INDUSTRIAL LOGISTICS PROPERTIES TRUST August 2023 309 Dulty’s Lane Burlington, NJ 633,836 Square Feet ILPT Ownership: 100% INVESTOR PRESENTATION
2 INDUSTRIAL LOGISTICS PROPERTIES TRUST This presentation contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws that are subject to risks and uncertainties. These statements may include words such as “believe”, “expect”, “anticipate”, “intend”, “plan”, “estimate”, “will”, “may” and negatives or derivatives of these or similar expressions. Forward-looking statements reflect ILPT’s current expectations, are based on judgments and assumptions, are inherently uncertain and are subject to risks, uncertainties and other factors, which could cause ILPT’s actual results, performance or achievements to differ materially from expected future results, performance or achievements expressed or implied in those forward-looking statements. Examples of these forward- looking statements and the related risks, uncertainties and other factors include, but are not limited to, the following: ILPT’s ability and the ability of its tenants to operate under unfavorable market and economic conditions, such as rising or sustained high interest rates, high inflation, labor market challenges, dislocation and volatility in the public equity and debt markets, challenges in the commercial real estate industry generally and in the industrial and logistics sector, geopolitical instability and economic recessions or downturns; demand for industrial and logistics properties; ILPT’s ability to reduce its leverage, generate cash flow and take advantage of mark-to-market leasing opportunities; ILPT’s ability to cost-effectively raise and balance its use of debt or equity capital; ILPT’s ability to pay interest on and principal of its debt and to meet the conditions to extend the maturity date of its debt; ILPT’s ability to maintain sufficient liquidity; ILPT’s tenants’ ability and willingness to pay their rent obligations to ILPT; ILPT’s ability to successfully compete for tenancies; the likelihood that the rents it realizes will increase when ILPT renews or extends its leases, enters new leases, or its rents reset at ILPT’s properties in Hawaii; whether ILPT’s tenants will renew or extend their leases or that ILPT will be able to obtain replacement tenants on terms as favorable to it as the terms of its existing leases; the credit qualities of ILPT’s tenants; changes in the security of cash flows from ILPT’s properties; ILPT’s ability to maintain high occupancy at its properties; its tenant and geographic concentrations; potential defaults of its leases by its tenants; changes in global supply chain conditions and emerging technologies; whether the industrial and logistics sector and the extent to which ILPT’s tenants’ businesses are critical to sustaining a resilient supply chain and that ILPT’s business will benefit as a result; ILPT’s expectations that e-commerce will continue to stimulate demand for industrial and logistics properties and that strong absorption and rent growth and high occupancy will continue; ILPT’s ability to pay distributions to its shareholders and to increase or sustain the amount of such distributions; ILPT’s ability to acquire properties that realize ILPT’s targeted returns; ILPT’s ability to sell properties at prices it targets; ILPT’s ability to prudently pursue, and successfully and profitably complete, expansion and renovation projects at its properties and to realize its expected returns on those projects; ILPT’s ability to sell additional equity interests in, or contribute additional properties to, its existing joint ventures, or enter into additional, real estate joint ventures or to attract co-venturers and benefit from its existing joint ventures or any real estate joint ventures ILPT may enter into; the ability of ILPT’s manager, The RMR Group LLC, or RMR, to successfully manage it; ILPT’s qualification for taxation as a real estate investment trust, or REIT, under the Internal Revenue Code of 1986, as amended; 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 ILPT incurring environmental remediation costs or other liabilities; ILPT's expected capital expenditures and leasing costs, as well as risks and uncertainties regarding the development, redevelopment or repositioning of ILPT’s properties, including as a result of inflation, cost overruns, supply chain challenges, labor shortages, construction delays or inability to obtain necessary permits, and ILPT’s ability to lease space at these properties at targeted returns; competition within the commercial real estate industry, particularly for industrial and logistics properties in those markets in which ILPT’s 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 ILPT’s business and its ability to satisfy complex rules in order for ILPT to maintain its qualification for taxation as a REIT for U.S. federal income tax purposes; non-performance by the counterparties to its interest rate caps and the costs for renewing or replacing the interest rate caps; actual and potential conflicts of interest with ILPT’s related parties, including its managing trustees, RMR and others affiliated with them; acts of terrorism, outbreaks or continuation of pandemics or other significant adverse public health safety events or conditions, war or other hostilities, supply chain disruptions, climate change or other manmade or natural disasters beyond ILPT’s control; and other matters. These risks, uncertainties and other factors are not exhaustive and should be read in conjunction with other cautionary statements that are included in ILPT’s periodic filings. The information contained in ILPT’s filings with the Securities and Exchange Commission, or SEC, including under the caption “Risk Factors” in ILPT’s periodic reports, or incorporated therein, identifies important factors that could cause differences from ILPT’s forward-looking statements in this presentation. ILPT’s filings with the SEC are available on the SEC’s website at www.sec.gov. You should not place undue reliance upon ILPT’s forward-looking statements. Except as required by law, ILPT does not intend to update or change any forward-looking statements as a result of new information, future events or otherwise. Notes Regarding Certain Information in this Presentation This presentation contains industry and statistical data that ILPT obtained from various third party sources. Nothing in the data used or derived from third party sources should be construed as investment advice. Some data and other information presented are also based on ILPT’s good faith estimates and beliefs derived from its review of internal surveys and independent sources and its experience. ILPT believes that these external sources, estimates and beliefs are reliable and reasonable, but it has not independently verified them. Although ILPT is not aware of any misstatements regarding the data presented herein, these estimates and beliefs involve inherent risks and uncertainties and are based on assumptions that are subject to change. Unless otherwise noted, (1) all data presented are as of or for the three months ended June 30, 2023, (2) references to “weighted average” mean a weighted average by annualized rental revenues and (3) references to “annualized rental revenues” mean the annualized contractual rents, as of June 30, 2023, 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 (annualized rental revenues may differ from actual historical rental revenues calculated pursuant to U.S. Generally Accepted Accounting Principles, or GAAP). Non-GAAP Financial Measures This presentation contains non-GAAP financial measures including FFO and Normalized FFO Attributable to Common Shareholders, EBITDA, EBITDAre, Adjusted EBITDAre, NOI and Cash Basis NOI. Calculations of, and reconciliations for these metrics to the closest GAAP metrics, are included in an Appendix hereto. Please refer to Definitions in the Appendix for terms used throughout this presentation. WARNING REGARDING FORWARD LOOKING STATEMENTS, DISCLAIMERS AND NON-GAAP FINANCIAL MEASURES
3 INDUSTRIAL LOGISTICS PROPERTIES TRUST 3 U.S. REIT with 413 Industrial & Logistics Properties ILPT AT A GLANCE Industrial Logistics Properties Trust (Nasdaq: ILPT) is a REIT focused on owning and leasing high quality distribution and logistics properties that serve the growing needs of e-commerce. More than 75% of ILPT’s annualized rental revenues are derived from investment grade tenants, tenants that are subsidiaries of investment grade rated entities or Hawaii land leases. 30% Annualized Rental Revenues from FedEx 60 Million Rentable Square Feet Located in 39 States 8 Years of Weighted Average Remaining Lease Term (by annualized revenue) 77% Annualized Rental Revenues from Investment Grade Tenants/Subsidiaries or Hawaii Land Leases 99% Occupancy 28% Annualized Rental Revenues from Properties in Hawaii
4 INDUSTRIAL LOGISTICS PROPERTIES TRUST 29 Other States, 30.9% HI, 28.0% OH, 7.4% IN, 5.7% SC, 5.2% FL, 5.1% GA, 4.8% TX, 4.2% NJ, 3.4% TN, 2.9% NC, 2.4% GEOGRAPHIC DIVERSITY WITH A UNIQUE HAWAIIAN FOOTPRINT Location and Number of Properties Geographic Mix of Annualized Rental Revenues • 187 industrial and logistics properties located in 38 states. • 43.3 million square feet that is 99.4% leased with a 6.4 year weighted average lease term (WALT) (by annualized rental revenues). • Accounts for 72% of annualized rental revenues. • Leases typically include fixed rent increases. • Tenants have invested significantly in improvements. • 226 well-located properties near Oahu’s prime CBD. • 16.7 million square feet that is 98.4% leased with a 13.4 year WALT (by annualized rental revenues). • Accounts for 28% of annualized rental revenues. • Leases typically include fixed rent increases or periodic rent resets to fair market value. • Location and scarcity of land continues to drive portfolio value. Hawaii PropertiesMainland Properties 226 3 2 4
5 SELECT PORTFOLIO PROPERTIES 482 Chaney Avenue Greenwood, IN 671,354 Square Feet ILPT Ownership: 61% 7409 Magi Drive Hanahan, SC 91,776 Square Feet ILPT Ownership: 100% 27200 SW 127th Avenue Homestead, FL 237,756 Square Feet ILPT Ownership: 100% 8411 Florida Mining Boulevard Tampa, FL 174,975 Square Feet ILPT Ownership: 61% INDUSTRIAL LOGISTICS PROPERTIES TRUST
6 INDUSTRIAL LOGISTICS PROPERTIES TRUST 0% 2% 4% 6% 8% 10% 12% 14% 16% $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 11' 12' 13' 14' 15' 16' 17' 18' 19' 20' 21' 22' In-Store Sales U.S. E-commerce Sales % Online $0 $200 $400 $600 $800 $1,000 $1,200 11' 12' 13' 14' 15' 16' 17' 18' 19' 20' 21' 22' GROWTH IN E-COMMERCE DRIVING INCREMENTAL INDUSTRIAL DEMAND E-commerce will continue to drive demand for industrial and logistics properties, support rent growth and sustain a favorable investment environment. (1) Source: U.S. Census Bureau as of May 18, 2023. ($B) ($B) U.S. E-Commerce Sales(1) U.S. Retail Sales Composition & E-Commerce as a % of Total(1)
INDUSTRIAL LOGISTICS PROPERTIES TRUST SELECT PORTFOLIO PROPERTIES 10551 N Congress Avenue Kansas City, MO 158,417 Square Feet ILPT Ownership: 61% 200 Orange Point Drive Lewis Center, OH 125,060 Square Feet ILPT Ownership: 100% 945 Monument Drive Lebanon, IN 962,500 Square Feet ILPT Ownership: 22% 510 John Dodd Road Spartanburg, SC 1,015,740 Square Feet ILPT Ownership: 100%
8 INDUSTRIAL LOGISTICS PROPERTIES TRUST Warehouse & Distribution: 65% Ground Lease: 28% Light Manufacturing: 7% HIGH QUALITY INDUSTRIAL PROPERTIES Property Type % of Annualized Rental Revenues Tenant Industry Type % of Portfolio Transportation & Shipping 36.8 Automotive 8.8 Construction & Building Materials 8.5 Food and Beverage 8.4 E-Commerce 7.5 Real Estate & Financial 5.3 Wholesale Trade 4.7 Commercial & Electronic Equipment 2.7 Manufacturing 2.4 Energy 2.1 Paper & Packaging 2.1 Technology & Communications 1.6 Furniture 1.5 Other 7.6 Total 100% Highly functional industrial properties leased to tenants in thriving industries and well located Hawaii land. Approximately 90% of Mainland rental revenues are generated by logistics facilities.
9 INDUSTRIAL LOGISTICS PROPERTIES TRUST STRONG CREDIT QUALITY AND DIVERSIFIED TENANT BASE More than 75% of annualized rental revenues are derived from investment grade tenants/subsidiaries or from secure Hawaii land leases. Tenant Credit Characteristics % of Annualized Rental Revenues Other Unrated or Non-IGR Other Leased Hawaii Lands Investment Grade Rated: 18% Subsidiaries of Investment Grade Rated Parent Entities: 39% Other Leased Hawaii Lands: 20% Other Unrated or Non-Investment Grade: 23% Top 10 Tenants % of Total Annualized Rental Revenues 1 FedEx Corporation 29.6% 2 Amazon.com, Inc. 6.8% 3 The Home Depot, Inc. 2.2% 4 UPS 1.6% 5 Restoration Hardware, Inc. 1.5% 6 Servco Pacific, Inc. 1.4% 7 American Tire Distributors, Inc. 1.3% 8 Par Pacific Holdings Inc. 1.2% 9 TD SYNNEX Corporation 1.1% 10 Berkshire Hathaway Inc. 1.0% Total 47.7%
10 INDUSTRIAL LOGISTICS PROPERTIES TRUST RECENT BUSINESS HIGHLIGHTS Full Year 2022 Same Property Cash Basis NOI Rental Rates Leasing Activity +1.0% +37.1% Leasing Activity WALT (by Sq. Ft.) 8.0 years Same Property NOI +2.6% 5,573,000 SF 10 +3.2% +23.0% 8.9 years 3,110,000 SF Year to Date 2023 +1.6%
11 INDUSTRIAL LOGISTICS PROPERTIES TRUST Mountain Industrial JV(1) Consolidated ILPT 61% Ownership 94 Properties 99.2% Occupancy $32.5M NOI $31.4M Cash Basis NOI $29.6M Adjusted EBITDAre $3.2B Total Gross Assets (1) Amounts represent this joint venture at 100%, not ILPT’s proportionate share thereof. INVESTMENT PORTFOLIO Q2 2023 RESULTS $1.7B Total Debt (Principal) Mainland Properties 92 Properties 99.4% Occupancy $29.0M NOI $28.8M Cash Basis NOI $26.3M Adjusted EBITDAre $1.9B Total Gross Assets $1.7B Total Debt (Principal) Hawaii Properties 226 Properties 98.4% Occupancy $22.6M NOI $20.4M Cash Basis NOI $21.6M Adjusted EBITDAre $714.7M Total Gross Assets $862.9M Total Debt (Principal) 100% Ownership $9.6M Normalized FFO -$4.4M Normalized FFO $0.3M Normalized FFO 855,000 SF Leasing Activity +41.7% Rental Rates 428,000 SF Leasing Activity +38.3% Rental Rates 684,000 SF Leasing Activity +6.2% Rental Rates 11
1.6 1.1 2.0 35.1% 15.1% 29.6% -20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 0.0 0.5 1.0 1.5 2.0 2.5 Q2 2022 Q1 2023 Q2 2023 Total Leasing (msf) Rent Roll-Up PROACTIVE ASSET MANAGEMENT AND LEASING Leasing Activity Square Footage in Millions INDUSTRIAL LOGISTICS PROPERTIES TRUST ILPT has executed more than three million square feet of leasing activity during the first half of 2023 and has a strong leasing pipeline with continued demand for its high quality portfolio. 12 WALT by SF (years) 8.98.9 28 Transactions 3.0 Million Total Square Feet Leasing Pipeline 1.0 Million Square Feet in Advanced Stages of Negotiation 11.7
LEASE EXPIRATIONS AND RENT RESETS BY INVESTMENT PORTFOLIO INDUSTRIAL LOGISTICS PROPERTIES TRUST 13 Hawaii Property Expirations and Resets % Total ILPT Annualized Rental Revenues Mountain Joint Venture Expirations % Total ILPT Annualized Rental Revenues Wholly Owned Mainland Property Expirations % Total ILPT Annualized Rental Revenues Total Consolidated Portfolio Expirations and Resets % Total ILPT Annualized Rental Revenues 1.3% 4.6% 3.1% 3.3% 5.6% 2023 2024 2025 2026 2027 0.4% 1.0% 3.1% 2.0% 5.1% 2023 2024 2025 2026 2027 0.4% 1.9% 0.6% 1.3% 1.7% 2023 2024 2025 2026 2027 Hawaii Expirations Hawaii Resets 2.1% 7.5% 6.8% 6.6% 12.4% 2023 2024 2025 2026 2027 Total Mainland Lease Expirations Total Hawaii Expirations and Resets
DEBT SUMMARY 14 Secured Floating Rate Debt $1.2B JV Secured Floating Rate Debt $1.4B Secured Fixed Rate Debt $1.7B $8.8 $18.1 $18.8 $19.5 $2,655.2 $1,614.3 2023 2024 2025 2026 2027 2028+ INDUSTRIAL LOGISTICS PROPERTIES TRUST Key Facts Debt Maturity Total Consolidated Debt Current Estimated Quarterly Interest Expense Run-Rate • Total consolidated debt of $4.3 billion. • Weighted average debt maturity term of 5.5 years, including extension options. • Next material debt maturity is March 2027, assuming extension options are exercised.(1) • Weighted average interest rate on debt of 5.5%. • Consolidated net debt to annualized Adjusted EBITDAre of 12.7x. (1) Includes $2.635 billion of loans that mature in 2024, assuming three one-year extension options are exercised, subject to meeting certain conditions including purchases of interest rate caps for each extension period. (2) Assumes short term interest rates remain at or above the strike rate on ILPT interest rate caps. (3) Represents the amortization of the premium we paid to acquire our interest rate caps over their terms in accordance with GAAP. ($ in Millions) ($ in Millions) (1) Cash Interest Expense (2) $60.2 Non-Cash Deferred Finance Fee Amortization 6.7 Non-Cash Interest Rate Cap Amortization (3) 6.1 Total estimated quarterly interest expense run-rate $73.0 Note: Table above includes principal payments of our amortizing loans.
JOINT VENTURES $12.2 Million$29.6 Million Mountain Industrial REIT LLC 22% / 78% Number of Properties Square Feet Adjusted EBITDAre(1) 61% / 39% 1894 11,726,000 SF20,981,000 SF ILPT/JV Ownership The Industrial Fund REIT LLC Raise capital at property net asset value. Grow relationships with new and existing investors. Target opportunistic acquisitions. INDUSTRIAL LOGISTICS PROPERTIES TRUST (1) Amounts represent these joint ventures at 100%, not ILPT’s proportionate share thereof. 15
16 INDUSTRIAL LOGISTICS PROPERTIES TRUST RMR’s Operations Include: National Multi-Sector Investment Platform OFFICE INDUSTRIAL GOVERNMENT MEDICAL OFFICE LIFE SCIENCE SENIOR LIVING HOTELS SERVICE RETAIL RMR Managed Companies Over 20,000 Employees Over 2,000 Properties More than $5 billion in Annual Revenues Approximately $36 Billion in AUM Over 600 CRE Professionals More than 30 Offices Throughout the U.S. Financial Services: Real Estate Services: Business Services: Accounting Acquisitions/ Dispositions Administration Capital Markets Asset Management Human Resources Compliance/ Audit Construction/ Development Information Technology (IT) Finance/ Planning Engineering Investor Relations Treasury Leasing Marketing Tax Property Management Legal/ Risk Management MANAGED BY THE RMR GROUP LLC, AN ALTERNATIVE ASSET MANAGER The RMR Group LLC
17 INDUSTRIAL LOGISTICS PROPERTIES TRUST • Base Business Management Fee: 0.5% multiplied by the lower of (i) gross historical cost or (ii) average market capitalization.(1) • Property Management Fees: 3% of gross collected rents and 5% of construction costs. • Incentive Management Fee: 12% of the outperformance of our total return per share compared to the MSCI U.S. REIT/Industrial REIT Index over a three year period multiplied by equity market capitalization.(2) (1) The first $250 million of growth is subject to a fee based on 0.7%. (2) The measurement periods are generally three year periods ending with the year for which the incentive management fee is being calculated. • If ILPT’s stock price goes up and its total market cap exceeds its historical cost of real estate; RMR base management fee is capped at 50 bps of historical cost of real estate. • If ILPT’s stock price goes down and its historical cost of real estate exceeds its total market cap; RMR gets less base management fee (50 bps on equity market cap plus debt). • Incentive fee structure keeps RMR focused on increasing total shareholder return. • Members of RMR senior management are holders of ILPT stock, some subject to long term lock up agreements. • ILPT shareholders have visibility into RMR, a publicly traded company. • ILPT benefits from RMR’s national footprint and economies of scale of $36 billion platform. Key Terms of Management Agreements MANAGEMENT ALIGNED WITH SHAREHOLDER INTERESTS Alignment of Interests
18 INDUSTRIAL LOGISTICS PROPERTIES TRUST A WINNING TRADITION RMR RECOGNITION EPA’S ENERGY STAR Partner of the Year 2019 - 2022. 77 properties with EPA ENERGY STAR certifications 55 properties with BOMA designations. Ranked #2 for portfolio with most designations 58 properties with LEED designations SUSTAINABILITY Boston Globe’s Top Places to Work 2020, 2021 & 2022 Commercial Property Executive Top Commercial Property Managers ranked 9th 2020 Women on Boards Winning Organization 2020 Fortune Magazine’s Fastest Growing Companies ranked 75th 2019 GlobeSt. Real Estate Forum’s Best Places to Work 2022 Boston Business Journal Middle Market Leader 2020, 2022, 2023 IREM Real Estate Management Excellence Award (REME) for Leadership & Development 2019 To find out more about RMR’s highlights, insights and accomplishments please visit The RMR Group’s annual Sustainability Report. 2022 2023
19 INDUSTRIAL LOGISTICS PROPERTIES TRUST APPENDIX 725 Darlington Avenue Mahwah, NJ 167,424 Square Feet ILPT Ownership: 100%
20 INDUSTRIAL LOGISTICS PROPERTIES TRUST SELECTED FINANCIAL INFORMATION As of and For the Three Months Ended 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 Selected Income Statement Data: Rental income $ 108,043 $ 110,258 $ 106,339 $ 103,215 $ 107,222 Net loss $ (36,580) $ (35,546) $ (41,759) $ (83,974) $ (151,321) Net loss attributable to common shareholders $ (25,828) $ (24,809) $ (31,043) $ (45,627) $ (143,539) NOI $ 84,424 $ 84,473 $ 83,598 $ 81,013 $ 86,894 Cash Basis NOI $ 80,827 $ 80,441 $ 79,931 $ 76,969 $ 79,949 Adjusted EBITDAre $ 81,331 $ 80,712 $ 79,213 $ 76,072 $ 80,811 FFO attributable to common shareholders $ 7,375 $ 7,916 $ 5,440 $ (10,134) $ (2,001) Normalized FFO attributable to common shareholders $ 7,594 $ 7,916 $ 5,440 $ 14,873 $ 28,302 CAD attributable to common shareholders $ 9,803 $ 10,182 $ 4,748 $ 8,290 $ 19,481 Rolling four quarter CAD attributable to common shareholders $ 33,023 $ 42,701 $ 55,675 $ 77,104 $ 94,657 Per Common Share Data (basic and diluted): Net loss attributable to common shareholders $ (0.40) $ (0.38) $ (0.48) $ (0.70) $ (2.20) FFO attributable to common shareholders $ 0.11 $ 0.12 $ 0.08 $ (0.16) $ (0.03) Normalized FFO attributable to common shareholders $ 0.12 $ 0.12 $ 0.08 $ 0.23 $ 0.43 CAD attributable to common shareholders $ 0.15 $ 0.16 $ 0.07 $ 0.13 $ 0.30 Rolling four quarter CAD attributable to common shareholders $ 0.51 $ 0.65 $ 0.85 $ 1.18 $ 1.45 Dividends: Annualized dividends paid per share $ 0.04 $ 0.04 $ 0.04 $ 0.04 $ 1.32 Annualized dividend yield (at end of period) 1.2% 1.3% 1.2% 0.7% 9.4% Annualized Normalized FFO attributable to common shareholders payout ratio 8.3% 8.3% 12.5% 4.3% 76.7% CAD attributable to common shareholders payout ratio 6.7% 6.3% 14.3% 7.7% 110.0% Rolling four quarter CAD attributable to common shareholders payout ratio 7.8% 6.2% 4.7% 3.4% 91.0% Selected Balance Sheet Data: Total gross assets $5,997,715 $5,939,557 $5,949,633 $5,962,116 $6,166,704 Total assets $5,662,080 $5,634,976 $5,676,166 $5,719,635 $5,955,838 Total liabilities $4,400,791 $4,348,801 $4,345,395 $4,358,125 $4,520,904 Total equity $1,261,289 $1,286,175 $1,330,771 $1,361,510 $1,434,934 (dollars in thousands, except per share data)
21 INDUSTRIAL LOGISTICS PROPERTIES TRUST CALCULATION AND RECONCILIATION OF NOI AND CASH BASIS NOI For the Three Months Ended For the Six Months Ended 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 6/30/2023 6/30/2022 Calculation of NOI and Cash Basis NOI: Rental income $ 108,043 $ 110,258 $ 106,339 $ 103,215 $ 107,222 $ 218,301 $ 178,597 Real estate taxes (15,100) (16,467) (14,164) (13,749) (13,275) (31,567) (22,711) Other operating expenses (8,519) (9,318) (8,577) (8,453) (7,053) (17,837) (13,825) NOI 84,424 84,473 83,598 81,013 86,894 168,897 142,061 Non-cash straight line rent adjustments included in rental income (3,355) (3,762) (3,368) (3,794) (3,220) (7,117) (4,376) Lease value amortization included in rental income (242) (270) (279) (250) (3,695) (512) (4,015) Lease termination fees included in rental income — — (20) — (30) — (30) Cash Basis NOI $ 80,827 $ 80,441 $ 79,931 $ 76,969 $ 79,949 $ 161,268 $ 133,640 Reconciliation of Net Loss to NOI and Cash Basis NOI: Net loss $ (36,580) $ (35,546) $ (41,759) $ (83,974) $ (151,321) $ (72,126) $ (161,108) Equity in earnings of unconsolidated joint venture (2,743) (3,961) (444) (3,297) (1,610) (6,704) (3,337) Income tax (benefit) expense 45 17 (68) 28 16 62 85 Loss before income tax expense and equity in earnings of unconsolidated joint venture (39,278) (39,490) (42,271) (87,243) (152,915) (78,768) (164,360) Loss on early extinguishment of debt 359 — — 21,370 — 359 828 Interest and other income (1,797) (1,146) (763) (1,068) (354) (2,943) (832) Interest expense 71,846 70,771 71,765 89,739 77,548 142,617 118,547 Loss on sale of real estate — 974 — — 10 974 10 Loss on equity securities — — — — 9,450 — 5,758 General and administrative 8,131 7,907 7,981 9,110 9,709 16,038 15,786 Acquisition and other transaction related costs — — — 586 — — — Loss on impairment of real estate 254 — — — 100,747 254 100,747 Depreciation and amortization 44,909 45,457 46,886 48,519 42,699 90,366 65,577 NOI 84,424 84,473 83,598 81,013 86,894 168,897 142,061 Non-cash straight line rent adjustments included in rental income (3,355) (3,762) (3,368) (3,794) (3,220) (7,117) (4,376) Lease value amortization included in rental income (242) (270) (279) (250) (3,695) (512) (4,015) Lease termination fees included in rental income — — (20) — (30) — (30) Cash Basis NOI $ 80,827 $ 80,441 $ 79,931 $ 76,969 $ 79,949 $ 161,268 $ 133,640 (dollars in thousands)
22 INDUSTRIAL LOGISTICS PROPERTIES TRUST RECONCILIATION OF NOI TO SAME PROPERTY NOI AND CALCULATION OF SAME PROPERTY CASH BASIS NOI Three Months Ended June 30, Six Months Ended June 30, 2023 2022 2023 2022 Reconciliation of NOI to Same Property NOI: Rental income $ 108,043 $ 107,222 $ 218,301 $ 178,597 Real estate taxes (15,100) (13,275) (31,567) (22,711) Other operating expenses (8,519) (7,053) (17,837) (13,825) NOI 84,424 86,894 168,897 142,061 Less: NOI of properties not included in same property results (1,270) (761) (83,132) (57,617) Same property NOI $ 83,154 $ 86,133 $ 85,765 $ 84,444 Calculation of Same Property Cash Basis NOI: Same property NOI $ 83,154 $ 86,133 $ 85,765 $ 84,444 Less: Non-cash straight line rent adjustments included in rental income (3,362) (3,228) (5,049) (2,662) Lease value amortization included in rental income (242) (3,693) (280) (3,808) Lease termination fees included in rental income — (30) — (30) Same property Cash Basis NOI $ 79,550 $ 79,182 $ 80,436 $ 77,944 (dollars in thousands)
23 INDUSTRIAL LOGISTICS PROPERTIES TRUST CALCULATION OF EBITDA, EBITDAre AND ADJUSTED EBITDAre (1) Amounts represent equity based compensation to ILPT's trustees and officers and certain other employees of RMR. (dollars in thousands) For the Three Months Ended For the Six Months Ended 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 6/30/2023 6/30/2022 Net loss $ (36,580) $ (35,546) $ (41,759) $ (83,974) $ (151,321) $ (72,126) $ (161,108) Plus: interest expense 71,846 70,771 71,765 89,739 77,548 142,617 118,547 Plus: income tax expense (benefit) 45 17 (68) 28 16 62 85 Plus: depreciation and amortization 44,909 45,457 46,886 48,519 42,699 90,366 65,577 EBITDA 80,220 80,699 76,824 54,312 (31,058) 160,919 23,101 Loss on impairment of real estate 254 — — — 100,747 254 100,747 Loss on sale of real estate — 974 — — 10 974 10 Equity in earnings of unconsolidated joint venture (2,743) (3,961) (444) (3,297) (1,610) (6,704) (3,337) Share of EBITDAre from unconsolidated joint venture 2,674 2,613 2,432 2,483 2,476 5,287 5,034 Loss on equity securities — — — — 9,450 — 5,758 EBITDAre 80,405 80,325 78,812 53,498 80,015 160,730 131,313 Plus: acquisition and other transaction related costs — — — 586 — — — Plus: general and administrative expense paid in common shares (1) 567 387 401 618 796 954 1,202 Plus: loss on early extinguishment of debt 359 — — 21,370 — 359 828 Adjusted EBITDAre $ 81,331 $ 80,712 $ 79,213 $ 76,072 $ 80,811 $ 162,043 $ 133,343
24 INDUSTRIAL LOGISTICS PROPERTIES TRUST CALCULATION OF FFO, NORMALIZED FFO AND CAD ATTRIBUTABLE TO COMMON SHAREHOLDERS For the Three Months Ended For the Six Months Ended 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 6/30/2023 6/30/2022 Net loss attributable to common shareholders $ (25,828) $ (24,809) $ (31,043) $ (45,627) $ (143,539) $ (50,637) $ (150,053) Depreciation and amortization 44,909 45,457 46,886 48,519 42,699 90,366 65,577 Equity in earnings of unconsolidated joint venture (2,743) (3,961) (444) (3,297) (1,610) (6,704) (3,337) Loss on equity securities — — — — 9,450 — 5,758 Share of FFO from unconsolidated joint venture 1,502 1,468 1,291 1,678 1,676 2,970 3,437 Loss on impairment of real estate 254 — — — 100,747 254 100,747 Loss on sale of real estate — 974 — — 10 974 10 FFO adjustments attributable to noncontrolling interest (10,719) (11,213) (11,250) (11,407) (11,434) (21,932) (16,038) FFO attributable to common shareholders 7,375 7,916 5,440 (10,134) (2,001) 15,291 6,101 Loss on early extinguishment of debt 359 — — 21,370 — 359 828 Acquisition, transaction related and certain other financing costs (1) — — — 32,016 30,303 — 48,976 Normalized FFO adjustments attributable to noncontrolling interest (140) — — (28,379) — (140) — Normalized FFO attributable to common shareholders $ 7,594 $ 7,916 $ 5,440 $ 14,873 $ 28,302 $ 15,510 $ 55,905 (dollars and shares in thousands, except per share data) (1) Amounts for the three months ended June 30, 2022, and September 30, 2022 primarily represent debt issuance costs recorded as interest expense related to certain financing and other transaction related costs expensed under GAAP.
25 INDUSTRIAL LOGISTICS PROPERTIES TRUST CALCULATION OF FFO, NORMALIZED FFO AND CAD ATTRIBUTABLE TO COMMON SHAREHOLDERS (continued) For the Three Months Ended For the Six Months Ended 6/30/2023 3/31/2023 12/31/2022 9/30/2022 6/30/2022 6/30/2023 6/30/2022 Normalized FFO attributable to common shareholders $ 7,594 $ 7,916 $ 5,440 $ 14,873 $ 28,302 $ 15,510 $ 55,905 Add (less): Non-cash interest expense 12,861 12,853 13,123 4,658 4,806 25,714 6,710 Non-cash revenues (3,597) (4,032) (3,647) (4,044) (6,915) (7,629) (8,391) Non-cash expenses 567 387 401 618 796 954 1,202 Recurring capital expenditures (3,781) (2,410) (6,590) (3,594) (3,003) (6,191) (6,474) Principal amortization (5,168) (5,530) (5,479) (5,429) (5,379) (10,698) (7,161) Share of FFO from unconsolidated joint venture (1,502) (1,468) (1,291) (1,678) (1,676) (2,970) (3,437) Distributions from unconsolidated joint venture 990 990 1,320 1,320 1,322 1,980 2,642 CAD adjustments attributable to non-controlling interest 1,839 1,476 1,471 1,566 1,228 3,315 1,641 CAD attributable to common shareholders $ 9,803 $ 10,182 $ 4,748 $ 8,290 $ 19,481 $ 19,985 $ 42,637 Weighted average common shares outstanding - basic and diluted 65,369 65,309 65,307 65,250 65,221 65,339 65,217 Per Common Share Data (basic and diluted): Net loss attributable to common shareholders $ (0.40) $ (0.38) $ (0.48) $ (0.70) $ (2.20) $ (0.77) $ (2.30) FFO attributable to common shareholders $ 0.11 $ 0.12 $ 0.08 $ (0.16) $ (0.03) $ 0.23 $ 0.09 Normalized FFO attributable to common shareholders $ 0.12 $ 0.12 $ 0.08 $ 0.23 $ 0.43 $ 0.24 $ 0.86 CAD attributable to common shareholders $ 0.15 $ 0.16 $ 0.07 $ 0.13 $ 0.30 $ 0.31 $ 0.65 (dollars and shares in thousands, except per share data)
26 INDUSTRIAL LOGISTICS PROPERTIES TRUST KEY FINANCIAL DATA BY INVESTMENT PORTFOLIO (1) With the exception of measures attributable to common shareholders, amounts represent this joint venture at 100%, not ILPT's proportionate share thereof. Amounts presented are derived from GAAP information and may not be comparable to amounts reflected in this joint venture's standalone financial information. (2) With the exception of measures attributable to common shareholders, other includes 100% of the results of one consolidated mainland property containing approximately 64,000 rentable square feet located in New Jersey in which ILPT has a 67% ownership interest; any corporate assets and liabilities including ILPT's equity investment in its unconsolidated joint venture; and adjustments to remove the non-controlling interest of Mountain Industrial REIT LLC from the balance sheet and income statement data. As of and For the Three Months Ended June 30, 2023 ILPT Wholly Owned Properties Mountain Industrial ILPT Hawaii Mainland Total REIT LLC (1) Other (2) Consolidated Ownership % 100% 100% 100% 61% Properties 226 92 318 94 1 413 Sq. Ft. 16,729 22,209 38,938 20,981 64 59,983 Occupancy % 98.4% 99.4% 99.0% 99.2% 98.1% 99.1% Selected Balance Sheet Data: Total gross assets $ 714,659 $ 1,868,573 $ 2,583,232 $ 3,197,071 $ 217,412 $ 5,997,715 Total debt (principal) $ 862,930 $ 1,722,070 $ 2,585,000 $ 1,749,755 $ — $ 4,334,755 Selected Income Statement Data: Rental income $ 30,382 $ 36,003 $ 66,385 $ 41,207 $ 451 $ 108,043 Net income (loss) $ 8,861 $ (21,295) $ (12,434) $ (27,363) $ 3,217 $ (36,580) Net income (loss) attributable to common shareholders $ 8,861 $ (21,295) $ (12,434) $ (16,687) $ 3,293 $ (25,828) NOI $ 22,619 $ 29,000 $ 51,619 $ 32,474 $ 331 $ 84,424 Cash Basis NOI $ 20,365 $ 28,805 $ 49,170 $ 31,352 $ 305 $ 80,827 Adjusted EBITDAre $ 21,573 $ 26,269 $ 47,842 $ 29,575 $ 3,914 $ 81,331 Normalized FFO attributable to common shareholders $ 9,588 $ (4,394) $ 5,194 $ 213 $ 2,187 $ 7,594 CAD attributable to common shareholders $ 8,001 $ 2,224 $ 10,225 $ (2,632) $ 2,210 $ 9,803 Key Ratios: Annualized Cash Basis NOI / total gross assets 11.4% 6.2% 7.6% 3.9% 5.4% Net debt / annualized Adjusted EBITDAre 10.0 x 16.4 x 13.5 x 13.7 x 12.7 x Select Quarterly Leasing Activity: Leasing activity (sq. ft.): 855 428 1,283 684 — 1,967 % Change in GAAP rent (weighted average by sq. ft.): 41.7% 38.3% 40.6% 6.2% —% 29.6% Weighted average lease term by sq. ft. (years): 11.2 4.9 7.6 6.9 — 7.3 (dollars and sq. ft in thousands, except per share data)
27 INDUSTRIAL LOGISTICS PROPERTIES TRUST DEFINITIONS Non-GAAP Financial Measures: ILPT presents certain “non-GAAP financial measures” within the meaning of the applicable rules of the Securities and Exchange Commission, or the SEC, including FFO attributable to common shareholders, Normalized FFO attributable to common shareholders, EBITDA, EBITDAre, Adjusted EBITDAre, NOI, same property NOI, Cash Basis NOI and same property Cash Basis NOI. 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 ILPT's operating performance or as measures of its liquidity. These measures should be considered in conjunction with net income (loss) and net income (loss) attributable to common shareholders as presented in ILPT's condensed consolidated statements of income (loss). ILPT considers 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. ILPT believes 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 its operating performance between periods and with other REITs and, in the case of NOI and Cash Basis 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 ILPT's properties. NOI and Cash Basis NOI: The calculations of net operating income, or NOI, and Cash Basis NOI exclude certain components of net loss in order to provide results that are more closely related to ILPT's property level results of operations. ILPT calculates NOI and Cash Basis NOI as shown on page 21 and same property NOI and same property Cash Basis NOI as shown on page 22. ILPT defines NOI as income from its rental of real estate less its property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that it records as depreciation and amortization expense. ILPT defines Cash Basis NOI as NOI excluding non-cash straight line rent adjustments, lease value amortization and lease termination fees, if any. ILPT uses NOI and Cash Basis NOI to evaluate individual and company-wide property level performance. ILPT calculates same property NOI and same property Cash Basis NOI in the same manner that it calculates the corresponding NOI and Cash Basis NOI amounts, except that ILPT only includes same properties in calculating same property NOI and same property Cash Basis NOI. Other real estate companies and REITs may calculate NOI and Cash Basis NOI differently than ILPT does. FFO and Normalized FFO Attributable to Common Shareholders: ILPT calculates funds from operations, or FFO, attributable to common shareholders and Normalized FFO attributable to common shareholders as shown on page 24. FFO attributable to common shareholders is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or Nareit, which is net 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 ILPT's 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 ILPT. In calculating Normalized FFO attributable to common shareholders, ILPT adjusts for the items shown on page 24 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 ILPT's Board of Trustees when determining the amount of distributions to its shareholders. Other factors include, but are not limited to, requirements to maintain ILPT's qualification for taxation as a REIT, limitations in the agreements governing its debt, the availability to ILPT of debt and equity capital, its distribution rate as a percentage of the trading price of ILPT's common shares, or dividend yield, and ILPT's dividend yield compared to the dividend yields of other industrial REITs, ILPT's expectation of its future capital requirements and operating performance and its expected needs for and availability of cash to pay its obligations. Other real estate companies and REITs may calculate FFO attributable to common shareholders and Normalized FFO attributable to common shareholders differently than ILPT does. EBITDA, EBITDAre and Adjusted EBITDAre: ILPT calculates earnings before interest, taxes, depreciation and amortization, or EBITDA, EBITDA for real estate, or EBITDAre, and Adjusted EBITDAre as shown on page 23. EBITDAre is calculated on the basis defined by Nareit, which is EBITDA, including ILPT's proportionate share of EBITDAre from unconsolidated joint venture properties, and excluding gains and losses on the sale of real estate, equity in earnings of unconsolidated joint venture, loss on impairment of real estate, any realized and unrealized gains or losses on equity securities, as well as certain other adjustments currently not applicable to ILPT. In calculating Adjusted EBITDAre, ILPT adjusts for the items shown on page 23. Other real estate companies and REITs may calculate EBITDA, EBITDAre and Adjusted EBITDAre differently than ILPT does. Cash Available for Distribution: ILPT calculates cash available for distribution, or CAD, as shown on page 25. ILPT defines CAD as Normalized FFO minus ILPT's proportionate share of Normalized FFO of unconsolidated joint venture properties, plus operating cash flow distributions received from ILPT's unconsolidated joint venture, recurring real estate related capital expenditures, adjustments for other non-cash and nonrecurring items, certain amounts excluded from Normalized FFO but settled in cash, less CAD adjustments attributable to noncontrolling interest, as well as certain other adjustments currently not applicable to ILPT. CAD is among the factors considered by ILPT's Board of Trustees when determining the amount of distributions to ILPT's shareholders. Other real estate companies and REITs may calculate CAD differently than ILPT does.
INDUSTRIAL LOGISTICS PROPERTIES TRUST August 2023 INVESTOR PRESENTATION Two Newton Place 255 Washington Street, Suite 300 Newton, Massachusetts 02458 ILPTREIT.COM 309 Dulty’s Lane Burlington, NJ 633,836 Square Feet ILPT Ownership: 100%