparable properties.

Depreciation and amortization. The increase in depreciation and amortization primarily reflects our acquisition and disposition activities.

Acquisition and other transaction related costs. Acquisition and other transaction related costs primarily consists of costs related to potential acquisition and disposition activities that were not completed.

General and administrative. The increase in general and administrative expenses is primarily due to an increase in business management fees as a result of our net acquisition activity.

Loss on impairment of real estate. We recorded a $100,747 loss on impairment of real estate in the 2022 period to reduce the carrying value of 25 properties we reclassified from held for sale to held and used in June 2022 to their estimated fair values.

Interest and other income. The increase in interest and other income is primarily due to higher cash balances during the 2022 period as compared to the 2021 period and distributions we received on certain equity securities we held during the 2022 period.

Interest expense. The increase in interest expense is due to higher average interest rates and higher average outstanding debt balances in the 2022 period as compared to the 2021 period, primarily related to our acquisition of MNR.

Loss (gain) on sale of real estate. Loss (gain) on sale of real estate in the 2022 period includes an adjustment to the gain from the sale of six properties to our joint venture during December 2021 and a net gain from the sale of a portion of a land parcel as a result of an eminent domain taking in the 2021 period.

Loss on equity securities. Loss on equity securities represents the realized loss of $5,758 on the sale of certain equity securities we acquired as part of our acquisition of MNR.

Loss on early extinguishment of debt. Loss on early extinguishment of debt primarily relates to our write off of unamortized costs related to the repayment of the Bridge Loan in September 2022 and terminating our unsecured revolving credit facility in February 2022.

Income tax expense. Income tax expense primarily reflects state income taxes payable in certain jurisdictions.

Equity in earnings of unconsolidated joint venture. Equity in earnings of unconsolidated joint venture is the change in the fair value of our investment in the unconsolidated joint venture.

Net (loss) income. The net loss for the 2022 period compared to the net income for the 2021 period reflects the changes noted above.

Net loss attributable to noncontrolling interest. Net loss attributable to noncontrolling interest represents the net loss attributable to the 39% equity interest in our consolidated joint venture that we did not own during the 2022 period.

Weighted average common shares outstanding - basic and diluted. The increase in weighted average common shares outstanding primarily reflects common shares awarded under our equity compensation plan since January 1, 2021.

Net (loss) income attributable to common shareholders per common share - basic and diluted. The net loss attributable to common shareholders per common share for the 2022 period compared to the net income attributable to common shareholders per share for the 2021 period reflects the changes to net income attributable to common shareholders and weighted average common shares noted above.

32

Non-GAAP Financial Measures

We present certain “non-GAAP financial measures” within the meaning of the applicable rules of the Securities and Exchange Commission, or SEC, including net operating income, or NOI, funds from operations, or FFO, attributable to common shareholders and normalized funds from operations, or Normalized FFO, attributable to common shareholders. These measures do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income (loss) or net income (loss) attributable to common shareholders as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income (loss) and net income (loss) attributable to common shareholders as presented in our condensed consolidated statements of comprehensive income (loss). We consider these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income (loss) and net income (loss) attributable to common shareholders. We believe these measures provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation and amortization expense, they may facilitate a comparison of our operating performance between periods and with other REITs and, in the case of NOI, reflecting only those income and expense items that are generated and incurred at the property level may help both investors and management to understand the operations of our properties.

Net Operating Income

We calculate NOI as shown below. We define NOI as income from our rental of real estate less our property operating expenses. The calculation of NOI excludes certain components of net income (loss) in order to provide results that are more closely related to our property level results of operations. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that we record as depreciation and amortization expense. We use NOI to evaluate individual and company-wide property level performance. Other real estate companies and REITs may calculate NOI differently than we do.

The following table presents the reconciliation of net (loss) income to NOI for the three and nine months ended September 30, 2022 and 2021 (dollars in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Reconciliation of Net (Loss) Income to NOI:
Net (loss) income	$	(83,974)	$	18,307	$	(245,082)	$	56,475
Equity in earnings of unconsolidated joint venture	(3,297)		(998)		(6,634)		(5,455)
Income tax expense	28		72		113		177
(Loss) income before income tax expense and equity in earnings of unconsolidated joint venture	(87,243)		17,381		(251,603)		51,197
Loss on early extinguishment of debt	21,370		—		22,198		—
Interest and other income	(1,068)		—		(1,900)		—
Interest expense	89,739		9,084		208,286		26,468
Loss (gain) on sale of real estate	—		(940)		10		(940)
Loss on equity securities	—		—		5,758		—
General and administrative	9,110		4,728		24,896		12,718
Acquisition and other transaction related costs	586		—		586		646
Loss on impairment of real estate	—		—		100,747		—
Depreciation and amortization	48,519		12,694		114,096		37,202
NOI	$	81,013	$	42,947	$	223,074	$	127,291
NOI:
Hawaii Properties	$	20,049	$	20,628	$	64,087	$	61,312
Mainland Properties	60,964		22,319		158,987		65,979
NOI	$	81,013	$	42,947	$	223,074	$	127,291

33

Funds From Operations and Normalized Funds From Operations Attributable to Common Shareholders

We calculate FFO attributable to common shareholders and Normalized FFO attributable to common shareholders as shown below. FFO attributable to common shareholders is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is net income (loss) attributable to common shareholders, calculated in accordance with GAAP, excluding loss on impairment of real estate, any gain or loss on sale of real estate, equity in earnings of unconsolidated joint venture and any realized and unrealized gains or losses on equity securities, plus real estate depreciation and amortization of consolidated properties and our proportionate share of FFO of unconsolidated joint venture properties and minus FFO adjustments attributable to noncontrolling interest, as well as certain other adjustments currently not applicable to us. In calculating Normalized FFO attributable to common shareholders, we adjust for the items shown below including similar adjustments for the unconsolidated joint venture, if any. FFO attributable to common shareholders and Normalized FFO attributable to common shareholders are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders. Other factors include, but are not limited to, requirements to maintain our qualification for taxation as a REIT, limitations in the agreements governing our debt, the availability to us of debt and equity capital, our distribution rate as a percentage of the trading price of our common shares, or dividend yield, and our dividend yield compared to the dividend yields of other industrial REITs, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations. Other real estate companies and REITs may calculate FFO attributable to common shareholders and Normalized FFO attributable to common shareholders differently than we do.

The following table presents our calculation of FFO attributable to common shareholders and Normalized FFO attributable to common shareholders and reconciliations of net income (loss) attributable to common shareholders to FFO attributable to common shareholders and Normalized FFO attributable to common shareholders for the three and nine months ended September 30, 2022 and 2021 (dollars in thousands, except per share data):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Reconciliation of Net (Loss) Income Attributable to Common Shareholders to FFO Attributable to Common Shareholders and Normalized FFO Attributable to Common Shareholders:
Net (loss) income attributable to common shareholders	$	(45,627)	$	18,307	$	(195,680)	$	56,475
Depreciation and amortization	48,519		12,694		114,096		37,202
Equity in earnings of unconsolidated joint venture	(3,297)		(998)		(6,634)		(5,455)
Loss on equity securities	—		—		5,758		—
Share of FFO from unconsolidated joint venture	1,678		1,215		5,115		3,621
Loss on impairment of real estate	—		—		100,747		—
(Gain) loss on sale of real estate	—		(940)		10		(940)
FFO adjustments attributable to noncontrolling interest	(11,407)		—		(27,445)		—
FFO attributable to common shareholders	(10,134)		30,278		(4,033)		90,903
Loss on early extinguishment of debt	21,370		—		22,198		—
Acquisition and other transaction related costs (1)	32,016		—		80,992		646
Normalized FFO adjustments attributable to noncontrolling interest	(28,379)		—		(28,379)		—
Normalized FFO attributable to common shareholders	$	14,873	$	30,278	$	70,778	$	91,549
Weighted average common shares outstanding - basic	65,250		65,178		65,228		65,154
Weighted average common shares outstanding - diluted	65,250		65,230		65,228		65,205
Per common share data:
FFO attributable to common shareholders - basic	$	(0.16)	$	0.46	$	(0.06)	$	1.40
FFO attributable to common shareholders - diluted	$	(0.16)	$	0.46	$	(0.06)	$	1.39
Normalized FFO attributable to common shareholders - basic	$	0.23	$	0.46	$	1.09	$	1.41
Normalized FFO attributable to common shareholders - diluted	$	0.23	$	0.46	$	1.09	$	1.40

(1)Amounts for the three and nine months ended September 30, 2022 primarily include certain debt issuance costs recorded as interest expense related to the Bridge Loan and other transaction related costs expensed under GAAP.

34

LIQUIDITY AND CAPITAL RESOURCES

Our Operating Liquidity and Resources (dollars in thousands) 

Our principal sources of funds to meet our operating and capital expenses, pay debt service obligations and make distributions to our shareholders are rents from tenants at our properties. As of September 30, 2022, investment grade rated tenants, subsidiaries of investment grade rated parent entities or our Hawaii land leases represented 78.1% of our annualized rental revenues and only 4.9% of our annualized rental revenues were from leases expiring over the next 12 months. We believe that these sources of funds will be sufficient to meet our operating and capital expenses, pay debt service obligations and make distributions to our shareholders for the next 12 months and for the foreseeable future thereafter. Our future cash flows from operating activities will depend primarily upon our ability to: 

•collect rents from our tenants when due;

•maintain the occupancy of, and maintain or increase the rental rates at, our properties;

•control our operating cost increases;

•purchase additional properties that produce cash flows in excess of our costs of acquisition capital and property operating expenses; and

•develop properties to produce cash flows in excess of our costs of capital.

The following is a summary of our sources and uses of cash flows for the periods presented, as reflected in our condensed consolidated statements of cash flows (dollars in thousands):

	Nine Months Ended September 30,
	2022		2021
Cash and cash equivalents and restricted cash at beginning of period	$	29,397	$	22,834
Net cash provided by (used in):
Operating activities	81,907		88,920
Investing activities	(3,457,034)		(135,093)
Financing activities	3,472,399		67,432
Cash and cash equivalents and restricted cash at end of period	$	126,669	$	44,093

The decrease in net cash provided by operating activities for the nine months ended September 30, 2022 compared to the 2021 period is primarily due to changes in our working capital. The increase in net cash used in investing activities for the nine months ended September 30, 2022 compared to the 2021 period is primarily due to our acquisition of MNR during the 2022 period as compared to our acquisition of four properties and one parcel of developable land during the 2021 period. The increase in net cash provided by financing activities for the nine months ended September 30, 2022 compared to the 2021 period is primarily due to the net borrowings and sale of joint venture equity interests used to finance our acquisition of MNR in the 2022 period.

Our Investing and Financing Liquidity and Resources (dollars in thousands, except per share and per square foot data)

Our future acquisition or development activity cannot be accurately projected because such activity depends upon available opportunities that come to our attention and upon our ability to successfully acquire, develop and operate properties, financing available to us, our cost of capital, other commitments we have made and alternative uses for the amounts that would be required for the acquisition or development, the extent of our leverage, and the expected impact of the acquisition or development on our debt covenants and certain other financial metrics. We generally do not intend to purchase “turn around” properties, or properties that do not generate positive cash flows, but we may conduct construction or redevelopment activities on our properties.

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As of September 30, 2022, we had cash and cash equivalents of $26,381. To maintain our qualification for taxation as a REIT under the Internal Revenue Code of 1986, as amended, or the IRC, we generally are required to distribute at least 90% of our REIT taxable income annually, subject to specified adjustments and excluding any net capital gain. This distribution requirement limits our ability to retain earnings and thereby provide capital for our operations or acquisitions. We may use our cash and cash equivalents on hand, the cash flow from our operations, net proceeds from any sales of assets and net proceeds of offerings of equity or debt securities to fund our distributions to our shareholders. On July 14, 2022, we announced that we reduced our quarterly cash distribution rate on our common shares to $0.01 per share and we expect our distributions to our common shareholders in 2022 will be, together with distributions we paid earlier in 2022, at least equal to the minimum amounts required for us to remain a REIT for federal income tax purposes.

On February 25, 2022, subsidiaries of our consolidated joint venture entered into a loan agreement with the Floating Rate Lenders, pursuant to which this joint venture obtained the Floating Rate Loan. Also on February 25, 2022, our consolidated joint venture entered into a guaranty in favor of the Floating Rate Lenders, pursuant to which this joint venture guaranteed certain limited recourse obligations of its subsidiaries with respect to 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 of SOFR plus a premium of 2.25%. Effective in March 2022, the Floating Rate Lenders exercised their option to increase the premium in connection with the securitization of the Floating Rate Loan, resulting in an increase of 51.5 basis points in the premium. We also purchased an interest rate cap through March 2024 with a SOFR strike rate equal to 3.40%. As of September 30, 2022, the weighted average annual interest rate payable under the Floating Rate Loan was 5.62% and the weighted average interest rate for borrowings under the Floating Rate Loan was 4.94% and 4.23% for the three months ended September 30, 2022 and the period from February 25, 2022 to September 30, 2022, respectively.

Also on February 25, 2022, certain of our subsidiaries entered into a loan agreement with the Bridge Lenders, and a mezzanine loan agreement with the Bridge Mezz Lender, together pursuant to which we obtained the Bridge Loan. Also on February 25, 2022, we entered into a guaranty in favor of the Bridge Lenders and the Bridge Mezz Lender, pursuant to which we guaranteed certain limited recourse obligations of its subsidiaries with respect to the Bridge Loan. The Bridge Loan was scheduled to mature in February 2023 and required that interest only be paid at an annual rate of SOFR plus a premium of 1.75% under the loan agreement and a premium of 8.0% under the mezzanine loan agreement. We also purchased an interest rate cap with a SOFR strike rate equal to 2.70%. The Bridge Loan was repaid in full on September 22, 2022 with cash on hand and proceeds from the ILPT Floating Rate Loan. During the three and nine months ended September 30, 2022, we also recorded a $22,231 loss on early extinguishment of debt to write off unamortized costs related to the Bridge Loan and related interest rate cap. The weighted average annual interest rate for borrowings under the Bridge Loan was 5.01% and 4.24% for the period from July 1, 2022 to September 22, 2022 and the period from February 25, 2022 to September 22, 2022, respectively.

Also on February 25, 2022, certain of our subsidiaries entered into a loan agreement with the Fixed Rate Lenders, and mezzanine loan agreements with the Fixed Mezz Lenders, pursuant to which we obtained the Fixed Rate Loan. Also on February 25, 2022, we entered into a guaranty in favor of the Fixed Rate Lenders and the Fixed Mezz Lenders, pursuant to which we guaranteed certain limited recourse obligations of our subsidiaries with respect to the Fixed Rate Loan. The interest only Fixed Rate Loan matures in March 2032 and requires that interest be paid at a weighted average annual fixed rate of 4.42%.

We used the aggregate net proceeds from the Loans to partially fund the acquisition of MNR. Principal payments on the Floating Rate Loan and Fixed Rate Loan are not required prior to the end of their respective initial terms, subject to certain conditions set forth in the applicable loan agreement. Subject to the satisfaction of certain stated conditions, we have the option under the applicable loan agreement: (1) to prepay up to $280,000 of the Floating Rate Loan after March 2023, at par with no premium, and to prepay the balance of the Floating Rate Loan at any time, subject to a premium; and (2) to prepay the Fixed Rate Loan in full or part at any time, subject to a premium, and beginning in September 2031, without a premium.

On September 22, 2022, certain of our subsidiaries entered into a loan agreement with the ILPT Floating Rate Lenders, and a mezzanine loan agreement with the ILPT Floating Rate Mezz Lenders, pursuant to which we obtained ILPT Floating Rate loan, secured by 104 of our properties. The ILPT Floating Rate Loan is comprised of a $1,100,000 mortgage loan and a $135,000 mezzanine loan. Also, on September 22, 2022, we entered into a guaranty in favor of the ILPT Floating Rate Lenders and the ILPT Floating Rate Mezz Lenders, pursuant to which we guaranteed certain limited recourse obligations of our subsidiaries with respect to the ILPT Floating Rate Loan. The interest only ILPT Floating Rate Loan matures on October 9, 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR, which is capped at an annual rate of 2.25% for the initial term of the ILPT Floating Rate Loan, plus a weighted average premium of 3.93%. The weighted average interest rate payable under the ILPT Floating Rate Loan as of September 30, 2022 and for the period from September 22, 2022 to September 30, 2022 was 6.18%. For further information on our interest rate caps, see Notes 5 and 10 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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The agreements governing the Floating Rate Loan, Fixed Rate Loan and the ILPT Floating Rate Loan contain customary covenants and provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default.

In connection with the Merger, our consolidated joint venture, in which we own a 61% equity interest, assumed an aggregate $323,432 of former MNR mortgages secured by 11 properties which are owned by this joint venture. These amortizing mortgages require monthly payments of principal and interest until maturity. The value of these mortgages approximated their estimated fair value on the date of acquisition.

As of September 30, 2022, we have an aggregate principal amount of $4,295,842 of debt, including the Floating Rate Loan, Fixed Rate Loan and the ILPT Floating Rate Loan, scheduled to mature between 2022 and 2038.

Since committing to the acquisition of MNR, there have been unanticipated increases in interest rates and uncertainty in real estate market conditions. As a result, the debt financing used to acquire MNR has been more expensive than originally anticipated and it is taking longer than originally expected to complete our long term financing plan for the MNR acquisition. We planned to sell certain properties and to sell additional equity interests in our consolidated joint venture, which would reduce our ownership percentage in that joint venture and raise additional proceeds to reduce our outstanding indebtedness. The current economic conditions have negatively impacted the real estate market and we may not be able to sell properties or additional equity interests in our joint venture as expected or at all.

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 $38,053, including acquisition related costs of $53. This property is 100% leased to a single tenant with a remaining lease term of approximately 14.9 years at the time of acquisition. This property was one of two committed MNR property acquisitions at the time of the Merger and was acquired directly by our consolidated joint venture. In September 2022, our consolidated joint venture terminated the agreement for the other committed MNR property acquisition.

For further information regarding our investing and financing activities, including our acquisition of MNR, see Notes 2, 4, 5, 9, 10 and 11 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Consolidated Joint Venture

Immediately following the closing of the Merger, we entered into a joint venture arrangement with an institutional investor for 95 of the acquired MNR properties in 27 states, including two then committed, but not yet then completed, property acquisitions. The investor acquired a 39% noncontrolling equity interest in the joint venture from us for $589,411, as of the completion of this transaction, and we retained the remaining 61% equity interest in the joint venture. The joint venture assumed $323,432 aggregate principal amount of former MNR mortgage debt on certain of the properties. In July 2022, our consolidated joint venture completed one of the two committed MNR property acquisitions, and in September 2022, our consolidated joint venture terminated the agreement for the other committed MNR property acquisition. We control this joint venture and therefore account for the properties on a consolidated basis in our condensed consolidated financial statements.

We recognized a 39% noncontrolling interest in our condensed consolidated financial statements for the three and nine months ended September 30, 2022. The portion of this joint venture's net loss not attributable to us, or $38,318 and $49,360 for the three and nine months ended September 30, 2022, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income (loss). During the nine months ended September 30, 2022, this joint venture made aggregate cash distributions of $1,365 to the other joint venture investor, which is reflected as a decrease in total equity attributable to noncontrolling interest in our condensed consolidated balance sheets. No distributions were made during the three months ended September 30, 2022. We may seek to sell additional equity interests in this joint venture and use the proceeds to reduce our debt. See Notes 1, 2, 9 and 11 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information regarding this joint venture.

Unconsolidated Joint Venture

As of September 30, 2022 and December 31, 2021, we also owned a 22% interest in an unconsolidated joint venture with 18 properties in 12 states. We account for the unconsolidated joint venture under the equity method of accounting under the fair value option.

We recorded a change in the fair value of our investment in the unconsolidated joint venture of $3,297 and $998 for the three months ended September 30, 2022 and 2021, respectively, and $6,634 and $5,455 for the nine months ended September 30, 2022 and 2021, respectively, as equity in earnings of unconsolidated joint venture in our condensed consolidated

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statements of comprehensive income (loss). In addition, the unconsolidated joint venture made aggregate cash distributions to us of $1,320 and $660 during the three months ended September 30, 2022 and 2021, respectively, and $3,962 and $1,980, during the nine months ended September 30, 2022 and 2021, respectively. In October 2022, the unconsolidated joint venture made a cash distribution to us of $20,900, including amounts related to a debt financing.

For further information regarding this joint venture, see Notes 2, 5 and 11 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

We expect to use payments we may receive from the other investors in our joint ventures in connection with any additional properties we may sell to our joint ventures, equity contributions from any third party investors in our joint ventures or any future joint ventures and net proceeds from offerings of equity or debt securities to fund any future property acquisitions, development or redevelopment efforts. We may also assume mortgage notes in connection with future acquisitions. When the maturities of our debt approach or we desire to reduce our leverage or refinance debt, we intend to explore refinancing alternatives, property sales or sales of equity interests in joint ventures. Such alternatives may include incurring term debt, obtaining financing secured by mortgages on properties we own, issuing new equity or debt securities, obtaining a revolving credit facility, participating or selling equity interests in joint ventures or selling properties. We currently have an effective shelf registration statement that allows us to issue public securities on an expedited basis, but we cannot be sure that there will be purchasers for such securities. Further, any issuances of our equity securities may be dilutive to our existing shareholders. Although we cannot be sure that we will be successful in completing any particular type of financing, we believe that we will have access to financing, such as debt or equity offerings, to fund capital expenditures, future acquisitions, development, redevelopment and other activities and to pay our obligations.

The completion and the costs of any future financings will depend primarily upon our success in operating our business and upon market conditions. In particular, the feasibility and cost of any future debt financings will depend primarily on our then current credit qualities and on market conditions. We have no control over market conditions. Potential lenders in future debt transactions will evaluate our ability to fund required debt service and repay principal balances when they become due by reviewing our financial condition, results of operations, business practices and plans and our ability to maintain our earnings, to stagger our debt maturities and to balance our use of debt and equity capital so that our financial performance and leverage ratios afford us flexibility to withstand any reasonably anticipated adverse changes. We intend to conduct our business activities in a manner which will afford us reasonable access to capital for investing and financing activities.

During the nine months ended September 30, 2022, we paid quarterly cash distributions to our shareholders totaling $43,821 using existing cash balances. For more information regarding these distributions we paid in 2022, see Note 6 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

On October 13, 2022, we declared a quarterly distribution of $0.01 per common share, or approximately $656, to shareholders of record on October 24, 2022. We expect to pay this distribution to our shareholders on or about November 17, 2022 using cash balances. We reduced our quarterly dividend to enhance our liquidity until we complete our long term financing plan for the MNR acquisition and/or our leverage profile otherwise improves.

During the three and nine months ended September 30, 2022 and 2021, amounts capitalized for tenant improvements, leasing costs, building improvements and development and redevelopment activities were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2022		2021		2022		2021
Tenant improvements and leasing costs (1)	$	2,302	$	1,819	$	8,290	$	3,083
Building improvements (2)	1,292		1,625		1,778		2,417
Development, redevelopment and other activities (3)	4,980		—		12,351		104
	$	8,574	$	3,444	$	22,419	$	5,604

(1)Tenant improvements and leasing costs include capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space and leasing related costs, such as brokerage commissions and tenant inducements.

(2)Building improvements generally include expenditures to replace obsolete building components and expenditures that extend the useful life of existing assets.

(3)Development, redevelopment and other activities generally include capital expenditure projects that reposition a property or result in new sources of revenues. 

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As of September 30, 2022, we had estimated unspent leasing related obligations of $25,939.

Debt Covenants (dollars in thousands)

Our principal debt obligations at September 30, 2022 were: (1) $1,235,000 outstanding principal amount of the ILPT Floating Rate Loan secured by 104 of our properties; (2) $1,400,000 outstanding principal amount of the Floating Rate Loan secured by 82 properties owned by our consolidated joint venture; (3) $700,000 outstanding principal amount of the Fixed Rate Loan secured by 17 our properties; (4) $650,000 outstanding principal amount of a mortgage loan secured by 186 of our properties; and (5) $310,842 aggregate principal amount of mortgages secured by 11 properties owned by our consolidated joint venture in which we own a 61% equity interest. For further information regarding our indebtedness, see Note 4 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

The agreements and related documents governing the ILPT Floating Rate Loan, Floating Rate Loan, Fixed Rate Loan and the $650,000 mortgage loan contain customary covenants, provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default and, in the case of the $650,000 mortgage loan, also require us to maintain a minimum consolidated net worth of at least $250,000 and liquidity of at least $15,000. As of September 30, 2022, we believe that we were in compliance with all of the covenants and other terms under the agreements governing the ILPT Floating Rate Loan, Floating Rate Loan, Fixed Rate Loan and the $650,000 mortgage loan.

Certain of the mortgages we assumed in conjunction with our acquisition of MNR are non-recourse, subject to certain limitations, and do not contain any material financial covenants. The agreements governing the ILPT Floating Rate Loan, Floating Rate Loan, Fixed Rate Loan and the $650,000 mortgage loan contain certain exceptions to the general non-recourse provisions, including our obligation to indemnify the lenders for certain potential environmental losses.

Related Person Transactions

We have relationships and historical and continuing transactions with RMR, RMR Inc. and others related to them. For further information about these and other such relationships and related person transactions, see Notes 8 and 9 to the Notes to Condensed Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, our 2021 Annual Report, our definitive Proxy Statement for our 2022 Annual Meeting of Shareholders and our other filings with the SEC. In addition, see the section captioned “Risk Factors” of our 2021 Annual Report for a description of risks that may arise as a result of these and other related person transactions and relationships. We may engage in additional transactions with related persons, including businesses to which RMR or its subsidiaries provide management services.

Critical Accounting Estimates

The preparation of our Condensed Consolidated 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 and assessment of impairment of real estate and the related intangibles.

A discussion of our critical accounting estimates is included in our 2021 Annual Report. There have been no significant changes in our critical accounting estimates since the year ended December 31, 2021.

Item 3. Quantitative and Qualitative Disclosures About Market Risk (dollars in thousands, except per share data)

We are exposed to risks associated with market changes in interest rates. We manage our exposure to this market risk by monitoring available financing alternatives. Our strategy to manage exposure to changes in interest rates is materially unchanged since December 31, 2021. Other than as described below, we do not currently expect any significant changes in our exposure to fluctuations in interest rates or in how we manage this exposure in the near future.

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Fixed Rate Debt

At September 30, 2022, our outstanding fixed rate debt consisted of the following mortgage notes:

			Annual		Annual			Interest
	Principal		Interest		Interest			Payments
Debt	Balance (1)		Rate (1)		Expense (1)		Maturity	Due
Mortgage notes (186 properties in Hawaii)	$	650,000	4.31	%	$	28,015	2029	Monthly
Mortgage notes (17 U.S. Mainland Properties )	700,000		4.42	%	30,940		2032	Monthly
Mortgage note (2)	14,074		3.76	%	529		2028	Monthly
Mortgage note (2)	5,008		3.77	%	189		2030	Monthly
Mortgage note (2)	5,295		3.85	%	204		2030	Monthly
Mortgage note (2)	14,793		3.56	%	527		2030	Monthly
Mortgage note (2)	13,012		3.67	%	478		2031	Monthly
Mortgage note (2)	14,443		4.14	%	598		2032	Monthly
Mortgage note (2)	31,517		4.02	%	1,267		2033	Monthly
Mortgage note (2)	43,999		4.13	%	1,817		2033	Monthly
Mortgage note (2)	26,602		3.10	%	825		2035	Monthly
Mortgage note (2)	42,743		2.95	%	1,261		2036	Monthly
Mortgage note (2)	46,659		4.27	%	1,992		2037	Monthly
Mortgage note (2)	52,697		3.25	%	1,713		2038	Monthly
	$	1,660,842			$	70,354

(1)The principal balance, annual interest rate and annual interest expense are the amounts stated in the applicable contract. In accordance with GAAP, our carrying values and recorded interest expense may differ from these amounts because of market conditions at the time we assumed or issued this debt.

(2)Our consolidated joint venture, in which we have a 61% equity interest, assumed these former MNR mortgages, which are secured by 11 properties in aggregate.

Our $650,000 and $700,000 mortgage notes require interest only payments until maturity. The remaining fixed rate mortgage notes require amortizing payment of principal and interest until maturity. Because our mortgage notes require interest to be paid at a fixed rate, changes in market interest rates during the terms of these mortgage notes will not affect our interest obligations. If these mortgage notes are refinanced at an interest rate which is one percentage point higher or lower than shown above, our annual interest cost would increase or decrease by approximately $16,608.

Changes in market interest rates would affect the fair value of our fixed rate debt obligations. Increases in market interest rates decrease the fair value of our fixed rate debt, while decreases in market interest rates increase the fair value of our fixed rate debt. The U.S. Federal Reserve has recently raised interest rates several times in an effort to combat inflation and may continue to do so. Based on the balance outstanding at September 30, 2022 and discounted cash flow analyses through the maturity date, and assuming no other changes in factors that may affect the fair value of our fixed rate debt obligation, a hypothetical immediate one percentage point change in the interest rates would change the fair value of this obligation by approximately $96,452.

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Floating Rate Debt

At September 30, 2022, our outstanding floating rate debt consisted of the following:

			Annual		Annual				Interest
	Principal		Interest		Interest				Payments
Debt	Balance (1)		Rate (1)		Expense (1)		Maturity		Due
ILPT Floating Rate Loan	$	1,235,000	6.18	%	$	76,323	2024	(2)	Monthly
Floating Rate Loan	1,400,000		5.62	%	78,680		2024	(3)	Monthly
	$	2,635,000			$	155,003

(1)The principal balance, annual interest rate and annual interest expense are the amounts stated in the applicable contract, as adjusted by our interest rate caps as applicable. In accordance with GAAP, our carrying values and recorded interest expense may differ from these amounts because of market conditions at the time we assumed or issued this debt.

(2)The ILPT Floating Rate Loan matures in October 2024, subject to three, one year extension options.

(3)The Floating Rate Loan matures in March 2024, subject to three, one year extension options.

At September 30, 2022, our aggregate floating rate debt was $2,635,000, consisting of the $1,400,000 outstanding principal amount of the Floating Rate Loan secured by 82 properties owned by our consolidated joint venture and the $1,235,000 outstanding principal amount of the ILPT Floating Rate Loan. The ILPT Floating Rate Loan matures on October 9, 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 3.93%. The Floating Rate Loan matures on March 9, 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.77%. We are vulnerable to changes in the U.S. dollar based short term rates, specifically SOFR. In conjunction with these borrowings, to hedge our exposure to risks related to changes in SOFR rates, we purchased interest rate caps with a SOFR strike rate equal to 2.25% for the ILPT Floating Rate Loan and 3.40% for the Floating Rate Loan.

In addition, upon renewal or refinancing of these obligations, we are vulnerable to increases in interest rate premiums due to market conditions or our perceived credit risk. Generally, a change in interest rates would not affect the value of our floating rate debt but would affect our operating results. The following table presents the approximate impact a one percentage point increase in interest rates would have on our annual floating rate interest expense at September 30, 2022, excluding the impact of our interest rate caps:

	Impact of an Increase in Interest Rates
					Total Interest		Annual
	Interest Rate		Outstanding		Expense		Earnings Per
	Per Year		Debt		Per Year		Share Impact (1)
At September 30, 2022	5.88	%	$	2,635,000	$	155,003	$	2.38
One percentage point increase	6.88	%	$	2,635,000	$	181,288	$	2.78

(1)Based on the diluted weighted average common shares outstanding for the nine months ended September 30, 2022.

The foregoing tables show the impact of an immediate one percentage point change in floating interest rates. If interest rates were to change gradually over time, the impact would be spread over time. Our exposure to fluctuations in floating interest rates will increase or decrease in the future with increases or decreases in the outstanding amounts of any floating rate debt we may incur.

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Item 4. Controls and Procedures

As of the end of the period covered by this Quarterly Report on Form 10-Q, our management carried out an evaluation, under the supervision and with the participation of our Managing Trustees, our President and Chief Operating Officer and our Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our Managing Trustees, our President and Chief Operating Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended September 30, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Warning Concerning Forward-Looking Statements

This Quarterly Report on Form 10-Q contains statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. Also, whenever we use words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions, we are making forward-looking statements. These forward-looking statements are based upon our present intent, beliefs or expectations, but forward-looking statements are not guaranteed to occur and may not occur. Forward-looking statements in this Quarterly Report on Form 10-Q relate to various aspects of our business, including:

•Our ability to complete our long term financing plan for the acquisition of MNR,

•Our tenants’ ability and willingness to pay their rent obligations to us,

•The likelihood that our tenants will renew or extend their leases or that we will be able to obtain replacement tenants on terms as favorable to us as the terms of our existing leases,

•Changes in global supply chain conditions,

•Our belief that the industrial and logistics sector and many of our tenants are critical to sustaining a resilient supply chain and that our business will benefit as a result,

•Our acquisitions or sales of properties,

•Our ability to compete for tenancies and acquisitions effectively,

•The likelihood that our rents will increase when we renew or extend our leases, when we enter new leases, or when our rents reset at our Hawaii Properties,

•Our ability to pay distributions to our shareholders and to sustain the amount of such distributions,

•Our policies and plans regarding investments, financings and dispositions,

•Our ability to raise debt or equity capital,

•Our ability to pay interest on and principal of our debt or refinance such debt,

•Our ability to appropriately balance our use of debt and equity capital,

•Our ability to expand by selling additional equity interests in our existing, or enter into additional, real estate joint ventures or to attract co-venturers and benefit from our existing joint ventures or any real estate joint ventures we may enter into,

•Whether we may contribute additional properties to our joint ventures and receive proceeds from the other investors in our joint ventures in connection with any such contributions,

•Our ability to reduce our leverage,

•Our ability to sell properties for proceeds we target,

•The credit qualities of our tenants,

•Changes in the security of cash flows from our properties,

•Our expectations about our ability and the ability of the industrial and logistics properties real estate sector and our tenants to operate throughout the remainder of the COVID-19 pandemic and current economic conditions,

•Our ability to maintain sufficient liquidity,

•Our ability to prudently pursue, and successfully and profitably complete, expansion and renovation projects at our properties and to realize our expected returns on those projects,

•Our expectation that we benefit from our relationships with RMR,

•Our qualification for taxation as a REIT under the IRC,

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•Changes in federal or state tax laws,

•Changes in environmental laws or in their interpretations or enforcement as a result of climate change or otherwise, or our incurring environmental remediation costs or other liabilities,

•The development, redevelopment or repositioning of our properties, and

•Other matters.

Our actual results may differ materially from those contained in or implied by our forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors, some of which are beyond our control. Risks, uncertainties and other factors that could have a material adverse effect on our forward-looking statements and upon our business, results of operations, financial condition, FFO attributable to common shareholders, Normalized FFO attributable to common shareholders, NOI, cash flows, liquidity and prospects include, but are not limited to:

•The impact of economic conditions, including increasing interest rates, inflation and a possible recession, and the capital markets on us and our tenants,

•Competition within the real estate industry, particularly for industrial and logistics properties in those markets in which our properties are located,

•Compliance with, and changes to, federal, state and local laws and regulations, accounting rules, tax laws and similar matters,

•Limitations imposed on our business and our ability to satisfy complex rules in order for us to maintain our qualification for taxation as a REIT for U.S. federal income tax purposes,

•Actual and potential conflicts of interest with our related parties, including our managing trustees, RMR and others affiliated with them, and

•Acts of terrorism, outbreaks of pandemics, war or other hostilities, further material or prolonged disruption to supply chains, or other manmade or natural disasters beyond our control.

For example:

•On July 14, 2022, we reduced our quarterly distribution rate to $0.01 per common share to enhance our liquidity. Our distribution rate may be set and reset from time to time by our Board of Trustees. Our Board of Trustees considers many factors when setting our distributions to shareholders, including FFO attributable to common shareholders, Normalized FFO attributable to common shareholders, requirements to maintain our qualification for taxation as a REIT, limitations in the agreements governing our debt, the availability to us of debt and equity capital, our dividend yield and our dividend yield compared to the dividend yields of other industrial REITs, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations and other factors deemed relevant by our Board of Trustees in its discretion. Future distributions may remain at this level for an indefinite period or be eliminated. Further, in order to preserve liquidity, we may elect to pay distributions to our shareholders in part in a form other than cash, such as issuing additional common shares of ours to our shareholders, as permitted by the applicable tax rules,

•If interest rates continue to increase and general real estate market conditions further deteriorate, the actions we have taken to date may not provide us with sufficient liquidity and our long term financing plan for the MNR acquisition may be further delayed, cost more than expected or not be completed, and we may not have sufficient liquidity absent taking additional action. Further, unanticipated events may require us to expend amounts not currently planned. As a result, we may need to take further action to enhance our liquidity and reduce our leverage. However, we may not be successful in executing any such action or achieving such results,

•We may not resume paying regular quarterly dividends on our common shares at or close to historical levels as or when expected, and the reduction of our quarterly dividend on our common shares may extend for an indefinite period, particularly if our liquidity is not enhanced, our leverage is not reduced or operating results or prospects decline,

•Our ability to make future distributions to our shareholders and to make payments of principal and interest on our indebtedness depends upon a number of factors, including our receipt of rent from our tenants, future earnings, the capital costs we incur to lease our properties and our working capital requirements. We may be unable to pay our

44

debt obligations or to maintain our current rate of distributions on our common shares and future distributions may be reduced or eliminated,

•Actual costs under our floating rate debt will be higher than the stated rate plus a premium because of fees and expenses associated with the applicable facility,

•Our existing, and any future, derivative contracts we are party to or may enter into may not have the intended or desired beneficial impact, and may expose us to additional risks such as counterparty credit risk and may involve additional costs and our approach to mitigate those risks may not be successful or avoid our incurring losses,

•We may incur additional debt. Additional debt leverage may limit our ability to make acquisitions, pay distributions and pursue other opportunities we may deem desirable. Further, increased leverage may increase our cost of capital,

•We may not be able to obtain replacement financing on desirable terms or otherwise when our debts mature,

•Our ability to grow our business and increase our distributions depends in large part upon our ability to acquire properties and lease them for rents, less their property operating costs, that exceed our capital costs. We may be unable to further grow our business by acquiring additional properties. We may be unable to identify properties that we want to acquire, and we may fail to reach agreement with the sellers and complete the purchases of any properties we do want to acquire. In addition, we might encounter unanticipated difficulties and expenditures relating to the properties we acquired in the MNR acquisition or other properties we may acquire in the future, and these properties may not provide us with rents less property operating costs that exceed our capital costs or achieve our expected returns,

•Contingencies in our acquisition and sale agreements may not be satisfied and any expected acquisitions and sales may not occur, may be delayed or the terms of such transactions may change, 

•The sales of the former MNR properties we anticipated to sell have been delayed due to current market conditions and such sales may not occur, may be further delayed or may be at prices lower than the carrying values,

•We may experience declining rents or incur significant costs when we renew our leases with current tenants or lease our properties to new tenants or when our rents reset at our properties in Hawaii,

•Leasing for some of our properties depends on a single tenant and we may be adversely affected by the bankruptcy, insolvency, downturn of business or lease termination of a single tenant at these properties,

•Economic conditions in areas where our properties are located may decline in the future. Such circumstances or other conditions may reduce demand for leasing industrial space. If the demand for leasing industrial space is reduced, we may be unable to renew leases with our tenants as leases expire or enter new leases at rental rates as high as expiring rents and our financial results may decline,

•E-commerce retail sales may not continue to grow and increase the demand for industrial and logistics real estate as we expect,

•Increasing development of industrial and logistics properties may reduce the demand for, and rents from, our properties,

•We may not achieve or sustain our targeted capitalization rates for properties we acquire and we may incur losses with respect to those acquisitions,

•Our belief that there is a likelihood that tenants may renew or extend our leases prior to their expirations whenever they have made significant investments in the leased properties, or because those properties may be of strategic importance to them, may not be realized,

•Some of our tenants may not renew expiring leases, and we may be unable to obtain new tenants to maintain or increase the historical occupancy rates of, or rents from, our properties, and we may need to make significant expenditures to lease our properties,

•We may not be able to maintain good relations with, and continue to be responsive to the needs of, our significant and other tenants,

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•The competitive advantages we believe we have may not in fact exist or provide us with the advantages we expect. We may fail to maintain any of these advantages or our competition may obtain or increase their competitive advantages relative to us,

•We intend to conduct our business activities in a manner that will afford us reasonable access to capital for investing and financing activities. However, we may not succeed in this regard and we may not have reasonable access to capital,

•Any existing or possible development, redevelopment or repositioning of our properties may not be successful and may cost more or take longer to complete than we currently expect or than we expected when the project commenced. In addition, we may not realize the returns we expect from these projects and we may incur losses from these projects,

•It is difficult to accurately estimate leasing related obligations and costs of development and tenant improvement costs. Our leasing related obligations, development projects and tenant improvements may cost more and may take longer to complete than we currently expect or than we expected when the project commenced, and we may incur increasing amounts for these and similar purposes in the future,

•We may spend more for capital expenditures than we currently expect and we expect to spend more than we have in the past,

•Our existing joint ventures and any additional joint ventures we may enter into in the future may not be successful, and we may not be able to sell any additional equity interests in our existing joint ventures at expected prices or at all,

•The business and property management agreements between us and RMR have continuing 20 year terms. However, those agreements permit early termination in certain circumstances. Accordingly, we cannot be sure that these agreements will remain in effect for continuing 20 year terms,

•We expect that we will benefit from RMR’s Environmental, Social and Governance, or ESG, program and initiatives. However, we may incur extensive costs and may not realize the benefits we expect from such program and initiatives and we or RMR may not succeed in meeting existing or future standards, or investors’ expectations, regarding ESG, and

•We believe that our relationships with our related parties, including RMR, RMR Inc. and others affiliated with them may benefit us and provide us with competitive advantages in operating and growing our business. However, the advantages we believe we may realize from these relationships may not materialize.

Currently unexpected results could occur due to many different circumstances, some of which are beyond our control, such as acts of terrorism, war or other hostilities, pandemics, natural disasters, climate change and climate related events, changes in our tenants’ financial conditions, the market demand for leased space, economic conditions, including interest rates, high inflation and a possible recession or other changes in capital markets or the economy generally.

The information contained elsewhere in this Quarterly Report on Form 10-Q and in our 2021 Annual Report or in our other filings with the SEC, including under the caption “Risk Factors”, or incorporated herein or therein, identifies other important factors that could cause differences from our forward-looking statements. Our filings with the SEC are available on the SEC’s website at www.sec.gov.

You should not place undue reliance upon our forward-looking statements.

Except as required by law, we do not intend to update or change any forward-looking statements as a result of new information, future events or otherwise.

Statement Concerning Limited Liability

The Amended and Restated Declaration of Trust establishing Industrial Logistics Properties Trust, dated January 11, 2018, as amended, as filed with the State Department of Assessments and Taxation of Maryland, provides that no trustee, officer, shareholder, employee or agent of Industrial Logistics Properties Trust shall be held to any personal liability, jointly or severally, for any obligation of, or claim against, Industrial Logistics Properties Trust. All persons dealing with Industrial Logistics Properties Trust in any way shall look only to the assets of Industrial Logistics Properties Trust for the payment of any sum or the performance of any obligation.

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PART II. Other Information

Item 1A. Risk Factors

There have been no material changes to the risk factors from those we previously provided in our 2021 Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Issuer purchases of equity securities. The following table provides information about our purchases of our equity securities during the quarter ended September 30, 2022:

					Maximum
				Total Number of	Approximate Dollar
				Shares Purchased	Value of Shares that
	Number of	Average		as Part of Publicly	May Yet Be Purchased
	Shares	Price Paid		Announced Plans	Under the Plans or
Calendar Month	Purchased (1)	per Share		or Programs	Programs
September 2022	31,455	$	7.40	—	$	—
Total	31,455	$	7.40	—	$	—

(1) These common share withholdings and purchases were made to satisfy tax withholding and payment obligations of our officers and certain other current and former officers and employees of RMR in connection with awards of our common shares and the vesting of those and prior awards of common shares to them. We withheld and purchased these common shares at their fair market value based upon the trading price of our common shares at the close of trading on Nasdaq on the purchase dates.

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Item 6. Exhibits

Exhibit Number	Description
3.1	Composite Copy of Amended and Restated Declaration of Trust of the Company, dated as of January 11, 2018, as amended to date. (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020.)
3.2	Amended and Restated Bylaws of the Company, adopted March 25, 2019. (Incorporated by reference to the Company's Current Report on Form 8-K filed on March 26, 2019.)
4.1	Form of Common Share Certificate. (Incorporated by reference to Amendment No. 2 to the Company's Registration Statement on Form S-11, File No. 333-221708.)
10.1	Loan Agreement, dated as of September 22, 2022, among certain subsidiaries of the Company, Citi Real Estate Funding Inc., UBS AG New York (1285 Avenue of the Americas) Branch, Bank of America, N.A., Bank of Montreal and Morgan Stanley Mortgage Capital Holdings LLC. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 26, 2022.)
10.2	Mezzanine Loan Agreement, dated as of September 22, 2022, among certain subsidiaries of the Company, Citigroup Global Markets Realty Corp., UBS AG New York (1285 Avenue of the Americas) Branch, Bank of America, N.A., Bank of Montreal, and Morgan Stanley Mortgage Capital Holdings LLC. (Incorporated by reference to the Company’s Current Report on Form 8-K filed on September 26, 2022.)
10.3	Form of Indemnification Agreement. (Filed herewith.)
31.1	Rule 13a-14(a) Certification. (Filed herewith.)
31.2	Rule 13a-14(a) Certification. (Filed herewith.)
31.3	Rule 13a-14(a) Certification. (Filed herewith.)
31.4	Rule 13a-14(a) Certification. (Filed herewith.)
32.1	Section 1350 Certification. (Furnished herewith.)
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document. (Filed herewith.)
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document. (Filed herewith.)
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document. (Filed herewith.)
101.LAB	XBRL Taxonomy Extension Label Linkbase Document. (Filed herewith.)
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document. (Filed herewith.)
104	Cover Page Interactive Data File. (Formatted as Inline XBRL and contained in Exhibit 101.)

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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 LOGISTICS PROPERTIES TRUST
By:	/s/ Yael Duffy
	Yael Duffy
	President and Chief Operating Officer
	Dated: October 25, 2022
By:	/s/ Brian E. Donley
	Brian E. Donley
	Chief Financial Officer and Treasurer
	Dated: October 25, 2022

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EX-10.3

Exhibit 10.3

INDUSTRIAL LOGISTICS PROPERTIES TRUST
FORM OF INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”), effective as of [DATE] (the “Effective Date”), by and between Industrial Logistics Properties Trust, a Maryland real estate investment trust (the “Company”), and [TRUSTEE/OFFICER] (“Indemnitee”).

WHEREAS, Indemnitee currently serves as a trustee and/or executive officer of the Company and may, in connection therewith, be subjected to claims, suits or proceedings arising from such service; and

WHEREAS, as an inducement to Indemnitee to serve as [a/the] [title(s)] of the Company, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law as hereinafter provided; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.Definitions. For purposes of this Agreement:

(a)“Board” means the board of trustees of the Company.

(b)“Bylaws” means the bylaws of the Company, as they may be amended from time to time.

(c)“Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date:

(i)any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 10% or more of the combined voting power of all the Company’s then-outstanding securities entitled to vote generally in the election of trustees without the prior approval of at least two-thirds of the members of the Board in office immediately prior to such person attaining such percentage interest;

(ii)there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board then in office, as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or

(iii)during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board (including for this purpose any new trustee whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the trustees then still in office who were trustees at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

(d)“Company Status” means the status of a Person who is or was a trustee, director, officer, employee, agent or fiduciary of the Company or any of its majority owned subsidiaries and the status of a Person who, while a trustee, director, officer, employee, agent or fiduciary of the Company or any of its majority owned subsidiaries, is or was serving at the request of the Company as a director, trustee, officer, partner, manager or fiduciary of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other Enterprise.

(e)“Control” of an entity, shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise.

(f)“Declaration of Trust” means the declaration of trust (as defined in the Maryland REIT Law) of the Company, as it may be in effect from time to time.

(g)“Disinterested Trustee” means a trustee of the Company who is not and was not a party to the Proceeding in respect of which indemnification or advance of Expenses is sought by Indemnitee.

(h) “Enterprise” shall mean the Company and any other corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, trustee, officer, partner, manager or fiduciary.

(i)“Expenses” means all expenses, including, but not limited to, all attorneys’ fees and costs, retainers, court or arbitration costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond or other appeal bond or its equivalent.

(j)“Independent Counsel” means a law firm, or a member of a law firm, selected by the Company and acceptable to the Indemnitee, that is experienced in matters of business law. If, within twenty (20) days after submission by Indemnitee of a written demand for indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall have been selected and agreed to by Indemnitee, either the Company or Indemnitee may petition a Chosen Court for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person so appointed shall act as Independent Counsel hereunder.

(k)“MGCL” means the Maryland General Corporation Law.

(l)“Maryland REIT Law” means Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland.

(m)“Person” means an individual, a corporation, a general or limited partnership, an association, a limited liability company, a governmental entity, a trust, a joint venture, a joint stock company or another entity or organization.

(n)“Proceeding” means any threatened, pending or completed claim, demand, action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), whether or not by or in the right of the Company, except one initiated by an Indemnitee pursuant to Section 9.

Section 2.Indemnification - General. The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date. The rights of Indemnitee provided in this Section 2 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the MGCL, as applicable to a Maryland real estate investment trust by virtue of Section 8-301(15) of the Maryland REIT Law.

Section 3.Proceedings Other Than Derivative Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 3 if, by reason of Indemnitee’s Company Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, other than a derivative Proceeding by or in the right of the Company (or, if applicable, such other Enterprise at which Indemnitee is or was serving at the request of the Company). Pursuant to this Section 3, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with a Proceeding by reason of Indemnitee’s Company Status unless it is finally determined that such indemnification is not permitted by the MGCL.

Section 4.Derivative Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of Indemnitee’s Company Status, Indemnitee is, or is threatened to be, made a party to any derivative Proceeding brought by or in the right of the Company (or, if applicable, such other Enterprise at which Indemnitee is or was serving at the request of the Company). Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding unless it is finally determined that such indemnification is not permitted by the MGCL.

Section 5.Indemnification for Expenses of a Party Who is Partly Successful. Without limitation on Section 3 or Section 4, if Indemnitee is not wholly successful in any Proceeding covered by this Agreement, but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 5 for all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis. For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 6.Advance of Expenses. The Company, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding in which Indemnitee may be involved, or is threatened to be involved, including

as a party, a witness or otherwise, by reason of Indemnitee’s Company Status, within ten (10) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by the MGCL has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form of Exhibit A hereto or in such other form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall be finally determined that the standard of conduct has not been met and which have not been successfully resolved as described in Section 5. For the avoidance of doubt, the Company shall advance Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with such a Proceeding pursuant to this Section 6 until it is finally determined that the Indemnitee is not entitled to indemnification under law in respect of such Proceeding. To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis. The undertaking required by this Section 6 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor. At Indemnitee’s request, advancement of any such Expense shall be made by the Company’s direct payment of such Expense instead of reimbursement of Indemnitee’s payment of such Expense.

Section 7.Procedure for Determination of Entitlement to Indemnification.

(a)To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written demand therefor. The Secretary of the Company shall, promptly upon receipt of such a demand for indemnification, provide copies of the demand to the Board.

(b)Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 7(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred or if, after a Change in Control, Indemnitee shall so request, (A) by the Board (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Trustees, or (B) if a quorum of the Board consisting of Disinterested Trustees is not obtainable or, even if obtainable, such quorum of Disinterested Trustees so directs, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board, by the shareholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Any Independent Counsel, member of the Board or shareholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement.

(c)The Company shall pay the fees and expenses of Independent Counsel, if one is appointed, and shall agree to fully indemnify such Independent Counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or the Independent Counsel’s engagement as such pursuant hereto.

Section 8.Presumptions and Effect of Certain Proceedings.

(a)In making a determination with respect to entitlement to indemnification hereunder, the Person or Persons making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(b)It shall be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence. Without limitation of the foregoing, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise. In addition, the knowledge or actions, or failure to act, of any trustee, director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

(c)Neither the failure to make a determination pursuant to Section 7(b) as to whether indemnification is proper in the circumstances because Indemnitee has met any particular standard of conduct, nor an actual determination by the Company (including by its trustees or Independent Counsel) pursuant to Section 7(b) that Indemnitee has not met such standard of conduct, shall be a defense to Indemnitee’s claim that indemnification is proper in the circumstances or create a presumption that Indemnitee has not met any particular standard of conduct.

(d)The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, shall not in and of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not meet the standard of conduct required for indemnification. The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty. In the event that any Proceeding to which

Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with or without payment of money or other consideration), it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding. Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

Section 9.Remedies of Indemnitee.

(a)If (i) a determination is made pursuant to Section 7(b) that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 6, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 7(b) within thirty (30) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall (A) unless the Company demands arbitration as provided by Section 17, be entitled to an adjudication in a Chosen Court or (B) be entitled to seek an award in arbitration as provided by Section 17, in each case of Indemnitee’s entitlement to such indemnification or advance of Expenses.

(b)In any judicial proceeding or arbitration commenced pursuant to this Section 9, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be. In the event that a determination shall have been made pursuant to Section 7(b) that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 9 shall be conducted in all respects as a de novo trial on the merits, and the Indemnitee shall not be prejudiced by reason of the adverse determination under Section 7(b).

(c)If a determination shall have been made pursuant to Section 7(b) that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 9, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the demand for indemnification.

(d)In the event that Indemnitee, pursuant to this Section 9, seeks a judicial adjudication of or an award in arbitration as provided by Section 17 to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement by the Company, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall indemnify Indemnitee against any and all Expenses incurred by Indemnitee in such judicial adjudication or arbitration and, if requested by Indemnitee, the Company shall (within ten (10) days after receipt by the Company of a written demand therefore) advance, to the extent not prohibited by law, any and all such Expenses.

(e)The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 9 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such judicial proceeding or arbitration that the Company is bound by all the provisions of this Agreement.

(f)To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral. Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

(g)Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth (10th) day after the date on which the Company was requested to advance Expenses in accordance with Section 6 of this Agreement or the thirtieth (30th) day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 7(b) of this Agreement, as applicable, and (ii) ending on the date such payment is made to Indemnitee by the Company.

Section 10.Defense of the Underlying Proceeding.

(a)Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)Subject to the provisions of the last sentence of this Section 10(b) and of Section 10(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within fifteen (15) days following receipt of notice of any such Proceeding under Section 10(a) above, and the counsel selected by the Company shall be reasonably satisfactory to Indemnitee. The Company shall not, without the prior written consent of Indemnitee, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee or (iii) has the actual or

purported effect of extinguishing, limiting or impairing Indemnitee’s rights hereunder. This Section 10(b) shall not apply to a Proceeding brought by Indemnitee under Section 9 above or Section 15.

(c)Notwithstanding the provisions of Section 10(b), if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Company Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company. In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other Person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, at the expense of the Company (subject to Section 9(d)), to represent Indemnitee in connection with any such matter.

Section 11.Liability Insurance.

(a)To the extent the Company maintains an insurance policy or policies providing liability insurance for any of its trustees or officers, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company trustee or officer during the Indemnitee’s tenure as a trustee or officer and, following a termination of Indemnitee’s service in connection with a Change in Control, for a period of six (6) years thereafter.

(b)If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

(c)In the event of any payment by the Company under this Agreement the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy. Indemnitee shall take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights in accordance with the terms of such insurance policy. The Company shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.

Section 12.Non-Exclusivity; Survival of Rights.

(a)The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Declaration of Trust or the Bylaws, any agreement or a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Company Status prior to such amendment, alteration or repeal. To the extent that a change in the Maryland REIT Law or the MGCL permits greater indemnification than would be afforded currently under the Declaration of Trust, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 13.Binding Effect.

(a)The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a trustee or executive officer of the Company or a director, officer, partner, member, manager or trustee of another Enterprise which such Person is or was serving at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(b)Any successor of the Company (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business or assets of the Company shall be automatically deemed to have assumed and agreed to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place, provided that no such assumption shall relieve the Company of its

obligations hereunder. To the extent required by applicable law to give effect to the foregoing sentence and to the extent requested by Indemnitee, the Company shall require and cause any such successor to expressly assume and agree to perform this Agreement by written agreement in form and substance satisfactory to Indemnitee.

Section 14.Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 15.Limitation and Exception to Right of Indemnification or Advance of Expenses. Notwithstanding any other provision of this Agreement, (a) any indemnification or advance of Expenses to which Indemnitee is otherwise entitled under the terms of this Agreement shall be made only to the extent such indemnification or advance of Expenses does not conflict with applicable Maryland law and (b) Indemnitee shall not be entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (i) the Proceeding is brought to enforce rights under this Agreement, the Declaration of Trust, the Bylaws, liability insurance policy or policies, if any, or otherwise or (ii) the Declaration of Trust, the Bylaws, a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board or an agreement approved by the Board to which the Company is a party expressly provides otherwise. Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances: (a) if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or (b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standard of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper without regard to any limitation on such court-ordered indemnification contemplated by Section 2-418(d)(2)(ii) of the MGCL.

Section 16.Specific Performance, Etc. The parties hereto recognize that if any provision of this Agreement is violated by the Company, Indemnitee may be without an adequate remedy at law. Accordingly, in the event of any such violation, Indemnitee shall be entitled, if Indemnitee so elects, to institute proceedings, either in law or at equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect to pursue.

Section 17.Arbitration.

(a)Any disputes, claims or controversies regarding the Indemnitee’s entitlement to indemnification or advancement of Expenses hereunder or otherwise arising out of or relating to this Agreement, including any disputes, claims or controversies brought by or on behalf of a party hereto or any holder of equity interests (which, for purposes of this Section 17, shall mean any holder of record or any beneficial owner of equity interests or any former holder of record or beneficial owner of equity interests) of a party, either on his, her or its own behalf, on behalf of a party or on behalf of any series or class of equity interests of a party or holders of equity interests of a party against a party or any of their respective trustees, directors, members, officers, managers, agents or employees, including any disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, including this arbitration agreement or the governing documents of a party, (all of which are referred to as “Disputes”) or relating in any way to such a Dispute or Disputes shall, on the demand of any party to such Dispute or Disputes, be resolved through binding and final arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) then in effect, except as those Rules may be modified in this Section 17. For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against the trustees, directors, officers or managers of a party and class actions by a holder of equity interests against those individuals or entities and a party. For the avoidance of doubt, a Dispute shall include a Dispute made derivatively on behalf of one party against another party. For purposes of this Section 17, the term “equity interest” shall mean, in respect of (i) the Company, shares of beneficial interest of the Company, (ii) shares of “membership interests” in an entity that is a limited liability company, (iii) general partnership interests in an entity that is a partnership, (iv) shares of capital stock of an entity that is a corporation and (v) similar equity ownership interests in other entities.

(b)There shall be three (3) arbitrators. If there are only two (2) parties to the Dispute, each party shall select one (1) arbitrator within fifteen (15) days after receipt by respondent of a copy of the demand for arbitration. The arbitrators may be affiliated or interested persons of the parties. If there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, shall each select, by the vote of a majority of the claimants or the respondents, as the case may be, one (1) arbitrator within fifteen (15) days after receipt of the demand for arbitration. The arbitrators may be affiliated or interested persons of the claimants or the respondents, as the case may be. If either a claimant (or all claimants) or a respondent (or all respondents) fail(s) to timely select an arbitrator then the party (or parties) who has selected an arbitrator may request AAA to provide a list of three (3) proposed arbitrators in accordance with the Rules (each of whom shall be neutral, impartial and unaffiliated with any party) and the party (or parties) that failed to timely appoint an arbitrator shall have ten (10) days from the date AAA provides the list to select one (1) of the three (3) arbitrators proposed by AAA. If the party (or parties) fail(s) to select the second (2nd) arbitrator by that time, the party (or parties) who have appointed

the first (1st) arbitrator shall then have ten (10) days to select one (1) of the three (3) arbitrators proposed by AAA to be the second (2nd) arbitrator; and, if he/they should fail to select the second (2nd) arbitrator by such time, AAA shall select, within fifteen (15) days thereafter, one (1) of the three (3) arbitrators it had proposed as the second (2nd) arbitrator. The two (2) arbitrators so appointed shall jointly appoint the third (3rd) and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within fifteen (15) days of the appointment of the second (2nd) arbitrator. If the third (3rd) arbitrator has not been appointed within the time limit specified herein, then AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.

(c)The place of arbitration shall be Boston, Massachusetts unless otherwise agreed by the parties.

(d)There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators. For the avoidance of doubt, it is intended that there shall be no depositions and no other discovery other than limited documentary discovery as described in the preceding sentence.

(e)In rendering an award or decision (an “Award”), the arbitrators shall be required to follow the laws of the State of Maryland without regard to principles of conflicts of law. Any arbitration proceedings or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq. An Award shall be in writing and shall state the findings of fact and conclusions of law on which it is based. Any monetary Award shall be made and payable in U.S. dollars free of any tax, deduction or offset. Subject to Section 17(g), each party against which an Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30th) day following the date of such Award or such other date as the Award may provide.

(f)Except to the extent expressly provided by this Agreement or as otherwise agreed by the parties thereto, each party and each Person acting or seeking to act in a representative capacity (such Person, a “Named Representative”) involved in a Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators shall not render an Award that would include shifting of any such costs or expenses (including attorneys’ fees) or, in a derivative case or class action, award any portion of a party’s award to its attorneys, a Named Representative or any attorney of a Named Representative. Each party (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, respectively) shall bear the costs and expenses of its (or their) selected arbitrator and the parties (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand) shall equally bear the costs and expenses of the third (3rd) appointed arbitrator.

(g)Notwithstanding any language to the contrary in this Agreement, an Award, including but not limited to any interim Award, may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (the “Appellate Rules”). An Award shall not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired. Appeals must be initiated within thirty (30) days of receipt of an Award by filing a notice of appeal with any AAA office. Following the appeal process, the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof. For the avoidance of doubt, and despite any contrary provision of the Appellate Rules, Section 17(f) shall apply to any appeal pursuant to this Section 17 and the appeal tribunal shall not render an Award that would include shifting of any costs or expenses (including attorneys’ fees) of any party or Named Representative or the payment of such costs and expenses, and all costs and expenses of a party or Named Representative shall be its sole responsibility.

(h)Following the expiration of the time for filing the notice of appeal, or the conclusion of the appeal process set forth in Section 17(g), an Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between those parties relating to the Dispute, including any claims, counterclaims, issues or accounting presented to the arbitrators. Judgment upon an Award may be entered in any court having jurisdiction. To the fullest extent permitted by law, no application or appeal to any court of competent jurisdiction may be made in connection with any question of law arising in the course of arbitration or with respect to any award made except for actions relating to enforcement of this agreement to arbitrate or any arbitral award issued hereunder and except for actions seeking interim or other provisional relief in aid of arbitration proceedings in any court of competent jurisdiction.

(i)This Section 17 is intended to benefit and be enforceable by the parties hereto and their respective holders of equity interests, trustees, directors, officers, managers, agents or employees, and their respective successors and assigns, and shall be binding upon all such parties and their respective holders of equity interests, and be in addition to, and not in substitution for, any other rights to indemnification or contribution that such individuals or entities may have by contract or otherwise.

Section 18.Venue. Each party hereto agrees that it shall bring any Proceeding in respect of any claim arising out of or related to this Agreement exclusively in the courts of the State of Maryland and the Federal courts of the United States, in each case, located in the City of Baltimore (the “Chosen Courts”). Solely in connection with claims arising under this Agreement, each party irrevocably and unconditionally (i) submits to the exclusive jurisdiction of the Chosen Courts, (ii) agrees not to commence any such Proceeding except in such courts, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such Proceeding in the Chosen Courts, (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such Proceeding, (v) agrees that service of process upon such party in any such Proceeding shall be effective if notice is given in accordance with Section 24 and (vi) agrees to request and/or consent to the assignment of any dispute arising out of this Agreement or the transactions contemplated by this Agreement to the Chosen Courts’ Business and Technology Case Management Program, or similar program. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by law. A final judgment in any such Proceeding shall be conclusive and may be enforced in

other jurisdictions by suit on the judgment or in any other manner provided by law. EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS. Notwithstanding anything herein to the contrary, if a demand for arbitration of a Dispute is made pursuant to Section 17, this Section 18 shall not preempt resolution of the Dispute pursuant to Section 17.

Section 19.Adverse Settlement. The Company shall not seek, nor shall it agree to or support, or agree not to contest any settlement or other resolution of any matter that has the actual or purported effect of extinguishing, limiting or impairing Indemnitee’s rights hereunder, including without limitation the entry of any bar order or other order, decree or stipulation, pursuant to 15 U.S.C. § 78u-4 (the Private Securities Litigation Reform Act), or any similar foreign, federal or state statute, regulation, rule or law.

Section 20.Period of Limitations. To the fullest extent permitted by law, no legal action shall be brought, and no cause of action shall be asserted, by or on behalf of the Company or any controlled affiliate of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company or its controlled affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

Section 21.Counterparts. This Agreement may be executed in any number of counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other party (including via facsimile or other electronic transmission), it being understood that each party hereto need not sign the same counterpart.

Section 22.Delivery by Electronic Transmission. This Agreement and any signed agreement or instrument entered into in connection with this Agreement or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of an electronic transmission, including by a facsimile machine or via email, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to the other parties. No party hereto or to any such agreement or instrument shall raise the use of electronic transmission by a facsimile machine or via email to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through electronic transmission as a defense to the formation of a contract and each such party forever waives any such defense.

Section 23.Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed to, or shall, constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 24.Notices. Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is accepted by the party to whom it is given, and shall be given by being delivered at the following addresses to the parties hereto:

(a)If to Indemnitee, to: The address set forth on the signature page hereto.

(b)If to the Company, to:

Industrial Logistics Properties Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458-1634
Attn: Secretary

or to such other address as may have been furnished to the Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 25.Governing Law. The provisions of this Agreement and any Dispute, whether in contract, tort or otherwise, shall be governed by and construed in accordance with the laws of the State of Maryland without regard to principles of conflicts of law.

Section 26.Interpretation.

(a)Generally. Unless the context otherwise requires, as used in this Agreement: (i) words defined in the singular have the parallel meaning in the plural and vice versa; (ii)”Articles,” “Sections,” and “Exhibits” refer to Articles, Sections and Exhibits of this Agreement unless otherwise specified; and (iii) “hereto” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(b)Additional Interpretive Provisions. The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. Any capitalized term used in any Exhibit to this Agreement, but not otherwise defined therein, shall have the meaning as defined in this Agreement. References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder and any successor statute or statutory provision. References to any agreement are to that agreement as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof. References to any Person include the successors and permitted assigns of that Person. Reference to any agreement, document or instrument means the agreement, document or instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof.

[Signature Page Follows]

IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Agreement as of the date first written above.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

By:    

Name:

Title:

[INDEMNITEE]

Indemnitee’s Address:

[Signature Page to Indemnification Agreement]

EXHIBIT A

FORM OF AFFIRMATION AND
UNDERTAKING TO REPAY EXPENSES ADVANCED

To the Board of Trustees of Industrial Logistics Properties Trust:

This affirmation and undertaking is being provided pursuant to that certain Indemnification Agreement dated ___________________, 20__ (the “Indemnification Agreement”), by and between Industrial Logistics Properties Trust, a Maryland real estate investment trust (the “Company”), and the undersigned Indemnitee, pursuant to which I am entitled to advancement of expenses in connection with [Description of Claims/Proceeding] (together, the “Claims”). Terms used, and not otherwise defined, herein shall have the meanings specified in the Indemnification Agreement.

I am subject to the Claims by reason of my Company Status or by reason of alleged actions or omissions by me in such capacity.

I hereby affirm my good faith belief that the standard of conduct necessary for my indemnification has been met.

In consideration of the advancement of Expenses by the Company for attorneys’ fees and related expenses incurred by me in connection with the Claims (the “Advanced Expenses”), I hereby agree that if, in connection with a proceeding regarding the Claim, it is ultimately determined that I am not entitled to indemnification under law with respect to an act or omission by me, then I shall promptly reimburse the portion of the Advanced Expenses relating to the Claim(s) as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 5 of the Indemnification Agreement. To the extent that Advanced Expenses do not relate to specific Claims, I agree that such Advanced Expenses may be allocated on a reasonable and proportionate basis.

IN WITNESS WHEREOF, I have executed this affirmation and undertaking on ____________________, 20__.

WITNESS:
Print name of witness	Print name of witness

Schedule to Exhibit 10.3

The following trustees and executive officers of Industrial Logistics Properties Trust, or ILPT, are parties to Indemnification Agreements with ILPT which are substantially identical in all material respects to the representative Indemnification Agreement filed herewith and are dated as of the respective dates listed below. The other Indemnification Agreements are omitted pursuant to Instruction 2 to Item 601 of Regulation S-K.

Name of Signatory	Date
Brian E. Donley	October 1, 2022
Matthew P. Jordan	June 1, 2022
June S. Youngs	March 28, 2022
Yael Duffy	March 2, 2020
Kevin C. Phelan	February 21, 2020
Laura A. Wilkin	February 21, 2020
John G. Murray	December 1, 2018
Bruce M. Gans	January 11, 2018
Lisa Harris Jones	January 11, 2018
Joseph L. Morea	January 11, 2018
John C. Popeo	January 11, 2018
Adam D. Portnoy	January 11, 2018
Richard W. Siedel, Jr.	January 11, 2018

EX-31.1

Exhibit31.1

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Adam D. Portnoy, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Industrial Logistics Properties Trust;

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(s) 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(s) 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.

5
Date: October 25, 2022	/s/ Adam D. Portnoy
	Adam D. Portnoy
	Managing Trustee

EX-31.2

Exhibit31.2

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Matthew P. Jordan, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Industrial Logistics Properties Trust;

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(s) 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(s) 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.

5
Date: October 25, 2022	/s/ Matthew P. Jordan
	Matthew P. Jordan
	Managing Trustee

EX-31.3

Exhibit31.3

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Yael Duffy, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Industrial Logistics Properties Trust;

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(s) 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(s) 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.

5
Date: October 25, 2022	/s/ Yael Duffy
	Yael Duffy
	President and Chief Operating Officer

EX-31.4

Exhibit31.4

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Brian E. Donley, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Industrial Logistics Properties Trust;

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(s) 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(s) 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.

5
Date: October 25, 2022	/s/ Brian E. Donley
	Brian E. Donley
	Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Sec. 1350

_______________________________________________

In connection with the filing by Industrial Logistics Properties Trust (the “Company”) of the Quarterly Report on Form 10-Q for the period ended September 30, 2022 (the “Report”), each of the undersigned hereby certifies, to the best of his or her 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.

9
/s/ Adam D. Portnoy	/s/ Yael Duffy
Adam D. Portnoy	Yael Duffy
Managing Trustee	President and Chief Operating Officer
/s/ Matthew P. Jordan	/s/ Brian E. Donley
Matthew P. Jordan	Brian E. Donley
Managing Trustee	Chief Financial Officer and Treasurer
Date: October 25, 2022

XML

Cover Page - shares	9 Months Ended
	Sep. 30, 2022	Oct. 24, 2022
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2022
Document Transition Report	false
Entity File Number	001-38342
Entity Registrant Name	INDUSTRIAL LOGISTICS PROPERTIES TRUST
Entity Incorporation, State or Country Code	MD
Entity Tax Identification Number	82-2809631
Entity Address, Address Line One	Two Newton Place,
Entity Address, Address Line Two	255 Washington Street,
Entity Address, Address Line Three	Suite 300,
Entity Address, City or Town	Newton,
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02458-1634
City Area Code	617
Local Phone Number	219-1460
Title of 12(b) Security	Common Shares of Beneficial Interest
Trading Symbol	ILPT
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		65,568,560
Entity Central Index Key	0001717307
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2022
Document Fiscal Period Focus	Q3

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Sep. 30, 2022		Dec. 31, 2021
Real estate properties:
Land	$ 1,117,801		$ 699,037
Buildings and improvements	4,053,913		1,049,796
Total real estate properties, gross	5,171,714		1,748,833
Accumulated depreciation	(242,481)		(167,490)
Total real estate properties, net	4,929,233		1,581,343
Investment in unconsolidated joint venture	145,693		143,021
Acquired real estate leases, net	313,444		63,441
Cash and cash equivalents	26,381		29,397
Restricted cash	100,288	[1]	0
Rents receivable, including straight line rents of $77,343 and $69,173, respectively	100,347		75,877
Other assets, net	104,249		15,479
Total assets	5,719,635		1,908,558
LIABILITIES AND EQUITY
Revolving credit facility	0		182,000
Mortgages and notes payable, net	4,243,271		646,124
Assumed real estate lease obligations, net	23,633		12,435
Accounts payable and other liabilities	86,727		27,772
Due to related persons	4,494		2,185
Total liabilities	4,358,125		870,516
Commitments and contingencies
Equity attributable to common shareholders:
Common shares of beneficial interest, $.01 par value: 100,000,000 shares authorized; 65,568,704 and 65,404,592 shares issued and outstanding, respectively	656		654
Additional paid in capital	1,013,802		1,012,224
Cumulative net income	148,228		343,908
Cumulative other comprehensive income	12,300		0
Cumulative common distributions	(362,565)		(318,744)
Total equity attributable to common shareholders	812,421		1,038,042
Total equity attributable to common shareholders
Total equity attributable to noncontrolling interest	549,089		0
Total equity	1,361,510		1,038,042
Total liabilities and equity	$ 5,719,635		$ 1,908,558

[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.

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CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2022	Dec. 31, 2021
Statement of Financial Position [Abstract]
Straight line rents	$ 77,343	$ 69,173
Common shares, par value (in dollars per share)	$ 0.01	$ 0.01
Common shares, shares authorized (in shares)	100,000,000	100,000,000
Common shares, shares issued (in shares)	65,568,704	65,404,592
Common shares, shares outstanding (in shares)	65,568,704	65,404,592

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Revenues:
Rental income	$ 103,215	$ 54,981	$ 281,812	$ 163,378
Expenses:
Real estate taxes	13,749	7,617	36,460	22,353
Other operating expenses	8,453	4,417	22,278	13,734
Depreciation and amortization	48,519	12,694	114,096	37,202
Acquisition and other transaction related costs	586	0	586	646
General and administrative	9,110	4,728	24,896	12,718
Loss on impairment of real estate	0	0	100,747	0
Total expenses	80,417	29,456	299,063	86,653
Interest and other income	1,068	0	1,900	0
Interest expense (including net amortization of debt issuance costs, premiums and discounts of $35,496, $505, $90,265 and $1,516, respectively)	(89,739)	(9,084)	(208,286)	(26,468)
Gain (loss) on sale of real estate	0	940	(10)	940
Loss on equity securities	0	0	(5,758)	0
Loss on early extinguishment of debt	(21,370)	0	(22,198)	0
(Loss) income before income tax expense and equity in earnings of unconsolidated joint venture	(87,243)	17,381	(251,603)	51,197
Income tax expense	(28)	(72)	(113)	(177)
Equity in earnings of unconsolidated joint venture	3,297	998	6,634	5,455
Net (loss) income	(83,974)	18,307	(245,082)	56,475
Net loss attributable to noncontrolling interest	38,347	0	49,402	0
Net (loss) income attributable to common shareholders	(45,627)	18,307	(195,680)	56,475
Other comprehensive income:
Unrealized gain on derivatives	8,847	0	18,917	0
Less: unrealized gain on derivatives attributable to noncontrolling interest	(4,119)	0	(6,617)	0
Other comprehensive income attributable to common shareholders	4,728	0	12,300	0
Comprehensive (loss) income attributable to common shareholders	$ (40,899)	$ 18,307	$ (183,380)	$ 56,475
Weighted average common shares outstanding - basic (in shares)	65,250	65,178	65,228	65,154
Weighted average common shares outstanding - diluted (in shares)	65,250	65,230	65,228	65,205
Numerators:
Net (loss) income attributable to common shareholders, basic (in usd per share)	$ (0.70)	$ 0.28	$ (3.00)	$ 0.86
Net (loss) income attributable to common shareholders, diluted (in usd per share)	$ (0.70)	$ 0.28	$ (3.00)	$ 0.86

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CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Income Statement [Abstract]
Amortization of debt issuance costs and premium	$ 35,496	$ 505	$ 90,265	$ 1,516

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CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Total Equity Attributable to Common Shareholders	Common shares	Additional Paid-in Capital	Cumulative Net Income	Cumulative Other Comprehensive Income	Cumulative Common Distributions	Total Attributable to Noncontrolling Interest
Beginning balance (in shares) at Dec. 31, 2020			65,301,088
Beginning balance at Dec. 31, 2020	$ 1,003,190		$ 653	$ 1,010,819	$ 224,226		$ (232,508)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	19,337				19,337
Share grants	239			239
Distributions to common shareholders	(21,550)						(21,550)
Ending balance (in shares) at Mar. 31, 2021			65,301,088
Ending balance at Mar. 31, 2021	1,001,216		$ 653	1,011,058	243,563		(254,058)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	18,831				18,831
Shares grants (in shares)			21,000
Share grants	780			780
Share repurchases (in shares)			(7,733)
Share repurchases	(202)			(202)
Distributions to common shareholders	(21,549)						(21,549)
Ending balance (in shares) at Jun. 30, 2021			65,314,355
Ending balance at Jun. 30, 2021	999,076		$ 653	1,011,636	262,394		(275,607)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	18,307				18,307
Shares grants (in shares)			118,800
Share grants	917		$ 1	916
Share repurchases (in shares)			(27,576)
Share repurchases	(713)			(713)
Shares forfeitures (in shares)			(700)
Share forfeitures	(4)			(4)
Distributions to common shareholders	(21,554)						(21,554)
Ending balance (in shares) at Sep. 30, 2021			65,404,879
Ending balance at Sep. 30, 2021	996,029		$ 654	1,011,835	280,701		(297,161)
Beginning balance (in shares) at Dec. 31, 2021			65,404,592
Beginning balance at Dec. 31, 2021	1,038,042	$ 1,038,042	$ 654	1,012,224	343,908	$ 0	(318,744)	$ 0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(9,787)	(6,514)			(6,514)			(3,273)
Share grants	407	407		407
Share repurchases (in shares)			(333)
Share repurchases	(7)	(7)		(7)
Shares forfeitures (in shares)			(400)
Share forfeitures	(2)	(2)		(2)
Net current period other comprehensive income	5,632	3,908				3,908		1,724
Contributions from noncontrolling interest	591,268							591,268
Distributions to common shareholders	(21,584)	(21,584)					(21,584)
Ending balance (in shares) at Mar. 31, 2022			65,403,859
Ending balance at Mar. 31, 2022	1,603,969	1,014,250	$ 654	1,012,622	337,394	3,908	(340,328)	589,719
Beginning balance (in shares) at Dec. 31, 2021			65,404,592
Beginning balance at Dec. 31, 2021	1,038,042	1,038,042	$ 654	1,012,224	343,908	0	(318,744)	0
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Distributions to common shareholders	(43,821)
Ending balance (in shares) at Sep. 30, 2022			65,568,704
Ending balance at Sep. 30, 2022	1,361,510	812,421	$ 656	1,013,802	148,228	12,300	(362,565)	549,089
Beginning balance (in shares) at Mar. 31, 2022			65,403,859
Beginning balance at Mar. 31, 2022	1,603,969	1,014,250	$ 654	1,012,622	337,394	3,908	(340,328)	589,719
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(151,321)	(143,539)			(143,539)			(7,782)
Shares grants (in shares)			24,500,000
Share grants	800	800		800
Shares forfeitures (in shares)			(900)
Share forfeitures	(4)	(4)		(4)
Net current period other comprehensive income	4,438	3,664				3,664		774
Distributions to noncontrolling interest	(1,365)							(1,365)
Distributions to common shareholders	(21,583)	(21,583)					(21,583)
Ending balance (in shares) at Jun. 30, 2022			65,427,459
Ending balance at Jun. 30, 2022	1,434,934	853,588	$ 654	1,013,418	193,855	7,572	(361,911)	581,346
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net (loss) income	(83,974)	(45,627)			(45,627)			(38,347)
Shares grants (in shares)			173,300
Share grants	622	622	$ 2	620
Share repurchases (in shares)			(31,455)
Share repurchases	(232)	(232)		(232)
Shares forfeitures (in shares)			(600)
Share forfeitures	(4)	(4)		(4)
Net current period other comprehensive income	8,847	4,728				4,728		4,119
Contributions from noncontrolling interest	1,971							1,971
Distributions to common shareholders	(654)	(654)					(654)
Ending balance (in shares) at Sep. 30, 2022			65,568,704
Ending balance at Sep. 30, 2022	$ 1,361,510	$ 812,421	$ 656	$ 1,013,802	$ 148,228	$ 12,300	$ (362,565)	$ 549,089

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands		9 Months Ended
		Sep. 30, 2022	Sep. 30, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income		$ (245,082)	$ 56,475
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation		75,014	23,500
Loss on impairment of real estate		100,747	0
Net amortization of debt issuance costs, premiums and discounts		90,265	1,516
Amortization of acquired real estate leases and assumed real estate lease obligations		33,680	12,567
Amortization of deferred leasing costs		1,170	620
Loss (gain) on sale of real estate		10	(940)
Loss on equity securities		5,758	0
Straight line rental income		(8,170)	(5,673)
Loss on early extinguishment of debt		22,198	0
Other non-cash expenses		4,443	1,932
Distributions of earnings from unconsolidated joint venture		3,962	1,980
Equity in earnings of unconsolidated joint venture		(6,634)	(5,455)
Change in assets and liabilities:
Rents receivable		(16,299)	960
Deferred leasing costs		(7,139)	(2,758)
Due from related persons		0	2,665
Other assets		3,615	(5,596)
Accounts payable and other liabilities		5,398	1,657
Rents collected in advance		15,739	4,012
Security deposits		923	393
Due to related persons		2,309	1,065
Net cash provided by operating activities		81,907	88,920
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions and deposits		(3,589,085)	(134,730)
Real estate improvements		(8,741)	(2,373)
Proceeds from sale of marketable securities		140,792	0
Proceeds from sale of real estate		0	1,206
Proceeds from sale of joint venture		0	804
Net cash used in investing activities		(3,457,034)	(135,093)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of mortgages and notes payable		3,335,000	0
Repayment of mortgage notes payable		(12,591)	0
Proceeds from secured bridge loan facility		1,385,158	0
Repayment of secured bridge loan facility		(1,385,158)	0
Borrowings under revolving credit facility		3,000	246,000
Repayments of revolving credit facility		(185,000)	(113,000)
Payment of debt issuance costs		(211,996)	0
Distributions to common shareholders		(43,821)	(64,653)
Proceeds from sale of noncontrolling interest, net		589,411	0
Repurchase of common shares		(239)	(915)
Distributions to noncontrolling interest		(1,365)	0
Net cash provided by financing activities		3,472,399	67,432
Increase in cash, cash equivalents and restricted cash		97,272	21,259
Cash, cash equivalents and restricted cash at beginning of period		29,397	22,834
Cash, cash equivalents and restricted cash at end of period		126,669	44,093
SUPPLEMENTAL DISCLOSURES:
Interest paid		113,748	24,708
Income taxes paid		223	386
Interest capitalized		68	0
NON-CASH INVESTING ACTIVITIES:
Real estate acquired by assumption of mortgage notes payable		323,432	0
Real estate improvements accrued, not paid		7,165	799
NON-CASH FINANCING ACTIVITIES:
Assumption of mortgage notes payable		(323,432)	0
SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH:
Cash and cash equivalents		26,381	44,093
Restricted cash	[1]	100,288	0
Total cash, cash equivalents and restricted cash shown in the statements of cash flows		$ 126,669	$ 44,093

[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.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical)	Sep. 30, 2022	Feb. 25, 2022
MNR
Equity interest in joint venture	61.00%	61.00%

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Basis of Presentation

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

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.

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Real Estate Investments

9 Months Ended

Sep. 30, 2022

Real Estate [Abstract]

Real Estate Investments

Real Estate Investments

As of September 30, 2022, our portfolio was comprised of 413 consolidated properties containing approximately 59,962,000 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 187 properties containing approximately 43,233,000 rentable square feet of industrial properties located in 38 other states, or our Mainland Properties, which includes 94 properties owned by a consolidated joint venture arrangement in which we own a 61% equity interest. As of September 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 September 30, 2022 and 2021, approximately 26.8% and 50.5%, respectively, of our rental income was from our Hawaii Properties. For the nine months ended September 30, 2022 and 2021, approximately 30.6% and 50.7%, respectively, of our rental income was from our Hawaii properties.

As of September 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
	Square		of	Lease Term	Rental Income								Rental Income
	Feet		States	(in years)	Three Months Ended								Nine Months Ended
Tenant	As of September 30, 2022				9/30/2022				9/30/2021				9/30/2022				9/30/2021
Federal Express Corporation/ FedEx Ground Package System, Inc.	22.0	%	34	7.3	$	31,697	30.7	%	$	2,706	4.9	%	$	76,227	27.0	%	$	8,152	5.0	%
Amazon.com Services, Inc./ Amazon.com Services LLC	7.7	%	6	6.2	7,244		7.0	%	5,231		9.5	%	20,095		7.1	%	16,117		9.9	%
Home Depot U.S.A., Inc.	5.7	%	3	26.3	3,346		3.2	%	1,322		2.4	%	10,169		3.6	%	3,948		2.4	%
Total	35.4	%	34	13.3	$	42,287	40.9	%	$	54,982	16.8	%	$	106,491	37.7	%	$	163,378	17.3	%

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 $3,739,048, 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 then completed, property acquisitions. The investor acquired a 39% equity interest in the joint venture from us for $589,411, as of the completion of this transaction, 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, 10 and 11 for more information regarding this joint venture and related loans.

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 was scheduled to mature in February 2023 and required that interest be paid at an annual rate of SOFR plus a weighted average premium of 2.92%. The Bridge Loan was repaid in full on September 22, 2022. The Fixed Rate Loan matures in March 2032 and requires that interest be paid at a weighted 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. See Note 4 for more information regarding 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 the Bridge Loan and the 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	$	430,818
Buildings	3,035,309
Acquired real estate leases (1)	294,576
Cash	8,814
Other assets, net	14,194
Securities available for sale (2)	146,550
Total assets	3,930,261
Mortgage notes payable, at fair value	(323,432)
Accounts payable and other liabilities	(25,327)
Assumed real estate lease obligations	(17,829)
Equity attributable to noncontrolling interest on the joint venture	(3,827)
Net assets acquired	3,559,846
Assumed working capital	(144,230)
Assumed mortgage notes payable, principal	323,432
Purchase price	$	3,739,048

(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 nine months ended September 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 nine months ended September 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 $38,053, including acquisition related costs of $53. This property is 100% leased to a single tenant with a remaining lease term of approximately 14.9 years at the time of acquisition.

We allocated the purchase price for this acquisition based on the estimated fair value of the acquired assets as follows:

Purchase				Buildings and		Acquired Real Estate
Price		Land		Improvements		Leases
$	38,053	$	3,818	$	30,780	$	3,455

This property was one of two committed MNR property acquisitions at the time of the Merger and was acquired directly by our consolidated joint venture. In September 2022, our consolidated joint venture terminated the agreement for the other committed MNR property acquisition.

During the nine months ended September 30, 2022, we committed $15,304 for expenditures related to leasing related costs for leases executed during the period for approximately 6,442,000 square feet. As of September 30, 2022, committed, but unspent, tenant related obligations based on existing leases were $25,939.

Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands changes; however, we do not have plans to change the use of those lands. As of both September 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 the maintenance of our properties for their 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. Charges for environmental remediation costs, if any, are included in other operating expenses in our condensed consolidated statements of comprehensive income (loss).

Disposition Activities

During the nine months ended September 30, 2022, we recorded a $100,747 loss on impairment of real estate to adjust the carrying value of 25 properties to their estimated fair value, due to a change in plans to sell and the reclassification of those properties from held for sale to held and used. See Note 5 for further information on these properties.

Joint Venture Activities

As of September 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 September 30, 2022		Properties	Location	Feet
Mountain Industrial REIT LLC	Consolidated	61%	N/A		94	Various	20,981,000
The Industrial Fund REIT LLC	Unconsolidated	22%	$	145,693	18	Various	11,726,000

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

				Principal Balance
	Interest			at September 30,
Joint Venture (Consolidated)	Rate		Maturity Date	2022 (1)
Mortgage notes payable (secured by 11 properties in 10 states)	3.67%	(2)	Various	$	310,842
Mortgage notes payable (secured by 82 properties in 25 states)	5.62%		3/9/2024	1,400,000
Weighted average/total	5.27%			$	1,710,842

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

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

				Principal Balance
	Interest			at September 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
Mortgage notes payable (secured by 5 properties in four states)	4.22%		10/1/2027	97,000
Weighted average/total	3.53%	(2)		$	503,980

(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.

Consolidated Joint Venture - Mountain Industrial REIT LLC

Immediately following the closing of the Merger, we entered into a joint venture arrangement with an institutional investor for 95 of the acquired MNR properties in 27 states, including two then committed, but not yet then completed, property acquisitions. The investor acquired a 39% noncontrolling equity interest in the joint venture from us for $589,411, as of the completion of this transaction, and we retained the remaining 61% equity interest in the joint venture. The joint venture assumed $323,432 aggregate principal amount of former MNR mortgage debt on certain of the properties. In July 2022, our consolidated joint venture completed one of the two committed MNR property acquisitions, and in September 2022, our consolidated joint venture terminated the agreement for the other committed MNR property acquisition. We control this joint venture and therefore account for the properties on a consolidated basis in our condensed consolidated financial statements.

We recognized a 39% noncontrolling interest in our condensed consolidated financial statements for the three and nine months ended September 30, 2022. The portion of this joint venture's net loss not attributable to us, or $38,318 and $49,360 for the three and nine months ended September 30, 2022, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income (loss). During the nine months ended September 30, 2022, this joint venture made aggregate cash distributions of $1,365 to the other joint venture investor, which is reflected as a decrease in total equity attributable to noncontrolling interest in our condensed consolidated balance sheets. No distributions were made during the three months ended September 30, 2022. See Notes 1, 4, 5, 9, 10 and 11 for more information regarding this joint venture.

Unconsolidated Joint Venture - The Industrial Fund REIT LLC

As of September 30, 2022 and December 31, 2021, we also owned a 22% interest in an unconsolidated joint venture with 18 properties in 12 states. We account for the unconsolidated joint venture under the equity method of accounting under the fair value option.

We recorded a change in the fair value of our investment in the unconsolidated joint venture of $3,297 and $998 for the three months ended September 30, 2022 and 2021, respectively, and $6,634 and $5,455 for the nine months ended September 30, 2022 and 2021, respectively, as equity in earnings of unconsolidated joint venture in our condensed consolidated statements of comprehensive income (loss). In addition, the unconsolidated joint venture made aggregate cash distributions to us of $1,320 and $660 during the three months ended September 30, 2022 and 2021, respectively, and $3,962 and $1,980, during the nine months ended September 30, 2022 and 2021, respectively. In October 2022, the unconsolidated joint venture made a cash distribution to us of $20,900, including amounts related to a debt financing.

See Notes 1, 4, 5, 9, 10 and 11 for more information regarding our joint ventures.

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Leases

9 Months Ended

Sep. 30, 2022

Leases [Abstract]

Leases

Leases

We are a lessor of industrial and logistics properties. Our leases provide our tenants with the contractual right to use and economically benefit from all the physical space specified in their respective leases; therefore, we have determined to evaluate our leases as lease arrangements.

Our leases provide for base rent payments and may also include variable payments. Rental income from operating leases, including any payments derived by index or market-based indices, is recognized on a straight line basis over the lease term when we have determined that the collectability of substantially all of the lease payments is probable. Some of our leases have options to extend or terminate the lease exercisable at the option of our tenants, which are considered when determining the lease term. We do not include in our measurement of our lease receivables certain variable payments, including payments determined by changes in the index or market-based indices after the inception of the lease, certain tenant reimbursements and other income until the specific events that trigger the variable payments have occurred. Such payments totaled $16,664 and $9,478 for the three months ended September 30, 2022 and 2021, respectively, of which tenant reimbursements totaled $16,419 and $9,233, respectively, and $46,071 and $28,341 for the nine months ended September 30, 2022 and 2021, respectively, of which tenant reimbursements totaled $45,336 and $27,606, respectively.

We increased rental income to record revenue on a straight line basis by $3,794 and $1,678 for the three months ended September 30, 2022 and 2021, respectively, and $8,170 and $5,673 for the nine months ended September 30, 2022 and 2021, respectively.

Right of use asset and lease liability. In connection with our acquisition of MNR, we assumed the lease for MNR’s former corporate headquarters, which expires on December 31, 2029, and three of the properties we acquired as part of the MNR acquisition were subject to ground leases under which we are the lessee. For leases under which we are the lessee, we are required to record a right of use asset and lease liability for all leases with a term greater than 12 months. As of September 30, 2022, the value of the right of use asset and related liability representing our future obligations under the lease arrangements under which we are the lessee were $4,959 and $5,019, respectively. The right of use asset and related lease liability are included in other assets, net and accounts payable and other liabilities, respectively, in our condensed consolidated balance sheets.

Generally, payments of ground lease obligations are made by our tenants. However, if a tenant does not perform obligations under a ground lease or does not renew any ground lease, we may have to perform obligations under, or renew, the ground lease in order to protect our investment in the affected property.

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Indebtedness

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Indebtedness

Indebtedness

As of September 30, 2022, our outstanding indebtedness consisted of the following:

										Net Book
										Value
			Principal Balance as of							of Collateral
			September 30,		December 31,		Interest			At September 30,
Entity	Type	Secured By:	2022 (1)		2021 (1)		Rate		Maturity	2022
ILPT	Revolving credit facility (2)	Unsecured	$	—	$	182,000	N/A		N/A	$	—
ILPT	Floating Rate - Interest only (3)	104 Properties	1,235,000		—		6.18	%	Oct 2024	1,077,796
ILPT	Fixed Rate - Interest only	186 Properties	650,000		650,000		4.31	%	Feb 2029	490,602
ILPT	Fixed Rate - Interest only	17 Properties	700,000		—		4.42	%	Mar 2032	521,785
Mountain (4)	Floating Rate - Interest only (5)	82 Properties	1,400,000		—		5.62	%	Mar 2024	1,923,147
Mountain (4)	Fixed Rate - Amortizing	One Property	14,074		—		3.76	%	Oct 2028	63,829
Mountain (4)	Fixed Rate - Amortizing	One Property	5,008		—		3.77	%	Apr 2030	40,002
Mountain (4)	Fixed Rate - Amortizing	One Property	5,295		—		3.85	%	Apr 2030	40,002
Mountain (4)	Fixed Rate - Amortizing	One Property	14,793		—		3.56	%	Sep 2030	51,100
Mountain (4)	Fixed Rate - Amortizing	One Property	13,012		—		3.67	%	May 2031	30,962
Mountain (4)	Fixed Rate - Amortizing	One Property	14,443		—		4.14	%	Jul 2032	45,094
Mountain (4)	Fixed Rate - Amortizing	One Property	31,517		—		4.02	%	Oct 2033	87,730
Mountain (4)	Fixed Rate - Amortizing	One Property	43,999		—		4.13	%	Nov 2033	131,986
Mountain (4)	Fixed Rate - Amortizing	One Property	26,602		—		3.10	%	June 2035	48,049
Mountain (4)	Fixed Rate - Amortizing	One Property	42,743		—		2.95	%	Jan 2036	102,593
Mountain (4)	Fixed Rate - Amortizing	One Property	46,659		—		4.27	%	Nov 2037	113,839
Mountain (4)	Fixed Rate - Amortizing	One Property	52,697		—		3.25	%	Jan 2038	117,386
	Total indebtedness		4,295,842		832,000					$	4,885,902
	Unamortized debt issuance costs		(52,571)		(3,876)
	Total indebtedness, net		$	4,243,271	$	828,124

(1)The principal balances are the amounts stated in contracts. In accordance with GAAP, our carrying values and recorded interest expense may be different because of market conditions at the time we assumed certain of these debts.

(2)In February 2022, we repaid the outstanding principal balance under our $750,000 unsecured revolving credit facility and then terminated the agreement governing the facility in accordance with its terms and without penalty.

(3)This loan matures in October 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a weighted average premium of 3.93%. We also purchased an interest rate cap through October 2024 with a SOFR strike rate equal to 2.25%.

(4)Mountain is Mountain Industrial REIT LLC, our consolidated joint venture, in which we own a 61% equity interest.

(5)This loan matures in March 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.77%. We also purchased an interest rate cap through March 2024 with a SOFR strike rate equal to 3.40%.

As of December 31, 2021, we had a $750,000 unsecured revolving credit facility that was available for our general business purposes, including acquisitions. The maturity date of this revolving credit facility was June 29, 2022 and had an option to extend the maturity date for one, six month period, subject to payment of extension fees and satisfaction of other conditions. As of December 31, 2021, the annual interest rate payable on borrowings under this revolving credit facility was 1.41%. The weighted average annual interest rate for borrowings under this revolving credit facility was 1.42% for the three months ended September 30, 2021 and 1.41% and 1.46% for the period from January 1, 2022 to February 25, 2022 and the nine months ended September 30, 2021, respectively. In connection with the closing of the Merger, we entered into the Loans, and repaid the outstanding principal balance under this revolving credit facility and then terminated the agreement governing the facility in accordance with its terms and without penalty. During the nine months ended September 30, 2022, we recorded a $828 loss on early extinguishment of debt to write off unamortized costs related to this facility.

On February 25, 2022, subsidiaries of our consolidated joint venture entered into a loan agreement with a group of institutional lenders, or the Floating Rate Lenders, pursuant to which this joint venture obtained the Floating Rate Loan. Also on February 25, 2022, our consolidated joint venture entered into a guaranty in favor of the Floating Rate Lenders, pursuant to which this joint venture guaranteed certain limited recourse obligations of its subsidiaries with respect to 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 of SOFR plus a premium of 2.25%. Effective in March 2022, the Floating Rate Lenders exercised their option to increase the premium in connection with the securitization of the Floating Rate Loan, resulting in an increase of 51.5 basis points in the premium. We also purchased an interest rate cap through March 2024 with a SOFR strike rate equal to 3.40%. As of September 30, 2022, the weighted average annual interest rate payable under the Floating Rate Loan was 5.62% and the weighted average interest rate for borrowings under the Floating Rate Loan was 4.94% and 4.23% for the three months ended September 30, 2022 and the period from February 25, 2022 to September 30, 2022, respectively.

Also on February 25, 2022, certain of our subsidiaries entered into a loan agreement with a group of institutional lenders, or the Bridge Lenders, and a mezzanine loan agreement with an institutional lender, or the Bridge Mezz Lender, together pursuant to which we obtained the Bridge Loan. Also on February 25, 2022, we entered into a guaranty in favor of the Bridge Lenders and the Bridge Mezz Lender, pursuant to which we guaranteed certain limited recourse obligations of its subsidiaries with respect to the Bridge Loan. The Bridge Loan was scheduled to mature in February 2023 and required that interest only be paid at an annual rate of SOFR plus a premium of 1.75% under the loan agreement and a premium of 8.0% under the mezzanine loan agreement. We also purchased an interest rate cap with a SOFR strike rate equal to 2.70%. The Bridge Loan was repaid in full on September 22, 2022 with cash on hand and proceeds from our $1,235,000 floating rate loan, which is further described below. During the three and nine months ended September 30, 2022, we recorded a $22,231 loss on early extinguishment of debt to write off unamortized costs related to the Bridge Loan and related interest rate cap. The weighted average annual interest rate for borrowings under the Bridge Loan was 5.01% and 4.24% for the period from July 1, 2022 to September 22, 2022 and the period from February 25, 2022 to September 22, 2022, respectively.

Also on February 25, 2022, certain of our subsidiaries entered into a loan agreement with a group of institutional lenders, or the Fixed Rate Lenders, and mezzanine loan agreements with a separate group of institutional lenders, or the Fixed Mezz Lenders, pursuant to which we obtained the Fixed Rate Loan. Also on February 25, 2022, we entered into a guaranty in favor of the Fixed Rate Lenders and the Fixed Mezz Lenders, pursuant to which we guaranteed certain limited recourse obligations of our subsidiaries with respect to the Fixed Rate Loan. The interest only Fixed Rate Loan matures in March 2032 and requires that interest be paid at a weighted average annual fixed rate of 4.42%.

We used the aggregate net proceeds from the Loans to partially fund the acquisition of MNR. Principal payments on the Floating Rate Loan and Fixed Rate Loan are not required prior to the end of their respective initial terms, subject to certain conditions set forth in the applicable loan agreement. Subject to the satisfaction of certain stated conditions, we have the option under the applicable loan agreement: (1) to prepay up to $280,000 of the Floating Rate Loan after March 2023, at par with no premium, and to prepay the balance of the Floating Rate Loan at any time, subject to a premium; and (2) to prepay the Fixed Rate Loan in full or part at any time, subject to a premium, and beginning in September 2031, without a premium.

On September 22, 2022, certain of our subsidiaries entered into a loan agreement with a group of institutional lenders, or the ILPT Floating Rate Lenders, and a mezzanine loan agreement with a separate group of institutional lenders, or the ILPT Floating Rate Mezz Lenders, pursuant to which we obtained the ILPT Floating Rate Loan, secured by 104 of our properties. The ILPT Floating Rate Loan is comprised of a $1,100,000 mortgage loan and a $135,000 mezzanine loan. Also, on September 22, 2022, we entered into a guaranty in favor of the ILPT Floating Rate Lenders and the ILPT Floating Rate Mezz Lenders, pursuant to which we guaranteed certain limited recourse obligations of our subsidiaries with respect to the ILPT Floating Rate Loan. The interest only ILPT Floating Rate Loan matures on October 9, 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR, which is capped at an annual rate of 2.25% for the initial term of the ILPT Floating Rate Loan, plus a weighted average premium of 3.93%. The weighted average interest rate payable under the ILPT Floating Rate Loan as of September 30, 2022 and for the period from September 22, 2022 to September 30, 2022 was 6.18%. See Notes 5 and 10 for further information on our interest rate caps.

The agreements governing the Floating Rate Loan, Fixed Rate Loan and the ILPT Floating Rate Loan contain customary covenants and provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default.

In connection with the Merger, our consolidated joint venture, in which we own a 61% equity interest, assumed an aggregate of $323,432 of former MNR mortgages secured by 11 properties which are owned by this joint venture. These amortizing mortgages require monthly payments of principal and interest until maturity. The value of these mortgages approximated their estimated fair value on the date of acquisition.

See Notes 2 and 5 for further information regarding our acquisition of MNR.

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Fair Value of Assets and Liabilities

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

Fair Value of Assets and Liabilities

Our financial instruments include cash and cash equivalents, restricted cash, rents receivable, the Floating Rate Loan, the ILPT Floating Rate Loan, the Fixed Rate Loan, mortgage notes payable, accounts payable, rents collected in advance, interest rate caps, security deposits and amounts due from or to related persons. At September 30, 2022 and December 31, 2021, the fair value of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows:

	At September 30, 2022				At December 31, 2021
	Carrying		Estimated		Carrying		Estimated
	Value (1)		Fair Value		Value (1)		Fair Value
Fixed rate loan, 4.31% interest rate, due in 2029	$	646,532	$	587,730	$	646,124	$	709,198
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024 (2)	1,213,336		1,213,336		—		—
Floating Rate Loan, 5.62% interest rate, due in 2024 (3)	1,378,000		1,378,000		—		—
Fixed Rate Loan, 4.42% interest rate, due in 2032	694,561		626,128		—		—
Fixed rate loan, 3.76% interest rate, due in 2028	14,074		13,105		—		—
Fixed rate loan, 3.77% interest rate, due in 2030	5,008		4,637		—		—
Fixed rate loan, 3.85% interest rate, due in 2030	5,295		4,918		—		—
Fixed rate loan, 3.56% interest rate, due in 2030	14,793		13,551		—		—
Fixed rate loan, 3.67% interest rate, due in 2031	13,012		11,900		—		—
Fixed rate loan, 4.14% interest rate, due in 2032	14,443		13,355		—		—
Fixed rate loan, 4.02% interest rate, due in 2033	31,517		28,715		—		—
Fixed rate loan, 4.13% interest rate, due in 2033	43,999		40,292		—		—
Fixed rate loan, 3.10% interest rate, due in 2035	26,602		22,671		—		—
Fixed rate loan, 2.95% interest rate, due in 2036	42,743		35,855		—		—
Fixed rate loan, 4.27% interest rate, due in 2037	46,659		42,183		—		—
Fixed rate loan, 3.25% interest rate, due in 2038	52,697		44,184		—		—
	$	4,243,271	$	4,080,560	$	646,124	$	709,198

(1)Includes unamortized debt issuance costs of $52,571 and $3,876 as of September 30, 2022 and December 31, 2021, respectively.

(2)The ILPT Floating Rate Loan matures in October 2024, subject to three, one year extension options.

(3)The Floating Rate Loan, entered into by our consolidated joint venture, matures in March 2024, subject to three, one year extension options.

We estimate the fair value of our mortgage notes payable using discounted cash flow analyses and current prevailing market rates as of the measurement date (Level 3 inputs). As Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value.

The table below presents certain of our assets measured on a recurring basis at fair value at September 30, 2022, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset:

			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Recurring fair value measurements
Investment in unconsolidated joint venture (1)	$	145,693	$	—	$	—	$	145,693
Interest rate cap derivatives (2)	$	67,998	$	—	$	67,998	$	—
Non-recurring fair value measurements
Real estate properties (3)	$	555,123	$	—	$	—	$	555,123

(1)We own a 22% equity interest in a joint venture that owns 18 properties and is included in investment in unconsolidated joint venture in our condensed consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs). The significant unobservable inputs used in the fair value are discount rates of between 5.25% and 7.00%, exit capitalization rates of between 4.50% and 6.00%, direct capitalization rates of between 4.00% and 4.50%, holding periods of approximately 10 years and market rents. Our assumptions are based on the location, type and nature of each property, and current and anticipated market conditions, which are derived from appraisers, industry publications and our experience. See Note 2 for further information regarding our investment in this joint venture.

(2)Our derivative assets are carried at fair value as required by GAAP. The estimated fair values of the derivative assets are based on current market prices in secondary markets for similar derivative contracts, (Level 2 inputs). See Note 10 for more information regarding our derivatives and hedging activities.

(3)We recorded a loss on impairment of real estate of $100,747 to reduce the carrying value of 25 properties in our condensed consolidated balance sheet to their estimated fair value (Level 3 inputs as defined in the fair value hierarchy under GAAP). See Note 3 for more information.

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Shareholders' Equity

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Share Awards:

On June 1, 2022, in accordance with our Trustee compensation arrangements, we awarded to each of our seven Trustees 3,500 of our common shares, valued at $15.07 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day.

On September 14, 2022, we awarded under our equity compensation plan an aggregate of 173,300 of our common shares, valued at $6.83 per share, the closing price of our common shares on Nasdaq on that day, to our officers and certain other employees of The RMR Group LLC, or RMR.

Common Share Purchases:

During the three and nine months ended September 30, 2022, we purchased an aggregate of 31,455 and 31,788 of our common shares, respectively, valued at a weighted average price of $7.40 and $7.56 per common share, respectively, from our officers and certain other current and former officers and employees of RMR, in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares.

Distributions:

During the nine months ended September 30, 2022, we declared and paid regular quarterly distributions to common shareholders as follows:

Declaration Date	Record Date	Payment Date	Distribution Per Share		Total Distribution
January 13, 2022	January 24, 2022	February 17, 2022	$	0.33	$	21,584
April 14, 2022	April 25, 2022	May 19, 2022	0.33		21,583
July 14, 2022	July 25, 2022	August 18, 2022	0.01		654
			$	0.67	$	43,821

On October 13, 2022, we declared a quarterly distribution to common shareholders of record on October 24, 2022 in the amount of $0.01 per share, or approximately $656. We expect to pay this distribution to our shareholders on or about November 17, 2022.

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Per Common Share Amounts

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Per Common Share Amounts

Per Common Share Amounts

We calculate basic earnings per common share by dividing net income (loss) attributable to common shareholders by the weighted average number of our common shares outstanding during the period. We calculate diluted earnings per share using the more dilutive of the two class method or the treasury stock method. Unvested common share awards, and the related impact on earnings, are considered when calculating dilutive earnings per share. The calculation of basic and diluted earnings per share is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerators:
Net (loss) income attributable to common shareholders	$	(45,627)	$	18,307	$	(195,680)	$	56,475
Loss attributable to unvested share awards	(2)		(43)		(128)		(140)
Net (loss) income attributable to common shareholder used in calculating earnings per share	$	(45,629)	$	18,264	$	(195,808)	$	56,335
Denominators:
Weighted average common shares for basic earnings per share	65,250		65,178		65,228		65,154
Effect of dilutive securities: unvested share awards (1)	—		52		—		51
Weighted average common shares for diluted earnings per share	65,250		65,230		65,228		65,205
Net (loss) income attributable to common shareholders per common share - basic	$	(0.70)	$	0.28	$	(3.00)	$	0.86
Net (loss) income attributable to common shareholders per common share - diluted	$	(0.70)	$	0.28	$	(3.00)	$	0.86

(1)    For purposes of calculating diluted earnings per share, we did not include 205 and 196 of unvested share awards for the three and nine months ended September 30, 2022, respectively, because to do so would have been antidilutive.

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Business and Property Management Agreements with RMR

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

Business and Property Management Agreements with RMR

Business and Property Management Agreements with RMR

We have no employees. The personnel and various services we require to operate our business are provided to us by RMR. We have two agreements with RMR to provide management services to us: (1) a business management agreement, which relates to our business generally; and (2) a property management agreement, which relates to our property level operations.

Pursuant to our business management agreement with RMR, we recognized net business management fees of $6,465 and $17,821 for the three and nine months ended September 30, 2022, respectively, and $2,708 and $7,832 for the three and nine months ended September 30, 2021, respectively. Based on our common share total return, as defined in our business management agreement, as of September 30, 2022 and 2021, no incentive fees are included in the net business management fees we recognized for the three and nine months ended September 30, 2022 or 2021. The actual amount of annual incentive fees for 2022, if any, will be based on our common share total return, as defined in our business management agreement, for the three-year period ending December 31, 2022, and will be payable in January 2023. We did not incur any incentive fee payable to RMR for the year ended December 31, 2021. We include business management fees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss). RMR provides management services to our two

joint ventures. See Note 9 for further information regarding our joint ventures’ management arrangements with RMR and the related impact on our management fees payable to RMR.

We and RMR amended our business management agreement effective August 1, 2021 to provide that (i) for periods beginning on and after August 1, 2021, the MSCI U.S. REIT/Industrial REIT Index will be used to calculate benchmark returns per share for purposes of determining any incentive management fee payable by us to RMR and (ii) for periods prior to August 1, 2021, the SNL U.S. REIT Industrial Index will continue to be used. This change of index was due to S&P Global ceasing to publish the SNL U.S. REIT Industrial Index.

Pursuant to our property management agreement with RMR, we recognized aggregate property management and construction supervision fees of $3,270 and $8,797 for the three and nine months ended September 30, 2022, respectively, and $1,675 and $4,860 for the three and nine months ended September 30, 2021, respectively. Of these amounts, for the three and nine months ended September 30, 2022, $2,976 and $8,104, respectively, were expensed to other operating expenses in our condensed consolidated financial statements and $294 and $693, respectively, were capitalized as building improvements in our condensed consolidated balance sheets. For the three and nine months ended September 30, 2021, $1,598 and $4,751, respectively, were expensed to other operating expenses in our condensed consolidated financial statements and $77 and $109, respectively, were capitalized as building improvements in our condensed consolidated balance sheets. The amounts capitalized are being depreciated over the estimated useful lives of the related capital assets.

We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR on our behalf. We are generally not responsible for payment of RMR’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR’s centralized accounting personnel, our share of RMR’s costs for providing our internal audit function, or as otherwise agreed. Our property level operating expenses are generally incorporated into the rents charged to our tenants, including certain payroll and related costs incurred by RMR. We reimbursed RMR $1,847 and $5,155 for these expenses and costs for the three and nine months ended September 30, 2022, respectively, and $1,184 and $3,451 for the three and nine months ended September 30, 2021, respectively. These amounts are included in other operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income (loss).

See Note 9 for further information regarding our relationships, agreements and transactions with RMR.

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Related Person Transactions

9 Months Ended

Sep. 30, 2022

Related Party Transactions [Abstract]

Related Person Transactions

Related Person Transactions

We have relationships and historical and continuing transactions with RMR, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR is a majority owned subsidiary of RMR Inc. The Chair of our Board of Trustees and one of our Managing Trustees, Adam Portnoy, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., chair of the board of directors, a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR. Matthew Jordan, our other Managing Trustee, is an executive vice president and the chief financial officer and treasurer of RMR Inc. and an officer and employee of RMR. John Murray, one of our Managing Trustees until June 1, 2022 and our President and Chief Executive Officer until March 31, 2022, also serves as an officer and employee of RMR, and each of our other officers is also an officer and employee of RMR. Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR or its subsidiaries provide management services. Adam Portnoy serves as chair of the boards and as a managing trustee or managing director of those companies. Other officers of RMR, including Messrs. Jordan and Murray and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies.

See Note 6 for information relating to the awards of our common shares we made in September 2022 to our officers and certain other employees of RMR and common shares we purchased from our officers and certain other current and former officers and employees of RMR in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares. We include amounts recognized as expense for awards of our common shares to our officers and RMR employees in general and administrative expenses in our condensed consolidated statements of comprehensive income (loss).

Our Manager, RMR. We have two agreements with RMR to provide management services to us. See Note 8 for further information regarding our management agreements with RMR.

Joint Ventures. We have two separate joint venture arrangements. One of these joint ventures is with two, third party institutional investors. This joint venture owns 18 properties. We own a 22% equity interest in this joint venture. We entered into this joint venture prior to January 1, 2021.

The other joint venture we entered into in connection with the Merger is with one, third party institutional investor. This joint venture owns 94 properties. We own a 61% equity interest in the joint venture and the other joint venture investor acquired a 39% equity interest in the joint venture from us for $589,411, as of the completion of this transaction, in connection with the joint venture’s formation in February 2022.

RMR provides management services to both of these joint ventures. We do not include our 18 property joint venture as a consolidated subsidiary and, as a result, we are not obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding that joint venture. Our 94 property joint venture is our consolidated subsidiary and, as a result, we are obligated to pay management fees to RMR under our management agreements with RMR for the services it provides regarding that joint venture; however, that joint venture pays management fees directly to RMR, and any such fees paid by that joint venture are credited against the fees payable by us to RMR.

In December 2021, we sold six properties to our then existing joint venture. We received proceeds of approximately $160,516 from the other equity investors in that joint venture in connection with this sale. We and the other equity investors maintained our respective percentage equity interests in that joint venture following this transaction. As of December 31, 2021 and September 30, 2022, we owed $225 and $554, respectively, to that joint venture for rents that we collected on behalf of that joint venture. These amounts are presented as due to related persons in our condensed consolidated balance sheet. We paid the amounts we owed as of December 31, 2021 in January 2022 and the amounts we owed as of September 30, 2022 in October 2022.

See Notes 2, 4, 5 and 11 for further information regarding our joint ventures.

TA. In May 2021, we acquired a property located in the Dallas, Texas market from TravelCenters of America Inc., or TA, for a purchase price of $2,319, including acquisition related costs of $119. RMR provides management services to TA and Mr. Portnoy serves as the chair of the board of directors and as a managing director of TA.

For further information about these and other such relationships and certain other related person transactions, see our 2021 Annual Report.

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Derivatives and Hedging Activities

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivatives and Hedging Activities

Derivatives and Hedging Activities

Risk Management Objective of Using Derivatives

We are exposed to certain risks relating to our ongoing business operations, including the impact of changes in interest rates. The only risk currently managed by us using derivative instruments is a part of our interest rate risk. We have an interest rate cap agreement to manage our interest rate risk exposure on each of the ILPT Floating Rate Loan and the Floating Rate Loan, both with interest payable at a rate equal to SOFR plus a premium. The use of derivative financial instruments carries certain risks, including the risk that the counterparties to these contractual arrangements are not able to perform under the agreements. To mitigate this risk, we only enter into derivative financial instruments with counterparties with high credit ratings and with major financial institutions with which we or our related parties may also have other financial relationships. We do not anticipate that any of the counterparties will fail to meet their obligations.

Cash Flow Hedges of Interest Rate Risk

As required by ASC 815, Derivatives and Hedging, we record all derivatives on the balance sheet at fair value. The following table summarizes the terms of our outstanding interest rate cap agreements designated as cash flow hedges of interest rate risk as of September 30, 2022:

Interest Rate Derivative	Balance Sheet Line Item	Underlying Instrument	Number of Instruments	Strike Rate	Notional Amount		Fair Value at September 30, 2022
Interest Rate Cap	Other assets	Floating Rate Loan (1)	1	3.40%	$	1,400,000	$	19,485
Interest Rate Cap	Other assets	ILPT Floating Rate Loan	2	2.25%	$	1,235,000	$	48,513

(1)The Floating Rate Loan was entered into by our consolidated joint venture.

Interest rate caps designated as cash flow hedges involve the receipt of variable amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. For derivatives designated and qualifying as cash flow hedges of interest rate risk, the gain or loss on the derivative is recorded in accumulated other comprehensive income and subsequently reclassified into interest expense in the same period during which the hedged transaction affects earnings. Gains and losses on the derivative representing hedge components excluded from the assessment of effectiveness are recognized over the life of the hedge on a systematic and rational basis, as documented at hedge inception in accordance with our accounting policy election. The earnings recognition of excluded components is presented in interest expense. Amounts reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made on our applicable debt.

In September 2022, in conjunction with the repayment of the Bridge Loan, we sold two interest rate cap instruments with an aggregate notional amount of $1,385,158, a strike rate equal to 2.70% and an original expiration date of March 15, 2023 for $7,740. As the underlying debt instrument that these interest rate caps were intended to hedge was repaid in its entirety and the related interest expense was no longer probable to occur, these interest rate caps were no longer designated as cash flow hedges and the remaining deferred gain was reclassified from cumulative other comprehensive income as a reduction of loss on early extinguishment of debt.

	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Amount of gain recognized in cumulative other comprehensive income	$	15,047	$	24,200
Amount reclassified from cumulative other comprehensive income into interest expense	761		1,678
Amount reclassified from cumulative other comprehensive income into loss on early extinguishment of debt	(6,961)		(6,961)
Unrealized gain on derivative instrument recognized in cumulative other comprehensive income	$	8,847	$	18,917

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Noncontrolling Interest

9 Months Ended

Sep. 30, 2022

Noncontrolling Interest [Abstract]

Noncontrolling Interest

Noncontrolling Interest

On February 25, 2022, we completed the acquisition of MNR. In connection with the Merger, we entered into a joint venture arrangement with an institutional investor for 95 of the acquired MNR properties, including two then committed, but not yet then completed, property acquisitions. The investor acquired a 39% noncontrolling equity interest in the joint venture for $589,411, as of the completion of this transaction, and we retained the remaining 61% equity interest in the joint venture. The joint venture assumed $323,432 aggregate principal amount of former MNR mortgage debt on certain of the properties. In July 2022, our consolidated joint venture completed one of the two committed MNR property acquisitions, and in September 2022, our consolidated joint venture terminated the agreement for the other committed MNR property acquisition. We control this joint venture and therefore account for the properties on a consolidated basis in our condensed consolidated financial statements.

We recognized a 39% noncontrolling interest in our condensed consolidated financial statements for the three and nine months ended September 30, 2022. The portion of this joint venture's net loss not attributable to us, or $38,318 and $49,360 for the three and nine months ended September 30, 2022, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income (loss). During the nine months ended September 30, 2022, this joint venture made aggregate cash distributions of $1,365 to the other joint venture investor, which is reflected as a decrease in total equity attributable to noncontrolling interest in our condensed consolidated balance sheets. No distributions were made during the three months ended September 30, 2022. See Notes 1, 2, 4, 5, 9 and 11 for further information regarding this joint venture.

An unrelated third party owns an approximate 33% tenancy in common interest in one of the properties we acquired as part of the MNR acquisition located in Somerset, New Jersey, and we own the remaining 67% tenancy in common interest in this property. The portion of this property’s net loss not attributable to us, or $29 and $42 for the three and nine months ended September 30, 2022, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income (loss).

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Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and 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.

Use of estimates

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.

Fair value of assets and liabilities

We estimate the fair value of our mortgage notes payable using discounted cash flow analyses and current prevailing market rates as of the measurement date (Level 3 inputs). As Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value.

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Real Estate Investments (Tables)

9 Months Ended

Sep. 30, 2022

Real Estate [Abstract]

Schedule of concentration of risk

As of September 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
	Square		of	Lease Term	Rental Income								Rental Income
	Feet		States	(in years)	Three Months Ended								Nine Months Ended
Tenant	As of September 30, 2022				9/30/2022				9/30/2021				9/30/2022				9/30/2021
Federal Express Corporation/ FedEx Ground Package System, Inc.	22.0	%	34	7.3	$	31,697	30.7	%	$	2,706	4.9	%	$	76,227	27.0	%	$	8,152	5.0	%
Amazon.com Services, Inc./ Amazon.com Services LLC	7.7	%	6	6.2	7,244		7.0	%	5,231		9.5	%	20,095		7.1	%	16,117		9.9	%
Home Depot U.S.A., Inc.	5.7	%	3	26.3	3,346		3.2	%	1,322		2.4	%	10,169		3.6	%	3,948		2.4	%
Total	35.4	%	34	13.3	$	42,287	40.9	%	$	54,982	16.8	%	$	106,491	37.7	%	$	163,378	17.3	%

Schedule of assets acquired and liabilities assumed

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

Land	$	430,818
Buildings	3,035,309
Acquired real estate leases (1)	294,576
Cash	8,814
Other assets, net	14,194
Securities available for sale (2)	146,550
Total assets	3,930,261
Mortgage notes payable, at fair value	(323,432)
Accounts payable and other liabilities	(25,327)
Assumed real estate lease obligations	(17,829)
Equity attributable to noncontrolling interest on the joint venture	(3,827)
Net assets acquired	3,559,846
Assumed working capital	(144,230)
Assumed mortgage notes payable, principal	323,432
Purchase price	$	3,739,048

(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 nine months ended September 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 nine months ended September 30, 2022.

We allocated the purchase price for this acquisition based on the estimated fair value of the acquired assets as follows:

Purchase				Buildings and		Acquired Real Estate
Price		Land		Improvements		Leases
$	38,053	$	3,818	$	30,780	$	3,455

Schedule of investment in unconsolidated joint ventures

As of September 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 September 30, 2022		Properties	Location	Feet
Mountain Industrial REIT LLC	Consolidated	61%	N/A		94	Various	20,981,000
The Industrial Fund REIT LLC	Unconsolidated	22%	$	145,693	18	Various	11,726,000

Schedule of the mortgage debt of our joint venture

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

				Principal Balance
	Interest			at September 30,
Joint Venture (Consolidated)	Rate		Maturity Date	2022 (1)
Mortgage notes payable (secured by 11 properties in 10 states)	3.67%	(2)	Various	$	310,842
Mortgage notes payable (secured by 82 properties in 25 states)	5.62%		3/9/2024	1,400,000
Weighted average/total	5.27%			$	1,710,842

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

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

				Principal Balance
	Interest			at September 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
Mortgage notes payable (secured by 5 properties in four states)	4.22%		10/1/2027	97,000
Weighted average/total	3.53%	(2)		$	503,980

(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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Indebtedness (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Schedule of outstanding indebtedness

As of September 30, 2022, our outstanding indebtedness consisted of the following:

										Net Book
										Value
			Principal Balance as of							of Collateral
			September 30,		December 31,		Interest			At September 30,
Entity	Type	Secured By:	2022 (1)		2021 (1)		Rate		Maturity	2022
ILPT	Revolving credit facility (2)	Unsecured	$	—	$	182,000	N/A		N/A	$	—
ILPT	Floating Rate - Interest only (3)	104 Properties	1,235,000		—		6.18	%	Oct 2024	1,077,796
ILPT	Fixed Rate - Interest only	186 Properties	650,000		650,000		4.31	%	Feb 2029	490,602
ILPT	Fixed Rate - Interest only	17 Properties	700,000		—		4.42	%	Mar 2032	521,785
Mountain (4)	Floating Rate - Interest only (5)	82 Properties	1,400,000		—		5.62	%	Mar 2024	1,923,147
Mountain (4)	Fixed Rate - Amortizing	One Property	14,074		—		3.76	%	Oct 2028	63,829
Mountain (4)	Fixed Rate - Amortizing	One Property	5,008		—		3.77	%	Apr 2030	40,002
Mountain (4)	Fixed Rate - Amortizing	One Property	5,295		—		3.85	%	Apr 2030	40,002
Mountain (4)	Fixed Rate - Amortizing	One Property	14,793		—		3.56	%	Sep 2030	51,100
Mountain (4)	Fixed Rate - Amortizing	One Property	13,012		—		3.67	%	May 2031	30,962
Mountain (4)	Fixed Rate - Amortizing	One Property	14,443		—		4.14	%	Jul 2032	45,094
Mountain (4)	Fixed Rate - Amortizing	One Property	31,517		—		4.02	%	Oct 2033	87,730
Mountain (4)	Fixed Rate - Amortizing	One Property	43,999		—		4.13	%	Nov 2033	131,986
Mountain (4)	Fixed Rate - Amortizing	One Property	26,602		—		3.10	%	June 2035	48,049
Mountain (4)	Fixed Rate - Amortizing	One Property	42,743		—		2.95	%	Jan 2036	102,593
Mountain (4)	Fixed Rate - Amortizing	One Property	46,659		—		4.27	%	Nov 2037	113,839
Mountain (4)	Fixed Rate - Amortizing	One Property	52,697		—		3.25	%	Jan 2038	117,386
	Total indebtedness		4,295,842		832,000					$	4,885,902
	Unamortized debt issuance costs		(52,571)		(3,876)
	Total indebtedness, net		$	4,243,271	$	828,124

(1)The principal balances are the amounts stated in contracts. In accordance with GAAP, our carrying values and recorded interest expense may be different because of market conditions at the time we assumed certain of these debts.

(2)In February 2022, we repaid the outstanding principal balance under our $750,000 unsecured revolving credit facility and then terminated the agreement governing the facility in accordance with its terms and without penalty.

(3)This loan matures in October 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a weighted average premium of 3.93%. We also purchased an interest rate cap through October 2024 with a SOFR strike rate equal to 2.25%.

(4)Mountain is Mountain Industrial REIT LLC, our consolidated joint venture, in which we own a 61% equity interest.

(5)This loan matures in March 2024, subject to three, one year extension options, and requires that interest be paid at an annual rate of SOFR plus a premium of 2.77%. We also purchased an interest rate cap through March 2024 with a SOFR strike rate equal to 3.40%.

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Fair Value of Assets and Liabilities (Tables)

9 Months Ended

Sep. 30, 2022

Fair Value Disclosures [Abstract]

Schedule of carrying value and the estimated fair market value of mortgage notes payable

At September 30, 2022 and December 31, 2021, the fair value of our financial instruments approximated their carrying values in our condensed consolidated financial statements, due to their short term nature or floating interest rates, except as follows:

	At September 30, 2022				At December 31, 2021
	Carrying		Estimated		Carrying		Estimated
	Value (1)		Fair Value		Value (1)		Fair Value
Fixed rate loan, 4.31% interest rate, due in 2029	$	646,532	$	587,730	$	646,124	$	709,198
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024 (2)	1,213,336		1,213,336		—		—
Floating Rate Loan, 5.62% interest rate, due in 2024 (3)	1,378,000		1,378,000		—		—
Fixed Rate Loan, 4.42% interest rate, due in 2032	694,561		626,128		—		—
Fixed rate loan, 3.76% interest rate, due in 2028	14,074		13,105		—		—
Fixed rate loan, 3.77% interest rate, due in 2030	5,008		4,637		—		—
Fixed rate loan, 3.85% interest rate, due in 2030	5,295		4,918		—		—
Fixed rate loan, 3.56% interest rate, due in 2030	14,793		13,551		—		—
Fixed rate loan, 3.67% interest rate, due in 2031	13,012		11,900		—		—
Fixed rate loan, 4.14% interest rate, due in 2032	14,443		13,355		—		—
Fixed rate loan, 4.02% interest rate, due in 2033	31,517		28,715		—		—
Fixed rate loan, 4.13% interest rate, due in 2033	43,999		40,292		—		—
Fixed rate loan, 3.10% interest rate, due in 2035	26,602		22,671		—		—
Fixed rate loan, 2.95% interest rate, due in 2036	42,743		35,855		—		—
Fixed rate loan, 4.27% interest rate, due in 2037	46,659		42,183		—		—
Fixed rate loan, 3.25% interest rate, due in 2038	52,697		44,184		—		—
	$	4,243,271	$	4,080,560	$	646,124	$	709,198

(1)Includes unamortized debt issuance costs of $52,571 and $3,876 as of September 30, 2022 and December 31, 2021, respectively.

(2)The ILPT Floating Rate Loan matures in October 2024, subject to three, one year extension options.

(3)The Floating Rate Loan, entered into by our consolidated joint venture, matures in March 2024, subject to three, one year extension options.

Schedule of Fair Value Measurements, Recurring and Nonrecurring

The table below presents certain of our assets measured on a recurring basis at fair value at September 30, 2022, categorized by the level of inputs as defined in the fair value hierarchy under GAAP, used in the valuation of each asset:

			Quoted Prices in		Significant Other		Significant
			Active Markets for		Observable		Unobservable
			Identical Assets		Inputs		Inputs
	Total		(Level 1)		(Level 2)		(Level 3)
Recurring fair value measurements
Investment in unconsolidated joint venture (1)	$	145,693	$	—	$	—	$	145,693
Interest rate cap derivatives (2)	$	67,998	$	—	$	67,998	$	—
Non-recurring fair value measurements
Real estate properties (3)	$	555,123	$	—	$	—	$	555,123

(1)We own a 22% equity interest in a joint venture that owns 18 properties and is included in investment in unconsolidated joint venture in our condensed consolidated balance sheet, and is reported at fair value, which is based on significant unobservable inputs (Level 3 inputs). The significant unobservable inputs used in the fair value are discount rates of between 5.25% and 7.00%, exit capitalization rates of between 4.50% and 6.00%, direct capitalization rates of between 4.00% and 4.50%, holding periods of approximately 10 years and market rents. Our assumptions are based on the location, type and nature of each property, and current and anticipated market conditions, which are derived from appraisers, industry publications and our experience. See Note 2 for further information regarding our investment in this joint venture.

(2)Our derivative assets are carried at fair value as required by GAAP. The estimated fair values of the derivative assets are based on current market prices in secondary markets for similar derivative contracts, (Level 2 inputs). See Note 10 for more information regarding our derivatives and hedging activities.

(3)We recorded a loss on impairment of real estate of $100,747 to reduce the carrying value of 25 properties in our condensed consolidated balance sheet to their estimated fair value (Level 3 inputs as defined in the fair value hierarchy under GAAP). See Note 3 for more information.

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Shareholders' Equity (Tables)

9 Months Ended

Sep. 30, 2022

Equity [Abstract]

Schedule of distributions declared and paid

During the nine months ended September 30, 2022, we declared and paid regular quarterly distributions to common shareholders as follows:

Declaration Date	Record Date	Payment Date	Distribution Per Share		Total Distribution
January 13, 2022	January 24, 2022	February 17, 2022	$	0.33	$	21,584
April 14, 2022	April 25, 2022	May 19, 2022	0.33		21,583
July 14, 2022	July 25, 2022	August 18, 2022	0.01		654
			$	0.67	$	43,821

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Per Common Share Amounts (Tables)

9 Months Ended

Sep. 30, 2022

Earnings Per Share [Abstract]

Schedule of weighted average number of shares

The calculation of basic and diluted earnings per share is as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2022		2021		2022		2021
Numerators:
Net (loss) income attributable to common shareholders	$	(45,627)	$	18,307	$	(195,680)	$	56,475
Loss attributable to unvested share awards	(2)		(43)		(128)		(140)
Net (loss) income attributable to common shareholder used in calculating earnings per share	$	(45,629)	$	18,264	$	(195,808)	$	56,335
Denominators:
Weighted average common shares for basic earnings per share	65,250		65,178		65,228		65,154
Effect of dilutive securities: unvested share awards (1)	—		52		—		51
Weighted average common shares for diluted earnings per share	65,250		65,230		65,228		65,205
Net (loss) income attributable to common shareholders per common share - basic	$	(0.70)	$	0.28	$	(3.00)	$	0.86
Net (loss) income attributable to common shareholders per common share - diluted	$	(0.70)	$	0.28	$	(3.00)	$	0.86

(1)    For purposes of calculating diluted earnings per share, we did not include 205 and 196 of unvested share awards for the three and nine months ended September 30, 2022, respectively, because to do so would have been antidilutive.

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Derivatives and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2022

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of interest rate swap derivatives

The following table summarizes the terms of our outstanding interest rate cap agreements designated as cash flow hedges of interest rate risk as of September 30, 2022:

Interest Rate Derivative	Balance Sheet Line Item	Underlying Instrument	Number of Instruments	Strike Rate	Notional Amount		Fair Value at September 30, 2022
Interest Rate Cap	Other assets	Floating Rate Loan (1)	1	3.40%	$	1,400,000	$	19,485
Interest Rate Cap	Other assets	ILPT Floating Rate Loan	2	2.25%	$	1,235,000	$	48,513

(1)The Floating Rate Loan was entered into by our consolidated joint venture.

Schedule of effects on consolidated statements of income and comprehensive income

	Three Months Ended September 30, 2022		Nine Months Ended September 30, 2022
Amount of gain recognized in cumulative other comprehensive income	$	15,047	$	24,200
Amount reclassified from cumulative other comprehensive income into interest expense	761		1,678
Amount reclassified from cumulative other comprehensive income into loss on early extinguishment of debt	(6,961)		(6,961)
Unrealized gain on derivative instrument recognized in cumulative other comprehensive income	$	8,847	$	18,917

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Basis of Presentation - Narrative (Details) - property		1 Months Ended
	Feb. 25, 2022	Sep. 30, 2022	Jul. 31, 2022
MNR
Variable Interest Entity [Line Items]
Number of properties acquired	95	94	1
Number of properties acquired but aren't yet completed	2		2
Mountain Industrial REIT LLC | Consolidated Joint Venture
Variable Interest Entity [Line Items]
Equity interest in joint venture	61.00%	61.00%

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Real Estate Investments - Narrative (Details) $ / shares in Units, ft² in Thousands		1 Months Ended				2 Months Ended	3 Months Ended			7 Months Ended	9 Months Ended		12 Months Ended
	Feb. 25, 2022 USD ($) ft² property option $ / shares	Oct. 26, 2022 USD ($)	Sep. 30, 2022 USD ($) ft² state property building $ / shares	Jul. 31, 2022 USD ($) ft² property	Mar. 31, 2022	Feb. 25, 2022 USD ($) ft² property $ / shares	Sep. 30, 2022 USD ($) ft² state property building $ / shares	Sep. 22, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) ft² state property building $ / shares	Sep. 30, 2022 USD ($) ft² state segment property building $ / shares	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) state property option $ / shares
Real Estate Properties [Line Items]
Number of properties owned | property			413				413			413	413
Net rentable area | ft²			59,962				59,962			59,962	59,962
Number of business segments | segment											1
Acquisition and other transaction related costs							$ 586,000		$ 0		$ 586,000	$ 646,000
Common shares, par value (in dollars per share) | $ / shares			$ 0.01				$ 0.01			$ 0.01	$ 0.01		$ 0.01
Debt outstanding			$ 4,243,271,000				$ 4,243,271,000			$ 4,243,271,000	$ 4,243,271,000		$ 828,124,000
Commitments related to tenant improvements and leasing costs											$ 15,304,000
Net rentable area | ft²			6,442				6,442			6,442	6,442
Committed bus unspent tenant related obligations			$ 25,939,000				$ 25,939,000			$ 25,939,000	$ 25,939,000
Accrued environmental remediation costs			$ 6,940,000				6,940,000			$ 6,940,000	6,940,000		$ 6,940,000
Loss on impairment of real estate							0		0		100,747,000	0
Net loss attributable to noncontrolling interest							38,347,000		0		49,402,000	0
Equity in earnings of unconsolidated joint venture							$ 3,297,000		$ 998,000		6,634,000	$ 5,455,000
MNR
Real Estate Properties [Line Items]
Number of states where real estate is located | property	27					27
Purchase price	$ 3,739,048,000
Number of properties acquired but aren't yet completed | property	2			2		2
Assumed mortgage notes payable, principal	$ 323,432,000
Repayments of debt	885,269,000
Purchase price of properties acquired but not yet completed	$ 78,843,000
Number of properties acquired | property	95		94	1
Number of properties impaired | property							25
Net loss attributable to noncontrolling interest							$ 38,318,000				$ 49,360,000
MNR
Real Estate Properties [Line Items]
Noncontrolling interest ownership percentage	39.00%		39.00%			39.00%	39.00%			39.00%	39.00%
MNR | Other Joint Venture Investor
Real Estate Properties [Line Items]
Cash distributions							$ 0				$ 1,365,000
Mountain Industrial REIT LLC
Real Estate Properties [Line Items]
Noncontrolling interest ownership percentage	39.00%					39.00%
Mountain Industrial REIT LLC | Co-venturer
Real Estate Properties [Line Items]
Noncontrolling interest ownership percentage	39.00%					39.00%
Noncontrolling interest in joint ventures	$ 589,411,000					$ 589,411,000
Series C Cumulative Redeemable Preferred Stock, 6.125% | MNR
Real Estate Properties [Line Items]
Preferred stock dividend rate	6.125%
Preferred stock par value per share (in dollars per share) | $ / shares	$ 0.01					$ 0.01
Right to receive cash plus accumulated and unpaid dividends (in dollars per share) | $ / shares	25.00					25.00
Common shares | MNR
Real Estate Properties [Line Items]
Right to receive cash (in dollars per share) | $ / shares	$ 21.00					$ 21.00
MNR | MNR
Real Estate Properties [Line Items]
Net rentable area | ft²	25,745					25,745
Number of properties | property	124					124
MNR | Common shares | MNR
Real Estate Properties [Line Items]
Common shares, par value (in dollars per share) | $ / shares	$ 0.01					$ 0.01
Floating Rate Loan
Real Estate Properties [Line Items]
Number of properties used as collateral | property	82
Debt outstanding			$ 1,400,000,000				$ 1,400,000,000			$ 1,400,000,000	1,400,000,000
Number of options to extend maturity date | option	3
Extension of maturity date	1 year
Weighted average interest rate (as a percent)							4.94%			4.23%
Floating Rate Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Real Estate Properties [Line Items]
Basis spread on variable rate	2.25%				3.40%					2.77%
Bridge Loan Facility
Real Estate Properties [Line Items]
Number of properties used as collateral | property	109
Debt outstanding	$ 1,385,158,000					$ 1,385,158,000		$ 1,235,000,000
Weighted average interest rate (as a percent)							2.92%
Bridge Loan Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Real Estate Properties [Line Items]
Basis spread on variable rate	1.75%
Weighted average interest rate (as a percent)								5.01%		4.24%
Fixed Rate Loan
Real Estate Properties [Line Items]
Number of properties used as collateral | property	17
Debt outstanding			$ 700,000,000				$ 700,000,000			$ 700,000,000	$ 700,000,000
Weighted average interest rate (as a percent)							4.42%				4.42%
Revolving credit facility
Real Estate Properties [Line Items]
Number of options to extend maturity date | option													1
Extension of maturity date													6 months
Weighted average interest rate (as a percent)						1.41%			1.42%			1.46%
Maximum borrowing capacity of revolving credit facility and term loan	$ 750,000,000					$ 750,000,000							$ 750,000,000
Joint Venture
Real Estate Properties [Line Items]
Assumed mortgage notes payable, principal	3,739,048,000
Joint Venture | MNR
Real Estate Properties [Line Items]
Number of properties acquired but aren't yet completed | property				2
Assumed mortgage notes payable, principal	$ 323,432,000
Number of properties acquired | property				1
Number of properties used as collateral | property	11
Hawaii
Real Estate Properties [Line Items]
Net rentable area | ft²			16,729				16,729			16,729	16,729
Number of buildings, leasable land parcels easements | building			226				226			226	226
Hawaii | Sales Revenue, Net | Geographic Concentration Risk
Real Estate Properties [Line Items]
Concentration risk							26.80%		50.50%		30.60%	50.70%
Other States
Real Estate Properties [Line Items]
Number of properties owned | property			187				187			187	187
Net rentable area | ft²			43,233				43,233			43,233	43,233
Number of states where real estate is located | state			38				38			38	38
Augusta, Georgia | Consolidated Joint Venture | MNR
Real Estate Properties [Line Items]
Net rentable area | ft²				226
Purchase price				$ 38,053,000
Acquisition and other transaction related costs				$ 53,000
Percent of property leased				100.00%
Remaining lease contractual term				14 years 10 months 24 days
Twelve Mainland Properties
Real Estate Properties [Line Items]
Net rentable area | ft²			11,726				11,726			11,726	11,726
Number of states where real estate is located | state			12				12			12	12
Equity interest in joint venture			22.00%				22.00%			22.00%	22.00%
Number of properties contributed | property			18				18			18	18		18
The Industrial Fund REIT LLC
Real Estate Properties [Line Items]
Number of states where real estate is located | state			12				12			12	12		12
Equity interest in joint venture			22.00%				22.00%			22.00%	22.00%		22.00%
Number of properties contributed | property			18				18			18	18		18
Equity in earnings of unconsolidated joint venture							$ 3,297,000		$ 998,000		$ 6,634,000	$ 5,455,000
Cash distributions							$ 1,320,000		$ 660,000		$ 3,962,000	$ 1,980,000
The Industrial Fund REIT LLC | Subsequent Event
Real Estate Properties [Line Items]
Cash distributions		$ 20,900,000
Mountain Industrial REIT LLC | Consolidated Joint Venture
Real Estate Properties [Line Items]
Number of properties owned | property			94				94			94	94
Net rentable area | ft²			20,981				20,981			20,981	20,981
Equity interest in joint venture	61.00%		61.00%			61.00%	61.00%			61.00%	61.00%
Number of properties contributed | property			94				94			94	94

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Real Estate Investments - Concentration of Properties (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) state	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) state	Sep. 30, 2021 USD ($)
Real Estate Properties [Line Items]
Rental income	$ 103,215	$ 54,981	$ 281,812	$ 163,378
Federal Express Corporation/ FedEx Ground Package System, Inc.
Real Estate Properties [Line Items]
Number of leases are located in | state	34		34
Federal Express Corporation/ FedEx Ground Package System, Inc. | Customer Concentration Risk
Real Estate Properties [Line Items]
Remaining lease contractual term			7 years 3 months 18 days
Federal Express Corporation/ FedEx Ground Package System, Inc. | Sales Revenue, Net | Customer Concentration Risk
Real Estate Properties [Line Items]
Concentration risk	30.70%	4.90%	27.00%	5.00%
Rental income	$ 31,697	$ 2,706	$ 76,227	$ 8,152
Federal Express Corporation/ FedEx Ground Package System, Inc. | Rentable Square Foot | Customer Concentration Risk
Real Estate Properties [Line Items]
Concentration risk			22.00%
Amazon.com Services, Inc./ Amazon.com Services LLC
Real Estate Properties [Line Items]
Number of leases are located in | state	6		6
Amazon.com Services, Inc./ Amazon.com Services LLC | Customer Concentration Risk
Real Estate Properties [Line Items]
Remaining lease contractual term			6 years 2 months 12 days
Amazon.com Services, Inc./ Amazon.com Services LLC | Sales Revenue, Net | Customer Concentration Risk
Real Estate Properties [Line Items]
Concentration risk	7.00%	9.50%	7.10%	9.90%
Rental income	$ 7,244	$ 5,231	$ 20,095	$ 16,117
Amazon.com Services, Inc./ Amazon.com Services LLC | Rentable Square Foot | Customer Concentration Risk
Real Estate Properties [Line Items]
Concentration risk			7.70%
Home Depot U.S.A., Inc
Real Estate Properties [Line Items]
Number of leases are located in | state	3		3
Home Depot U.S.A., Inc | Customer Concentration Risk
Real Estate Properties [Line Items]
Remaining lease contractual term			26 years 3 months 18 days
Home Depot U.S.A., Inc | Sales Revenue, Net | Customer Concentration Risk
Real Estate Properties [Line Items]
Concentration risk	3.20%	2.40%	3.60%	2.40%
Rental income	$ 3,346	$ 1,322	$ 10,169	$ 3,948
Home Depot U.S.A., Inc | Rentable Square Foot | Customer Concentration Risk
Real Estate Properties [Line Items]
Concentration risk			5.70%
Three Major Customers
Real Estate Properties [Line Items]
Number of leases are located in | state	34		34
Three Major Customers | Customer Concentration Risk
Real Estate Properties [Line Items]
Remaining lease contractual term			13 years 3 months 18 days
Three Major Customers | Sales Revenue, Net | Customer Concentration Risk
Real Estate Properties [Line Items]
Concentration risk	40.90%	16.80%	37.70%	17.30%
Rental income	$ 42,287	$ 54,982	$ 106,491	$ 163,378
Three Major Customers | Rentable Square Foot | Customer Concentration Risk
Real Estate Properties [Line Items]
Concentration risk			35.40%

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Real Estate Investments - Purchase Price Allocation (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Feb. 25, 2022	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Asset Acquisition [Line Items]
Loss on equity securities		$ 0	$ 0	$ (5,758)	$ 0
MNR
Asset Acquisition [Line Items]
Land	$ 430,818
Buildings	3,035,309
Acquired real estate leases	294,576
Cash	8,814
Other assets, net	14,194
Securities available for sale	146,550
Total assets	3,930,261
Mortgage notes payable, at fair value	(323,432)
Accounts payable and other liabilities	(25,327)
Assumed real estate lease obligations	(17,829)
Equity attributable to noncontrolling interest on the joint venture	(3,827)
Net assets acquired	3,559,846
Assumed working capital	(144,230)
Assumed mortgage notes payable, principal	323,432
Purchase price	$ 3,739,048
Cost of marketable securities sold		$ 146,550		146,550
Proceeds from sale of marketable securities				$ 140,792
Above Market Leases | MNR
Asset Acquisition [Line Items]
Weighted average useful life	11 years 18 days
Lease Origination Value | MNR
Asset Acquisition [Line Items]
Weighted average useful life	8 years 6 months
Capitalized Below Market Lease | MNR
Asset Acquisition [Line Items]
Weighted average useful life	7 years 9 months 29 days

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Real Estate Investments - Property Acquisitions (Details) - USD ($) $ in Thousands	1 Months Ended
	Jul. 31, 2022	Sep. 30, 2022	Dec. 31, 2021
Real Estate [Line Items]
Land		$ 1,117,801	$ 699,037
Buildings and Improvements		4,053,913	1,049,796
Acquired Real Estate Leases		$ 23,633	$ 12,435
Augusta, Georgia | MNR
Real Estate [Line Items]
Purchase price	$ 38,053
Land	3,818
Buildings and Improvements	30,780
Acquired Real Estate Leases	$ 3,455

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Real Estate Investments - Joint Venture Activities (Details) ft² in Thousands, $ in Thousands	Sep. 30, 2022 USD ($) ft² state property	Feb. 25, 2022	Dec. 31, 2021 USD ($) state property
Schedule of Equity Method Investments [Line Items]
Investment in unconsolidated joint venture | $	$ 145,693		$ 143,021
Net rentable area | ft²	59,962
Twelve Mainland Properties
Schedule of Equity Method Investments [Line Items]
Equity interest in joint venture	22.00%
Number of properties contributed | property	18		18
Number of states where real estate is located | state	12
Net rentable area | ft²	11,726
The Industrial Fund REIT LLC
Schedule of Equity Method Investments [Line Items]
Equity interest in joint venture	22.00%		22.00%
Number of properties contributed | property	18		18
Number of states where real estate is located | state	12		12
The Industrial Fund REIT LLC | Joint Venture
Schedule of Equity Method Investments [Line Items]
Equity interest in joint venture	22.00%
Investment in unconsolidated joint venture | $	$ 145,693
Number of properties contributed | property	18
Net rentable area | ft²	11,726
Mountain Industrial REIT LLC | Consolidated Joint Venture
Schedule of Equity Method Investments [Line Items]
Equity interest in joint venture	61.00%	61.00%
Number of properties contributed | property	94
Net rentable area | ft²	20,981

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Real Estate Investments - Joint Venture Indebtedness (Details) $ in Thousands	Sep. 30, 2022 USD ($) property state	Dec. 31, 2021 USD ($)
Schedule of Equity Method Investments [Line Items]
Principal Balance	$ 4,295,842	$ 832,000
Consolidated Joint Venture
Schedule of Equity Method Investments [Line Items]
Interest rate (as a percent)	5.27%
Principal Balance	$ 1,710,842
Mortgage note payable | Mortgage notes payable (secured by 11 properties in 10 states) | Consolidated Joint Venture
Schedule of Equity Method Investments [Line Items]
Number of properties | property	11
Number of states where real estate is located | state	10
Interest rate (as a percent)	3.67%
Principal Balance	$ 310,842
Mortgage note payable | Mortgage notes payable (secured by 82 properties in 25 states) | Consolidated Joint Venture
Schedule of Equity Method Investments [Line Items]
Number of properties | property	82
Number of states where real estate is located | state	25
Interest rate (as a percent)	5.62%
Principal Balance	$ 1,400,000
Twelve Mainland Properties
Schedule of Equity Method Investments [Line Items]
Number of states where real estate is located | state	12
Twelve Mainland Properties | Joint Venture
Schedule of Equity Method Investments [Line Items]
Interest rate (as a percent)	3.53%
Principal Balance	$ 503,980
Twelve Mainland Properties | Mortgage note payable | Mortgage note payable (secured by one property in Florida) | Joint Venture
Schedule of Equity Method Investments [Line Items]
Number of properties | property	1
Interest rate (as a percent)	360.00%
Principal Balance	$ 56,980
Twelve Mainland Properties | Mortgage note payable | Mortgage note payable (secured by 11 other properties in eight states) | Joint Venture
Schedule of Equity Method Investments [Line Items]
Number of properties | property	11
Number of states where real estate is located | state	8
Interest rate (as a percent)	333.00%
Principal Balance	$ 350,000
Twelve Mainland Properties | Mortgage note payable | Mortgage note payable (secured by 5 other properties in four states) | Joint Venture
Schedule of Equity Method Investments [Line Items]
Number of properties | property	5
Number of states where real estate is located | state	4
Interest rate (as a percent)	4.22%
Principal Balance	$ 97,000

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Leases - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Leases [Abstract]
Certain variable payments	$ 16,664	$ 9,478	$ 46,071	$ 28,341
Tenant reimbursements	16,419	9,233	45,336	27,606
Straight line rental income	3,794	$ 1,678	8,170	$ 5,673
Right-of-use asset	4,959		4,959
Operating lease liability	$ 5,019		$ 5,019

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Indebtedness - Schedule of Outstanding Indebtedness (Details) $ in Thousands			1 Months Ended		7 Months Ended	9 Months Ended	12 Months Ended
	Sep. 22, 2022 USD ($) option property	Feb. 25, 2022 USD ($) option property	Mar. 31, 2022	Feb. 28, 2022 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($) property	Dec. 31, 2021 USD ($) option
Debt Instrument [Line Items]
Principal Balance					$ 4,295,842	$ 4,295,842	$ 832,000
Unamortized debt issuance costs					(52,571)	(52,571)	(3,876)
Carrying value					4,243,271	4,243,271	828,124
Net Book Value of Collateral					$ 4,885,902	$ 4,885,902
Mountain Industrial REIT LLC
Debt Instrument [Line Items]
Noncontrolling interest, ownership percentage by parent					61.00%	61.00%
Fixed Rate Loan, 5.62 % interest rate,due in 2024
Debt Instrument [Line Items]
Interest Rate					5.62%	5.62%
Fixed rate loan, 3.76% interest rate, due in 2028
Debt Instrument [Line Items]
Interest Rate					3.76%	3.76%
Fixed rate loan, 3.77% interest rate, due in 2030
Debt Instrument [Line Items]
Interest Rate					3.77%	3.77%
Fixed rate loan, 3.85% interest rate, due in 2030
Debt Instrument [Line Items]
Interest Rate					3.85%	3.85%
Fixed rate loan, 3.56% interest rate, due in 2030
Debt Instrument [Line Items]
Interest Rate					3.56%	3.56%
Fixed rate loan, 3.67% interest rate, due in 2031
Debt Instrument [Line Items]
Interest Rate					3.67%	3.67%
Fixed rate loan, 4.02% interest rate, due in 2033
Debt Instrument [Line Items]
Interest Rate					4.02%	4.02%
Fixed rate loan, 4.13% interest rate, due in 2033
Debt Instrument [Line Items]
Interest Rate					4.13%	4.13%
Fixed rate loan, 3.10% interest rate, due in 2035
Debt Instrument [Line Items]
Interest Rate					3.10%	3.10%
Fixed rate loan, 2.95% interest rate, due in 2036
Debt Instrument [Line Items]
Interest Rate					2.95%	2.95%
Fixed rate loan, 4.27% interest rate, due in 2037
Debt Instrument [Line Items]
Interest Rate					4.27%	4.27%
Fixed rate loan, 3.25% interest rate, due in 2038
Debt Instrument [Line Items]
Interest Rate					3.25%	3.25%
Revolving credit facility
Debt Instrument [Line Items]
Principal Balance					$ 0	$ 0	$ 182,000
Net Book Value of Collateral					0	$ 0
Repayments of lines of credit				$ 750,000
Number of options to extend maturity date | option							1
Extension of maturity date							6 months
Mortgage note payable
Debt Instrument [Line Items]
Carrying value	$ 1,100,000
Mortgage note payable | Mortgage note payable (secured by one property in Florida)
Debt Instrument [Line Items]
Number of properties used as collateral | property						104
Mortgage note payable | Fixed Rate Loan, 4.31%, due in 2029
Debt Instrument [Line Items]
Number of properties used as collateral | property						186
Mortgage note payable | Fixed Rate Loan, 4.417%, due in 2032
Debt Instrument [Line Items]
Number of properties used as collateral | property						17
Mortgage note payable | Fixed Rate Loan, 5.62 % interest rate,due in 2024
Debt Instrument [Line Items]
Number of properties used as collateral | property						82
Mortgage note payable | Fixed rate loan, 3.76% interest rate, due in 2028
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 3.77% interest rate, due in 2030
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 3.85% interest rate, due in 2030
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 3.56% interest rate, due in 2030
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 3.67% interest rate, due in 2031
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Mortgage Note Payable, 4.140%, due in 2032
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 4.02% interest rate, due in 2033
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 4.13% interest rate, due in 2033
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 3.10% interest rate, due in 2035
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 2.95% interest rate, due in 2036
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 4.27% interest rate, due in 2037
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
Mortgage note payable | Fixed rate loan, 3.25% interest rate, due in 2038
Debt Instrument [Line Items]
Number of properties used as collateral | property						1
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024
Debt Instrument [Line Items]
Number of properties used as collateral | property	104
Number of options to extend maturity date | option	3	3
Extension of maturity date	1 year	1 year
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	2.25%	2.25%
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024 | Fixed Rate Loan, 6.18%, due in 2024 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate		3.93%
Floating Rate Loan
Debt Instrument [Line Items]
Number of properties used as collateral | property		82
Carrying value					$ 1,400,000	$ 1,400,000
Number of options to extend maturity date | option		3
Extension of maturity date		1 year
Floating Rate Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate		2.25%	3.40%		2.77%
Floating Rate Loan | Fixed Rate Loan, 6.18%, due in 2024
Debt Instrument [Line Items]
Principal Balance					$ 1,235,000	1,235,000	$ 0
Net Book Value of Collateral					$ 1,077,796	$ 1,077,796
Interest Rate					6.18%	6.18%
Floating Rate Loan | Fixed Rate Loan, 4.31%, due in 2029
Debt Instrument [Line Items]
Principal Balance					$ 650,000	$ 650,000	650,000
Net Book Value of Collateral					$ 490,602	$ 490,602
Interest Rate					4.31%	4.31%
Floating Rate Loan | Fixed Rate Loan, 4.417%, due in 2032
Debt Instrument [Line Items]
Principal Balance					$ 700,000	$ 700,000	0
Net Book Value of Collateral					$ 521,785	$ 521,785
Interest Rate					4.42%	4.42%
Floating Rate Loan | Fixed Rate Loan, 5.62 % interest rate,due in 2024
Debt Instrument [Line Items]
Principal Balance					$ 1,400,000	$ 1,400,000	0
Net Book Value of Collateral					$ 1,923,147	$ 1,923,147
Interest Rate					5.62%	5.62%
Floating Rate Loan | Fixed Rate Loan, 5.62 % interest rate,due in 2024 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate		2.77%
Floating Rate Loan | Fixed rate loan, 3.76% interest rate, due in 2028
Debt Instrument [Line Items]
Principal Balance					$ 14,074	$ 14,074	0
Net Book Value of Collateral					$ 63,829	$ 63,829
Interest Rate					3.76%	3.76%
Floating Rate Loan | Fixed rate loan, 3.77% interest rate, due in 2030
Debt Instrument [Line Items]
Principal Balance					$ 5,008	$ 5,008	0
Net Book Value of Collateral					$ 40,002	$ 40,002
Interest Rate					3.77%	3.77%
Floating Rate Loan | Fixed rate loan, 3.85% interest rate, due in 2030
Debt Instrument [Line Items]
Principal Balance					$ 5,295	$ 5,295	0
Net Book Value of Collateral					$ 40,002	$ 40,002
Interest Rate					3.85%	3.85%
Floating Rate Loan | Fixed rate loan, 3.56% interest rate, due in 2030
Debt Instrument [Line Items]
Principal Balance					$ 14,793	$ 14,793	0
Net Book Value of Collateral					$ 51,100	$ 51,100
Interest Rate					3.56%	3.56%
Floating Rate Loan | Fixed rate loan, 3.67% interest rate, due in 2031
Debt Instrument [Line Items]
Principal Balance					$ 13,012	$ 13,012	0
Net Book Value of Collateral					$ 30,962	$ 30,962
Interest Rate					3.67%	3.67%
Floating Rate Loan | Mortgage Note Payable, 4.140%, due in 2032
Debt Instrument [Line Items]
Principal Balance					$ 14,443	$ 14,443	0
Net Book Value of Collateral					$ 45,094	$ 45,094
Interest Rate					4.14%	4.14%
Floating Rate Loan | Fixed rate loan, 4.02% interest rate, due in 2033
Debt Instrument [Line Items]
Principal Balance					$ 31,517	$ 31,517	0
Net Book Value of Collateral					$ 87,730	$ 87,730
Interest Rate					4.02%	4.02%
Floating Rate Loan | Fixed rate loan, 4.13% interest rate, due in 2033
Debt Instrument [Line Items]
Principal Balance					$ 43,999	$ 43,999	0
Net Book Value of Collateral					$ 131,986	$ 131,986
Interest Rate					4.13%	4.13%
Floating Rate Loan | Fixed rate loan, 3.10% interest rate, due in 2035
Debt Instrument [Line Items]
Principal Balance					$ 26,602	$ 26,602	0
Net Book Value of Collateral					$ 48,049	$ 48,049
Interest Rate					3.10%	3.10%
Floating Rate Loan | Fixed rate loan, 2.95% interest rate, due in 2036
Debt Instrument [Line Items]
Principal Balance					$ 42,743	$ 42,743	0
Net Book Value of Collateral					$ 102,593	$ 102,593
Interest Rate					2.95%	2.95%
Floating Rate Loan | Fixed rate loan, 4.27% interest rate, due in 2037
Debt Instrument [Line Items]
Principal Balance					$ 46,659	$ 46,659	0
Net Book Value of Collateral					$ 113,839	$ 113,839
Interest Rate					4.27%	4.27%
Floating Rate Loan | Fixed rate loan, 3.25% interest rate, due in 2038
Debt Instrument [Line Items]
Principal Balance					$ 52,697	$ 52,697	$ 0
Net Book Value of Collateral					$ 117,386	$ 117,386
Interest Rate					3.25%	3.25%
Bridge Loan Facility
Debt Instrument [Line Items]
Number of properties used as collateral | property		109
Carrying value	$ 1,235,000	$ 1,385,158
Bridge Loan Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate		1.75%

XML

Indebtedness - Narrative (Details)				1 Months Ended	2 Months Ended	3 Months Ended			7 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2022 USD ($)	Sep. 22, 2022 USD ($) option property	Feb. 25, 2022 USD ($) option property	Mar. 31, 2022	Feb. 25, 2022 USD ($) property	Sep. 30, 2022 USD ($)	Sep. 22, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2022 USD ($) property	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) option
Debt Instrument [Line Items]
Debt outstanding	$ 4,243,271,000					$ 4,243,271,000			$ 4,243,271,000	$ 4,243,271,000		$ 828,124,000
Loss on early extinguishment of debt						$ 21,370,000		$ 0		$ 22,198,000	$ 0
Fixed Rate Loan, 5.62 % interest rate,due in 2024
Debt Instrument [Line Items]
Interest Rate	5.62%					5.62%			5.62%	5.62%
Bridge Loan Facility | Interest Rate Swap | Cash Flow Hedging | Designated as Hedging Instrument
Debt Instrument [Line Items]
Strike Rate	2.70%		2.70%	3.40%	2.70%	2.70%			2.70%	2.70%
MNR
Debt Instrument [Line Items]
Equity interest in joint venture	61.00%		61.00%		61.00%	61.00%			61.00%	61.00%
MNR
Debt Instrument [Line Items]
Assumed mortgage notes payable, principal			$ 323,432,000
Number of real estate buildings collateralized | property			11		11
Joint Venture
Debt Instrument [Line Items]
Assumed mortgage notes payable, principal			$ 3,739,048,000
Joint Venture | MNR
Debt Instrument [Line Items]
Number of properties used as collateral | property			11
Assumed mortgage notes payable, principal			$ 323,432,000
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024
Debt Instrument [Line Items]
Number of properties used as collateral | property		104
Number of options to extend maturity date | option		3	3
Extension of maturity date		1 year	1 year
Weighted average interest rate (as a percent)	6.18%	3.93%
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024 | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate		2.25%	2.25%
Revolving credit facility
Debt Instrument [Line Items]
Maximum borrowing capacity of revolving credit facility and term loan			$ 750,000,000		$ 750,000,000							$ 750,000,000
Number of options to extend maturity date | option												1
Extension of maturity date												6 months
Interest rate at the end of the period (as a percent)												1.41%
Weighted average interest rate (as a percent)					1.41%			1.42%			1.46%
Loss on early extinguishment of debt										$ 828,000
Mortgage note payable
Debt Instrument [Line Items]
Debt outstanding		$ 1,100,000,000					$ 1,100,000,000
Mortgage note payable | Fixed Rate Loan, 5.62 % interest rate,due in 2024
Debt Instrument [Line Items]
Number of properties used as collateral | property										82
Bridge Loan Facility
Debt Instrument [Line Items]
Debt outstanding		1,235,000,000	$ 1,385,158,000		$ 1,385,158,000		$ 1,235,000,000
Number of properties used as collateral | property			109
Weighted average interest rate (as a percent)						2.92%
Loss on early extinguishment of debt						$ 22,231,000				$ 22,231,000
Bridge Loan Facility | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Weighted average interest rate (as a percent)							5.01%		4.24%
Basis spread on variable rate			1.75%
Mezzanine agreement premium			8.00%		8.00%
Floating Rate Loan
Debt Instrument [Line Items]
Debt outstanding	$ 1,400,000,000					$ 1,400,000,000			$ 1,400,000,000	$ 1,400,000,000
Number of properties used as collateral | property			82
Number of options to extend maturity date | option			3
Extension of maturity date			1 year
Weighted average interest rate (as a percent)						4.94%			4.23%
Prepayment terms without premium amount			$ 280,000		$ 280,000
Floating Rate Loan | Fixed Rate Loan, 5.62 % interest rate,due in 2024
Debt Instrument [Line Items]
Interest Rate	5.62%					5.62%			5.62%	5.62%
Floating Rate Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate			2.25%	3.40%					2.77%
Option to increase in premium (in basis points)	0.515%					0.515%			0.515%	0.515%
Floating Rate Loan | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate | Fixed Rate Loan, 5.62 % interest rate,due in 2024
Debt Instrument [Line Items]
Basis spread on variable rate			2.77%
Fixed Rate Loan
Debt Instrument [Line Items]
Debt outstanding	$ 700,000,000					$ 700,000,000			$ 700,000,000	$ 700,000,000
Number of properties used as collateral | property			17
Weighted average interest rate (as a percent)						4.42%				4.42%
Mezzanine Loan
Debt Instrument [Line Items]
Debt outstanding		$ 135,000,000					$ 135,000,000

XML

Fair Value of Assets and Liabilities - Fair Value of Financial Instruments (Details) $ in Thousands	Feb. 25, 2022 option	Sep. 30, 2022 USD ($)	Dec. 31, 2021 USD ($)
Fair Value of Financial Instruments
Fixed rates loans receivable		$ 4,243,271	$ 646,124
Fair Value, Recurring
Fair Value of Financial Instruments
Investments in unconsolidated joint venture		145,693
Fair Value, Inputs, Level 3 | Fair Value, Recurring
Fair Value of Financial Instruments
Investments in unconsolidated joint venture		$ 145,693
Fixed rate loan, 4.31% interest rate, due in 2029
Fair Value of Financial Instruments
Interest Rate		4.31%
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024
Fair Value of Financial Instruments
Weighted average interest rate		6.18%
Fixed Rate Loan, 5.62 % interest rate,due in 2024
Fair Value of Financial Instruments
Interest Rate		5.62%
Fixed Rate Loan, 4.42% interest rate, due in 2032
Fair Value of Financial Instruments
Interest Rate		4.42%
Fixed rate loan, 3.76% interest rate, due in 2028
Fair Value of Financial Instruments
Interest Rate		3.76%
Fixed rate loan, 3.77% interest rate, due in 2030
Fair Value of Financial Instruments
Interest Rate		3.77%
Fixed rate loan, 3.85% interest rate, due in 2030
Fair Value of Financial Instruments
Interest Rate		3.85%
Fixed rate loan, 3.56% interest rate, due in 2030
Fair Value of Financial Instruments
Interest Rate		3.56%
Fixed rate loan, 3.67% interest rate, due in 2031
Fair Value of Financial Instruments
Interest Rate		3.67%
Fixed rate loan, 4.14% interest rate, due in 2032
Fair Value of Financial Instruments
Interest Rate		4.14%
Fixed rate loan, 4.02% interest rate, due in 2033
Fair Value of Financial Instruments
Interest Rate		4.02%
Fixed rate loan, 4.13% interest rate, due in 2033
Fair Value of Financial Instruments
Interest Rate		4.13%
Fixed rate loan, 3.10% interest rate, due in 2035
Fair Value of Financial Instruments
Interest Rate		3.10%
Fixed rate loan, 2.95% interest rate, due in 2036
Fair Value of Financial Instruments
Interest Rate		2.95%
Fixed rate loan, 4.27% interest rate, due in 2037
Fair Value of Financial Instruments
Interest Rate		4.27%
Fixed rate loan, 3.25% interest rate, due in 2038
Fair Value of Financial Instruments
Interest Rate		3.25%
Carrying Value
Fair Value of Financial Instruments
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024		$ 1,213,336	0
Long-Term Debt		4,243,271	646,124
Unamortized premium		52,571	3,876
Carrying Value | Fixed rate loan, 4.31% interest rate, due in 2029
Fair Value of Financial Instruments
Fixed rates loans receivable		646,532	646,124
Carrying Value | Fixed Rate Loan, 5.62 % interest rate,due in 2024
Fair Value of Financial Instruments
Fixed rates loans receivable		1,378,000	0
Carrying Value | Fixed Rate Loan, 4.42% interest rate, due in 2032
Fair Value of Financial Instruments
Fixed rates loans receivable		694,561	0
Carrying Value | Fixed rate loan, 3.76% interest rate, due in 2028
Fair Value of Financial Instruments
Fixed rates loans receivable		14,074	0
Carrying Value | Fixed rate loan, 3.77% interest rate, due in 2030
Fair Value of Financial Instruments
Fixed rates loans receivable		5,008	0
Carrying Value | Fixed rate loan, 3.85% interest rate, due in 2030
Fair Value of Financial Instruments
Fixed rates loans receivable		5,295	0
Carrying Value | Fixed rate loan, 3.56% interest rate, due in 2030
Fair Value of Financial Instruments
Fixed rates loans receivable		14,793	0
Carrying Value | Fixed rate loan, 3.67% interest rate, due in 2031
Fair Value of Financial Instruments
Fixed rates loans receivable		13,012	0
Carrying Value | Fixed rate loan, 4.14% interest rate, due in 2032
Fair Value of Financial Instruments
Fixed rates loans receivable		14,443	0
Carrying Value | Fixed rate loan, 4.02% interest rate, due in 2033
Fair Value of Financial Instruments
Fixed rates loans receivable		31,517	0
Carrying Value | Fixed rate loan, 4.13% interest rate, due in 2033
Fair Value of Financial Instruments
Fixed rates loans receivable		43,999	0
Carrying Value | Fixed rate loan, 3.10% interest rate, due in 2035
Fair Value of Financial Instruments
Fixed rates loans receivable		26,602	0
Carrying Value | Fixed rate loan, 2.95% interest rate, due in 2036
Fair Value of Financial Instruments
Fixed rates loans receivable		42,743	0
Carrying Value | Fixed rate loan, 4.27% interest rate, due in 2037
Fair Value of Financial Instruments
Fixed rates loans receivable		46,659	0
Carrying Value | Fixed rate loan, 3.25% interest rate, due in 2038
Fair Value of Financial Instruments
Fixed rates loans receivable		52,697	0
Estimated Fair Value
Fair Value of Financial Instruments
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024		1,213,336	0
Long-Term Debt		4,080,560	709,198
Estimated Fair Value | Fixed rate loan, 4.31% interest rate, due in 2029
Fair Value of Financial Instruments
Fixed rates loans receivable		587,730	709,198
Estimated Fair Value | Fixed Rate Loan, 5.62 % interest rate,due in 2024
Fair Value of Financial Instruments
Fixed rates loans receivable		1,378,000	0
Estimated Fair Value | Fixed Rate Loan, 4.42% interest rate, due in 2032
Fair Value of Financial Instruments
Fixed rates loans receivable		626,128	0
Estimated Fair Value | Fixed rate loan, 3.76% interest rate, due in 2028
Fair Value of Financial Instruments
Fixed rates loans receivable		13,105	0
Estimated Fair Value | Fixed rate loan, 3.77% interest rate, due in 2030
Fair Value of Financial Instruments
Fixed rates loans receivable		4,637	0
Estimated Fair Value | Fixed rate loan, 3.85% interest rate, due in 2030
Fair Value of Financial Instruments
Fixed rates loans receivable		4,918	0
Estimated Fair Value | Fixed rate loan, 3.56% interest rate, due in 2030
Fair Value of Financial Instruments
Fixed rates loans receivable		13,551	0
Estimated Fair Value | Fixed rate loan, 3.67% interest rate, due in 2031
Fair Value of Financial Instruments
Fixed rates loans receivable		11,900	0
Estimated Fair Value | Fixed rate loan, 4.14% interest rate, due in 2032
Fair Value of Financial Instruments
Fixed rates loans receivable		13,355	0
Estimated Fair Value | Fixed rate loan, 4.02% interest rate, due in 2033
Fair Value of Financial Instruments
Fixed rates loans receivable		28,715	0
Estimated Fair Value | Fixed rate loan, 4.13% interest rate, due in 2033
Fair Value of Financial Instruments
Fixed rates loans receivable		40,292	0
Estimated Fair Value | Fixed rate loan, 3.10% interest rate, due in 2035
Fair Value of Financial Instruments
Fixed rates loans receivable		22,671	0
Estimated Fair Value | Fixed rate loan, 2.95% interest rate, due in 2036
Fair Value of Financial Instruments
Fixed rates loans receivable		35,855	0
Estimated Fair Value | Fixed rate loan, 4.27% interest rate, due in 2037
Fair Value of Financial Instruments
Fixed rates loans receivable		42,183	0
Estimated Fair Value | Fixed rate loan, 3.25% interest rate, due in 2038
Fair Value of Financial Instruments
Fixed rates loans receivable		$ 44,184	$ 0
Floating Rate Loan
Fair Value of Financial Instruments
Number of options to extend maturity date | option	3
Extension of maturity date	1 year
Floating Rate Loan | Fixed Rate Loan, 5.62 % interest rate,due in 2024
Fair Value of Financial Instruments
Interest Rate		5.62%
Floating Rate Loan | Fixed rate loan, 3.76% interest rate, due in 2028
Fair Value of Financial Instruments
Interest Rate		3.76%
Floating Rate Loan | Fixed rate loan, 3.77% interest rate, due in 2030
Fair Value of Financial Instruments
Interest Rate		3.77%
Floating Rate Loan | Fixed rate loan, 3.85% interest rate, due in 2030
Fair Value of Financial Instruments
Interest Rate		3.85%
Floating Rate Loan | Fixed rate loan, 3.56% interest rate, due in 2030
Fair Value of Financial Instruments
Interest Rate		3.56%
Floating Rate Loan | Fixed rate loan, 3.67% interest rate, due in 2031
Fair Value of Financial Instruments
Interest Rate		3.67%
Floating Rate Loan | Fixed rate loan, 4.02% interest rate, due in 2033
Fair Value of Financial Instruments
Interest Rate		4.02%
Floating Rate Loan | Fixed rate loan, 4.13% interest rate, due in 2033
Fair Value of Financial Instruments
Interest Rate		4.13%
Floating Rate Loan | Fixed rate loan, 3.10% interest rate, due in 2035
Fair Value of Financial Instruments
Interest Rate		3.10%
Floating Rate Loan | Fixed rate loan, 2.95% interest rate, due in 2036
Fair Value of Financial Instruments
Interest Rate		2.95%
Floating Rate Loan | Fixed rate loan, 4.27% interest rate, due in 2037
Fair Value of Financial Instruments
Interest Rate		4.27%
Floating Rate Loan | Fixed rate loan, 3.25% interest rate, due in 2038
Fair Value of Financial Instruments
Interest Rate		3.25%

XML

Fair Value of Assets and Liabilities - Assets Measured on Recurring Basis (Details) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022 USD ($) property	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) property	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($) property
Fair Value of Financial Instruments
Real estate properties	$ 4,929,233		$ 4,929,233		$ 1,581,343
Loss on impairment of real estate	$ 0	$ 0	$ 100,747	$ 0
The Industrial Fund REIT LLC
Fair Value of Financial Instruments
Equity interest in joint venture	22.00%		22.00%		22.00%
Number of properties contributed | property	18		18		18
Joint Venture | The Industrial Fund REIT LLC
Fair Value of Financial Instruments
Equity interest in joint venture	22.00%		22.00%
Number of properties contributed | property	18		18
MNR
Fair Value of Financial Instruments
Number of properties impaired | property	25
Fair Value, Inputs, Level 3
Fair Value of Financial Instruments
Holding period			10 years
Fair Value, Inputs, Level 3 | Minimum | Discount rate
Fair Value of Financial Instruments
Unconsolidated joint venture measurement input	0.0525		0.0525
Fair Value, Inputs, Level 3 | Minimum | Exit capitalization rate
Fair Value of Financial Instruments
Unconsolidated joint venture measurement input	0.0450		0.0450
Fair Value, Inputs, Level 3 | Minimum | Direct capitalization rate
Fair Value of Financial Instruments
Unconsolidated joint venture measurement input	0.0400		0.0400
Fair Value, Inputs, Level 3 | Maximum | Discount rate
Fair Value of Financial Instruments
Unconsolidated joint venture measurement input	0.0700		0.0700
Fair Value, Inputs, Level 3 | Maximum | Exit capitalization rate
Fair Value of Financial Instruments
Unconsolidated joint venture measurement input	0.0600		0.0600
Fair Value, Inputs, Level 3 | Maximum | Direct capitalization rate
Fair Value of Financial Instruments
Unconsolidated joint venture measurement input	0.0450		0.0450
Fair Value, Recurring
Fair Value of Financial Instruments
Investments in unconsolidated joint venture	$ 145,693		$ 145,693
Interest rate cap derivatives	67,998		67,998
Fair Value, Recurring | Fair Value, Inputs, Level 1
Fair Value of Financial Instruments
Investments in unconsolidated joint venture	0		0
Interest rate cap derivatives	0		0
Fair Value, Recurring | Fair Value, Inputs, Level 2
Fair Value of Financial Instruments
Investments in unconsolidated joint venture	0		0
Interest rate cap derivatives	67,998		67,998
Fair Value, Recurring | Fair Value, Inputs, Level 3
Fair Value of Financial Instruments
Investments in unconsolidated joint venture	145,693		145,693
Interest rate cap derivatives	0		0
Fair Value, Nonrecurring
Fair Value of Financial Instruments
Real estate properties	555,123		555,123
Fair Value, Nonrecurring | Fair Value, Inputs, Level 1
Fair Value of Financial Instruments
Real estate properties	0		0
Fair Value, Nonrecurring | Fair Value, Inputs, Level 2
Fair Value of Financial Instruments
Real estate properties	0		0
Fair Value, Nonrecurring | Fair Value, Inputs, Level 3
Fair Value of Financial Instruments
Real estate properties	$ 555,123		555,123
Fair Value, Nonrecurring | Fair Value, Inputs, Level 3 | MNR
Fair Value of Financial Instruments
Loss on impairment of real estate			$ 100,747
Number of properties impaired | property			25

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Shareholders' Equity (Details) $ / shares in Units, $ in Thousands							3 Months Ended						9 Months Ended
	Oct. 13, 2022 USD ($) $ / shares	Sep. 14, 2022 $ / shares shares	Aug. 18, 2022 USD ($) $ / shares	Jun. 01, 2022 trustee $ / shares shares	May 19, 2022 USD ($) $ / shares	Feb. 17, 2022 USD ($) $ / shares	Sep. 30, 2022 USD ($) $ / shares shares	Jun. 30, 2022 USD ($)	Mar. 31, 2022 USD ($)	Sep. 30, 2021 USD ($)	Jun. 30, 2021 USD ($)	Mar. 31, 2021 USD ($)	Sep. 30, 2022 USD ($) $ / shares shares
Shareholders' Equity
Dividends paid (in dollars per share)			$ 0.01		$ 0.33	$ 0.33							$ 0.67
Distributions to common shareholders | $			$ 654		$ 21,583	$ 21,584	$ 654	$ 21,583	$ 21,584	$ 21,554	$ 21,549	$ 21,550	$ 43,821
Trustee
Shareholders' Equity
Number of officers | trustee				7
Common shares granted (in shares) | shares				3,500
Common share price (in usd per share)				$ 15.07
Officers and Other Employees
Shareholders' Equity
Common shares granted (in shares) | shares		173,300
Common share price (in usd per share)		$ 6.83
Officers and Other Current and Former Officers Employees
Shareholders' Equity
Share repurchases (in shares) | shares							31,455						31,788
Share repurchase price (in usd per share)							$ 7.40						$ 7.56
Subsequent Event
Shareholders' Equity
Dividends paid (in dollars per share)	$ 0.01
Distributions to common shareholders | $	$ 656

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Per Common Share Amounts (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Numerators:
Net (loss) income attributable to common shareholders	$ (45,627)	$ 18,307	$ (195,680)	$ 56,475
Loss attributable to unvested share awards	(2)	(43)	(128)	(140)
Net (loss) income attributable to common shareholder used in calculating earnings per share	$ (45,629)	$ 18,264	$ (195,808)	$ 56,335
Denominators:
Weighted average common shares for basic earnings per share (in shares)	65,250	65,178	65,228	65,154
Effect of dilutive securities: unvested share awards (in shares)	0	52	0	51
Weighted average common shares for diluted earnings per share (in shares)	65,250	65,230	65,228	65,205
Net (loss) income attributable to common shareholders, basic (in usd per share)	$ (0.70)	$ 0.28	$ (3.00)	$ 0.86
Net (loss) income attributable to common shareholders, diluted (in usd per share)	$ (0.70)	$ 0.28	$ (3.00)	$ 0.86
Unvested Share Awards
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of EPS	205		196

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Business and Property Management Agreements with RMR (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2022 USD ($) employee agreement joint_venture	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($) employee agreement joint_venture	Sep. 30, 2021 USD ($)	Dec. 31, 2021 USD ($)
Related Party Transaction [Line Items]
Number of employees | employee	0		0
Number of management service agreements | agreement	2		2
Incentive fee expense					$ 0
Business Management Fees
Related Party Transaction [Line Items]
Incentive fee expense		$ 0	$ 0
Joint Venture
Related Party Transaction [Line Items]
Number of joint ventures | joint_venture	2		2
Reit Management And Research L L C
Related Party Transaction [Line Items]
Number of management service agreements | agreement	2		2
Business management fees	$ 6,465,000	2,708,000	$ 17,821,000	$ 7,832,000
Management service agreement term			3 years
Related party reimbursement expense	1,847,000	1,184,000	$ 5,155,000	3,451,000
Reit Management And Research L L C | Property Management and Construction Supervision Fees
Related Party Transaction [Line Items]
Expenses from transactions	3,270,000	1,675,000	8,797,000	4,860,000
Reit Management And Research L L C | Property Management and Construction Supervision Fees | Other Operating Income (Expense)
Related Party Transaction [Line Items]
Expenses from transactions	2,976,000		8,104,000
Related party reimbursement expense		1,598,000		4,751,000
Reit Management And Research L L C | Investment Building and Building Improvements | Capitalized Costs
Related Party Transaction [Line Items]
Expenses from transactions	$ 294,000	$ 77,000	$ 693,000	$ 109,000

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Related Person Transactions - Narrative (Details) $ in Thousands		1 Months Ended				9 Months Ended
	Feb. 25, 2022 USD ($) property	Sep. 30, 2022 USD ($) agreement investor property	Jul. 31, 2022 property	Dec. 31, 2021 USD ($) property	May 31, 2021 USD ($)	Sep. 30, 2022 USD ($) agreement investor property	Sep. 30, 2021 USD ($)	Nov. 30, 2020	Jan. 17, 2018 investor
Related Party Transaction [Line Items]
Number of management service agreements | agreement		2				2
Number of joint venture agreements | agreement		2				2
Proceeds from sale of joint venture						$ 0	$ 804
Due to Related Parties		$ 4,494		$ 2,185		4,494
Dallas, TX
Related Party Transaction [Line Items]
Payments to acquire real estate held-for-investment					$ 2,319
Acquisition related costs					$ 119
MNR
Related Party Transaction [Line Items]
Number of investors | investor									1
Number of properties acquired | property	95	94	1
Rents Collected For Joint Venture | Industrial Fund
Related Party Transaction [Line Items]
Due to Related Parties		$ 554		$ 225		$ 554
Mountain Industrial REIT LLC
Related Party Transaction [Line Items]
Noncontrolling interest ownership percentage	39.00%
Mountain Industrial REIT LLC | Co-venturer
Related Party Transaction [Line Items]
Noncontrolling interest ownership percentage	39.00%
Noncontrolling interest in joint ventures	$ 589,411
Twelve Mainland Properties
Related Party Transaction [Line Items]
Number of investors | investor		2				2
Number of properties contributed | property		18		18		18
Equity interest in joint venture		22.00%				22.00%
Proceeds from sale of joint venture				$ 160,516
Twelve Mainland Properties | Variable Interest Entity
Related Party Transaction [Line Items]
Number of properties contributed | property				6
Twelve Mainland Properties | The Industrial Fund REIT Inc. | Amended and Restated Asset Management Agreement
Related Party Transaction [Line Items]
Equity interest in joint venture								22.00%
MNR
Related Party Transaction [Line Items]
Equity interest in joint venture	61.00%	61.00%				61.00%

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Derivatives and Hedging Activities - Schedule of Interest Rate Cap Agreements (Details) - Interest Rate Swap - Cash Flow Hedging - Designated as Hedging Instrument $ in Thousands	Sep. 30, 2022 USD ($) derivative_instrument	Mar. 31, 2022	Feb. 25, 2022
Floating Rate Loan
Derivative Instruments, Gain (Loss) [Line Items]
Number of Instruments | derivative_instrument	1
Strike Rate	3.40%
Notional Amount	$ 1,400,000
Fair Value at September 30, 2022	$ 19,485
ILPT Floating Rate Loan, 6.18% weighted average interest rate, due in 2024
Derivative Instruments, Gain (Loss) [Line Items]
Number of Instruments | derivative_instrument	2
Strike Rate	2.25%
Notional Amount	$ 1,235,000
Fair Value at September 30, 2022	$ 48,513
Bridge Loan Facility
Derivative Instruments, Gain (Loss) [Line Items]
Number of Instruments | derivative_instrument	2
Strike Rate	2.70%	3.40%	2.70%
Notional Amount	$ 1,385,158
Fair Value at September 30, 2022	$ 7,740

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Derivatives and Hedging Activities - Narrative (Details) - Bridge Loan Facility - Interest Rate Swap - Cash Flow Hedging - Designated as Hedging Instrument $ in Thousands	Sep. 30, 2022 USD ($) derivative_instrument	Mar. 31, 2022	Feb. 25, 2022
Derivative Instruments, Gain (Loss) [Line Items]
Number of Instruments | derivative_instrument	2
Notional Amount	$ 1,385,158
Strike Rate	2.70%	3.40%	2.70%
Fair Value at September 30, 2022	$ 7,740

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Derivatives and Hedging Activities - Schedule of Activity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2022	Sep. 30, 2021	Sep. 30, 2022	Sep. 30, 2021
Derivative Instruments, Gain (Loss) [Line Items]
Amount of gain recognized in cumulative other comprehensive income	$ 15,047		$ 24,200
Unrealized gain on derivative instrument recognized in cumulative other comprehensive income	8,847	$ 0	18,917	$ 0
Interest Expense
Derivative Instruments, Gain (Loss) [Line Items]
Amount reclassified from cumulative other comprehensive income into interest expense	761		1,678
Gain (Loss) On Early Extinguishment Of Debt
Derivative Instruments, Gain (Loss) [Line Items]
Amount reclassified from cumulative other comprehensive income into loss on early extinguishment of debt	$ (6,961)		$ (6,961)

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Noncontrolling Interest (Details) $ in Thousands		1 Months Ended		3 Months Ended			9 Months Ended
	Feb. 25, 2022 USD ($) property	Sep. 30, 2022 property	Jul. 31, 2022 property	Sep. 30, 2022 USD ($)	Jun. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)	Sep. 30, 2022 USD ($)	Sep. 30, 2021 USD ($)
Noncontrolling Interest [Line Items]
Net income (loss) attributable to noncontrolling interest				$ 38,347		$ 0	$ 49,402	$ 0
Cash distributions					$ 1,365
MNR
Noncontrolling Interest [Line Items]
Number of properties acquired | property	95	94	1
Number of properties acquired but aren't yet completed | property	2		2
Assumed mortgage notes payable, principal	$ 323,432
Net income (loss) attributable to noncontrolling interest				38,318			49,360
Cash distributions				$ 0			$ 1,365
Mountain Industrial REIT LLC
Noncontrolling Interest [Line Items]
Noncontrolling interest ownership percentage	39.00%
Noncontrolling interest, ownership percentage by parent		61.00%		61.00%			61.00%
Mountain Industrial REIT LLC | Co-venturer
Noncontrolling Interest [Line Items]
Noncontrolling interest ownership percentage	39.00%
Noncontrolling interest in joint ventures	$ 589,411
Somerset, New Jersey | Mountain Industrial REIT LLC
Noncontrolling Interest [Line Items]
Equity interest in joint venture	67.00%
Somerset, New Jersey | Mountain Industrial REIT LLC
Noncontrolling Interest [Line Items]
Number of properties acquired | property	1
Net income (loss) attributable to noncontrolling interest				$ 29			$ 42
Somerset, New Jersey | Mountain Industrial REIT LLC | Unrelated Third Party
Noncontrolling Interest [Line Items]
Noncontrolling interest ownership percentage	33.00%
Joint Venture
Noncontrolling Interest [Line Items]
Assumed mortgage notes payable, principal	$ 3,739,048
Joint Venture | MNR
Noncontrolling Interest [Line Items]
Number of properties acquired | property			1
Number of properties acquired but aren't yet completed | property			2
Assumed mortgage notes payable, principal	$ 323,432
Consolidated Joint Venture | Mountain Industrial REIT LLC
Noncontrolling Interest [Line Items]
Equity interest in joint venture	61.00%	61.00%		61.00%			61.00%
Consolidated Joint Venture | Mountain Industrial REIT LLC
Noncontrolling Interest [Line Items]
Noncontrolling interest, ownership percentage by parent	61.00%